West Announces Second-Quarter 2021 Results

The Biologics and Pharma market units had strong double-digit organic sales growth, and the Generics market unit had low-single digit organic sales growth.

Contract-Manufactured Products Segment

Net sales grew by 6.7% to $136.4 million.  Organic sales growth was 3.2% with currency translation increasing sales growth by 350 basis points.  Segment performance was led by sales of healthcare-related injection and diagnostic devices.

Financial Highlights (first six months of 2021)

Operating cash flow was $233.1 million, an increase of 13.6%.  Capital expenditures were $111.6 million, an increase of 61% over the same period last year.  Free cash flow (operating cash flow minus capital expenditures) was $121.5 million, a decrease of 10.7%.

During the first-half 2021, the Company repurchased 479,000 shares for $137.1 million at an average share price of $286.23 under its share repurchase program.

Our capital and financial resources, including overall liquidity, remain strong.  We believe that cash on hand and cash generated from operations, together with availability under our $300.0 million multi-currency revolving credit facility, will be adequate to address our foreseeable liquidity needs based on our current expectations of our business operations, capital expenditures and scheduled payments of debt obligations.

Full-Year 2021 Financial Guidance

• Full-year 2021 net sales are expected to be in a range of $2.760 billion to $2.785 billion, compared to a prior guidance range of $2.630 billion to $2.655 billion.
• Organic sales growth is expected to be in a range of 24% to 25%, compared to a prior range of 19% to 20%.
• Net sales guidance includes an estimated full-year 2021 benefit of $80 million based on current foreign exchange rates, compared to a prior estimated benefit of $75 million.
• Full-year 2021 adjusted-diluted EPS is expected to be in a range of $8.05 to $8.20, compared to a prior range of $6.95 to $7.10.
• Full-year adjusted-diluted EPS guidance range includes an estimated benefit of approximately $0.27 based on current foreign currency exchange rates, compared to a prior estimated benefit of $0.23.
• The revised guidance includes a $0.24 EPS positive impact from first-half 2021 tax benefits from stock-based compensation.
• For the remainder of the year, our EPS guidance range assumes a tax rate of 23% and does not include potential tax benefits from stock-based compensation. Any tax benefits associated with stock-based compensation beyond those recorded in the first-half 2021 would provide a positive adjustment to our full-year EPS guidance.

Second-Quarter 2021 Conference Call
The Company will host a conference call to discuss the results and business expectations at 9:00 a.m. Eastern Time today.  To participate on the call please dial 877-930-8295 (U.S.) or 253-336-8738 (International). The conference ID is 3089097.

A live broadcast of the conference call will be available at the Company's website, www.westpharma.com, in the "Investors" section.  Management will refer to a slide presentation during the call, which will be made available on the day of the call.  To view the presentation, select "Presentations" in the "Investors" section of the Company's website.

An online archive of the broadcast will be available at the website three hours after the live call and will be available through Thursday, August 5, 2021, by dialing 855-859-2056 (U.S.) or 404-537-3406 (International) and entering conference ID 3089097.

Forward-Looking Statements
Certain forward-looking statements appear in this release and include such words as "raising," "believe," "potential," "increased," "future," "remain," "growing," "expect," "foreseeable," "expected," "to be," "includes," "estimated," "assumes," "would provide," and other similar terminology.  These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this release.  There is no certainty that actual results will be achieved in-line with current expectations.  These forward-looking statements involve a number of risks and uncertainties.  The following are some of the factors that could cause our actual results to differ materially from those expressed in or underlying our forward-looking statements: the duration and severity of the global COVID-19 pandemic, including prevailing economic conditions and general uncertainties relating thereto that may be unknown and unforeseeable; customers' changing inventory requirements and manufacturing plans and customer decisions to move forward with our new products and product categories, including any re-prioritization of product needs due to COVID-19; other potential impacts from COVID-19, including interruptions or weaknesses in our supply chain, illness in our workforce and access to transport for our products; average profitability, or mix, of the products we sell; dependence on third-party suppliers and partners; increased raw material costs; fluctuations in currency exchange; and the ability to meet development milestones with key customers.  This list of important factors is not all inclusive. For a description of certain additional factors that could cause the Company's future results to differ from those expressed in any such forward-looking statements, see Part I Item 1A , entitled "Risk Factors," in the Company's Annual Report on Form 10-K for the year ended December 31, 2020.

Except as required by law or regulation, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. 

Non-U.S. GAAP Financial Measures

For the purpose of aiding the comparison of our year-over-year results, we may refer to net sales and other financial results excluding the effects of changes in foreign currency exchange rates.  Organic net sales exclude the impact from acquisitions and/or divestitures and translate the current-period reported sales of subsidiaries whose functional currency is other than the U.S. Dollar at the applicable foreign exchange rates in effect during the comparable prior-year period.  We may also refer to financial results excluding the effects of unallocated items.  The re-measured results excluding effects from currency translation and excluding the effects of unallocated items are not in conformity with U.S. generally accepted accounting principles ("U.S. GAAP") and should not be used as a substitute for the comparable U.S. GAAP financial measures.  The non-U.S. GAAP financial measures are incorporated into our discussion and analysis as management uses them in evaluating our results of operations and believes that this information provides users a valuable insight into our overall performance and financial position.  A reconciliation of these adjusted Non-U.S. GAAP measures to the comparable U.S. GAAP financial measures is included in the accompanying tables.

WEST PHARMACEUTICAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(in millions, except per share data)
	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net sales	$723.6	100%	$527.2	100%	$1,394.3	100%	$1,018.7	100%
Cost of goods and services sold	408.5	56	332.1	63	807.3	58	656.6	64
Gross profit	315.1	44	195.1	37	587.0	42	362.1	36
Research and development	13.8	2	10.8	2	26.0	2	21.5	2
Selling, general and administrative expenses	92.7	13	77.7	15	172.9	12	149.5	15
Other expense (income), net	(2.7)	-	3.0	-	1.2	-	(0.5)	-
Operating profit	211.3	29	103.6	20	386.9	28	191.6	19
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