West Announces Fourth-Quarter and Full-Year 2020 Results
Fourth-Quarter and Full-Year 2020 Summary (comparisons to prior-year period)
- Fourth-quarter 2020 net sales of
$580.2 million grew 23.3%; organic sales growth was 19.8%. Full-year 2020 net sales of$2.147 billion grew 16.7%; organic sales growth was 16.3%. - Fourth-quarter 2020 reported-diluted EPS of
$1.29 increased 53.6%. Full-year 2020 reported-diluted EPS of$4.57 increased 42.4%. - Fourth-quarter 2020 adjusted-diluted EPS of
$1.34 increased 63.4%. Full-year 2020 adjusted-diluted EPS of$4.76 increased 46.9%. - Company is introducing full-year 2021 financial guidance of net sales in a range of
$2.500 billion to$2.525 billion and reported-diluted EPS in a range of$6.00 to$6.15 .
"Adjusted-diluted EPS" and "organic sales growth" are Non-
"We had a successful 2020 with tremendous execution, dedication and resiliency of our team and, most importantly, the trust of our customers across the globe. I am proud that we finished the year with record full-year net sales, organic sales growth and operating profit margin. Fourth quarter results were robust, led by strong growth in our Biologics and Generics market units. In addition, we experienced an acceleration in COVID-19-associated sales of high-value product (HVP) components used for vaccines and therapeutics," said
Proprietary Products Segment
In the fourth-quarter 2020, net sales grew by 28.7% to
Our Biologics market unit had strong double-digit organic sales growth, led by Flurotec®, Westar®, Daikyo® and NovaPure® components. Our Generics market unit posted double-digit organic sales growth, led by Flurotec and Westar components. Our Pharma market unit had low single-digit organic sales growth, led by Westar and Flurotec components and Crystal Zenith® containers.
In the full-year 2020, net sales grew 17.9% to
Contract-Manufactured Products Segment
In the fourth-quarter 2020, net sales grew by 7.0% to
In the full-year 2020, net sales grew by 12.9% to
Full-Year 2020 Financial Highlights
Operating cash flow was
Full-Year 2021 Financial Guidance
Full-year 2021 net sales are expected to be in a range of
- Organic sales growth is expected to be in a range of 13% to 14%.
- Net sales guidance includes an estimated full-year 2021 benefit of
$75 million based on current foreign exchange rates. - Full-year 2021 reported-diluted EPS is expected to be in a range of
$6.00 to$6.15 . - Full-year reported-diluted EPS guidance range includes an estimated benefit of approximately
$0.23 based on current foreign currency exchange rates. - This reported-diluted EPS guidance range assumes a full-year 2021 tax rate of 23%, which does not include potential tax benefits from stock-based compensation. As in prior years, we are not including potential 2021 tax benefits from stock-based compensation, as they are out of the Company's control. Any tax benefits associated with stock-based compensation that we receive in 2021 would provide a positive adjustment to our full-year EPS guidance.
- Full-year 2021 capital spending is expected to be in a range of
$230 million to$240 million . This includes incremental capital spending to support capacity expansions at existing HVP facilities to produce components to be used with treatments and vaccines related to COVID-19.
Fourth-Quarter 2020 Conference Call
The Company will host a conference call to discuss the results and business expectations at
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
Forward-Looking Statements
Certain forward-looking statements appear in this release and include such words as "believe," "continue," "maintain," "expected," "to be," "includes," "estimated," "assumes," "potential," "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 and Part II Item 1A, entitled "Risk Factors," in the Company's Annual Report on Form 10-K for the year ended
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-
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
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Three Months Ended |
Twelve Months Ended |
|||||||
2020 |
2019 |
2020 |
2019 |
|||||
Net sales |
|
100% |
|
100% |
|
100% |
|
100% |
Cost of goods and services sold |
369.1 |
64 |
317.4 |
67 |
1,379.1 |
64 |
1,234.2 |
67 |
Gross profit |
211.1 |
36 |
153.2 |
33 |
767.8 |
36 |
605.7 |
33 |
Research and development |
12.9 |
2 |
10.2 |
2 |
46.9 |
2 |
38.9 |
2 |
Selling, general and administrative expenses |
76.3 |
13 |
69.0 |
14 |
302.0 |
14 |
272.7 |
15 |
Other expense (income), net |
5.8 |
1 |
(4.1) |
- |
12.0 |
1 |
(2.5) |
- |
Operating profit |
116.1 |
20 |
78.1 |
17 |
406.9 |
19 |
296.6 |
16 |
Interest expense, net |
1.9 |
- |
0.8 |
- |
6.8 |
- |
4.7 |
- |
Other nonoperating (income) expense |
(0.9) |
- |
(0.1) |
- |
(1.2) |
- |
0.1 |
- |
Income before income taxes |
115.1 |
20 |
77.4 |
17 |
401.3 |
19 |
291.8 |
16 |
Income tax expense |
20.4 |
4 |
16.5 |
3 |
72.5 |
4 |
59.0 |
3 |
Equity in net income of affiliated companies |
(3.7) |
(1) |
(3.0) |
- |
(17.4) |
(1) |
(8.9) |
- |
Net income |
|
17% |
|
14% |
|
16% |
|
13% |
Net income per share: |
||||||||
Basic |
|
|
|
|
||||
Diluted |
|
|
|
|
||||
Average common shares outstanding |
74.0 |
74.1 |
73.9 |
74.0 |
||||
Average shares assuming dilution |
76.1 |
75.7 |
75.8 |
75.4 |
|
||||
Three Months Ended |
Twelve Months Ended |
|||
|
|
|||
|
2020 |
2019 |
2020 |
2019 |
Proprietary Products |
|
|
|
|
Contract-Manufactured Products |
126.1 |
117.9 |
498.6 |
441.5 |
Eliminations |
- |
- |
(0.3) |
(0.2) |
Consolidated Total |
|
|
|
|
Gross Profit: |
||||
Proprietary Products |
|
|
|
|
Contract-Manufactured Products |
21.7 |
19.3 |
85.6 |
65.5 |
Unallocated items |
- |
(0.2) |
- |
(0.2) |
Gross Profit |
211.1 |
|
|
|
Gross Profit Margin |
36.4% |
32.5% |
35.8% |
32.9% |
Operating Profit (Loss): |
||||
Proprietary Products |
|
|
|
|
Contract-Manufactured Products |
16.5 |
15.6 |
68.6 |
49.1 |
Stock-based compensation expense |
(6.4) |
(5.6) |
(34.0) |
(24.4) |
General corporate costs |
(12.6) |
(11.8) |
(52.1) |
(41.9) |
Adjusted Operating Profit |
|
|
|
|
Adjusted Operating Profit Margin |
20.5% |
15.5% |
19.4% |
16.1% |
Unallocated items |
(3.0) |
5.0 |
(10.1) |
0.2 |
Reported Operating Profit |
|
|
|
|
Reported Operating Profit Margin |
20.0% |
16.6% |
19.0% |
16.1% |
|
||||
Reconciliation of Reported and Adjusted Operating Profit, Net Income and Diluted EPS |
||||
Three months ended |
Operating |
Income |
Net |
Diluted |
Reported ( |
|
|
|
|
Pension settlement (1) |
- |
0.1 |
0.3 |
0.01 |
Cost Investment Impairment (2) |
2.5 |
- |
2.5 |
0.03 |
Restructuring and severance related charges (3) |
0.3 |
0.1 |
0.2 |
- |
Amortization of Acquisition-related Intangible Assets (4) |
0.2 |
- |
0.7 |
0.01 |
Adjusted (Non- |
|
|
|
|
Twelve months ended |
Operating |
Income tax expense |
Net |
Diluted |
Reported ( |
|
|
|
|
Pension settlement (1) |
- |
0.9 |
2.9 |
0.04 |
Cost Investment Impairment (2) |
2.5 |
- |
2.5 |
0.03 |
Restructuring and severance related charges (3) |
7.0 |
1.7 |
5.3 |
0.07 |
Amortization of Acquisition-related Intangible Assets (4) |
0.6 |
0.1 |
3.6 |
0.05 |
Adjusted (Non- |
|
|
|
|
Three months ended |
Operating |
Income |
Net |
Diluted |
Reported ( |
|
|
|
|
Restructuring and related charges (3) |
1.1 |
0.3 |
0.8 |
0.02 |
Gain on restructuring-related sale of assets (5) |
(1.7) |
(0.4) |
(1.3) |
(0.02) |
Pension settlement (1) |
- |
0.2 |
0.6 |
0.01 |
|
- |
(0.3) |
0.3 |
- |
Tax recovery (7) |
(4.4) |
(1.5) |
(2.9) |
(0.04) |
Tax law changes (8) |
- |
(0.7) |
0.7 |
0.01 |
Adjusted (Non- |
|
|
|
|
Twelve months ended |
Operating |
Income tax |
Net |
Diluted |
Reported ( |
|
|
|
|
Restructuring and related charges (3) |
4.9 |
1.2 |
3.7 |
0.04 |
Gain on restructuring-related sale of assets (5) |
(1.7) |
(0.4) |
(1.3) |
(0.02) |
Pension settlement (1) |
- |
0.8 |
2.7 |
0.04 |
|
1.0 |
- |
1.0 |
0.01 |
Tax recovery (7) |
(4.4) |
(1.5) |
(2.9) |
(0.04) |
Tax law changes (8) |
- |
0.3 |
(0.3) |
- |
Adjusted (Non- |
|
|
|
|
(1) |
During the three and twelve months ended |
(2) |
During the three and twelve months ended |
(3) |
During the three and twelve months ended |
(4) |
During the three and twelve months ended |
(5) |
During the three and twelve months ended |
(6) |
During the twelve months ended |
(7) |
During the three and twelve months ended |
(8) |
During the three and twelve months ended |
|
|||||||
Reconciliation of |
|||||||
Three months ended |
Proprietary |
CM |
Eliminations |
Total |
|||
Reported net sales ( |
|
|
$ - |
|
|||
Effect of changes in currency translation rates |
(12.9) |
(3.4) |
- |
(16.3) |
|||
Organic net sales (Non- |
|
|
$ - |
|
|||
Twelve months ended |
Proprietary |
CM |
Eliminations |
Total |
|||
Reported net sales ( |
|
|
|
|
|||
Effect of acquisitions and/or divestitures |
(1.2) |
- |
- |
(1.2) |
|||
Effect of changes in currency translation rates |
(2.2) |
(3.5) |
- |
(5.7) |
|||
Organic net sales (Non- |
|
|
|
|
(9) |
Organic net sales exclude the impact from acquisitions and/or divestitures and translate the current-period |
|
||
Twelve Months Ended |
||
2020 |
2019 |
|
Depreciation and amortization |
|
|
Operating cash flow |
|
|
Capital expenditures |
|
|
|
||
As of |
As of |
|
Cash and cash equivalents |
|
|
Accounts receivable, net |
|
|
Inventories |
|
|
Accounts payable |
|
|
Debt |
|
|
Equity |
|
|
Working capital |
|
|
Trademark Notices
Trademarks and registered trademarks are the property of
Daikyo Crystal Zenith® and Daikyo CZ® are registered trademarks of
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SOURCE
Investor Contact: Quintin Lai, Vice President, Investor Relations, Vice President, Global Communications, (610) 594-3318, Quintin.Lai@westpharma.com; Media Contact: Michele Pelkowski, (610) 594-3054, Michele.Pelkowski@westpharma.com