West Pharmaceutical Services, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the fourth quarter 2020 West Pharmaceutical Services Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you'll need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, press star 0. I would now like to hand the conference over to your speaker today, Mr. Quentin Lai, Vice President of Investor Relations. Please go ahead, sir.

Thank you, Catherine. Good morning and welcome to West's fourth quarter and full year 2020 conference call. We issued our financial results this morning and the release has been posted in the investor section on the company's website located at westpharma.com. This morning, CEO Eric Green and CFO Bernard Burkett will review our financial results, provide an update on our business, and present our financial outlook for the full year of 2021. There's a slide presentation that accompanies today's call, and a copy of that presentation is available on the investor section of our website. On slide four is our safe harbor statement. Statements made by management on this call and in the accompanying presentation contain forward-looking statements within the meaning of U.S. federal securities law. These statements are based on our beliefs and assumptions, current expectations, estimates, and forecasts. The company's future results are influenced by many factors beyond the control of the company. Actual results could differ materially from past results, as well as those expressed or implied in any forward-looking statement made here. please refer to today's press release as well as any other disclosures made by the company regarding the risk to which it is subject, including our 10-K, 10-Q, and 8-K reports. During today's call, management will make reference to non-GAAP financial measures, including organic sales growth, adjusted operating profit, adjusted operating profit margin, and adjusted diluted EPS. Reconciliations and limitations of the non-GAAP financial measures to the most comparable financial results prepared in conformity to GAAP are provided in this morning's earnings release. I now turn the call over to West's CEO and President, Eric Green. Thank you, Quentin, and good morning, everyone.

Thank you for joining us today. West had an extraordinary year of success in the face of the biggest healthcare challenge of our generations. our record-setting year of sales and margins were driven by base business demand of our components devices and solutions as well as the accelerating demand for components associated with covet 19 vaccines and therapeutics this was accomplished by our dedicated team members across the globe working tirelessly to show up each day at our facilities our labs, and remotely at their homes to make a meaningful difference to customers and patients. I want to begin by acknowledging his incredible efforts and say thank you. Starting on slide five of the presentation, the past year has truly brought to life the importance of our mission and values that guides our work each day at West. We remain steadfast in our purpose to serve society and lead by example for the communities in which we live and work. Importantly, we continue to manage through these unprecedented times by focusing on two key priorities. One, keeping our team members safe, and two, ensuring uninterrupted supply of high-quality containment and delivery devices required by our customers and the patients we jointly serve. The criticality of our business today is shown in the character and the perseverance of our team members to deliver on our commitments as a trusted partner for our customers. The strength of our performance this past quarter and throughout 2020 demonstrates the forward momentum that we have built over time with our market-led strategy, globalization of our manufacturing network, and one West team approach to satisfy market demand. Moving to slide six. These charts show a breakdown of the 2020 sales and the impact of our high-value products that we bring to numerous customers around the world. As the base business continues to grow and as we saw a growing demand for components associated with COVID-19, we leveraged our global infrastructure and Teams agility to meet the increased demand. Now turning to slide seven. Proudly, West's components are on a majority of the vaccines on the market and in development to combat COVID-19. The process for selecting the best high-quality packaging components for use with injectable medicines, including vaccines, is a complex one driven by years of science, which West has pioneered. It became clear to us in early 2020 that that we would need to accelerate production capacity for certain high-value products. As I previously shared, many of our customers are selecting fluoropolymer-coated stoppers from vial configurations made by both West and our partner, Dykeo. These are the industry standard for packaging sensitive molecules and have an outstanding track record of quality and reliability. Some of our customers have selected NovaPeer, as they have made the decision to use this best in industry component to ensure the highest degree of quality and safety. In addition, we're involved in many therapeutic approvals, and our contract manufacturing business is supporting the COVID-19 diagnostic requirements of our customers. In Q4, we accelerated our capacity expansion and began the installation of additional equipment with a modular approach to expand Floritech and NovaPure capacity. This included the installation of several 45-ton hydraulic presses and additional HVP manufacturing processes to produce components for COVID-19 vaccines at several sites. I'm proud to say that the first presses were installed and validated at the end of 2020, and we're now producing product. And we're not done yet. We have more presses that will be installed in the first half of this year. It should be noted that these investments were already included in the five-year plan. We just brought them forward to support the pandemic efforts. Moving to slide eight. While COVID-19 was much of the focus in 2020, there are a few other notable highlights I would like to share. Wes was named to the S&P 500 and recently joined the S&P 500 Dividend Aristocrats. We continue to make significant progress with our environmental, social, and governance priorities and have received many accolades in 2020 for these efforts. we launched several innovative products, such as our 20-millimeter vial-to-bag advanced product, Acceltra component line extensions, and a flip-off seal container closure system compatible with Dicul Crystals unit vials. our team of scientific and technical experts continue to educate and share insights in biologics, combination products, and container closure integrity, which are priority areas in pharmaceutical packaging and necessity during this pandemic to ensure patient safety. At the end of the year, West Digital Technology Center successfully implemented a new ERP system, SAP S4 HANA, which during this pandemic is quite an accomplishment. As we continue to improve our internal systems, S4HANA brings enhanced analytics to improve responsiveness, operating efficiencies, and greater service levels for customers. Turning to slide nine, the opportunity ahead of us centers around three core pillars, execute, innovate, and grow. The first pillar, execute, is about continuing to build from the strength and success of the market-led strategy, further globalization of our operating model, and lastly, a shift from analog to a digital environment across West. We continue to drive the market-led strategy for further defining unique value propositions to address specific customer needs in biologics, generics, and pharma. These are very attractive, robust markets for the future of injectable medicines. For the benefit of our customers, we have been able to leverage our global manufacturing network by enabling the right capabilities, scale, and flexibility to keep up with the increased demand. With the ability to leverage existing assets more effectively across our global network, we can respond to the demand of our base business and, importantly, the demand for COVID-19 while maintaining our global leadership position. we will continue to deliver digital tools such as the Dallas Center and the West Virtual, along with enhancements to improve plant productivity with automation and advanced manufacturing systems. The second pillar is innovate, with a focus on R&D efforts from concept to commercialization. Our newly aligned R&D team is focused on several areas. The first area is new products and platforms to connect the dots across science and technology for potential value creation. The second area is technology scouting and new go-to-market enablement, which explores adjacent technologies and disruptors to realize new opportunities. And the third area is product lifecycle management with the execution of development agreements and product extensions. We are confident that these R&D efforts will have us well-positioned to deliver unique innovations and future improvements to existing portfolios for our customers. The third pillar is growth, capital deployment, and free cash flow. As mentioned earlier, we have increased capital expenditures on specific equipment focused on Floritech and NovaPeer to enable us to respond to the core business growth and vaccine requirements. And as vaccines are being approved, making sure we can respond and meet the customer demands. And we continue to look for external technology opportunities to complement our business. We are working from a position of strength as we believe we have a long horizon of continued organic sales growth and margin expansion. Our focus within these three pillars, execute, innovate, and grow, allows us to be more responsive, leverage our assets more effectively, and support the trends that are happening in the industry today. Turning to slide 10 and our performance in the fourth quarter and full year. Our financial results are strong. We had approximately 20% organic sales growth in the fourth quarter and 16% for the full year, driven again by robust biologics growth, high-value product sales, and contract manufacturing. And our base business delivered significant growth with solid growth and operating profit margin expansion. This resulted in a strong adjusted EPS and pre-cash flow for the fourth quarter. And with that, I'll turn it over to our CFO, Bernard Burkett, who will provide more detail on our financial performance and guidance. Hey, Bernard.