West Pharmaceutical Services, Inc.

Good day and thank you for standing by. Welcome to the West Pharmaceutical Services second quarter 2021 earnings conference call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to Quentin Lai, Vice President of Investor Relations. Thank you. Please go ahead.

Thank you, Erica. Good morning, and welcome to West's second quarter 2021 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 an update on our full year 2021 financial guidance. 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. Starting on slide five, I am pleased to report that we delivered another solid quarter of growth. This was driven by strong organic sales in both our base business and the accelerating demand for products associated with COVID-19. Our high-value products, coupled with productivity gains, continue to fuel expanding growth and operating margins. Together, this has resulted in significant EPS growth for the second quarter. The strong performance demonstrates the criticality of our business as the market leader in primary packaging of injectable drugs. and is a testament to the foundation we have built over time with our market-led strategy, globalization of our manufacturing network, and our One West team approach, which is bringing meaningful benefits to our customers to support patient health. We continue to manage through the challenges of the pandemic with focus on our key priorities of team member safety and ensuring uninterrupted supply of high-quality containment and delivery devices. I am proud of our team across the globe for the dedication to customers, patients, and most importantly, to each other as we have met the demands of our business. Another highlight this quarter is the release of our 2020 Corporate Responsibility Report. The core values of WEST are well aligned with our environmental, social, and governance goals with a great year of achievement and accolades. And in the future, we expect even more progress as we continue to raise our ESG expectations. I encourage you to get the report, which is on our corporate website. And as for guidance, we're well positioned with the right strategy, strong core business, and the incremental pandemic opportunities. With this momentum and a strong execution by the team, we're raising our sales and EPS guidance for the full year 2021. Bernard will go into greater detail shortly. Turning to slide six. We continue to deliver the key drivers of growth in Q2 with strong customer demand of HVP components, including Westar, Floratech, Envision, and NovaPeer offerings, as well as Dykeo's Crystal Zenith. It is clear that our unique value propositions and technical expertise resonate with our customers. As quality requirements continue to rise, we have seen growing demand each year for our HVP products. Our industry-leading portfolio of film-coated components, Dicol, Floratec, and Novapyr, are sought by our biologic and pharma customers as an effective barrier against organic and inorganic extractibles and minimizing the interaction between the drug and closure while maintaining container closure integrity. Through the first half of 2021, our participation rate in recently approved new molecular entities in the U.S. and Europe remains strong. Our components by West or our partner, Dicul, are spec'd on almost all of the biologics and biosimilars approved so far in 2021, and a large majority of small molecules approved. And for the most part, these new drugs are using our highest level of HPPs, including Novapyr, Floratec, and Westar. This has translated into robust double-digit growth for our biologics and pharma segments, both including and excluding COVID-19-related sales. Altogether, we continue to see sustainable, consistent growth and momentum in revenue growth and margin expansion. And we have increased visibility into customer demand as our book of committed orders continue to significantly expand and grow, not only for the second half of this year, but also for sales into 2022 and beyond. Moving to slide seven. And speaking of visibility into future demand, we continue to increase the capacity of our global manufacturing network to support our growth trajectory to keep pace with the demand increase. At the outset of the pandemic crisis, we responded by accelerating our plans to expand HVP capacity, especially for Floritech and NovaPeer components. This is above our typical annual capex spend of approximately 7% of sales. That first tranche of capacity expansion began in May of last year. Our teams did a fantastic job of procuring, installing, and validating the equipment, and all of it is now producing commercial product at our sites in the U.S., Ireland, Germany, and Singapore. In December, we begin another tranche of investment based on increased visibility of vaccine development success in our growing base business. We expect this portion to be completed and in production during the second half of this year. Of note, these capacity expansions are within existing HVP sites, and coupled with higher margins of HVP components, provides shorter paybacks and higher returns on invested capital than greenfield investments. This was made possible through the multi-year strategic transformation that our operations is currently executing, moving from a site or regional model to a global operating supply chain network. As we discussed in the last earnings call, We have been contemplating an additional tranche as we are working with our customers to evaluate the need for even more volume production to stay ahead of both base and pandemic demand. Today, we are announcing that we have begun to execute that part, which is approximately $80 million to support future demand of NovaPeer and seals as well as other HVP finishing capabilities. We expect to start in the second half of this year and be online towards the back half of 2022. Now I'll turn it over to our CFO, Bernard Burkett, who will provide more detail on our financial performance. Bernard?