Q1 2025 West Pharmaceutical Services Inc Earnings Call

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Okay.

Operator: Good day and thank you for standing by.

Good day, and thank you for standing by.

Operator: Welcome to the West Pharmaceutical Services First Quarter 2025 Earnings Conference. 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 will need to press star 11 on your telephone. You will then hear an automated message advising your hand is free. To withdraw your question, please press star 1 1 again.

Welcome to the West pharmaceutical services first quarter 2025 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 will need to press star one on your telephone.

Speaker Change: You will then hear an automated message advising your hand is race.

Speaker Change: To withdraw your question. Please press star one again.

Operator: Please be advised that today's conference is being recorded.

Speaker Change: Please be advised that today's conference is being recorded.

John Sweeney: I would now like to hand the conference over to your speaker today, John Sweeney, Vice President of Investor Relations. Please go ahead.

Speaker Change: I would now like to hand, the conference over to your speaker today, John Sweeney.

Speaker Change: President.

Speaker Change: Please go ahead.

Speaker Change: Okay.

Eric Green: Good morning and welcome to West's first quarter 2025 earnings conference call. We issued our financial results early this morning and the release has been posted in the investors section of the company's website located at westpharma.com. On the call today, we will review our financial results, provide an update for our business, and present our financial outlook for FY25. There's a slide presentation that accompanies today's call and a copy of the presentation is available on the investor page of West's website.

Speaker Change: Good morning, and welcome to West first quarter 2025 earnings Conference call.

Speaker Change: We issued our financial results earlier this morning, I'm going to leave it has been posted in the investors section of the company's website located at west Palm or Dot com.

Speaker Change: On the call today, we will review our financial results provide an update for our business and present, our financial outlook for FY 'twenty five.

Speaker Change: A slide presentation that accompanies today's call and a copy of the presentation is available on the Investor page of West's website.

Eric Green: On slide four, there's a safe harbor statement and statements made by management on the call and in the accompanying presentation contain forward-looking statements with the meaning of the 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 statements made here.

Speaker Change: On slide four there's a safe Harbor statement statements made by management on the call and the accompanying presentation contain forward looking statements within the meaning of the 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.

Speaker Change: Actual results could differ materially from past results as well as those expressed or implied in any forward looking statements made here.

Eric Green: Please refer to today's press release as well as any other disclosures made by the company regarding the risks to which it is subject, including their 10-K, 10-Q, and 8-K reports.

Speaker Change: Please refer to today's press release as well as any other disclosures made by the company regarding the risks to which it is subject, including our 10-K 10-Q and 8-K reports.

Bernard Birkett: 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. Limitations and reconciliations 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.

Speaker Change: 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 limitations and reconciliations of the non-GAAP financial measures to the most comparable financial results prepared in conformity to GAAP are provided in this more.

Eric Green: I'll now turn the call over to our CEO, Eric Green. Eric. Thank you, John, and good morning, everyone. Thanks for joining us today. I'll begin today's remarks with our performance in the first quarter. Then I'll provide some context on the trends we are seeing and share how the company is positioned for long-term growth.

Speaker Change: Earnings release, I'll now turn the call over to our CEO, Eric Eric. Thank you John and good morning, everyone. Thanks for joining us today I'll begin today's remarks with our performance in the first quarter.

Speaker Change: Then I'll provide some context on the trends, we have seen and share how the company is positioned for long term growth.

Bernard Birkett: followed by Berners detailed financial review.

Speaker Change: Buy burner detailed financial review.

Eric Green: I will then wrap up with some closing thoughts. Starting on slide five, I'm pleased to report that we delivered a solid start to the year as both revenues and adjusted EPS exceeded our expectations. This was largely driven by solid contributions from GLP-1s and a reduced impact from industry-wide destructions. Our results reflect the West team's operating execution in the areas where we maintain competitive advantages and strong customer relationships.

Speaker Change: I will then wrap up with some closing thoughts.

Speaker Change: Starting on slide five I'm pleased to report that we delivered a solid start to the year.

Speaker Change: As both revenues and adjusted EPS exceeded our expectations.

Speaker Change: It was largely driven by solid contributions from <unk> and a reduced impact from industry wide feedstock him.

Speaker Change: Our results reflect the west teams operating.

Speaker Change: Execution in the areas, where we maintain competitive advantages and strong customer relationships.

Eric Green: Moving to slide six. Our proprietary products business, which includes HVP components, standard products, and HVP delivery devices, was up 0.6% or up 2.4% on an organic basis. In the past five years, HVP components have grown at a CAGR of 13%. And overall, we expect HPP components revenues to grow mid-single digits in 2025, down from our previous expectations of mid- to high-single digits, a change driven by mix and timing. A key driver of HPP components growth is our ability to capitalize on the significant opportunities in the GLP-1 market. Our HVP GLP-1 Elasper business is performing well, growing to about 7% of total revenues in the first quarter.

Speaker Change: Moving to slide six.

Speaker Change: Our proprietary products business, which includes HCP components standard products and the <unk> delivery devices was up 0.6% or up two 4%.

Speaker Change: Ganic basis.

Speaker Change: Past five years H B P components have grown at a CAGR of 13%.

Speaker Change: And overall, we expect HCP components revenues to grow mid single digits in 2025 down from our previous expectations of mid to high single digits, a change driven by mix and timing.

Speaker Change: A key driver of HCP components growth is our ability to capitalize on the significant opportunities in the <unk> one market.

Speaker Change: <unk> one of the last part business is performing well growing to about 7% of total revenues in the first quarter.

Eric Green: Furthermore, we continue to make progress with our Biologics customers, solidifying our position as the global leader in this space.

Furthermore, we continue to make progress with our biologics customers and solidifying our position as the global leader in this space.

Eric Green: There are two parts to our biologics business that I would like to address individually. First, delivery devices is a small portion of the portfolio within biologics and is a current source of growth as we installed a new production line in Q3 of 2024. However, the growth will reverse in the second half of 2025 when we comp against the significant incentive payments we received in Q3 and Q4 of last year. The largest portion of the portfolio within Biologics is HVP components, and this has a positive trend. These are pacing negative in the first and second quarters of 2025, a function of tail-end destocking.

Speaker Change: There are two parts to our biologics business that I would like to address individually.

Speaker Change: <unk> delivery devices is a small portion of the portfolio within biologics.

Speaker Change: Does the current source of growth as we installed a new production line in Q3 of 2024. However, the growth will reverse in the second half of 2025, when we comp against the significant incentive payments. We received in Q3 and Q4 of last year.

Speaker Change: The largest portion of the portfolio within biologics is HPE components in it.

Speaker Change: As a positive trend.

Speaker Change: These are pacing negative in the first and second quarters of 2025, a function of tail end Destocking, we anticipate that this trend will reverse and expect the highest single digit growth rate.

Eric Green: We anticipate that this trend will reverse and expect a high single-digit growth rate in the second half of 2025 for Biologics HVP components. On an aggregate basis, we expect Biologics growth of low single digits in 2025. We are encouraged with the progress we're making with Annex I. In Q1, Annex I revenues were about 200 basis points of total revenue. This was stronger than our expectation of 100 to 150 basis points for the full year, driven by a favorable Q1 timing. To date, we have approximately 340 Annex 1 projects in various stages with our customers. Up from the 280 we mentioned in the last earnings call, importantly, Annex 1 increases the value proposition of our HPP portfolio with a positive mix.

Speaker Change: <unk> half of 2025 for biologics HCP components.

Speaker Change: On an aggregate basis, we expect biologics growth of low single digits. In 2025, we are encouraged with the progress we're making with Alex one in Q1 <unk> revenues were about 200 basis points of total revenues.

Speaker Change: This was stronger than our expectation of 100 to 150 basis points for the full year driven by favorable Q1 timing to date, we have approximately 340 <unk> won projects in various stages with our customers up from the 280, we mentioned the last earnings call.

Speaker Change: Portland, Phoenix, one decreases the value proposition of our HCP portfolio with a positive mix shift.

Eric Green: Moving on to a discussion of our HVP delivery devices business on slide seven. The growth in this area was driven by a continued volume ramp in Smart Dose in the first quarter of 2025.

Speaker Change: Moving on to a discussion of our HCP delivery devices business on slide seven.

Speaker Change: The growth in this area was driven by our continued volume ramp and smart dose in the first quarter of 2025.

Eric Green: We have a two-fold strategy for this area of our business. First, we're working hard to drive significant margin improvement as we move forward. This incorporates driving scale for the business. Introducing an automated line later in 2025 to early 2026, and we're working to improve the economics around this business in the near term.

Speaker Change: We have a two fold strategy for this area of our business first.

Speaker Change: Working hard to drive significant margin improvement as we move forward.

Incorporates driving scale for the business.

Speaker Change: Introduced in the automated line later in 2025 to early 2026, and we're working to improve the economics around this business in the near term.

Eric Green: Second, we continue to evaluate the best path forward for this business and all options remain on the table.

Speaker Change: We continue to evaluate the best path forward for this business and all options remain on the table.

Eric Green: Finally, standard products were relatively flat year over year. Overall, we are seeing improvements in the proprietary products business driven by strength and GLP-1s in line with our expectations in 2025.

Speaker Change: Finally standard products were relatively flat year over year.

Speaker Change: Overall, we are seeing improvements in the proprietary products business driven by strength in <unk> in line with our expectations in 2025.

Eric Green: In our contract manufacturing segment on slide 8, revenue growth in our GLP-1 auto injector business is offsetting the CGM contract exits. We continue to work towards filling the space and onboarding new contracts as we continue to execute on this business. We believe that for the full year our investments in GLP-1 facilities will continue to deliver low single-digit growth for this segment. Our goal is to continue growing our contract manufacturing business and move it into drug handling, which we believe will be higher margin and comes with lower capital intensity.

Speaker Change: In our contract manufacturing segments on slide eight revenue growth in our <unk> auto injector business is offsetting the CGM contract exits we continue to work towards filling that space and Onboarding new contracts as we continue to execute on this business we believe.

Speaker Change: For the full year, our investments in <unk> facilities, we will continue to deliver low single digit growth for this segment.

Speaker Change: Our goal is to continue growing our contract manufacturing business and move it onto drug handling, which we believe will be higher margin and it comes with lower capital intensity.

Eric Green: In the near term, we are executing on our capital allocation strategy, which involves investing in the overall business to drive future performance, returning capital to shareholders through our stock repurchase program, and dividends.

Speaker Change: In the near term, we are executing on our capital allocation strategy, which involves investing in the overall business to drive future performance returning capital to shareholders through our stock repurchase program and dividends.

Eric Green: Before I turn the call over to Bernard, I'm sure you have seen the press release this morning regarding the executive leadership changes. I know that Bernard's decision was not made lightly, and we appreciate the notes he has given the company in order for us to seek a successor and ensure a smooth transition of his role. Bernard has been an invaluable partner and advisor to me and the entire organization. His contributions and leadership over the past seven years have been instrumental to our success. He will be missed. We have initiated a search process to identify Bernard's successor, and he has committed to be part of the selection process where his insights will be beneficial.

Speaker Change: Before I turn the call over to Bernard I Am sure you have seen the press release. This morning regarding the executive leadership changes I know that burdens decision was that made lightly and we appreciate the notes has given the company in order for US the secret successor, and ensure a smooth transition of his role.

Speaker Change: Brian has been an invaluable partner and advisor to me and the entire organization his contributions and leadership over the past seven years have been instrumental to our success he will be missed.

Speaker Change: We have initiated a search process to identify a burner successor, and he has committed to be part of the selection process.

Speaker Change: His insights will be beneficial.

Eric Green: Additionally, I am pleased to highlight an outstanding new addition to our executive leadership team. Shane Campbell is joining us as the Senior Vice President of Chief Proprietary Segment Officer. He comes to us from Carlisle Company, where he served as the Chief Commercial Officer of the construction materials business. As an accomplished leader, including a 20-year career at DuPont, Shane brings extensive global management experience in areas of elastomers, polymers, building materials, chemicals, and packaging. We look forward to working with him and the vast experience he'll bring to West.

Speaker Change: Additionally, I am pleased to highlight an outstanding New addition to our executive leadership team Shane Campbell is joining us as the senior Vice President and Chief proprietary segment Officer. He comes to US from Carlisle Company, where he served as a chief commercial officer of our construction materials business.

Jane: He is an accomplished leader, including a 20 year career at Dupont Jane brings extensive global management experience in areas of elastomers polymers building materials chemicals and packaging.

Jane: We look forward to working with him and the vast experience will bring to us.

Bernard Birkett: I'll now hand the call over to Bernard. Bernard? Thank you, Eric, and good morning. I appreciate your kind words. As you know, I really enjoyed our partnership, working with the West team, and I am proud of what we have been able to achieve.

Jane: I'll now hand, the call over to Bernard Bernard Thank you, Eric and good morning.

Bernard: I appreciate your kind words as you know I really enjoyed our partnership.

Bernard: Working with the West team and I am proud of what we have been able to achieve.

Bernard Birkett: Now let's review the numbers in more detail. We'll first look at Q1 2025 revenues and profits, where we saw a low single digit increase in organic sales, an increase in adjusted operating profits and a reduction in diluted EPS compared to the first quarter of 2024. I will take you through the drivers impacting sales and margin in the quarter, as well as some balance sheet takeaways.

Bernard: Now, let's review the numbers in more detail.

Bernard: We will first look at Q1, 2025 revenues and profits, where we saw a low single digit increase in organic sales.

Bernard: An increase in adjusted operating profit and a reduction in diluted.

Bernard: EPS compared to the first quarter of 2024.

Bernard: I will take you through the drivers impacting sales and margin in the quarter as well as some balance sheet takeaways.

Bernard Birkett: And finally, we will provide an update to our guidance. First up, Q1. Our financial results are summarized on slide 9, and the reconciliation of non-U.S. GAAP measures are described on slide 17-19. We recorded net sales of $698 million, representing an organic sales increase of 2.1%. Looking at slide 10, proprietary products organic net sales increased 2.4% in the quarter. primarily driven by positive sales price, slightly offset by High-value products, which made up 73% of proprietary product sales in the quarter, increased by low single digits. led by Customer Demand for Self-Injection Device Platform. The Biologics Market Unit delivered mid-single-digit organic net sales growth, driven by an increase in sales of self-injection device platforms, partially offset by lower sales of Floratec products.

Bernard: And finally, we will provide an update to our guidance.

Bernard: First up Q1.

Bernard: Our financial results are summarized on slide nine and the reconciliation of non U S. GAAP measures are described on slide 17 to 19.

Bernard: We recorded net sales of $698 million.

Bernard: Representing an organic sales increase of two 1%.

Bernard: Looking at slide 10 proprietary.

Bernard: Products organic net sales increased two 4% in the quarter.

Bernard: Primarily driven by positive sales price slightly offset by mix.

Bernard: High value products, which made up 73% of proprietary product sales in the quarter increased by low single digits.

Bernard: Led by customer demand for self injection device platforms.

Bernard: Our biologics market unit delivered mid single digits organic net sales growth driven.

Bernard: Driven by an increase in sales of self injection device platforms, partially offset by lower sales of Thoratec products.

Bernard Birkett: The pharma market unit saw mid-single-digit growth primarily due to an increase in sales of Standard Products and Westar products, while the generics market unit declined mid-single-digits, driven by a decline in sales of Standard and Floratech products. Our contract manufacturing segment experienced low single-digit net sales growth in the first quarter. primarily driven by an increase in sales in self-injection devices for obesity and diabetes. We recorded $231.9 million in gross profit, which was $1.7 million, or 0.7% higher than Q1 of last year. and our gross profit margin of 33.2% with a 10 basis point year-over-year increase. or adjusted operating profit margin of 17.9% with an increase of 20 basis points from the same period last year.

Bernard: The pharma market unit saw mid single digit growth, primarily due to an increase in sales of standard products and westar products.

Bernard: While the generics market unit declined mid single digits, driven by a decline in sales of standard and Florida Tech products.

Bernard: Our contract manufacturing segment experienced low single digit net sales growth in the first quarter.

Bernard: Primarily driven by an increase in sales and self injection devices for obesity and diabetes.

Bernard: We recorded $231 9 million and gross profits.

Bernard: Which was $1 7 million or <unk>, 7% higher than Q1 of last year.

Bernard: And our gross profit margin of 33, 2% with a 10 basis point year over year increase.

Bernard: Our adjusted operating profit margin of 17, 9% with an increase of 20 basis points from the same period last year.

Bernard Birkett: Finally, adjusted diluted EPS declined 7.1% for Q1. Excluding stock-based compensation tax benefits, EPS improved by 1.4% compared to the same period last year.

Bernard: Finally, adjusted diluted EPS declined seven 1% for Q1.

Bernard: Excluding stock based compensation tax benefits EPS improved by one 4% compared to the same period last year.

Bernard Birkett: Now let's review the drivers in both the revenue and profit performance. On slide 11, we show the contributions to organic sales increase in the quarter. Sales price increases contributed $23.3 million, 3.4 percentage points of growth in the quarter. offsetting price with a negative volume and mixed impact of $9 million as we saw higher sales of self-injection offset by a decline in Floratech and a foreign currency headwind of approximately $11.7 million. Looking at margin performance. Slide 12 shows our consolidated gross profit margin of 33.2% for Q1 2025, up from 33.1% in Q1 2024. Proprietary products first quarter gross profit margin of 37.3%, with 30 basis points higher than the margin achieved in the first quarter of 2024.

Bernard: Now, let's review the drivers in both our revenue and profit performance.

Bernard: On slide 11, we show the contributions to organic sales increase in the quarter.

Bernard: Sales price increases contributed $23 3 million or three four percentage points of growth in the quarter.

Bernard: Offsetting price was a negative volume and mix impact of $9 million as we saw higher sales of self injection offset by a decline in Florida.

Bernard: And a foreign currency headwind of approximately $11 7 million.

Bernard: Looking at margin performance.

Bernard: Slide 12 shows our consolidated gross profit margin of 33, 2% for Q1 2025.

Bernard: From 33, 1% in Q1 2024.

Bernard: Proprietary products' first quarter gross profit margin of 37, 3%, but 30 basis points higher than the margin achieved in the first quarter of 2024.

Bernard Birkett: The key drivers for the increase in proprietary products' gross profit margin, in addition to sales price, were production efficiencies partially offset by a negative shift in sales mix from HVP components to HVP devices. Contract manufacturing first quarter gross profit margin of 16.1% was 90 basis points below the margin achieved in the first quarter of 2024. primarily due to increased spend and production inefficiencies.

Bernard: The key drivers for the increase in proprietary products gross profit margin. In addition to sales price our production efficiencies, partially offset by a negative shift in sales mix from HCP components to H VP devices.

Bernard: Contract manufacturing first quarter gross profit margin of 16, 1% was 90 basis points below the margin achieved in the first quarter of 2024.

Bernard: Primarily due to increased spend and production inefficiencies.

Bernard Birkett: Now let's look at our balance sheet and review how we've done in terms of generating cash for the business. On slide 13, we have listed some key cash flow metrics. Operating cash flow was $129.4 million for the three months ended March 2025. growth of 11.2 million compared to the same period last a 9.5% increase, primarily due to favorable working capital management. Our first quarter 2025 year-to-date capital spending was $71.3 million, $19.3 million lower than the same period last year. Working capital of approximately $931 million at March 31, 2025 decreased by $56.9 million from December 31, 2024, primarily due to a reduction in our cash balance.

Bernard: Now, let's look at our balance sheet and review, how we've done in terms of generating cash for the business.

Bernard: On slide 13, we have listed some key cash flow metrics.

Bernard: Operating cash flow was $129 4 million for the three months ended March 2025.

Bernard: Growth of $11 2 million compared to the same period last year.

Bernard: A nine 5% increase primarily due to favorable working capital management.

Bernard: Our first quarter 2025 year to date capital spending was $71 3 million.

Bernard: $19 3 million lower than the same period last year.

Bernard: Working capital of approximately $931 million at March 31, 2025 decreased by $56 9 million from December 31, 2024, primarily due to a reduction in our cash balance.

Bernard Birkett: Our cash balance of March 31, 2025 of $404.2 million was $80.4 million lower than our December 2024 balance. The decrease in cash is primarily due to $134 million of share repurchases and our capital expenditures offset by cash from operations.

Bernard: Our cash balance at March 31, 2025 or.

Bernard: $404 2 million was $80 4 million lower than our December 2020 for balance.

Bernard: The decrease in cash is primarily due to $134 million of share repurchases and our capital expenditures offset by cash from operations.

Bernard Birkett: Turning to guidance, slide 14 provides a high-level summary. We are increasing our full year 2025 revenue guidance for the impact of foreign currency exchange. We expect net sales in a range of $2.945 to $2.975 billion, compared to prior guidance of $2.875 to $2.905 billion. There is an estimated full year 2025 headwind of approximately $5 million based on current foreign exchange rates. We continue to expect organic sales growth to be approximately 2 to 3% unchanged from prior guidance. We're increasing our full year 2025 adjusted diluted EPS guidance to a range of $6.15 to $6.35, up from the previous range of $6 to $6.20.

Bernard: Turning to guidance Slide 14 provides a high level summary.

Bernard: We are increasing our full year 2025 revenue guidance for the impact of foreign currency exchange.

Bernard: We expect net sales in a range of $2 94, 5% to $2 97 5 billion.

Bernard: Compared to prior guidance of $2 87, 5% to $2 905.

Bernard: <unk>.

Bernard: There is an estimated full year 2025 headwind of approximately $5 million based on current foreign exchange rates.

Bernard: We continue to expect organic sales growth to be approximately 2% to 3% unchanged from prior guidance.

Bernard: We are increasing our full year 2025, adjusted diluted EPS guidance to a range of $6 15 to $6 35 up from the previous range of $6 to $6 20.

Bernard Birkett: Full year 2025 adjusted diluted EPS guidance assumes no impact based on current foreign exchange rates, compared to an FX headwind of $0.23 from prior guidance. The updated guidance also includes EPS. $0.02 associated with first quarter 2025 tax benefits from stock-based compensation. Our guidance excludes future tax benefits from stock-based compensation.

Bernard: Full year 2025, adjusted diluted EPS guidance assumes no impact based on current foreign exchange rates.

Bernard: Pair to an FX headwind of 23 from prior guidance.

Bernard: The updated guidance also includes EPS.

Bernard: <unk> associated with first quarter 2025 tax benefits from stock based compensation.

Bernard: Our guidance excludes future tax benefits from stock based compensation.

Bernard Birkett: Here is our assumption about tariffs in our EPS guidance. Based on the tariffs that have been set, we believe the net impact to our business will be $20 to $25 million for the remaining three quarters of 2025. However, there is a lot of uncertainty here and we appreciate that this number could be more or less depending on retaliatory tariffs and other factors. We continue to monitor the situation and we are utilizing every available mitigation lever to offset this impact. The tariff headwind is more than offset by the strength we saw in the first quarter. Foreign Currency Improvement and the First Quarter Stock Comp Benefit.

Bernard: Here is our assumption about tariffs in our EPS guidance.

Bernard: Based on the tariffs that have been SaaS, we believe the net impact to our business will be 20% to $25 million for the remaining three quarters of 2025.

Bernard: However, there is a lot of uncertainty here and we appreciate that this number could be more or less depending on retaliatory tariffs and other factors.

Bernard: We continue to monitor the situation and we are utilizing every available.

Bernard: <unk>.

Bernard: Lever to offset this impact.

Bernard: The tariff headwind is more than offset by the strength, we saw in the first quarter.

Bernard: Foreign currency improvement and the first quarter stock comp benefit.

Bernard Birkett: We are not currently incorporating any estimate for tariff-related pass-through revenues in our guidance at this point.

Bernard: We are not currently incorporating any estimate for tariff related pass through revenues in our guidance at this point.

Bernard Birkett: Moving on to our second quarter guidance, we anticipate revenue to be in the range of $720 to $730 million. which translates to approximately three to four percent of second quarter organic sales growth. second quarter adjusted diluted EPS is expected to be in a range $1.50 to $1.55.

Bernard: Moving onto our second quarter guidance, we anticipate revenue to be in the range of $720 to $730 million.

Bernard: Which translates to approximately 3% to 4% of second quarter organic sales growth.

Bernard: And second quarter adjusted diluted EPS is expected to be in the range of.

Bernard: $1 50 to $1 55.

Bernard Birkett: Lastly, our 2025 CapEx guidance is $275 million for the year, unchanged from prior guidance.

Bernard: Lastly, our 2025 capex guidance of $275 million for the year unchanged from prior guidance.

Eric Green: I would now like to turn the call back over to Eric. Thanks, Bernard. As you have heard today, 2025 is off to a solid start. We look forward to building on this momentum as we move throughout the year. Our team is steadfast in meeting the expectations to drive our growth. To that end, today, we have increased our adjusted diluted EPS guidance for 2025. You can expect us to continue to capitalize on our competitive strengths and make decisions that improve our overall margin. We're laser-focused on returns on invested capital, and we'll have more to share in the coming quarters.

Eric Eric: I would now like to turn the call back over to Eric.

Eric Eric: Thanks, Bernard as you have heard today 2025 is off to a solid start we look forward to building on this momentum as we move throughout the year. Our team is steadfast in meeting the expectations to drive our growth to that end today, we have increased our adjusted diluted EPS guidance for 2025.

Eric Eric: Can expect us to continue to capitalize on our competitive strengths and make decisions that improve our overall margin. We're laser focused on our returns on invested capital and we will have more to share in the coming quarters.

Eric Green: Over the past few months, we were fortunate to have the opportunity to speak with many shareholders and our analysts. There seems to be a general consensus among those who we spoke with on those challenges and opportunities here at West. And we're committed to delivering on those goals and objectives.

Eric Eric: Over the past few months, we were fortunate to have the opportunity to speak with many shareholders and our analysts seems to be a general consensus among those who spoke with on those challenges and opportunities here at west and we're committed to delivering on those goals and objectives.

Eric Green: Lastly, I would like to thank all the team members at West who contributed to our successful first quarter.

Eric Eric: Lastly, I would like to thank all the team members at West who contributed to our successful first quarter.

Operator: Operator, we're ready to take questions. Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. In the interest of time, we ask that you please limit yourself to one question and one follow-up. Please stand by while we compile the Q&A raw.

Eric Eric: Operator, we're ready to take questions. Thank you.

Speaker Change: As a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.

Eric Eric: In the interest of time, we ask that you. Please limit yourself to one question and one follow up please.

Eric Eric: Please standby, while we compile the Q&A roster.

Eric Eric: Yeah.

Paul Knight: And our first question comes from Paul Knight with KeyBank. Your line is open. Thank you. Great quarter, Bernard. Thanks for everything.

Paul Knight: And our first question comes from Paul Knight with Keybanc. Your line is open.

Paul Knight: Thank you.

Speaker Change: Great corner Bernard Thanks for everything we will Miss you a lot.

Paul Knight: We'll miss you a lot.

Eric Green: The two questions are, what percent utilization are you assuming in the new site in Dublin, Eric, in your guidance? And then the follow up is for Bernard and that is your margin seems to have been a little bit better on the adjusted op margin in one queue. Are things, is it business mix or are things getting a little improved at delivery devices?

Speaker Change: The two questions are.

Speaker Change: 1% utilization are you assuming in the new site in Dublin, Eric in your guidance and then the follow up for Bernard.

Speaker Change: Bernard and that is your margin seems to have been a little bit better on the adjusted op margin in one Q.

Speaker Change: Our things.

Speaker Change: Is it business mix or are things getting a little.

Improved delivery devices.

Eric Green: Thanks. Yeah, thank you, Paul, for the question. And good morning. Yeah, in our, specifically in our Dublin site, which is for contract manufacturing, we are initiated ramping up earlier this year, and that will continue throughout the year. So the utilization percentage is quite low as we speak, and that's incorporated into our guidance. As we mentioned before, on that site, it will handle, do drug handling, and that will be available towards the end of the year, early next year, to launch and for commercialization. So low percentage at this point in time, Paul.

Paul Knight: Yes. Thank you Paul for the question.

Speaker Change: Good morning, yes.

Speaker Change: Specifically, our Dublin site, which is for contract manufacturing we are initiated ramping up earlier this year and that will continue throughout the year. So the utilization pursue.

Speaker Change: Vintage is quite low as we speak.

Speaker Change: And that's incorporated into our guidance.

Speaker Change: As we mentioned before on that site. It will handle do drug handling and that will be available towards the end of the year early next year.

Speaker Change: Two launch and for commercialization so low percentage at this point in time, Paul Burner Yep.

Bernard Birkett: Bernard? Yeah, Paul, on the operating margin, we actually saw better efficiencies within our EMPC business compared to what we had originally forecast. So that was a positive. We also saw an improvement in the margin within contract manufacturing versus the forecast that we had for Q1. So again, very positive there. And then on our SG&A and R&D, the spend was a little bit lighter in Q1, again, versus what was forecast, and we have made some adjustments in those areas to control costs. And then, again, some of that was related to timing. And again, that's updated in the guidance that we've given.

Speaker Change: Yes.

Speaker Change: On the operating margin, we actually saw better efficiencies within our A&P C business compared to what we had originally forecast so that was a positive.

Speaker Change: We also saw an improvement in the margin within contract manufacturing versus the forecast that we have for Q1, so again very positive there.

Speaker Change: And then on our SG&A and R&D spend was a little bit lighter in Q1 again versus what was forecast and we have made some adjustments in those areas to control costs and then some of that was related to timing.

Speaker Change: Again, that's updated and day guidance that we've given so.

Bernard Birkett: So. A lot of positives for us around the cost base and we just need to maintain that as we go through the year.

Speaker Change: A lot of positives for us around the cost base and we just need to maintain that as we go through the year.

Larry Solow: Our next question comes from Larry Solow with CJS Securities. Your line is open. Great, thank you. I echo Paul's comments. Bernard, I wish you best of luck, as well.

Speaker Change: Thank you. Our next question comes from Larry Solow with CJS Securities. Your line is open.

Larry Solow: Great. Thank you.

Speaker Change: Echo Pauls comments Bernard I wish you best of luck as well I guess first question just on the guidance and the horizontal product mid single digit growth is that purely a function of.

Larry Solow: I guess first question just on the on the guidance and the how Zio product meets single digit growth, is that purely a function of just the inventory, you mentioned timing is that and you discussed inventory destocking. Is that primarily a function of that? It does feel like as you run through the year, you sound like you continue to expect that. track upward. So is there really any other change outside of the timing? I know you mentioned iNex1 was a little bit better in Q1 or contributions from that, but that sounds like that might tail off.

Speaker Change: Just the you mentioned timing is that and discuss the inventory destocking is that primarily a function of that it does feel like as you run through the year, you're it sounds like you continue to expect that.

Speaker Change: Track upwards so.

Speaker Change: Is there really any other change outside of the timing I know you mentioned, Alex one was a little bit better in Q1, our contributions from that but that sounds like that might tail off. So I'm just trying to get a little more color just around the high value product.

Larry Solow: So I'm just trying to get a little more color just around the high value product.

Larry Solow: Yeah, Larry, there's a couple of factors impacting that. One is on pricing, we're seeing pricing come in a little bit lower than we originally anticipated. Not overly material, but we just want to make sure people understand that so when we report in the next couple of quarters, you'll see it a little bit lower. And we also have a constraint situation in one of our product that they want to take from us. So it's put a lot of demand into one facility where originally we had that demand spread out across a number of sites. So we do see a constraint here in the short term.

Speaker Change: Outlook yet.

Larry Solow: Larry does it does a couple of factors.

Larry Solow: Impacting that one is on pricing, we're seeing pricing come in a little bit lower than we originally anticipated.

Larry Solow: No not overly material, but we just want to make sure people understand that the report in the next couple of quarters.

Larry Solow: And you'll see it a little bit lower and we also have a constraint situation in one of our facilities, where a customer has switched the product that they want to take from us.

Larry Solow: So it's put a lot of demand into one facility, where originally we had that demand spread out number across a number of sites.

Larry Solow: We do see a constrained here in the short term. So it's more of a short term supply issue rather than a demand issue. So what we're actually seeing is an increasing demand.

Larry Solow: So it's more of a short term supply issue rather than a demand issue. So what we're actually seeing is increasing demand, but we have to be able to deliver on that. So timing, that's what that relates to. So, you know, we do expect in the second half of the year to see a step up in HPP components across all our sites. And again, that's embedded in the guidance.

Speaker Change: I'll have to be able to deliver on that so when Eric called out timing.

Speaker Change: What that relates to so we do expect in the second half of the year to see a step up in the <unk> components.

Speaker Change: Across all of our sites and again, that's embedded in the guidance.

Larry Solow: Okay, and then just a second question, you mentioned sort of the impact of, or the unknown impact obviously of tariffs and geopolitical, what about just, any thoughts on, obviously with the reduction in government spending going on and lots of headlines on the impact of healthcare, and you mentioned some also on the macroeconomic stuff there in your prepare remarks, Eric, do you see any real, you know, significant impact outside of some of the direct tariff impacts, but just on demand or concerns on demand, you know, in your business, because of some of the sort of government headwinds going on?

Speaker Change: Okay and then just the second question you mentioned through the impacts of the <unk>.

Speaker Change: Unknown impacts obviously.

Speaker Change: Tariffs and geopolitical.

Speaker Change: What about just any thoughts on obviously.

Speaker Change: The reduction in government spending going on and lots of headlines on the impacts of healthcare and you mentioned some also on the macroeconomic stuff there.

Speaker Change: Our prepared remarks.

Speaker Change: Eric do you see any real significant impact outside of some of the direct tariff impact, but just on demand or concerns on demand in your business because of some of the sort of government headwinds going on.

Eric Green: Yeah, Larry, it's a very good question. You know, as we talked about tariffs, we feel we have a good view of where we are today based on the current factors. And as you know, that landscape could change. And we do have several programs that we are implementing and have implemented to mitigate those expenses, such as passing on some of the costs to our customers. And also a fortunate part of our business that we created this network of operations across the globe to build support more in the region. So regional support, therefore, there's a lot of less cross-border movement of our goods for our customers.

Eric Eric: Yes, Larry its a very good question as.

Larry Solow: As we talked about tariffs, we feel we have a good view.

Eric Eric: View of where we are today based on the current factors and as you know that that landscape could change and.

Larry Solow: And we do have several programs that we are.

Larry Solow: <unk> implemented a haven't admitted to mitigate those expenses such as Pat said some of the cost to our customers.

Larry Solow: Also fortunate part of our business that we created this network.

Larry Solow: The operations across the globe to build support more in the region. So regional support therefore, we bought less cross border movement of our goods for our customers as well as side, a 100% pure I think this global network that we've created <unk> as an example.

Eric Green: While it's not 100% peer, I think this global network that we've created, HPP, as an example, a couple sites in the U.S., a couple sites in Europe, one in Singapore, gives great leverage to build support to our customers. The other factor is macroeconomics. There are other levers that we'll keep an eye on. But right now, we don't see that impacting our volume and demand commitments that we are going to fulfill for our customers throughout the year. We're not seeing patterns change. In fact, as Bernard talked about a little bit earlier, the one change we're seeing is a visible increase in demand as we go through this year, which is a positive sign, which is consistent with what we talked about in the last quarter.

Larry Solow: Sites in the U S. A couple of sites in Europe, one in Singapore is great leverage to build support our customers. The other factors macroeconomics there are other levers that.

Larry Solow: We will keep an eye on but right now we don't see that impacting our volume demand.

Larry Solow: Commitments that we are going to fulfill for our customers throughout the year.

Speaker Change: We're not seeing patterns change in fact, as Bernard talked about little bit earlier. The one change. We're seeing is a increase we've seen a visible increase in demand as we go through this year, which is a positive sign which is consistent what we talked about in the last quarter.

Justin Bowers: Our next question comes from Justin Bowers with Deutsche Bank. Your line is open. Hi, good morning, everyone. I just wanted to follow up on the last question related to timing and sourcing. So it sounds like that's related to HVP. I just want to confirm that.

Speaker Change: Thank you. Our next question comes from Justin Bowers with Deutsche Bank. Your line is open.

Justin Bowers: Hi, Good morning, everyone I just wanted to follow up on the last question related to timing and sourcing.

Speaker Change: So it sounds like Thats related to HCP.

Justin Bowers: Just wanted to confirm that and then part two of that would be.

Eric Green: And then part two of that would be, would the increase in demand and the timing shift, should we infer that some of that demand spills over into 2026? Yeah, so you're correct, Justin, that very good question. The the demand that we're talking about right now, the constraint is in one of our HVP plants that we're working through those constraints as we speak, to be able to support our customers. But with the lens that we have today, we just want to make sure we call that out. There are a number of initiatives to address that. And as the demand continues to climb, there might be some that goes into 2026.

Justin Bowers: With the increase in demand and the timing shifts as should we infer that some of that demand spills over into 2026.

Justin Bowers: Yes, so youre correct, Justin very good question the demand that we're talking about right now the constraint is in one of our <unk> plants that we're working through those constraints as we speak.

Justin Bowers: To build to support our customers, but with the lens that we have today. We were just wanted to make sure we call that out.

Justin Bowers: There are a number of initiatives to address that.

Justin Bowers: And as the demand continues to climb there might be some that goes into 2026.

Eric Green: But we'll keep you updated as we go throughout the year.

Justin Bowers: We'll keep you updated as we go throughout the year.

Justin Bowers: Okay, and then just a quick follow up on the tariffs. Is that mostly how much of that is impact is from component sourcing versus maybe something that's going cross border in terms of like a finished good? And then the follow up to that is, is does that all drop through? Or is there any, you know, should we just assume like, um kind of like the the overall tax like the effective tax rate um or is there any is there any you know tax offset there? Sorry, I couldn't actually hear the question. It's very muffled. Justin, I think I have it.

Justin Bowers: Okay, and then just a quick follow up on the tariffs is that mostly.

Justin Bowers: How much of that is impacting.

Justin Bowers: Impact is from component sourcing versus maybe something thats going cross border.

Justin Bowers: Like a finished good.

Justin Bowers: And then the follow on to that is does that all drop through or is there any.

Justin Bowers: Should we just assume like.

Justin Bowers: Kind of like the overall tax.

Justin Bowers: The effective tax rate.

Justin Bowers: Or is there any is there any tax offset there.

Justin Bowers: Alright, I Couldnt actually hear the question. It is very much yesterday I think I have it you are asking about tariff setting is saying is in finished goods or is it an add.

Eric Green: You're asking about tariffs, and you're saying, is it in finished goods or is it in the sourcing? And it's actually in a little bit of both. And then you're also, I think, asking about the proposed U.S. manufacturing tax rate of 15 percent, and if that's something that could potentially be an offset. Is that correct? That's right. Yeah, so we have, as we've looked at the tariffs, we've looked at it from multiple different perspectives. One is on components, as John said, the second is on other sourcing where our suppliers would pick up the tariff, but then potentially pass it on to us.

Justin Bowers: The sourcing it's actually in a little bit of both and then you also I think asking about the proposed U S manufacturing tax rate of 15%.

Justin Bowers: And if that's something that could potentially be an upside is that correct.

Justin Bowers: That's right.

Justin Bowers: Yes, so we have.

Justin Bowers: As we've looked at the tariffs we've looked at it is.

Justin Bowers: From a multiple different perspectives one is on components as John said, the second is on others.

Justin Bowers: Other sourcing where our suppliers was.

Speaker Change: Pick up the tariff, but then potentially pass it onto us so we've embedded estimates of that into our.

Eric Green: So we've embedded estimates of that into our guidance. We're also looking at where we, on the INCO terms, where we ship product to, and if we're the importer, do we pick up the tariff costs at that point. Again, all of those elements are built into our guide. But based on what we know today, again, it's a very fluid situation. There are various mitigations that we're actually working on at this point to, you know, reduce that number over time. But again, we want to see those materialize before we call those out and say what they are.

Justin Bowers: Into our guidance are also looking at.

Justin Bowers: Where are we on the ankle terms, where we ship product to and that's where the.

Justin Bowers: The imports or do we pick up the tariff costs at that point again all of those elements are built into our guide the but based on what we know today again, it's a very fluid situation. There are various mitigation set we're actually working on at this point too.

Justin Bowers: Juice that number over time, but again, we want to see those materialize before we call those out and say what they are so we're giving you the clearest picture that we have today.

Eric Green: So we're giving you the clearest picture that we have today.

Justin Bowers: <unk>.

Justin Bowers: And then when we look at any future tax benefits that could come in the US, yeah, if the tax rate lowers, it is a benefit, but again, we have to wait and see when and how that materializes. Thank you.

Justin Bowers: And then when we look at any future tax benefits that could come in the U S. GAAP tax rate lower so it is a benefit but again, we have to wait and see when and how that materializes.

Michael Ryskin: Our next question comes from Michael Ryskin with Bank of America. Your line is Great. Thanks. Quick follow-up question. I thought, to an earlier question, I think you said that one of the... price came in a little bit lower than expected, I want to make sure. business overall and I was a little bit more than to clarify your comments. Yeah. Michael, when we look at it for the year, we expect it to be a little bit lighter than originally estimated. but in the quarter to come in. Also later. The quarter we were happy about it, it's more of a forward-looking...

Speaker Change: Thank you. Our next question comes from Michael <unk> with Bank of America. Your line is open.

Michael: Great. Thanks.

Speaker Change: Quick final question.

Speaker Change: To an earlier question I know you said that one of the factors is the price came in a little bit lower than expected on to make sure I heard that correctly because.

Speaker Change: I think you did three 4% price contribution in the quarter for the business overall.

Speaker Change: A little bit more than we thought it would be.

Speaker Change: If you could clarify your comments on pricing and sort of where it was a little bit better.

Speaker Change: Michael when we look at it for the year and what we expect it to be a little bit lighter than originally estimated.

Speaker Change: Okay.

Speaker Change: Okay, but in the quarter to come in.

Speaker Change: Also later.

Speaker Change: The quarter, we were happy about it.

Speaker Change: No.

Michael Ryskin: Okay, all right.

Speaker Change: Okay.

Michael Ryskin: And then just the other questions that are related to tariffs and your customer behavior. You know, one of the things we're thinking about is Some of your customers may be looking to... Speed up some manufacturing or maybe accelerate some plans to try to get ahead of. on their product. and Pharmaceutical Products, if that comes in during the year, there's some elevated levels of manufacturing or product shipments. Did you see any of that? Did you see any weird timing of... pulling forward a little bit or customers moving around.

Speaker Change: Okay, Alright, and then.

Speaker Change: The other questions that are related to tariffs in your customer behavior.

Speaker Change: One of the things we're thinking about is that.

Speaker Change: Some of your customers may be looking to speed up some manufacturing or maybe accelerate some plans to try to get ahead of tariffs on their products on.

Speaker Change: Pharmaceutical products and that comes in during the year. There are some reports since.

Speaker Change: Elevated levels of manufacturing or product shipments in the first quarter did you see any of that is really weird timing of maybe things.

Speaker Change: Pulling forward, a little bit or customers moving around timing plans for the year.

Speaker Change: From that perspective.

Eric Green: I know, Mike, that's a very good question. For us, since most of our transactions or our manufacturing processes are made to order, the answer is no. We didn't see any changes to the demand profile and the order cadence that we're seeing throughout the balance of the year. So we're seeing at this point in time, we're not seeing any adjustments or any change of behaviors due to these tariffs. And again, just to reiterate, a lot of our manufacturing sites are not 100 percent, but the majority of it is co-located in the geographies where our customers reside or where they want to take shipments.

Speaker Change: Yes, Michael that's a very good question for us since most of our transactions are.

Speaker Change: Our manufacturing processes are made to order.

Speaker Change: The answer is no we didn't see any changes to the demand profile in the order cadence that we're seeing throughout the balance of the year.

Speaker Change: So we are seeing at this point in time, we're not seeing any adjustments or any change of behaviors due to these tariffs again just to reiterate.

Speaker Change: A lot of our manufacturing sites are.

Speaker Change: Not 100%, but majority.

Speaker Change: The majority of it is co located in the geographies, where our customers reside where they want to take shipments.

Eric Green: So therefore, that's a net benefit. So we're not seeing a change of behaviors at this point in time or their demand profiles of their own product. Thank you.

Speaker Change: That's a net benefit so we're not seeing a change of behavior at this point in time.

Speaker Change: Or their <unk>.

Speaker Change: Manned profiles of their own products.

David Windley: Our next question comes from David Windley with Jeffries. Your line is open. Hi, good morning. Thanks for taking my questions.

Speaker Change: Thank you. Our next question comes from David Windley with Jefferies. Your line is open.

David Windley: Hi, good morning, Thanks for taking my questions and congrats to both Barnard and Mr. Campbell.

David Windley: And congrats to both Bernard and Mr. Campbell, going out and coming in. The first question I have is, is around utilization, I guess, or margin trade offs, so to speak. When I look at your year over year comparisons, P&L comparisons, they are Surprisingly similar revenue, gross margin, operating margin. Basically, the EPS difference, you know, comes down to SBC tax benefit differences. And yet within the P&L, I think we know that, you know, as you're calling out, very, very high margin fluorotech is is down and low margin self injection devices is driving the growth. So you you have some offsets in there and other otherwise that are helping to mitigate that mixed trade off.

Speaker Change: Going out and coming in.

Speaker Change: The first question I have is is around utilization I guess or margin trade off so to speak.

Speaker Change: When I look at your year over year comparisons P&L comparisons they are.

Speaker Change: Surprisingly similar revenue gross margin operating margin basically the EPS difference comes down to SPC tax benefit differences.

Speaker Change: And yet within the P&L I think we know that.

Speaker Change: As you are calling out very very high margin floor attack us is down and low margin.

Speaker Change: Self injection devices is driving the growth. So you know you have some offsets in there and other otherwise that are helping to mitigate that mix tradeoff and I wondered if you could.

David Windley: And I wondered if you could explore or better elucidate what some of those things are. And in that, maybe Annex 1 is potentially one of them. And I wondered on that, if you could comment what the typical. upgrade or step up in economics. is that we should think about when a client, you know, goes through one of these Annex 1 projects and moves forward to a change in their component sourcing. Thank you.

Speaker Change: Explore or better elucidate what some of those things are at.

Speaker Change: And in that maybe annex one is potentially one of them.

Speaker Change: And I wondered on that if you could comment what the typical.

Speaker Change: Upgrade or step up and economics.

Speaker Change: Is that we should think about when a client goes through one of these <unk> projects and moves forward to a change in their component sourcing. Thank you.

Bernard Birkett: Yeah, David, I'll take that to start with. On Annex 1, it's not having an overly material impact at the moment. It is growing. And, you know, the, as Eric said, the level of interest is, you know, increasing. What we would typically see if we're moving to Annex 1, you're moving from standard type product margin to a HPP, you know, margin, probably a little bit north of our corporate average. So I would say it is a pretty significant step up. And then that can vary depending on how far customers want to move up that HVP curve.

David Windley: Yes, David I'll take that to start with.

Speaker Change: On an X one.

Speaker Change: It's not having it already material impact at the moment it is growing.

Speaker Change: As Eric said the level of interest.

Speaker Change: Increasing.

Speaker Change: What we would typically see from moving to our next one youre moving from standard type product margin too.

Speaker Change: <unk>.

Speaker Change: Sure.

Speaker Change: Margin, how long would a little bit north of our corporate average.

Speaker Change: So what I would say it is.

Speaker Change: Pretty significant step up and then that can vary depending on how far.

Speaker Change: Customers want to move up that HP curve.

Bernard Birkett: But, you know, really, when we've been looking at our business and managing the P&L, you know, as we've been moving into 2025 and, you know, looking at the growth challenges that we have been facing and trying to get back to that LRP, there's been a lot of focus on utilization and efficiencies within our manufacturing operations. We're starting to see, you know, positivity there. I called it out earlier, I think when the question was asked about operating margin improvements, that is one of the key drivers. We're also seeing it across our contract manufacturing business and also looking at our spends within, you know, OPEX.

Speaker Change: But really when we have been looking at our business and managing the P&L.

Speaker Change: As we've been.

Speaker Change: Moving into 2025.

Speaker Change: Looking at the growth challenges that we have been facing in trying to get back to that at RP theres been a lot of focus on.

Speaker Change: Utilization and efficiencies within our manufacturing operations are starting to see.

Speaker Change: Positivity, there I called it out earlier I think when the question was asked about operating margin improvements that is one of the key drivers were also seeing it across our contract manufacturing business.

Speaker Change: And also looking at our spend within Opex, we're seeing really a lot of control around research and development and SG&A. So it's really managing our P&L.

Bernard Birkett: We're seeing, you know, really a lot of control around research and development and SG&A. So it's really managing our P&L on an active basis to make sure that we're able to at least maintain the margin in this period as we transition back to the LRP.

Speaker Change: On an active basis to make sure that we're able to at least maintaining the margin in this period as we transition back to the MLP.

Eric Green: My follow up, Eric, is for you. The couple of announcements today from a management standpoint seems like you're in the process of perhaps rebuilding your management team on a broader basis. There was a 8k about a chief commercial officer departure, and I think some others. So I wondered if you could comment on where that stands and how you're thinking about, you know, the leadership team that you need to build for the next, say, five years of your your company's growth. Thanks. Yeah, David, thanks for the question. You know, I've been fortunate to have a 10-year career here at West, been to work with some phenomenal people, and there's been a lot of tenure with the leadership team, and there does come times where individuals have made decisions to do other next steps of their careers.

Speaker Change: Got it my follow up Eric is for you.

Speaker Change: We'll have announcements today from a management standpoint, it seems like.

Speaker Change: You're in the process of perhaps rebuilding your management team on a broader basis.

Speaker Change: There was an 8-K about a chief commercial officer departure, and I think some others. So I wondered if you could comment on where that stands and how youre thinking about the.

Speaker Change: Our leadership team that you need to build for the next say five years of your your company's growth. Thanks.

Speaker Change: Yeah, Dave I think the question I've been fortunate to have the.

Speaker Change: 10 year career here at West.

Speaker Change: A bit of work with some phenomenal people.

Speaker Change: And there's been a lot of 10 year with the leadership team and there does come times, where individuals have made decisions to do other next steps of their careers and for example, burner has been a phenomenal partner and I've said that many of times.

Eric Green: And, for example, Bernard's been a phenomenal partner, and I've said that many times, but this is an opportunity at this point to continue to, as opportunities present themselves as bringing new leaders into the organization. So I wouldn't characterize it as a change. I would just say there is a natural evolution of leadership over long periods of time. And that's what I think that's what you're seeing. But again, very, very appreciative of the partnerships I've had over the years. And as we move forward, we'll continue to to bring leaders and that have seen where we want to go and be part of that journey.

Speaker Change: But this is an opportunity at this point to continue to.

Speaker Change: As opportunities.

Speaker Change: Present themselves is bringing new leaders into the organization.

Speaker Change: So I wouldn't characterize it as a change I would just say there is a natural evolution of leadership.

Speaker Change: Over long periods of time, and Thats, what I think thats, what youre seeing.

Speaker Change: Again, very very appreciative of the partnerships have had over the years.

Speaker Change: And as we move forward, we'll continue to bring leaders in that have seen where we want to go and be part of that journey.

Daniel Markowitz: Our next question comes from Daniel Markowitz with Evercore ISI. Your line is open. Hey, thank you for taking my questions and congrats on the quarter. So the first one is on Annex One. I think that's a really exciting part of the bull case for investors, and I appreciate all the disclosures there. They're very helpful. There was better performance in one cue, and this is now the second quarter in a row with double digit percent sequential project growth.

Speaker Change: Thank you.

Speaker Change: Our next question comes from Daniel Markowitz with Evercore ISI. Your line is open.

Speaker Change: Hey, Thank you for taking my questions and congrats on.

Speaker Change: The quarter. So the first one is on <unk>, one I think that's a really exciting part of the Bull case for investors and I. Appreciate all the disclosures there theyre very helpful. There was better performance in <unk> and this is now the second quarter in a row with double digit percent sequential project growth can you discuss the potential upside you could continue to see from annex one over the coming quarters and years.

Eric Green: Can you discuss the potential upside you could continue to see from Annex One over the coming quarters and years? And if there are any customer anecdotes that would suggest we could see more upside? You know, thank you for the question. It's a very good question. I mean, we're obviously excited about the prospects of Annex One. As you know, it's an element of a regulatory change that fits well with the thesis of West, particularly on the HPP portfolio. This is what we've been driving for a number of years, and that's been giving us great confidence of future growth and margin expansion.

Speaker Change: And if there are any customer anecdotes that would suggest we could see more upside. Thank.

Speaker Change: Thank you.

Speaker Change: Thank you for the questions very good questions.

Speaker Change: We're obviously excited about the prospects of Nx, one as you know.

Speaker Change: An element of a regulatory change that fits well with the thesis of west, particularly around the HCP portfolio. This is what we've been driving for a number of years and that's been given us great confidence.

Speaker Change: Our future growth and margin expansion that gives us.

Eric Green: That gives us that makeshift effect that we're looking for. You're right, there has been an increase of number of projects that we have taken on since the last call. We anticipate that to continue to grow.

Speaker Change: That mix shift effect that we're looking for.

Speaker Change: Right. There has been an increase of number of projects that we have taken out since the last call. We anticipate that to continue to grow I won't articulate the numbers for targeting.

Eric Green: I won't articulate the numbers we're targeting. And Bernard was right to call out earlier, it's not a significant number now. So the way I would characterize this is in twofold. One is, it is, one project isn't always, one customer is not just one project, it could be multiple projects. And it also means that could be large and small. But the general thesis of moving from a lower margin, lower ASP to a higher ASP, higher margin, because the services and capabilities we're providing and leveraging existing assets we have in place for HPP processing is a perfect fit of growth algorithm for long term.

Speaker Change: And burner was ready to call out earlier, it's not a significant.

Speaker Change: <unk> number now so the way I would characterize this as in twofold one is.

Speaker Change: It is one project isn't always.

Speaker Change: One customer or is that just one project could be multiple projects.

Speaker Change: And it also means that could be large and small but the general thesis of moving from the lower margin lower ASP to a higher ASP higher margin because the services and capabilities, we're providing and leveraging existing assets we have in place for HCP processing.

Speaker Change: A perfect fit of the growth algorithm more long term.

Eric Green: And it's not just a one or two year event, but more long term.

Speaker Change: So one or two youre event for more long term.

Eric Green: And the second area I'll just comment on, it tends to be more around the pharma and the generic space than biologics. As biologics, when they enter into the market, the new molecule, we tend to be already in the mid to high end of our HPP spectrum. So that's how I would kind of characterize it. But it is long term, initial traction looks strong in line with our expectations, and the team's very much focused on executing this initiative for a number of years ahead.

Speaker Change: And the second area just comment on if there are is it tends to be more around the pharma in the generic space than biologics as biologics when they enter into the market. The new molecule, we tend to be already in the mid to high end of our <unk>.

Speaker Change: Spectrum, so that's how I would kind of characterize it but it is long term initial.

Speaker Change: Traction looks.

Speaker Change: Strong in line with our expectations and the teams very very much focused on <unk>.

Speaker Change: Executing this in this different number of years ahead.

Speaker Change: Okay.

Thomas DeBourcy: Our next question comes from Thomas DeBourcy with Nephron Research.

Speaker Change: Thank you next question please.

Speaker Change: Our next question comes from Thomas <unk> with Nephron Research Your line is open.

Eric Green: Your line is Hi guys, thanks for taking the time. So I just had a question first on your transition in contract manufacturing, you know, as CGM revenue rolls off at GLP-1 contracts, you build that pipeline. And so I was curious, just in terms of the level of demand and your ability to capitalize on that opportunity and actually, you know, fill that supply that, I guess, been left open by the previous CGM manufacturer. Yeah, no, thank you for the question. And I will say that since we've had some discussions the last couple months, we continue to see interest with the number of customers to identify new projects, long-term projects.

Speaker Change: Hi, guys. Thanks for taking the time.

Speaker Change: So I just had a question first on.

Speaker Change: Your transition to contract manufacturing.

Speaker Change: CGM revenue.

Speaker Change: <unk> off <unk>, one cut checks.

Speaker Change: You build that pipeline I was curious.

Speaker Change: Just in terms of the level of demand in your ability to.

Speaker Change: Capitalize on that opportunity it actually.

Speaker Change: Still that that supplied bed leftover bid by that.

Speaker Change: Previous CGM manufacturing.

Speaker Change: Yes, no. Thank you for the question and I would say that since since we've had some discussions last couple of months, we continue to see interest.

Speaker Change: The number of customers to identify new projects.

Eric Green: Remember, the agreements we tend to sign within contract manufacturing are seven-plus-type years. These are very long contracts with clear sharing of capital deployment between our customers and ourselves as we move forward with these business arrangements. We have transitioned more of our focus towards more delivery devices like auto injectors and pens and also moving downstream with drug handling, which will take time, but it has higher margins and lower capital investment. We have engaged with a number of customers and we're excited about the projects we have in hand. leverage the space that's going to be vacant when CGM is moved out, but also even future growth.

Speaker Change: Long term projects because remember the agreements we tend to sign within contract manufacturing are seven plus type years. These are very long contracts with with clear.

Speaker Change: Sharing of capital deployment.

Speaker Change: Between our customers and ourselves.

Speaker Change: As we as we move forward. These business arrangements, we have transitioned more of our focus towards.

Speaker Change: More.

Speaker Change: Delivery devices like auto injectors, and pens and also moving downstream.

Speaker Change: Drug handling, which will take time, but it has higher margins and lower.

Speaker Change: Capital investments.

Speaker Change: We have <unk>.

Speaker Change: Gauge with the number of customers.

Speaker Change: We're excited about the prospects we have in hand.

Speaker Change: Just.

Speaker Change: <unk>.

Speaker Change: Leverage the space that can be vacant when the CGM has moved out but also even future growth. So I think we're positioned well right now the 2025, we still have ramp up.

Eric Green: So I think we're positioned well right now. At 2025, we still have ramp up of NGLP-1s and some more ramp up in Grand Rapids from a utilization perspective. As I mentioned to Paul's question earlier, in Dublin, we're basically starting early this year of manufacturing commercial product, which will take us throughout the year and then moving into drug handling. And that's pretty typical. It's 12 to 18 months to get to utilization levels that we're very comfortable with. That is the intended installed capacity. So that gives you kind of a framework where we are with CM. But yes, a lot of interest with our customers and we will continue to report as we get more clarity and sign agreements over the next couple of quarters.

Speaker Change: And <unk> ones.

Speaker Change: Some more ramp up in Grand Rapids from a utilization perspective, as I mentioned to Paul Paul's question earlier and Dublin.

Speaker Change: Yes, we have.

Speaker Change: We're basically starting earlier this year of manufacturing commercial product, which will take us throughout the year I think we'll move it into drug handling and Thats pretty typical 12 to 18 months to get to utilization levels that we're very comfortable with that as the intended to install capacity. So that gives you kind of a framework, where we are with <unk>.

Speaker Change: But yes, a lot of interest.

Speaker Change: With our customers and.

Speaker Change: We will continue to report out as we.

Speaker Change: Give more clarity.

Speaker Change: And signed agreements over the next couple of quarters.

Eric Green: And just as a follow-up question on Smart Dose, I know the second quarter, you mentioned all options on the table. I know Smart Dose margins currently are below typical HVP margins. And so, in terms of, I guess, your evaluation of options, you know, do you see a pathway for Smart Dose to, you know, become close to HVP, you know, component margins or you know, do you just view that maybe as a separate business or you would need a significant increase in the volume in order to have similar margins?

Speaker Change: And just as a follow up question.

Speaker Change: Smart dose.

Speaker Change: This is the second quarter you bet.

Speaker Change: Options on the table I don't start dose margins currently are below typical HCP margins and so.

Speaker Change: In terms of I guess your evaluation of options.

Speaker Change: Do you see a pathway for smart dose too.

Speaker Change: Become close to HCP.

Speaker Change: <unk> margins or.

Speaker Change: Do you just view that maybe as a separate business or you would need.

Speaker Change: A significant increase in the volume in order to have similar margins that does it for me.

Eric Green: Yeah, no, thanks for the question. Our view hasn't changed on smart bills. We will there's a two prong approach that we have. Our team that's running that business is focused on driving costs. out of that production process. And they're making good strides. However, it really does require going from a manual two-line process to fully automated. As you can imagine, the yield, the output, productivity, and just the cost structure does change. That will not be validated and commercialized until the end of this year. Going into early next year, it will take time to ramp. So that's the first lever and focus that we have for the team of the organization.

Speaker Change: Yes, no. Thank you for the question our view Hasnt changed on smartphones, we will there's a two pronged approach that we have.

Speaker Change: Our team that's running that business is focused on driving cost out.

Speaker Change: Out of that production process, and they're making good strides.

Speaker Change: However, it really does require going from manual to line process to fully automated as you can imagine the.

Speaker Change: The yield the output productivity and just the cost structure does change that.

Speaker Change: That will not be.

Speaker Change: Validated and commercialize until the end of this year going into early next year. It will take time to ramp so thats. The first lever and focus that we have for the for the team and the organization. While the demand continues to increase we will build support our customer.

Eric Green: While the demand continues to increase, we will be able to support our customer. And secondly, as we have discussed in the last call, we have been reviewing options on what's the best path forward with this product within our portfolio. We do have a belief where we should be going, but at this time, I'm just going to leave it as that. We'll just say that all options on the table to make sure that the best path forward is the best result for our customers, but also for our shareholders and for our team.

Speaker Change: And secondly, as we have discussed last call we have been.

Speaker Change: Reviewing.

Speaker Change: Options on what's the best path forward with this product within our portfolio, we do have.

Speaker Change: Belief or we should be going.

Speaker Change: <unk>.

Speaker Change: But at this time Im just going to leave it as that will just say that all options on the table.

Speaker Change: To make sure that the best path forward is the best result for our customers, but also for our shareholders and for our team.

Eric Green: Thank you.

Doug Schenkel: Our next question comes from Doug Schenkel with Wolf Research. Your line is open. Good morning and thank you for taking my questions. I just want to, I guess, take the opportunity to ask a few follow-ups or just, you know, maybe do some cleanup.

Speaker Change: Thank you. Our next question comes from Doug Schenkel with Wolfe Research. Your line is open.

Doug Schenkel: Good morning.

Doug Schenkel: Thank you for taking my questions I, just wanted to I guess.

Doug Schenkel: Take the opportunity to.

Doug Schenkel: Ask a few follow ups or just.

Doug Schenkel: So, you know, following up on the smart dose question, Could you share anything in terms of what are the, you know, what's the status of discussions pursuant to, you know, getting the price that I think you hoped to get? You know, essentially, I think you had hoped to turn those incentive payments into, you know, durable pricing. That obviously hasn't happened yet. So what's the status of those discussions? I just want to confirm.

Doug Schenkel: Maybe do some cleanup so following up on the smart dose question.

Could you share anything in terms of what are the what's the status of discussions pursuant to getting the price that I think you hoped to get essentially I think you had hoped to turn those incentive payments.

Doug Schenkel: Durable pricing that obviously hasn't happened yet so what's the status of those discussions. So I just want to confirm there is nothing in guidance for pricing benefits related to smart. So that's the first topic.

Doug Schenkel: There's nothing in guidance for pricing benefits related to Smart Dose.

Doug Schenkel: So that's the first topic.

Bernard Birkett: The second follow-up I want to ask is on tariffs. I just want to confirm there's no pricing or tariff surcharge benefit factored into your new guidance assumptions. And, you know, you talked about, you know, working towards further mitigation efforts. You know, those I think could be amongst those. I just want to make sure those aren't in guidance right now.

Speaker Change: The second follow up I wanted to ask is on tariffs I just wanted to confirm there is no pricing or tariff surcharge benefit factored into your new guidance assumptions.

Speaker Change: You've talked about working towards further mitigation efforts.

Speaker Change: I think could be amongst those I just want to make sure those aren't in guidance right now and then lastly on operating margin guidance for the year, which I don't think that you provided which is normal and I'm sorry, if I missed that but it looks like mathematically you are targeting around 19%.

Bernard Birkett: And then lastly, on operating margin guidance for the year, which I don't think you provided, which is normal.

Bernard Birkett: I'm sorry if I missed that. But it looks like mathematically you're targeting around 19%. I want to make sure I'm in the right neighborhood. And if so, you know, then looking ahead, how far away sitting here today are you from getting back to that? I think it's 23% LRP target.

Speaker Change: I want to make sure I'm in the right neighborhood and if so that's looking ahead, how far away sitting here today are you from getting back to that.

Speaker Change: I think it's 23% <unk> target.

Bernard Birkett: Thank you.

Bernard Birkett: Well, I'll. trying to take those in sequence. And so from the smart dose.

Speaker Change: Okay.

Speaker Change: Ill.

Speaker Change: Try and take those in sequence.

Speaker Change: So from the <unk>.

Bernard Birkett: And we have not embedded anything in our guidance related to price guess at this point. So, you know, there's anything there that that's upside. So, and then on the tariffs, we've given a net figure. A lot of mitigation work that we're doing around customers and looking at passing through some of those tariff charges, again, not embedded in the guidance at this point until we actually get agreement on that so we're not overextending ourselves. We're giving you the clearest picture we can and again, you'll appreciate it, it's a moving target at the moment given what's happened.

Speaker Change: And we have not.

Speaker Change: <unk> anything in our guidance related to price gas at this point so.

Speaker Change: Or is there anything there that's.

Speaker Change: Upside.

Speaker Change: So.

Speaker Change: Then on the tariffs, we've given a net figure theirs.

Speaker Change: A lot of mitigation work that we're doing around customers and looking at.

Speaker Change: Passing through some of those tariff charges again not embedded in the guidance at this point until we actually get agreement on that so we're not overextending ourselves.

Speaker Change: We're giving you the clearest picture, we can and again.

Speaker Change: I appreciate it's a moving target at the moment given what's happening.

Bernard Birkett: And so essentially, we're trying to be relatively conservative around the tariff approach, operating margin, we typically, you know, don't guide, but I don't think you're a million miles away based on the assumption that you've made. And then getting back to getting back to the higher operating margin, I think he called out 23%. You know, for us to get back to that margin, we need to be at LRP. And we would typically be targeting a similar mixed profile, you know, compared to what we experienced, I would think, you know, in the early part of the stock in the 2023 timeframe, and that will get us back to that margin.

Speaker Change: So essentially we're trying to be relatively conservative around the tariff approach operating margin. We typically don't guide, but I don't think there are many miles away based on the assumption that your base.

Speaker Change: I think getting back to getting back to the higher operating margin I think you called out 23%.

Speaker Change: For us to get back to that origin, we need to be at <unk>, and we would typically be targeting a similar mix profile compared to what we experienced I would think.

Speaker Change: And the early part of Destocking in the 2023 timeframe and that will get us back to that margin.

Bernard Birkett: So it It's really, you know, getting back to LRP, seeing biologics, you know, getting back to that double-digit growth rate. called out in the past and obviously, you know, called the next one. and GLP ones. And we are starting to see traction in some of those areas. As we've said, we believe it's going to take some time to transition back to LRP. It's not going to be overnight or a hockey season. based on what we see today.

Speaker Change: It's really getting back to <unk> seen biologics.

Speaker Change: Getting back to that double digit growth rates.

Speaker Change: We called out in the past.

Speaker Change: And obviously growth dynamics, one on mix shift.

Speaker Change: <unk>.

Speaker Change: We are starting to see traction in some of those areas.

Speaker Change: As we've said we believe it's going to take some time to transition back to MRP.

Speaker Change: Going to be overnight or a hockey stick.

Speaker Change: Based on what we see today.

Mack Itosh: Our next question comes from Mack Itosh with Stevens. Your line is open. Good morning and thank you for taking my questions. Just a few, but I appreciate the color around 2Q. It seems to be a little bit of outside of what the street was modeling and what I was expecting as well. So maybe can you just discuss.

Speaker Change: Thank you. Our next question comes from Mack <unk> with Stephens. Your line is open.

Speaker Change: Good morning, and thank you for taking my questions just a few but I appreciate the color around <unk>.

Speaker Change: It seems to be a little bit of a outside of what the street was modeling in what I was expecting as well. So maybe can you just discuss.

Eric Green: what your how the year's progressing as compared to your internal expectations thus far and Yeah, we'll go from there. Yeah, Mac, thanks for the question. The year is progressing as we anticipated. The one area that we did call out was around the HVP products components. And that was really what Bernard discussed earlier around a little bit lightness in the price. And also we're working through a shift in demand into one particular plant, but that will be it's a near term that we will work through. But in general, we're seeing the trends that we anticipated for the rest of the year, I would say, to be clear on on biologics, as I mentioned, there's two elements to that.

Speaker Change: What your how the year's progressing as compared to your internal expectations, thus far and.

Speaker Change: Yes, we'll go from there.

Matt: Yes, Matt Thanks for the question.

The year is progressing as we anticipated.

Matt: The one area that we did call out was around.

Matt: The <unk> products.

Matt: Components and that was really what.

Burner: Burner discussed earlier around the little bit of lightness in the price.

Burner: Also we are working through a shift in demand into one particular plant, but that will be at some near term that we will work through.

Burner: But in general we're seeing the trends that we anticipated.

Burner: For the rest of the year I would say to be clear on.

Burner: Biologics as I've mentioned, there's two elements to that.

Eric Green: And what you're going to see, especially with HVP, is that in the back half of the year, the reason why we're calling out strong high single digits on HVP components is because that's when we see the biologics continue to escalate based on the demand that we're seeing with our customers. And, and, and then the offset of that a little bit is in the biologic spaces around this smart dose we called out, or the, the incentives that we had in Q2 and Q3 of last year don't, I'm sorry, Q3 and Q4, thank you, don't aren't planning to be repeating at the end of this year.

Burner: What are you going to see especially with HCP.

Burner: Is that in the back half of the year reason why we're calling out strong high single digits on HCP components is because that's when we see the biologics.

Burner: Continue to.

Burner: <unk>.

Burner: Based on the demand that we're seeing with our customers and then the offset of that a little bit is in the biologics space is around this smart dose we called out for the <unk>.

Burner: Incentives that we had in Q2 and Q3 of last year.

Burner: I'm sorry in Q3 and Q4. Thank you don't really aren't planned to be repeating at the end of this year. So that kind of gives you a perspective, but.

Eric Green: So that kind of gives you perspective, but really, consistent as we discussed a couple months ago.

Burner: Really.

Consistent as we discussed a couple of months ago.

Bernard Birkett: And given the cost associated with the restructuring, it appears you may have already accounted for this in the past. The investments in R&D and SGA with the original guidance, but is it fair to assume these costs will not reoccur? And secondly, what all does the restructuring entail? Yeah, because like once the costs are out, they're not. going to reoccur. And then we have, you know, some various smaller levels of consolidation at some of our sites, and most of that restructuring work is done at this point. and the cost savings that come from that are embedded in the guidance.

Burner: Got it got it and given the costs associated with the restructuring. It appears you may have already accounted for this.

Burner: The investments in R&D and SG&A with the with your original guidance, but is it fair to assume these costs will not reoccur and secondly put all the restructuring and sale.

Burner: Yes, I think costs like once the costs are out yet or not.

Burner: Going to occur and then we have.

Burner: Some.

Burner: Areas smaller levels of consolidation that some of our sites.

Burner: Most of that that that restructuring work.

Speaker Change: John at this point.

Speaker Change: And then the cost savings come from that are embedded in the guidance.

Patrick Donnelly: Our next question comes from Patrick Donnelly with Citi. Your line is open. Hey, guys, thanks for taking the questions. Maybe another one on the high value components piece. You certainly appreciate that shift in demand to the one plan you talked about. Just curious in terms of the ramp, what are you guys seeing on the order front? Just wondering on the visibility, if you're continuing to see the orders improve, destocking lift, and just the confidence in that second half ramp, given again, some of the stuff seems temporary. So just wanted to talk through the order trends there.

Patrick Donnelly: Thank you. Our next question comes from Patrick Donnelly with Citi. Your line is open.

Patrick Donnelly: Hey, guys. Thanks for taking the questions.

Patrick Donnelly: Maybe another one on the high value components piece, certainly appreciate that shifted demand to the one plan you talked about.

Patrick Donnelly: Just curious in terms of the ramp what are you guys seeing on the order front I was just wondering on the visibility if youre continuing to see the orders improve destocking lift and just the confidence in that second half ramp given against some of the subsequent temporary just just wanted to talk to the order trends there.

Eric Green: Yeah, Patrick, very good question. Good morning. Yes, to both of those elements. I think D-SOC, it's consistent with what we anticipated throughout the year. Obviously, pharma has subsided. We're comfortable in the pharma and the biologics. We commented that a while back, there will be, you know, D-SOC can continue the first part of 2025. But as I just mentioned earlier, that we'll see a ramp up in the second half and the demand profile based on orders that we're receiving supports that statement. And then generics will persist throughout 2025. But again, no change to what we discussed before on the D-SOC side.

Patrick Donnelly: Yes, Patrick very good question and good morning, Yes.

Patrick Donnelly: Yes to both of those elements.

Speaker Change: The Destocking, where it's consistent with what we anticipated throughout the year, obviously pharma has subsided we're comfortable in the pharma.

Patrick Donnelly: In the biologics, we commented that while back there'll be.

Patrick Donnelly: <unk> continued in the first part of 2025, but as I just mentioned earlier that we'll see a ramp up in the second half and the demand profile based on <unk>.

Patrick Donnelly: Orders that we're receiving.

Patrick Donnelly: Supports that statement and then generics will persist throughout 2025, but again no change to what we.

Patrick Donnelly: What we discussed before on the Destocking side, so the order patterns are.

Eric Green: So the order patterns are, we're feeling good about the demand. And it's consistent to what we anticipated and guided that it will be a sequential improvement as we go throughout the year. And then, you know, I'm not going to give guidance going forward, but it's a favorable view that we see today on the order pattern.

Patrick Donnelly: We're feeling good about the demand.

Patrick Donnelly: And it's consistent to what we anticipated and guided that it will be a sequential improvement as we go throughout the year.

Patrick Donnelly: I'm not going to give guidance going forward, but it's a.

Patrick Donnelly: It's a favorable view that we'd see today on the order patterns.

Bernard Birkett: Okay, that's helpful.

Patrick Donnelly: And then maybe one for Bernard, just following up on Doug's question on the pricing, you know, it sounds like you guys are working with customers to pass through some of the pricing on the tariff piece. Can you talk about how those conversations are going? And then it doesn't sound like it's embedded in the guide, at least on the revenue side. So what would the impact be if you did pass along some of this pricing? You know, it feels like maybe the offset is built into the P&L, but not the revenue. I just want to make sure we're understanding that appropriately.

Speaker Change: Okay. That's helpful.

Speaker Change: And then Mike maybe one for Bernard just following up on Doug's question on the pricing. It sounds like you guys are working with customers to pass pass through some of the pricing on the tariff piece can you talk about how those conversations are going and then it doesn't sound like it's embedded in the guide at least on the revenue side. So what would the impact be if you did pass along some of those pricing.

Speaker Change: Feels like maybe the offset is built into the P&L, but not the revenue I just want to make sure. We're understanding that appropriately. Thank you guys.

Bernard Birkett: Thank you guys. Yeah, the offsets, there are additional offsets that we are working on that are not embedded in the P&L today. At this point, given that it's a very fluid situation, you know, I'm not prepared really to give a number on that until we get a clear line of sight as to what that would be and agreement with our customers. What I would say is, you know, based on how we've been able to guide tariffs and assess it, we believe there are mitigation factors on a number of different levels that we can work through, you know, over the next number of months to help mitigate some of that number.

Speaker Change: Yes.

Speaker Change: The offsets there are additional offset sale that we are working on that are not embedded in the P&L today.

Speaker Change: At this point given that it's a very fluid situation.

Speaker Change: I'm not prepared really to give a number on that until we get.

Speaker Change: And clear line of sight as to what that would be in agreement with our customers.

Speaker Change: What I would say is.

Speaker Change: And based on how we've been able to guide tariffs and assesses.

Speaker Change: We believe there are mitigation factor is on a number of different levels that we can work through over the next number of months to help mitigate some of that number.

Bernard Birkett: And, you know, on our Q2 call, we'll give you a greater level of clarity around that when we have it ourselves. Thank you.

Speaker Change: On our Q2 call, we'll give you great greater level of clarity around that when we have it ourselves.

Matt LaRue: Our next question comes from Matt LaRue with William Blair. Your line is Hi, good morning. The first is a follow up to your progress on the automated line. Obviously, that's something you've been speaking about and working towards for the last couple of years. You know, Eric, at this point, do you have enough pieces in place, have you made enough progress that the timeline you've cited you feel confident won't slip? Or are there sort of additional hurdles remaining that potentially could put that timeline at risk? Yeah, Matt, good question. We're on schedule, in line with the schedule that we've communicated.

Thank you. Our next question comes from Matt Larew with William Blair. Your line is open.

Speaker Change: Hi, Good morning, the first is a follow up to your progress on the automated line, obviously that's something.

Speaker Change: You've been speaking about and working towards for the last couple of years.

Speaker Change: Eric at this point do you have enough pieces in place had made enough progress that the timeline you've cited you feel confident.

Speaker Change: While it slip or are their store sort of additional hurdles remaining.

At that time might have risk.

Matt: Yeah, Matt good question.

Speaker Change: On schedule.

Speaker Change: In line with the schedule that we communicated towards the end of the year, we will have validation and start.

Eric Green: Towards the end of the year, we'll have validation and start moving towards commercialization. So pleased with the progress more recently. You're right. A couple of years ago, we had some delays, but we are in a good position today as we move towards the schedule for the end of the year. Okay, thanks.

Speaker Change: Moving towards commercialization, so pleased with the progress bar recently Youre right. A couple of years ago, we had some delays, but we are in a good position today.

Speaker Change: As we move towards the scheduled for the end of the year.

Matt LaRue: And then the second one is. Kind of a broader question around GLPs and long-term growth. Obviously, as you are emerging from this period of destocking and hopefully getting back to longer-term growth, relative to perhaps a couple of years ago, GLPs as a percentage of revenue, and I'm thinking just on the component side, not even factoring in contract manufacturing, it's a bigger piece of the revenue book. And maybe 18 months ago, the consensus would have been that would have been growth accretive. And perhaps with the little oral readout and others coming, maybe there's some debate as to whether it might be growth dilutive.

Speaker Change: Okay. Thanks, and then the second one is.

Speaker Change: Kind of a broader question around DLP and long term growth.

Speaker Change: Obviously as you are emerging from this period of Destocking, and hopefully getting back to longer term growth.

Speaker Change: You have to perhaps a couple of years ago DLP is as a percentage of revenue and I think you just on the component side not even factored in contract manufacturing is a bigger piece of that rapidly, but Ken maybe 18 months ago.

Speaker Change: It would have been that would have been growth accretive and <unk>.

Speaker Change: Perhaps with similarly.

Speaker Change: Oral readout at others come in maybe there is some debate as to whether it might be growth dilutive.

Eric Green: So just curious how you're thinking about GLP growth in the future, what you're hearing from customers, including those that may have molecules delivered both using your products and potentially oral.

Speaker Change: Just curious how you're thinking about <unk> growth in the future of what Youre hearing from customers, including those that may have molecules delivered both using your products and potentially oral.

Speaker Change: And then b.

Eric Green: Beyond GLPs, thinking more broadly on the products and the category you play in, whether you still feel confident in the longer-term growth plan you've outlined. Yeah, Matt, that's a great question. And I know there's some recent news that stimulated more conversations about oral, but let me step back a moment to simply say, the benefit that we, the position where we are in the market right now with our HVP portfolio, and how we're able to support multiple customers, a very diverse portfolio of customers, very diverse portfolio of which type of molecules we're touching in regards to our primary containment and delivery devices.

Speaker Change: <unk> DLP is taking more broadly in the other products in that category. Your plan, whether you still feel confident and longer.

Speaker Change: Longer term growth plan that you've outlined.

Matt: Yes, Matt that's a great question.

Speaker Change: With some recent news that.

Matt: Stimulated more conversations about oral but let me step back a moment is simply to say.

Matt: The benefit that the position we are in the market right now with our HCP portfolio.

Matt: And how we're able to.

Matt: Support multiple customers the very diverse portfolio of customers very diverse portfolio of whats type of molecules we're touching in.

Matt: In regards to our primary containment and delivery devices. So.

Eric Green: So while GLP-1s is a fast growing area, we still are excited about other areas of the business too, as we continue to see new drug launches. And I'm very pleased with the results of the Q1 with the approvals that we've seen, and what we're participating on. So to answer your question directly, though, in the GLP-1s, you know, we have been in discussions with our customers for a long period of time in regards to oral versus injectables. And our position, you know, I'd rather have our customers talk about how they see the market shifting. But when we modeled our investments, when we modeled our forecast, we took that in consideration of these various inputs of the potential impact of orals.

Matt: While <unk> is a.

Matt: The fast growing area. We still are excited about other areas of the business too as we continue to see new drug launches.

Matt: And I am very pleased with the results of the Q1 with their with the approvals that we've seen and what we're participating in.

Matt: So to answer your question directly, though and the GOP ones.

Matt: We have been in discussions with our customers first for a long period of time in regards to oral versus injectables in our position and I'd, rather have our customers talk about how they see the market shifting but when we modeled our investments when we modeled our our forecast we took.

Matt: That in consideration of these various inputs of the potential impact of oral <unk>. We do still believe majority of the delivery of <unk> ones in the future. We will continue to be Injectables. However, there will be a space one day.

Eric Green: We do still believe majority of the delivery of GLP-1s in the future will continue to be injectables. However, there will be a space one day in regards to oral. And I would say our customers are in a better position to say that. But, you know, we're positioned well. What's really good about the GLP-1 growth for us is the assets we put in for COVID are fungible for GLP-1s. We think about HVP processing, the washing, the sterilization, and et cetera, in our HVP plants. So we're leveraging existing assets. And again, as I said, we modeled our future growth based on some assumptions of a shared market between injectables and oral.

Matt: In regards to oral and I would say our customers in a better position to say that.

Matt: But we're.

Matt: We're positioned well, what's really good about the <unk> growth for us.

Matt: The assets, we put in for Covid are fungible for <unk>, you think about HCP processing, the washing and sterilization and et cetera, and our <unk> plants. So we're leveraging existing assets and again as I've said, we've modeled our future growth based on some assumptions of assured.

Matt: Market between the Injectables MRO.

Eric Green: Thank you.

Kyle Cruz: Our next question comes from Kyle Cruz with UBS. Your line is open. Thank you for taking questions.

Kyle Crews: Thank you. Our next question comes from Kyle crews with UBS. Your line is open.

Kyle Crews: Okay. Thank you for taking the questions with regards to the updated adjusted EPS Guide if you walk through the FX adjusted tax benefit Andy.

Bernard Birkett: With regards to the updated, adjusted EPS guide, if you walk through the FX adjustment, HACS benefit, and the pair of headwind, it seems like core EPS was increased by an implied 15 cents. Is that a result of the restructuring efforts?

Speaker Change: Eric headwind it seems like the core EPS was increased by <unk> 15 cents is.

Speaker Change: Is that a result of the restructuring efforts and then secondly could you talk to the incremental opportunity you see from drug handling and attempt to size. It. Thank you.

Bernard Birkett: And then secondly, could you talk to the incremental opportunity you see from drug handling and attempt to size it? Thank you. On the guidance, not specifically around restructuring, you know, we did see an improvement in efficiencies and profitability across a number of our businesses or proprietary business. We saw improvements in contract manufacturing. So the beat was really operationally driven. And so, you know, we passed on a certain amount of that beat. And then there's an element regarding timing on some spend, particularly around R&D and SG&A that, you know, we expect to move into future quarters.

Speaker Change: On the guidance.

Speaker Change: Not specifically around restructuring.

Speaker Change: We did see an improvement in efficiencies and profitability.

Speaker Change: Cross a number of our businesses our proprietary business, we saw improvements in contract manufacturing. So the beat was really awkward operationally driven.

Speaker Change: And so we passed on.

Speaker Change: A certain amount of that piece and then there is an element.

Speaker Change: Regarding timing on some spend.

Speaker Change: Particularly around R&D and SG&A.

Eric Green: But really, it's business performance rather than restructuring. Thank you, Kyle. Thank you, Bernard and Kyle.

Speaker Change: Like to move into future quarters, but really its business performance rather than restructuring.

Speaker Change: Thank you, Brian and ill address your question of <unk> drug handling.

Eric Green: I'll address your question regards drug handling. You know, it's an exciting opportunity for us. It's very early. We do have a few customers in a smaller scale that we're working on adopting the technology and start that capability. We do have, in our Dublin facility, we have a significant portion of that asset will be to support drug handling. So it's early for us. But what's exciting about for us at West is just the continuum of downstream. And it just shows you the confidence of our existing customers have with us, not just providing the components or the devices for their drug molecules, but also now handling some of the drug handling and then going into the market.

Speaker Change: It's an exciting opportunity for us is very early.

Speaker Change: We do have a few customers in a smaller scale that we're working on.

Speaker Change: Adopting the technology and start.

Speaker Change: That capability, we do have in our Dublin facility, we have a significant portion of that asset will be to support drug handling. So it's early for us, but what's exciting about for US is just a continuum of downstream and it just shows you the confidence of our existing customers have with us not just providing the components or the device.

Speaker Change: <unk> for their drug molecules, but also now handling some of the some of the drug handling and then going into the market. So it's early.

Eric Green: So it's early. We'll update you as we go forward. We're excited about the prospect. It's leveraging our competencies. It's leveraging our existing customers. And it's just a continuum of what we do today in the marketplace. Thank you.

Speaker Change: We'll update you as we go forward. We're excited about the prospect is leveraging our competencies is leveraging our existing customers.

Speaker Change: And it's a continuum of what we do today in the marketplace.

John Sweeney: I'm showing no further questions at this I would now like to turn it back to John Sweeney for closing remarks. Thank you so much for joining us today on The Call. An online archive of the broadcast is available on our website at westpharma.com in the Investor Relations section. Additionally, you can access the replay for 30 days following the presentation by using the dial-out numbers and the conference IDs provided at the end of the day's earnings release.

Speaker Change: Thank you I'm showing no further questions at this time I would now like to turn it back to John Sweeney for closing remarks.

John Sweeney: Thank you so much for joining us today on the call an online archive of the broadcast is available on our website at <unk> Dot com in the Investor Relations section. Additionally, you can access a replay for 30 days following the presentation by using the dialogue numbers on the conference I'd provided at the end of today's earnings release that concludes.

Operator: That concludes The Call. Thank you. Have a great day.

Speaker Change: The call. Thank you have a great day.

Operator: This concludes today's conference. Thank you for participating. You may now disconnect.

Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.

Speaker Change: Okay.

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