On July 28, 2022 West Pharmaceutical Services, Inc. (NYSE: WST) reported its financial results for the second-quarter 2022 and updated full-year 2022 financial guidance (Press release, West Pharmaceutical Services, JUL 28, 2022, View Source;utm_medium=Email&utm_campaign=Investors_Email&utm_content=28_July_2022&utm_source=West+Pharmaceutical+Services%2C+Inc.&utm_campaign=f7424fcbb0-EMAIL_CAMPAIGN_2022_03_31_10_50_COPY_01&utm_medium=email&utm_term=0_4b4b77d239-f7424fcbb0-584006100&ct=t(EMAIL_CAMPAIGN_5_12_2022_16_15_COPY_01)#west-announces-second-quarter-2022-results [SID1234617100]).

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Second-Quarter 2022 Summary (comparisons to prior-year period)

Net sales of $771.3 million grew 6.6%; organic net sales growth was 13.1%.
Reported-diluted EPS of $2.48, compared to $2.47 in the same period last year.
Adjusted-diluted EPS of $2.47, compared to $2.46 in the same period last year.
The Company is updating full-year 2022 net sales guidance to a range of $2.950 billion to $2.975 billion, compared to a prior range of $3.050 billion to $3.075 billion, to reflect changes in foreign currency rates and a decline in expected COVID-19 related net sales.
The Company is updating full-year 2022 adjusted-diluted EPS guidance to a new range of $9.00 to $9.15, compared to a prior range of $9.30 to $9.45.
"We delivered excellent second-quarter results with Proprietary Products organic net sales growth in the high-teens, led by demand for our high-value products (HVPs)," said Eric M. Green, President, Chief Executive Officer and Chair of the Board. "Our base business continues to be strong, reflecting our team’s successful execution of strategic initiatives and dedication to improving patient lives. In the quarter, COVID-19 related net sales slightly declined. While we expect further declines in COVID-19 related demand over the next two quarters, we also anticipate a more robust base business. We remain on track to expand our global HVP manufacturing capacity to support increased demand across our Biologics, Generics and Pharma market units."

Proprietary Products Segment
Net sales grew by 11.3% to $653.7 million. Organic net sales growth was 18.3%, with currency translation decreasing sales growth by 700 basis points. HVP sales represented over 70% of segment sales and generated double-digit organic sales growth, led by customer demand for NovaPure, Envision and Daikyo Crystal Zenith components and for self-injection devices.

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

Contract-Manufactured Products Segment
Net sales declined by 13.6% to $117.8 million. Organic net sales declined by 8.9% with currency translation decreasing sales growth by 470 basis points. Segment sales declined primarily due to a decrease in sales of components for diagnostic devices.

Financial Highlights (first six months of 2022)
Operating cash flow was $324.3 million, an increase of 39.1%. Capital expenditures were $131.9 million, an increase of 18.2% over the same period last year. Free cash flow (operating cash flow minus capital expenditures) was $192.4 million, an increase of 58.4%.

During the first-half 2022, the Company repurchased 476,667 shares for $175.7 million at an average share price of $368.54 under its share repurchase program.

Full-Year 2022 Financial Guidance

Full-year 2022 net sales are expected to be in the range of $2.950 billion to $2.975 billion, compared to a prior guidance range of $3.050 billion to $3.075 billion.
Organic sales growth is expected to be approximately 11%, compared to a prior guidance range of 11% to 12%.
The Company expects a full-year decline in COVID-19 related sales of approximately 20%, or $85 million less than 2021 sales, compared to prior expectation of year-over-year growth. Higher base business sales are expected to partially offset the decline in COVID-19 related sales.
Net sales guidance, based on current foreign currency exchange rates, includes an estimated full-year 2022 headwind of $190 million, compared to prior guidance of a $115 million headwind.
Full-year 2022 adjusted-diluted EPS is expected to be in the range of $9.00 to $9.15, compared to a prior guidance range of $9.30 to $9.45.
The full-year adjusted-diluted EPS guidance range, based on current foreign currency exchange rates, includes an estimated headwind of $0.55, compared to a prior guidance of a $0.38 headwind.
The revised guidance includes a $0.13 EPS positive impact from first-half 2022 tax benefits from stock-based compensation.
For second-half 2022, our EPS guidance range assumes a tax rate of 23% and does not include potential tax benefits from stock-based compensation. Any tax benefits associated with stock-based compensation beyond those recorded in first-half 2022 would provide a positive adjustment to our full-year adjusted-diluted EPS guidance.
Full-year 2022 capital spending is expected to be $380 million, unchanged from prior guidance. This includes incremental capital spending to support capacity expansions at existing HVP facilities.
Second-Quarter 2022 Conference Call
The Company will host a conference call to discuss the results and business expectations at 9:00 a.m. Eastern Time today. The live audio-only webcast will be made available via the Company’s Investor Relations website at https://bit.ly/3cgSM9S.

To participate and ask questions during the conference call, you must register in advance at https://bit.ly/3z4iU0g. Upon registration, all telephone participants will receive the dial-in number along with a unique PIN number that will be used to access the call.

Management will refer to a slide presentation during the call, which will be made available on the day of the call. To view the presentation, select "Presentations" in the "Investors" section of the Company’s website.

A replay of the conference call and webcast will be available on the Company’s website for 30 days.