On October 28, 2021 West Pharmaceutical Services, Inc. (NYSE: WST) reported its financial results for the third-quarter 2021 and updated full-year 2021 financial guidance (Press release, West Pharmaceutical Services, OCT 28, 2021, View Source [SID1234592128]).

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Third-Quarter 2021 Summary (comparisons to prior-year period)

Net sales of $706.5 million grew 28.9%; organic sales growth was 27.9%.
Reported-diluted EPS of $2.31 increased 112%.
Adjusted-diluted EPS of $2.06 increased 79%.
Company is raising full-year 2021 net sales guidance to a new range of $2.800 billion to $2.810 billion, compared to a prior range of $2.760 billion to $2.785 billion.
Company is raising full-year 2021 adjusted-diluted EPS guidance to a new range of $8.40 to $8.50, compared to a prior range of $8.05 to $8.20.
The Company also announced that its Board of Directors has approved a fourth-quarter 2021 dividend of $0.18 per share, a 5.9% increase over the $0.17 per share paid in each of the four preceding quarters. This is the twenty-ninth consecutive annual increase in the Company’s dividend. The dividend will be paid on November 17, 2021, to shareholders of record as of November 10, 2021.
"Adjusted-diluted EPS" and "organic sales growth" are Non-U.S. GAAP measurements. See discussion under the heading "Non-U.S. GAAP Financial Measures" in this release.

"We had robust growth in all three of our Proprietary Products market units, led by the sales of components in our High-Value Product (HVP) portfolio," said Eric M. Green, President and Chief Executive Officer. "This quarter’s strong performance came from both our base business, especially in the Biologics market unit, and COVID-19 related sales. Demand continues to grow for our premium offerings, such as NovaPure and FluroTec components, and, as a result, we are again increasing our planned capital expenditures, commencing next year, to expand HVP capacity at existing sites."

Proprietary Products Segment
Net sales grew by 36.9% to $577.0 million. Organic sales growth was 35.7%, with currency translation increasing sales growth by 120 basis points. HVP sales represented over 70% of segment sales and generated double-digit organic sales growth, led by customer demand for Westar, FluroTec and NovaPure components and Daikyo Crystal Zenith containers.

All three market units – Biologics, Generics and Pharma – had strong double-digit organic sales growth.

Contract-Manufactured Products Segment
Net sales grew by 2.4% to $129.7 million. Organic sales growth was 2.1% with currency translation increasing sales growth by 30 basis points. Segment performance was led by sales of healthcare-related medical devices.

Financial Highlights (first nine months of 2021)
Operating cash flow was $423.2 million, an increase of 30.7%. Capital expenditures were $176.9 million, an increase of 51.6% over the same period last year. Free cash flow (operating cash flow minus capital expenditures) was $246.3 million, an increase of 18.9%.

During the first nine months of 2021, the Company repurchased 479,000 shares for $137.1 million at an average share price of $286.23 under its share repurchase program.

Full-Year 2021 Financial Guidance

Full-year 2021 net sales are expected to be in a range of $2.800 billion to $2.810 billion, compared to a prior guidance range of $2.760 billion to $2.785 billion.
Organic sales growth is expected to be 28%, compared to a prior range of 24% to 25%.
Net sales guidance includes an estimated full-year 2021 benefit of $55 million based on current foreign exchange rates. This updated guidance is a reduction of $25 million, compared to a prior estimated full-year benefit of $80 million.
Full-year 2021 adjusted-diluted EPS is expected to be in a range of $8.40 to $8.50, compared to a prior range of $8.05 to $8.20.
Full-year adjusted-diluted EPS guidance range includes an estimated benefit of approximately $0.19 based on current foreign currency exchange rates. This updated guidance is a reduction of $0.08, compared to a prior estimated benefit of $0.27.
The revised guidance includes a $0.35 EPS positive impact of tax benefits from stock-based compensation from the first nine months of 2021.
For the remainder of the year, our EPS guidance range assumes a tax rate of approximately 23% and does not include potential tax benefits from stock-based compensation. Any tax benefits associated with stock-based compensation beyond those recorded in the first nine months of 2021 would provide a positive adjustment to our full-year EPS guidance.
Third-Quarter 2021 Conference Call
The Company will host a conference call to discuss the results and business expectations at 9:00 a.m. Eastern Time today. To participate on the call please dial 877-930-8295 (U.S.) or 253-336-8738 (International). The conference ID is 5587559.

A live broadcast of the conference call will be available at the Company’s website, www.westpharma.com, in the "Investors" section. Management will refer to a slide presentation during the call, which will be made available on the day of the call. To view the presentation, select "Presentations" in the "Investors" section of the Company’s website.

An online archive of the broadcast will be available at the website three hours after the live call and will be available through Thursday, November 4, 2021, by dialing 855-859-2056 (U.S.) or 404-537-3406 (International) and entering conference ID 5587559.