West Pharmaceutical Services — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales for the third quarter of 2026 reached $874.5 million, an 8.7% increase year-over-year, with organic growth of 11.9%.
• Diluted earnings per share (EPS) were $3.02, a 57.3% increase compared to the prior-year period.
• Adjusted-diluted EPS was $2.66, representing a 35.7% increase year-over-year.
• Year-to-date operating cash flow was $403 million, while capital expenditures totaled $125 million.
• The company repurchased $231 million of stock in the quarter, bringing the year-to-date total to $685 million.
• Reported operating profit for the quarter was $267.4 million, compared to $167.6 million in the prior-year period.
• Gross profit margin for the quarter was 39.7%, up from 36.6% in the prior-year period.
• Adjusted operating profit margin was 25.3%, compared to 21.1% in the prior-year period.

Guidance and Future Outlook:

• Full-year 2026 net sales guidance was raised to a range of $3.41 billion to $3.42 billion, up from the previous range of $3.345 billion to $3.380 billion.
• Full-year 2026 adjusted-diluted EPS guidance was increased to a range of $9.38 to $9.48, up from the previous range of $8.85 to $9.05.
• Full-year 2026 capital spending guidance was reduced to a range of $215 million to $220 million, down from the prior range of $250 million to $275 million.
• Organic net sales growth guidance for the full year was increased to a range of 11.3% to 11.6%, up from the prior range of 10% to 11%.
• No additional SmartDose® 3.5mL product sales are expected for the remainder of 2026.

Business Segments and Product Lines:

• The Proprietary Products segment generated net sales of $728.8 million, growing 12.6% year-over-year and 16.6% on an organic basis.
• High-Value Product (HVP) Components net sales were $466.7 million, increasing 19.7% year-over-year and 20.3% organically, accounting for 53% of total company net sales.
• HVP Delivery Devices net sales were $99.1 million, flat year-over-year but up 26.4% organically excluding foreign currency and the SmartDose® 3.5mL divestiture, accounting for 11% of total net sales.
• Standard Products net sales were $163.0 million, increasing 2.9% year-over-year and 3.1% organically, accounting for 19% of total net sales.
• The West Vantage segment generated net sales of $145.7 million, a 7.3% decrease year-over-year and a 6.6% decline on an organic basis, accounting for 17% of total net sales.
• SmartDose® 3.5mL net sales were $11.8 million in the third quarter of 2026, compared to $29.8 million in the prior-year quarter.

Market and Competitive Landscape:

• Biologics market group organic sales grew 23.2% in the third quarter.
• Pharma market group organic sales grew 21.4% in the third quarter.
• Generics market group organic sales declined 4.5% in the third quarter.
• Asia Pacific region reported a 42.4% increase in reported net sales and 41.9% organic growth.
• Americas region reported a 6.9% increase in reported net sales and 12.4% organic growth.
• EMEA region reported a 4.2% increase in reported net sales and 5.7% organic growth.

Risks and Challenges:

• The company recorded pre-tax restructuring charges of $6.3 million in the quarter related to existing restructuring programs.
• A one-time tax cost of $12.0 million was recorded in the first quarter of 2026 associated with an internal legal entity restructuring.
• The company recorded a net benefit of $54.0 million related to M&A activities, primarily the sale of SmartDose® 3.5mL assets to AbbVie.
• Cost-method investment impairment charges of $3.5 million were recorded in the nine-month period.
• Other nonrecurring professional fees were recorded related to a cybersecurity incident in May 2026.

Management Commentary and Tone:

• President and CEO Michel Lagarde stated that third-quarter results exceeded expectations, driven by the High-Value Product (HVP) Components business.
• Management attributed strong operating income margin expansion and EPS growth to robust sales performance.
• Lagarde expressed gratitude to global teams for their focus on execution and emphasized West's role as a critical primary containment and drug delivery partner.
• The tone was confident, citing strong execution as the reason for raising full-year guidance.

Other Key Points:

• The Board of Directors declared a fourth-quarter dividend of $0.26 per share, an 18% increase over the $0.22 per share paid in the prior quarter.
• The company sold its SmartDose® 3.5mL On-Body Delivery System and associated facilities to AbbVie, resulting in a net gain on sale of $55.7 million in the quarter.
• Cash and cash equivalents were $464.1 million as of September 30, 2026, down from $791.3 million at December 31, 2025.
• Long-term debt was $202.9 million as of September 30, 2026, compared to $202.8 million at December 31, 2025.
• Total equity was $2,968.2 million as of September 30, 2026, down from $3,176.0 million at December 31, 2025.