West Pharmaceutical Services, Inc. (NYSE:WST) Q3 2023 Earnings Call Transcript

Quintin Lai: Yes. That’s right. That’s right. And then CM to get back down to kind of that 16% to 16.5% range.

Derik De Bruin: Got it. Okay. And so how long does that sort of like — I mean how long does that sort of like drag on Proprietary products as we start thinking about building out our quarterly models or quarterly estimates for next year?

Quintin Lai: No, no. I mean look I mean we’re in the process of formalizing kind of the plans for 2024. But as we look at it next year with the top line growth that we get led by HVP you’re going to see gross margins improve year-on-year.

Derik De Bruin: Got it. Okay. That’s great. And just going back I mean I know we’ve talked about the — I know we’ve talked about the guide and it’s — questions have been asked. But I mean I’ve covered the stock for a while and you’re right. I mean you historically are doing better than your 7% to 9% construct. I mean why wouldn’t you do at least the high end of that range next year? I mean given you’ve got pricing, you’ve got demand, you’ve got some orders that got pushed from this year to next year. I mean why wouldn’t COVID is normalizing why wouldn’t that be just like why wouldn’t that be a reasonable 9% or better?

Quintin Lai: Well, Derik look we’re sitting here in October where we’re putting our plans together. We’re trying to give you kind of a preview of next year. And we’re also doing it cognizant of the fact that we’re hearing other life science tools companies upstream of us talk about softness and tougher times. We don’t have some of the high exposure that they have in certain areas like emerging bio and pre-commercial companies and things like that. But still we just want to be again we want to be we acknowledge that there are uncertainties out there. So as we sit there and put all that in and that’s how we come up with that preliminary guide. And we’ll provide a lot more detail in February. Because we’ll have a lot more information then and we’re happy to come back and talk to you then.

Eric Green: Yes. And I think we’ve been consistent on the message that that’s just — to us we want to continuously hit or exceed. So that’s where we sit right now with the visibility we have.

Derik De Bruin: Great. Thanks a lot. Appreciate it.

Quintin Lai: You bet. Good talking to you Derik.

Operator: Thank you. And I would like to hand the conference back over to Quintin Lai for any further remarks.

Quintin Lai: Thanks, Michelle. Thank you for joining us on today’s conference call. An online archive of the broadcast will be available on our website at westpharma.com in the Investors section. Additionally you may access a replay for the 30 days following this presentation by using the dial-in numbers and conference ID provided at the end of today’s earnings release. That concludes the call. Have a nice day.

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