West Pharmaceutical Services 10-Q 2022-03-31

FORM 10-Q

(Mark One)

For the quarterly period ended March 31, 2022

or

For the transition period from to

Commission File Number 1-8036

WEST PHARMACEUTICAL SERVICES, INC.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: 610-594-2900

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

As of April 15, 2022, there were 74,075,617 shares of the registrant’s common stock outstanding.

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PART I. FINANCIAL INFORMATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

West Pharmaceutical Services, Inc. and Subsidiaries

(in millions, except per share data)

See accompanying notes to condensed consolidated financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

West Pharmaceutical Services, Inc. and Subsidiaries

(in millions)

See accompanying notes to condensed consolidated financial statements.

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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

West Pharmaceutical Services, Inc. and Subsidiaries

(in millions, except per share data)

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OVERVIEW

The following discussion is intended to further the reader’s understanding of the consolidated financial condition and results of operations of our Company. It should be read in conjunction with our condensed consolidated financial statements and accompanying notes elsewhere in this Quarterly Report on Form 10-Q (“Form 10-Q”) as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and accompanying notes included in our 2021 Annual Report. Our historical financial statements may not be indicative of our future performance. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains a number of forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risks discussed in Part I, Item 1A of our 2021 Annual Report and in Part II, Item 1A of this Form 10-Q.

Throughout this section, references to “Notes” refer to the notes to our condensed consolidated financial statements (unaudited) in Part I, Item 1 of this Form 10-Q, unless otherwise indicated.

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Non-U.S. GAAP Financial Measures

For the purpose of aiding the comparison of our year-over-year results, we may refer to net sales and other financial results excluding the effects of changes in foreign currency exchange rates. Organic net sales exclude the impact from acquisitions and/or divestitures and translate the current-period reported sales of subsidiaries whose functional currency is other than USD at the applicable foreign exchange rates in effect during the comparable prior-year period. We may also refer to adjusted consolidated operating profit and adjusted consolidated operating profit margin, which exclude the effects of unallocated items. The unallocated items are not representative of ongoing operations, and generally include restructuring and related charges, certain asset impairments, and other specifically-identified income or expense items. The re-measured results excluding effects from currency translation, the impact from acquisitions and/or divestitures, and excluding the effects of unallocated items are not in conformity with U.S. GAAP and should not be used as a substitute for the comparable U.S. GAAP financial measures. The non-U.S. GAAP financial measures are incorporated in our discussion and analysis as management uses them in evaluating our results of operations and believes that this information provides users with a valuable insight into our overall performance and financial position.

Our Operations

We are a leading global manufacturer in the design and production of technologically advanced, high-quality, integrated containment and delivery systems for injectable drugs and healthcare products. Our products include a variety of primary packaging, containment solutions, reconstitution and transfer systems, and drug delivery systems, as well as contract manufacturing, analytical lab services and integrated solutions. Our customers include the leading biologic, generic, pharmaceutical, diagnostic, and medical device companies in the world. Our top priority is delivering quality products that meet the exact product specifications and quality standards customers require and expect. This focus on quality includes a commitment to excellence in manufacturing, scientific and technical expertise and management, which enables us to partner with our customers in order to deliver safe, effective drug products to patients quickly and efficiently.

Our business operations are organized into two reportable segments, Proprietary Products and Contract-Manufactured Products. Our Proprietary Products reportable segment offers proprietary packaging, containment and drug delivery products, along with analytical lab services and other integrated services and solutions, primarily to biologic, generic and pharmaceutical drug customers. Our Contract-Manufactured Products reportable segment serves as a fully integrated business, focused on the design, manufacture, and automated assembly of complex devices, primarily for pharmaceutical, diagnostic, and medical device customers. We also maintain collaborations to share technologies and market products with affiliates in Japan and Mexico.

Impact of COVID-19

West has been actively monitoring the COVID-19 situation and its impact globally. Our primary objectives have remained the same throughout the pandemic: to support the safety of our team members and their families and continue to support patients around the world. Our production facilities continue to operate as they had prior to the COVID-19 pandemic, other than for enhanced safety measures intended to prevent the spread of the virus. Our capital and financial resources, including overall liquidity, remain strong. The remote working arrangements and travel restrictions imposed by various governments had limited impact on our ability to maintain operations, as our manufacturing operations have generally been exempted from stay-at-home orders. However, we cannot predict the impact of the progression of the COVID-19 pandemic on future results due to a variety of factors, including the continued good health of our employees, the ability of suppliers to continue to operate and deliver, the ability of West and its customers to maintain operations, continued access to transportation resources, the changing needs and priorities of customers, any further government and/or public actions taken in response to the pandemic and ultimately the length of the pandemic. We will continue to closely monitor the COVID-19 pandemic in order to ensure the safety of our people and our ability to serve our customers and patients worldwide.

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2022 Financial Performance Summary

The following tables present a reconciliation from U.S. GAAP to non-U.S. GAAP financial measures:

During the first quarter 2022, we recorded a tax benefit of $8.9 million associated with stock-based compensation.

During the first quarter 2021, we recorded a tax benefit of $11.1 million associated with stock-based compensation.

(1)The Company recorded a pension settlement charge within other nonoperating (income) expense, as it determined that normal-course lump-sum payments for our U.S. qualified defined benefit pension plan exceeded the threshold for settlement accounting.

(2)During the three months ended March 31, 2022 and 2021, the Company recorded $0.2 million of amortization expense within operating profit associated with an intangible asset acquired during the second quarter of 2020. During the three months ended March 31, 2022 and 2021, the Company recorded $0.5 million of amortization expense in association with an acquisition of increased ownership interest in Daikyo.

RESULTS OF OPERATIONS

We evaluate the performance of our segments based upon, among other things, segment net sales and operating profit. Segment operating profit excludes general corporate costs, which include executive and director compensation, stock-based compensation, certain pension and other retirement benefit costs, and other corporate facilities and administrative expenses not allocated to the segments. Also excluded are items that we consider not representative of ongoing operations. Such items are referred to as other unallocated items for which further information can be found above in the reconciliation from U.S. GAAP to non-U.S. GAAP financial measures.

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Percentages in the following tables and throughout the Results of Operations section may reflect rounding adjustments.

Net Sales

The following table presents net sales, consolidated and by reportable segment, for the three months ended March 31, 2022 and 2021:

Consolidated net sales increased by $49.3 million, or 7.4%, for the three months ended March 31, 2022, as compared to the same period in 2021, including an unfavorable foreign currency translation impact of $24.2 million. Excluding foreign currency translation effects, consolidated net sales for the three months ended March 31, 2022 increased by $73.5 million, or 11.0%, as compared to the same period in 2021.

Proprietary Products – Proprietary Products net sales increased by $57.6 million, or 10.6%, for the three months ended March 31, 2022, as compared to the same period in 2021, including an unfavorable foreign currency translation impact of $20.6 million. Excluding foreign currency translation effects, net sales for the three months ended March 31, 2022 increased by $78.2 million, or 14.4%, as compared to the same period in 2021, primarily due to growth in our high-value product offerings, including our NovaPure® products and our Westar® components, offset by the recognition of approximately $15 million in one-time fees due to COVID supply agreements recorded during the three months March 31, 2021.

Contract-Manufactured Products – Contract-Manufactured Products net sales decreased by $8.4 million, or 6.6%, for the three months ended March 31, 2022, as compared to the same period in 2021, including an unfavorable foreign currency translation impact of $3.6 million. Excluding foreign currency translation effects, net sales for the three months ended March 31, 2022 decreased by $4.8 million, or 3.8%, as compared to the same period in 2021, due to a decline of sales of components for diagnostic devices, offset by sales price increases.

The intersegment sales elimination, which is required for the presentation of consolidated net sales, represents the elimination of components sold between our segments.

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Gross Profit

The following table presents gross profit and related gross profit margins, consolidated and by reportable segment:

Consolidated gross profit increased by $12.7 million, or 4.7%, for the three months ended March 31, 2022, as compared to the same period in 2021, including an unfavorable foreign currency translation impact of $10.3 million for the three months ended March 31, 2022, as compared to the same period in 2021. Consolidated gross profit margin decreased by 1.0 margin point for the three months ended March 31, 2022, as compared to the same period in 2021.

Proprietary Products - Proprietary Products gross profit increased by $8.8 million, or 3.5%, for the three months ended March 31, 2022, as compared to the same period in 2021, including an unfavorable foreign currency translation impact of $9.5 million. Proprietary Products gross profit margin decreased by 2.9 margin points for the three months ended March 31, 2022, as compared to the same periods in 2021, due to increased overhead costs, primarily within transportation and compensation, that were driven by inflation, higher allocation of functional spend from Selling, General & Administrative expense, as well as the recognition of approximately $15 million in one-time fees due to COVID supply agreements recorded during the three months March 31, 2021.

Contract-Manufactured Products - Contract-Manufactured Products gross profit increased by $3.9 million, or 19.5%, for the three months ended March 31, 2022, as compared to the same period in 2021, including an unfavorable foreign currency translation impact of $0.8 million. Contract-Manufactured Products gross profit margin increased by 4.4 margin points for the three months ended March 31, 2022, as compared to the same period in 2021, due to sales price increases and production efficiencies, partially offset by increased overhead costs that were driven by inflation.

Research and Development (“R&D”) Costs

The following table presents R&D costs, consolidated and by reportable segment:

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Consolidated R&D costs increased by $2.4 million, or 19.7%, for the three months ended March 31, 2022, as compared to the same period in 2021, due to additional research performed in an effort to identify new product opportunities. Efforts remain focused on the continued investment in self-injection systems development, fluid transfer admixture devices, elastomeric packaging components, and formulation development.

All of the R&D costs incurred during the three months ended March 31, 2022 and 2021 related to Proprietary Products.

Selling, General and Administrative (“SG&A”) Costs

The following table presents SG&A costs, consolidated and by reportable segment and corporate:

Consolidated SG&A costs increased by $3.2 million, or 4.0%, for the three months ended March 31, 2022, as compared to the same period in 2021, due to an increase in selling expenses and professional fees, offset by higher allocation of functional spend to Cost of Goods Sold and a favorable foreign currency translation impact of $1.8 million.

Proprietary Products - Proprietary Products SG&A costs decreased by $0.6 million, or 1.1%, for the three months ended March 31, 2022, as compared to the same period in 2021. Proprietary Products SG&A costs decreased primarily due to a higher allocation of functional spend to Cost of Goods Sold and a favorable foreign currency translation impact of $1.5 million, offset by an increase in selling expenses and professional fees.

Contract-Manufactured Products - Contract-Manufactured Products SG&A costs increased by $1.1 million, or 29.7% for the three months ended March 31, 2022, as compared to the same period in 2021.

Corporate - Corporate SG&A costs increased by $2.7 million, or 13.5%, for the three months ended March 31, 2022, as compared to the same period in 2021, primarily due to an increase in compensation costs and costs related to professional fees.

Other (Income) Expense

The following table presents other income and expense items, consolidated and by reportable segment, corporate and unallocated items:

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Other income and expense items, consisting of foreign exchange transaction gains and losses, gains and losses on the sale of fixed assets, development and licensing income, contingent consideration, fixed asset impairments and miscellaneous income and charges, are generally recorded within segment results.

Consolidated other (income) expense changed by $7.0 million for the three months ended March 31, 2022, as compared to the same period in 2021, due to the factors described below.

Proprietary Products - Proprietary Products other (income) expense changed by $3.8 million for the three months ended March 31, 2022, as compared to the same period in 2021, primarily due to a $2.8 million gain related to oil hedges recorded during the three months ended March 31, 2022 compared to a loss of $0.5 million for the three months ended March 31, 2021.

Contract-Manufactured Products - Contract-Manufactured Products other (income) expense changed by $0.1 million for the three months ended March 31, 2022, as compared to the same period in 2021.

Corporate and unallocated items - Corporate and unallocated items changed by $3.3 million for the three months ended March 31, 2022, as compared to the same periods in 2021 primarily due to a $2.2 million cost investment impairment charge and restructuring and related charges recorded during the three months ended March 31, 2021 that did not recur in 2022.

Operating Profit

The following table presents operating profit and adjusted operating profit, consolidated and by reportable segment, corporate and unallocated items:

Consolidated operating profit increased by $14.1 million, or 8.0%, for the three months ended March 31, 2022, as compared to the same period in 2021, including an unfavorable foreign currency translation impact of $8.4 million for the three months ended March 31, 2022, as compared to the same period in 2021.

Proprietary Products - Proprietary Products operating profit increased by $10.8 million, or 5.9%, for the three months ended March 31, 2022, as compared to the same period in 2021, including an unfavorable foreign currency translation impact of $8.0 million, due to the factors described above, most notably the sales increase in our high-value product offerings.

Contract-Manufactured Products - Contract-Manufactured Products operating profit increased by $2.7 million, or 16.5%, for the three months ended March 31, 2022, as compared to the same period in 2021, including an unfavorable foreign currency translation impact of $0.4 million, due to the factors described above, most notably the sales price increases and product efficiencies.

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Corporate- Corporate costs increased by $2.8 million, or 14.1%, for the three months ended March 31, 2022, as compared to the same period in 2021, due to the factors described above.

**Unallocated items –**Other unallocated items during the three months ended March 31, 2022 consisted $0.2 million of amortization expense associated with an acquisition of an intangible asset in the second quarter of 2020. Other unallocated items during the three months ended March 31, 2021 consisted of $1.2 million in restructuring and related charges, a $2.2 million impairment charge related to one of our cost investments, and $0.2 million of amortization expense associated with an acquisition of an intangible asset in the second quarter of 2020.

Interest Expense, Net

The following table presents interest expense, net, by significant component:

Interest expense, net, increased by $0.1 million, or 5.6%, for the three months ended March 31, 2022, as compared to the same period in 2021.

Other Nonoperating (Income) Expense

Other nonoperating (income) expense changed by $1.1 million for the three months ended March 31, 2022, as compared to the same period in 2021, primarily due to a reduction in pension income related to our U.S. qualified defined benefit pension plan. Additionally, in the current year and prior year, we determined that normal-course lump-sum payments for our U.S. qualified defined benefit pension plan exceeded the threshold for settlement accounting under U.S. GAAP for the year.

Income Tax Expense

The provision for income taxes was $21.2 million and $28.7 million for the three months ended March 31, 2022 and 2021, respectively, and the effective tax rate was 11.3% and 16.4%, respectively. The decrease in the effective tax rate is primarily due to the $5.9 million tax benefit recorded as a result of the state tax valuation allowance reversal for the three months ended March 31, 2022, as compared to the same period in 2021.

Equity in Net Income of Affiliated Companies

Equity in net income of affiliated companies increased by $2.2 million for the three months ended March 31, 2022, as compared to the same period in 2021, due to favorable operating results at Daikyo and the Mexico affiliates.

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FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

The following table presents cash flow data for the three months ended March 31:

Net Cash Provided by Operating Activities – Net cash provided by operating activities increased by $62.5 million for the three months ended March 31, 2022, as compared to the same period in 2021, primarily due to improved operating results and decreases in the change of working capital.

Net Cash Used in Investing Activities – Net cash used in investing activities increased by $13.8 million for the three months ended March 31, 2022, as compared to the same period in 2021, primarily due to an increase in capital expenditures in 2022.

Net Cash Used in Financing Activities – Net cash used in financing activities increased by $16.3 million for the three months ended March 31, 2022, as compared to the same period in 2021, primarily due to increases in purchases under our share repurchase programs.

Liquidity and Capital Resources

The table below presents selected liquidity and capital measures:

Cash and cash equivalents include all instruments that have maturities of ninety days or less when purchased. Working capital is defined as current assets less current liabilities.

Cash and cash equivalents – Our cash and cash equivalents balance at March 31, 2022 consisted of cash held in depository accounts with banks around the world and cash invested in high-quality, short-term investments. The cash and cash equivalents balance at March 31, 2022 included $253.6 million of cash held by subsidiaries within the U.S., and $414.1 million of cash held by subsidiaries outside of the U.S. During the three months ended March 31, 2022, we purchased 390,000 shares of our common stock under our calendar-year 2022 share repurchase program at a cost of $147.1 million, or an average price of $377.23 per share.

Working capital – Working capital at March 31, 2022 decreased by $42.2 million, or 3.7%, as compared to December 31, 2021, which includes an unfavorable foreign currency translation impact of $3.7 million. Excluding the impact of currency exchange rates, cash and cash equivalents and total current liabilities decreased by $89.8 million and $5.6 million, respectively, while accounts receivable and inventories increased by $14.0 million and $41.3 million, respectively.

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The decrease in cash and cash equivalents was due to share repurchases and payment of annual incentive compensation during the three months ended March 31, 2022. The decline in the accrued salaries, wages and benefits caused the decrease in total current liabilities. The increase in accounts receivable was due to increased sales activity. The increase in inventories was to ensure we have sufficient inventory on hand to support the needs of our customers.

Debt and credit facilities – The $0.5 million decrease in total debt at March 31, 2022, as compared to December 31, 2021, resulted from debt repayments under our Term Loan.

Our sources of liquidity include our Credit Facility. At March 31, 2022, we had no outstanding borrowings under the Credit Facility. At March 31, 2022, the borrowing capacity available under the Credit Facility, including outstanding letters of credit of $2.4 million, was $497.6 million. We do not expect any significant limitations on our ability to access this source of funds.

Pursuant to the financial covenants in our debt agreements, we are required to maintain established interest coverage ratios and not to exceed established leverage ratios. In addition, the agreements contain other customary covenants, none of which we consider restrictive to our operations. At March 31, 2022, we were in compliance with all of our debt covenants.

We believe that cash on hand and cash generated from operations, together with availability under our Credit Facility, will be adequate to address our foreseeable liquidity needs based on our current expectations of our business operations, capital expenditures and scheduled payments of debt obligations.

Commitments and Contractual Obligations

A summary of future material cash payments resulting from commitments and contractual obligations was provided in our 2021 Annual Report. During the three months ended March 31, 2022, there were no material changes outside of the ordinary course of business to our commitments and contractual obligations.

OFF-BALANCE SHEET ARRANGEMENTS

At March 31, 2022, we had no off-balance sheet financing arrangements other than unconditional purchase obligations incurred in the ordinary course of business and outstanding letters of credit related to various insurance programs, as noted in our 2021 Annual Report.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There have been no changes to the Critical Accounting Policies and Estimates disclosed in Part II, Item 7 of our 2021 Annual Report.

NEW ACCOUNTING STANDARDS

For information on new accounting standards that were adopted, and those that were issued but not yet adopted, during the three months ended March 31, 2022, and the impact, if any, on our financial position or results of operations, see Note 2, New Accounting Standards.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Our disclosure and analysis in this Form 10-Q contains some forward-looking statements that are based on management’s beliefs and assumptions, current expectations, estimates and forecasts. We also provide forward-looking statements in other materials we release to the public, as well as oral forward-looking statements. Such statements provide our current expectations or forecasts of future events. They do not relate strictly to historical or current facts.

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We have attempted, wherever possible, to identify forward-looking statements by using words such as “plan,” “expect,” “believe,” “intend,” “will,” “estimate,” “continue” and other words of similar meaning in conjunction with, among other things, discussions of future operations and financial performance, as well as our strategy for growth, product development, market position and expenditures. All statements that address operating performance or events or developments that we expect or anticipate will occur in the future - including statements relating to sales and earnings per share growth, cash flows or uses, and statements expressing views about future operating results - are forward-looking statements.

Forward-looking statements are based on current expectations of future events. The forward-looking statements are, and will be, based on management’s then-current views and assumptions regarding future events and operating performance, and speak only as of their dates. Investors should realize that, if underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could vary materially from our expectations and projections. Investors are therefore cautioned not to place undue reliance on any forward-looking statements.

The following are some important factors that could cause our actual results to differ from our expectations in any forward-looking statements:

• sales demand and our ability to meet that demand;

• competition from other providers in our businesses, including customers’ in-house operations, and from lower-cost producers in emerging markets, which can impact unit volume, price and profitability;

• customers’ changing inventory requirements and manufacturing plans that alter existing orders or ordering patterns for the products we supply to them;

• interruptions or weaknesses in our supply chain, including from reasons beyond our control such as extreme weather, longer-term climate changes, natural disasters, pandemic, war, accidental damage, or unauthorized access to our or our customers’ information and systems, which could cause delivery delays or restrict the availability of raw materials, key purchased components and finished products;

• the timing, regulatory approval and commercial success of customer products that incorporate our products and systems;

• whether customers agree to incorporate our products and delivery systems with their new and existing drug products, the ultimate timing and successful commercialization of those products and systems, which involves substantial evaluations of the functional, operational, clinical and economic viability of our products, and the rate, timing and success of regulatory approval for the drug products that incorporate our components and systems;

• the timely and adequate availability of filling capacity, which is essential to conducting definitive stability trials and the timing of first commercialization of customers’ products in Crystal Zenith prefilled syringes;

• average profitability, or mix, of the products sold in any reporting period, including lower-than-expected sales growth of our high-value proprietary product offerings;

• maintaining or improving production efficiencies and overhead absorption;

• dependence on third-party suppliers and partners, some of which are single-source suppliers of critical materials and products, including our Japanese partner and affiliate, Daikyo;

• the loss of key personnel or highly-skilled employees;

• the availability and cost of skilled employees required to meet increased production, managerial, research and other needs, including professional employees and persons employed under collective bargaining agreements;

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• the successful and timely implementation of price increases necessary to offset rising production costs, including raw material prices, particularly petroleum-based raw materials;

• the cost and progress of development, regulatory approval and marketing of new products;

• our ability to obtain and maintain licenses in any jurisdiction in which we do business;

• the relative strength of USD in relation to other currencies, particularly the Euro, SGD, the Danish Krone, Yen, Colombian Peso, Brazilian Real, and the South Korean Won; and

• the potential adverse effects of global healthcare legislation on customer demand, product pricing and profitability.

This list sets forth many, but not all, of the factors that could affect our ability to achieve results described in any forward-looking statements. Investors should understand that it is not possible to predict or identify all of the factors and should not consider this list to be a complete statement of all potential risks and uncertainties. For further discussion of these and other factors, see the risk factors disclosed in Part I, Item 1A of our 2021 Annual Report as well as Part II, section 1A of this quarterly report.

Except as required by law or regulation, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

There have been no material changes in our exposure to market risk or the information provided in Part II, Item 7A of our 2021 Annual Report.

Disclosure controls are controls and procedures designed to reasonably ensure that information required to be disclosed in our reports filed under the Exchange Act, such as this quarterly report, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Our disclosure controls include some, but not all, components of our internal control over financial reporting.

Evaluation of Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of our management, including our CEO and CFO, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934), as of the end of the period covered by this quarterly report on Form 10-Q. Based on this evaluation, our CEO and CFO have concluded that, as of March 31, 2022, our disclosure controls and procedures are effective.

Changes in Internal Controls

During the quarter ended March 31, 2022, there have been no changes to our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

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There are no material changes to the risk factors disclosed in Part I, Item 1A of our 2021 Annual Report.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table shows information with respect to purchases of our common stock made during the three months ended March 31, 2022 by us or any of our “affiliated purchasers” as defined in Rule 10b-18(a)(3) under the Exchange Act:

(1)In December 2021, our Board of Directors approved a share repurchase program for calendar-year 2022 authorizing the repurchase of up to 650,000 shares of our common stock from time to time on the open market as permitted under Exchange Act Rule 10b-18 or in privately-negotiated transactions. The number of shares to be repurchased and the timing of such transactions will depend on a variety of factors, including market conditions. This share repurchase program is expected to be completed by December 31, 2022.

The list of exhibits in the Exhibit Index to this report is incorporated herein by reference.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, West Pharmaceutical Services, Inc. has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

WEST PHARMACEUTICAL SERVICES, INC.

(Registrant)

By: /s/ Bernard J. Birkett

Bernard J. Birkett

Senior Vice President and Chief Financial Officer

April 28, 2022

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EXHIBIT INDEX

(1) We agree to furnish to the SEC, upon request, a copy of each instrument with respect to issuances of long-term debt of the Company and its subsidiaries.

• Furnished, not filed.

F-1