西式醫藥服務 (WST) 2025 Q3 法說會逐字稿

Good day, and welcome to West's third-quarter 2025 earnings conference call. (Operator Instructions) As a reminder, this call may be recorded.

大家好，歡迎參加West公司2025年第三季財報電話會議。（操作員說明）提醒您，本次通話可能會被錄音。

I would now like to turn the call over to John Sweeney, Vice President of Investor Relations. Please go ahead.

現在我將把電話交給投資者關係副總裁約翰‧斯威尼。請繼續。

Good morning, and welcome to West's third-quarter 2025 earnings conference call, which has been webcast live. With me today on the call are West's CEO, Eric Green; and CFO, Bob McMahon. Earlier today, we issued our third quarter financial results. A copy of the press release, along with today's slide presentation containing to supplement information for your reference has been posted in the Investors section of the company's website located at investor.westpharma.com. Later today, a replay of the webcast will also be available in the Investors section of our website.

早安，歡迎參加 West 公司 2025 年第三季財報電話會議，本次會議已進行網路直播。今天和我一起參加電話會議的有 West 公司的執行長 Eric Green 和財務長 Bob McMahon。今天早些時候，我們發布了第三季財務業績。新聞稿副本以及包含補充資訊的今日簡報已發佈在公司網站投資者關係頁面（investor.westpharma.com）。今天晚些時候，網路直播的回放也將在公司網站投資者關係頁面提供。

On the call, we will review our financial results and provide an update to our business and outlook for FY25. Statements made by management on the call and the accompanying presentation contain forward-looking statements within the meaning of US federal securities law. These statements are based on our beliefs and assumptions, current expectations, estimates and forecasts.

在電話會議上，我們將回顧我們的財務業績，並提供我們業務的最新進展以及 2025 財年的展望。管理階層在電話會議和隨附的簡報中所作的陳述包含美國聯邦證券法意義上的前瞻性陳述。這些陳述是基於我們的信念和假設、目前的預期、估計和預測。

The company's future results are influenced by many factors beyond the control of the company. Actual results could differ materially from past results as well as those expressed or implied in any forward-looking statements made here. Please refer to today's press release, as well as other disclosures made by the company regarding the risks to which it is subject, including our 10-K and 10-Q.

公司的未來業績受許多公司無法控制的因素影響。實際結果可能與過去的業績以及此處所作的任何前瞻性陳述中明示或暗示的結果有重大差異。請參閱今天的新聞稿，以及公司就其面臨的風險所做的其他揭露，包括我們的 10-K 和 10-Q 報告。

During the call, management will make reference to non-GAAP financial measures, including organic sales growth, adjusted operating profit, adjusted operating profit margin, free cash flow and adjusted diluted EPS. Limitations and reconciliations of non-GAAP financial measures to the most comparable financial results prepared in conformity to GAAP are provided in this morning's earnings release.

在電話會議中，管理階層將提及非GAAP財務指標，包括有機銷售成長、調整後營業利潤、調整後營業利益率、自由現金流和調整後稀釋每股收益。今天早上發布的盈利報告中提供了非GAAP財務指標的局限性以及與按照GAAP編制的最可比較財務結果的調節情況。

I'll now turn the call over to our CEO, Eric Green. Eric?

現在我將把電話交給我們的執行長埃里克·格林。艾瑞克？

Thank you, John, and good morning, everyone. Thanks for joining us today. I'm pleased to report we delivered solid third quarter results with revenues, margins and adjusted EPS coming in above our expectations. Revenues of $805 million were up 5% on an organic basis. The adjusted operating margins were 21.1%, and adjusted EPS of $1.96 was up 6% compared to prior year.

謝謝你，約翰，大家早安。感謝您今天收看我們的節目。我很高興地報告，我們第三季業績表現穩健，營收、利潤率和調整後每股盈餘都超乎預期。營收達 8.05 億美元，年增 5%。經調整後的營業利潤率為 21.1%，經調整後的每股收益為 1.96 美元，比上年增長 6%。

As you will hear today, our business momentum is steadily improving, and we expect this trend to continue. As a result of this strong performance, we are increasing our guidance for 2025. I want to especially thank our West team members for their efforts and continued focus in achieving these results. Before getting into the details of our Q3 performance, I want to highlight two notable appointments, which further strengthened our executive leadership team.

正如你們今天將聽到的，我們的業務發展勢頭正在穩步改善，我們預計這一趨勢將繼續下去。由於業績表現強勁，我們提高了對 2025 年的業績預期。我特別要感謝我們西部團隊的成員們為取得這些成果所付出的努力和持續的專注。在詳細介紹我們第三季的業績之前，我想重點介紹兩項重要的人事任命，這兩項任命進一步加強了我們的高階主管領導團隊。

In August, our new CFO, Bob McMahon joined West. Many of you know Bob, and he has done an exceptional job transitioning into his role, already visiting several of our websites and meeting with many of you. I'm excited to have Bob on board and partner together to lead the next phase of West's growth.

8 月，我們的新財務長 Bob McMahon 加入了 West 公司。你們當中許多人都認識鮑勃，他出色地完成了過渡工作，已經訪問了我們的幾個網站，並與你們中的許多人進行了會面。我很高興鮑伯加入我們，我們將攜手合作，共同引領韋斯特公司進入下一個發展階段。

I'm also extremely pleased to welcome Devesh Mathur, our new Chief Technology Officer, who also joined West in August and is tasked with accelerating our innovation and new product introductions. Our team looks forward to benefiting from his industry experience and expertise.

我非常高興地歡迎 Devesh Mathur 加入我們，他於 8 月加入 West 公司，擔任首席技術官，負責加速我們的創新和新產品推出。我們的團隊期待著受益於他的行業經驗和專業知識。

Now back to the Q3 financial results. Let's begin with a review of the Proprietary Products segment. Revenues of $648 million were up 5.1% on an organic basis. These results were driven by HVP components, our largest and most profitable business. We have a strong market position because of our trusted reputation for high-quality scale and reliability. This business has continued to strengthen each quarter, and revenues increased 13% organically in Q3.

現在回到第三季財務業績。讓我們先來回顧一下專有產品部分。營收達 6.48 億美元，年增 5.1%。這些業績主要得益於HVP組件業務，這是我們規模最大、獲利能力最強的業務。我們憑藉著高品質、規模化和可靠性的良好聲譽，擁有強大的市場地位。該業務每季都在持續成長，第三季營收實現了13%的有機成長。

Several factors drove the strength of HVP components. First, elastomers for GLP-1 has strong growth and now account for 9% of total company sales. We benefit from our long-standing relationships as we partner with our customers in this market, supporting them as they expand their GLP-1 franchises.

HVP組件的優勢是由多種因素造成的。首先，GLP-1 彈性體業務成長強勁，目前占公司總銷售額的 9%。我們與該市場的客戶建立了長期合作關係，並以此為契機，支援他們拓展 GLP-1 產品線。

We're also collaborating closely with customers who are launching a pipeline of new GLP-1 molecules and generics. And we expect this market to continue to evolve as there are a number of new early-stage trials seeking to expand the range of indications and treatments using GLP-1s.

我們也與正在推出一系列新的 GLP-1 分子和仿製藥的客戶密切合作。我們預計，隨著許多新的早期試驗尋求擴大 GLP-1 的適應症和治療範圍，這個市場將繼續發展。

Second, in biologics. We're encouraged for their underlying market demand as ordering trends are returning to normal. Less participation rate for biologics and biosimilars is trending above our historical levels year-to-date of greater than 90%.

其次，在生物製劑領域。訂單趨勢正在恢復正常，我們對其潛在的市場需求感到鼓舞。生物製劑和生物相似藥的參與率低於我們今年迄今的歷史水準（超過 90%）。

The third driver is HVP upgrades, including Annex 1. Given our strong market position with our elastomers portfolio, we are well positioned to benefit from what we believe is a long-term opportunity. We are tracking ahead of our expectations, and we currently have 375 ongoing Annex 1 upgrade projects. With the robust pipeline of new projects and our ability to partner with customers to convert current projects into commercial production, we anticipate Annex 1 and related HVP upgrades to deliver 200 basis points of growth this year, up from our previous expectation of 150 basis points.

第三個驅動因素是 HVP 升級，包括附件 1。鑑於我們在彈性體產品組合方面擁有強大的市場地位，我們有能力從我們認為的長期機會中獲益。我們的進展比預期要好，目前我們有 375 個正在進行的 Annex 1 升級項目。憑藉強勁的新專案儲備以及我們與客戶合作將現有專案轉化為商業生產的能力，我們預計 Annex 1 和相關的 HVP 升級今年將帶來 200 個基點的成長，高於我們先前預期的 150 個基點。

We expect Annex 1 to drive continuing demand for higher-quality products as European regulators now require pharmaceutical companies to demonstrate their culture of continuous manufacturing improvement. West is well positioned to support our customers with HVP components and technical documentation to meet those requirements. We continue to work through our constraint at our HVP manufacturing site in Germany.

我們預計附件 1 將推動對更高品質產品的持續需求，因為歐洲監管機構現在要求製藥公司證明其持續改善生產製造的文化。West公司擁有完善的設施，能夠為客戶提供HVP組件和技術文檔，以滿足這些需求。我們仍在努力克服在德國HVP生產基地遇到的瓶頸問題。

During the quarter, we made good progress hiring and training employees in installing new equipment to expand capacity. These efforts, in addition to product tech transfers, will allow us to further leverage our investments made in our global HVP components infrastructure and balance production across the network, enabling enough to drive future growth.

本季度，我們在招募和培訓員工、安裝新設備以擴大產能方面取得了良好進展。除了產品技術轉移之外，這些努力將使我們能夠進一步利用我們在全球 HVP 組件基礎設施方面的投資，並平衡整​​個網路的生產，從而為未來的成長提供足夠的動力。

Moving to the HVP Delivery Device business. Revenues declined compared to prior year as expected, driven mainly by the $19 million incentive payment we received last year. With respect to Smart [Build] 3.5, which is less than 4% of the total company revenues were improving profitability every quarter by driving down costs and remain on track to go live with automation in early 2026, even as we continue to evaluate options to maximize the value of this business.

轉向HVP輸送設備業務。如預期，收入較前一年下降，主要原因是去年我們收到了 1,900 萬美元的激勵款項。關於 Smart [Build] 3.5，雖然其收入占公司總收入的不到 4%，但透過降低成本，每個季度都在提高盈利能力，並且我們仍然預計在 2026 年初實現自動化，同時我們也在繼續評估各種方案，以最大限度地提高這項業務的價值。

Lastly, our Standard Products business increased 3.6% on an organic basis this quarter. Converting standard products to HVP components over time serves as an important funnel for our business by generating revenue and expanding margins.

最後，本季我們的標準產品業務實現了3.6%的有機成長。隨著時間的推移，將標準產品轉化為 HVP 組件，可以為我們的業務創造收入並擴大利潤，從而成為一個重要的管道。

Turning to Contract Manufacturing segment. This business performed well in the quarter, delivering revenues of $157 million, growing by 4.9% organically. Moving forward, we are now utilizing our Arizona CGM footprint to consolidate operations from less efficient locations. We continue to expect the second CGM contract to conclude at the end of Q2 2026. The future available space is in an attractive location with strong operating team that is resulting in a number of promising discussions with multiple customers.

轉向合約製造領域。該業務在本季表現良好，實現營收 1.57 億美元，有機成長 4.9%。展望未來，我們將利用我們在亞利桑那州的 CGM 業務佈局，整合效率較低地點的營運。我們仍然預計第二份 CGM 合約將於 2026 年第二季末完成。未來可用的辦公空間位於一個極具吸引力的地段，擁有一支強大的營運團隊，這促成了與多家客戶之間一系列富有前景的洽談。

Turning to our Dublin site. We continue to ramp production of delivery devices for the obesity market. We are currently validating and testing the equipment installed for the commercialization of our drug handling business in early 2026. GLP-1s is in the Contract Manufacturing segment accounts for 8% of total company sales. Overall, I'm very pleased with the performance of both the proprietary products and contract manufacturing segments along with the trends that we are seeing in our business and in the markets.

接下來請造訪我們的都柏林站點。我們持續增加對肥胖症市場用輸送裝置的生產力度。我們目前正在驗證和測試為實現藥品處理業務在 2026 年初的商業化而安裝的設備。GLP-1s屬於合約製造領域，占公司總銷售額的8%。總的來說，我對自有產品和合約製造部門的表現，以及我們在業務和市場中看到的趨勢都非常滿意。

Now I will turn the call over to Bob. Bob?

現在我將把通話交給鮑伯。鮑伯？

Thanks, Eric, and good morning, everyone. It's great to be here, and I'm pleased to be part of the West team. West team. West's Injectable Solutions and Services business is second to none, and I'm excited about the long-term growth potential of the company. Now before getting into the details, I wanted to highlight that we have revamped our quarterly presentation to provide some supplemental segment information, which we may find useful going forward.

謝謝你，艾瑞克，大家早安。很高興來到這裡，也很榮幸能成為西部團隊的一員。西部球隊。West 的注射解決方案和服務業務首屈一指，我對該公司的長期成長潛力感到興奮。在詳細介紹之前，我想強調一下，我們已經改進了季度報告，以提供一些補充的細分市場信息，這些信息在未來可能會很有用。

Now on to the quarterly results. In my remarks this morning, I'll provide some additional details on revenue as well as take you through the income statement and some other key financial metrics. I'll then cover our updated full year and fourth quarter guidance. As Eric mentioned, third quarter revenue was $805 million, above the top end of our revenue guidance, beating our expectations.

接下來公佈季度業績。今天早上的演講中，我將提供一些關於收入的更多細節，並向大家介紹損益表和其他一些關鍵的財務指標。接下來，我將介紹我們更新後的全年和第四季業績預期。正如艾瑞克所提到的，第三季營收為 8.05 億美元，高於我們營收預期的上限，超出了我們的預期。

On a reported basis, total revenues increased 7.7%. Currency had a positive impact of 2.7 percentage points, resulting in organic growth of 5.0%. Of note, the incentive fee reduced organic growth by 280 basis points. So a solid result overall. I'll now go through each of our businesses in more detail.

據報告，總收入增加了7.7%。匯率產生了 2.7 個百分點的正面影響，從而實現了 5.0% 的自然成長。值得注意的是，激勵費用使有機成長率下降了 280 個基點。整體來說，結果不錯。接下來，我將更詳細地介紹我們每項業務。

Within the proprietary segment, HPV components, our largest business, accounting for 48% of total company sales was the standout. Revenues of $390 million increased 13.3% organically. This was driven by robust growth in GLP-1s, HVP upgrades, including Annex 1, improving performance in biologics and a normalizing demand environment. We are very pleased with the continued momentum in this business this year.

在專有業務領域中，HPV 組件是我們最大的業務，占公司總銷售額的 48%，表現最為突出。營收達 3.9 億美元，年增 13.3%。這主要得益於 GLP-1 產品的強勁成長、HVP 升級（包括 Annex 1）的推進、生物製劑性能的提升以及需求環境的正常化。我們對今年業務持續成長勢頭感到非常滿意。

In our HVP delivery devices business, which accounted for 12% of the company's net sales in the quarter, revenues were $99 million. This was down 16.7% year-on-year organically, but roughly flat sequentially as we expected. In Standard Products, revenues of $158 million increased 3.6% on an organic basis, even as we saw Annex 1 accelerate. Standard products accounted for 20% of total company net sales this quarter.

在本季度，我們的 HVP 輸送設備業務占公司淨銷售額的 12%，營收為 9,900 萬美元。與去年同期相比，有機成長率下降了 16.7%，但與預期相比，環比基本持平。在標準產品方面，營收為 1.58 億美元，以有機成長計算成長了 3.6%，儘管我們看到 Annex 1 加速成長。本季度，標準產品占公司淨銷售額的 20%。

Now looking across our end markets for proprietary. Biologics revenue was $329 million and up 8.3% on an organic basis. Growth in products using our laminated technology and strength in Westar and Envision offset the headwind from the incentive fee in the prior year. Pharma revenue rose 1.4% on an organic basis to $183 million, with growth in RU seals, stoppers and plungers. And generics revenue increased 2.6% organically to $136 million, also driven by growth in seals and stockers.

現在正在考察我們的終端市場，尋找專有技術。生物製劑收入為 3.29 億美元，以有機成長計算成長 8.3%。採用我們層壓技術的產品的成長以及 Westar 和 Envision 的實力，抵消了上一年激勵費用的不利影響。醫藥收入按有機增長計算增長了 1.4%，達到 1.83 億美元，其中 RU 密封件、塞子和活塞的增長功不可沒。仿製藥收入有機成長 2.6%，達到 1.36 億美元，這也得益於密封劑和儲藏劑的成長。

Now finishing up revenues. Our Contract Manufacturing segment delivered $157 million, growing 4.9% on an organic basis. Segment performance in the quarter was driven by an increase in sales of self-injected devices for obesity and diabetes, partially offset by a decrease in sales of health care diagnostic devices. Contract manufacturing accounted for 20% of total company net sales in the quarter. Pricing was a positive 1.7%, and we are tracking at roughly 2.4% for the first nine months of the year, right in line with our 2 to 3 percentage point expectation.

現在正在統計營收。我們的合約製造業務部門實現了 1.57 億美元的收入，以有機成長計算成長了 4.9%。本季該業務部門的業績成長主要得益於肥胖症和糖尿病患者自註射設備的銷售額增加，但部分被醫療保健診斷設備的銷售下降所抵銷。本季度，合約製造業務占公司淨銷售額的 20%。定價上漲了 1.7%，今年前九個月的漲幅約為 2.4%，與我們 2 到 3 個百分點的預期基本一致。

Now let's take a closer look at the rest of the P&L. Gross margin was 36.6% in the quarter, up 120 basis points as compared to the prior year. This strong result is due to the positive mix of HVP components, as well as good execution in our supply network. Adjusted operating margins of 21.1%, while down 40 basis points compared to the prior year were ahead of our expectations.

現在讓我們仔細看看損益表的其餘部分。本季毛利率為 36.6%，較上年同期成長 120 個基點。這項優異成績歸功於HVP組件的良好組合，以及我們供應鏈網路的良好執行。調整後的營業利潤率為 21.1%，雖然比前一年下降了 40 個基點，但仍高於我們的預期。

And below the line, our net interest income was $4.5 million. The tax rate came in at 19.8%, slightly better than expected, and we had 72.6 million diluted shares outstanding in the quarter. Now putting it all together, Q3 adjusted earnings per share were $1.96, up 6% versus last year and $0.26 above confident of guidance.

此外，我們的淨利息收入為 450 萬美元。本季稅率為 19.8%，略優於預期，稀釋後流通股數為 7,260 萬股。綜合來看，第三季調整後每股收益為 1.96 美元，比去年同期成長 6%，比預期高出 0.26 美元。

Moving on to a few cash flow metrics. Year to date, operating cash flow is $504 million, up 9%, while free cash flow of $294 million is 54% higher than last year as capital expenditures are down 23%. To date, we have invested $210 million in capital expenditures and remain on track for $275 million for the year.

接下來來看幾個現金流指標。今年迄今為止，經營現金流為 5.04 億美元，成長 9%；自由現金流為 2.94 億美元，比去年成長 54%，因為資本支出下降了 23%。截至目前，我們已投入 2.1 億美元用於資本支出，預計今年將實現 2.75 億美元的目標。

In summary, we had a very solid third quarter operationally that exceeded our expectations. And as a result, we're increasing our full year guidance on both revenue and earnings per share. For the full year, we are now anticipating our reported revenue to be in the range of $3.06 billion to $3.07 billion. This represents reported growth of 5.8% to 6.1% and organic growth of 3.75% to 4% for the full year.

總而言之，我們第三季的營運表現非常穩健，超出了我們的預期。因此，我們提高了全年營收和每股盈餘的預期。我們現在預計全年報告收入將在 30.6 億美元至 30.7 億美元之間。據報告，全年成長率為 5.8% 至 6.1%，有機成長率為 3.75% 至 4%。

The foreign exchange environment has remained relatively stable since our last guide and so currency is still expected to be a $59 million tailwind for the year. We are also increasing our full year adjusted EPS range to $7.06 to $7.11 representing year-on-year growth of 4.6% to 5.3%. A few more items to help you modeling. This assumes flat other income and expense, a 21% tax rate in the fourth quarter and 72.6 million diluted shares outstanding.

自我們上次發布指南以來，外匯環境一直保持相對穩定，因此預計匯率仍將成為今年 5,900 萬美元的利多因素。我們同時將全年調整後每股盈餘預期範圍上調至 7.06 美元至 7.11 美元，年增 4.6% 至 5.3%。還有一些資料可以幫助你建模。這假設其他收入和支出保持不變，第四季稅率為 21%，稀釋後流通股數為 7,260 萬股。

In addition, we continue to anticipate $15 million to $20 million in tariff-related costs this year and now expect to mitigate more than half of those costs in 2025. For 2026, we expect to fully mitigate the impact based on the current tariff landscape. Our updated full year guidance translates to fourth quarter revenue of $790 million to $800 million.

此外，我們預計今年將產生 1,500 萬至 2,000 萬美元的關稅相關成本，並預計到 2025 年將減少其中一半以上的成本。預計到 2026 年，根據目前的關稅狀況​​，我們將完全消除其影響。我們更新後的全年業績預期意味著第四季度營收將在 7.9 億美元至 8 億美元之間。

This is a reported increase of 5.5% to 6.8% and an organic increase of 1% to 2.3%. And as a reminder, we also had a $25 million incentive fee in Q4 of last year, which we do not expect to repeat this year and is reducing our expected Q4 organic growth by roughly 360 basis points. In fourth quarter, adjusted earnings per share are expected to be between $1.81 and $1.86.

據報道，這一數字增長了 5.5% 至 6.8%，有機增長了 1% 至 2.3%。另外提醒一下，我們去年第四季還有一筆 2,500 萬美元的激勵費，我們預計今年不會再有這筆費用，這將使我們預計第四季的有機成長率下降約 360 個基點。預計第四季度調整後每股收益將在 1.81 美元至 1.86 美元之間。

Before turning the call back over to Eric. And while we're still going through our planning process, I did want to share a few thoughts on 2026. We are exiting 2025 in a good place. We believe destocking is largely behind us and demand will continue to improve for our key growth drivers.

在將電話轉回給埃里克之前。雖然我們仍在進行規劃，但我確實想分享一些關於 2026 年的想法。2025年結束時，我們處境良好。我們認為去庫存階段已基本結束，我們關鍵成長動力的需求將持續改善。

That said, our end markets remain dynamic, and we could see a range of outcomes. So we will be prudent with our planning. Our HPV components business will lead the way given the multiyear growth drivers of GLP-1s and HVP upgrades, driving our biologics end market. We are anticipating the remaining CGM contract will continue to run at full capacity until exiting in mid-2026.

也就是說，我們的終端市場仍然充滿活力，我們可能會看到各種各樣的結果。因此，我們在製定計劃時會謹慎行事。鑑於 GLP-1 和 HVP 升級帶來的多年成長動力，我們的 HPV 組件業務將引領潮流，從而推動我們的生物製劑終端市場。我們預計剩餘的 CGM 合約將繼續滿載運轉，直至 2026 年年中到期。

This is roughly a $40 million headwind for the second half of 2026. We are actively working on refilling that space with higher-margin business with the expectation of the pacing and ramp, the pipeline coming in better view by the end of the year.

這意味著到 2026 年下半年將面臨約 4,000 萬美元的不利影響。我們正在積極努力，以利潤更高的業務填補這一空白，預計到年底，業務進度和成長動能將更加明朗。

Lastly, we are building out drug handling in our Dublin facility, and this is expected to add roughly $20 million in revenue for next year, which will help offset the CGM contract. And we will get back to expanding margins. So while early, I believe 2026 is coming into better focus, and I look forward to giving specific guidance on the next earnings call.

最後，我們正在都柏林工廠擴建藥品處理設施，預計明年將增加約 2,000 萬美元的收入，這將有助於抵消 CGM 合約的費用。我們將重新開始擴大利潤率。雖然現在還為時過早，但我相信 2026 年的情況正在逐漸明朗，我期待在下次財報電話會議上給予具體的指導。

Now I'd like to turn the call over to Eric for closing comments. Eric?

現在我想把電話交給艾瑞克，請他做總結發言。艾瑞克？

Great. Thanks, Bob. To summarize, we had a solid quarter, resulting in an upward adjustment to our guidance. We believe the positive trends in our business are sustainable due to strong execution, improving market conditions and our ability to respond to the evolving needs of our customers, our reputation for high-quality and services paramount.

偉大的。謝謝你，鮑伯。總而言之，我們本季業績穩健，因此上調了業績預期。我們相信，由於強大的執行、不斷改善的市場環境以及我們能夠響應客戶不斷變化的需求，再加上我們以高品質和服務著稱，我們業務的積極趨勢是可持續的。

West has key competitive advantages that allow us to protect our business model long term, especially in our highest-margin HVP components franchise, and we continue to make progress improving our margins. This is why I'm confident that we are well positioned for Q4 and into 2026.

West 擁有關鍵的競爭優勢，使我們能夠長期保護我們的商業模式，尤其是在我們利潤最高的 HVP 組件特許經營領域，並且我們不斷取得進步，提高我們的利潤率。正因為如此，我對我們為第四季以及2026年的發展做好充分準備充滿信心。

Operator, we're ready to take questions. Thank you.

接線員，我們已準備好接受提問。謝謝。

(Operator Instructions)

（操作說明）

Paul Knight, KeyBanc Capital Markets.

Paul Knight，KeyBanc Capital Markets。

Hi, Eric. Hi, Bob and John, and congrats on the quarter. As you think about your long-term construct of 7% to 9% growth, are we heading there in 2026 in your opinion in terms of the momentum you're citing here in 3Q?

嗨，艾瑞克。嗨，鮑伯和約翰，恭喜你們本季業績出色。考慮到您設定的長期成長目標為 7% 至 9%，您認為根據您在第三季提到的成長勢頭，我們能否在 2026 年實現這一目標？

Yeah. Thanks for that, Paul. And I'll start and then maybe ask Bob to join us in the conversation. But as we think about the key drivers to be able to deliver the long-range plan and long-term construct it really -- the thesis is really around the HVP components and driving into double-digit growth consistently year-over-year.

是的。謝謝你，保羅。我先開始，然後也許會邀請鮑伯加入我們的對話。但當我們思考實現長期計劃和長期構建的關鍵驅動因素時，我們發現，其核心論點實際上是圍繞高價值產品 (HVP) 的組成部分，並持續推動每年兩位數的成長。

And as you know, the key drivers of that for us are biologics or biosimilars, it's also the driver on Annex 1 and also GLP-1. So we feel good that we have the foundation laid that allows us to drive in the right direction to get to that LRP long term. Bob, do you want to give more color?

如您所知，對我們來說，關鍵的驅動因素是生物製劑或生物相似藥，這也是附件 1 和 GLP-1 的驅動因素。因此，我們感到欣慰的是，我們已經打下了堅實的基礎，使我們能夠朝著正確的方向前進，最終實現長期發展目標。鮑勃，你想再加點顏色嗎？

Yeah. Hey, Paul. Good morning and thanks for the question. As Eric said, the biggest growth driver we're seeing really nice momentum. As I mentioned on the call earlier, we've got some puts and takes here in 2026. But we feel good about the long-term growth of the business. We have to work through the puts and takes of some of the contracts that are coming in and out. And right now, I would say the Street is in a good place.

是的。嘿，保羅。早安，謝謝你的提問。正如艾瑞克所說，我們看到的最大成長動力是強勁的發展勢頭。正如我之前在電話會議上提到的，我們對 2026 年有一些看跌和看漲的看法。但我們對公司的長期發展前景感到樂觀。我們必須仔細分析一些正在生效和失效的合約的買賣情況。而就目前而言，我認為華爾街情況良好。

Michael Ryskin, Bank of America.

邁克爾·里斯金，美國銀行。

Hey. Thanks for taking the questions, guys. Maybe just to follow up on that. The HPV components, as you said, a big part of the story. Really good growth in 2Q, continued that in the third quarter. Obviously, on GLP-1 and Annex 1 part of that. But could you talk about the sustainability of that being over double -- the double digits. You talked about hitting in the fourth quarter as well, but then going beyond just confidence in that trajectory?

嘿。謝謝各位回答問題。或許只是想就此做個後續說明。正如你所說，HPV 成分是故事的重要組成部分。第二季成長動能良好，第三季也延續了這股勢頭。顯然，這涉及 GLP-1 和附件 1 的部分內容。但是，您能否談談這種增長超過兩倍——兩位數增長——的可持續性？你也談到了在第四節的得分，但除此之外，你還能否對這種得分勢頭充滿信心呢？

And then if I could throw on just a quick second part on the margin comment you made, Bob, about expanding margins next year. Can you talk about the new pieces of that between gross margin and volume leverage or your cost actions? Thanks.

然後，鮑勃，關於明年擴大利潤率，我還能再補充一點你剛才提到的利潤率方面的評論嗎？您能否談談毛利率和銷售槓桿作用或成本控制措施的新變化？謝謝。

Thanks, Michael. And you're absolutely correct on the HVP components, I mean, the growth is starting to sequentially get stronger from the beginning of this year as we were looking at how the order patterns are becoming more normalized. So we're seeing the markets become more in line with what we would expect long term. We're seeing that with the order trends through our discussions with our customers.

謝謝你，麥可。您對 HVP 組件的看法完全正確，我的意思是，從今年年初開始，隨著訂單模式逐漸趨於正常化，增長勢頭開始逐年增強。因此，我們看到市場正變得越來越符合我們對長期發展的預期。我們透過與客戶的交流，從訂單趨勢中也看到了這一點。

And another precursor for us, we keep a cool sign on as the bioprocessing space. As you know, that's a key indicator of what we should see and expect more near to midterm. We also are -- so we're confident in our position in biologics and biosimilars, particularly of the products in market but also new approvals that are in pipeline.

對我們來說，另一個先決條件是，我們在生物加工領域中保持著良好的勢頭。如你所知，這是預測中期選舉臨近時我們應該看到和期待的關鍵指標。我們也是一樣——所以我們對自己在生物製劑和生物相似藥領域的地位充滿信心，特別是對已上市的產品以及正在研發中的新核准產品。

And then Annex 1 is another key driver that has multiyear growth algorithm conversion from standard to high-value products, which is a -- it's a good opportunity for long-term growth to get us to that growth algorithm we talked about double digits for high-value product components. And Bob, do you want to?

附件 1 是另一個關鍵驅動因素，它實現了多年成長演算法從標準產品向高價值產品的轉換，這是一個實現長期成長的好機會，讓我們能夠達到我們之前提到的高價值產品組件兩位數的成長演算法。鮑勃，你願意嗎？

Yeah, Mike, thanks for the question. Maybe to add on the first question about HVP components. Certainly, we're feeling good about the momentum here. We're actually building to our Q4 guidance is low to mid-teens. So that momentum we're expecting to continue. Obviously, as we get into next year, there's some more challenging comps in the back half of the year.

是的，麥克，謝謝你的提問。或許可以補充一下關於HVP組件的第一個問題。當然，我們對目前的勢頭感到樂觀。我們目前的第四季業績預期為十幾到五成。因此，我們預計這種勢頭將會持續下去。顯然，進入明年後，下半年會有一些更具挑戰性的比賽。

But that being said, the long-term growth drivers of GLP-1s and Annex 1 and the HPV upgrades are there. And that actually leads to your second question around the margin expansion. One of the things that I think we saw here in the quarter was just the beauty of that business being upgraded.

但即便如此，GLP-1 和 Annex 1 的長期成長動力以及 HPV 升級仍然存在。這其實引出了你關於利潤率擴張的第二個問題。我認為我們在本季看到的其中一件事就是這項業務升級帶來的美好成果。

The power of being able to drive more efficiency through the factories with the investments that we've made over time here as well as being able to provide more value-added products to our customers. I would expect that to continue next year. So when we think about opportunities, I do expect gross margin to be an area of opportunity for us to expand margins.

我們透過這些年來在工廠的投資，提高了工廠的效率，並能夠為客戶提供更多高附加價值的產品。我預計這種情況明年還會持續。所以當我們考慮機會時，我確實認為毛利率將是我們擴大利潤率的一個機會領域。

But we're also looking at how do we ensure that we're also driving efficiencies kind of below the gross margin level as well. So I'd say it's both. But certainly, as HVP drives the growth that's -- we generate a mix benefit as well. So very nice from that standpoint.

但我們也正在研究如何確保在毛利率以下的層面上也能提高效率。所以我認為兩者都是。但可以肯定的是，隨著 HVP 推動成長，我們也產生了混合效益。從這個角度來看，這非常好。

Patrick Donnelly, Citi.

派崔克唐納利，花旗銀行。

Hey, guys. Thanks for taking the questions. Maybe one quick one on the CGM contract. It sounds like -- kind of the exited mid-'26. I appreciate the commentary there, Bob, on the $40 million headwind. I guess in terms of the visibility and fulfilling that with high-margin business, it sounds like, what are the conversations there? What would the timing look like in terms of the backfill? How big of a gap would there be?

嘿，夥計們。謝謝您回答問題。或許可以簡單談談CGM合約。聽起來像是——有點像興奮的26年中期。鮑勃，我很欣賞你對4000萬美元逆風的評論。我想，就提高知名度和透過高利潤業務來實現這一點而言，聽起來，這方面有哪些討論呢？就回填工作而言，時間安排會是怎麼樣的？差距會有多大？

And then maybe secondarily, just following up on Mike's question there, Bob, I know you spent a lot of time thinking about the margin opportunity here, where there's opportunities, whether it's footprint, higher utilization, when you dug into the company here and look at the margin opportunity, can you just talk about some of that long-term stuff that you see and what opportunity you see on the margin, not only the mix to high value but also just more efficient operations? Thank you.

其次，我想接著麥克剛才的問題問一下，鮑勃，我知道你花了很多時間思考這裡的利潤空間，思考有哪些機會，無論是擴大規模、提高利用率，當你深入研究這家公司並分析利潤空間時，你能談談你看到的一些長期因素，以及你看到的利潤空間機會嗎？不僅是向高價值產品組合轉型，還有提高營運效率？謝謝。

Yeah. No, it's a great question, and good morning, Patrick. Let me -- I'll cover the first, and then Bob will address your second question. But in regards to contract manufacturing, specifically the CGM manufacturing we have in Dublin, we have a number of customers we're engaged with today that late-stage discussions to identify what would be appropriate business to replace the CGM business that we be exiting or finishing the current agreement until the end of June of 2026.

是的。不，這是一個很好的問題，早上好，派崔克。讓我先回答第一個問題，然後鮑伯會回答你的第二個問題。但就合約製造而言，特別是我們在都柏林的 CGM 製造業務，我們目前正在與一些客戶進行後期討論，以確定什麼業務適合取代我們即將退出或結束當前協議（直至 2026 年 6 月底）的 CGM 業務。

So we feel good about the prospects. We do know that the economics of the future business. The expectation is to be stronger than what we currently have in that facility. And secondarily, there will be a transition period the second half of 2026. But usually, what you'll find is, as we extract the equipment for our previous customer and install new equipment, there's engineering fees that we incorporate into our revenue for contract manufacturing.

所以我們對前景感到樂觀。我們確實了解未來商業的經濟法則。預期目標是比我們目前在該設施中的設施更強大。其次，2026 年下半年將是過渡期。但通常情況下，你會發現，當我們為之前的客戶拆除設備並安裝新設備時，會產生工程費用，我們會將這些費用計入合約製造的收入中。

So there will be revenues to replace the gap. And I won't say it's going to be 1 to 1, but healthy revenues and margin. And we expect to have commercial operations up towards the end of 2026 if it is a pretty straightforward process. So I'm feeling good about the prospects and now the conversations have been ongoing and very, very attractive business that we could put into that location.

因此，會有收入來彌補這一缺口。我不會說會達到 1:1 的比例，但營收和利潤率都會很健康。如果流程比較順利，我們預計到 2026 年底就能開始商業營運。所以我對前景感到樂觀，目前雙方一直在進行洽談，我們可以在那個地點開展一些非常有吸引力的業務。

Yeah. And Patrick, on your second element of the question around our supply network. I think one of the things that I would say first off, is as we look at the footprint our ability to be local for local is a big opportunity and advantage for us for our customers.

是的。派崔克，關於你提出的第二個問題，就是關於我們供應鏈網路的問題。首先我想說的是，當我們審視我們的業務佈局時，我們能夠為當地客戶提供在地化服務，這對我們和我們的客戶來說都是一個巨大的機會和優勢。

That being said, I think there's an opportunity in the medium and longer term to really optimize our footprint. And we're actually going through that analysis right now given the investments that we've made to kind of not only level load and fill those factories with check transfers across, but also the ability to actually drive more efficiency within the existing footprint.

也就是說，我認為從中長期來看，我們有機會真正優化我們的業務佈局。鑑於我們已經進行投資，不僅要平衡各工廠的負荷，並透過支票轉移填滿這些工廠，而且還要在現有規模內提高效率，我們目前正在進行這項分析。

And I think that there probably is more opportunity to consolidate certain areas to drive even more efficiency as we go forward. That's not a 2026 element time frame. That's more of a longer term, which actually makes me feel good that there's not only some near-term opportunities to drive cost efficiencies, but also longer-term opportunities.

而我認為，隨著我們不斷前進，或許還有更多機會整合某些領域，進一步提高效率。那不是2026年的時間框架。這更多的是一個長期目標，這讓我感到欣慰，因為不僅有一些近期提高成本效益的機會，而且還有一些長期的機會。

Daniel Markowitz, Evercore ISI.

Daniel Markowitz，Evercore ISI。

Guys, congrats on the print and welcome, Bob.

各位，恭喜你們的作品印刷成功，歡迎鮑伯加入。

Thanks, good to be here.

謝謝，很高興來到這裡。

Awesome. So Eric and Bob, I had a two-parter for you. First, I'm curious on high-level headwinds and tailwinds to high-value components in 2026 as you see it today. As I think about it, I see a few tailwinds.

驚人的。艾瑞克和鮑勃，我本來準備了兩個部分內容要告訴你們。首先，我想了解一下，就目前來看，2026 年高價值組件面臨的高層次逆風和順風有哪些。仔細想想，我覺得有些順風。

One is that you're comping the destock, especially in the first half. Second, you have GLP-1s growing off of a larger base. Third, Annex 1 is accelerating following the uptick in project growth through 2025. And then lastly, you have this unique one-off customer situation that I think was about 150 basis point headwind to '25, but should benefit '26. So wrapping up on this first one, is there anything else I should be thinking about as a headwind on the other side or anything I'm missing?

一是你在清倉甩賣，尤其是在上半年。其次，GLP-1 是在更大的基礎上生長的。第三，隨著專案成長在 2025 年前加快，附件 1 的發展速度也正在加快。最後，還有這種獨特的、一次性的客戶情況，我認為這對 2025 年造成了大約 150 個基點的不利影響，但應該會對 2026 年有利。第一個問題總結完畢，我還應該考慮其他方面的不利因素或我遺漏了什麼嗎？

And then the second question, zooming in on one of those on GLP-1 elastomer growth, it was mid-single-digit percent of sales in 2024, and now it's been climbing pretty steadily to now about 9% of total revs. That implies a pretty healthy growth for GLP-1s in 2025. Is it right to think it's more than like 50% growth? And if so, what's causing that, should we expect sustained over 20% growth over the next few years? Thank you and sorry for being long-winded.

然後是第二個問題，聚焦於 GLP-1 彈性體成長，2024 年其銷售額佔比為個位數百分比，而現在它一直在穩步攀升，目前已佔總收入的 9% 左右。這意味著到 2025 年，GLP-1 類藥物將實現相當健康的成長。認為成長率超過 50% 是否正確？如果真是如此，是什麼原因造成的？我們是否可以預期未來幾年將持續維持 20% 以上的成長？謝謝，不好意思我說了這麼多。

Yeah. I'll verify your math, Dan. We've been very pleased with the growth in GLP-1s. And I'll turn it over to Eric to actually give some of the color commentary on what's been driving that. But I think it's important to understand that we expect that GLP-1s, while they may not be growing at that level, given the law of large numbers coming into next year, we are expecting very healthy growth in GLP-1 next year given the kind of underlying market dynamics there, Eric?

是的。丹，我幫你核對一下你的計算結果。我們對 GLP-1 的成長非常滿意。接下來，我將把麥克風交給艾瑞克，讓他來對推動這一趨勢的因素進行一些有趣的評論。但我認為重要的是要明白，我們預計 GLP-1 雖然可能不會達到那個增長水平，但考慮到明年的大數定律，鑑於目前市場的潛在動態，我們預計 GLP-1 明年將實現非常健康的增長，Eric 嗎？

Yeah, that's an excellent question. So as we think about the key drivers for other product components, you're absolutely correct that GLP-1s will continue to grow over seeing even -- as you think of long term with the potential introduction of orals into the equation, we do think the market itself will be a healthy blend of injectables and orals with injectables continue to be the larger portion, but the overall market continues to grow quite nicely based on what we are hearing from our customers, but also other sources.

是的，這是一個很好的問題。因此，當我們考慮其他產品成分的關鍵驅動因素時，您說的完全正確，GLP-1 類藥物將繼續增長，即使從長遠來看，考慮到口服製劑的潛在引入，我們認為市場本身將是注射劑和口服劑的健康組合，其中註射劑仍將佔據較大份額，但根據我們從客戶和其他渠道將繼續了解的情況，整體市場將繼續保持良好的增長勢頭。

So we're very well positioned with GLP-1s. As you remember, this is -- this is leveraging our high-value product manufacturing plants. We have five across the globe. And it's -- so we do have scale. We do have the portfolio that supports our customers in that area. You commented about the timing of potential headwinds.

因此，我們在 GLP-1 領域處於非常有利的地位。如您所記得，這是—這是利用我們高價值產品製造工廠。我們在全球共有五個辦事處。而且——所以我們確實有規模。我們擁有能夠為該領域的客戶提供支援的產品組合。你評論了潛在逆風出現的時間。

I think the one area I would say is on Annex 1 while we have really good momentum in our contamination control strategy, working with our customers is really resonating. And as you know, this is really converting our standard products that are on drug molecules in commercial today to high-value products. And the economics for us is very attractive.

我認為需要重點關注的領域是附件 1，雖然我們在污染控制策略方面取得了非常好的進展，但與客戶的合作也產生了很大的正面影響。如您所知，這實際上是將我們目前市售的藥物分子上的標準產品轉化為高價值產品。而且對我們來說，經濟效益非常有吸引力。

As you know, our averages for standard products are margins in the 20% to 30% range, while the HVP is 60%-plus. And so it's -- but the timing on how these projects roll off into commercial revenues do vary from client to client. And so that -- I wouldn't say it's a headwind. It's more of a timing from quarter-to-quarter, but we're really optimistic and confident in the pipeline that we're currently working on, but also know that we're only touching a fraction of the 6 billion components, we believe, is the market opportunity here.

如您所知，我們標準產品的平均利潤率在 20% 到 30% 之間，而 HVP 的利潤率則超過 60%。確實如此——但是這些項目轉化為商業收入的時間因客戶而異。所以——我不會說這是逆風。這更多的是一個季度之間的時間安排問題，但我們對目前正在研發的產品線非常樂觀和充滿信心，但我們也知道，我們目前只觸及了60億個零部件中的一小部分，我們相信，這才是這裡巨大的市場機會。

I think the other area is just, again, timing of new drug molecules approved in market. If you kind of look at last year to this year, a number of approvals by the FDA might be a little bit lower for various reasons. But as we are planning with our customers of future launches, the timing might be a little bit on certain launches.

我認為另一個方面仍然是新藥分子獲准上市的時間問題。如果將去年與今年進行比較，由於各種原因，FDA 的批准數量可能會略有下降。但是，由於我們正在與客戶一起規劃未來的產品發布，因此某些產品的發佈時間可能會稍微延遲。

Now saying that, the growth levers that you mentioned earlier about biologics, biosimilars, GLP-1s and Annex 1 are very favorable. And those are the tailwinds that we're moving to the balance of this year and into next year.

話雖如此，您之前提到的關於生物製劑、生物相似藥、GLP-1 和附件 1 的成長槓桿是非常有利的。這些就是我們今年餘下時間以及明年將繼續保持的有利因素。

Daniel, just maybe one other thing to follow up on your initial question around GLP-1s. Obviously, we watch that very closely and feel that our growth is largely in line with the growth that the end market is seeing as well.

Daniel，關於你最初提出的 GLP-1 問題，或許還有一點要補充。顯然，我們對此非常關注，並認為我們的成長與終端市場的成長基本上一致。

Dan Leonard, UBS.

丹‧倫納德，瑞銀集團。

Thank you very much and Bob, you might have addressed my question right there, but I have a follow-up on GLP-1s. It does seem like from the script data for Novo and Lilly that you're growing a lot faster than the market is growing. I wonder if there's a way to reconcile that. Could there be a compound or element here? Is it the clinical trial participation you alluded to? Any thoughts would be appreciated. Thank you.

非常感謝，鮑勃，你可能已經解答了我的問題，但我還有關於 GLP-1 的後續問題。從諾和諾德和禮來的處方數據來看，你們的成長速度似乎比市場成長速度快得多。我想知道是否有辦法調和這兩種情況。這裡會不會含有某種化合物或元素？您指的是參與臨床試驗嗎？任何想法都將不勝感激。謝謝。

Yeah, Dan, this is Eric. You're touching on exactly the areas. So if you think about we're starting to see an increase in vials. So therefore, our stockers and seals are necessary. So that's a factor when we think about our volumes and also the pipeline of new molecules being looked at and gone through clinical. So there's other factors that we're working with several customers. And also, there's a couple of geographies. There's an element around generics that were also able to support. So overall, it's -- I would say it's a little bit broader than just the scripts data of our two customers.

是的，丹，這是艾瑞克。你提到的正是這些面向。所以想想看，我們開始看到藥瓶數量增加了。所以，我們的庫存和密封件是必要的。所以，這是我們在考慮產量以及正在研究和進行臨床試驗的新分子研發管線時需要考慮的因素。所以，我們還在與幾位客戶合作，考慮其他一些因素。此外，還有幾個不同的地理區域。泛型中也存在一些能夠支持的元素。所以總的來說，我認為它的範圍比我們兩位客戶的腳本資料要廣一些。

Justin Bowers, Deutsche Bank.

賈斯汀·鮑爾斯，德意志銀行。

Hi, good morning, everyone, and first, I appreciate the increase detail and transparency on some of the disclosures this quarter. So a two-parter for me. One, I just wanted to follow up on Annex 1. There were some updates earlier this year. And just curious how that's impacting customer decision-making and some of the conversions. And if that's been a catalyst for some of the acceleration we're seeing.

大家好，早安。首先，我感謝本季披露的資訊更加詳細和透明。對我來說，這分為兩個部分。第一，我只是想跟進附件 1 的情況。今年早些時候有一些更新。我很好奇這會對客戶的決策和轉換率產生怎樣的影響。如果說這正是我們所看到的某些加速發展的催化劑的話。

And then part two earlier in the prepared remarks, you talked about liquid handling in Dublin, being about a $20 million opportunity, plus or minus. Is that sort of the peak opportunity? Or is there room for growth there in that facility beyond 2026?

然後在之前準備好的發言稿的第二部分，您談到了都柏林的液體處理業務，這是一個價值約 2000 萬美元的機會，上下浮動。這是最佳機會嗎？或者說，該設施在 2026 年後還有發展空間嗎？

Yeah, Justin, thank you for that. First of all, touch on the Dublin real quick. On the $20 million that we communicated. As we ramp up a new site, it does take time to get to full utilization. So I would consider this as early stages. And as we move into 2027 and a little bit beyond, that's when we get into our peak volumes and revenues. So the $20 million is really just kind of the ramp-up stage and then move through efficiencies through a few quarters, you'll start seeing the utilization significantly go up. So I would not look at $20 million as the peak revenues of that site for the drug handling.

是的，賈斯汀，謝謝你。首先，我們快速地簡單談談都柏林。關於我們溝通過的2000萬美元。新站點投入使用需要時間才能達到滿載運轉。所以我認為這還處於早期階段。隨著我們進入 2027 年及以後，我們將迎來銷售和收入的高峰。所以這 2000 萬美元實際上只是一個啟動階段，然後經過幾個季度的效率提升，你會看到利用率顯著提高。因此，我不認為 2000 萬美元是該毒品處理場所的最高收入。

On the Annex 1, it's -- there are different factors. We do know that there are more conversations with the EU regulators with our customers as they are auditing and discussing about the regulations. Therefore, there is an interest to continue these projects on an accelerated pace.

關於附件 1，情況是－存在不同的因素。我們知道，隨著歐盟監管機構進行審計和討論相關法規，我們的客戶與歐盟監管機構之間的溝通也越來越多。因此，各方都希望加快這些專案的推進速度。

But again, as I mentioned earlier, there's a tremendous amount of opportunity of drug molecule that goes into Europe that we believe this is just really early stages out of the $6 billion components, it's a small fraction that we are currently converted to commercial at this time.

但是，正如我之前提到的，歐洲蘊藏著巨大的藥物分子開發機會，我們認為這僅僅是價值 60 億美元的藥物分子開發項目的早期階段，目前我們將其轉化為商業化的產品只佔很小一部分。

Larry Solow, CGS Securities.

Larry Solow，CGS Securities。

Great. Thanks. Good morning. I echo the appreciation on the transparency, and I also welcome, Bob. I guess I want to just follow up on the -- just on the gross margin, really strong this quarter. Just curious if you guys are actually seeing, and I think this has been part of the team too, just an improvement in mix within HVP and getting more towards the -- up and to the right until the NovaPure and higher-margin HVP components. Are you seeing that dynamic continue as well?

偉大的。謝謝。早安.我贊同這種透明的做法，也歡迎鮑伯的加入。我想就毛利率這部分再補充一點，這季的毛利率真的非常強勁。我只是好奇你們是否真的看到了，而且我認為這也是團隊的一部分，只是 HVP 內部的混合比例有所改善，並且越來越向右上方移動，直到 NovaPure 和利潤更高的 HVP 組件。您是否也觀察到這種趨勢？

Yeah. Hey, Larry, I appreciate the feedback. And to your question on gross margin, yes, that certainly is an element of it. When you look at our gross margin despite the incentive fee, we were actually up year-on-year 120 basis points. That was up almost 300 basis points. If you take that out kind of on a like-for-like basis and really the proprietary business, our HVP component business drove that.

是的。嘿，拉里，感謝你的回饋。至於你問到的毛利率，是的，那當然是其中一個因素。即使加上激勵費用，我們的毛利率實際上也比去年同期增加了 120 個基點。那比上年同期上漲了近300個基點。如果把這些因素單獨拿出來，只考慮專有業務，那麼我們的 HVP 組件業務就是推動這一成長的主要因素。

So what we're seeing is not only the investments that we made over the last couple of years being able to be filled and that capacity driving and you can imagine with the fixed installed base, the incremental margins are quite nice from that standpoint as it goes through the factory.

因此，我們看到的不僅是過去幾年我們所做的投資能夠充分利用，而且產能也在推動，你可以想像，有了固定的安裝基礎，從工廠的角度來看，增量利潤相當可觀。

But then as you're having these higher-value products there, you're driving higher ASP products through the facilities. And I think you see that, that's a very positive mix standpoint. The team has also done a very good job of driving down costs and driving up efficiencies. If I think about scrap and our yields, those are also areas of focus that the teams are really driving and I think as we talked about earlier, I think that we've got a multiyear opportunity from that standpoint.

但是，隨著這些高價值產品的出現，你就推動了工廠內平均售價較高的產品銷售。我認為你也看到了，這是一個非常積極的組合。該團隊在降低成本和提高效率方面也做得非常出色。如果我考慮廢料和我們的產量，這些也是團隊真正努力推進的重點領域，而且我認為正如我們之前討論的那樣，從這個角度來看，我們擁有多年的機會。

And then also, one of the areas is around also being much more focused on some of the raw material input costs. We're building out capabilities in our sourcing organization, working closely with our supply chain as well as streamlining some of the production traveling of our -- some of our products before they get to customers. So there's a number of elements, I think, that are in the next several years that I feel that we have an opportunity to continue to drive that gross margin opportunity.

此外，其中一個方面是更加關註一些原材料投入成本。我們正在加強採購部門的能力建設，與供應鏈密切合作，並簡化部分產品在到達客戶手中之前的生產運輸流程。所以我認為，在未來幾年裡，有許多因素將為我們繼續推動毛利率成長創造機會。

Doug Schenkel, Wolfe Research.

道格‧申克爾，沃爾夫研究中心。

Good morning and thank you for taking the questions. Two quick topics I want to touch on. One is just a question on Q4 guidance and then one is on really visibility heading into next year. So on the fourth quarter, I want to confirm that you essentially bumped up guidance by the magnitude of the revenue beat. And if so, were there any timing dynamics in the third quarter that held you back from bumping up guidance more? Or was this just trying to be conservative in a period of continued uncertainty. So that's the first topic.

早上好，感謝您回答問題。我想簡單談談兩個話題。一個問題是關於第四季業績指引，另一個問題是關於明年業績前景的展望。所以，關於第四季度，我想確認一下，你們是否根據營收超預期的幅度，大幅提高了業績預期。如果是這樣，第三季是否存在任何時間因素阻礙了您進一步提高業績預期？或者，這只是在持續不確定的時期裡試圖採取保守的做法？這是第一個話題。

The second is risk and visibility as a topic. So part of the attraction for a long time of West for investors has been that this has been a great sleep at night story, a steady compounder last year, with that in mind, I think the company and certainly the investment community were surprised by the roll-off of the incentive payments and drug delivery and also the changes in contract manufacturing. How would you characterize anything resembling that category of risk heading into year-end?

第二點是關於風險和可見性的問題。因此，長期以來，West 對投資者的吸引力之一在於，它一直是一個讓人安心入睡的好故事，去年實現了穩定的複合成長。考慮到這一點，我認為公司和投資界都對激勵性付款和藥物交付的取消以及合約製造的變化感到驚訝。您如何描述年底前類似這類風險？

I would guess you feel pretty good about it, but I just want to give you an opportunity to kind of tell us where we should all feel better about this getting back to be in the old West again?

我猜你對此感覺應該不錯，但我只是想給你一個機會，讓你告訴我們，為什麼我們所有人都會對重返西部舊時代感到更加安心？

Yeah, I'll start, Doug, and on the Q4 guidance, don't read anything into that. We don't believe that there was any material pull forward when we look at it, actually, if you look at it on a two-year stack basis, Q4 is actually an acceleration but there's also an element of prudence that even given the market dynamics outside that we want to make sure that we feel good about that, and we do.

好的，我先來，道格。至於第四季的業績指引，不要過度解讀。我們認為，從兩年的時間跨度來看，並沒有出現任何實質的提前成長。實際上，第四季度實際上是加速成長，但同時也存在謹慎因素，即使考慮到外部市場動態，我們也希望確保我們對此感到滿意，而我們確實感到滿意。

And so we've got some good momentum there and I'll just leave it at that. Maybe I'll start with the second piece and then turn it over to Eric as well. I think this is an area that I'm focused on intently. And I don't want to declare victory just yet in terms of that. And we -- but we do feel good about some of the trends. I would say we have -- in our -- we're committed to improving and providing more transparency, which we'll continue to do over time. But the market is still dynamic.

所以我們現在勢頭不錯，我就說到這裡吧。或許我會先從第二塊開始，然後再交給艾瑞克。我認為這是我目前重點關注的領域。就這一點而言，我還不想宣布勝利。我們也——但我們對某些趨勢感到樂觀。我想說，我們已經——在我們的——致力於改進並提供更高的透明度，我們將隨著時間的推移繼續這樣做。但市場依然充滿活力。

I think we are improving our visibility. But the market still has some variables that we're working through our business planning process right now, and that's why we wanted to provide some puts and takes to what we know today for next year. And I think the long-term trends are positive. It's the pace of when we get back there. And I'll turn it over to Eric to maybe add anything.

我認為我們的知名度正在提高。但市場仍然存在一些變數，我們正在透過業務規劃流程來解決這些問題，因此我們希望根據我們目前對明年的了解，提出一些預測和展望。我認為長期趨勢是正面的。關鍵在於我們回到那裡之後的節奏。接下來我會把話題交給艾瑞克，看看他是否還有補充。

Yeah. No, thanks, Bob. And Doug, it's a great question because that's critical for -- historically West has been consistently from a demand profile perspective, pretty consistent of the market -- the injectable market space. We believe, based on the work that we have been doing and Bob did touch on this, is that going deeper in the different segments with clear accountability and ownership has given us better line of sight of our markets, obviously, engage with our customers, getting closer to them, which we observed during the pandemic period, we needed to do more of. And I'm confident we're making good headway and traction in that direction.

是的。不用了，謝謝，鮑伯。道格，這是一個很好的問題，因為這對於——從需求概況的角度來看，歷史上西方市場一直相當穩定——注射劑市場領域至關重要。我們相信，根據我們一直在做的工作（鮑勃也談到了這一點），深入不同的細分市場，明確責任和所有權，可以讓我們更好地了解我們的市場，顯然，可以與我們的客戶互動，拉近與他們之間的距離，而我們在疫情期間觀察到，我們需要在這方面做得更多。我相信我們正朝著這個方向取得良好的進展和成效。

The underlying market conditions continue to improve, considering where we were a while back. But your point is we are laser-focused on making sure we are reducing those risks and increase in visibility. And also providing more of that lens as we engage in these conversations.

考慮到我們之前所處的境地，市場基本面持續改善。但你的觀點是，我們正全力以赴確保降低這些風險並提高可見度。在參與這些對話時，我們也應該更多地運用這種視角。

Mac Etoch, Stephens Inc.

Mac Etoch，Stephens 公司

Hey, good morning. Appreciate you taking the questions. Maybe just one on delivery license, relatively flat year-over-year, excluding the incentive fee. And I think you highlighted some improving economics ahead of the automated line coming on in 2026. So can you just highlight some of the various aspects driving performance during the quarter and the variables that you're seeing on the top line of margins as well? Thank you.

嘿，早安。感謝您回答這些問題。或許只有一項配送許可證費用，與去年同期相比基本持平，不包括獎勵費用。我認為你強調了在2026年自動化生產線投入使用之前，經濟狀況會有所改善。那麼，您能否重點介紹本季推動業績成長的各個方面，以及您在利潤率方面觀察到的變數？謝謝。

Yeah. No, absolutely. Thanks for the question. When we look at the direct delivery device business, the area look at it holistically, the entire portfolio, we have administration systems in that category. We have Crystal Zenith and obviously, injectable devices like SmartDose.

是的。不，絕對的。謝謝你的提問。當我們審視直接交付設備業務時，要從整體上看待這個領域，包括整個產品組合，我們在這個類別中也包括管理系統。我們有 Crystal Zenith，當然還有像 SmartDose 這樣的注射式設備。

And I'm really pleased with the progress we're going to have throughout the year for our Crystal Zenith and also our admin systems. The area of focus has been on SmartDose to drive two levers with urgency. One is to drive down costs and improve efficiencies. And that -- the progress the team has made is on track with our expectations for this year, and we're seeing an improved margin performance or profitability quarter-over-quarter. There's more to come.

我對我們今年在 Crystal Zenith 和管理系統方面將取得的進展感到非常滿意。重點領域是 SmartDose，旨在盡快推動兩個關鍵環節。一是降低成本，提高效率。而且，團隊的進展符合我們今年的預期，我們看到利潤率或獲利能力逐季提高。還有更多精彩內容即將呈現。

With the automation that we are -- kind of being commercializing in early 2026, we're just going through the validation process as we speak. And we're confident that we'll be able to drive even more cost out of the -- out of the product itself. The second is to continue to look at alternative options to create even more value. with that product. And we will communicate once we can, but the final decision, but we're making progress in both areas.

就我們目前的自動化技術而言——我們計劃在 2026 年初實現商業化，但我們現在正在進行驗證過程。我們有信心能夠進一步降低產品本身的成本。第二點是繼續尋找其他方案，為該產品創造更多價值。一旦條件允許，我們會進行溝通，但最終決定尚未做出，不過我們在這兩個領域都取得了進展。

Yeah. And I would just add, Mac, on that. If you look at it on a quarterly basis sequentially, is it where we expected it to. So we feel good about that and that work that Eric just talked about, we're looking at both of those paths with urgency and focus. And so I feel good that each quarter, the economics have improved in delivery devices, as we said in our prepared remarks, and there's more room to go, but we're also making sure that we're looking at this for the long term and evaluating what's the best value for shareholders.

是的。我還要補充一點，Mac，關於這一點。如果按季度順序來看，它是否達到了我們的預期？所以，我們對此感到滿意，也對艾瑞克剛才提到的工作感到滿意，我們正在以緊迫感和專注度關注這兩條路徑。因此，我很高興地看到，正如我們在準備好的發言稿中所說，每季輸送設備的經濟效益都在改善，而且還有更大的發展空間，但我們也確保著眼於長遠，並評估什麼才是對股東最有價值的。

Matt Larew, William Blair.

馬特拉魯，威廉布萊爾。

Hi, good morning. Kind of a two-part question around your manufacturing network. So after a couple of years of pressure on free cash flow and obviously an elevated CapEx spend for you, you've had a significant improvement in free cash this year as CapEx has normalized down to around 9%.

您好，早安。這是一個關於您的製造網路的兩部分問題。因此，在經歷了幾年自由現金流壓力以及資本支出顯著增加之後，今年隨著資本支出正常化降至 9% 左右，您的自由現金流得到了顯著改善。

So Bob, you referred a couple of times the opportunity for network optimization, but there's then the balance of obviously customers thinking about regionalization of manufacturing, some of the policy dynamics and obviously, still significant investment in HVP. So just as you think about maybe that balance of network optimization versus making sure you have capacity available for customers. But how are you thinking about the levels of CapEx needed to support growth, that'd be the first part.

所以鮑勃，你曾多次提到網路優化的機會，但顯然客戶也在考慮製造業的區域化，一些政策動態，以及顯然對HVP的大量投資，這些都需要權衡。所以，就像你在思考網路優化與確保為客戶提供可用容量之間的平衡。但您認為支持成長所需的資本支出水準是多少？這是第一部分。

The second part is there's been a number of recent headlines around pharma tariffs and MFN. And I realize your business is tied to commercial volumes, not necessarily earlier-stage R&D how tuned in are your customers to those headlines in terms of influencing investment decisions versus sort of -- the train has left the station in terms of realization of their manufacturing. Thanks for taking the question.

第二部分是，最近有很多關於藥品關稅和最惠國待遇的新聞報導。我知道您的業務與商業銷售有關，不一定與早期研發有關。您的客戶對這些新聞的關注程度如何？這些新聞會影響他們的投資決策嗎？還是說，他們的生產計畫已經錯過了最佳時機？感謝您回答這個問題。

Yeah, Matt, thanks for the question. Let me start with the CapEx that we are -- we have spent. But you're absolutely correct. Our focus really is on the high-value product components with our five center of excellence that we have, obviously, in Asia, Europe and US. Fortunately, over time, we have built the capacity and the capabilities to be able to support our global customers from multiple sites.

是的，馬特，謝謝你的提問。首先，我想談談我們已經投入的資本支出。但你完全正確。我們真正關注的是高價值產品組件，我們在亞洲、歐洲和美國設有五個卓越中心。幸運的是，隨著時間的推移，我們已經建立了足夠的能力，能夠從多個地點為我們的全球客戶提供支援。

So as you think about being more regionalized, we will support our customers in all markets. We're very well positioned from an infrastructure perspective. You're correct. As volumes increase, we will need to layer in additional capital, but we do feel comfortable that we're going to be back to the 6% to 8% of sales corridor for CapEx, but heavily weighted towards the high-value product components part of our business.

因此，當您考慮更加區域化時，我們將為所有市場的客戶提供支援。從基礎設施的角度來看，我們擁有非常有利的地位。你說得對。隨著銷售量增加，我們將需要投入更多資金，但我們有信心將資本支出恢復到銷售額的 6% 到 8% 的範圍內，但會重點投入到我們業務中高價值產品組件的部分。

And again, the concept of the center of excellence giving us that network capability, but also more of a campus site perspective versus doing more greenfield. I'll talk a little briefly on the -- on the second question you posed, and I'll turn it over to Bob to add any comments.

再次強調，卓越中心的概念賦予了我們網路能力，但同時也更從校園場地角度出發，而不是從綠地建設的角度出發。關於你提出的第二個問題，我先簡單談一下，然後交給鮑伯補充意見。

But you're right. That conversation is active with our customers in the sense of what can we do to support our customers to drive down costs to support them. One is continue to leverage our global network. So there are a few cases where we could do tech transfers to move from one location to another geography to be more co-located with their end market. That's one opportunity that we are working with, but those do take around 12 to 18 months to complete and then to commercialize.

但你是對的。我們與客戶的對話是正面的，探討我們如何幫助客戶降低成本，以便更好地為他們提供支援。一是繼續利用我們的全球網路。因此，在某些情況下，我們可以進行技術轉移，將技術從一個地方轉移到另一個地方，以便更接近其最終市場。這是我們正在努力爭取的機會，但這類專案通常需要 12 到 18 個月才能完成並商業化。

But also I just want to comment. The products that we provide, the elastomer components that we provide are critical to the drug molecule, and they are less than 1% of the COGS of the drug. And so therefore, our focus is how can we help our customers drive better yields and efficiencies of their fill/finish process by providing more of the HVP services.

但我也想發表一下意見。我們提供的產品，也就是我們提供的彈性體組件，對藥物分子至關重要，它們佔藥物成本的不到 1%。因此，我們的重點是如何透過提供更多 HVP 服務來幫助我們的客戶提高填充/包裝流程的產量和效率。

So in that sense, we are working with our customers to provide additional services to improve the yield output from our -- for our customers. So it's an active dialogue. But for us, we're seeing less discussion about price, but more about making sure we're balanced from our global manufacturing perspective. Bob?

因此，從這個意義上講，我們正在與客戶合作，為客戶增加額外的服務，以提高我們的產品產量。所以這是一場積極的對話。但對我們來說，我們看到的關於價格的討論越來越少，而更多的是關於確保我們在全球製造方面保持平衡。鮑伯？

Yeah. Matt, I'll just add a couple of things. Obviously, that's one of the areas that's pretty dynamic when we talk about kind of the MFN here in the US just recently, we haven't seen any change in our customer buying behavior. That's something that we'll continue to watch.

是的。馬特，我再補充幾點。顯然，當我們談到美國最近的最惠國待遇時，這是一個相當動態的領域，但我們並沒有看到客戶的購買行為有任何變化。我們會繼續關注此事。

But -- and on the other side, I actually think that, that's a potential lift of an overhang so that they can now move forward. And then the investments here that we're seeing in the US we are seeing that -- we believe that's real. That's a multiyear kind of investment. But as we think about we're talking about kind of level loading, we've made a lot of investment in the US for the COVID capabilities and capacity a couple of years ago.

但是——另一方面，我實際上認為，這可能會消除懸垂結構，使他們能夠繼續前進。然後，我們看到美國正在進行的投資——我們相信這是真的。這是一項需要多年才能完成的投資。但當我們思考時，我們談論的是某種均衡的負荷，幾年前我們在美國為應對新冠疫情的能力和容量進行了大量投資。

And so we're working very closely with those -- as those customers are building out additional capacity in the US about this tech transfer that Eric was just talking about. So I think we've got good relationships with those customers. And I think we're well placed to be able to continue to invest. And I'll just want to reiterate what Eric said. We do think that we're going to continue to drive down our capital spend as a percent of revenue. but disproportionately invest behind our highest growth opportunities, which is an HVP.

因此，我們正在與這些客戶密切合作——因為這些客戶正在美國擴大產能，以推進艾瑞克剛才提到的技術轉移。所以我覺得我們跟這些客戶的關係很好。我認為我們有能力繼續投資。我只想重申一下艾瑞克剛才說的話。我們確實認為我們將繼續降低資本支出佔收入的比例，但會不成比例地投資於我們最具成長潛力的機會，也就是高價值產品（HVP）。

Tucker Remmers, Jefferies.

塔克‧雷默斯，傑富瑞。

Good morning. Thanks for taking my question. I had another question on Annex 1. So talk about 2% contribution this year from Annex 1 projects. Can you break down how that split between those projects that are in a development or validation phase versus switches that have already been put in place and sort of hitting what I would call commercial production? Thank you.

早安.感謝您回答我的問題。關於附件1，我還有另一個問題。所以，今年附件一專案貢獻的2%就到此為止吧。你能詳細說明一下處於開發或驗證階段的專案與已經實施並進入我所謂的商業生產階段的專案之間的差異嗎？謝謝。

Yeah, great question. I would say if we look at the entire -- at the end of Q3, the number of open projects that we're currently working on, and the number of projects that convert into revenues are less than 40% with having converted since the duration of this project or this move towards Annex 1, so that kind of gives you a feel of as we ramp more new projects and they're rolling up. And we did mention earlier that some projects could be three to four quarters, and a few others could be a six to eight quarters. So it does depend on the scale of the project and the speed that our customers want to convert.

是的，很好的問題。我想說，如果我們縱觀整個第三季末的情況，我們目前正在進行的未完成項目數量，以及自本項目或轉向 Annex 1 以來轉化為收入的項目數量，不到 40%，這讓你感受到隨著我們啟動更多新項目，它們正在逐步實現。我們之前也提到過，有些項目可能需要三到四個季度，而有些項目可能需要六到八個季度。所以這取決於專案的規模以及客戶希望的轉換速度。

Luke Sergott, Barclays.

盧克·塞爾戈特，巴克萊銀行。

Great. Thanks, guys. Just wanted to ask here about the capital allocation. The first one of the hat tip to the transparency on the -- and the deck is beautiful. So given that you guys have like a pristine balance sheet right now, producing a lot of cash, margins going the right way, free cash flow seems to be picking back up. So update us on your capital allocation priorities, favoritism towards maybe a repo versus more bolt-on M&A?

偉大的。謝謝各位。我想在這裡問一下關於資金分配的問題。首先要讚揚的是透明度——而且甲板很漂亮。鑑於你們目前的資產負債表非常健康，現金流充裕，利潤率也穩定提升，自由現金流似乎正在回升。那麼，請您更新您的資本配置優先事項，您是否更傾向於回購交易而不是其他補充性併購？

Hey, Luke. I appreciate the feedback. This is Bob. And you're hitting on one of the key priorities that I've got and talking with Eric and the rest of the team and actually just spoke with our Board about this I think there's an opportunity for us to better define and establish a capital policy.

嘿，盧克。感謝您的回饋。這是鮑伯。你提到的正是我目前關注的關鍵優先事項之一。我和艾瑞克以及團隊其他成員討論過這個問題，實際上，我剛剛也和董事會談過，我認為我們有機會更好地定義和製定資本政策。

And to your point, with being blessed with such a strong balance sheet and our cash flows to be more active in using those cash flows to really drive the business. And so what I would say is stay tuned, but it is high on the list of opportunities that will help continue to grow the business over time.

正如您所說，我們擁有如此強勁的資產負債表和現金流，因此可以更積極地利用這些現金流來真正推動業務。因此，我想說的是，敬請期待，但這絕對是有助於公司未來持續發展的重要機會之一。

Thank you. I'm showing no further questions at this time. I'd like to turn the call back over to John Sweeney for any further remarks.

謝謝。我目前沒有其他問題要問。我想把電話轉回給約翰·斯威尼，讓他再補充一些內容。

Thank you all very much for joining us today on the call. An online archive is available at our website at westpharma.com in the Investor Relations section. That concludes the call. Thank you very much, everybody, and have a great day.

非常感謝各位今天參加我們的電話會議。您可以在我們網站 westpharma.com 的「投資者關係」部分查看線上存檔。通話到此結束。非常感謝大家，祝大家今天過得愉快。

Thank you for your participation. You may now disconnect.

感謝您的參與。您現在可以斷開連線。