Good day, and thank you for standing by. Welcome to the third quarter 2023 West Pharmaceutical Services earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, please press star one one on your telephone. You will then hear an automated message advising you that your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Quintin Lai, VP of Investor Relations. Please go ahead. Thank you, Michelle. Good morning, and welcome to West's third quarter 2023 conference call. We issued our financial results this morning, and the release has been posted in the Investors section on the company's website, located at westpharma.com. This morning, we will review our financial results, provide an update on our business, and present an update on our financial outlook for the full year 2023. There is a slide presentation that accompanies today's call, and a copy of that presentation is available on the Investors section of our website. On slide 4 is our safe harbor statement. Statements made by management on this call and in the accompanying presentation contain forward-looking statements within the meaning of U.S. Federal Securities law. These statements are based on our beliefs and assumptions, current expectations, estimates, and forecasts. 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 statement made here. Please refer to today's press release as well as any other disclosures made by the company regarding the risks to which it is subject, including our 10-K, 10-Q, and 8-K reports. During today's call, management will make reference to non-GAAP financial measures, including organic sales growth, adjusted operating profit, adjusted operating profit margin, and adjusted diluted EPS. Reconciliations and limitations of the non-GAAP financial measures to the most comparable financial results prepared in conformity to GAAP are provided in this morning's earnings release. I now turn over the call to our CEO, Eric Green. Great. Thank you, Quintin, and good morning, everyone. Thanks for joining us today. Due to an unexpected family emergency back in Ireland, Bernard cannot participate today. I appreciate your understanding. Quintin will step in for Bernard. We'd like to begin by addressing the ongoing situation in Israel. Our top priority and focus remains on the safety and well-being of our team members and their families that live and work in the region. Now, let's turn us to slide five and the Q3 performance. I am pleased to report that our team delivered a solid third quarter. Our ongoing success can be attributed to our well-established market-led growth strategy, which allows us to take full advantage of our solid base customer demand and recent capacity expansions. It is the strength of our one West team, who I'd like to thank, that make a meaningful difference to ensuring our customers have a reliable supply of components necessary to deliver drugs to patients. In the third quarter, we had solid organic net sales growth of 5.7%, with an approximate $78 million year-over-year decrease in COVID-19 related sales. Our base organic sales growth exceeded 20% for both the enterprise and our proprietary product segment. Shifting to slide 6. In proprietary products, we had strong base demand of HVP components and devices. We continue to see certain customers experiencing strong uptake of their drugs as they accelerate and increase their replenishment orders with us. The greater than 20% growth in our base business was again led by our biologics market unit, which had very strong double-digit growth in the quarter, excluding the impact of COVID-19-related sales. As we have seen through much of the year, we also had accelerated growth from restocking long lead time HVP components that we've been able to produce through our capacity expansions. This fueled growth in our generics and pharma market units. During September and October, we have started to see an increase in inventory management trends by certain large pharma and generic customers, especially for our standard products, as they manage their safety stocks for the remainder of the year. These issues have led us to temper our fourth quarter organic sales growth to 2%-3%. Excluding COVID-related sales, we expect double-digit overall organic sales growth and double-digit proprietary product sales growth for the quarter. We continue to monitor the situation in Israel and currently do not expect any impact on our ability to manufacture and ship out of the country. As in prior years, we will provide our formal 2024 guidance on our upcoming February Q4 call. In a bit of a preview, despite the inventory management we are seeing by some of our large customers, we continue to expect to deliver our financial construct of 7%-9% organic sales growth and 100 basis points of operating margin expansion. In addition, we anticipate that our pandemic-related sales are at a point where we will no longer have to separate out base performance in 2024. Lastly, a key aspect of our growth strategy and market leadership is West's team of scientific thought leaders and technical experts. They continue to advance the care for patients with our customers through valuable insights to address the changing needs of more complex molecules and combination products. For example, at the recent PDA conference and CPHI Worldwide Conference, several of our West experts delivered insightful presentations about the revised regulatory standards and emphasis on the development of sustainable products. Now, I'll turn the call over to Quintin, who will go into more detail from the quarter. Quintin? Thank you, Eric, and good morning. Let's review the numbers in more detail. We'll first look at Q3 2023 revenues and profits, where we saw a mid-single-digit increase in organic net sales growth, an increase in diluted EPS, and a decline in operating profit compared to the third quarter of 2022. I will also take you through the drivers impacting sales and margin in the quarter, as well as some balance sheet takeaways, and finally, we'll provide an update to our 2023 guidance. First up, Q3. Our financial results are summarized on slide 7, and the reconciliation of non-GAAP measures are described in slide 16 to 20. We recorded net sales of $747.4 million, representing organic sales growth of 5.7%. COVID-related net revenues are estimated to have been approximately $18 million in the quarter, a decline of $78 million compared to the same period last year. Looking at slide 8, Q3 proprietary products, organic net sales increased 3.2%. High-value products, which made up approximately 76% of proprietary product segment sales, grew by mid-single digits, led by customer demand for HVP components and devices. Taking a look at the performance of the market units, including the negative impact from a reduction of COVID-19-related sales, the generics market unit delivered high single-digit growth, and the pharma market unit experienced low single-digit growth, both led by Westar components and admin systems. The Biologics market unit also saw low single-digit growth, driven by sales of FluroTec components and self-injection delivery devices. Our contract manufacturing segment experienced double-digit net sales, organic sales growth, led by an increase in components and sales of components related to injection-related devices and healthcare diagnostic devices. Our adjusted operating profit margin of 24.2% was a 290 basis point decrease from the same period last year. Finally, adjusted diluted EPS increased 6.4% for Q3, excluding stock-based compensation, tax benefit, adjusted diluted EPS increased by 1% compared to last year. Now, let's review the drivers in both our revenue and profit performance. On slide 9, we show the contribution to organic sales growth in the quarter. Sales price increases contributed $46.2 million, or 6.8 percentage points of growth in the quarter. Foreign currency tailwind was approximately $25.1 million, with 3.7 percentage points of growth. Overall mix and volume negatively impacted sales by $7.3 million. This includes an approximate $78 million reduction in COVID-19 related net demand, partially offset by positive volume and mix contribution from our non-COVID-based business. Looking at margin performance, slide 10 shows our consolidated gross profit margin of 38.6% for Q3, down from 39.0% in the same period last year. Proprietary products, third quarter gross profit margin of 43.4% was 20 basis points lower than margin achieved in the same period last year. The key driver for the decline in proprietary products gross profit margin was an unfavorable mix from a reduction in sales related to COVID-19 vaccines, offset by sales price increases that offset inflationary cost pressures in our plants. Contract manufacturing, third quarter gross profit margin of 18.6% was 130 basis points higher than the margin achieved in the third quarter of last year, due to a favorable mix of products sold and increased sale prices offset by inflationary pressures on our plant labor costs. Now let's look at our balance sheet and review how we've done in terms of generating cash for the business. On slide 11, we have listed some key cash flow metrics. Operating cash flow was $537.4 million for the first nine months of 2023, an increase of $44.2 million compared to the same period last year. A 9% increase, primarily due to improvement in working capital. Our third quarter 2023 year-to-date capital spending was $253.3 million, $63.6 million higher than the same period last year. We continue to leverage our CapEx to increase our high-value product manufacturing capacity. Working capital of approximately $1.44 billion at September 30, 2023, increased by $38.3 million from December 31, 2022, primarily due to growth in our current assets, offset by an increase in our current portion of long-term debt. Our cash balance at September 30, 2023, was $898.6 million and was $4.3 million higher than our December 2022 balance. The small increase in cash is primarily driven by positive operating results, offset by increased repurchases under our share repurchase program and higher CapEx. Turning to guidance, slide 12 provides a high-level summary. We're updating our full-year 2023 net sales guidance and expect net sales to be in a range of $2.95-$2.96 billion, compared to a prior guidance range of $2.97 billion-$2.995 billion. There's an estimated full-year 2023 tailwind of $20 million based on current FX rates, unchanged from prior guidance. We expect organic sales to be approximately 2%-3% for the full year, compared to the prior guidance range of 3%-4%. We are raising our full-year 2023 adjusted diluted EPS guidance to be in a range of $7.95-$8, compared to a prior range of $7.65-$7.80. Also, our CapEx guidance is $350 million for the year, unchanged from prior guidance. There are some key elements I want to bring to your attention. We have lowered our revenue guidance to reflect a recent trend with certain pharma and generic customers slowing their restocking of inventory and increased inventory management as we head into the end of the year. We expect full-year COVID-19-related sales to be approximately $68 million, compared to prior guide of $60 million. Net sales guidance also includes a reduction of $8 million, resulting from a divestiture of a European facility that produced standard proprietary products, and this is unchanged from prior guidance. Full year 2023 adjusted diluted EPS range includes an FX tailwind of approximately $0.07 based on current FX exchange rates, compared to prior guidance of a tailwind of $0.05. The updated guidance also includes EPS of $0.41 associated with year-to-date 2023 tax benefits from stock-based comp. Our guidance excludes future tax benefits from stock-based compensation. I would like to highlight that over the last 5 years, our base business growth, excluding COVID-19, has been within or above our construct of annual organic revenue growth of 7%-9%. Over this same time period, we've averaged annual operating margin expansion of over 100 basis points. As Eric mentioned earlier, we are providing a preliminary look to 2024. Based on current trends and demand, we anticipate that West will again be within our long-range financial construct of organic sales growth and operating profit margin expansion. As usual, we'll provide more detailed guidance on 2024 on our February call. I'd like to turn the call back over to Eric. Thank you, Quintin. To summarize slide 13, we had a solid Q3 performance and are on track for double-digit base organic sales growth in Q4. Our base business remains strong, which is a testament to the durability of the foundation we have built over time. We are proud to serve as a valuable, trusted partner for customers to support patient health and look forward to continue to play a critical role in delivering healthcare well into the future. Michelle, we're ready to take questions. Thank you. Thank you. As a reminder to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. We ask that you please limit yourself to one question and one follow-up question. Please stand by while we compile our Q&A roster. Our first question is going to come from the line of Paul Knight with KeyBanc Capital Markets. Your line is open. Please go ahead. Hi, Eric. Hi, Quintin. You mentioned this stocking issue was kind of in the standard products category, which leads to the question of, in the high-value product category, are you obviously we know you're supplying GLP-1 products, but are you capacity constrained on that side of the business? If you could talk to that issue and how big is GLP-1, if you can or will. And then lastly, these CapEx numbers, what facilities open next year? Thanks. Great. Thank you for the question, Paul, and good morning. Let's start with the GLP-1 question. If you look at, we serve that space in both areas of our business, proprietary products with our elastomer components. Specifically in that space, you'll see HVP plungers, and then in the contract manufacturing space, we support our customers in the GLP-1s with auto- injectors. So I would say today, from our perspective, we're not capacity constrained. We're able to re-leverage some of the assets that we had that we put in place for COVID, a lot of that technology, and we also leverage on our global network. And so we'll see we'll be able to continue to ramp, particularly on the elastomer space, HVP plungers, to build support our customers as new drug molecules are approved and launched across the globe. On the CM side, we have we are currently producing auto- injectors into the market, and we've been asked to expand capacity, which we've actually put expansions in place and they're ongoing. It'll take several quarters to get completed and validated throughout, let's call it throughout 2024. And particularly, those sites that we're referring to, Paul, is Dublin and also Grand Rapids, Michigan. So significant investments in those two areas. And from a market size perspective of GLP-1, we haven't commented, we still will not. We would say that from a volume perspective, I would focus from our customers on how they communicate their expectations. But I can assure you that we're working with them to ensure that we are not and will not be the bottleneck as we continue to grow in that space for a number of years to come. In regards to the restocking, you're absolutely correct. It's not as much in the HVP area. It tends to be it is really around our standard products. It's in categories around disposable medical devices. This tends to be the standard elastomer components. And we're being, you know, asked to divert some of those orders into 2024. So that's the cadence. It's not a lot to share, and we continue to have a very healthy win ratio of new approved molecules, particularly in biologics. And so our position from a market position hasn't changed, but it is just a timing of inventory management with a few select customers. Thank you. We'll move on to our next question. One moment, please. Our next question is going to come from the line of Larry Solow with CJS Securities. Your line is open. Please go ahead. Good morning, guys. Thanks for taking the questions, and wish all luck to Bernard. I guess the first question, Eric, is just a little bit of a slowdown in proprietary products just seasonally, and I know you guys were increasing capacity, so I'm just curious. I thought we were going to kind of trend up. Is there just a little bit more of a return to some seasonality you're seeing? I know Q3 historically, you know, pre-COVID was kind of a little bit slower. You know, then the last few years have obviously been, you know, kind of, you know, I think that's been thrown out the window. But are we kind of getting back to some of that? Maybe that kind of goes hand in hand with the inventory management, too, where now supply chains are maybe somewhat normalized, so some of the larger customers have the ability to manage their inventory better as well. Yeah, Larry, thanks for the question. First of all, I'll pass on your remarks to Bernard a little bit later. In regards to the inventory management, what we're seeing, it's not really - it's not seasonality or... it's more around timing of orders. So if we think about the investments we're making, and I know Paul earlier asked about specific capital investments in different plants, and most of our investments, about two-thirds, let's call it two-thirds of our CapEx, is around growth orientation. Right now, there's a heavy emphasis around HVP, particularly around plungers, and also in the CM side, it's been a little bit larger than typical because of the supporting some of the new drug launches coming down the road. But we're seeing, we're seeing some of the-- and, and so those investments are going to be at our major HVP sites, and I already commented on which, which sites for CM. In regards to, timing of the orders, it's not, it's not seasonality. It also is timing of customer manufacturing schedules. So what I would look at is Q3 with the 20% base organic growth, and the comments that biologics give the number, but was led that, so it's obviously above. Right. that is really new molecules in the market and success of those existing components, sorry, molecules in the market already. Yeah. So the demand continues to be layered on top. We plan in the Kinston site, as an example, we, we've installed new capacity for NovaPure plungers. We've been ramping that up through Q3, and we'll also do that through Q4, and we should be able to relieve the bottleneck of the backorder situation by the end of this year. We'll be in a very good position to be able to service our customers effectively throughout 2024 in the fastest area of growth. So hopefully that gives you some context, Larry, of what we're seeing around product, standard products in the market. Got you. Great. Just something I want to follow up on the HVP solution that you came a good way into that. Obviously, that continues to be, you know, the driver, and it sounds like there hasn't been much slowdown to any there. In terms of, I think you said it was greater than 75% in the quarter for revenue. Can you remind us approximately what it was last year? And more importantly, I know it's a lot lower on volume. Can you give us a kind of a guesstimate of where it is on a volume basis? And I imagine NovaPure still remains a minority piece of that, and that sounds like that's, you know, potential to be the fastest-growing piece going forward. Any color there will be great. Thanks. Yeah, Larry, I can't recall. I'll have to get back to you on what it was as a% of sales, last year, somewhere around 70 or plus or minus. We have seen growth year-over-year, and it's a combination of volume, mix, and price that have driven the year-on-year growth. And, you know, if you think about it, when some of the new drugs that Eric has mentioned, that incremental volume of those such drug successes typically come at our higher end of HVP, like NovaPure. And so therefore, you know, it has a bigger impact, so it may not have as big a volume, as much as a mix impact for us. One additional comment, the algorithm, Larry, if you think about the growth of HVP in the double digits that requires about 100 basis points increase year-over-year of volume for HVP. Right. So we're still, we're still in the 23%-24% corridor from a volume perspective, but because the way that Quintin articulated the ASP margins, it's actually quite significant impact on the overall portfolio. Got it. Great. I appreciate the call. Thanks. Thanks, Larry. Thanks, Larry. Thank you, one moment as we move on to our next question. Our next question is gonna come from the line of Jacob Johnson with Stephens. Your line is open. Please go ahead. Hey, thanks. Good morning, and my best to Bernard as well. I guess I'll stick with the popular subject of the morning. Maybe just first going back to the restocking dynamic. You call it out as a slowdown in restocking trends. I'm just curious kind of what surprised you about this. Is it a lack of restocking and customers not going to as high of a safety stock as you would have expected? Or is it some destocking, not to get too caught up in the vernacular here. And then the other piece of that is just, Eric, you mentioned growing next year despite that inventory management. How should we, how long should we think about this dynamic persisting? You want to cover the first part? Sure. You know, Jacob, I'll give you an example. We, at the start of the year, we had customers putting orders in for Q4 that, based on where we were in our capacity and our ability to deliver, we said, "We're gonna have to get it to you next year." I mean, you know, that's the lead time issue that we had, and we had those types of discussions. As our team have done a fantastic job of getting, you know, getting at it and increasing the capacity, we got over the issues that we had last year in terms of some of the issues of installing that, you know, some of the HVP processing capacity in one of our sites. We built on new facilities like in Kinston and in other areas. You know, we were able to start to clear some of that backlog, and then we were able to go to those customers and said, "Hey, you know, we're gonna be able to now deliver, like you said, originally, for the end of the year." And what they came back to us and said, "No, no, we're good. You know, we've already reset our manufacturing schedules. You know, we're gonna just take it here in 2024 instead." And so, you know, what we thought we were gonna be able to do and handle it, because now we've got that additional capacity and helped restock them, you know, now it's just a matter of timing. So, you know, that just gives you an example of some of the things that we've seen as the years progressed. Eric? Yeah, absolutely. I think the last aspect around this is that if you think about the dynamics as this long term, what we're speaking with customers on, it really is the rescheduling of their production lines and the need of the product. That's why we've given indication, and we're not doing the full guidance today, but we're giving indication that 7%-9% corridor of the top line growth is being led by HVP, and it's being led by biologics. We're putting COVID into the number. That gives you kind of the dynamics that we're seeing right now. We should, this is a temporary situation. Okay. That's, that's helpful. And then, Eric, you, you were just talking about the Kinston capacity ramping in 3Q and 4Q, and you kind of mentioned that, that you would catch up on maybe some back orders or something like that, if, if I heard you correctly. I'm just curious, as it relates to, to that market, do you think containment solutions have been a bottleneck for, for the ramp of some of these drugs? And, and is this something that, like, as you get caught up on, we should expect, you know, Kinston to ramp pretty well in 4Q and maybe into early next year? Yeah, I would say, no, we're not the bottleneck, to be clear, in some of these drug launches. We would state that we have been able to navigate and manage through. And I was just before this call, we were just kind of doing another review of the customers that are coming out of that Kinston plant, for particular NovaPure plungers, and it's quite a few customers. So it's not one molecule, it's not one customer, it's multiple, and there's ramping up for 2024 campaigns. So we're excited about where we are, but I would say right now, we're not a bottleneck. It just goes back to what we spoke about earlier, is that we're, we would like to, they would like to see better, stronger safety stocks at their own, in their own pipeline. But we do know that there's some other issues that we see, but that's not for us to discuss, of some of these launches. But I would say we're not the bottleneck. We got the investments put in place. It's validated. The customers are very satisfied with the quality of the product from our Kinston facility, and we have capacity to continue to grow and support, frankly, the biologics launches. And these are the areas around oncology, autoimmune, immunology. I mean, these are exciting areas for us, and I think we're well positioned for the future, particularly out of that plant. Got it. Thanks for taking the questions. Thank you. Thank you. In one moment, while we move to our next question. Our next question is going to come from the line of John Sourbeer with UBS. Your line is open. Please go ahead. Good, good morning, and best to Bernard. I guess just, you know, starting off on GLP-1s, just any additional color or even maybe broader biologics, but how do you see this market evolving, maybe between auto- injectors and multi-dose pens and maybe GLP-1s more specifically, just any thoughts on potential transition to more oral products there? Yeah, no, it's. I don't want to be speaking on behalf of my customers. I got to be careful here. So what we're prepared to do for them is we'll continue to be the primary, the key manufacturer of elastomer components that go into several of these auto- injectors and other modalities. And so from a elastomer position, we're very encouraged with our HVP plunger portfolio, and we're able to support them on the demand and actually stay ahead of the demand with our manufacturing capabilities. We mentioned a little bit earlier today that some of the assets we put in for COVID are actually fungible for this, not just for GLP-1, but for HVP in general. I think in regards to multi-use pens, again, I would refer to our customers in that discussion. But from our point of view, we participate in all, and we are the market leader in injectable medicines. Now, we don't participate in oral, and that is the uptake of oral, the effectiveness of oral, those are all discussions I would really encourage you to speak with our customers on directly. But as the injectable space continues to grow in GLP-1, as new molecules are approved and launched, and the investments we're making, both on the proprietary and CM side, we have a good visibility of cadence of what we're being asked to build support through our global network to support the demand. I'll just be clear, one other aspect is on the proprietary side, we always enjoy a very high participation rate. On the CM side, we've been very clear that our customers are looking at multiple suppliers to support them, and we're one of them. We're positioned very well on both sides of the business. Hopefully, it gives you some context of what we're seeing. Yeah. Thanks. Appreciate the color there. And also, you know, just looking to the high level framing around next year, you know, you've had pretty strong pricing this year, I think in the 5%-6% range. Just any color on what you think pricing could look shake out to for 2024? Yeah. I won't give exact at this point because we are still working through our details, and we have been in discussions with customers. I think one thing to think about, you're right. This year we were communicating between 5%-6% net price realization. I think we're clearly in that corridor, if not on the upper end, and which is positive when you think about the inflationary pressures that all of us around the world are faced with, and we're able to offset majority of that pressure. We are taking consideration of additional inflation if what that would look like next year. So just to give you a little context of how we look at this, and that will help us inform our decision about exactly what corridor we're going to be in. I would say, I can say here that the historic, I'm talking years ago, when we were at sub 1 or between 1 and 2%, I believe that's behind us. We do think we're in a very in a better position to capture more price going forward. Thanks, Eric. And then the last one, just on my end, on COVID, sounds like you're no longer going to break that out next year. You know, there was an increase in the guidance for this year. Anyway, just to think about, you know, what is the endemic level there on COVID going forward? Yeah, I think just based on the guidance Quintin articulated, and I think both Bernard and Quintin have been clear on, is about—we're looking about $68 million for this year. So it would—the basically, if you do the, you know, if you do the delta, it's about $8 million in the fourth quarter. And that means, you know, compare that to $388 million prior year, and we had a little bit more of that the previous year to that. You know, it's hard to predict, and but we're—we've—in the last two quarters, we've been basically between $10 million and $20 million a quarter. And so the way we look at it is, yes, that could potentially be a headwind if there's less doses that are administered, or it could be a tailwind if there's more doses, depending on how this pandemic evolves. But we're gonna right now, our thinking is to put it into the base and run the business as a whole, because at this point, it's becoming a very small portion of overall West. So yes, we'll be, we'll be clear for the balance of this year, but then we'll give better clarity in February if we think if we do need to still call it out. But our thinking right now is to eliminate that. Thanks for taking the questions. Thank you. Thank you. One moment as we move on to our next question. Our next question is going to come from the line of Matt Larew with William Blair. Your line is open. Please go ahead. Morning. Obviously, the focus in terms of the contract manufacturing and auto- injector investments right now are around GLP-1s. But there's, you know, growing interest, I think, more broadly in new delivery modalities, and obviously, you have your SmartDose platform. So just curious if you can maybe update us on either the interest, the funnel pipeline, or more generally, what discussions with customers are like in more of the device category that you've been invested in. Matt, thank you for the question. Excellent question. Quintin, do you want to start? Yeah. So, Matt, let me clarify. So when we think about injection delivery platforms, you know, what we at West can participate in two ways. One, if the customer has the IP, then we can manufacture on behalf of that customer, and that's where our contract manufacturing is. We're really good at it. We're not the only ones that will be there, though. They, as we've said in the past, the customers with the IP will typically outsource to 2-3, and if it's a very big project, it could be up to 5-6 different players. So, so that's how we participate. And very often, those customers also happen to be key proprietary product elastomer customers. And then on the SmartDose side, that is proprietary to us. That is our design, and that's when customers come to us and work with us to spec in that device with their drug to make a drug device combination therapy. And there, we're seeing really active uptake. We are up to four now drug approvals using our SmartDose platform, and we have a very active pipeline of customers that are evaluating the platform. Excellent. Thank you, Quintin. Okay. Thanks, Quintin. And then next on capacity, obviously, sort of Kinston is ramping to full capacity. I think you'd referenced maybe adding to the Waterford site in 2024. So I guess, just as we think about where capital is moving next from an investment perspective, is it Waterford? Are there other sites or particular categories you have in mind? And as you're doing that, I know you've referenced building additional automation into newer builds. Are those things that can help speed time to ramp or more just benefits at steady state? Yeah, that's so the two points, if you think about the first one in regards to our network and where we're investing our capital, particularly on HVP, it's heavily concentrated between Kinston, a little bit in Jersey Shore, up in Pennsylvania, but in Europe, it's Waterford and Eschweiler. And we're also looking at additional expansion in Singapore to build support the Asia market. But the priority has been really around the U.S., and Europe, and we'll continue to invest. And it's interesting, the growth that we're experiencing with HVP, to be able to support that, it is really around, you think about the pharma washing, sterilization, and vision, that is helping us to drive the HVP conversion. So I'm excited about where we are, but also the investments are in flight, what that will give us, and also give us the ability to do uplift, and additional demand that we expect. The automation is ongoing, and actually, I'm pleased with some of the recent progress we made on new technology for West that allows us to be more efficient, improve quality. In my mind, I'm always looking at ways to improve safety. It also allows us to scale up faster, when we start thinking about to support various areas, whether it's biologics, with I mentioned earlier about oncology, immunology, or autoimmune. But it's also thinking about how do we support this scale-up on GLP-1. This automation that we're working on with a couple of our external partners. I need to get over to Europe recently to see some new investments that we put in place. I'm excited for what the engineering team has been doing, and it's going to give us the ability to scale faster. But more importantly, I think the automation will provide a better product that continues to differentiate West in the marketplace. That's what I'm really excited about. Yes, we'll get efficiencies, yes, we'll get more throughput. But reality is, main focus is a higher quality product that differentiates in the market. Okay. Thank you. Thank you. Thank you. One moment as we move to our next question. Our next question is gonna come from the line of David Windley with Jefferies. Your line is open. Please go ahead. Hi, good morning. Thanks for taking my questions, and best to Bernard and his family. I wanted to start on stocking and just to understand some moving parts a little bit better. I'm understanding, I think, well, that you're talking today that within elastomers or components, the destocking is mostly standard. I think early in the year, we had understood that you had some areas that post-pandemic, you know, maybe Westar, for example, post-pandemic had, you know, not gotten the capital allocation, the growth allocation, and were understocked and catching up. And so I guess I wanted to try to understand better if those two factors were both at play and offsetting in the quarter, or maybe the Westar was already done, and therefore, the standard destocking now is what we're feeling. I just. It feels like there have been through the year, moving parts in both directions, and I just wanted to understand those and the cadence of them. Thanks. It's a good question, David. Yeah. Hey, Dave. So maybe it's just a definition or just maybe, w hen you say destocking, we think of it more as customers that are having a demand issue, like in COVID-19, and what they're doing is they're not reordering, and they're taking down their safety stocks and consuming their safety stock. And that's certainly happening in COVID-19, which we're seeing year-over-year declines. The other impact is the fact that, you know, we have been, you know, behind in terms of delivering because of our capacity constraints. And then as we've been able to restock, the base growth that you've seen in generics and pharma is well above the financial construct. So what. That has been going on for, you know, the first part of this year. What we're seeing now is that base growth is going to temper. It's not declining, it's just not gonna be as high as we thought it was going to be in Q4. That's why we're calling it a slowing of a restock. It's not necessarily a destock situation. And again, you know, a lot of it happens is the fact that we've done a really good job of clearing the backlog. We've been, we've gone to our customers, we said, "Hey, we have that capacity to deliver product," and they said, "No, given where we are in the year, given where our manufacturing schedules are, we would rather it be delivered next year instead of Q4. Okay. Helpful. Thank you. In thinking about your initial comments on 2024, and admittedly, you know, I appreciate your answers to Paul's question to start on GLP-1s, and I think we all know that the attention there is probably overwrought. But in so much as there's a lot of enthusiasm for that particular class, I think you know, folks that are paying attention to West believe that that can be a very strong driver for you, perhaps in excess of your you know, your long-term construct. Would you tell us that that is, that our assessment of that is, you know, too enthusiastic? Or is it that the pace at which that comes on is perhaps not as quick as we think? Or is it that other parts of the business are offsetting, and those things net you into that 7%-9% target range? Thanks. So again, understanding your question, here's what: here's our philosophy: We need to be ready for whatever the customers need from us. And so we have. That's why our teams have such great communication with the customers. We have cited that we have customers that are doing really well and are increasing their reorders. In the event that those, you know, things change to the positive, that's where our global network is ready. We are. So we're in position for that. We've got the global network to do that, and so now, what happens to that class of drug? That's really better addressed by our customers. All we can say is that we'll be ready and, you know, continuing to be ready, and that's why we've got so much capital projects going on right now. Eric? So, in addition to that, I mean, Quintin's right. It's, if you think about the growth, we're really confident with the growth of biologics, continues to be strong. And when we speak about biologics, we're not really bringing in GLP-1 conversations into that mix. And so the growth we talk about 7%-9% construct, it has to be led by HVP, it has to be led by biologics. That really isn't part of the GLP-1 conversation. As demand comes in for GLP-1, when the drugs are approved and as further launches, and the whole supply chain is working effectively and efficiently, we'll be in a very good position to be able to support that scale-up. Exact timing, exact cadence of that aspect, I would probably refer more to our customers on that. But we're positioned well to absorb the elastomer side and also the investments we're making. We'll take some time to get the buildings and validate, get that up in addition to what we have already. That will be, CM is a little bit longer term, but we're ready to address that, Dave. I appreciate that answer. If I could just clarify, Eric, on what you just said. When you say you're not bringing GLP-1s in on that statement, does that mean that GLP-1s are categorized, say, in pharma, not biologics? Or are you just saying that you're enthusiastic about the biologics pipeline, notwithstanding, you know, whatever GLP-1s do to that pipeline? Yeah, it's really, it's latter. It's, I tend to focus on what's, what's approved or about to get approved in the market, and, and that's around the biologic space. We have a diverse portfolio of customers, diverse portfolio of approved drugs in the market and about to be approved. And you know, yes, we as an organization are going to fully support and be ready, ready and available to support the any GLP-1 launches that are beyond what we see today. And we're excited to be part of that participation, and, and, we'll lead in the front like we have. And there's no reason why we can't deliver like we did around COVID. It's the same model, frankly. When you think about really the number of SKUs, number of assets that we're leveraging their existing operations, we're very confident we can deliver. But I would say, I just want to be clear, I'm very excited about biologics without saying that this growth can be driven by GLP-1. Understood. Thanks for the clarification. Thank you. Thanks. Thank you. And one moment as we move on to our next question. And our next question is going to come from the line of Justin Bowers with Deutsche Bank. Your line is open. Please go ahead. Hey, good morning, everyone. Just a two-parter on the outlook for 2024, which I think we all appreciate. One, wanted to clarify that the 7%-9% organic does include the $68 million. It's on top of the COVID or the $68 million in COVID. And then number two, sort of, can you help us understand the visibility that you have now into that growth? Is there, you know, is there a level of commitments from customers? Are you already talking about sort of like project planning in the pipeline for next year? Just, you know, investors in the space have been very skittish around visibility, so any framing there would be helpful. Yeah, no, great questions. The first one is pretty clear. Yes, when we talk about 7%-9% top line, 100 basis point margin expansion, that is inclusive of the COVID $68 million that we guided for 2023 in that number. So, and if there's a drastic change between now and February, we'll communicate that. But based on what we're seeing, the answer is yes, it's part of that equation. The second part about visibility, just to... It's interesting, our business is made to order for the most part. So our customers are coming to us and giving us campaigns, whether it's three quarters, six quarters, five quarters, and we're able to support them on whether it's new drug launches or existing drug launches. And there's always going to be some variability on each and every molecule. And so, but on aggregate, we have pretty good lens what type of volume we need for our SKUs and what investments we need to make. On the CM side, it tends to be very long contracts with specific assets in CapEx installed that will take a little time to ramp, but once we're operating, we pretty much know what the capacity and output will be day over day. On the elastomer side, this leaves more volatility, more variability. And again, it depends on how successful the drugs are in the marketplace. And so therefore, we're able to move a little bit up and down quarter to quarter. So we do have visibility. Is it 100%? No. This business has tremendous amount of, I call it, annuity-like repeat year over year. It's not 100%, but it's very high, and that gives us confidence on how we can plan existing growth, but also future launches working with our customers. So there's a little bit of both in there in that answer. Got it. And then just a quick follow-up on CM. Sort of the margins this year, or this quarter, is that, is that sort of a good go-forward? rate, just given sort of the commentary on the, you know, the long, the longer visibility of that business? Yeah. I think that this quarter, we did have some benefit from some pricing that we did take through some of our contracts. We think longer term, we're looking 16%-17%. Okay. That's all for me. Thank you. Yeah, thank you. Thank you. And one moment as we move on to our next question. And our next question is going to come from the line of Derik De Bruin with Bank of America. Your line is open. Please go ahead. Hey, thanks for taking my question. So, the margin guide that's implied for the fourth quarter, I mean, to get to your EPS number, that is basically and sort of using your organic parameter guidance and everything you put in there, to get to that, your EPS number for the year, even if we don't assume you're going to get any of that stock-based compensation, it looks like you're going to take a pretty big step down sequentially, Q3 to Q4. I'm just curious what's going on. Is it validation of lines? You know, why is there such a big implied margin step down between the quarters? Thanks. Hey, Derik. Thanks, thanks for the question. Really, it's just utilization and absorption. Given that we're probably gonna have lower volumes through our facilities in the fourth quarter, we just wanna make sure that we have a reasonable swag at gross margin. And then, you know, we're gonna continue to manage our costs on the SG&A and R&D line. But so that's where the margin impact is really gonna be reflected, especially in proprietary products margin for the quarter. Got it. So gross margin on proprietary products, you expect to be down sequentially, just given the- Yes - Utilization issues? That's right. That's right. right. And then CM to get back down to kind of that 16%-16.5% range. Got it. Okay. And so how long does that sort of like... I mean, how long does that sort of, like, drag on proprietary products as we start thinking about building out our quarterly models, our quarterly estimates for next year? No, no, I mean, look, I mean, we're in the process of you know formalizing kind of the plans for 2024, but as we look at it, next year, with the top line growth that we get, led by HVP, you're gonna see gross margins improve year on year. Got it. Okay, that's great. And, just going back, I mean, I know we've talked about the guide, and its questions have been asked, but, I mean, I've covered this stock for a while, and you're right. I mean, why wouldn't you do at least the high end of that 7%-9% construct next year? I mean, given you've got pricing, you've got, you know, you've got demand, you've got, you know, you've got some orders that got pushed from this year to next year. I mean, why wouldn't COVID is normalizing, why wouldn't that be just like, Why wouldn't that be a reasonable 9% or better? Well, Derik, look, you know, we're sitting here in October. We're putting our plans together. We're trying to give you kind of a preview of next year, and we're also doing it cognizant of the fact that we're hearing other life science tools companies upstream of us talk about softness and tougher times. You know, we don't have some of the high exposure that they have in certain areas, like emerging bio and pre-commercial companies and things like that. But still, we just want to be, again, we want to be, we acknowledge that there are uncertainties out there. So, you know, as we sit there and put all that in, and yeah, that's how we come up with that preliminary guide. You know, we'll provide a lot more detail in February because we'll have a lot more information then, and we're happy to come back and talk to you then. Yeah, and I think we've been consistent on the message that that's just, to us, we wanna continuously hit or exceed. So, that's where we sit right now with the visibility we have. Great. Thanks a lot. Appreciate it. Thanks, Derik. You bet. Good talking to you, Derik. Thank you, and I would like to hand the conference back over to Quintin Lai for any further remarks. Thanks, Michelle. Thank you for joining us today on today's conference call. An online archive of the broadcast will be available on our website at westpharma.com in the Investors section. Additionally, you may access a replay for the 30 days following this presentation by using the dial-in numbers and conference ID provided at the end of today's earnings release. That concludes the call. Have a nice day. This concludes today's conference call. Thank you for participating. You may now disconnect.