Head of Investor Relations. Gentlemen, thanks for joining us. Thank you, and thanks for the invite. It's good to be here. It's great to have you. I guess just our standard question to kick things off. You know, 1Q results came in ahead of expectations. You had an overall organic decline of -3. You know, you maintained the organic guide for the year for revenues, but you raised the EPS by $0.13. You know, a couple moving pieces in that. Could you just give us an update on how 1Q played out relative to your expectations? Yeah. 1Q was pretty close to where, you know, we thought it would come in, a little bit stronger. We saw some orders that we had, you know, expected probably to come in Q2. You know, customers asked could we produce them in Q1 and deliver them, which we did. So, you know, good performance based on, you know, where we thought we would be and what we were experiencing. On the EPS side, you know, again, pretty much in line what we thought it would be. I think stock-based compensation tax benefit was in there, and that, you know, layered into the overall change in guidance for the full year. But you know, as you know, we reaffirmed for 2024, the cadence that we talked about in February, you know, still holds true for what we're seeing materialize as we move through the year. So, you know, first half a little bit weaker than the second half. And, you know, we haven't changed our view on that at this point. Okay. And then, you know, anything you can say in terms of order books, you know, how things are trending, you know, visibility into end markets? I know it's a little volatile week to week, you know, month to month, but- Yeah, you know, I think it's the same as what we've been communicating, you know, over the last couple of months. You know, as we move into the second half of the year, when we look at our orders on hand as a% of forecast for the second half of the year, that's trending a little bit ahead of where we were at this point in time in 2019, you know, pre-COVID. So we've seen that, you know, continue as we've, you know, moved through the last number of months. So again, no change there, and that ties into how we're guiding for the year. Okay. All right. And the probably the high debate point on the stock these days is destocking situation, what you're seeing in the end market. You know, we've heard mixed commentary from some of your other packaging component manufacturers. You know, could you give us an update into visibility into customer levels? You know, how do you manage that, and how do you gain confidence that, you know, you've got a good sense of what's going on there? Yeah, so, you know, we're constantly in communication with our customers. You know, assessing where they are, what is their demand, what is the timing of that demand? So that's an ongoing process. And, you know, then we correlate that to what we're seeing in actual orders coming through. As I just mentioned, as we're seeing what's coming through in the back half of the year and just all of that tied together. Again, it's evolving. It's something that we monitor very closely. Okay. And Mike, maybe I'll just add to that, because we've had some questions earlier today, customer concentration with respect to this destocking. What we've seen is that it's across the board for us. It's pharma companies, it's generic companies, it's biologic companies. There isn't a single customer that we would call out as being an overly impactful in destocking. It's several customers, which makes it more of a sector-wide trend that we're seeing, and not just specific to a, you know, a customer or customers. Okay. And what... You know, looking back, now that we, you know, now we see that situation unfold, what do you think drove the excess inventory levels some of these customers built up in 2023? Was it, concerns on supply chain or availability of product? Yeah, you know, part of it was driven by our own lead times that actually had pushed out over the last number of years. So, you know, that would have influenced how, you know, some customers were looking at what level of safety stocks they believe they needed to hold. I think the supply chain, again, in and of itself, over the last number of years, influenced the level of stock that people needed to and wanted to carry. I think that's, you know, shifting a little bit now as our lead times have come down. We've added in more capacity. We're back to more normal levels of supply. And then when we look at our customers, you know, are they also looking at their levels of safety stock at this point in time, and now what's appropriate for them? So there are a number of factors. There's like working capital and inventory management in there also. So I don't think it's just one driver. I think there are a number of factors influencing it. Okay, and you go ahead. You just touched on your own lead times getting better. You know, would you say that you know, all the manufacturing and all the logistics, that's all been worked out and is sort of back to pre-COVID levels, or are there still any pockets where it's elevated? It's for all intents and purposes, it's back to pre-COVID levels. You know, we have seen obviously COVID itself, and the pressures that put on our business has dissipated. We've added in capacity into certain areas of business, which are growth driven and primarily within the high-value product segment across five different manufacturing plants. And that's enabled us to bring those lead times down, and now it also enables us to respond to pick up in demand when that comes to allow us to maintain the lead times that we're currently experiencing. So as not to, you know, drive lead times back up to 40, 50 weeks, which is something that we want to avoid. Okay. And when you, you know, as you said, you reiterated the guide on a sales basis, organic sales basis, in April, but in, you know, in January, February, the revision was, you know, a lot of the revision to the guide was tied to that excess inventory. As you sit four months later into the year, is your timeline for that inventory drawdown unchanged? Do you still see that, you know, returning to normal by the end of the year? Yeah, based on the information that we have and the indicators that we're getting, that would be the case. So we would expect to see, you know, things improve as we move through the year, quarter over quarter. Okay. All right. And one of the other bits you've, you've been talking more and more about in recent conferences is, Annex 1, regulatory rule in Europe. That's got a lot of noise. Could you just provide a little more clarity, you know, where you would see the benefit from that? Is that, you know, that incremental or that different than other regulatory changes you've seen in the past, and just sort of, you know, how it benefits you specifically? So Annex 1 is a lot of focus on improving the quality of injectable drugs, especially on contamination and particulates. Which means that you're going to be affecting the manufacturer, the fill-finish, the final package. All of those things can contribute to improving the quality. We've had some customers who have been looking at the proposed changes that were talked about and were proactive and started to look at their processes, especially processes of older drugs that have used legacy components, legacy processes, and are in the process of looking to upgrade. And we even cited one customer who's in that process right now. Since the Annex I has been put into place, we have seen a marked increase in the number of customers that are initiating projects to take a look at their products and their processes for upgrades. And so it was. So we called that out on the April call, quite a big uptake. As we review all those different projects, it is interesting that each customer, each drug, has got a specific case. And so, they're, that's why they're starting a dialogue with us, so that they can understand on the component side what they could be doing. Whether it be moving their legacy component from bulk to washed sterilized, or maybe even moving that legacy component to a more modern formulation, washed, sterilized, Envisioned, or maybe even to coated. So, it really is something that we're just at the start of right now. It does play into our overall thesis in that the bar for quality continues to only move upward. The regulators are only moving that bar upward, and we think that there is, and we have said it a while, that there's a long runway for HVP conversion in our business. So taking everything you just said, what is the timeline we should be thinking about here? I mean, these are a lot of these products are spec'd in. You're not gonna flip a switch and change overnight. So how do we think about Annex I playing out? So I think that again, because it's not just the component, it could very well also be a clean room. It could be a Restricted Access Barrier, an isolator that has to be put in. There are other pieces that have to go along with the ecosystem, that there will be a component of time to go into it. So what we're doing is that we're preparing, we're working with those customers, we're making sure that we have the capacity, so that as customers start to switch, that we don't see any kind of slugs in our lead time like we had a couple years ago. And so, if you look at a lot of our capacity that we've been putting in and continue to put in, a lot of it is focused on HVP processing. Yes, I think it's an important point that, we don't expect a big bang event with this. It's, it'll layer in over time. It could take, you know, a couple of years, for people to convert. I think they're gonna look at, probably looking at new molecules coming to the market. What does it mean for those looking at existing platforms? How do they transition? So it is gonna take time. But as Quintin said, we have been layering in capacity around specific processes to support the change, and that's something that we continuously evaluate to understand, do we have that right capacity? Because we don't want to essentially commit to a customer and not be able to deliver on it, and then to delay any implementation. So that's something that we work very closely with our customers on. But again, it is gonna take time. Okay. And Annex 1 is a Europe phenomenon, but you're a global company and your customers are global customers, right? So how do you, how are they balancing that? You know, are they, are they really going with two approaches, where we're gonna do this in Europe and this in the US? Or are they just saying, "The bar got moved here, so we might as well raise it here everywhere else? Yeah, typically, we would see that they would switch to one, that they're not—we don't see them having two different solutions coming from us. So I think it will be a global platform change rather than specific to a region. It's the way we would read it now. Okay. All right. And sort of taking that and folding it into the LRP and the long-term outlook for the business, you know, there—when we think about how West is positioned, you know, you've got a couple tailwinds. You know, you've got the evolution of you know, higher value products. You've got tailwinds from GLP-1, which we haven't even touched on yet. You know, you've got Annex I rolling in, higher regulation. You know, headwinds, you've got destocking inventory, everything that's happened in the last couple of years, some volatility in pricing that's sort of obscuring the underlying demand. Taking these two offsetting pieces, you know, how do you, sitting here, how do you reevaluate your LRP and your, you know, your view of the underlying market growth? Yeah, we continue to, you know, look at our LRP within that 7%-9% range. We're not-- We don't see a need to really move off that at the moment, and we'll have to see how things materialize. It's really... You know, we're focusing on three different areas. We got volume-- There's volume growth based into that. There's a level of pricing, and then also you've got mix shift. So there's three different drivers and, you know, we believe that that's confident in it as we look into the long term and we just get through 2023, 2024. Okay. And talking about, you know, in your prior answer on Annex I, you touched a lot on capacity, ensuring you have enough capacity and making sure that lead times and supply chain doesn't get messed up as volume comes back. You know, you guided to $350 million of CapEx this year. You know, you've had elevated CapEx or heavy CapEx for a number of years. You know, how much of that is already sort of spoken for in terms of Annex I and things like that, or how much incremental CapEx do you think you'll need going forward to position yourself for that? Yeah, I think if we, you know, look at the next number of years, I think once we get over layering in this level of capacity, and we're doing it both in our proprietary business and we've had some, you know, incremental capacity adds within our contract manufacturing business, which will be coming online in 2025. We would expect that we would be coming back to the, like, kind of probably 6%-7%, maybe 8% range on CapEx as a% of revenues, which is typically what we were doing pre-COVID. But again, a lot of the vast majority of the CapEx that we've been layering in over the last number of years has really been driven by growth initiatives and future demand that we're seeing from customers, and primarily concentrated in the high-value product space. So as you layer that in ahead of future demand, sort of how much lead time do you need? How much visibility do you need? So, you know, let's say you're putting, let's say you start digging today, what is that intended for? Is that intended to feed 2026 demand, 2028? Yeah, if we start it today, you're typically looking at, you know, 2026 and beyond, where if it's equipment only, it could be 12-24 months by the time you get it spec'd out, delivered, validated, and in production. And then if you're looking at doing any modifications to facilities and stuff, it can add time to that. So that's why it's important for us to be always investing ahead of the curve, because what we're trying to avoid is getting into these lead time problems that we've encountered over the last couple of years. So it's really to make sure that we're in a place to capture any of these opportunities as and when they present themselves and not kind of having to do it after the fact. Okay. So then just to play devil's advocate on that, you know, if you're investing that far ahead of time, how do you ensure you have confidence in, you know, in the fact that you're not gonna have too much capacity, that the demand will be there two, three years down the road? You know, what's the visibility there? Yeah, so typically, what we're able to see is we, our volume growth is pretty consistent among our various business segments. And then there are specific areas of opportunity that, you know, we have had a lot of conversation with our customer, customers about to get levels of insights as to what they're expecting, where and when they need product, and then making sure together that we have the capacity in place. Now, the capacity that we layer in is never really specifically just for one customer. It's agnostic, so we can use it across multiple customers, multiple products, so it's not dedicated to any one particular area. So we have that level of flexibility as well. Okay. Then, you know, the other question we often get is, competitive landscape, differentiation versus some of your peers and some of your counterparts, and that kind of gets to the point of moat and share shifts. You know, how would you characterize those dynamics? Well, I think that what we focusing on is what do our customers look for in a primary package supplier? And the number one parameter is quality, especially now with all the regulatory changes going on. Quality was always number one, and it's now just further number one. Number two and three, I think number two right now is scale, availability, because even though they are doing inventory management now, I think the whole world understands how fragile supply chains can be, and they wanna make sure, are you gonna be ready, and are you gonna be ready in the places that we're selling drug, which means Europe, North America, Asia. And then, you know, if you take a look at our footprint, we have HVP in all of those areas. We also have manufacturing in South America. So we... We think scale, availability, is super critical. Science and regulatory support, super important because as these regulatory changes occur on legacy products, you may have to do upgrades, and you may have to do refilings. And what team is going to be able to sit there and go through all that paperwork and all that testing and stability? And so those are the three areas that we typically focus on. And we think that that is where our competitive advantage is. The other suppliers in the space are doing the same, but again, you know, they do it at a little bit different scale than we do. Okay. And taking those factors you called out, you know, quality, scale, you know, the science regulatory support, where does that leave you when it comes to price? You know, how much of a lever is price, and how does that - how do you see that changing going forward? Yeah, so in the past, we were getting 1%-2% on price. Right now, we're targeting, you know, in the 2%-3% range. I think in the first quarter, we were a little bit ahead of that. Last year was a bit of an anomaly because of inflation, we were passing on some of those inflationary cost increases that we were getting, but we would typically look at the 2%-3%. It's different in different parts of our business. Some parts are more price-sensitive than others. And, you know, when we're looking at these relationships with customers, we're also looking at long-term partnerships. So we also need to kind of provide a level of visibility around price to customers and to make sure that those price increases are sustainable over time. Okay. I was actually going to ask on, you know, your relationship with pharma and biotechs. That's a good transition. You know, you've obviously had very long-standing relationship with a lot of your customers and partners. You know, have those conversations changed in recent quarters or recent years in terms of their portfolio shifts or maybe some competitive landscape shifts? Just, like, what's the relationship with the bigger sponsors out there? So I think that the opportunity for us to, especially with some of the things that are going on with the regulatory environment, we have seen some customers look at their portfolio and are looking to say, "Okay, given the situation, how should we manage it? Should we just be managing it drug by drug, or should we be moving to a platform approach?" And these are not easy decisions because what you're talking about is potentially opening up drug filings, relooking, and maybe having to modify that drug filing to go to something that would be like a Westar Select type quality, where you can use our network as opposed to maybe it's being specified to a formulation, a site. But there are some benefits to that, and the benefits are availability, being able to source it from various places within our network. And so our teams have had very constructive discussions as we've been going along that pathway. Put into context, we work in an industry that has a very high inertia level. Change doesn't come quickly to these things. Once you're specced in, you typically are specced in, and you don't want to change it. But those are the kind of discussions that we're having. And then as well as talking about their new drugs, their new pipeline, having those type of discussions, and then, that's where we are able to come in with our even higher-level products, such as NovaPure, Crystal Zenith, our delivery devices. And then that also is introducing the concept that we're trying to pioneer, which is the integrated systems. Because we think that that could be the next frontier for offerings, where you are now creating these packages of glass elastomer that are designed to work with each other. And again, that's something that they're looking further down the pipeline. Okay. That's helpful. Bernard, a couple for you on the P&L and margin dynamics in the quarter and as you go through the year. You know, you've got a pretty steep ramp built in, but a lot of that is just tied to volume levers, there's some tied to mix. Could you take us through the moving pieces as we think about, you know, what happened in 1Q and how that trends through the rest of the year? Yeah. So I think the biggest challenge we had in, you know, in the first quarter was really volume. So we're a volume-dependent business, so you could see the impact on throughput through some of our facilities and the absorption impact that had on margin. Then there was also a mix impact, you know, which we had called out, which was going to happen around some of this destocking. So as we move through the year and, you know, we do see margins improving through higher levels of production and, you know, the mix shift being addressed, more High-Value Products coming through. So, you know, that ties into greater revenue growth, but also margin expansion. I think if you look back at, you know, the last number of years when we were driving a lot of margin improvement, it was really higher volumes around higher-value products. You know, that shows the power of it once it kicks in. So once we transition into the, you know, the back half of the year, that's when we should see materialize. Okay. And as you said, a lot of that multi-year margin runway comes from the HVP? Yeah, that's- Mix shift. The HVP mix shift is really the biggest driver of the margin expansion, and we see it predominantly within the biologics market segment. That's where we see, you know, the greatest or the highest level of adoption for HVP. It's really any customer that's in that space when they're speccing in, you know, for their molecules, they're really looking at HVP. We see a certain, you know, pharma probably is our lowest level of penetration around HVP, but we are seeing some traction there, and then generics somewhere in the middle, but biologics is the main driver. Okay. And when you think about that margin expansion, LRP, you know, the 100 basis points annually that comes along with that revenue line, you know, you feel pretty good about the sustained runway there, given- Yeah, again, it all ties back. It's really driven predominantly by the mix shift, you know, within HVP and to HVP. And then we've already spoken about some of the other drivers as to, you know, why that would take place and what supports it. So you have the growth within biologics itself, then you have, you know, things like Annex 1, these regulatory changes, you know, taking people up that HVP curve and getting them onto it. So that sustains that margin expansion, and then there's a little bit of OpEx leverage, but it's primarily around mix shift. I mean, given the factors you talked about, Annex 1, you know, mix shift within your customers, is there an opportunity for the shift to HVPs to accelerate even further? I mean, it's been going on for years and years, but given some of the changes you're seeing in that market, could you see another step higher there? Typically, we see about 100 bips of volume converting to high-value products on an annual basis, and that's been, you know, pretty consistent over the last number of years if you strip out the COVID dynamic. Yeah. You know, that's what we would expect to continue. Now, something like Annex 1 could accelerate that, but again, you're really looking at the timing around that and trying to predict it, which now is, you know, it's not something we're prepared to do. Yeah. So I think the 100 basis points is something we're comfortable with. And as we've communicated in the past, you know, if we can drive past 100 basis points, yeah, we will. Okay. All right. It's too early to call that for now? Yeah. Okay, fair enough. You know, when we think about the balance sheet and some of the uses there, you know, we talked about CapEx. There's always, you know, CapEx, you talk about 6%-8% of revs, but the balance sheet is in a pretty good position. Aside from organic investment, innovation, and CapEx, you know, can you talk about other capital deployment, whether it's share buybacks or dividends or what's your priority for the cash use? Yeah, so we really concentrate the capital deployment, you know, on CapEx and leveraging that, driving a lot of growth. The share buyback, we're really, you know, maintaining the share count. That's our primary focus with that. I know for the last, I think, year, we've probably done a little bit, accelerated on that a little bit. And then, really, the next thing for us to do is to look at M&A within certain segments of our business. If we look at areas like drug delivery, it's looking at what opportunities are there, how do we expand that portfolio? So that, that is something that we haven't really done in the past, haven't been that active, but I think as we move forward, it's something that we, you know, will look at more closely. What are the opportunities there? Is it more sort of early-stage technologies and IP, or are there any, you know, at-scale businesses? We don't have anything specific to call out today, but I, you know, it'll be a combination, I think. Okay, great. We're nearing the bottom of the session. You know, I'll end with sort of our usual question of, you know, what do you think is most underappreciated or misunderstood about West? You know, would you like to clarify? Is there anything that's come up in your meetings early in the day that you want to focus on? I think people are beginning to and have been appreciating us or West more in the last couple of years than they had in the past, and really understanding the story, understanding the regulatory moat around the business, but also the sustained growth potential for an organic business, both on the top and bottom line. And then for us, it's really executing on that story. But I think it shows how sustainable it is over the long haul. And even with the you know, we get the challenges like we're facing right now, but again, they're really short term. But the growth is there, and there are a number of different drivers in the space to do that. Okay. If you want to add anything. No, again, I agree. You know, we are a life science tools company, and we only go as fast as our customers. We have to be ready when our customers are ready, so that means that by definition, we always have to be a little ahead of the curve and ahead of the demand. And that's our job is to try to stay ahead of the demand, but not get so far ahead that we have a lot of unused capacity. And so we do it through phases of CapEx, and as you've heard, in the past, when we have demand that's ahead, we will pull forward those CapEx plans to adjust. And if there's a change in demand on the other side, we also have the ability to push out some of those phases. But that is what we do as a life science tools company. Got it. Thanks so much, guys. Thanks for coming. Thank you. Appreciate it. Thank you, everyone.