Inventory contraction impacted on West throughout 2009, contributing to a 21 per cent drop in operating income for the year, but the company is optimistic about the coming 12 months.
"The fourth quarter was a terrific finish to a difficult year and is consistent with our view that the worst of the effects of inventory contraction are behind us," said Donald Morel Jr, chairman and CEO at West.
Fourth quarter results were buoyed by demand for H1N1 related products, which generated sales of $12.3m (€9.0m), but even excluding this, and the contributions of currency and acquired business, revenues and profitability grew.
This growth was driven by the pharmaceutical systems business. Operating profit from the business sector grew by 43 per cent to $42.7m, primarily because of strong demand for higher quality pharmaceutical components.
West highlighted quarterly revenues of $7.5m from prefilled syringe components and $7.1m from metal seals as contributing to growth.
Business also benefited from a decline in US raw material costs, as a result of lower petroleum prices, although this was more than offset by other increases in production expenditure.
Despite these positives West’s overall operating profit for the quarter fell by 15 per cent to $21.7m.
Reorganisation
West faced challenging market conditions in 2009 and this led to revenues being flat and operating profit falling. To drive growth in coming years West has reorganised into two divisions, packaging systems and delivery systems.
In 2010 West expects both divisions to grow revenues, resulting in annual sales of around $1.1bn, up from $1.05bn in 2009.