ATR - Earnings call transcript Q3 2019

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to AptarGroup's 2019 Third Quarter Conference call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Introducing today's conference call is Mr. President, and Vice Senior Dellamaria, Investor Communications. Relations Matt go ahead, sir. Please

Matt Dellamaria

Bob Participating Howard, and call and President, and you, and on Financial Chief Executive Officer Chief welcome, Officer; President Thank Tanda, everyone. our Secretary. Vice Stephan today Executive Kuhn, are

find our press a the well release on results of summarizes that presentation our copy our can as as You slide website.

replay on our We call will website. conference also of this post a

cause review actual Please statements. to Lastly update today's no therein. factors to contained SEC those that filings some obligation information could in statements. from call materially refer to contained the results our differ forward-looking to or Aptar forward-looking includes projected the forward-looking undertakes

call now to Stephan. to the I'd like conference over turn

Stephan Tanda

we growth reported adjusted sales X% and and X% of of core you, thanks everyone, Thank Matt, Yesterday good growth EBITDA the morning, us. third for quarter. and for joining

quarterly segment more over our update go results of announced the to acquisition I let Before before some details. recent will I Bob the an most segment the sharing segments start more it on to turning speak me leadership Then into each appointments. and by Noble for in detail, of

website. X can featured our You presentation that slide the on is refer of to

drug acquired prefilled which our mimic are key treatment. error Noble including settings designed in adherence activation forces to devices, self-administer programs. we outcomes devices, training respiratory care feel on-boarding we reduce Noble's and health both the patients the on-body As functions leader devices improving in the announced and to of where device, increase and press delivery injectors, ultimately device drug and release, actual delivery familiarity, are syringes, International, in have training a auto and patient especially

product you our for drug business being see in how a provider are is X, our build our and stage. full-service from to this and pharma expanding through we slide components delivery the On another development attractive post-launch acquisition strategy our growing market. rapidly customers, devices offering to This can from service next serving step out

these clients, and increase to companies, likelihood Our market success are of performance of to services to smaller launch and more time innovations improved launch. do pharma innovative the the in to their increasingly post who shorten the procure more of

X, segment Marc topics assume + announced strategic as Home new shown leadership of have as will on we appointments. our new leadership leadership Prieur be overseeing on a Now slide segment, role will Eldon Schaffer projects taking shifting most Europe. and Food commercial led Food will Hedi And excellence initiatives. + previously led segment recently also Home in Aptar and business Beauty Marc Tili Beverage. + as the of Hedi succeed the Beverage Europe President in Beauty +

new responsibilities new take picked up The into activity All the a considerably well past year. with effect years. X, activity in Aptar going of handover the pace has thorough over December

more level Eldon that several We projects are executive is and investing that suited in oversight require to uniquely provide. strategic attention

We talent operational segment Beauty Marc's with and are make combined him solutions ideal take to fortunate draw his to extensive base + for heights. leadership upon sustainable passion our to new Home an innovative leader deep experience,

operation for Africa high-growth execution and Food has strategy his Beauty markets segments has knowledge important He Home Hedi + going both Middle initiatives and segments. both emerging East transformation sales including be our led forward. implemented our Beverage having international the + experience in European for and very of brought and successfully will

had a quarter. share Now turning another segment, our to slide summary X, which outstanding of pharma I will

quantities. XX of the a treatments due to primarily now strong branded significant benefit category the part which being months, and sales the from our The is continue has XX success allergic nervous We over-the-counter back in to sold really outperformed rhinitis over of business you to pharma significant categories. system when huge in central look allergy momentum past the

we expansion of the we what believe the the being is smaller in the pharma although segment We earlier growth are part That of and the in term. expect tremendous in this are devices, we is in to we stages U.S. near of said, growth today. category in normalize have the we central seen trajectory believe our this a stages nervous of system later our

saw also demand applications, our across other health consumer We pharma increased care the Injectables including business and broad-based our division.

for drugs Technologies to solid oral FDA recently approval the Food packaging prevention for approved by our a broad the spectrum of can integrated Drug by scavenging. an was for solid system, the I'm proprietary fully Activ-Blister pleased developed stability also This that medicine. moisture customized formulation, represents of into is oxygen drug and that be package. which for delivery, share oral the developer's solution a blister dose system including specifically older protection Aptar Administration with and/or U.S. the protects first our Activ-Blister to absorption solution offers HIV CSP contributes drug dose and The

key been replacing the privately other of nasal injectors. its entered but for Bryn our held of pharma the stress delivering clinical therapeutic approved delivery announced partnership by nasal see of this has of spray with of that company Bryn need nasal existing spray, using epinephrine carry a we this epinephrine, want another conducted pharma nasal route. have epinephrine a not yet doses of the converting medicines Bryn the In epinephrine auto example our to has two our agreement the Bidose as we capable drug in news, trial delivery device, development I device. two Pharma, to and using version currently into also has an yet FDA to portable

sales we this slide faced demand markets from the grew quarter care fragrance customers market. in from challenges At same weaker prestige Home + previous demand the nicely the and considerable care to skin increased to segment market. home the segment strong personal care saw from turning to broad-based and beauty demand Now our as and with time, X, the care in and Beauty home

underutilized and under-absorbed costs facilities progress, transformation due the personal however, in Our demand fixed to by weak was care. offset

as to strategy previously at our an important fast-growing Looking column have Chinese taken in step market. gain we right announced beauty to the in scale the the

of in industry. a and meets color and metal leading for a packaging BTY transaction This Chinese have and with We metal innovative cosmetic an solutions our technology option to complete equity subassemblies agreement XX% years. an manufacturer high-quality plastic of signed to includes know-how decorative interest players components with investment our disciplined in recognized partnering approach beauty leading the future raise acquire stake

innovation skin separate China, cartridge. about also dual facial first an launch our a I'm of product airless excited in that care dispenser features interesting the booster

for called premium device Neomix care Our product is the on brand local skin a dual by serum Jala. fast-growing facial featured Chando

shown of from topic the closure colored resin a the solutions, post-consumer Love is recycled haircare far on which made our of is Beauty right, on line Planet. as On and for XXX% sustainable featured

+ is seasonality our X, increased for reduction our reflecting Beverage sales our segment general grew slide for demand in to beverage core closures some sales for dispensing closures demand as weaker now Moving and overcame which food Food beverage products China. additional in

also system. invert cost resin where moving creating on the This are headwind see top our pouches We our additional dispensing formats lower products from to Food several the condiments benefit opportunities line. you'll Beverage to through passing traditional especially segment + an from to in customers with conversion continues

even for with in new combination up on our example trend custom pouch now fitment an found also the features valve purchases the in cleaner, open guacamole Chico precise One format. flip and more and food is The squeezable our Yucatan, launched inverted newly that will very in lid were Honey. ring format. of more optimistic previously which and pull closure this SimpliSqueeze same pouch be Both Squeeze closure application this inverted dispensed we can by is valve with for products the pouch towards here not products are U.S. that opportunities featured

top gains Beverage good offsetting in pharma had quarter softness overall have we and Beauty some + line + summary, Home. with In a in Food

the conversion We are we solution. active new first packaging product announced strategic also new FDA for listed that stories our and approval pleased partnerships

With now the some quarter. details Bob, turn over to the walk financial that of that Bob? going I impacted who's through will to it

Bob Kuhn

through Stephan briefly concerning results. good morning, everyone. our you, quarter I'll of the and Thank third details walk some

with press to we XX. following release, slides can the are you If published you Slide the refer

We and acquisitions impact X% of of growth from growth rates currency of that reported sales a was X% impact from comprised sales negative positive core X% a X%. of of with

achieved division, drove prescription growth margin of EBITDA sales XX%. adjusted and in of Our high to particularly core of pharma an the the XX% volumes, margins end a The range. segment strong long-term sales our

market system treatments nasal due Core increased drug rhinitis, prescription to driven asthma. care used sales our to market consumer the our products to Core delivery X%, increased nervous healthcare for central demand saline treatments. demand the for eye sales increased for on systems and innovative increased and XX%, allergic by

increased market increased injectables Lastly, for core and sales XX%, to our demand plungers stoppers. to due the

slightly year XX% compared the transformation EBITDA personal was X%, margin above decreased related prior our sales ago. demand Core segment. in the offset a positive effects to Home + weakness the negative to efforts volumes. lower due Beauty decrease by were market material raw significant of the from in our + Beauty to costs and of Turning level. the Home's adjusted effects The primarily to year care

and increased sales at to in Core and Looking the beauty luxury driven primarily strong X% basis. skin and market core growth by growth sales care by due of products previously care market the Core to China fragrance due the applications, on market a decreased I travel that personal to body across was care retail. major X%, hair care our products. most to including market demand the sales weak that mentioned

sales cautious inventory home to increased Political higher sales and our customers economic variety to of across X%, to reduce categories. uncertainties levels. their care and a market Core are causing the due be

the the from in America X% not perspective, the business a decline core and or North in enough the saw at Looking Asia offset to sales we America. Europe Latin regional were decline increases X% in

affected Food from by segment, This the adjusted to lower XX% productivity in and on our negative Beverage's includes at raw EBITDA improvements Food passing sales margin material core costs growth Looking which the due the costs. quarter. impact negatively + reached Beverage increased X%. resin + lower X%

Looking Core increased sales the and and sales increased application due custom by X%, Core food decreases at market bottled granular, in water each in strong tooling demand our sales. Increased China sales dairy the sales applications. to soft functional was used in X%, due on Europe. powder, increased market drink offset beverage products to of categories to primarily to market. and condiment

per adjusted had earnings third adjusted effective tax comparable the tax rate $X.XX. you quarter share in we earnings Turning effective to earnings year share year Slide totaled XX%. With Prior benefits that like was our third on XX. per to XX%, also discrete tax I $X.XX. would of prior certain rate remind quarter totaled an and

EBITDA adjusted and to XX%. approximately also We the quarter in expanded margin by grew EBITDA our overall adjusted X%

outlook. Slides year-to-date share and our earnings growth. X% core sales XX our XX performance and and highlight XX good adjusted cover per refers Slide growth our X% to

for in share tax per earnings the fourth expecting of share, an be using are of per $X.XX quarter range to XX%. range XX% We to $X.XX to the expected rate

hand and I have a will Stephan. details few share then other to it back to I

XX, in $XXX As million cash free shown million strong the compared quarter, a flow and on million. approximately $X approximately million from cash approximately our Slide were Capital to expenditures was ago. totaled $XX approximately operations flow therefore $XX and year was

brings led to the working earnings Higher capital improvement year flow ago. $XX $XXX to cash year-to-date our compared million free and a in This improvements to million cash free flow.

sheet on XX% On levered. than basis less a Looking was debt-to-capital while basis, remain capitalization. balance times approximately a approximately we it at our gross XX% two was and net

provide few we time, Q&A. to this a Stephan At comments will before move

Stephan Tanda

core few adjusted to like through markets or The even key with the Slide us some of I'd our leave our you of to in months closing, weakness growth. In takeaways regions. the portfolio allow a continues as sales of on We XX. if also with grow to there's Bob. diversity growth double-digit X% shown nine first posted EBITDA Thanks, year

product innovate new that greatly We're our to the had with dispensing year. service pharma are packaging delivery our offerings We drug and and three continue acquisitions building value to customers. out enhancing vigorously this active date several to bring launches we

addition scale the of beauty our growing capabilities more with there, in new better our add partnership with especially to serve for the BTY. rapidly business and markets to continue Asia We

long-term While the growth, are we also are company near-term we for some challenges. positioning facing

and of we have Home As more inventory we that parts and uncertainty will consumer the our impact the in Several to revert customers political above reducing look a levels the Beauty have anticipate growth to to business fourth rate. pharma around developments products. normal their normalized for that they indicated reaction growth quarter, + demand are in we of seen economic

leading value In brands. provide term the tangible closing, we our this the for are to managing and consumers focus continue and for customers and long of business many world's on we'll

bring to dispensing and experience will We around life world. solutions everyday enhance users the transform that

With it that questions. for your I to up open would like

Operator

Jefferies. question Daniel first or Rizzo Instructions] of the from line [Operator from comes comment Our

line Your is open.

Daniel Rizzo

guys. Good are How you? morning,

Stephan Tanda

Good morning, Dan.

Daniel Rizzo

just there Just are of synergies? with kind Noble the the acquisition, it expand does any Or product platform?

Stephan Tanda

how at product our customers done it's smaller by our development, mix look biotech in you is especially -- of customers. changing, the When increasingly customers are new

these revenue products deal So their opportunity get to smaller additional require market customers and the services FDA with to all an that us. provides approvals for faster

,we is device launched. as of the benefit product increased also from course And sale the

So it effect devices I when think synergistic solution at do. provide is we is really exclusively We or end. delivery everything services injectable the a with our involved one tail almost of these

Bob Kuhn

customers we early at couple Noble the on could very other cycle is just the involved on And later with you add where our process. look And points. on. for I it's a in maybe sales small the get device, Typically, if

we on pipeline much to than seen provide clearly the of So window they've past. sooner a Noble projects in can opportunities

thing since pharmaceutical about device a developing on-boarding benefit have think the the they devices. great applications. that us And and are they new in think various dealing like I forward we for other what important is, patients dislike some with moving feedback really that's on patient patient

Daniel Rizzo

that right. how allergies, should terms should in about forward? you you -- how the it All was mentioned yes just going know growth about color. percentages. I for that Thank I of wondering more like we looking in towards of we then means for think And normal terms in Or don't what were think

Stephan Tanda

that clear for X% in business rate above This well in the XX% particular that. pharma growth been has Well the range. long-term is our business been we've to

So it to will that range. kind revert back of

Daniel Rizzo

What in, in finally terms Okay. the is And spray. nasal -- the then you of that with FDA? mentioned terms phase -- of... aforementioned In

Stephan Tanda

have II whether in it's Phase trials. III. I don't Phase still with clinical It's me or

Daniel Rizzo

much. very Thanks

Operator

Thank you.

of question John or William line from comes Kreger comment Our next from the Blair.

is open. Your line

John Kreger

Hi, thanks very much.

pharma to that your expand trend you question realized on or Just business. is the From something that within longer-term just about the new be will QX? perspective normalization think a in

Stephan Tanda

is trend to Well X% long-term the XX%.

see been Now and And particular for above that for in much X% to reasonable. well XX% we XX that more we've I months the segment materializing. is think that teens almost

John Kreger

products clinical trials the are stages would Okay, great. business products you that Thanks and How be for during that through five then into prepared development? maybe just the of walked digging currently remarks. Slide pharma of much us commercialized earlier versus your in or

Stephan Tanda

in By products, commercialized realize our the I far from most device Yes. majority of is is because vast revenue revenue.

compared So commercial the lower. quantity of devices used to the clinical to trials is much

have side. the services side offer for already for Noble for Now of the And route. with now and injectable having we an Gateway, Nanopharm unit house for we provide can said quite and Bob services some express the human mentioned delivery through and also all patient as nasal on-boarding that, factor the time the

John Kreger

Great. Thank you.

Operator

Thank you.

Gabe Our Hajde Securities. line next of from comment question the from Fargo or comes Wells

Gabe Hajde

it financial in give the I any there in Unless, I of might a missed guess I guess looked terms EBITDA Good profile. a perspective what to to I Noble see I to way bit. Is it didn't a way like million around morning. what revisit us try choppy. $XX to might We're expect even saw contribution be going little you revenue? or I as although revenue from, looked it little much mean

that hoping in regard? can us So you help

Bob Kuhn

on estimate comment And and EBITDA new highly million Sure. we're very an introductions is to in you're bit that. it choppy. specifically device market. a It's Yes that that perspective, not $XX the on on from spot Gabe you've going into got dependent

results. XXXX have then an and fourth will or XXXX on to EPS it impact we and expect quarter beyond. dilutive up it's an be ramp to in $X.XX not will It I $X.XX slightly would the from perspective; you tell going

really this us growth So in near see future. for is a platform the we nice upside and some

Stephan Tanda

They're services service I given for are more pharma high-growth the those business segment So is have requiring big especially need smaller. and the not part of they services. the these would therefore more the add that of though clients pharma a the houses that itself and

good So growth we as see this a opportunity.

Gabe Hajde

and business Understood, grow maybe you offer the I or on something another you service? it that can this that another something at out guess to Stephan. expect is to Or go stand-alone basis? a that acquire have Is product rates

Stephan Tanda

No.

As we filled pretty this ruling got we you think see And but have need. space a out nicely slide of not big in X, I part out. anything, pretty what we

Gabe Hajde

is a issue the comment remarks you -- a Okay. issue think haunt And might little China back Is how bit, Food follow-up excuse of all a segment, as you in in it Halloween. dual more any of me I or bev persist? and terms the about you have and to on beverage you long something it thanks coming in visibility mentioned that prepared source can at --

Stephan Tanda

I sure you it. of can It bit in us add a think to that This customer but impact. comparable prior the to a -- anything I growth more an impact had years. visibility. give It's not I'm it characterized not still never well. little we now perfect is

Gabe Hajde

Thank you.

Operator

Thank you.

the comes Our or from next question from Great comment Review. of Lakes Jason line Rodgers

open. Your is line

Jason Rodgers

Yes.

you nervous Just pharma generated of what the allergy us prescription versus other better the can side the from give and in areas? your a idea revenues area segment, of in central percent are

Stephan Tanda

Sure.

prescription prescription and from less nervous So generated for allergy products system. division of coming revenues division's today of it's then about roughly related X/X the are sales than about central the are XX%

Bob Kuhn

half And our I think pharma about is prescription business. of

Jason Rodgers

an because fall somewhere you strong line rates? in side your potentially expect would is so in growth Or the could pharma allergy area that? -- that it's below And with come long-term to that's

Stephan Tanda

entries highly be well. dependent But growth going to more mean I target. this to on on going upside long-term the it's surprised any the we've off taper mean certainly hard been closer and as say. product to new category to it's into It's geographically I before.

trends happening the Really warming expanding certainly year-round time, hand the reason a at climate continues become increases but – not -- I to is everything read allergy be more -- allergies us of in loads the through all an multiple whatever And I'm the on for one around to environment. allergen category prone same expert, the certainly allergies.

And and a to overlays parts medications more affects will we is stores of that growth conversion On that went distribution, so more club top U.S. afford broader over-the-counter of where can the that world more including driver is that on continue e-commerce. and grow. the in allergy more and -- this had that with

its But to is pick But two to We easy. those kind rates think don't the run see going that's of the we range. quarters like course. have has in it's In And the yes slowdown something XX% X% low end. to quarters, apart We it's certainly ball crystal mid-teen at be be to that to that. more reasonable trends some not mid-range. at a from a some going

Jason Rodgers

competitor new And to any with a there's correct? like do situation nothing or like that

Stephan Tanda

Not our and market. really. I activities I mean in a is some market always competition. certainly competitive high mean there competitive but share we have XXX% will not be

Jason Rodgers

Thank you. Okay.

Operator

comes Capital BMO Our next Markets. Wilde line comment Mark the from question or from of

line Your open. is

Mark Wilde

Bob. morning Good

Bob Kuhn

Good morning.

Mark Wilde

dig just on in to the wanted I fourth quarter outlook.

care? about third a weakness the I'm you that talked than and out You personal sort destocking. pointed quarter of this more is recent and separate home customers beauty in curious phenomenon

Stephan Tanda

degree beauty inventories is quite back uncertainty uniform short, also In their back in customers I bit. almost we are a up chorus from about not much throttling demand only get our customers, of ratcheted they our their that but care personal absolutely. and that mean pretty

additional pointed So, care that we personal are personal we the that weakness different care before. weaknesses is than out that the to

quarter see gone that certainly quarter two force have these quarters. on historically, seeing We already destocking started in to Now, four. in it full in three We three. movements

with Our history QX. of us part be probably indicates will

we in in but business, of of certainly America is pointed a America Bob out, is part not and a + four big a as And particular that Beauty our North Latin state steady which in weakness saw picture Home it's here. quarter all

Mark Wilde

hit it is to market harder than Prestige tend the mass or Board? that does say pretty Stephan across much And

Stephan Tanda

It's impacted part the one still here. that's the of market broader is of market the Prestige doing part Prestige luxury well. Masstige really being the the that's one of Actually

Mark Wilde

having is update of looking footprint efforts Okay. your think even kind excellence? councils. improve Though manufacturing can And over I of you reduction I other on just you've the in the efforts kind works sort been some conversations cost question Europe had us to with of at

on So, of that can of if I get things? kind side update an

Stephan Tanda

Sure.

to of you're And three just Home So, successful commercial + activities excellence We which gained reminder talking the topline was topline set backdrop just -- out We're is as do a what about to on. sales. some reaccelerate notwithstanding discussed and much actually years to for as Beauty a the to quite grow sales declining so our several by reaccelerate really everybody, a we flat able above activity and stronger after transformation. we things; one market. share

a to all The of in our sites streamlining work the the the in beauty approval corporate headcount the bit Europe all second also reduction and is operational SG&A That we anodizing installation where third part longer quite drawn issues, sites including the center, had which France, and is a in service custom sites couple is also France address process. requires council support then and that shared underperforming one site, out functions. in the a And is U.S.

in are very increased much better is in getting what sites weeks ago about our heartened trouble are successfully the doing do. of been successful was the feedback Also customers back by actually Now, addressing levels, and service And the we're to we performing good. from our are it and couple proactiveness out most just our pipeline the set feeling we of spots. looks executing have of we a Monaco

cost is up fixed are like better. now having that, have and we future executing if which eating revenue New performing gains, much nevertheless, doing Now, those York hits said your you parcel we're unabsorbed

in course, additional Anything in contracts the opposite. are and costs fixed who imagine temporary have working cases, we our you in-sourcing own on short-term. at reducing it time actually In measures eliminating where doing the other the a further to people over of sense course, few looking cost, makes subcontracting Europe quite can Now, of which to we demand purchasing. leverage taking variablize scenario, have work

-- scenarios at Now, looking also streamline we're footprint. our if to further

discussed. Some we've of already those

also recently to continue to as -- I that as that can on based And cover. Argentina the This announced we look We consolidating probably we additional whether much structural there. we facilities weakness will are make need internally in changes.

Mark Wilde

good. I'll over very turn Okay, it

Operator

Thank you.

Our next question or line KeyBanc. Adam comes comment of the from from Josephson

Your open. line is

Adam Josephson

Good Thanks. everyone. morning

Stephan Tanda

Adam. Good morning

Adam Josephson

would Stephan or you consider into Bob But guidance us this know think destocking just that just Home you you it much -- it would sense extent a expecting terms you nonrecurring destocking. state kind said to QX. a you the you think expect a I Can from QX you're Stephan steady of in to a customer I commented situation? situation is don't the last given the can how give of Beauty hit + it of -- again of

Stephan Tanda

quarter expect It's apart. all it tweeze Actually decline beauty We the Adam. in to certainly Clearly, to to the favorable. and X% business expect in the Yes, X% that trends underlying hard look see very to we this to in grow continue range. beauty would four. segment we

a is Personal challenge. Care larger

we the bullish think very But destocking about beauty patterns, care that side of it some I a in of trends I in look. particularly see overall, usage the closer hair need there changes notwithstanding. this remain

Adam Josephson

Sure.

Beauty on Home. One others. two on Just + also

impact sales you're having segment weakness length at the be reducing Do in employees restructurings about that you're relationship seeing and talked So, an the you there's program on any your between you Stephan this extent might think just now. doing core there? sales to restructuring the

Stephan Tanda

whatsoever. None

customers still the happy are and fact the looks here. I've certainly In as And business good. as pipeline been

So, I don't there. any see relationships

Adam Josephson

Beauty And Home. just on one last one + again

EBITDA was you was on So, restructuring Home that Beauty and $XX had million + intended primarily the focused target.

the Can quarters million or which ago you quarters by two I where segment. of you guided now are update the don't of -- opposed you EBITDA as of of from next to change us know and just year you're Now, to two that why the the leadership now? kind leadership of on EBITDA incremental end changing terms in $XX

Stephan Tanda

very about end Sure. Marc current some Eldon and some of we good certainly I a required. And that in feel picture. team the now business. need up the experiences skills. Eldon those done say good And experience excellence been topics more. would skills We expertise obviously a attention frankly, has brings we're front of halfway that leverage that through. a the is job And need on that elsewhere his with different and eaten commercial demand mix particular and has of on

Adam Josephson

Thanks Stephan.

Operator

Thank you.

Our or of Panjabi the Baird. next line question comment comes from from Ghansham

line is Your open.

Ghansham Panjabi

America. terms couple to you as X% last from of they two America. as weeks That Good I decline morning. North of particularly give number on guys. Home Hey the Beauty on particular on some color us weak to up earnings. guess Care Can North what's there? in and more in the that's for seems following last going over been reported relative just + Personal I what mean have questions customers a a saying pretty category significant just your

Stephan Tanda

big are let previously with Ghansham. me frankly, provide some Hi transparency. growing others we them, year. of are The Yes, more last actually and highlighted launch think Certainly disappointment their is not. pretty that a I our been has we customers public of in the great. that not performance J&J And And -- I their product product in one bit particular think -- sell-through but about in

Difficulty] [Technical

Operator

hold. Ladies please Speaker connect by. line -- dropped. reconnect, We'll and gentlemen please get stand

you're Okay reconnected.

me back Mr. up. put Ghansham Let

Stephan Tanda

Yes please. And everybody.

Operator

Okay.

Stephan Tanda

where Sorry lose you? did Ghansham we

Ghansham Panjabi

and J&J hear and anything after couldn't mentioned disappointment with I you think that that. then I product the

Stephan Tanda

Yes. Right.

something. was Our adding Bob line dropped.

Bob Kuhn

to some we're I I'm going of And, very customer that, gains were announcements saying talking think, volume. the their than core be was not I mistaken, Yes. volume-dependent. more were sales about if obviously, coming pricing from

also the that's So part of equation.

Ghansham Panjabi

pharma, various nodes the your just a of give broadening that out how five, then the much cetera? pull-driven? build of et also pools terms profit of as you And of on your us to highlighted can service in And the of helpful. kind is That's sort out relevance, Okay. capabilities, you just in strategy you customer slide of this sense terms as

Stephan Tanda

it of clearly, of today majority the more is part downstream. Yes. revenue service very and profitability is I is frankly our mean, vast rapidly growing good. The

certainly opportunities. And we in profitability. line really -- with two that see So pharma

for pharma through we is, at of in back services the in other revenue, the money increase successful benefit higher a actually at just the some can also service odds in One the participate the is that launch success same end. our that and the devices strength but the sales. charge device the from good of model being two unlike the time, markets, And

kind refer there payments we these of in are along pipeline. And that to, exclusivity payment, between also milestone things the

ecosystem into building chain really more whole the whole show slide profit pool it's the there that the dipping of and five. out So on we

Ghansham Panjabi

And Hey, one, Thanks. the you a Bob. tax in that just are XXXX rate, going that's companies one final Or of increase a Okay. new is terms baseline sort anomaly? tax this that's one a forward? guys rate rate, Is the of year-over-year an substantial. for Thanks. maybe especially the of seen follow we one for in tax just few

Bob Kuhn

sure. question Good Yes, Ghansham.

So U.S. of out, mentioned the when came our the business outside tax reformat we about that is had XX% of

the more of of got and bit little a really more a our U.S. were U.S. to business disproportionate changes that manufacturing tax the of share to we've the bring So outside meant

the been exercises and tax the Our lower fluctuation deductibility has in increased from predominantly past tax tax that. -- our the on and rate option

rate range. absent more in run discrete benefits normal XX% our to is stock So from those items tax exercises, of option that XX% any and

Ghansham Panjabi

much. so it. Thanks Got

Operator

Merrill George from Our Lynch. next comes from line BOA the comment question Staphos of or

line open. is Your

Molly Baum

conference for today. Baum is This had conflicting Molly call He a George. sitting in

your you Capital to guys I lot about The Day. at question a Markets talked first wanted ask, sustainability

impact, focus the other in then, space any be if negative, just to or of And impact general, on seen seen opportunities from in sustainability. I ask So see or you. if wanted you've you've seen or and positive increased in in particular risks any any this segments categories. Thank we've better it the

Stephan Tanda

Hi, topic Molly. Thanks I our words in have for with for high very in the say, customers deeds. would but also engagement proactive marks and from just we not question. gotten the

the the start more on and see are about Board higher bring in the those really pilot to pipeline our Loop with to our to pure in And PCR products. content cycle As in we of help grade participation get wanting you hands-on investment XXX% know, food or customers XXX% polypropylene being also and the projects recycled. Loop,

Recently, I fully the lowest who is very of that advantage look, said, of one footprint about plastic CEO the taking of the and because recyclable of rid also glass carbon getting plastics. good it, than and saw carbon of much This making about from interview of this aluminum. products, a lower not of Coke, course is footprint is

and then us it's a ends how this in ocean don't this primarily which and really whole on topic. issue the up with to in waste customers who management So solve rise gave countries it issue, Asian good have to situations waste engaging is

see from them And shifts, material as at we engage to with material more customers I'm some will you more make certainly and more that we multiple more get sure, levels, to unique the and also projects senior are recyclable. things

You are that engaged and see shifts may those are products reused projects. that be use can many of one-time we products to in of

Molly Baum

fill do look the five Really, to then, back that potentially pharma is, you you my And broadly. And gaps could further for really you product I you you question additional question if goes business? slide Thank -- second expand to it. the want what stages do the, how acquisitions? Thank and bolt-on do you you. see cycle at Noble along much through just acquisition guess, further the the more life services Got details.

Stephan Tanda

Yes.

here. not speculate me Let

if but filled M&A it an Of is course, we're active we quite want. how happy you out this with environment, slide,

very slides you with a These happy things internal progress. also ago, If the our in years strategy from of stages. go saw couple

to in the add that happy we of But right. to course synergies. line may road, to And, but need business want we all what lift yes, we're which we have digest with top the synergies, are their These we quite are mainly down We successful have. own here. what

Molly Baum

right. All again. Thanks

Operator

you. Thank

Our from next Bank. question the line or Debbie Jones comes of comment from Deutsche

open. is line Your

Debbie Jones

is, Hi. for questions. my highlighted the for first think you created I Good morning. role My here. was taking that Thanks question Eldon

just the could that that he's to projects talk are kind what kind And a commercial bit, if so about needed if things to you focus some And you Really, very excellence least, possible? strategic of, of be there going having? do.

Stephan Tanda

has mean the maybe years we over few and have publicly increased by proofing you company future but are not the the about, the that right we're nature, in I and strategic done I can the not activity that company of noticed of last positioning projects think terms level our Yes. something talk very in areas.

projects are few there. guidance Eldon's in is towering strength more benefit rest And certainly and that a from quite there the attention. more company So need commercial excellence of the his can

Debbie Jones

that. asked move sorry earlier. uptick of Bob were about could the that you Okay. calling if of on sure cap line wondering and is was for not if just my I'm that call during and color I the kind kind highlighted in more anyone just the in I'm some out get working CapEx, and cutting we

Bob Kuhn

based Yes. we've read where just working there's little finished, a -- QX picked bit, capital, really Debbie, QX on capital. into I on I to mean, actuals much don't up the think we that. it

capital, extending benefits of working terms starting of we to some with the On are payment some our see suppliers.

any as a in but progress And area We've we receivables haven't way made degradation the to seen side. on well, long some have inventory real we the further go. still

all-in-all, So, are work from got good refocused capital businesses good we got a while we've still we've in And working this still some -- was like progress, made of some topic. front the and quarter I left said, us. on it

Debbie Jones

it great. Okay, I'll turn Thank you. over.

Operator

you. Thank

Stanley. next line the or from from question Our comes of Neel comment Kumar Morgan

Your line is open.

Neel Kumar

Great. Thanks.

impacting normalize it expect levels? OTC maybe pharma, to limited you is have about of higher market? In the terms And Can end the also just prescription mainly well. allergy market? talk margins is whether then normalization of Or or growth in just trending target the towards in margins near-term been range you allergy stay that your at current also to as the

Stephan Tanda

Yes.

primarily little in the is need are given market. in handicap the another you here, dominance the question, because of first one But a prescription right the that OTC think On I bit that OTC it's might U.S. right. comment your to about I country country. be

of largely the really is mix on businesses. margin dependent The also

average. our the we've margin injectable lower has than that So a business open very been

So Bob? if our margin. portfolio injectable the business you grows faster for a couple of quarters see than the the other that impact will part of

Bob Kuhn

the No also very I that's to you Yes. say very, you injectable guys margin packaging also it's mean, throw as and well. mix that performing been into closer active can I would well.

in growth the come pharma we've past, a in off think the very prescription I business So robust overall.

the margin impacting -- that the So mix and that tempering really margin. what's is mix tempering

Neel Kumar

Okay. of And performance the also with in just CSP then about quarter, it's talking newer any the progress some how on performing applications?

Bob Kuhn

Sure.

doing well. actually it's been So quite

we So is we've growth, of anniversary. September, up the the In terms mid-teens which on good. like-for-like month. lapped one one-year in were And

performing as new I to some had We're So expected. traction gain some new say starting it's we would application. on

the our also Stephan in package. starting mentioned, pipeline. of and a the the more vial integrity to epinephrine protect the will the business, the CSP activity as jointly we project with Activ-Blister We're mentioned, Stephan application others have some on legacy to contain that see well

synergies the So we device of from are the starting and to see both packaging secondary some things. side

pleased of very see we're the So the horizon. a CSP lot with developments on more and

Neel Kumar

Very helpful.

Operator

you. Thank

of Our from next or Josephson comment KeyBanc. comes question the Adam line from

Your line is open.

Adam Josephson

extent sales toward quarter quarter the Thanks, there because Home taking of just mind then destocking? ups. of follow of the cadence was Beauty + talking to through Bob, the my inventory everyone the notable you slowdown the a end growth and the would for about

whether you that you compare about just when to then XXXX saw how to compared And previous destocking those how this the customer back? you you're seeing cycles would regard? previous feels this talk XXXX, Can XXXX, relatedly, bounce in periods

Bob Kuhn

Sure.

normal of we time. didn't be September stronger months of month-to-month. that really have this in me to figures in don't But one I front of tends see and the terms typically cycle So our in

one that's quarter. month-to-month want at you look indication if the to So progress the throughout

economic from Stephan typically I've as is Typically, I can would cycle. and last out two normal. first at then a three we've for for very personal least into And the first mentioned, oftentimes anywhere be between quarters. seen what whatever say, this experience seen, my and reason care, slow down

of in we saw beauty. XXXX, half dip then back beauty followed cycle year, But on the And the was it first of XXXX first the to back of the in fourth Looking in in personal care see quarter first XXXX, then out to personal this the side. the care. in we by started come the quarter

there why but So I explain typical is definitely very would normal. something that phenomenon say, us. that it's it's I seems for can't

Adam Josephson

appreciate again the earlier And weakness question two out the care how I this, that. was help you can between called about to difference last Mark's understand issues? quarter different just than personal I me back think the you just

Stephan Tanda

and used And is and doing by and repeating down. Well, particular and dry mentioned being of That end-user one shifts personal And of with also we product grooming, the care example inventories hey customers to well. not demand millennials. it's in have the pattern. to mix our we're really change beauty a different care J&J spooked exposure I hair usage run the shampoo the going sudden, not product launch the the of than we're more as all

Adam Josephson

Sure. Thanks, Stephan.

Operator

Thank you.

one for more We question. have time final

from Our Partners. last Vertical Salvator question is from Research Tiano

is line Your open.

Salvator Tiano

Hi, good morning, Stephan and Bob.

what How a and Pharma in we moving and with margins. you to change next cash volume + think the you should some trends just talk implications see Beauty if a earnings provide to about little CapEx Home year's pieces your So flow? early besides regard and short-term can that or direction in you bit XXXX, already meaningful discussed about about

Stephan Tanda

targets the We long-term just at guidance. Hi, Salvator. for stage our stand for guidance segments. We really don't by this three XXXX. QX give gave We the

I + year takes. think have mode entering into that see year the we think you I guidance with how discussed in And we'll the side. a Home that we've Beauty we And to really in are give the at clearly can't this destocking beyond challenges XXXX stage. the long

Bob Kuhn

certainly and of next will scrubbed early ready we haven't and for flow. the the on cash reviewed capital the very requirements on your that touch Yes month on not complete -- pipeline that we're and I'll but be mean, are free highly early be year. in finished that our will to And projects it's question execute. and review I dependent

focus on continue improvements. capital to working to We are going

that's that's about be XXXX certainly can flow from well. as give I an to in So And a guidance going really focus all cash of perspective. area you

Salvator Tiano

much. very you Thank Great.

Stephan Tanda

you us everybody. to joining the we for Thank Thanks you look and seeing road. forward on

Operator

This gentlemen, and for you thank Ladies program. in concludes participating the conference. today's

Everyone day. a now may You disconnect. wonderful have

AptarGroup (ATR) 1 Nov 192019 Q3 Earnings call transcript