ATR - Earnings call transcript Q1 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to AptarGroup 2020 First Quarter Conference Call. At this time, all participants will be in listen-only mode. Later we will conduct a question-and-answer session. Introducing today's conference call is Mr. Matt DellaMaria, Senior Vice President, Investor Relations and Communications. sir. ahead, go Please

Matt DellaMaria

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

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

over on and screen clicking the arrows. If along you advance presentation our you are the the can website, following slides by hovering on

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

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

to I Stephan. would to call now like turn the over conference

Stephan Tanda

Thank and joining morning, for Matt, us. good everyone. you Thanks,

expressing families Let safe staying this you hope my well doing me and that start are are and by difficult time. during your

like the X. Before I on some would results, Slide on share starting on I the crisis, to thoughts comment COVID-XX

are tomorrow. During brighter support photos and of the perseverance to the deliver To challenge and a to call, your and this continued customers, say all to the unprecedented time, efforts some consumers you look forward of of listening each our guided by thank care supporting see stories for and many on employees to rising values promises. this around in want other our slide, we patients. On and as world our I people this on you we for our

all of the Keep have we and customers for their pride great expressed immense up what great gratitude efforts. in do, have work. We your our

X. Turning now Slide to

critical as other is To chain suppliers of industries capacity. some substantially Almost as continue partner we the Homeland been most at are flows of as food all maintain minimal by supply supply facilities chain and operating, such disruptions, open governments products, essential incoming the customers U.S. vendors. primary supply in and of Our operate. Security our by well. our consumer to healthcare, all date, XX countries Department the identified Aptar we've in and operate and have all to from an industries which supporting reduced and pharmaceuticals, albeit experienced able we

but which On critical you to of our global see time. Slide a during this will sample X, are solutions, society

drug delivery, Our medicines, and of solutions food on sanitizers, and number packaging dispensing, beverage cleaners and sealing be can active products. a found

We about our have transparent chain suppliers of very and the engaged the with end in our discussions supply and customers markets. state

working our production are to are by specific and now In our which for some and ramped where food closures We we needed. up some have certain made closely market, solutions to together repurposed including COVID-XX-related beverage being dispensing sanitizers, of bring fragrance sanitizer customers. cases,

priority. be first to Turning continues safety of health The X. Slide to our our people and

COVID-XX Our production and of implemented each meets global and in ongoing our order early potential risks support balance Control workers staff team proper Aptar the mitigate identify daily COVID-XX has to Exposure on. been at to maintain action efforts. on-site a We and remote location Plan

for essential only escalated continuity all business cleaning We are sanitizing have those and restricting visitors to our procedures. and

encourage to We we hygiene they available. become as and everyone continue to distributing are distancing, social masks good and have practice

are keeping also meetings. and monitoring are in and hall via town time, instances frequent We reporting real people COVID-XX we virtual our informed

communities ways would I live X. in supporting we Slide we to and work. recognize few like where to the Moving are just which a

the are face masks, shields to and that mask include Some produce are of other donated holders and selfless hospitals, just examples hospitals. of healthcare glasses the local brewery many workers, partnering XD to the local to contributions printing with gowns repurposed acts donating kindness protective around our and These money hospitals support local raising and from of of the people package gel sanitizer few for a children's to many world.

to Slide quarter. offer I would comments the Turning to a few X. on like

year. delivered performance outstanding and strong when Our packaging Pharma last with first quarter grew to an our growth even across comparing sales particularly each Core injectables strong identified to another a in project business Pharma healthcare end team has XXX market, almost-daily of and basis. pandemic on from the over inquiries COVID-XX as The receive potential industry an businesses. active continues the result

Now turning introduction. to a recent product

their Blairex PureHale Our chosen Essentials by device brand. Free was respiratory for Laboratories new Breathe

not essential device Our prefilling any or the and saline Unlike natural can PureHale mist system PureHale the a nebulizers, used be oils. of and of moisturizing reservoir does dispenses the require traditional on go. fine batteries

time. final approval the technology. for have submitted excited still The ActivShield FDA, to U.S. as Authorization highly progressing package Emergency request FDA an the solutions. also respirator Use we be announced, Finally, using continue but NXX within on is we potential at for of Based request decontamination Aptar's the previously have developed, and this we this innovation about decontamination disinfecting data materials pending strong is and relevant to the

sanitizers resins, of featured and negatively to actuator retail declines. Reduced for are like demand travel dispensing our of spray our pet-care on and solutions retail during closing increased Neutra by the line closures products a care products spray, beauty featured from and March. impacted and indie traditional recycled hair Beauty sunscreen the and on Air and impacted for cleaners quarter postconsumer of also pumps was to would while Home during not spray results, closing segment the for highlight Our brand the demand enough WildWash. settings is sector offset that disinfectant our the the I was Lysol's our

foodservice passing on sales on-the-go now as Turning Food decrease impacted Sales well and lower of as by beverage anf were COVID-XX negatively closure to the to crisis Beverage. in the lower due resin costs. sales sharp a

we Powerade that with closure. supported Coca-Cola product with expanding features line time the beverage in sports quarter, its the for first in our a also is However, zero-sugar years new several

Slide to Turning X.

we are have decorative and beauty to leading in Asia, parallel of in completed our for with accessories COVID-XX. strategic investments in To a actions manufacturer and strategic the execute to our capabilities market. our equity our continuing metal We reach near-term advance priorities BTY, related

platforms previously partnership respiratory-related for into digital with we As new announced, to market therapies. provider, entered Sonmol, connected bring a platform to

of also FusionPKG, the concept-to-launch North and American for the beauty turnkey We capabilities market. acquisition agile completed adding

invest with high-growth finish remain beauty we of While goal transformation long-term the we our our line the areas initiatives target business, over to committed our range. to for long-term in margin bringing reach EBITDA our

is sustainable recyclable of XXXX. objectives, continue which is products. reusable or position on work help economy these exploring for us customers toward are to and also All We are with by to to achieve a packaging where most refillable circular efforts many achieve Furthermore, opportunities and collaborating XXX% we their well recycled. that resins customers our packaging reused

In applications active our invested our we new have continue seek material to in growing addition, science, and for packaging platforms. service solutions

to is Bob, our going With will to results. comments on I it additional now provide that, over who turn

Bob Kuhn

Thank first concerning number you, and with quarter COVID-XX the I'll through Stephan, morning, XX. and Slide good our the of impact pandemic, of the everyone. walk results details some starting

impacted in timing excluding impacts. For passing quarter rates, X%. XXXX, and resin of on the and to the first cost customers lower reported by effects, declined X% sales, Core negatively acquisition changes COVID-XX-related sales currency currency declined were and

Core to prescription and a very our delivery X% treatments. which used systems growth for to due strong X% an achieved healthcare on look sales to decongestants segment nasal products. the segment, pump compared our market used ago. to and increased our of nasal a quarter increased sales a performance Core X% sales strong of eye Pharma our XX% at of growth adjusted rhinitis core demand in saw products first due to allergic by EBITDA the market year consumer margin We performance. Taking increased with sales care

the XX% increased launch Activ-Blister Core to that increased preventative the market solid the to was increased with sales the medicine. of dose that sales market a new injectables XX% demand variety approved active drug across due to oral the due Core stability provides primarily to HIV in-package our technology to packaging components. of

XX% quarter. within Core to reduced to categories retail sales such our Home segment. and the of COVID-XX. Certain Sales care, decline closing quarter, market travel by sunscreen toward negatively the the and and Award impacted. also expense X% to care, margin the to began beauty Beauty due Home's effects declined Turning the Beauty underabsorbed the quarter to was were which impact the led employees. costs to sales and impacted of end first adjusted of personal the stores onetime Thank decreased was in EBITDA to related negative fixed due hair You the in the negatively of the and quarter as cash that and

travel of also international beauty impacted retail beauty-related from market sales beauty the by sales the products sales Looking the travel. core in and beauty were in products. our were Latin as basis. in impacted shops by lower by of at sales America additionally, reduction decreased to sales the And retail channel selling on closing XX% growth market in Europe negatively a Core Europe

the due care variety and to market care market in sun to personal insect care due the to including hair a decreases X% that offset solutions products decreased primarily moisturizers. was partially for to home dispensing in demand care the sanitizers Core increase by mentioned an for lotion and repellants. Core X% of sales softness sales previously across decreased also categories,

XX%, beverages. impacted negatively quarter Core of primarily the segment. Beverage's related customers, through Food products which Food to the negative on-the-go EBITDA by adjusted the was negatively the prices for business. on approximately volumes were X% also and of closure sales it mainly lower and growth resin our beverage was Certain in line. our X% restrictions in due at Looking by impacted accounted COVID-XX to reduced margin decreased Beverage our top and passing to

X% sales decreased Looking Core on-the-go dairy the significantly used by at beverage in impacted COVID-XX increased sales to each due restrictions. products, of the to XX% due and of market, food increased core products market the our market decline sales functional-drink to to sales our were spreads. which on

Slide XX. Turning to

totaled quarter year share $X.XX. per share First earnings per comparable $X.XX. adjusted totaled earnings Prior

the affected, of to happened is grinding XX we conditions similar a meant the to major on impact economic our beauty surprises significant here and the of businesses. With to the has view beauty from in No to impact halt, high-level stores current see we according how that a scale Slide XXXX. what retail serve. give markets market customers' is this the closing international travel most a

as is Beverage, serve, to which single of business affected as habits. our discussed, purchasing have and highly is majority the lifestyles on-the-go beverage also we the linked is

our prescription in end different with Pharma see continues scale, and we is have People business, the medicines, that delivery all over-the-counter up affected. to categories, their the of the limited access interruption. can least treatments Moving of

XX. Slide to Moving

are the We several taking of impact due company actions continuing COVID-XX. cost-containment across to the

subcontracted our that period. employees some We holding use regional businesses modifying and where reducing production and this during have headcount, face and vacation we in their market we our requested work undergone temporary-labor softness, schedules. furloughs are In site-specific time

reduced and travel We nonessential are business all following country eliminated guidelines and have spending. travel all

price We are through our also passing customers. adjustments to

XX to liquidity. refers our Slide

Aptar's As to credit end of XXXX, additional on had Aptar million ability to in term to cash of debt approximately at facilities XX, with million existing an outstanding March billion XXXX $XXX maturing borrow first up million. available $XX total loan. the the with hand approximately revolving the quarter under was our of relating $X.X $XXX

Our was after ratio of the acquisition. times X FusionPKG approximately leverage the funding

for second our outlines outlook XX Slide quarter. the

to We in pandemic quarter. they through than expect COVID-XX the experienced pronounced anticipate the near-term we that and second be the the will quarter effects to more related first continue

we of gradual idling expect be with We the cost half while keep are to the the diligently the balance engines point recovery managing second QX to a in need low structure year. the we as our

Beauty our continued to primarily segment significantly and COVID-XX. market effects weakness impacted of results are to of The each by the end related across Home be expected

very primarily Food in quarter, Our and the second weakness year the expected prior had segment, market impact in related growth passing costs. strong is Beverage on to to resin lower which and COVID-XX see beverage continued the from

Our the its compared growth, prior difficult is exceptional within Pharma division. facing especially comparisons segment year's to prescription

sales lower quarter. for in second the expecting packaging also active are We

share to and Our second possible Award turn call $X.X Thank to results closing approximately during will pre-tax have for details infrastructure the few it quarter a related remarks. for to million expense continue the then critical supply COVID-XX our financial being will who results You around I more us made include crisis. over industries given to of employees Stephan to the

totaled cash our Slide In to the was the approximately flow $XX and prior quarter, reported was shown free million compared And Capital as $XX $XX expenditures were on cash year. approximately from million. $XX flow XX, strong million in million. operations

program the basis, policy gross net We sheet, on continue we XX%, balance debt-to-capital was a basis, a as have And approximately to will given approximately while repurchasing near-term it on measure precautionary strong is The pause intact. share XX%. a and uncertainties. temporarily current was our a dividend

In $XXX a and to addition, $XXX needs challenge we continue to our million capital of evaluate forecasting million. expenditure and range are

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

Stephan Tanda

Bob. you, Thank

takeaways these and take, fresh the food all us time beauty the proud on will colleagues play our maybe am this a the to cover products care products from up me and we I than and world, Aptar to Let we perspectives the to everyday of role we the few close XX, in household solutions ideas. products Aptar emerge consume homes, medicines around society. more on Slide We dispensing and to we live have the confident and responsibility ever. day. my to On with key get now behalf important we out. personal purpose in an Most we are life, and count through make at the of new our difficult

I courage, an dedication connections and with growth the long-term I for in doubt to have stronger performance partners. people, confidence no will organization our look I to creation. even deeper opportunities continue of to that and have incredible Aptar our When our become value

We have portfolio broad and of innovative and markets, customers. that serve differentiating attractive diverse solutions and end regions a

conditions the in our current recession and will the ability, cash-flow-generation cost-containment strong challenging balance severe focus and sheet, we our past, to with weathered have commitments We customers. navigate

We to and to world, the local are will in rise the we and continue difference communities making challenge. a in our

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

Operator

from first with Your Ghansham Baird. Instructions] [Operator question Panjabi comes

open. line is Your

Ghansham Panjabi

sort across us any each from sales pull context many just of across as injectables. April loading curious quarter Hey segments. of it the doing how think as three in all benefited level the you in start guys, Pharma first doesn't prescription It of in in performed OTC sense are But can just versus you at give Hope consumer forward? way good a there? also, of like seem whether well. morning. categories, pantry obviously you terms just the of to And maybe off Yes, and have to your then any

Stephan Tanda

I'll first take the second one, Bob, and take the one.

really well the want might I of the is seen don't have supply filled. sure that. But packaging serve So that for area in where the one the and the rest market see chain the forward diabetes in Activ-Blister addition, we And people course, where active really launch. portfolio, to is the we pull make we had this a area, of in

Bob Kuhn

take from can back that when it April through step mean, you and until to the March, we're March patterns started out shutdowns restrictions as that regarding And see trends midway wasn't significant there. I seeing, the appreciate, we of and the impact to if shelter-at-home customer a were month we really the

we full as and of we're April. month on here April, the getting you are might the in impact So expect,

month that pandemic, started trending So worse full is be I would say the the it the of March. that where we April we when right expected to looking at so now, clearly saw activity for than we

Ghansham Panjabi

rest do dynamic segment of I you you that mobility, the mean, as how lab in access, kind had team impact of related And pipeline entail? Okay. the segment, exactly of think about limited then to talked, identified to of you of within then may specific year? your the activity think And projects etc, terms does this What XXX-some-odd the has Pharma COVID-XX. current through Pharma Stephan, that that that,

Stephan Tanda

Sure.

about there's activity, development, you So really no think impact. project on actually, the early stage pipeline when

collaboration find going virtual used is done things that with to have customers, actually We be we switched well. of remotely have face-to-face can We surprisingly where all obviously meetings. that to lot and a

some where approved is will No for So needed pandemic. be is where of delayed trials doubt cases clinical And audit on-site are instances instances there in are to priority continuing that launch, there because is well. an fighting getting the for pipeline the going things is or there some some fill delay.

I Now to think, long not "new normal" this in will getting half, be you the if in to able sometime back term. we're find yes, the second effect the

there to then up. went years, to on for will obviously, we an As XX this take we five projects if are pharma and an opportunity have would be know, But impact. pipelines years, catch

little On let XXX the me second a question, number bit. qualify the

a us, there that XXX course, the that in bring we injectable are targeting many hundreds, are in really is projects The industry space. nasal, capabilities of inhaler, projects out COVID-XX. to the pharma there So maybe thousand relevant

we're nasal through. course, projects it one would on notable in we so at is advance to uptick, few working those, of of but The in we a those And pipeline company. COVID-XX. probably time, as actively And any you that Realize that large a one is, for them one a projects work NXX the majority of also have with decontamination thousand also on the going Authorization space the FDA of. expect, the Maybe that Emergency in project remind injectable-related, Use some the course, masks. effort a with are in is I of the we're for of space. certainly people got It's on of inhaler the and but would, also we've proud

Operator

Your KeyBanc. next question Adam from comes with Josephson

Your is open. line

Adam Josephson

you're just or XQ to by Bob, follow just April. very expecting referenced. magnitude second declined either sales And specific segment? you on substantial us all companies this uncertainties you I then the obviously about in of that to But terms April, have total also at in Ghansham's just that declines guidance, following roughly core the can of up your question what given guidance quarter provide some of isn't help what with

what decision into give went So actually your XQ to guidance?

Bob Kuhn

of China, slightly with activity, forward-looking we're kind you the normal one-month mean, can the into And kind to I of right we more best giving rest the getting I at much back second now guidance to the that. qualitatively, because as who's really, impact a QX past. our in the in pronounced So impact, more throes our of projections the as and less now in it's I saw, I what see some typically But response, of tell any Western mentioned going only of to the pandemic. of sales head than business we're not is mean part quarter, is really in Ghansham's of cases, business we exception our in in

performance our say forward like. the look you take might I project And look what Beauty Home, can QX is, so what and at QX that of kind would in a and certainly

I a into a it's terms put from wanted around what a why I of on range and where given, market traditionally our in close we've team but that should who's calls but is guidance, what research And go, went things. to and very have of guidance then could that the we it a we the give some, bit we uncertain market goalposts the fall think little of And really feel QX realizing a think the and we pretty work somewhere activity good guess, there. some QX of customer-by-customer we in just up culmination ground the lot opened and with middle obviously, to it

Adam Josephson

I several years gradually versus XQ wondering XQ to just just Normally, normal think XQ you year. the of offset the the rest Can just purposes. the by that earnings higher in know about of in to earnings sequentially seasonality I'm modeling declines XQ to of is me that sales for in have years. there the how and down up why help at and through seasonality be extent back to But the just the your year? XQ and just business just recent been much picks business from I'm look balance your Normally, XQ. may activity what are extent on seasonal more XQ, onward, wondering, earnings One don't last I from the

Bob Kuhn

Sure.

QX QX. stronger than have part. right mean typically is lot So one our is higher that the launches, nature, end and summer seasonality of tracking A sales, gearing of their on Beauty we you're that quarters as the been typically typically I projects. with season, beverage the starting get strong sales, up to also for of of things condiment those due customized year. slightly

But is in trump I one slide that we I the is So the as we the in right presentation, seasonality it traditionally, the be QX right? pandemic if think projected we any at to mean do to in see QX. you looked have, see higher going really year. activity point the low I now think

that it If out outweighs going seasonality of so I half do think any And if is to would to pull pulling in far negative back weigh the And gradually we on seasonality think I quarter, I anything, don't that. more start toward think again, out I the the second our of see a being business. pandemic of positive. the

Stephan Tanda

just wanted have to add. get falls for if exactly other particular significant the clearly, Yes. I the And demand no I there big with. let's of people want some pent-up low mean upside point, pent-up now this you that with see. be we back be QX there and demand. don't to the I People QX or there. our is and on but whether to QX, will want, this balance Bob as caught to think lost, in back end is of that There's get out year that to question But want salon. a here. the in up demand said, seasonality be factor And that will business,

Adam Josephson

any last tax No, one on rate. rate Stephan. of you're I XQ guiding XQ? now. XX% there's thoughts what relative think tax for would And and Should mean be? the the to abnormal lot just the normal But that's elevated of the know on Or level what right to of Bob, I sure, sustainability a as we one

Bob Kuhn

Sure.

from book we've to get impacts gain so on comes touched quarters, significant option between the actual the one the more delta tax the in we our money the So the of or on the tax expense. versus effective rate the as stock the delta effective previous on positive and lowering rate exercises,

of exercises. amount this we're So forecasting a ago. option that accounting obviously started several change years In not environment, significant

we're not tax And point QX, carryforwards. the to to forecasting on is we I we've of going we're would effect out loss thing in other uncertainty then due And point in losses forward, kind some of are have low that as countries. estimate. we chosen that the those that our hit the of to So some conservative very expecting some

books pulling the pre-tax the you're income asset So for any down corresponding in carryforward. on without loss essence, your

increasing, our those traditionally So QX would things two rate versus in are negatively say, tax seen. I we've what

Operator

with Question Morgan Neel comes Kumar Stanley. from

line is Your open.

Neel Kumar

Hi, Thanks taking my question morning. good for and.

have pretty given high quarter margins Pharma to Pharma these lower-margin prescription generally, mix first the injectables From your Pharma what tougher are given strong margins the business? packaging higher-margin in on active achieving of a a areas, the end your in going target contributed for above You range? outlook businesses. and of perspective, growth what comps And forward, the is

Stephan Tanda

want take that? Bob, you to

Bob Kuhn

Sure.

So Neel, you're right. those I mean see traditionally, it in but the injectable some past, margin, and strength the so the in did fact, overall active of packaging both on traditionally both the space, the we've move was incremental mentioned in we lower slightly up strong divisions, margin. XX%, has

in So a say, pattern. And percent CHC both were the would expect see of in, would normal normally prescription you both up growth that we a degradation couple fact, didn't I and each.

So of in quarter that's what boosted Pharma. kind margin that first

depend to going think looking really and it's going mix QX. that think is to what to forward guidance on much our going forward, in again, I it's very going we're see I the

So prescription, for it, higher-income you if was And QX strong quarter a at year us. look us, last margin. contributes certainly for really

So difficult we're very, up some comps. very against

in QX final mix we're how have that to we going sustainable margin and by be We'll the come sales hit that to is going division. ultimate forecasting So forward. that, in division not see

Neel Kumar

environment we further midpoint. the a if capital you you talk of these about Can helpful for at opportunity guidance just That's And for think initiatives? How there's weak million some context. persists? where And lowered about focus I year the capex reductions should potential management. by working greater on the of the benefits Okay. you mentioned also noticed full $X

Bob Kuhn

the the actively that thought capital projects we longer can upside as months are been a world needed of increases we few side, capacity And the are our divisions have turned imagine, the in needed. on kind Well ago no you all challenging we that has down, pipeline.

as started molds takes Some many those may to necessary. build machines assembly cases, projects some of have and it already in months, and the been the

where ones seeing the growth, capacity are they the delayed, certainly, on we those and on other can hand as sanitizers some be started, moisturizers, at we But put and to which stopped, looking we're seeing if call, mentioned areas So hold. and see in restraint. lotion haven't we're

So look we're balance and trying that. to at actively

run I going could but would that further those of some we efficiency for see term continued to think enhancements we continue go pull long And the you progresses do There challenge started to many But if facilities. how we nature. term, see that back we're and business that improvement, our is. the I as this what we'll long are of have investments in imagine are investments. through, in we've already to don't

In facility. state-of-the-art new a cases, it's Sometimes, certain facility.

for, on meet to So we're we we a that continue out is will to tragic really be able we as this pent-up other the long-term going demand is to and said, while those feel to end come be prepared of this Stephan make demand. that investments it because situation, transitory this. And want to

have make demand, we the continue side, to on in carrying challenging supply that want Inventory, working progress want at make is the front. the we much. the because be time, you On sure on payables decrease capital the one to to same don't with hand, But too disruptions. don't again, you

So one, to quite things. the their and and AR on that facilities. to terms honestly, that collections we to remain area. some not as payment that down on sure we're to who continue essential and need current are going is work keep We maintain have maybe we make of in customers diligent our eye the shut have business strongest

across that bit to little of concerted there's think capital, So going but we a it's take three working those all on overall I levers. be a extract can do to more effort it's going

Stephan Tanda

you different. really whatever This [Indiscernible] Let what looking crisis, more. price, a build unique. [Indiscernible] But mean is me those we it, have are just downturn, on to [Indiscernible] is bit similar this this to want you. call for I

in and businesses, especially postrecessionary also Our a are business, our environment. resilient consumer-facing

and as So of confinement even as procedures demand with buy are go [Indiscernible] going as more or that But product kind consuming [Indiscernible] soon a to the world the house large artificially now, back consumption, orders. new or able not to almost. shiny context, [Indiscernible] people the but and electronic, is basic will go that is new car regular [Indiscernible] the now they right

in So being ready balancing then of for we and that and are products buying kind uptick being these taking stuff. that really plants not off-line

Operator

of Mark Question Bank Wilde comes from Montreal. with

Your America. with Staphos Bank question from next George of comes

is line Your open.

George Staphos

COVID Thanks I I guess doing back with. the had all come want COVID. up to Ghansham to for you're with begin catered to question

away. conversations ultimately terms being capacity, with in and If why that to your in vaccine manufacturing of having would Can approved if what products one talk because, some determine production once, are how now mentioned toward asking approval on right of what you obviously an there is terms have what start help have you hopefully, can, your any they're that they those us you remedies comment to components, customers, would conversations your to on vaccine you're ahead start terms customer anything leaning traction a much produced? about you're are vaccine of you you data, number two seeing hopefully, again, there's the of or But you're vaccines, on. approval in degree, now has of from working

Stephan Tanda

vaccine course, certainly trials appreciate. of comment projects, if of meet we But really to be demand capacity on required around vaccines part are needed. of cannot particular discussions some the successful. we we can you as scale-up that and, Yes, clinical the as individual And have would

as far go. think can probably that's I as I

George Staphos

number is on talked about. number think, imagine you're that trials trials XXX would could you're that of you less I way a COVID-related there Is than, the the size you I on? the project Stephan, of that

Stephan Tanda

not No. It's but insignificant. it's

Let stop it me there.

George Staphos

would the Or obviously growth all food to loading saw couple to for of in with Food the in Beverage. been Were at piece we of you been that wanted was we've run our second And on-the-go you're I last the that's pantry shelter-in-place. companies And pantry challenges the space. in that some you ameliorated for supply? lingering you seeking Has have beverage bit in by more the the expected Okay. recognize of Can customer side, I driving have of switch the comment beverage, Asian other impacted volume appreciate pleased its effect? little course issue with seeing the business largely that. trends that or food? how on you not and terms a years? loading seen volume for

Stephan Tanda

geography. by different obviously it's Well,

So who to and adults let's consumed Actually, school. start kids our China. beverage particular by young mainly go in is

been, has snapped has school economy, than is much So or snapped now. happening West, earlier in while back as the China an return to only

is So because particularity. Asia certainly, shortfall significant beverage part in a that that of of

in the On has to and also from little Yes. a decline pantry other call condiments. is back for the what foodservice and love net impact to but certainly, for up is hard positive, hand, coming your the us, And China more it where decline an infant is I loading, condiment we the Would West? significantly us that. it's the see to And pantry sales in bit nutrition, foodservice loading. balance benefit on

George Staphos

the are one there. would with R&D last segment COVID is hurting Okay. And past, a that is still the doing my used has hopefully, In into independent. to three developing Home? leverage. and through remind benefit the contrast event that and higher in Can segments having stands and the in which one, you Aptar recorded gotten it obviously, But quite obviously like Pharma, us I'll innovation you just over. that's feed you and have results going of other And be Beauty portfolio in segments, why multiple stark that can from the it well with challenges a one-off, obviously obviously and turn

that of the benefit see good So quarter. luck what's, And it, the you portfolio? in as having

Stephan Tanda

Well, to same we pull you the out it that safety of safety food And technology now in into Exhibit made food came we is application, quick-service Pharma, use restaurants. pharma A want, for that we that the application a if that technology the maybe just ActivShield FDA, application. into

clean course, room. followed also, core rooms. assembly. do for technology of But Of question example, injection your operations precision we are work the injection high-speed a molding larger the The infant course, question, clean inside we it In the we've dispensing operate and of same, core inside nutrition, addressed manufacturing do behind frequently. by Pharma,

lot of in especially leverage there. these diversification. people degree appreciate also a So times, And of there's some do

is long Of But course, balance advantages term. in the beneficial. all in the a also term, understand short certain we pure-play the

stop there. Let me

Operator

with Gabe from comes Securities. Hajde Question WF

open. is line Your

Gabrial Hajde

then fixed XXXX, life most of, if the Curious you overhead, interested to guess for at and a maybe in this current vaccine all I back Home. to And on we guess, trigger comment in specifically, heels maybe, transformation Bob, regards I underabsorbed have in normal X.X? can I'm if see and a Beauty is as you would downturn maybe

Bob Kuhn

obviously the as effects. from there's generalize we're organized fixed a basis worldwide underabsorbed an overhead, manufacturing segment by on So on to it's But regional technology. you because mean, overall hard know, perspective I

pumps in say, of that plants facilities. some focuses pumps care beauty contrast skin supplying were plant And some and that impacted. we're sanitizers, pumps which fragrance numbers terms moisturizers strong of we pretty our negatively productivity of So let's a coming or with, up on those putting out in hand for for lotion that was

low shut just down talked fixed all it because we as run lights are I our them off customers about, cut turn the of not mean I idle And the down. you costs. need at can't and all to speed for

you you've in So heavy those. as can a infrastructure pretty of some appreciate, got

a mixed and that. by it's regions within those So technology on bag

where also but a get throughput, pretty bit where significant out. bad. it to you're the in you're spending shortfalls then things So And good ones overtime little that volume, the you traditionally hurts on getting you've like and just capacity got on

segment. a our and Home be the to tends on weight of So beauty the overall overall net because of Beauty negative business

Stephan Tanda

the the address Maybe of let me second question. part

are operating rattle capability. is our actually just I this well-defined much has could continuous transformation. absorption with business. capability. executing at front-end time, one that of in even especially fact at the and What of low the intensity of levels low side I a this in side or same in off One the transformation run The the of overhead front-end execution level the brought and commercial terms operating of at more is time, capability mean on some our some Pharma result a having levels for at execution can efficiency, everything on or tracking pipeline capability plants We improvement of still record the plants. the activities effect but better that's different much

consumer certainly that Having new course, try assess will products do all will behavior, to us to of the said that of we will we mean of channels then again. of transformation, a does popular, with rather the the needed, what be be that will kind normal bought don't So add capabilities, have the in that, that they even through. terms mix. need successful, And find more to, bit I our more okay, may set solutions, footprint footprint. And of that lead to be broad services, maybe to little will than look services will of be this

our That's lot just X.X will transformation that it can continuous "new you a evolving. never and call can evolution reality. of of call face the and strengths reality we And is that we the or You company, in the one opportunity it also stop normal." adapt will mean of key to

Gabrial Hajde

or, curious I region? activity also emerge in insight, you're that us give seeing a I what customer thaw, guess, China begins if dialogue sell-through as was any terms you can I to in guess, from of

Stephan Tanda

Sorry, in which region?

Gabrial Hajde

In China or in specifically Southeast Asia.

Stephan Tanda

realized be. of and the SARS, in is context. it many seen daily been to traveled not or to used us China work the that since to have wearing after continuing they've we've pronounced is out rapid masks because what is of eating yes, so probably snapback a used new office in pretty daily ever as Asia, life The life now Yes, as

than is more even already there's been. So it's more e-commerce consumption. the in-home off charts

has the is China though, realize So lower much, than part, the much it other in West. is the of crisis on the been impact to

had to maybe shut few mean period Factories we to of early after But West That's Wuhan focus e-commerce, normal cleaning, disinfecting, what people expect mention around in more to work to province We it's going certainly Wuhan number realize not and a for by few. reasons. extra the will and a forward I the extended shut as Chinese was down the within But basically maybe weeks offices. e-commerce time. in as certainly an holiday, far extensive the an for too in tell after a new more Year look sanitizing, really expect New on of continued was the we do just significantly were that West. down week went back like.

Operator

Debbie Deutsche from Jones comes with Question Bank.

open. line Your is

Deborah Jones

I your see if wanted a to bit could in exposure about talk Brazil. you

kind that's that progressing Some and time had the impact have for harder get just sense other been a how of with region a companies of you COVID-XX the in of and impact.

Stephan Tanda

of ago, in Certainly, then West. started And than the the Brazil of later Yes, or Europe, Debbie. of is Asia it's Italy terms in way month so Brazil an pandemic, where on the Spain much a our Thanks, Yes. and up. evolution certainly a is U.S. part is topic. the now and probably China, with later Brazil. were business it beauty important still And

very are faring the impact, is companies. who environment geared an doing poorer. different toward Others geared different are actually companies for e-commerce So it are retail has toward but it Those who well are well. more quite

a I clearly, said, as for is it our outlook a mixed impact, topic. of QX. So it's But part but

Deborah Jones

the globally. way impossible about vaccine about talk it to of I not difficult be but there ask the be to it's anyway. would almost this, part the Because that have realize I to And and to think given it would delivery possibility I'm going general, would along just try for Aptar unique? that process you major a But with the that terms portfolio delivery anything your of lot drug around in the there suppliers in drug need its more make for of is vaccines

Stephan Tanda

as for positioned, think I well sometimes mean the supplier, all to vaccines, are supplier. I majors we a the as second first supply

So I fully statement. your agree with

another. we one we have a breakout this vaccine will where be participate a via in speculation, that delivery, course, pure is scenario position. Of nasal but would the be if way particularly strong or delivered would But could

Operator

Comes from William Owens Courtney with Blair.

line Your open. is

Courtney Owens

retail those hard do more different kind pretty retail impactful book traditional start quantify, of or lift then to return being guys little the regions And continue been bit first guess as social my about closures can that but of business? your and pockets, to between a distancing hopefully travel the of to hopefully each rather I and realize split for normalcy guys closures? in question, has you to some the and slowdown to traditional travel which you of retail the the that a about part So and some think measures, of probably slowdown it's retail the of kind how beauty of business? talk of I

Stephan Tanda

suppliers say, rebound portion European back. Asian because sure from break that European those that China. But who is observed much we what out quicker American, come our in are a participate been beauty and it those this in I to not we significant pure, is Asia, thing they back let's the way. that on can one have in can slower I'm to those say particular, coming have clients were want who much Yes, the And

And only e-commerce one, retail the already in who in retail who are are in and down down the savvy shut was shut first February of than traditional more not was have apt the fared those better the in those period, West, March. Clearly, the more beginning whereas the traditional surprisingly, second stores. let's really in say, middle travel

effect. sequencing a is there So

Operator

Josephson Adam KeyBanc. from with Comes

is open. line Your

Adam Josephson

year, any get this guys fully next whatever to obviously, And that down. back we're we draw in And in And you Stephan said, or you I we've 'XX? Bob, 'XX, situation basically you down we're how 'XX, expect were some would year. look, that. would between companies have done other had parallels this

you your sales I were and around? this were XX%, sales think 'XX core similarities, up, were X%. time And next to see down right in then XXXX. your think, the Do levels year, differences back they I

Bob Kuhn

me effort team let Well,

Stephan Tanda

it's of started is we down, in mean X/XX, basically that two also to I there after staying different. in Western think, have back yes, shut economies are we course, but in all have homes travel very a mean similarities, to balance Well, unique. up we I can different week, months, people their company to I we duty traveling very again for course, It's the was it continue consume. what's rebound. started that the to of XXXX, strong that sheet, and XXXX, and go of running. national take a run traveling here. out is became advantage and And and have TSA a same airline the and

up. we holed a as have here pent-up of speculation. bit more demand Bob? But a will think were people that's I

Bob Kuhn

back things obviously reduction and weren't on that. to mean financial would and liquidity seen add like Yes. market right. those that beauty, back, they I trends cut was like things 'XX, I just the is comfortable a Stephan's going 'XX, the XXX% going a have we've the cut would the was Even whether to similar. in small back to in the borrowings one see. But going This to to people to in that. are how crisis on the of movie be of be shopping be they people going entirely going be stores malls And be like and going how and to restriction state theaters, consumer. of lifting by dependent comfortable that, with the 'XX, 'XX confidence state, into question are it's going discretionary are we'll because and access to companies sure they spend have

out. it, before, probably thing will said with a antiviral ease people get if as people go But coming same going the there's different put it's mean, that I not travel vaccine I that's think for the be even you side, now ultimately, to back that, and experience die different right? at a because medication the either feel it's to may it's from for why I where hey, push it. and it big I And drugs,

with think until vaccine. happens the I and So confidence going up really to we're watch what have virus to the get a we

Adam Josephson

sheet. balance And Bob, on No, Yes. the understood. just one

down balance companies the sheet. know guys if come balance as precisely you've I good mean At that everyone's sheet I repurchase. roaring the the a Many having I Why how to sheet but from times balance balance I point, you to back mean uncertain, there's But very for is So use side. we've And it's know you understand markets you sudden this I and a for like on kudos have the hatches. why is not about it? U.S. are use good it's this, And this you really we what are suspended like when so got maintain anymore. done share low, know would reason. dislocated know such good a seen some battening dislocation, and same the great market thinking we've point don't times the sheet you private this what, we say, don't which yours? of for a there

Bob Kuhn

we're is what foremost. like looking the horizon, there's obviously think we first And were the I 'XX on there along saw Well, the there's of in way. at secondly, losers and while clarity also for the winners end think 'XX, day, more I crisis, looking we're the some at

Aptar now competition, got companies on is to Those M&A got on where know-how the have and struggling. are acquiring chain, supply capabilities. has that a lot And a say, been smaller technology-rich are So keep with we I of companies we've successful, market. eye the technologies that right would are in front close the

to out what's one to happening the other have a be the is and sheet. leverage. venture may any in finish that balance mind an I get line that. a in maybe be capital terms Stephan, strong that of I preference would love across think market. I in in for opportunity who the there's of look on ideas if the thoughts use still things great we our to unable You at their that you And think would the could that mean balance market, technology know, utilizing someone we don't lot of I something sheet acquire certainly

Stephan Tanda

No.

virtual year, that of of we is said. of session group, development not we company, our being strategic year. the I The well course, point think larger do strategy are like every this earlier that's suspending, the the

And certainly, do that responsibly. will we act be will new to opportunities So there on.

Operator

There Tanda Stephan are now turn at back call to this the queued for Mr. no I closing further time. over questions up will remarks.

Stephan Tanda

you Look safe. joining Thank Thank road to you. everybody, All us And stay shows some elaborate virtual times. these in all right. interesting please for more. forward to

Operator

This does conclude today’s conference call.

now You disconnect. may

AptarGroup (ATR) 1 May 202020 Q1 Earnings call transcript