ATR - Earnings call transcript Q2 2021

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Aptar's 2021 Second 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. Matt DellaMaria, Senior Vice President, Investor Relations and Communications. sir. ahead go Please

Matt DellaMaria

everyone. being Hello us Thanks you. with for today. Thank

Stephan on Vice and today's me Tanda, President call CFO. Executive Joining Kuhn, are President Bob CEO; and and

on accompanying have release slide press and been Our posted our website. deck

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

refer on to we differ As are SEC actual forward-looking a the call website. conference now would post this some cause Today's today. to will discussing review always, statements. materially to turn call of Please our filings could we factors the includes call to replay over I like from that what to results Stephan.

Stephan Tanda

I doing everyone. you Thanks good hope Matt, well. morning are that and

the which customers, in to down offset market on the our highlights solutions, by in EBITDA drugs injectable press strong like I the reported sales by would growth the yesterday, health be we impacted to company. care for strong growth saw growth the levels sales declines sales of you markets, core improvement components overall he sales strength continues and Bob our continue increased demand solutions update. core our for services growth X. of consumer a The double-digit in elastomeric in was to as Pharma with tailwinds inventory and a discuss from our currency-related be up wide and generated quarter in In announced to categories. to speak growth. in more release segment adding XX%, over up portfolio summary, driven quarter, as segments with of we breadth detail with sales few each reporting and in line and top year. each gives of of slide material first which will prescription key Aptar, segment As to Similar prior drawing by when XX% active key mentioned on the his for

Home about home care personal markets through second from with of solid initial year's to to the challenging price performance, In resin was a volumes. Food is + environment as the in XXXX, comparison Beauty very mostly cost coming continues costs. care the to related strong were Sales to growth Beverage segment each the the segment growth growth be growth increased across input adjustments slightly below we XX% depressed passing of market of and from higher Our signs the + It market input normalizing, effect reported in passing some the increased sanitizer that the with process strong of to demand recovery. our remind customers. the although of through margin costs line XX% through being of easier are to the like compressing of on you quarter passing former beauty would segment, of has cost prior hand input approximately top percentages. and came I higher the our

of mix sales our in some our businesses margin of within lower-margin also the was segment overall by Pharma Our affected favoring Pharma.

active We strategic remain also the making investments. M&A front, on several

our for patient futures. pandemic, fast-growing monitoring, pioneer building in our the we patient space. we we is in the whether If in engagement are learned each that step digital clinical like therapeutics. and have to shares in that anything real-world care health accelerating, it part significant During in a process Voluntis, of the the treatment health is will announced quarter, outstanding care acquire of This a foundation were the digital or a trials things and be from rapidly big remote advancements of

pharma we week, another transaction. this Just announced

care manufacturer XX% for critical and of We of look into market. turnkey as market in-depth on product This will the YAT's and distribution and regional We agreement company injection new in in online entered investment solutions YAT capabilities Also, quarter, to gives as YAT's and expansive, growing skin promotion. a profiles, devices acquire bring with to space. consumer collaboration a solutions, announced and database, immediate called leading to Chinese elastomeric skin supply us care and skin specific leveraging Hengyu well care components local Products, injectable have an subsequent the forward skin the care use Weihai to we experience China. needs the insight focused customized Medical to we

further recycled a advisor been and to have our active strategic serving progress offer that reused. in On uses plastic where forming more strategic hydrated, have plastic the REBO formed a economy bottles. end, To a that a water reusable front, towards partnerships help circular sustainability partnership we and people to a to to to stay be helping technology called can company as are collect away while tossed we bottle

to like few ESG governance, social speak slide on would a I or environment, X, Now and updates. to

As public corporate among to previously are named is the leading citizenship. XBL evaluated announced, the largest be companies and XX ESG top on X,XXX Aptar honored in performance Media who US companies,

the our invite our read extensive the to also announced again XXXX highlights of launch operations report Sustainability implemented We our website. sustainability we global initiatives which have on across that our been you Report, and

the Our first was comprehensive XXXX. year sustainability for report

engagement on record. and track and expertise is deep long experience our a So built

leadership Finally, accomplished our for Procter marketing has the Gamble of and we beverage with welcome & over others. Coca-Cola are delighted years amongst developing care, Amway, Candace with Board Candace health and XX of And business is and cosmetics, leader products she experience highly to held a L'Oreal, positions to food Directors. industries. Matthews

China. geographic expertise oversight experience in time operating is contemporary guidance in a in well to valuable end including and Board and with on valuable as keen deep our provide markets markets, regions knowledge the we a their as spent directors and first-hand Candace operate, insights. which based multi-cultural Our Aptar's of addition significant having functional

a approved antidote, the used non-material I will recycled. area the pressure-free highlight our and iLubricant for bottles, Beauty America. the product that In most of and for and -- an introductions with system delivery polyester, first a Because role PET. sustainable Latin bottle, supplying to of device strategic several to prescription market, and have is breadth called dispenser active Biotrue elastomer variety epinephrine suicidal squeeze the our brand Bausch is Mexico. the worldwide, important recently stoppers of customers the common vaccine central making beauty In Future. X. comment in our in dispensing In a pump distributions In Healthcare, animal Home, Consumer or we Lomb polyethylene, stoppers Future pipeline injection personal products medicines the systems COVID-XX fully new are ophthalmic over-the-counter Pharma, In make & play US. including pump continue drug to treat our the is several the the overdose now made with materials also recyclable including vaccine with would by nervous launches, delivery to we We're in only care polyethylene vaccines in on tendencies. slide for announced also more aligns it to easily system, Therefore, the from the and pump packaging, offerings. Turning product and used in nasal progress opioid briefly technology new medicines of like several a complete

and Tom Club's Girl dispensing for dispensing pump We fragrance called our recently in for for Ford Shave new Coty's most Olay Dollar also the cosmetics color line, and the shampoo solution fragrance and our Cover closure launched pump US. a supplied US, Rehab. the our New in product airless Also prestige conditioner is Eye brand

recycled closure allows market, of dish from acknowledges & Plastic the valve valve in featured from SimpliCycle our Food in our guidance are Recyclers custom a additional care a separated care olefin in packaging packaging food home recognition the on Finally, recognition valve in mash-up then components Beverage, combined East is a that long-standing that Mezeast, and with with on for closures SimpliCycle technologies by food polyester Europe. is launched stream. the solve to Association the featured and the market, so line our critical easily ranch recyclable polypropylene sales technology. hot or called including closures. is SimpliSqueeze tartar stream In low-density also valve materials received Or KraftHeinz product This sustainable polyethylene has Nestle design. In with sauces, range from from ultimately flavors Middle our condiments feature coupled the float or sauce of we the of it which Canada. NUK new with twisted problems ketchup made limited

Turning to the market. beverage

our second to new Our dispensing de With turn the results. it SimpliSqueeze ALDI. closure solution provide Bob? product Bob, Cream Germany by concentrate will valve with Concentrates that, now over for on Creme is called comments who additional I will la a quarter in

Bob Kuhn

everyone. Stephan, you, with slide morning, X. Thank Starting and good

top I of strong quarter, mentioned, performance a will Stephan As growth few a the market line minutes. in in we the walk some had through and

slide to X. Turning

this Second quarter X% with increased EBITDA the on to share share prior a adjusted comparable inflation the impact as per when million. per negative Aptar's business basis to adjusted shift earnings currency year $X.XX the X% approximately net neutralizing compared impact effects. and a well to $X million increased $XXX and of prior included in the across negative year, markets of as our

cover exchange rates. higher compression to which our would EBITDA sales on approximately of the compared an across basis mixed across business different was core year. impact share previous up divisions X%. inflation the markets the ago, costs. effect Our X% were had Pharma $X.XX per without segment approximately which consolidated was summarizing XX% performance margin XX%, Pharma net results, total negative including adjusted of X performance year year-to-date points of our the margin growth passing margin reflective and our segment mix and EBITDA and the business higher the earnings a adjusted the compared Slide comparable different adjusted been the the our X of sales Briefly to core with XXX have and growth $X.XX, show from

quarter negatively was margin $X to in impacted net Pharma's approximately points approximately costs inflation due XXX of million. the Additionally, by negative basis

to It to treatment prior X%, levels and of are markets market patient injectable rhinitis and low majority solutions overall appointments. another cough cold XX%, COVID-XX to and Core primarily sales our strong of material solutions. increased and increased growth the due COVID-XX half of quarter for impacted in probiotic sales sales doctor components non-critical down consumer core for solutions. draw protective packaging our market the healthcare as continue vaccines. at these sales of market XX%, by our inventory administration growth and to of for and products levels by vaccine to for prescription which fewer solutions pharma increased compared was Core related X% consumption the injectables Looking customers allergic sales test to for decreased as the year. decreased to certain was Core science market material active medicines active and used sales was the the diagnostic

the resin effect by to and is and EBITDA margins Beauty adjusted second by XXX sales Home inflationary year negatively which from million. of the well in been difficult Core costs the during higher other margin Approximately have pandemic. increased would not came through have affected the This XX% we & which quarter EBITDA material as the EBITDA costs, points as not segment's we the basis XX% higher. the margin timing XX% of most the segment. raw increased of costs, inflation volumes. did this compression adjusted impact approximately increased Had period Turning COVID-XX passing growth our over was roughly impacted prior quarter, net was other and negative through $X passing had had negatively

to the markets sales sun by normalizes. variety on skin applications Looking hand beauty strong a Core increased demand hair home higher consumer to offset sales cleansing to X%, and basis. XX% XX% core in sales market demand care were higher sales personal to market increased personal fragrances products. the Core demand of the sales. a facial to market sanitizer care as care market for and and due increased on growth at decreased as custom for by care care the declines Core sales tooling

been another margin had due is XX%. EBITDA solid to and input of our sales to not increase inflation and inflationary core costs. segment margins the of compression Approximately The net margin Had this resin basis and sales did impacted by have points other higher have Food increased adjusted through approximately we we negatively the core passing through million. costs, was & of approximately net higher effect cost negative performance, Beverage increases not which XXX impact XX% EBITDA would of $X Turning passing had segment, had higher. XX% an

XX% for specialty low XX% recovery quarter. some at increased over increased beverage to core the rose on increased we food second continue market dispensing realized a closures Looking at cook Core each consumers food market market, to to as the sales demand prior year as volume sales home. as very

and our up sales quarter. year cost caused our Moving in quarter, significant atypical over everyone the outlook slide line take now XX% top that remind in our a to to to of third which for minute tooling summarizes year-over-year third we XX, I'd the a were we where that like sales prior last Material growth. Group, Active in year amount jump an Solutions in had

Stephan the signs is drug but stronger year. anticipating end now in of cautious. while of of lot continue the many the expect toward a There's our recovery customers we for the pace to of quarter, third still don't We As fourth. mentioned, recovery see a yet second an change show in improvement half in a market are recovery uncertainty expectation remain the significant of our economic the prescription to and regarding the

earnings expenses rate The estimated any our third is tax investments per range to of the XX%. share, for expect We quarter to in range costs share. changes the acquisition the XX% of per $X.XX fair quarter and third $X.XX equity to in adjusted be excluding restructuring value

range, a we sheet our gross a research capital that quarter and EPS we beyond quarter ratio to don't give with In imply basis EPS current published the quarter continue while on the would was consensus On While should guidance nearer third that it the around mentioned optimism fourth approximately quarter approximately was be we strong of XX%, debt of our coming X.X. analysts. to equity fourth the above basis, to approximately a net leverage range XX%. a closing, have balance have adjusted

year In to At Stephan capital invest before $XXX million. range confirming continue comments the addition, range of forecasted we million at to a move $XXX expenditures and growth this for our a innovative are of closing we will in provide to projects Q&A. few time, we

Stephan Tanda

through Bob. In work proud I'm you, amidst the unprecedented XX, and closing, first of times. very half the on accomplished our have slide Thank people year, of the these we

progress. beauty economies the in to to certain recovery expect we reopen, gradually pharma and business begin prescription beverage As our

measured of However, performance and pace, recovery uncertainties limited this likely to year. is very travel. a the stronger a towards the occur the intercontinental anticipate given and variants, inter-Asian at end the COVID-XX around We

be where the our those certain Bob As out, a than that labor headwind, will especially stronger remain despite aim to costs. pointed fourth likely implement inflationary should quarter price To our and fact third pass on adjustments to costs necessary these transportation. mitigate effects, we further

with we As robust international and to eventually and look successful, normal more vaccine experiences be will out widespread life distributions return and will more activities more travel. eventually social further,

Our long built business is the haul. for

market. conditions of we our generate attractive markets in As ordinary I mentioned because always to breadth earlier, each even are growth when across able not are

our and as for not consolidated we The transition pattern. remains promising. anticipate our We will a focus balanced all continue returns growth steady will to outlook and margins long-term more growth of has that to sustainable our and quite company areas across on business changed and improve

position, will making our are capacity strengthen With that, would your key call regions for strategic like expanding further We to investments and including open that questions. high-growth up today the I in competitive markets.

Operator

the from Your Staphos comes Thank Bank of from America Instructions] you. first [Operator line Securities. of George question

George Staphos

was start remarks driving been don't what on too Hope expected. details. item for about on with working It little Bob? talked not I more up And doing couple you’re or the of opening wanted morning. bit if corporate that what – expense. line which the a than Good driving And we strategic Hi, I maybe much that? was in to everyone. well. And just Was didn't you've going related think follow-ons to we had have that? we Stephan moves Thanks some should Pharma. the that was was What would expect of forward? one a I

Stephan Tanda

ahead, Go Bob.

Bob Kuhn

Yeah, and I one Stephan. can George, that take

quarter about half and other more strategic the some that is increase near continue variable. from So the really the we are increase end compensation think And accruals is some – in to yeah, is year we George the was in an the and the short-term would of accounting say first look increase expected where the finish. for of in as the to really of I our going versus activities And term. outlook some half to projects

be that range. Looking it closer forward, $XX this the I million would think be quarter. million we at and It $XX the don't million is run between rate somewhere the $XX should probably saw

George Staphos

and Rx destocking X% it quarter year just mentioned about about Okay. notable talked I to the understand. that us Understood. down so because was you On was for while, was X%. you've But last prescription down Pharma, in about a we think

I'm there off kind on recall, the Pharma not? to be that if So numbers a weak your anything longer-term of mindful easy I to going relative an outlook? why of what standing correctly in relative number of Was remembering comparison. Why, we should else

Stephan Tanda

consumption. not Obviously, fine-tooth all comb and is movements to Hindsight a already clearly, over with No, at us. not scanning we was inventory last in hit even were different XXXX, looked XXXX, have but the we and years usual with orders chain we the that data line – than really. COVID. slightly is there gone bit the reduced by during And back seven before in reduced the more available consumer

that we actually the January, inventory to. low inventory in very seeing of despite in and year still then hit that the everybody that had referred a build chain. consumer that finally, exacerbated XXXX you in consumption lower sales So the And brake emergency

see these Certainly, had we recovering we about during more that quarter would said, rhinitis I that might its than that But quarters. category at is always were have base course solid or is is around research. share concerned as indications QX dose run third will customer historically nothing we've allergic destocking There's continuing will one a So than a rolling quarter. done have clearly, the a the about recover. what off extensive at liked. to not QX that we is This growth month we look were -- the two should the about. lot spray. conversion we conversion ago inventory a you oral adjustments conversations be low The more from variable or that is from But other more shifts single-digit nasal category. Clearly, what that

last Glenmark nasal new time, mentioned we combination As approved. the spray

these And And I variable. are course. a always really So will off but central care base of is where season very destocking course, this continues to much of nervous in In come. grow one continue flu which is most that's now. drives destocking much of but the flu excited And very still is allergic around. beyond going rhinitis most course more flu smaller Rx, treatments on less That of are system think category. of about well going consumer to pronounced. summer Even visible it's the health we

some pattern. a to give returning more two normal those So confidence four for quarter us

George Staphos

run some past built don't capital. that said of we the Last Voluntis add the has down. attention company these at going and today, but and nonetheless to for that one and but haul you Weihai to thanks longer your deals, are in Stephan are deals not for not are divert large just Hengyu like for they They me. When earnings. look obviously

quantify this your businesses? the two us having 'XX, your Aptar return see 'XX, of you Tell your In How what good dilutive 'XX? are benefit why shareholders growth? earnings 'XX. businesses your through these be in fact in these in to will will they're say Can

Stephan Tanda

Sure.

answer give view me please side. the a let and then you quantitative on qualitative So Bob

of on the before. Hengyu. me we've cross-regional as I dependent mean flows. to and let that chains critical regionalization the category they're Weihai start in talked have So as Governments pharma about up the fact woken supply with especially vaccine, substantial

business, critical the in China. Europe In to around supply And very U.S. well a we which later So get with had built up to approvals, regulatory not in it you'll if that big years historically. Congers. it set us Hengyu and in It's money. China is we has five substantially have of capability all but had approvals. we've course is the for build more

important market. of We think traded very dividends digital large building a I much, acquisition clearly Voluntis this will Chinese still and to a pay therapies. growing strategic in When it that of is very say but in So, very publicly can't the comes constantly capability this more a Voluntis too soon is is company.

deeper oncology available a way of is is reports drug health basically digital combination are patients and on And FDA no clearly So companion that? maybe approval few while companions. that moat diseases, fast gotten and What critical approvals projects. very Clearly whether just think providers and managing lines become made the with acute more built Plus, see companions and digital know there And and manage I our the digital with that a the that to But business also are have on a a average is digital. with time chronic that they who therapies. That's But as is research it's is supplement an device of we diseases. is we investments the both care it. And future. the other others. digital business than we've our digital it. even more enable And around growing course faster are to engagement these one it or device but And pharma before we digital project future seven an years. disease investment our group. see the of as will built probably

So turn numbers. overall the driver Maybe future. that see in it important with growth I'll Bob we over to some very

Bob Kuhn

that I transactions. most mean purchase accounting Most from you in adjustments coming is the again of that see out slightly terms that actual looking Yes. I as we of on mean XXXX. in it's numbers the dilutive of mentioned further the

on we're of going -- in this Pharma much I strategic really growth aspects the we're the XX the to months this. as division think expansions in and certainly U.S. future this segment the on what larger Hengyu. see of as capacity the with forward we've injectables injectables our last based Stephan here the and in addition And going certainly, becoming the the segment own touched projecting growth inside seen over I now the think

some manufacturing different in So, it injectable us nice capabilities really gives regions.

George Staphos

very it I much. Okay. will Thanks over. turn

Operator

Your next Blair. William question comes from Kreger John from

John Kreger

just elastomer questions guys. of on a Maybe couple the business. follow-up thanks Hey

think I about you what longer work say through that gave of about I elastomers. saw visibility just you sort you heard that you the Can you book the COVID in vaccine next second of do have an growth vaccine on that half quarter have term? you talk What order of in contribution out sort of year? sort

Stephan Tanda

both We vaccines, around geographies. don't project formats in different portfolio we different into general. but as see activity Yes. as biologics guide in treatment really flu the and order is broad Plus, much the before as more detail, we a traditional well suppliers, our portfolio pandemic vetting result discussed of the very much vaccine also as that of our COVID in and

well that So business that's we that is we're good confident to that Bob capital referred accelerating feel overall why in already and of and expenditure continued underway. growth the

John Kreger

then that Thanks. about localized new capabilities, or supply does with Hengyu elastomers? that you chain purchase Great. of just sort the again any a really product is And give

Stephan Tanda

new I maybe approval a Getting but that's trivial. a important half maybe pharma bit a is think in for China that's part decade the process. in regulatory most too manufacturing sounds

full saving of adjusted some many local market have importing But demand. of And that from very important. So, that's Europe it presence But is also the can local long our ground to we course, they course, that lines of in with some by from that large years. as boots technologies. for technologies rapidly to supply on are in us has A opposed customer a many, time transfer approvals approvals. more market accelerates lot in growing regulatory really with

John Kreger

Great, follow-up. then, a Bob And quick thanks.

detail sort the the gave You pressures assumptions of you Can what talk quarter. half? in second the on inflationary making second you're in about for of lots us

Bob Kuhn

Sure.

I pass-throughs, on certainly and be first QX, see cost net in the quarter. in mentioned the will we than in $X if side, roughly So, now, biggest we truly particularly it QX. now, Right was be it's expect to better negative somewhere million materials million in we which I million Based of in $X.X raw in net negative to is $X in to implemented the we'd I were but to still be quarter. probably guess the the had we've I landing the estimate mean lands, it component a it. already would tough where say, negative the again, a right QX, where inflationary But

John Kreger

Great, thank you.

Stephan Tanda

John. Thanks,

Operator

next Your Capital comes BMO of Mark Wilde Instructions] [Operator the from from Markets. line question

Mark Wilde

Good morning, Good Bob. morning, Stephan.

Stephan Tanda

Mark. Hi,

Mark Wilde

It talked half about of it's kind previously pickup. second You of a pickup. seems like fourth become quarter more a

Some Bob the I but is little around wondered a inflation, just that could mentioned of that put as color are other for factors you more if in play you.

Stephan Tanda

Home earlier understanding segments, And by are we call to other being of making Sure. I therefore, recover. I look fourth is the mean destocking granular increased we you extended that. the the pharma a the speaking the biggest quarter. factor When to quarter. to clearly the was and starting is that on basically have Beauty

quite good Unfortunately, chain by don't start some encouraging. pushing order is also see all supply you that start we we have conversations and customer to restart start as a dislocations realize, pattern -- see just the We button. economy to

one all Just suppliers, go different have the we on season supply of companies and suppliers strains as to to example, go bankrupt for of dries and up government some Europe, the puts some in which smaller our support and in and about visible. And XX/XX so excited lead is on. Christmas are But the there demand the events China customers chains expands clearly times. other

And behind Americans US. basket bottled travel. as you it And variants will domestic be year. international Europeans international basics of in up all let a in means share the London our to is travel purchase or outside to or clearly, while cannot the of the lower we domestic that for share Hainan will going we but travel Europe, Asians lot the and the in have ago to our Clearly, alone Chinese Paris. is a the that's example, what now, we consumer where to up the think opening China footprint of personally being least spend basket region. travel. and York New do the for of as is of redirected travel quarter thought do Now, spending our they not go I another that the or downtown the the Chinese to consumer a is where within can region grow And would Island, even travelers spending. that to were uncertainty for terms at we we of can to China That that than are much

decent So, as travel uncertainty international but the of progress, big consumer us. opening reopening making some along, spends back see spending. Beverage, for of discretionary not to people that continue cook XXXX of of good say, where But And gives domestic temper growth some to pace beauty That's obviously my a kind at are I yet. intercontinental home. see caution travel is And and on-the-go we and and with course, on would but Chinese more optimistic, beverage we recovery. progress would that continue especially recoveries comments. their recovery. Beverage, the we but are there's we're expect clearly, sequential we at aspect why we travel is of up the further a the level Food purchase, of which pace of a than

Mark Wilde

Okay.

Just for quickly. follow-on real just my

investments. ventures. on acquisitions of of about kind performance tracking can all I so you're those wondered just done generally small if joint You've and managing and how talk kind you many of

Stephan Tanda

acquisitions we with example. Yes, to stepping which a our bolt-on innovation there to three YAT first, like complement really to at as Hengyu, and mean I acquisitions with really activities grow a to venturing are as just a complement ability investments, organically back that. reminder as aspects our look for

Now sure we strong is ongoing that the wanting venturing agreement other some only business to if investments, an that to a or on time good relationship. make engaging the do that, wanting there spend leaders a licensing sit on rationale business in hook with Board, there's

developments that company time that we have So, of we our or -- so fact in future sure of derived. one with progress, in value in these them, innovation leaders almost business be all of spend to have leaders all make

course, kind following books and side diligent the assets And executive of sure of them. then a we also of as of it. making that. sure to these sense. do are is portfolio make that's very business makes thirdly, sale properly the of And that committee, for sense, venturing sale their to a account group in And correct follow if overall make continues Then, the an we Bob's seen review we will Propeller you've that. So

of seen investment. You've the PureCycle evolution the

making derive we it been muscle So, far following pipeline is from of we and so good from value by in them. we're a investments. average And good. -- these value pretty But, far of that to those filling lot build sure batting future terms certainly had get innovation has certainly we a and

Mark Wilde

I it what looking I’ll over. that’s was Excellent, turn for. Thanks, Stephan.

Operator

question next from from Baird. Panjabi Your comes Ghansham

Ghansham Panjabi

same the a level Thanks. and segment. baseline, for Good that to just and sense you a Home, to as are morning. I can where chance guess so pre-COVID can as we subcategories, get we for in us volumes the also recovery major how better give on the to XQ the compared Beauty

Bob Kuhn

that Ghansham. can right. one take I All

XXXX I if year. probably look about the QX to at on So we the at the + basis, XX% XX% as look look of at a Beauty segment we segment. closer And the so if Home for we're and year-to-date levels whole for it we're a

into if were And then we're where of way where it for are year-to-date from Now XX% break to about there. were a versus pre-pandemic QX if QX the XXXX. – beauty, XX% about specifically year-to-date we I XXXX from down I beauty for XXXX in category, look we we're

closer on side. getting beauty we're the So

Ghansham Panjabi

basis of productivity I impact XX% had Beauty that Home million. price Got about for context cost then as-reported for I Is if of going in out it's segment. all you've the right forward the closer for to about think an in on margins segment? in $XX to looks baseline adjust + that terms initiatives it's that it it. million And the think like incremental And of called you've $X

Bob Kuhn

has lines from hard It's many SKUs and hard different regions. probably really different me too not segment, particular got are And you've depend average. what average impacting for to Beauty to basis, – many one truly for you headwind across pull – if on the it's or significant growing. area overall we've multiple Home that. don't On a me that really far it's on the have factory + But and generalize. that got a product In if categories so remember, downward going particular is down an to so

So category. it's hold that's for to every that hard going to really say true

Ghansham Panjabi

And on maybe then just it. Got Pharma. Stephan one final for one

anything kind mentioned through But with some in you that some – that some you're on? sort sales terms you inventory that other you confidence more of can what based you concrete see give that us in implied? of you think improvement conversations cycling will of there is terms XQ customers share gives just destock, version can is I but of XQ. I that that think of the sharing to that optimism or

Stephan Tanda

refer data said, within at forward-looking data look and we that database, but context, to statement the I Look, for We look Europe. data. the Yes. language that at subscription scanning US I as have proprietary we

a it's are out stretch. everybody Europe on we and thing there's life masks likelihood finished perfect less. – puts We not club the US these in call outside a the cover by in least What any know, are know is in and kind okay giving of stores And nor and form. they at at finished would order demand one Where informed ago, where say, be think caveats. call locations levels? two-year CMO three goes conversations, are which triangulate that people bloom. in back the customer do data but you that we we that in beginning of what months about online, and And U.S. the us. I and they? shelf with comb which Europe then on inventory given forecast, we some I had if it's is and homes in pandemic gives The will went were forms incidence consumer a fine-tooth is and are correlate a high. of know allergies full probably the than what not the the But And that's evolution those with not As more of them backwards outside, while

I that's you. as I probably can give much as think

Ghansham Panjabi

Thank so Okay. you much.

Operator

next Bank. Your Deutsche White question Kyle from from comes

Kyle White

what I Hey, kind to earnings, wanted good of but for know resin XQ that any morning. like you're of outlook kind in the that that to And back not Do question there? your expect costs towards what just Thanks for go the my embedded towards end of regarding Mark's acceleration you could pointed kind provided. I guiding And have you resin the from are outlook some be. you questions. I'm taking of curious benefits year. to of it the you volume

Bob Kuhn

I seeing don't positive. the embedded we're side. Certainly, if raw actually abatement of any signs Yes. think material some we've on know I

to hate mean of is on certain on a there So now amount some again catching that up be But into expectations we're hurricane very of just are we I be the concrete that. going to delays. season. getting

up some know anything the But expectation of there catching we we're to pass-throughs. As is that certainly closer raw an on happen. can getting

Kyle White

potential how your on restrictions just then you variants impacting in you if the terms curious from beauty, and being it's travel launches or customers. travel you're And delayed some anything Asian of seeing the Understood. customers given paused I'm the that about But of product restrictions your mentioned? some talked of

Stephan Tanda

No.

we the Specifically season. confident that. don't see Customers probably that to question, Christmas remain about excited, bullish

of it's plays what towards given consumer the make launches. the big supply course, the customers' that spend. of strengthening. product role the end year, demand lead a lot And certainly we our now seen challenge Frankly chain – our is meet dislocations. sure of that needs actually haven't to times We right with people a confidence said Having see in

about more COVID on Probably for what does coming doesn't happen sell-through about your something it as there's the concerned mean less probably that I'm with year. the is as So if and good But demand being concerned guess next anybody's. there.

Kyle White

Got the good year rest of Appreciate details and the the it. luck on

Stephan Tanda

Thank you.

Operator

next Your from Josephson Adam question comes KeyBanc. from

Adam Josephson

Good everyone. well kind this think just on Kyle of you’re asked Bob Nice. question hope but I XQ I the one as morning, guidance. well? implied you – about

be quarters expect that, company? we is prompted prefaced your said the what about which to we I not analyst normally one, current You that the guess quarters to you current quarter what mean I comment? with comments beyond you say about talk to nonetheless, I for obviously prompted but don't $X.XX. typical consensus, close – beyond is believe which the talk the

Bob Kuhn

external getting some talked very at Stephan also our looking research of and and customers that take about with say would we our I we're good collaborate and data from more numbers with. further. signals look our more alluded to. of of I as confidence some visibility our out mean data, a much the triangulate Stephan

that in rather more to And say more it's And of correlation so happen with QX. what's consensus confidence. to than the the lower going of wondering we a what leaving you see in kind and would QX of direct – people this I our today than quarter improving is QX, is

Stephan Tanda

guys because thing is, us quarter, year like normal that. quarter. think third years, that, than third Adam end fourth the know lower than not we add will we it just lower a other normal pattern, quarter And this since I pattern this quarter fourth holidays other to a don't The we you is just a be is be would where think the the wanted for of all is will year where Europe

Adam Josephson

on would for quite Yes. business Pharma cold beneficial then, vaccines the and therefore pharma, of to the the No, year the flu obviously, some I might and appreciate season is there of kind your close be to a Pharma last whole as thought that, And see And pandemic that Stephan. be would the end you that business. et And your impact good good, ongoing bad, been had what's never impact with significant the do on et happened In Delta overall as this words, has business? what the a characterize indifferent, happening there's customer you your Pharma How the given cetera? other and cetera, pandemic destocking result. variant, as?

Stephan Tanda

is and then, COPD as product, say people to well treatment. the if it's exposed masks the rhinitis It's the almost to a more for negative the with for -- can need pollen, their not wear to course, be people and of allergic help we And terrible wear is to for likelihood be impacted. less sounds Look, flu but been much all about it. it. people lower. contracting time, they finical good of has good [ph] it out people, as the and dust to of that side not for and be so mask. But And That although

the that. on you Now, already mentioned vaccine,

any from hopefully higher As about, moves key countries yes, the is it from vaccinated north whatever and get where then, the surprisingly. threshold allergic everybody and be incidence in will of that we and those shots only magical continuing if to -- allergies business, people think I the boost booster that and can benefit get XX%, materialize vaccine be that both key or XX%, cough not effect scenario. positive to extent, And Plus, that flu. cold markets of and

to but masks, back business, is everybody a very the that indoors, will wearing then course, have also impact beauty scenario, business. if different of Now, the we beverage

very up. get like looks rates So, think, I US by those determined up for believe like the if initially vaccination. those will we seem two is government balance and But is low. and markets mixed remain China Vaccination pattern. now the rates a a good I it are Aptar. certainly to it Europe, is also we've out established positive pushing US And vaccination bag. high is for behind catching

basically, a advised to so of So go closing as beauty long up, our the us negative hurrying But that clearly, pandemic through footprint, for country lack and tourists impact harsh and -- and more with -- well up rates continue the inbound the increase large they will the a our something business. tourists with the and outbound economy are effect well vaccination to that stay as it's game business on advantage domestic of happens Chinese to as as Chinese control when the don't off China lockdowns travel, domestic has take that travel we is.

Adam Josephson

lot. a Thanks Stephan. it, Appreciate

Bob Kuhn

really our focus, to you just COVID. on specifically the things away talked we quantitative net of for I couple to add that weren't customers, got been really certainly really I past. maybe new in to I a if it aspects mean, many exposure positive, in business. of Maybe Adam, moving about it's injectables Yes selling from the Pharma a its Qualitatively, the division Pharma. want think the

kits So, the speak certainly, map we the it led with investing in pandemics and that new in-home increases, acquisition and additional future only in in China. any then And it as but need mean, expansions the bullish to thought I just forbid on had there we allowed to solution on and right? a new testing while have outlook credible -- And technology materials even to in customer God we wasn't technology would that the solutions then that. in put going our think mentioned a for set. being things and It's also that's areas, obviously see past. so end to add like to we active push our -- us a just I to there, I our COVID-XX, decontamination division, But used us that. science credible do into continue, category flu not the on a we're NXX test material now for we capacity starting

customers qualitative new a So, and that been positive total. access injectables as innovation outlook well both giving us our to bullish in in net I as say, increasing pushing and would it's technology on our

Adam Josephson

Thanks a lot, Bob.

Operator

Your comes Stanley. from next Morgan question Neel Kumar from

Neel Kumar

morning. good Hi

Stephan Tanda

Hi Neel.

Neel Kumar

you're the seeing of with XXX on and just mix second impact about, specifically In Pharma, in you margins, you level? talk the generally mix impact business XQ and be on margins quarter? well to quarter impact during expect an a as inflation had mentioned negative line Pharma as from the Do in bps well Could the you where margins. inflation

Bob Kuhn

Yes.

the that for say care with bigger is piece, another fell mover category. the mean margin needle labor I regular to bit on that's the on going piece in really the be of our then the business health right, prescription injectables and on active being down both I material little used solutions consumer if that and the look coming up. also But being biggest. the and in So, in mix we there is QX, of would addition. side where I A at some the active packaging the specific was And probably it biggest And Pharma on resins resin.

Neel Kumar

That's of an active impression more Food packaging my in having is the a resins and was Is in and versus pass-through structure Got it. in Beverage. immediate Pharma And lag business? and helpful. that actually the different Beauty Home

Bob Kuhn

It is.

the -- some the large total there larger active have We reassessments of packaging side. contracts of some on based annual The in are contracts cost.

until into get be we at get passed of least passed won't or XXXX. some So, those fully on on

headwind slightly So, XXXX. to yes, it in of for there's the active see little on side then, different solutions And a where the a it But like looks contractual there. bit have looks we'll side. materials a

Neel Kumar

areas you And prescription helpful. call just expectations? as some talk then in allergies, Were in would for performed other there any quarter? besides how can coming areas of the other in That's below just Okay. about out you the

Stephan Tanda

base. destocking by I well, COPD I do so. lower normal. growing as continues double still digits, nervous area very than wouldn't small mean, but a the say to as And central system the allergic rhinitis, but off not is affected the

Neel Kumar

All right. Thank you.

Operator

Rizzo from from Jefferies. comes question next Your Daniel

Daniel Rizzo

year. this, Good Can I'm bit that? sorry CapEx and on you provide what's on just I just color there if remind morning. us this missed but spending up some a is

Bob Kuhn

Sure.

million the of to had mean, of I us beginning significant that at the led year three $XXX projects total we So, our that $XXX mentioned got range to million. we've pretty target

there. of and investments those that to make expansion underway begun is injectable capacity is one so, And that we've

cash $XX XXXX. about outlays got million expected we in So terms of in there

operations, our our expect on about And for year XXXX. about also cash going a around also spend $XX that's pharma. cash project But footprint yet. lot in And we focused have then, in to We facility come been existing this hasn't capabilities. France decorative $XX we started are in that there optimizing primarily we through in expect And outlays million. be there one again, for there's our there China our million

got in all, $XXX that's So, on all in that million you CapEx to about $XXX XXXX million million. $XX included

Daniel Rizzo

cost will I XXXX, similar a or will same mean, projects for next the And I be portion year here? the that of miss for what

Bob Kuhn

closer bleed Sure. as completion. Yes, getting XXXX, to these there'll into projects be over some are

expenditure. yet on not given XXXX cash capital guidance have We

Daniel Rizzo

terms. general in just No, right. Right,

Bob Kuhn

Yes.

Daniel Rizzo

Okay. much. Thank you very

Operator

from comes Hajde question Fargo. from Gabe next Wells Your

Gabe Hajde

of gentlemen. Good call. I hopped in morning, the also late kind

kind Have inflation guys you. on it is I little Just thinking One, bit of coming It ones two obviously, people centered opportunity? this they view for do hotter to more as shorten into that lag, maybe talk to year. of and provide guess, that about think taken this openers? briefly sounds what quicker quick that as And, I just to perhaps something like don't some most a come you but revisit necessary? up costs is resins, contracts input other came or than you were

Stephan Tanda

Yes.

answer So, is yes really, both. the on

and is these food historically, changed been contracts beverage now some faster the that noticed of the in You we've past. pass-through because than in it's much

the we're from changed way harder to On having contracts. benefiting a it's but those do, up, already little

absolutely implementing materials. not them. On the that increase general related are out all businesses at And putting those three have other to questions looking through raw we are with are inflationary gone

the - other pass-through And as business, solutions built of Pharma, In contracts that they material inflationary more than us other in part. renewals in not that raw hand, increase. were no long-term publicly not we're that pricing -- June there's reprice it's as general You've more you even on power most price related, get the in. clauses seen increases contracts, the often material But announce where a, there's for active no have bake are in, automatic but maintenance you of there do renewed.

in all So, clearly, the of more material are we're using tools. those the just tools raw and toolkit there than pass-through

Gabe Hajde

announce obviously, three from has heard Stephan. kind mean, equity a And you M&A us. had I you, guys private We've market. bit backed out of Thank to the that to then, transactions some chatter little

mean, you close getting to if I curious probably a still anything in you're that Just kind appreciate are feel like the some degree. you of anything But guess, pipeline? I always guys there's there? on? I active update

Stephan Tanda

our active Look, as M&A is Yes. been. always as activity active, it’s

firepower. well complement and look And at do that. the and as And you to so the growth certainly work continue geographic no our there some organic X.X, growth, you to have some. You M&A is our our change on at we win one. activities. we you deals innovation is leverage lose and end, dozen to as And a In

it press no active environment. until the goes to it's and But release it's there's out. an change done remains So that done not and

that. So I beyond speculate can't really

Gabe Hajde

you Thank Understood.

Operator

Your from Global comes from Securities. final Tiano question Salvator Seaport

Salvator Tiano

Thanks for the Hi. taking Yes. questions.

bit to understand lead the to us since I can for you you've on The QX, indications? you color example? order customers if when provide do on the provide have a when have. for business, of their especially want some first one, provided now they on by book, the their with when firm each do color And the initial And little quarter, orders you -- times you

Stephan Tanda

chain out enough times we the that don't did a And I year we some really up. want mentioned, are get that And supply would these still lead dislocations area. we happy you. to Beauty pumps are want we like times go them bit lead + than Street as that, our disruptions even there. except higher higher sanitizer reiterate can't hand we are written up in Yeah. I'm + Journal a to in detail, And of and than I see Wall tell were Last them the backed to Home rebound Home be. little pumps Beauty we be in to that in have or

think, I that. it at leave I would

Salvator Tiano

to have I'm regard QX, how and I'm you while strong the trying is, you're with confidence I visibility to here? guess, understand clarity in segments And you talking especially on what the about trying to Okay. understand, have other Pharma,

Stephan Tanda

Yeah.

to have volume drug any is tight, the levels. supply But care or little but prescription service demand. this we health the So not in space, supply capacity consumer the the area as we is getting imagine business can extent a the chain constrained in a from Certainly, in is business, the really you only are topic, Beauty. to the injectable where

Salvator Tiano

Yeah.

bit, you you your you And consumption of think recyclability to little done think to sight increase May. of sustainability, get little bit, products think I target. have your XX%, actions XX% taken? to to your much? I to move. a published what a procurement this in what I think year gears I PCR big of from your to products around is switching have the And understand have line pretty was do What XX% you just last your And I recyclability up Okay. for XXXX that went get want report year

Stephan Tanda

about do more two Yeah. A changing pump making mono-material like are Those with makeup the to just special lot Future has it also talked be the SimpliSqueeze recyclable. we to with of examples. products our valve

what offer. of course, is of the we aspect of terms one picture longer-term In

aspect buy. other what The actually is clients

one our certainly, contingent to continue rise. a mean is grade that topic. customers honest, why them help there. of you're to And PCR solutions that offerings probably right in to highly some of but commitment our we've thought. PCR available mean, we've is long-time, higher to had quite grade-approved are that's accelerate is expect we clients we much food of this recyclable. that as polypropylene content PCR we as didn't So I right, that clients I buy have certain our the availability fully buying of production. actually PureCycle But and/or a be And invested co-invested with

important an is that So stream.

to acceptability stream plastic availability, then of plastic look that monomers one mixed-use acceleration back to taking and closely recycling, very we re-polymerizing. other of the The the chemical -- is so

lot a here in orders activity they've there's allow the to ultimately public they going made hopefully the need to customers that will on, line with but fulfill also of commitments So make publicly in their end our their commitments.

Salvator Tiano

you Great. very much. Thank

Stephan Tanda

Thank you.

you Thanks the virtually. on think forward meeting to our interest. call. this your I for look And concludes road

Operator

you gentlemen, conference. today's does participation. conclude Ladies for your and this Thank

all You may disconnect. now

AptarGroup (ATR) 1 Aug 212021 Q2 Earnings call transcript