ATR - Earnings call transcript Q3 2021

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to Aptar's 2021 Third Quarter Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question and answer session. Introducing today's conference call is Mr. President, and Vice Senior DellaMaria, Investor Communications. Relations Matt go ahead, sir. Please

Matt DellaMaria

for Hello, us everyone, you. being and Thank thanks with today.

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

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

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

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

Stephan Tanda

hope I that for everyone. morning, you thank all well, Slide good and us Matt, joining X. doing you Starting and today. on are Thanks,

our were across reported X% markets technologies with As release, results These and you portfolio strong by for medicines and our lineup a ability that resumed to another and top with deep healthcare of When our positive look, were consumer earnings press saw in line our diverse made line guidance. growth product in we segments. elastomer possible solutions of previous our our injected posted a shared trajectory. growth components quarter, multiple our taking serve closer our strong

high for diagnostics especially be and demand, Our in active to solutions material continue probiotics.

the had quarter However, as significant we in did tooling previously, as year declined indicated that sales repeat. not we sales year-over-year custom a last

pulmonary particular, a we pandemic. drug to the million This capabilities honored to again sales The stay Activ-Film of fewer In U.S. and awarded technology visit our again the market film are business. consequently, proprietary our of of this expansion has high domestic This is Delta increase we activities, doctors at in our colds rhinitis, treatments. COVID-XX fight devices for the at drawdown nasal of against are cough And antigen for illnesses, prolonged socially Activ-Film during people of of meant $XX and Thankfully, common used The for government will unique keep we signs prescription seeing the rates visits, our and beginning technology, to masks in recovery a than lower importance role to continue certain of reflection tests. before. distance. rise, we that variant, the are people inventories has fewer doctor to in and some with has in validation that been caused some the the fund the and a wear the a and caused contract that COVID-XX vaccination this as our allergic effect, home, and regions cases consumption proprietary of our customers. Also part greater degree are production. delayed positive playing and important this to As this pulmonary at-home the have is social a quarter, declined. year demand restrict

referred rise what the recent incidents number in about even the of we anecdotally, However, the cold to a are as and is cold. reading of super U.K. in

greater about move unfortunately, it pre-pandemic a and So degree, are illnesses as up people common seems, returning. to

higher weak personal when from care prescription year market was pricing. double-digit market. growth reflecting rebound beverage period the our also quarter prior the beauty Beauty recovery, body business due achieved sales core and volumes We previously a and saw business, in ago. continued to continued lower mainly Food we in and also Beverage trends, margin its on saw and Pharma market benefit the of both cooking and Our The food a in demand market Home, particularly to the increased mix closure care dispensers for below we the and in increased hair a mentioned. and at-home year, care The compared to the to

Our related challenges. Beauty Food reflected effects and Home, as and and pass-through inflationary and chain supply well as accelerating Beverage the margins rapidly environment

We not fully We the to in rising did offset ground to up the quarter. quarter. cost on those pass but within fourth continue more make expect costs fully

As percentages. that technologies slides, end like the Pharma highlight few foundational a on our enable from to dollar-for-dollar our core our input recent has our I technologies passing customers our segment reminder, The of strength the compressing growth. a is markets to of Slide in increased our derived customers' business a of and all are starting would solutions next with across the by basis using few launches of leveraged X. through cost on shared effect margin

of our Our ensure nasal drug integrity. Hikma dry is Pharma's partner, Two and And plunger Point symptoms to of premium treat proven use devices. Device Nasal that launch prefillable naloxone the with our for drugs administered a Unidose disease, TYRVAYA with launched nasal market announced to only effective our eye that wide coating Kloxxado, a to syringe incorporates with that first Oyster has for overdoses. validating film channel Becton the biologics variety medicines. spray further Dickinson, the is of treats suspected FDA-approved technology an opioid with treatment, ETFE coast intended came nasally new

recently with is for sensitive and moisture patients more Our devices, conditions other drug for Gilead's active oral with which HIV. an products, was protects environmental probiotics, medication Biktarvy, food approved material technology, and medical which

our Shiseido's the penetrate features Beverage, solutions. In and cream airless is Activ-Vial. the is and personalized formulation new is NutraOne brand in its skin our and care skin capable leakage for In Elephant for our Unilever's FusionPKG transportation solution skincare solutions X, cheese. is to technology sports of North care Dove probioticX, flexible now In pouches Reveal to technology Kroger's featuring And called continues on addition, And lock in closure twist new with business dispensing our from Defy brand. a several with our on Food categories a squeezable comes Home, patented for in mineral-infused provides L'Oreal's oil. featured packaging electrolytes cartridge Bright packaging e-commerce America, water. our prevents there that Baby which Beauty during On booster Slide probiotic Drunk patient solutions China and closure also

Now turning X. to Slide

the On our Pharma we segment. in have capabilities key M&A added front,

we During agreement on closed Hengyu XX% for component the to manufacturing China injectable in acquire elastomeric quarter, plastic our adding and of Products, drug delivery. Weihai capabilities Medical

of leveraged including test and government, across dose market, other capacity, awarded portfolio solid a our care solutions and the public of Also, in completed platforms, investments for also threshold digital digital will Voluntis U.S. antigen by the in our result the further earlier. oral the protection we medicines, in contamination the fully creating diseases. a the to I company. food spoilage. in services which quarter, acquisition component also chronic elastomer therapeutic This the offer increasing be a Voluntis, stake We care our of and adding conditions health strips, we reached prevent tender to acquire broadening our expand where of to as to and health required digital the protecting technology, addition our contract previously for antimicrobial are Subsequent referenced technology food is multiple solutions capacity completed Activ-Film addition expands to and remaining the shares by which our across to majority announced we

to our We be completed expect at Auburn, XXXX. site in Alabama this early investment

claims sites turn come. European sustainability certified identity food our XX similar the Certification, over help with solutions On validate provide Bob our of plus Carbon customers to who can to now grade of ensures -- content enables of comments to sustainable With quarter that segments the I Sustainability our from or to feedstock sustainability will certified leading a certification that, and front, additional to provide quality conventional and manufacturing and will around at resin produced all results. system with resin. are Bob? ISCC International on certifications This traceability, third that it is recycled

Bob Kuhn

Stephan, and morning, you, Thank everyone. good

Turning Slide X. to

the As an mentioned, increased effects the on third had X%, quarter. currency Stephan in XXXX, increased sales effect reported acquisitions X% completed in translation of adjustments. rates, quarter quarter core briefly price and including immaterial sales, including the sales Recent approximately for the positive

to Turning X. Slide

$X.XX positive and the inflation Third quarter negative the million. earnings of translation and rates per $XX Adjusted totaled net million. impact were earnings currency approximately $XXX per adjusted of included share EBITDA effects share adjusted

Our were X% performance, effect and have summarizing cost And and $X.XX, up our net earnings year-to-date EBITDA sales been comparable X margin would quarter the and margin ago, without higher consolidated a approximately to rates. Briefly share impact including passing per compared price adjusted the XXX year on our X% results. segment our $X.XX achieved we third XX from exchange basis costs. compression adjusted points core Slides highlight higher to growth.

sales a tooling of segment's core margin third the to XX% partly was prior prior declined compared Adjusted the below X%, mix across custom sales EBITDA year. markets. approximately margin quarter Our to lower due end to the and due year's growth Pharma

at Core for X%. pharma decreased Looking market each the market. prescription sales

care increasing tooling not the material of Core we discussing rhinitis, cold and and during revenue for significant allergic season for As market the increased injectable consumption. from continued category. in continued and with active being demand vaccines. certain certain protective such to applications. with trend cough primarily XX% quite If It of that core our for have low eye custom our components health primarily noncritical the another revenue visits repeat. and solutions demand doctor sales entirely sales for strong decreased the that sectors increased business sales due resulted double-digit the customers components drawing revenues fewer year, levels science did by are down used year, on strong inventory strong with in growth of strong quarter consumer our increased levels due the isolate was X%, to to Core the would year to pulmonary patient is tooling we prior used care pharma medicines have XX%, due been diagnostic this the probiotic in prior as have impacted as treatments underlying and

passing have of of Home the this would from half impact through EBITDA sales of had included and Had cost negative was EBITDA the Approximately increased and increased XX% margin margin have million. net Turning in higher. we other to higher year volumes Beauty compression $X growth our margins segment. not XXX points segment's effect price came approximately Core adjusted prior been quarter. price increases. from third quarter costs, not basis inflation over and This and the effect we did half the the over the negative XX%

as sales XX%, each care as and contributing market. Core to sales increased facial higher solutions increased increased with for skincare personal at Core X% hand to the hair normalize. the Looking were sales market demand beauty market demand Beauty partially to household on care, to sales care and growth. our Home by fragrance the decreased the home continues cleaners. in sun cleansing to sanitizer the and markets to market care for body personal sales offset demand declines Core X% lower care

which to had sales third XX%. Food and quarter solid Turning another performance, Beverage for our the segment, increased core

In in addition accounted sales margin segment's in to double-digit the a of also we passing million. XX% XX% points adjusted had effect The compression contributed XXX through strong we cost quarter. adjustments negative and net was been basis not segment's of margin for higher Had effect negative higher. over EBITDA net growth, and have not EBITDA of included the costs, did pricing volume approximately price quarter growth the and margins impact would have approximately the this inflation $X

was to food the to sauce price sales sales. each demand price a to at increased XX% condiment at a adjustments tooling recovery due to with compared XX% Looking closure to third the market sales beverage year quarter market year. custom Approximately adjustments prior this and and consumers of cook tooling due continuing weak and market level very closures for beverage growth of increased in and to on-the-go increased of Core partial home. a core the the dispensing beverage sales XX% the demand high market, from

foreign inflation in Moving growth tempered where and currency expect segment. growth mix, translation outlook by disruptions. to chain we for Earnings Slide XX, which each our the be headwinds, core quarter, business sales will fourth summarizes supply business

be fourth and times, in continue continue share, restructuring range to invest $X.XX changes per in sheet our earnings with in to to ratio balance $X.XX the to we a estimated closing, the pursue which slightly expect adjusted XX% and of any quarter value In strong the shareholders leverage quarter continue dividends fair for acquisition than XX%. business, X.X to a of the fourth of us repurchases. tax return range have to share. unrealized value the The is to costs We per rate in strategic allows expenses, investments, less of and excluding equity form opportunities to

on approximately to quarter, shareholders, dividend year of earlier In we announced our the for $XX common during million we We preserve repurchases. authorized million the repurchases in $XX.X in this the shares approximately $XXX uncertainty. that pandemic cash height to to stock liquidity had had lifted the repurchased which was for totaled have million. addition of suspension share We payments common that place XXX,XXX currently

growth projects discussed in the we projects invest across this segments, X innovative to including year. accelerated continue We earlier our

facility chain being in state-of-the-art prestige new future state-of-the-art China, be facility our injected our division Pharma new device of housing shared beauty and expansion supply Our in for segments, support components the each that elastomer site France. a segment built the production our Suzhou, will medicines, to the of for in capacity

our projects, expenditures range we year this million. to a at of with move time, each begun previously to have the on are a $XXX for few provide $XXX closing to forecasted million At excited very are range comments capital Stephan Q&A. will we track these before of We and of

Stephan Tanda

Bob. the XX, supply you, In medicines are strategy our M&A the to and we Delta active of science components the Thank various meaningful and we to product numerous company our including elastomer pleased variant months, growth across we pandemic investments inflationary environment. with challenges while positioning our time, the current and of growth about solutions, chain been to closing, significant beyond capacity ability deliver on economic our in for succeed The our for results surge to material making pressures. and At injected over solid progress completion and on the the the the we future end growth, navigating and have produce represents making recent increasing support geographic applications. are ability summer progress excited transactions are markets same Slide

encouraged The fourth by in in asthma the The demand headwinds ago. market used a Pharma's recovery more the As core time, devices delaying levels the treatment level for expected segment for same devices system growth expect including high below to Bob prescription be with solid quarter business we albeit earnings, mentioned, recovery, the be across continue demand considerable pace on each At mix. shift of for temporary the at the nervous central treatments, for year and to allergy some which drug is expected, its mainly prior variant partial fourth we beauty quarter. near summer, a over a than of gradual in are Delta will year's expected to the are the projects. market previously due very

Our Food Beverage consumer up high saw levels of a + trends. a against be comparison tough to which ago, stocking will segment year

recover to We contain effects raise prices of the efficiencies will improve to and rising inflation. costs, continue

the a as proud supply is diligently secure team is and energy working rely procurement Aptar provide active every questions. and science to the adaptable to materials, millions of material resilient would and on the all delivery, chains people world solutions that, to that am day. go commitment around the tenuous we and consumer navigate workforce I supplies equipment their like With open need for Our now to call very the your challenging our of I move markets drug and single global company. forward. we dispensing

Operator

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

George Staphos

quarter? gave you commentary quarter. it's project will fourth had help we for you So know that you quarter that you I your do you, less checks, more will given think, Any and difficult the or be would market end of the us and phase first Do by will or destocking be when you pharma? be know be terrific. right to very terms in there the through this given fourth qualitative helpful think resolved through in first what I -- question now, channel some When

the consensus for second which was Obviously, over to a quarter, the $X. question I time, through at fourth the think you where had you're were and when is have any you supply I quarter. relatively a I The are what is there much like should it in guidance think is quarter little commenting, expected much in Anything quantify the of on, that inflation suffering headwinds of it close chain? Is helpful. be to terms in that chain on guidance just inflation? is is How Last would if else's ago? said where quarter lots there fourth so you everybody now way was is. supply below and range How somewhat would be

Stephan Tanda

down. break try -- to me let it George,

pharma that the of about quarter. a huge lump fourth quarter through. tell of some year. the lumpy think coming the we CMS to spillover see this hard related kind clearly see business our in customers fourth The quarter, the the and to business quarter we encouragement more from an this the be be and the line I the the is but to destocking, fourth the last more consumer with returning. it's We clearly, that that is consumer in cold in cannot see and health cough will you a But for coming give in quite prescription clearly that that is be a will quarter For fourth order scope and exact we is, orders an drag Unfortunately, on last for however, you picture, rhinitis And close there care. in people, up. pointing is of in some intake done We business. had year, will time. year-over-year feel, to with first What health That's allergic the effect. on care end -- we fourth quarter

to strength from continuing business strength. Now rest pharma go the of the is to

very in in and we business any capacity us that. don't continues we see injectable reduction investing Our and nicely, see to grow

numbers business. award active that confirming more will government, in of really But with Force, the nicely. overall, then wanting saw continue in. that. we growth -- mask and the Air good course, And is grow larger from in on nice fact, kick have And the material business U.S. Of year-on-year technology from comparisons we that the to the

a next overall, the pharma we you. on middle of right rhinitis by course So rebound quarter, in a can't the quarter. kind And for that already in clearly, it's have I the year, I the seems first signs. to Whether will horizon. But Allergic think of really its tell we're of sure, the state. overall, be end run see normal

on second And Bob Clearly, we've very pie give really supply situation, we more businesses. just which And the out and losses. bit detail. are that Now then leaned tremendously. before the a should you get top different disruptions on -- we world the variant have but question, friction some real. creates deficiencies and we everybody, labor has impact enormous huge done Two, a your delta in One, now. but very a into also chain accelerated everywhere our just pressures than humble hear of July, then I'll inflationary are that, window little the on U.S. have in have the

those our changed So have outlook it break and down. that can Bob I are think ones big the

Bob Kuhn

Sure.

So July. we drivers anticipated sitting inflation back from back in looking going than be in July, had what biggest when now we stronger coming two the to out, were are being

those to are $X.XX. $X.XX be closer about rough we then, headwind So were back We're and the now for very, it QX. numbers, to projecting a inflation in anticipating very

there. X.XX, EUR the dots July, rate we're right back exchange EUR assumptions So and be $X.XX at projecting about our And QX now to X.XX. we were of about then that's in

inflation give And my said going I had we EUR a just that to from the So was actually you net to on about X.XX we on back roundings coming QX, X.XX million. depending -- EUR about end remarks, think idea, from I've heard I headwinds the you expecting there, FX. rough to QX on were as earlier coming about And call, $X.X of got you've mentioned in be XX%. and to

truly didn't all even Europe back Asia the situation, shutdowns Stephan at energy know time. prices rolling about So weren't electricity it talking at in spiking fluid thinking We is as in mentioned. We July. about a in

guidance our influencing are that for well. things are as these QX So

Operator

Panjabi is Baird. with question from of Next the Ghansham line

Ghansham Panjabi

I with guess a second. Pharma sticking for

obviously, that last volume of my -- from for back implied a years, 'XX, rates? of of you're just question to terms to reopened historical versus last guidance will has reasons And level before volumes, is, year. sort cetera, cetera, world as XQ. mini using seeing terms version in growth also looks I three then inventory comparisons 'XX in of of And in XXXX et beauty, guess 'XX, of the some the terms XXXX? that understand you a if growth expect your double-digit of much sort about the So your is in cycle and a de-stock, standpoint. be but point headwind of we some I get will, at And inventory customer year transition be we we is through as level? How realignment, XXXX the et at should sort flat,

Stephan Tanda

bit say we’re very the encouraging Yes. targets. not the And have the staying it's much market one pipeline in and On all, Everything that we I discouraging published are Pharma, us. would, fact, first that. we of seeing in work behind our from is in

this with very experience big through think the in just business another optimism. the other now more lot a a other There Delta inventory is a all in summer. going as And later, clearly X lumpiness of a of not actions But we the pharma mentioned effect, with On pharma into investments, I and cautious. was experienced fundamentally, in talked there's flattish as fully, clearly, I back. the guided is the your we an taking is is rates. business those think the what nothing I And COVID some off its year the in with there back quarter there kind 'XX see pulled build picture starting in optimism of is think, we going industry CMS, the hit, XXXX to growth year lot do quarter. -- really we're in can year. I don't XXXX, and pharma. came We off is beauty, people that that assumption. adding R&D effects but -- disagree the But debate impact see We're first capabilities lot opposite. again broken I the so Quite to immediately lanes. See

as know, business about launches. beauty in how on the the is you the launches, So sell-through successful always is

go we the So the I in was optimism with up go, us New one biggest a Delta, Pack after year. it and are the term last that if dealing on had think Pack organized and Christmas in is next York But supply for Luxe disruptions. that's in with question operations of the set Monaco, is quote XX/XX week. I will industry our same in one how There's of chain chaos. optimism Europe, recently lot there a Luxe at lot their down everybody Clearly, largest clearly, the And that of customers, also.

shipments to with availability, own manufacturing issues, also deal and all having short So their that. labor

the a So manage discussed, up we those. growth is but all gearing able for industry we're year the holes that to with additional

Ghansham Panjabi

cash for free on to and with relative cetera. Bob, should flow. I for how year capital should just the fourth sort of I about working last reasons materially 'XX. flow year maybe below year? inventory and how mean, full year. we understand think But about free last some there's we question, second full cash think just And the adjustments, quarter et Obviously,

Bob Kuhn

our our going year. cash outstanding, working it our Ghansham. influencing spend side cash of thing base anything to is But we're of last going sales mean some that's like are to collectibility nailed Yes. No be capital it balances That's capital real seeing I issues picks the flow. I free we're seeing be compared business higher receivable and was change last I is or obvious, mean on I are that. year off you as mean than what no the we up, one on to right? down qualitatively, think reasons increasing.

increased side, because On an laws inventory disruptions the that's on the And that in, and chain supply the obviously, of coming the we've low come having to like inventory that in all out are on increase been things valuation. costs that, certain materials being dangerously resins talking and about components. like certain we've of and quarters in some colorants previous raw of in our almost stock the

we when replenish opportunity doing to have So we are the so. the supplies,

And material to a probably we're and we're the we carrying goods finished issues in than things raw on like that's that. of the past, in So side. then just little terms partially train slightly and of conservative due have higher kind and bit transportation

Operator

of Mark Wilde Markets. the with BMO Capital question next Your is from line

Mark Wilde

you world wondered part could of help Bob, I mentioned, you've pieces way issues issues but So, the global drag the that shipped us another. with in I'm that third one component quarter also quantifying from any of any from just historically, logistics. conscious to if you labor with the

Bob Kuhn

up of So I between then tell give XX% will inflation, really you chain really negative the I is it on can't the you net labor. numbers supply coming about making from and rest. hard the of breakout that total materials, and XX% is

to of a more, our is and global like goods of It's able et transportation to customers, issues of that's cetera. North things issue. doing ship We're finished the The many supply lack and North component Our chain be that. American to intercompany America, issue. shipments more more primarily are on a drivers cases, truck labor okay

more some are to dates producing really doing out make we're we're that how sure on to That's U.S. of sure much make shipment of cases, getting I labor. in we advance can time. what can't issue. that But is break So a the the specifically in customers products

Stephan Tanda

because Maybe some qualitative here it let me comments is really pervasive. add

XX% XX% to of end, the That facilities of we the large So having you results happens headcount to is understaffed often in our tune certain of are several in staffed. the at shifts. not what can't run

all just bonuses, day to also bonus wait they'd have pay we various have products. then of Obviously, not some first And sign-up we the for wages ship the we after can't got bonuses. You the retention across factories. often, And we out. retention and will

our environment. It's facing only customers Germany, It's that. But qualified far people. better. Europe that. very unprecedented us tough So not to it a is in by is pretty facing hire also it's

our but as are impact. the just customers demand. biggest truck said, in drivers up So the And Bob U.S., it's very far the And pick shipment. by -- can't high

environment So anytime hard market than to will we the automation ease is time, because to soon. logical not the more going It's look is up now. before. Over U.S. the labor just certainly pretty consequence

Mark Wilde

did Stephan, you just And not? to to quarter? or also lose an sales enough defer inability of or third deliver in any Because or produce the

Stephan Tanda

to -- look, are you are whole we it's that sell make done didn't -- is everybody have lines they more that flat a don't Clearly, schedule other not get we could up pick could tight. I work There more, their and very we Yes. it you out things labor. could lines because applicable, then if changed then is sell And more. sometimes, portfolio. the the some hard have we customer mean because where if

it's absorbed I not automatically two But that yes, more the Mathematically, a or quarter, general, be so in I'm think fourth be So for will so. percentage could more, sure. fraction.

Bob Kuhn

Yes. these I see would that was year. to started transportation add, Mark, that earlier when disruption, in we the

to did you that's We're So gone to And was some QX now QX. But roll didn't kind shipments earlier we've on what year, in ended think some go in up QX maybe we rolled going QX. that things as going now, I in supposed that have go what go. is in the were got ready that sitting got to have QX. to going QX into should of to have

certainly, and I say shipments think will into that And it's that fall here quarter-on-quarter QX. on massive don't So effect. we're sitting significant sit a wouldn't I

Stephan Tanda

environment, you you end and the thing That's and changed on there. kinetic in cost -- more with right. up highly end, time the The dynamic main

Operator

Deutsche from Bank. Next of line the question White is with Kyle

Kyle White

focus I wanted pharma. to on

and how segments. I Can outside more think you of in segment? level impact to inflation unique. chain bit you is of are been your pharma about in a And there? recognize a What environment, issues we seeing you price has headwind inflation just cost in supply talk resets regards able you to the other cover? price the inflationary that packaging your But contractual all to materials? is still are Or and there gave

Bob Kuhn

negative $X the pharma for net entire the around on So was million. the side, segment

or can't I XXX is is down material roughly that of others. would out the from break coming from margin. the say division parse basis than it really active -- majority what's I labor So about Again, the from can't probably on anything. I the what science our points

Stephan Tanda

also repricing not And a long-term mean where contracts, do I into much you and this more break you is something Yes. can on that we that we basis. industry month-to-month. is that. in pharma, do annual it's but more are an But

Kyle White

are on customers? chain? with And given And beauty, it impact shopping manage that consumers like do on this times gaining have tight in customers seems supply kind or then of you holiday you? what did How terms from do lead the looking of Are you to this seeing your sooner.

Stephan Tanda

are lead a I lot times Yes. longer. mean, obviously

the say, this Chinese moving the is for sure lot. a tell again. with easier saw is off will shops and they're rates ahead recovery the So China, is very XX/XX moved pooling the around on lot give in stepping color We hits. a so gas as differences. people country. and are must I'm up more New Europe gas Europe going actually not pulling you than taking actually can Delta that U.S. I And Year. the now well. Obviously, I us that. the of open, up of much have as going is well the vaccination foot then Christmas regional season

on the are we positive very overall, pickup. So

Operator

question Next Gabe Hajde line of from with Wells Fargo. is the

Gabe Hajde

for the XXX in I lag wanted basis about I and margin. recovery Bob, was clarify the points I in to, Stephan, EBITDA what home guess, heard beauty that

So it XX% us that puts to kind of range. close

again don't And things talked the before. then to issue savings So that $XX if a kind margin up kind about other this profile know you restructuring that that's that of get to of it quarter. had you could million timing I like And more there confirm if to guys looked jumped accomplish restore importantly, of that. or transformation there are some and you trying if are

Bob Kuhn

Sure.

So in yes, can which the million. I the was in negative, about in and basis terms home of confirm $X beauty point XXX net impact

because them Coast we pumps, into being our far East American demand North as of at year the the facilities. in as of had last our that, about existing East remember, and delay last for sanitizers shutting even time facility. larger-than-expected We year to and produced merging restructuring As costs, Coast had down talked operations you which the some were

the North of the plan, other their restructuring into -- coming that So majority everything we from American of is large moved now costs that and large facilities. finalization

Gabe Hajde

there that maybe for action be just right fixed you quantify savings might Could us cost what or with the

Bob Kuhn

I have a get don't I'd to and [indiscernible] know. check back to on

Gabe Hajde

right. All

I redeployment. of one about kind other thinking The capital was curious just

of the back about guys tree, bought How And of active guys is? context kind also sort decision You an guys of and quarter. your Capital $XX incentive kind comp. there you how versus the appreciating that kind kind with million shares in then Markets ROIC that M&A in share repo this acquisition? Day go of targets of the part of through environment put And making of out you it's

Stephan Tanda

be we general, disciplined. the be continues very and to mean, I to M&A in very Yes. continue environment active,

the So the there's on expects. step or end, in if deals business return of to capital with capital most is overall prices that expenditure predictable to look projects the we steady we side and seller simply of not very those step a But been a our the first are and pay XX%. throughout at, have lot capital invest on priority our away the back in return allocation, and projects clearly, north expenditure on the do and

XX years Clearly, share annually M&A the is have, that buybacks. I priority. before, about we of back we to reason won't paused the cautious that buybacks But seen to no dividend now at we've streak. comes more and of first that. preserve I as and pandemic the and are liquidity. Then, and not certainly, the And break the have of course, then it rising So share to think, we've height in market continue be

Operator

is Josephson of question from KeyBanc. the Adam line with next Your

Adam Josephson

the restructuring charges three restructuring you all realized frame in returns think that your or how would asking was -- quarters? restructuring the fair just say, Bob to you've should of just that actions see then or just future Stephan, years? on to that past, about, four not issue assume that relatedly, it much the is Gabe on over of expect And we the you of way

Bob Kuhn

the I'll So whatnot. of I it's that take the at of the restructuring Yes, first kind -- part say think safe we're of tail charges the to official end the and question.

So I true statement. think that's a

returns, actual capability, the we continue that the the seeing improve you're as I rightsize during business But I it's difficult of very multiyear to what times. a is the front mean, project. the end far some think As business,

And so in business, we've plants in our about and off-line X we've taken gotten investments more capital. efficient

you think situated done we're said to back, for if transformation. we very the a to and And come. the do we well rebound think take what So step I were really I going we've

and visible a and out everything we think return got I So COVID "Hey, with business to now to have Talk years there say, right a we'll discussion. different of a couple in of this. great me when normalizes the

Stephan Tanda

I position would malt from the business and quantitative, the it's our on qualitative if And add, customers, areas. share. that's high-growth to back know compare our I to market, also that's share been the Yes. pivoted compare on both in that's I feedback foot business just a gaining the foot I our front losing geographically would it's

work. that's for pretty important me, a of the all So consequence

done. never we're Now

think it. that the I with for So restructuring on Bob most agree part, but that's certainly charges, the

Adam Josephson

year, a unanticipated do you And you it problems expect point, from so in supply year how inflation, destocking, issues, aside, next will of years, stage, for for appreciate this many what's to Just the fruits we'll couple Bob. many comment the most it you? of to persist? happened of of year you do to any chain pharma been have variant made destocking labor. you I year et foresee same the this this Or be problems how Bob, How The next preliminary that compared been when part, foresee might year Do pharma unexpected the that there this do just do these so And clean business cetera. problems think much other these Stephan from conditions normalize see a persist? mean, a about up? and evolve thoughts Delta you year? expect I has to you of shaping next any given how just,

Stephan Tanda

When actually back Yes. moment, that Maybe came. I'm very can course, that after of Nobody pharma, COVID. year, Bob, it current predicted the of to resiliency, on add. also one growing including that Look, for to do the the I the COVID. the of with, wouldn't at as characterize look that stood forecast team the it the please we're were managed a related Aptar. through I let variants flat. This as you the of we that's or events? was and up -- And team, character problems. And of and you last And the again. issues then, last would has that Delta dealt me dealings, effect the of is team with hopefully, story. how the how and proud it to assume all year, but strengths probably, is

those handling So I think the very is company well. issues

me of Now if of year. there next have these again be we'll you none the rest tell that can issues year, will

there is with have to variant, it. delta another but -- deal will we So if

will with it. We be dealing

We have capable team. a

on pharma and on gave color think I expectations our I good beauty.

whatever now I -- have will echo we'll year. and So a if great and variant, good no you tell us think there be

Bob Kuhn

I planning, that's But to how Stephan back add, It's with mean did XXXX, 'XX. I look that it? do go way we only mean and that deal in in crisis. at mean, Adam, as right? it and would a I you through on-the-shelf just said, can Yes. 'XX I I something we the challenge, is And contingency XXXX,

We today. to do continue

for and we do the So the budget year. have forecast next

sheet it the where Of to Swan have Stephan place Black assumptions. another than said, as course, have wherewithal execute number invest expected we should, on do we plans And the willing well. of event ready if a balance But in various and on invest we're to better happen, side, that as based flip we things go to we also we right? contingency need also and the

manage contingency you we've So predict, can through It's the the in the really difficult I experience through only that's us mean this. flexibility these I think in think to way plans having kind that the place storms. and the muscle makes of weather and had is what I but

Operator

Angel is of from Castillo the with Your next Morgan question line Stanley.

Angel Castillo

looking of different on way to at is point a which pharma, it. deliver maybe to the pay Just

you customer they than that the -- they here fourth guess, getting think looking characterize, as historically? to had kind you into normal? of about closer Or levels destocking inventory continues you would would run As that, of quarter, leaner say to are I

Stephan Tanda

Yes.

uptake. rhinitis again, digit. 'XX we And rhinitis and growing cough. an is which and quarter of we quarter had The levels as We cough X at unaffected and destocking. X are have on in Pharma, division, nicely. destocking was active significant break with think Allergic this to X we and in materials So the double would clearly within in levels, prescription allergic I injected cold the the remember, -- X we be and that -- seems will the Cold from business normalizing that 'XX which were see line said us. behind be units

compared being we're our calling additional will that's lump we big So the business. the year in why last is still the out item we a prepared rest of had And not growing very in sales see that one mode prescriptions likely remarks a that repeat. pharma of CNS not that most to

Angel Castillo

the of is there in normal of it Yes. and bit restocking little are a do comps little -- a inventory? easier environment, guess about more of And improvement your -- we kind or a for then to if one. to that I'm kind of think we enough thinking prescription, has of just guess particularly of get next happened, Or quarters within of destocking have do have the I you they way the opportunity I the of as kind customers mean, to clarify, maybe couple is, kind about bit kind there? I that's my

Bob Kuhn

the environment. is that we've would out, of no schools pharmacies go the and thing please response call into completely kind would But crews really distribution speculate. channels one unconventional. and data. emergency also I what's very retail in Yes. there deep remember want also I in are a dive sold to through CNS I not The done

Angel Castillo

I just then you continue as labor that in have separate And we automation -- answer a U.S. potential, one of the to to investments a on issues guess, some the to mentioned

that? forward XXXX, have contemplated that would Or process of we to much thought one, look need -- you've these that? the would the as of on maybe done? the kind labor the is we further? I restructuring automate in kind of guess, kind of in be about that tight kind Or as to and around to would What kind what that to issues? So persistent invest mean restructuring How think continue of business we you

Stephan Tanda

No, call it I wouldn't restructuring.

think of we the I to do productivity you to case. look create economic return is this at headcount we every investment able investment, be business going When investments. you're what the is just with do normal the savings the when

Bob Kuhn

mean Yes. and transformation, be a G&A. final I to $XX to in specifically our part the automate packaging and and the shipping automation little over That I for annual automating I we about of of ways our like increases, invested efficient. anything we'll and think and things look to handling restructuring kind as more continue million that. And for material and talked mean technology improves that's ranges factories. from in that we

Operator

line question the from Jeffries. Daniel with is of Rizzo next Your

Daniel Rizzo

in mentioned or comparison pretty was couple tough in again, if quarters? QX. wondering be, the tough of You it's I to next tooling going over QX the being

Bob Kuhn

were you if or slightly always I in Daniel, is, us actually actually at look mean, overall, up we So to company-wide markets. it tooling more the total It were one for impacts tooling.

XX% drag of happened beverage that on to this pharma But mentioned was about negative be a for time. pharma growth. So remember, we've accounting their

now things positive a is difficult forecast. of there. was that's one it -- So and those again, to Right tooling

any production tooling You're not going online. significant year. consolidated expecting on level when is to prior with differences come the not right now, But sure a we're exactly

Stephan Tanda

And material that, can to active so in we already solutions, coming. specific preannounced that speak, you the Bob, -- one maybe, was

Bob Kuhn

Yes.

of we on in due So to and systems. Active an were flash monitoring pharma up Solutions third Material percent sale XX-some exceptional quarter, in the last success that really glucose tooling year, was the customers

and don't either. their of every don't always certainly, product But for events happen was this a year the of every us forward. types those kind quarter, that So of range obviously evolution fueling going positive is happen next

Daniel Rizzo

wondering mean, and materials, going respect what look or your continue polypropylene like are expecting polyethylene, your plateau And things to you forward? chain I rise you catch-up to and just that. to then it of just are cost if here was aside, supply labor at with I a and particularly expectations kind plan like or your guidance, what? raw

Stephan Tanda

to North expected it's slightly as and it but much at decrease Europe, we saw still what America now in higher So be of last than will year. in rates

of higher comparison to quarters. So the yes, at to prior still kind over abate year-on-year going seen rate last than potentially but year. We're we've it is several a and -- significantly little subside will the it's not be bit, the increasing expecting

Operator

is Seaport the of with line Our next Salvator question from Research. Tiano

Salvator Tiano

lot, saw in going much albeit first to the of decline you mix on me if back in a can tooling. impact active quarter year. profitability? the solutions bit and worse And if was on business what provide and from what sales third pharma the It the didn't little earnings of on more tooling your we become put of decline you firstly, I wonder a happened? details this the If year-on-year can why to So like kind finer half accelerated print seems the a the in the

Bob Kuhn

Okay.

around talking are improve. on We decongesting destocking Consumer allergic the is mix previous did destocking we've the really, factor the So COPD-type to around in we the RX products. I and care cold. been Salvator, earlier now as relates what mean And that's And Health division. our primarily and starting quarters. in that see to products a in about year most that rhinitis the cough

asthma, has Stephan little on allergic recovery bit of and to the in a short Device and We horizon. rhinitis sales about comparison term season talked is compared are COPD mentioned, cold tough back. As flu increasing a and CNS.

don't or can't it specifically. about make year Material in million but Solutions third Active lot a total $XX.X tooling of tooling for in materials, revenue We I last was active on quarter. As money general, sales, in the comment

sales, future positive from going that's standpoint with is the that's as I again, customers. So to from mentioned, on product us focused which that we're really our a lead to what

Stephan Tanda

Salvator, hopefully be out let outlook. to So assume me just

have different profitability. units. pharma X reporting of So again, consists as they business our reminder, And segment a

Then we which and when nervous comes disclose to of health allergic material but profitability. this directional that's And everything care. consumer in less Although injectable profitable ophthalmology. drug are the the And big is active cold, pulmonary course, there injectable the prescription profitable prescription. have being one treatment, comes business. thermal what company. Slightly engine rinse, a nasal still That's give it overall units terms context drug, guidance. with the mix and then central of The COPD and treatment, nice we and comes cough around nice in the year. business, material most effect, out rhinitis system active lot is played it, a profitable, a in has declines, prescription solutions don't growth Then you the and faster really grows and

Salvator Tiano

they Voluntis operating bit question, more on acquisitions. Especially recent loss, an have And think you if of detail a the provide financial the I other X the correctly. can impact I the if remember segment, do

earnings from the on your impact about think we should how this? So

Stephan Tanda

Yes. numbers. digital the give of some is in in can therapies run. basically a companions Bob digital But into the general, R&D devices and all Voluntis to investment our long

in So next-generation this investment an the really platform. is

threshold minorities is. been a We and this have to public digital our Thankfully, adding it we'll the but capability. has to Voluntis, crossed be you as therapy we've company, know, is squeeze still able out,

in But used rising business. is boots that for this effort injectable to a over important from a in can add. revenues the that their pivot for I You on if Hengyu, paid growth find still Then the of part think we of Weihai is us, very China Significant but ground filings, as public significant getting the be medicine R&D by to segment. world. the

the of Day. about that to In world, general, at basis of is that us term good. is on long record, injectable with M&A and expand think, sustainable. Weihai that -- a nicely serve allow And will we not this far, in the is imports So overall mainly our that medicine, Markets Capital We from this very on with Europe part track business I a exclusively building talked profitable Hengyu.

business the X very venture very investments returning which but course, active well FusionPKG, science are as Of larger nicely. ones the CSP, well, became as our also material doing

give Bob, some you impact. numeric maybe, can So

Bob Kuhn

Sure. Sure.

the QX, on dilutive, of the to And in and going in digital from work then move as what dilutive typical that So $X.XX you looking side. the but probably and acquisition Voluntis give of coming be accounting through inventory purchase the it's at $X.XX really can't a we to And improving and I be Hengyu to like out will pretty primarily the some beyond that's you the got kind investment. $X.XX XXXX, it roughly XXXX. is, as write-ups health break

Operator

Your of is the question with from Justin Blair. line next Ullman William

Justin Ullman

ones two for Just You and quick cold flu I the me. your cold in upcoming your potential mentioned for that's expectation super season, into what's guidance? Europe. baked there's guess,

mean So still norms you're or I something to that maybe similar guess, does expecting something pre-pandemic lower?

Stephan Tanda

Yes.

have of couple earnings announcement. several last the of days, think their I customers pharma our had

don't give Europe, it business. Clearly, the evidence going our season, as Healthcare think anecdotal from like I statement or reading we their above an customers to whether good be optimism Consumer a are speculate. flu normal. looks colleagues you. I as it's with in quarter going CDC, So And fourth can into in probably is is it's want I normal our answer maybe clearly our the to

Justin Ullman

for me. just one And another

have shortage talked continue place to particularly inflation navigate down measures of your I prices guess But to other supply labor this You customers. cost for the environment I'm another about and and curious, chain just do what in pass you to and year? your raising continuing

Stephan Tanda

I with pricing. better pricing, that. are at Yes, this change how is I that. beverage a raising and getting we vigilant in mean that really pricing, cost. pass is we food recognize on often structurally delay we're it our Three business they words, prices, to higher very want ensuring do and

passed on. have it lot we So because be tough, the while price honest, everywhere. is And increase general increases, receptive this is them more but environment time customers to our inflationary just a every in

walk So do nobody what, we to one. say, we guess when and is there got surprised in another

Bob Kuhn

of see right just that mean, a I we I multinationals. I our mean, historically, through higher lot serve pass would look out And at accepting you us add, of But Yes. don't customers just reports the you if are now, consumers cost.

private also a lot brands. label the serve We of

that's so on. keeping eye something an that And we'll out be

products, to labels branded what we're we're to see a typically, if to selling could any that us, selling in mean from You But to multinational. around that less point the the business get doesn't save roughly a dispensing, use. few And private the consumers ease pennies. shift want with prices of for sophistication

Stephan Tanda

the attract in at course, And a that you It's and work. not a other while. just marketplace expect tools not And lot in so the got fine all all is and well doing we on. we're labor. around that I I'm us savings, retain mean, to the automation that But it's marketplace the use been to are for of harder the than right productivity would work do

Operator

We follow-up question the of Bank have from George of line with a Staphos America.

Krishna Tula

partnership if This remind could us PureCycle just there. George the go of quickly you charge is related on background Tula and of Krishna behalf was Staphos the through to here. I on wondering the just

Bob Kuhn

Yes.

we went the that public that an was quarter. or in a SPAC made investment PureCycle so ago So via second year vehicle

saw gain unrealized $X unrealized the million. the in public. had about, of went And still that for million, basis, I huge it write-up write-down. $XX $XX net-net as $X and we about on But up the of initially So about million a think, was we're We quarter now a they investment. year, million an

Stephan Tanda

what reminder, a use as to more the few polypropylene. of recycled have technology. our our have just food be of polypropylene need polymer medicines, large developed is with with And content, one treatments. PureCycle contact more that that with customers the recycled a And in And so food, is to as beauty need and in we is Yes. world can is they the grade, part

investments of really the clearly, was potential. seeing including them have of but is in sees same plans, the get to market the customers of still the marketplace us -- seen ground, that potential, off the for to this and large-scale capital other build have some And that our They strategic is same day. make investors one thankfully, technology help So the light the this people sure measuring that now.

going money of to putting X But So it's that our leading investments into kind of are just we example to All Again, make the appreciate stage that, quarter forward be With look the early the natural it's renovation those it four road. all to and in as talking sure all example right. we trends things. interim do on available we wrap that to you need we're work questions. at marketplace. into without up. the a of I to technology the we out, good themselves confidence look we with these the

Operator

today's call. And conference this concludes

You may now disconnect.

AptarGroup (ATR) 29 Oct 212021 Q3 Earnings call transcript