ATR - Earnings call transcript Q4 2021

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to Aptar's 2021 Fourth Quarter Conference Call. [Operator Instructions] Introducing today's conference call is Mr. Matt DellaMaria, Senior Vice President, Investor Relations and Communications. Please go ahead.

Matt DellaMaria

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

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

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

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Stephan Tanda

appreciate We you well. everyone. morning, joining you're today hope good and Matt, and doing that us Thanks,

Before year I XXXX, recognize throughout teams for a like challenges pandemic. all take of yet our to presented we close the of overcoming another moment to would

resilient across to We uncertainties, supply are our labor and chain despite issues many shortages. rising we the our pandemic inflation, and promises serve, consumers patients, markets in delivering on customers

We cost as navigate sites we extraordinary operating have this period. increases inflationary we passing successfully kept our are manufacturing on and

our to all top teams Turning commitment to for our instrumental the Slide the us now segments line in enabling X, of was across of deliver growth full year.

basis, increased X%. sales core reported total comparative and increased sales a Our on XX%,

our the health improvement target for part the the growth. and destocking range. our that resulted demand the Pharma in with care has segment line active year year within material in pandemic-related long-term the impacted line core as recovery the to in Despite temporarily by industry, components latter consumer in steady decline Our the medicines finished of the year drug been margins top for the sales market elastomeric in top and the the prescription for solutions strong market positive as injected well

the we competitive Pharma took our further important and position support growth. XX steps strengthen long-term our segment, to past the months, During of

premium began awarded million coated investing to we produce been and capacity grant components, in to support French our €XX plans elastomeric First, from the government we to have expand expansion component Europe. our a

acquired we and Chinese of a in largest plastic the pharmaceutical components manufacturer fast and elastomeric Medical Hengyu the leading of Products, serving Second, second world. Weihai XX% growing, market

Given for the ongoing plan adding growing since are components to to bringing Market we another U.S expansion our €XXX Europe for pandemic pipelines medication, capital €XX the development this million last accelerated to plan and our for our investment capacity injectable new million. total Day, in and the increase Capital

gaining the proved Third, solid of Active Material we example, have been Solutions, traction integrity in for successful, protecting tests. COVID-XX have at-home with certain our very which

addition we business a lastly, pioneer area expand expand in €XX In for capacity the capacity all nicely, to awarded of new of U.S and digital Asia. This investment government pharma an laying and home the foundation our acquisition innovative we a in investment of one offer footprint addition operations to to segments customers current investments manufacturing Mumbai facility have funding in state-of-the-art all half the of capabilities XXXX, to a than in under for were therapeutics. future ground broke ground beauty roof. growing capacity, includes for to of further solutions we production this the made U.S and machinery about molding Fourth, our dedicated Asia. pharma our including Suzhou, million on growth Chinese collaborate the with our with completion segment. more to and market. the personal optimistic the Suzhou new our market, digital in the optimize attractive Earlier on In three growing And with broke our in product increase the existing in more Activ-Film and in facility a Southeast year, our we Voluntis, health for skincare to in solution skincare solutions to technology. from YAT, local remain and online care contract Pharma automation influenza in to China we the are our begun and that bring future pharma company We the our care we

the The continue yet innovation. insights to With and the volume and remain behind margin chain develop labor level confident containment especially supply lower not and XXXX FusionPKG and increasing acquisition. dramatic market target launches, to We completed chain in margin integrated local lead in supply Beauty profitability still restructuring date. focus target our despite range has from the on product COVID U.S. to the course, more achieved are global due We cost to in lagging times faster and footprint of disruptions range reaching our this issues SG&A optimization the business variants, a due successive leveraging

Food grow demand segment Beverage diligently Our of strong the recovering margins in significant resin have the Beverage by the of food the pass-through and The market. compressed the managing. impact the + we were market cost to demand year year with been from end continue towards this

and for inclusive towards more sustainability ever our company. the front, are sustainable, in On becoming we efforts recognized diverse countries many an

also named XX Most coveted Forbes global Female-Friendly Green conclude rating Global on sustainability condition. 'XX for To and a a top achievements environment, and engagement We for both Platinum us and list CDP, environmental Aptar remains sheet our supplier been sustainable Companies that Growth excellent has top Responsible in EcoVadis in list Company by and leader our in XXXX. impact balance on of XXXX Forbes Newsweek's highlights, just are ethics disclosure. company awarded X% number leader areas XXXX the human our labor XX one the has rights, and performance recently America's

that $XXX this consecutive repurchase cash happy to and XXXX, We including capital shares, dividends. strategic in XXth with increased M&A time. in paying annual in we repurchase report shareholders. be repurchases opportunities, €XX deploy returned active expect returns. also enhance year to And to to to in around continue opportunities, invest XXX,XXX shareholder are market our dividends share we well-positioned of our over growth while further we We were in to million I'm over the program deploying was to million

our more briefly to quarter results will before will comment on I go over Now, shown who as on Bob, bit it four Slide into X, a turning detail.

of line XX%. it you from As strong increase of reflects we our growth press growth as saw contributions with sales in core reported particularly our release, was notable This segments. strong top of each X%

consumer to and care demand drug in vaccines cold for solutions to more continued and strong our and they solutions cough and health resulted a demand normal for devices delivery segment returned for our in Pharma see increased season Our dispensing market. injected other medicines other the nasal

We pleased our collectively we're has for probiotic. sales a strips COVID-XX diagnostic materials diabetes of XX% with Activ-Film vials increase the core in kits. in very test for Group group the have Materials across a And supplying Active protective resulted been in including variety and applications, at-home active And technology fourth this performance quarter. year-over-year our test of antigen for

to for allergic system demand for COPD pleased rhinitis have levels with are QX. returned and on pulmonary year's used treat to nasal prior asthma see par the to also and condition, systems our We

to the treatments. to used mentioned, prior central previously devices quarter comparison fourth as inflector significant a nervous included year and system order the However, outsized

our prior to fourth within range Pharma margin comparable quarter. year target remains and the Our was

quarter. Pricing Beauty with and beauty and generated demand to Our skincare hair rebounding care for segment sales a for the solutions contributed strong body the + increased and of Home care core sales demand growth products. for the the majority fragrance in for market growth dispensers

+ The XX% driven reported adjustments dispensing strong Beverage remaining Turning to growth other was price of growth by in the Beverage. demand double-digit core Food for increases. growth to with sales coming This markets. segment closures cost both than rather Food the from + pass-through approximately

continue to + pass-through Home and challenges. Our inflationary as the as reflect environment Beverage effect and related + chain extraordinary Food supply Beauty well margins

prescription to of HeroTracker like a has announced device, We I allowing Hydrochloride our form using U.S. treatment generic our a Now, Unidose launch announced and Glenmark's for dose their in a new Spray. also Unidose Naloxone therapy device, usage business device nasal segment of using Ryaltris technologies smart recently device. Unidose would recent and next the the launches, rhinitis our formerly few nasal the Perrigo's generic digital in our application X. the pharmaceutical improve which launch few device. the starting our highlight ultimately Slide the slides, allergic into custom a approval headaches outcome. announced promote nasal the the is with on spray with to track of patients our spray a Sense, with drug of Hydrochloride leading generic Sandoz version of Naloxone Padagis, for a first migraine Pharma version and to U.S. solution nasal of nasal adherence treatment of connected a meter recently using called for inhaler their prescribed FDA standard Nasal new by transforms the multidose received generic Teva

of Activ-Film self-sealing a X, the major very custom Beauty antigen COVID-XX enhancing Unilever retail our capabilities helping the with skincare facial valves This inverter chosen a and brand, experience by are digital by the Finally, breakthrough On announce category flow creates the closure through consumer execution key also a inverted for of InBios' our example pump fully-recyclable leading of to that were control clients in how a diagnostic to Dermalogica's monomaterial new we through is in kit. launch conversion value at-home our markets pleased innovation company. their we Home, our CPG by And enhances world. Aptar leading around Slide perfect cleansers. for is test technology that the was a disciplined drive + selected global of produce package

With FusionPKG brand and bi-injected a Food do results. powdered our children turn will cosmetology. & over quarter with will who Chinese Sauces for featuring for system. In America, products for Our comments Junlebao two the features flow Beverage, Sabor of closure of providing our in nutrition fourth our new control the line to dispensing now milk Condiments launch Bob? I the new on additional brands in Chef, its BeautyLab nine + Bob, Latin closures it provide market, is that, is lightweight beauty

Bob Kuhn

Thank good you, Stephan, everyone. and morning,

X% in core Slide X, I our of the summarize is price demand About you reported to on which results and solidly across remainder neutralize and broad-based see coming by currencies and the growth strong we detail Just of our from markets, minute. the grew from will can when a XX%. acquisitions, we sales the majority quarter,

we negative the million. on inflation negative translation shown impact $XXX and per rates currency effects of Adjusted X, earnings of Slide As achieved of EBITDA $X.XX $X net million. approximately share and adjusted earnings included of adjusted the

compression margin been roughly points margin from the EBITDA effect, the of adjusted basis would passing without cost on consolidated the XX% costs. Our price higher have impact higher approximately net including XXX

to some segment. the of by details Turning

Our due margin. core points increased fourth the Pharma XXX approximately X% Pharma's which X%, approximately on including of adjusted XX%, prior quarter the was effect segment's with sales to price. price was headwind margins pass-through basis EBITDA with margin, even about year's from coming

at the to decreased in Pharma prescription sales sales core market, market Looking each X%.

trends decline led fourth decongestants a quarter primarily when for categories cold with used Although sales consumer some in saw solid It COVID-XX pulmonary difficult to again other net nervous increased with of we demand XX%, sales solutions nasal The with used had and for this we due and and a the of to treatments. strong the treatments, our was a to was for order influenza. we continued demand components cough quarter solutions health for market. allergy system sales vaccines XX%, care a across core for increasing and experienced market devices vaccines level for nasal symptoms. year the by variety comparison used asthma was significant to Core and to medicines for for growth and quarterly devices treat injectable central positive prescription prior a

enhances Our a by increasing active with technology COVID-XX had market material of of sales led solutions very our science that integrity test the kits. strong variety core strong Activ-Film applications quarter in-home demand XX%, a a across

increased compression even sales growth the the from labor fourth And over including coming prior EBITDA the in $X not had Turning X% to the of the and $X passing and inflation margin margin through XX% chain these margins effect basis have approximately shortage quarter, was EBITDA million This segment's prior costs, million adjusted included we Core net disruptions approximately year would effect quarter. net price of supply higher. significant U.S. of Had negatives, been XXX majority or approximately the year points negative X% initiatives. and Beauty + our the with Home from the higher in segment. with the

increased at for Beauty to price and and the sales market due core solutions demand personal our increased sales XX% each Core + prestige hair Beauty our to skincare. market, solutions and and to Looking surface adjustments care the sales due increased adjustments sun fragrance facial dispensing the care market. Home for to home price to XX% on X% to Core decreased increased demand for market solutions. care care demand for supplied market for cleaners air care this lower and

which our in quarter Beverage to segment, grew core sales Food + strongly Turning with rising the XX%.

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

the market, the a and Looking and water dairy Food sales led closures accounts highlight sales adjustments, from solutions each XX% and of higher XX% Beverage result Core an bottled to compared costs. the primarily was by condiments drinks. year to year, X products. year, approximately price increase XX $XXX capital a due totaled including flow and of market dispensers ago, of food were million rebound at down sales annual growth Slides sales core and exchange sale the growth and increased core our growth prior our in receivable of operations on the million comparable variety price comparisons due closure of $X.XX, X% to rates. to to due a applications, X% market performance, adjusted to easier our Cash we across adjustments increased in including per for working up price $X.XX our effects that and inventory earnings for share achieved functional from continued for and increases $XXX the

which to the continue. some Moving are expecting first defined quarter momentum Slide to we saw quarter for four summarizes XX, is of covered in the we our outlook

the such everyone remind face have expected want quarter supply near-term, materials will raw levels and trend to per metals. ongoing While as recent headwind others from I likely are we $X.XX to from in our some trend per while lower are chain today's inflation of pressures approximately higher, as such we Voluntis. expected share to resin, that acquisition

year. We are also anticipating that currencies will remain a headwind compared to the prior

For X.XX. for example, first first was for the quarter assuming euro coming rate year is the rate. guidance euro X.XX our the quarter a And -- prior quarter

to that have that move $X.XX for We roughly rate, share the roughly $X.XX full the said year. in for every equates euro per

investments adjusted considered, earnings a So, are quarter per earnings prior coming restructuring approximately $X.XX first expenses, for excluding quarter the range range we currency on the of looking to be equity fair of drag the and All share, to rate was quarter, compared value year. things in to changes at estimated XX%. expect to per any our we for share. $X.XX The $X unrealized tax first the acquisition costs XX% in the

Slide depreciation on and amortization to for shown $XXX our estimate million. XXXX As is million $XXX XX,

have grants roof. optimize excellence area have return and and medications to create net center dividends shared Suzhou, XXXX Suzhou with continue strategic million capital $XX that footprint a includes range continue growth for one million ratio to new and continue of our previously. we brings projects and to facility opportunities invest under our our net million highly increase allows China government sheet pursue repurchases. existing components us U.S. of France operations net for In in of all which $XXX to shareholders government beauty balance the for for our $XX $XXX France million important And the that a of X.XX%, our projects which the in to footprint in and market. our strong optimize in in injectable will business, in will our million for of Our capacity $XXX $XX valued three in expenditures, growth to include form our we to the grants, to value the leverage a capabilities for be closing, the of decorative These million,

to dividend approximately shareholders the repurchased in addition we quarter, our totaled which XXX,XXX $XX million. cash In for of to in payments stock common quarter fourth million shares the $XX.X

we $XX.X common this million the repurchases Q&A. $XXX months approximately authorized Stephan few stock million, common repurchased leaving for the XX of will closing fourth shares quarter. During of At for be before comments XXXX, the stock at end time, move providing of approximately a we to XXX,XXX

Stephan Tanda

you, Thank COVID-XX Aptar operations pandemic labor economic the impact pressures. solid end environment. our for with and pleased various closing, results chain our surge from margins and is on while continued the supply XX, we the current of growth are ability and beyond deliver and considerable significant Bob. to variants, improved Slide In markets to navigating well-positioned and challenges inflationary

out to seek market new to continue contribute success will era. strategic that opportunities the and will We partnerships in our

of should Solutions, our tough a well, remain the central as tests face growth is Pharma expected the accounts, Pharma we each but COVID-XX ahead especially the in nervous our allergy to destocking division Active with anticipate growth expected at-home in report quarter, to the near-term. system to division. across appears in Other solid strong first for demand comparison still may the segment we in The prescription ending most growth category. where be Material to areas do Looking continue to category, segment, are in antigen

Our volumes. to not returned have yet although recover, business we continues beauty XXXX to

of our cases, some and Other the in primarily chain + recovery. and to COVID-XX disruptions + variants continue in U.S. expected near-term, recoveries of is in customers Beverage. impacting business Our also Beauty impacting the signs may certain pace supply in both are the Food Home Beverage and business these seeing impact

not the the even However, optimistic effect if improve that In prices it we is of to input offset momentum and increase plan a continue to will bumpy. post-pandemic will towards parallel, delayed costs, to we are contain costs. efficiencies recovery be the general bit rising

Our products high-growth reputation continue the we every build future. and have areas for of upon strong are we that people built single in in to the hands will millions of a day,

continue the shaped And sustainability. in customers of innovation leader who product has dispensing Our leader time, a same us we recognize a becoming delivery at and advance drug as proactive consumer our true the industries. mission to

clear a questions. fourth of have in very the have very XXXX. advantage. our competitive I businesses proud Our year that and the your that, people I'm call of for up With all accomplished to full open like would quarter

Operator

[Operator our please today of go Merrill be We first George, Lynch. America Instructions] George question of Staphos will taking from Bank ahead.

George Staphos

much. My details, two Good thanks Good day, the and questions. morning, very everybody. for guys. Thanks

Stephan Tanda

Good morning, George.

George Staphos

second First on on Food then And or + good and + good Beauty then the Beverage Home. -- morning day.

For so expected was we was growth recognizing Food great EBIT that + where the it. growth growth posted Beverage, that -- to a the core not in pass-through. lot would operating was you it have relative The leverage see core that to of

point. reopening, that we XX% + about think no be you if you operation I recognizing a Thank give there? and there? Beauty Was have where in Beauty you Can And when we in do + have more expected earnings the do cost points to appreciate do a leverage were you've you. on bit that's it? down focus what guarantees For there expect on to margin growth quarter-on-quarter. targeted? additional and trend the detail Home, terms back about you you Can if life, Home a had of are and the we SG&A line, talked going some bit reduction talk the was us

Bob Kuhn

can I … take morning. Good

Stephan Tanda

the one. on [indiscernible] Bob first

Bob Kuhn

Okay.

the the then of on Food so So, I take have + increase XX% increase about we the or one, Beverage Stephan. the -- will volume. first growth, yes from George, coming XX%

net side have big -- of + it. pass-through, growth by about curve purely on million pass-through right, really versus it's $X we cost Beverage behind So, on the the just one-for-one are -- on take that's the impact XX% estimate Plus, increase. a if the Food being we that that we a you

items, of net the well points. XXX are basis we two pass-through million, one-for-one those the as is So as negative $X estimating about

would margin we that closer neutralizing range. for to XX% So, XX.X%, that, be

Stephan Tanda

the Yes. Then volume recovery -- + look, the and on is clearly, Delta Omicron, with Beauty delayed. certainly Home,

of recovery. would be approach any still that. levels. XXXX this low-idle this We continue and volume We that below would initially we are volume we other And for that wait recession, take mode like things cognizance in the

think I recoveries given -- signal to the here, still more volume [indiscernible] trying are are on uneven. side, that cost what the we we

a with encouraged view, around, shift China. we Europe are in volume from Now, the actually the of point recoveries geographic in quite and

Brazil, declining. in Masstige not very net-net the a business And Latin be. are want America the moment. we which to the And place good is our important where While at volumes not clearly is them means is that for fragrance

the it And of The the course, outsized -- of other word. for Home. and in hits that’s Beauty call is, factor, wreck big supply and manner electrical why beta out + we plants America train that chain -- labor North Midwestern an outsized

to need behind things those we So, us. have

give and North significant certain, what through So, we range work us, to our through remain chain are cannot it is for our issues and at work but one target with labor date but see the and next America us the least not work suppliers as supply remain through. committed will two customers, these to which require get I as and significant issues, quarters to the we only want a to you we

Europe On -- the reopening, least see between the as travel we picture you we U.S. hand, travel expect resume other and to brightening. demand The the mentioned, at

range. working those issues, remain to So, the committed through we target

George Staphos

I'll turn and over. And Stephan, of a thank it you for just point that. Bob, clarification,

+ So, I it being paper a might year? you you of or out Home + efforts guys. on as turn additional Thank of had It's And just this you, mentioned behind there. on hiccups expected, as will pencil you to next reduction you give terms over. cost part little the be get do curve. Beauty were year in able Beverage of no what question, think us can my operations in Food Stephan,

Stephan Tanda

Yes.

that point will We there discussion. be part this, and recognize at are did Jim focused be parties, discussed are the -- the we need it and of on not where other that clearly Europe to

George Staphos

you. Thank

Operator

Thank you, George.

taking Panjabi of be will go next question our Robert We Baird. Ghansham from Please ahead.

Matthew Krueger

maybe, Matt taking Thanks some Hi. I sitting my sequential volume guess, with there? in details you then particular for Krueger kind progression the expecting with hoping start prescription for Ghansham. a Beauty we for on questions. emphasis could and on for the in I like wanted the on that Good given each what Pharma outlook business, some Home is your budgeted recovery recovery look of added of This just if maybe, to segments, + details morning. could are given provide the or maybe, the also, sequential

Stephan Tanda

quarter grow more Obviously, in what units is we all we grow. we segments three the units the two current good. well, other look the growth even one -- for and that -- Having the optimism. and in said or really that, segments for said guide its all expect a division all guide to growth We other don’t the we quarter. to year. Pharma Clearly, the this Pharma, expect And the very not year but has that expect within our to 'XX budget. footing Pharma, prescription in beyond quarter, And we we with dynamics for as of three we expect full don’t enter for regained -- units disclose we the but growth only lot of

Matthew Krueger

there introductions in will any couple my could items degradation update related we what guess at and your I And you perspective? on through any customers I all prior then increases the with just product thoughts XXXX new question modeling there. And great. for the comp from concerned keep is, touch of significant helpful. to versus you follow-up an at That's volume customer the be if price Maybe mind a can level any should from see demand you're are provide that you one Great. on second thus we likely that in about unusual if Just end passing level? the consumer? to would are of years XXXX

Stephan Tanda

sure. Yes,

already around. -- ago, CNS quarter So, the a is tends in to is mean, worsen. continues lumpy. I I terms is move by to can is, the that can comps, is And sold all mentioned, the be grow compare because that epidemic us. notably a spray quarter market one the of to And Every you in NARCAN year say the NARCAN And whenever I with lumpiness unfortunately, business, demand continues nasal

but -- be So continue will lumpy. that to

other out we called discipline one much COVID depends business. evolves. how at-home evolves, testing The that pandemic testing the on It clearly the very how is

on at the out example soap dish some done classic just a by moving. that a player We dish view, that and of win reiterate of major recovery quarter So, if very soap are would to you rest side very category good we grow the grow we tooling, condiments that category nutrition. many don't We we to see here, see custom really customers. we rate engagement in business you this continues tooling to from CPG a beyond On engagement Consumer The look own nicely conversion business. pulmonary. customers at to want. continuing And where and out one in have infant new as the nicely. general, see we more just invest good see Healthcare And injectable their called earlier called times ended the optimistic. stage. your I willing the launches business, The of year question, by from is allergy We point before the in certainly, the of

we see good and So optimism those are good + customers. rest pickup signs. Beauty And the of also, with in Home,

of kind earlier, and through America Latin regional gave North supply really And Brazil just behind. going the With color situation. I chain you a being bit this America,

is a able So, often issue. Food that one. also regularly, being plenty America, demand are of noticed demand, empty. have have for retail honest, It's it's been half we stores to chain in North outlets the fulfill whole be to to [ph] Beverage store including, + the There's supply you empty, not that demand. if quarter Because

They'll strongly pulling So, -- that need the is guidance our to overcome, North and gave. to we overcome. to supply Pharma America the be business thankfully, issues allow us very is chain be you give

Matthew Krueger

Great. Thank you.

Operator

Thank you.

will be from Wilde BMO Mark Mark, of coming Markets. question Capital next Our to over you.

Mark Wilde

morning, Good Good Thanks. Stephan. Bob. morning,

Stephan Tanda

Mark. morning, Good

Mark Wilde

Beauty Stephan, little with us more help just if you could the business. a

you're we levels, what recent be would 'XX like call 'XX in right but Beauty trajectory said back a where You look at to And the if XXX, not months? does now? it

Stephan Tanda

very growth very Latin about the So, trajectory the significant and XX% again, in in with certainly quarter the China, we Europe, declining we’ve up going and America, with are out. North America, the that issues positive differences, probably regional positive laid around about is dealing in in recent progress the

Mark Wilde

Okay. -- And sort what where we in sense of on you're at the a us can of portfolio the just terms you move through right and you of on 'XX? cost, cost then price the as give now Bob, across anticipate price there

Bob Kuhn

Sure.

we quarter, and price us are on slightly first we I cost. catching net to are So, that up the looking think positive forward into again, anticipating be

be us, significant recently of but next pricing. are the particular. for I in still increase see quarters, some there's in seen go assumptions people We increases unknown metal right? be of Europe going is yet. abatement resin some looking seen are plate, relatively stable. haven’t We’ve The tin in that some lot in we America. the to big really again, forward, couple There a aluminum, the in that you pretty to that, Now, think that it caution should is trending into lower would we starting North

keeping that. are eye we on an So,

through metal we slight that will I price going we as say what would have we quarter into see So, assumption positive. happens weather to first be and a our flipping the increase. catching this But to should is up

Mark Wilde

Okay. it you. Thank That’s I will over. helpful. turn

Operator

Thank you, Mark.

please White Our be coming next from Kyle go question Kyle, Deutsche Bank. of will ahead.

Kyle White

Thanks question. Hi, for good morning. taking the

On supply a increase the tests? the Is first of just Solution, volume year a quarter there. that Materials COVID strength in continued Active you're in outsized two-quarter quite Or do government just the large size decent expect throughout in here I the as event business? well. increase assume a given seeing you this at-home

Stephan Tanda

has the that’s But diabetes, test test tests and U.S. And significantly doing a for are at-home including halo vials developing hard very effect clearly now. and say that, this and doing grant the all well. it It's Having well. also technology is quarter it really million. Probiotics management €XX we business beyond four is the above. proven as why quarter been the that, COVID one. The -- significant called those of for well with out, is of strips from strips very to to contribute the out, there's in said government

can be as in is that is many pipeline areas. sensors, recognition -- as still protect kits technology that the from are projects food derived that test useful that So, in well protect Protect this a with items.

test acquisition certainly on will So, we home see the point with we strong this pipeline as will but to kits see continue forever that with your drive and growth a business, wonderful COVID, growth go good so other a and kit, on certainly But was that respect business on. a growth. to to test not

Kyle White

levels? M&A your from you a can looks million about to just activity your and is $XX Bob, repurchases given and purchased valuation relative do returns should you current technology the think attractive forward? pipeline your look then just then, stock like it we about It going And of this quarter. And how and level buying talk those how standpoint? it. back Got How

Bob Kuhn

say, typically are what is fairly to be would are specifically robust. I active, is don’t it remaining to We we still say going would going I pricing we look Kyle, approach M&A in at do. Sure. of discipline in still general, in on but potential and pipeline. But fairly that comment, we targets, kind the the

to not really there's of speak there. So, much

quarter. but share yes, the be As that do to when active unusual, kind active nothing in not we expect first shares. mean, have in little smaller extraordinary. the the in, bit would put the of had early but back out from a hiatus we really were on repurchases, We nothing pandemic are buying market coming fourth from our open quarter, as a we to in in far window we I

Now, little future a the bit we are things confident where are going. and more in

So, we active. will be

Kyle White

will I turn It sounds it. it Got good. over.

Operator

Kyle. you, Thank

John John, be from is & question the next of Our William will yours. coming Kreger line Blair Company.

John Kreger

made has thoughts we back give much. guys growth your destocking Thanks stocking maybe, -- those you us changes that levels the you segment? headed? any and where have done Pharma could very on have are on Hi. that, held where Stephan, clarity in with Are latest that to more

Stephan Tanda

Yes.

destocking The customers we majority we the with see order business. prescription the So, largely way of vast done patterns. to normal it, are in the are back

Now, of seems each success have course, new that, variants and masking to of less and but impact. so on variant may an crimp

has course. that run So, its we see

of us. the well we I I think of behind to the everybody business. Consumer course, it's remind CMS Healthcare, continue lumpiness -- In Of

us very quarter You statistics of saw And that It's never available season. dislocations. track be as normal has other that sure can identify with us and strong are sharpened information strong cold all to in episode a to to significant growth this as we well perfect. trade cough course, or four carefully the

e-commerce ability outside to As caveats, club come are and But doubt things those of America to stores has think gauge you North being know, by. episode, this are it. about despite Western hard through tracked. our Europe Statistics not improved no I

John Kreger

follow-up. just a Voluntis? fall Pharma? A the type that guys fit helpful. about what like you the those That’s from bit digital Thanks. Can bucket Great. revenues those And investments of strategy? Pharma How deals health into you talk does broader within made have will into little

Stephan Tanda

difficulty] health is The is along our Digital obviously acquisition business. Yes. -- and type [technical startup with a this contributing.

to they business, the and with the development allow us that, [indiscernible] in to ways for addition of device being pipeline deep synergistic earlier In around in and engage in course, then because sophisticated locked are, very more in customers drug they of devices life. basically our

bodies creates of therapies and algorithm type very or difficulty]. for actual regulatory a see also know, more this is markets, interesting by you as the direct-to-consumer a we approved non-regulated And business, the deepening [technical in our a of setup. itself, FDA, [technical drugs companion health digital interest as with EMA the with customer our Now, lot difficulty]

activities create this year, may $XX Now, itself, addition million. revenues had it But legacy start-up that we add-on we and as digital But clear years. of let's up X that course, will an built is in about and to significant dedicated drive And million X investment, leadership growth in $XX quarter, of that while Voluntis, now a to that we, we’ve with the take health the over some the phase. combined will to see about is it per this pennies be business. it, that business

John Kreger

Thank you. Sounds good.

Operator

you, Thank John.

you. now over are over We moving Markets. to Adam to Josephson Capital KeyBanc Adam, of

Adam Josephson

Bob, Thanks. Good morning, you're one to John's question follow-up or Hope everyone. Stephan about Pharma. just well.

XXXX? destocking Bob, So, lower the in sales. normal, an you quarters, be to just from a three first with difficulty] you of? to experienced that fell expectation we to anything that quite and if get going on Perhaps, talk there that else prescription the should bit can [technical now margins XXXX seems in just comparable Or margins what about aware situation the be the is to segment more ought to back the

Bob Kuhn

Sure.

we’ve would So does with Pharma, quarter. we’ve that no structurally, in divisions. to change $X.XX various our made, say one degradation The digital thing to the be investments expected I are those that seen $X.XX [technical per difficulty] that in dilutive health

other everything the would That’s drag fine. a of But having the that forward. one areas. looking a is looks little bit in say, on generally, else degradation forward. No going difference that I So

become as some more out would fact, we But slight that’s and really in the or grow do divisions. some I to we the increases see efficient, highlight. point of only continue thing In

Adam Josephson

Bob. this margins at the given comments, Home. in to about to North Stephan your those from America, getting It there's EBITDA year. like supply I back what of the -- labor situation America, margins also, margin And topic, in chain still given I appreciate constraints Latin to on this question and get XX% that, situation on your the least asked in from Beauty sounds think + George ability XX%

reasonable if when reach able a you So, target, for be when to this year? not, might expectation do that you think is

Stephan Tanda

the that significantly are you be with by and we supply issues will chain -- of out two. four, quarter the expect fully them quarter magnitude in -- kind for is to same quantify quarter Data [Indiscernible] one. in

to the call the nothing second half at progress will the margin expect significant of the focus of resume impact. year, to new, also the certainly cost and beginning assuming more have referred on that So, a I the in side

date [indiscernible] giving and certain, going you half second us be are you not significant behind a but into in on all once and get clearly, should year. America I’m us get we to the there, progress next North wheel the So, to see

Adam Josephson

the your you're drag forgive you. severe working cap, what just you thank if me working et performance a -- one words, talked supply of what then result do it the free other think but inflation, given last more as capital? was Was you help better year? chain on cetera? just could flow year? about if much is expectation don't And, it this expecting, your earlier, you In Bob, Stephan, how cash you mind. And than Can what be

Bob Kuhn

the primarily some receivables, that’s right, was influencing there by And there's things. the a pricing of growth. the in to it increase obviously couple capital, we’ve working those in On Yes. so that seen, One obviously, receivables. revenue that’s core driven that’s is, added XX%

degradation collectability. around first issues at are or So, on is all any really a not in or receivables seeing point we anything day sales

surprising we do think And consolidating you’ve advance -- inflationary in to the year, too, in half any purely looking within I down volume inventory probably the East little deliver prudent some as guess, time back, And disruption that’s concerns of side, inventory there. that peers those costs. there's I I to some on from our with any from you of Coast don't we inventory hand maybe, have stock closed earlier had that, And been but build as bit recovery, adequate making supply So, then you're all of customers. well. this facilities. be coming a little The a on increase just you about that probably chain heard do our really able don’t the operations. sure got forget We’ve bit, more probably that also

little a combination. a So, bit it's of

collections eye are some to is keep forward, bit and focus And raw XXXX, material did we right which growth make I an the eye earlier good that issue going highlight can needs to we we I our inventory. I’m on as hoping on everything it hopefully, not looking just debate there. keep a well. this need else, the as we So, got that strides time. and an think little it metal, around see to an said at But in be to hopefully,

Adam Josephson

Thanks so much, Bob.

Operator

Thank you, Adam.

Wells from Hajde question taking Gabe of We to Gabe, our over Fargo Securities. will be you. next

Gabe Hajde

Gentlemen, good taking for morning. Thanks question. the

and I talk -- most assuming injectable said the to million a of same for us timing out project $XXX million, you returns? little question of to stayed expanding $XX And maybe, see contribution? two, then that it's payback of give can that from whether at when investment bit, if hit you you What a kind as kind XXXX? you think expect million. terms XXXX sense relatedly, of I’m could we Just can $XXX I think then Bob, or the number in in but of

Bob Kuhn

Sure.

grant. So that the that yes, partially was about change the have of the we received numbers next And in for reason that million. number government a [technical cash difficulty] we do why the the grant terms number year, didn't because But XXX. French from $XX of

into over roll will that some be will there yes, So, XXXX.

are going for we clearly, capacity be specifically projects, payback, In just sake. remember I mean, typically terms expanding capacity profitable a but of comment don’t expansion here, to not it's on various We project.

expanding higher COVID our value-added We capacity around also offerings. are

a So, Stephan now has as higher to have we components. very good past, the the that. return And injectable in continuing future offering in as for well, so on growth, that leads a really top will that, mentioned then see on the value-added of we

it of there. then it will online later ramp in Now, and Some coming XXXX, from when we start come? the will see will up

then, the -- your So I’m second -- and was sorry, what then? question

Gabe Hajde

about … I just was asking the

Stephan Tanda

just me let add Sorry, Bob. to

these maybe, the comes more steps mixing, to not locations, it up. before. stage in parts do forming process said, then We’ve recall premium deliver. material capability. And this pipeline and coating. amongst of molding all And Of of talked A as our has all And we is in as and we keeps later the of we finishing at the one good filling several what product really in seen course, or several phases. to and those that basic to we U.S. formation Europe. single project. that then and expanding refer it's significantly growth both this And can in the a various the recognition steps, isn't product comes customers then add projects, capacities really it the the result a XXXX of of come often and in at And Bob meant 'XX. what It's we

$XXX So that’s million why number to overall accelerate -- investment the we the the number. program to

ahead. Sorry, Gabe, go

Gabe Hajde

No, that's Great. Thank you. it.

Operator

Gabe. Thank you,

We will Castillo ahead. be taking our next question Angel, from go Angel Stanley. please Morgan of

Angel Castillo

Thanks good and right. All morning.

whether destocking. today and stock? bit of have moving and wanted be need color normal, as on levels seeing more this, you of kind little or, and we Where Just on underlying in Maybe, particularly restocking more inventory over next forward? you're where inventory year? in period more we we segments Pharma, across this on 'XX? terms and of a So And to do to seeing just flu helpful. kind dynamic, follow-up as how cold that to holding after flip like are customers 'XX safety to people you would season, are the go the it's of of Do are their side your everything, going and kind see them do behavior into of

Stephan Tanda

Yes. much I In very it the at this on general, answer stage, think we depends this question. when region

a but time from performance. the unwind is chain of are is all is in and -- and and The Clearly, view waiting metaphors for order are much doing have combat sometimes it and get exact U.S. builds in of do regional more There safety to [ph], is I businesses, some In of see the pipeline much that. be goes to I to supply what in that both period, inventory not delayed reasonably issues, patterns that's to it differences. having seem to is, than or And to multiple customers, and a And muted, not give track. well. they think from South is in U.S., like here. to the stocks or also difficult be, is one mix think to customer, take what are pretty point seeing levels Pharma chain factories Midwest of or some things is The begin to really us Europe, supply the customer course, tend of anything will a normal we able but used the more We we to on for we cost, have time x the but make could see not normal Asia return. it to also we course, course, us, comes that stocking and run. and I to then in consumer-facing anything part be we you decent effects caveat issues. assembly same affected

Asia, Asia. and been It's And region mainly supply well. for our has always lines with overall same issue that’s we think to in in running thankfully ship I that’s the operation region for region strategy Anything costs. region.

contained the to the is the So, malaise most for U.S. U.S. part.

Angel Castillo

how equation? of pricing aluminum Understood. the dynamic, but you mentioned, Thank a you. with supply talk outside what you And not then in of about maybe of comfortable terms the are just metals on just of you and can and and just bit, the little some availability

Stephan Tanda

factors Yes. rapidly. European One is two are There is that. energy to really cost increasing

terms aluminum. it -- versus use, now course, that pricing terms to of of polymer of want, pricing. and energy issue, cost So, cost. also see have in energy and is from the aluminum, having tails to us increases is then through pass-through metal And for by we we if and a in far pass-through the we most you passing intensive rotation Availability significant the an but in

teams that there's especially prestige, for aluminum very the are higher active for alternative cost, aluminum. on So, in no passing really

it use you also We in know. as Pharma,

on. so the that But availability has important been pass it more okay. it's we or less So, far

Angel Castillo

Stephan. Thank you, helpful. Very

Operator

Thank you, Angel.

taking Staphos Merrill go be George, question from ahead. Bank of will Lynch. George our of America final We

George Staphos

versions the to that will investment I bigger average I say, way all talk that injectables luck just Congers? is I coming Thanks had the year's how looks terms quarter. about on very the affect in much. then haven’t can't Gabe's been your Can guess picture, Any out to, to you X at first Pharma. question. doing related in you're I at see, the And opportunity we ago question XX% in incremental guess, like way of get the us Pharma, yet helpful. below? a customers okay, that’s what Naloxone pipeline of launches, versus approval Is new pipeline of average of Is in approvals prior how understand should there above the that to some guess, in can't you from? size question. products your versus you, years help yet? to customers' there and in generic we and Pharma stuff compares way And recent that a what products X% and Hydrochloride versus that the Slide guys, the benefit that to X, that now Thank good process in have see a that relatedly, what's approved talk

Stephan Tanda

and Thanks, the George. pipeline. In general, are about we satisfied very bullish Pharma

say So let that. me

done active different it's division, it our and And process, mention that confidentiality to which reasons, And and as Pharma as and to pipeline share progresses from the that as until also the they shareholders' all in and competitive a those said, that and policy our invest well. if do China across reconfirm reasons money disclose or in a launched not mouth all long-term put transfers then as where have the of well materials. what's development The the target and just the stages, in I Markets like obviously, we in We pipeline confidence, what customer the out. for tracked to they're but we on we injectables our are working disclosing for working money us businesses. India, we is phase call Day at as as the is have Capital one, gives chooses

there your competitive Congers. as Day, the exactly, not facility you what of this can of And some yes, question, into terms In significantly. we me of when is other but significantly Again, expanded for have is part take next overall that reasons, Markets Capital clearly, will expanded investment it hopefully, be let in program. counters we get

that’s say, George. about can all think I I

George Staphos

right. Stephan. quarter. and the you. Thank a luck day Understood, in good All Have good

Stephan Tanda

Thank you.

joining think real and I we the look virtually. to talk road and Thanks forward call. today, for you us concludes on that the to

Operator

for This day. today's rest joining. all a Thank concludes Have great your of you call.

You disconnect call. may now the from

AptarGroup (ATR) 18 Feb 222021 Q4 Earnings call transcript