APTARGROUP, INC. Q3 FY2024 earnings call

• Third - quarter core sales growth of 2% and adjusted EPS of $1.49 per share, a 6% increase over the prior year quarter. Adjusted EPS was up 15% for the first nine months of the year. - Pharma segment: Strong demand for proprietary drug delivery systems, with 12% core sales growth in the quarter; growing royalty revenues; recent acquisition of SipNose's IP assets; new injectable facility in Granville, Normandy, France and capacity expansion in Congers, New York; active materials science division achievements including a contract from the U.S. federal government for ActivShield sterilization technology and N - Sorb being accepted into the FDA's Emerging Technology Program. - Closures segment: Core sales increased 4% due to increased demand globally, with innovation in food, beverage, and personal care closures. - Beauty segment: New launches and collaborations, such as Neo dropper technology for Freda brand hair care products in Asia.

Aptar's third - quarter segment performance: The Pharma segment saw core sales growth, with its proprietary drug delivery systems showing strong demand. For example, allergy sprays, central nervous system and emergency medicines had 12% core sales growth in the quarter. Adjusted EBITDA margin was at the high end of the long - term target range. The Closures segment had core sales increase of 4%, which was within the long - term target range, driven by increased demand globally, focusing on higher value dispensing closures and cost reduction efforts. The adjusted EBITDA margin for the Closures segment was 17%. The Beauty segment had mixed results; the personal care market saw a 5% core sales increase due to demand for body lotions and hair care products, mainly in Europe and North America, while the prestige fragrance faced challenges.

• Anticipated fourth - quarter adjusted earnings per share, excluding certain items, in the range of $1.22 to $1.30 per share. - Full - year adjusted EPS expected to be in the range of $5.34 to $5.42, a double - digit increase over 2023. - Estimated depreciation and amortization for 2024 between $260 million to $270 million. - Capital expenditures in 2024 expected to be between $280 million and $300 million, with the majority allocated to the Pharma segment.

• China market recovery not as vigorous as expected, affecting Beauty segment sales globally. - Consumer health care companies' more stringent working capital management and inventory rightsizing in cough and cold end markets. - Seasonal fluctuations and inventory issues impacting sales in certain segments.

Q: George Staphos from Bank of America asked about Beauty's margin outlook, China impact on Beauty, and inventory issues in the fourth quarter.

A: Stephan Tanda responded that Beauty is making progress with productivity work, China's lack of strong rebound from COVID is affecting sales, and inventory issues in consumer health care and Beauty are due to seasonal and inventory management factors.

Q: Ghansham Panjabi from Baird asked about Pharma's new product cadence, prestige fragrance weakness, and share repurchase authorization.

A: Stephan Tanda and Bob Kuhn responded that Pharma's new products contribute to growth, prestige fragrance is a short - term de - stocking issue, and the share repurchase is an extension of optionality.

Q: Daniel Rizzo from Jefferies asked about OTC Narcan's ramp, cough and cold season, and beauty product sales cycle.

A: Stephan Tanda responded that Narcan has growth potential, the cough and cold season is a year - end effect, and beauty product sales cycle varies by region.

Q: Matt Larew from William Blair asked about injectables' performance and profitability.

A: Stephan Tanda responded that injectables are growing with a bullish outlook for next year and profitability will improve as it scales.

Q: Gabe Hajde from Wells Fargo asked about Pharma's nasally delivered brain - targeting treatments and stock - based comp expense.

A: Stephan Tanda responded on the opportunity in nasally delivered brain - targeting treatments and Bob Kuhn noted no unusual items for stock - based comp expense in Q1 2025.

Q: George Staphos followed up on Pharma's nasally delivered treatments and Beauty's footprint rightsizing.

A: Stephan Tanda responded on the potential of nasally delivered treatments and that Beauty has more ideas for footprint optimization but it's not a prerequisite for margin.