AptarGroup, Inc.

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

Thank you. Hello, everyone, and thanks for being with us today. Joining me on today's call are Stephan Kanda, President and CEO, and Bob Kuhn, Executive Vice President and CFO. Our press release and accompanying slide deck have been posted on our website. If you are following along on our website, you can advance the slides by hovering over the presentation screen and clicking on the arrows on the right and left. As always, we will post a replay of this call on our website. Today's call includes some forward-looking statements. please refer to our SEC filings to review factors that could cause actual results to differ materially from what we are discussing today. I would now like to turn the conference call over to Stephan. Thanks, Matt, and good morning, everyone.

We appreciate you joining us today. I hope that you're doing well. Before we close in 2021, I would like to take a moment to recognize our teams for overcoming all of the challenges presented throughout yet another year of the pandemic. We are resilient in delivering on our promises to patients, consumers, and our customers across the many markets we serve, despite pandemic uncertainties, rising inflation, supply chain issues, and labor shortages. We have kept our manufacturing sites operating, and we are successfully passing on cost increases as we navigate this extraordinary inflationary period. Turning now to slide three, the commitment of our teams was instrumental in enabling us to deliver top-line growth across all of our segments for the full year. Our total reported sales increased 10%, and on a comparative basis, core sales increased 7%. Our farmer segments finished the year with positive core top-line growth. Despite the decline in sales to the prescription drug market that has been temporarily impacted by pandemic-related destocking in the industry, The steady strong demand for elastomeric components for injected medicines and active material solutions, as well as a recovery in the latter part of the year in the consumer healthcare market, resulted in the top-line improvement for the year and margins within our long-term target range. During the past 12 months, we took important steps to further strengthen the competitive position of our pharma segment and support our long-term growth. First, we began investing to expand our capacity to produce premium-coated elastomeric components, and we have been awarded a €13 million grant from the French government to support our component expansion plans in Europe. Second, we acquired 80% of Weihai Hanyu Medical Products, a leading Chinese manufacturer of elastomeric and plastic components, serving the fast-growing and second largest pharmaceutical market in the world. Given the ongoing pandemic development and our growing pipeline since our last capital market day, we are adding another $60 million to our capital investment plan to increase capacity in the U.S. and Europe for components to injectable medications, bringing the new total for this accelerated expansion plan to $180 million. Third, we have been gaining solid traction with our active material solutions, which have proved very successful For example, in protecting the integrity of certain at-home COVID-19 tests. In addition to growing that business nicely, we were awarded a contract from the U.S. government with $19 million in funding to expand our capacity in the U.S. for our active film technology. Fourth, we are laying the foundation for our future digital health solutions with the completion of our acquisition of Volantis, a pioneer in digital therapeutics. And lastly, we have begun to expand our pharma capacity in Asia. In 2021, we broke ground on a new facility in Suzhou, China, to optimize our footprint and bring all our existing operations in the Suzhou area under one roof. This investment includes state-of-the-art machinery and automation for all three of our segments, with more than half of the investment dedicated to the pharma segment. Earlier this year, we broke ground on a new pharma production facility in Mumbai to further increase our local manufacturing capacity, including the addition of molding capabilities to offer more innovative product solutions to pharma customers in Southeast Asia. We remain optimistic about current and future growth in the beauty, personal care, and home care market and remain an investment in YAT, a Chinese online influencer and skin care company, to collaborate on solutions for the growing and attractive skin care market. We continue to develop more integrated local supply chains to lower lead times and faster market launches, leveraging the insights from our Fusion PCG acquisition. With beauty volume still lagging behind 2019 levels due to successive COVID variants and the dramatic global supply chain disruptions and labor issues, especially in the U.S., the profitability of this business has not yet achieved our target margin range despite the restructuring completed to date. We remain confident in reaching the target margin range in due course and are increasing our focus on SG&A, cost containment, footprint optimization, and product innovation. Our food and beverage segments continue to grow with strong demand from the food market and recovering demand towards the end of the year in the beverage market. Margins were compressed this year by the impact of the significant resident cost pass-through we have been diligently managing. On the sustainability front, we are recognized in many countries for our efforts towards becoming an ever more sustainable, inclusive, and diverse company. We're number one on Forbes' 2021 Green Growth 50 list and a top 10 company on both Forbes' 2021 Global Female-Friendly Company list and Newsweek's America's Most Responsible Companies for 2022. Echavates has just awarded us the coveted top 1% platinum rating for our sustainability achievement in the areas of environment, labor, and human rights, ethics, and sustainable performance. And APSA has also recently been named the supplier engagement leader by TDP, a global leader in environmental impact disclosure. To conclude our 2021 highlights, our balance sheet remains in excellent condition. We are well positioned to continue to invest in growth opportunities, including strategic M&A opportunities, while we deploy capital to enhance shareholder returns. I'm happy to report that in 2021, we returned around $100 million in cash dividends to shareholders, and this was our 28th consecutive year of paying increased annual dividends. We were also active in our share repurchase program, deploying $78 million to repurchase over 600,000 shares, and we expect to be in the market with further repurchases over time. Now I will brief a comment on our quarter four results as shown in slide four. Before turning it over to Bob, we will go into a bit more detail. As you saw in our press release, we reported strong top line growth of 9%, with core sales growth of 10%. This increase was particularly notable as it reflects strong contributions from each of our segments. Our pharma segments continued to see strong demands for solutions for vaccines and other injected medicines, and a return to a more normal cough and cold season resulted in increased demands for nasal drug delivery devices and other dispensing solutions in the consumer healthcare market. We have been very pleased with the performance of our active materials group across a variety of applications, including protective vials for our diagnostic diabetes test strips and probiotics. And we are supplying our active film technology for at-home COVID-19 antigen test kits. And collectively, this has resulted in a 50 by 0% increase in core CLG over a year for our active materials groups in the fourth quarter. We are also pleased to see demand for our nasal system used to treat allergic rhinitis and pulmonary systems for asthma and COPD conditions have returned to levels on par with the prior year's Q4. However, as previously mentioned, the comparison to the prior year fourth quarter included a significant and outsized ordering flux for devices used for central nervous system treatment. Pharmimagine remained within our target range and was comparable to the prior year fourth quarter. Our beauty and home segment generated strong sales growth with a rebounding demand for fragrance and skincare solutions for the beauty market and increased demand for dispensers for hair care and body care products. Pricing contributed to the majority of the core sales growth in the quarter. Turning to food and beverage, this segment reported double-digit core sales growth with approximately 60% of the growth coming from price adjustments to pass-through, resin, and other cost increases. The remaining growth was driven by a strong demand for dispensing closures in both the food and beverage markets. Our beauty-in-home and food and beverage margins continue to reflect the extraordinary inflationary environment and related pass-through effects as well as supply chain challenges. Now I would like to highlight a few recent launches by testing and using our technologies in the next few slides, starting with our pharma segment on slide 5. Tadavis, formerly Perigo's generic prescription pharmaceutical business, has announced the launch of a generic version of a leading nasal spray for the treatment of migraine headaches with our Unidose nasal device. Teva announced the launch of the first U.S. generic version of Naloxone hydrochloride in a nasal spray form using our Unidose nasal device, and Sandoz is also using our Unidose device for their generic Naloxone hydrochloride nasal spray. Glenmark's Ryaltris recently received new drug application approval by the U.S. FDA for the treatment of allergic rhinitis with our multi-dose natal device. We recently announced a new digital solution called Hero TractorSense. It transforms a standard needed dose inhaler into a smart connected device, allowing patients to track usage and promote adherence to their pre-sprite therapy and ultimately improve the outcome. Finally, our active film technology is also enhancing the diagnostic capability of in-bios at-home antigen COVID-19 test kits. On slide 6, in Beauty and Home, we were selected to produce a custom inverted closure with our self-stealing flow control valve for the global launch of a new inverted dish soap package by a leading PPG company. This is a perfect example of how Apgar creates value by helping our clients drive the conversion of a major retail category through breakthrough innovation that enhances the consumer experience and through disciplined execution in key markets around the world. And we are very pleased to announce that our fully recyclable monomaterial pump was chosen by Unilever for their leading skincare brand, Dermalogica Facial Cleansers. Our Fusion PKG Beauty Lab is providing a line of nine beauty products for the brand Cosmicology. In food and beverage, in the Chinese nutrition market, Juno Labao is featuring our bi-injected closures for two of its children's powdered milk plants. And the new launch for sauces and condiments in Latin America, Zabor de Chef, features our new lightweight closure with flow-controlled dispensing system. With that, I will now turn it over to Bob, who will provide additional comments on our fourth quarter results. Bob?