AptarGroup, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to Aptar's 2023 first 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 Mrs. Mary Scafidis, 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 Stefan Tanda, President and CEO, and Bob Kuhn, Executive Vice President and CFO. A press release and accompanying slide deck have been posted to our website. We will also post a replay of this call on our site. 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 Stefan.

Thank you, Mary, and good morning, everyone. We appreciate you joining us on the call today. I will begin my remarks by highlighting our results for the first quarter. Later in the call, Bob Kuhn, our CFO, will provide additional details on the quarter. I will also give an update on our progress on key initiatives. Starting on slide three, For the first quarter, I am pleased to report that Apto achieved core sales growth of 4% and delivered adjusted EPS of 95 cents per share due to strong demand for our pharma and beauty dispensing solutions. We guided our adjusted earnings per share for the first quarter to be in the range of 85 to 93 cents per share. Our adjusted EPS includes a 12 cent impact from startup costs in our injectables expansion program and the rollout of the new Enterprise Resource Planning, or ERP, system. Originally, we anticipated that the cost would be closer to $0.08. Our pharma segment experienced significant demand for our proprietary dispensing devices in every region and across every end-use category, including nasal decongestion, eye care, cough and cold, saline rinses, as well as allergic rhinitis, emergency medicines, and depression therapies this growth was in line with the brisk market demand the one area where we anticipate that there is inventory buildup is in emergency medicines on march 29th the fda approved narcan for over-the-counter or otc usage as we previously indicated anticipation of this approval has benefited our pharma segment as this new distribution channel for narcan ramps up Demand for the OTC channel should moderate over time. When looking at core sales growth over the long term for our pharma segment, we expect to remain in our 6% to 10% target range. For injectables, the impact of startup costs and the implementation of the new ERP system was 12 cents. The rollout took longer than anticipated as we went from a manual process to a fully integrated system. We have ironed out most of the implementation issues and will continue to close the gap and ramp up production in Q2. We anticipate returning to business as usual and catching up on the revenue displaced by the implementation by the end of the year. Market demand for elastomeric components used with injectable medications remains strong, including components for the delivery devices used in glucagon like peptide 1 or GLP-1 drugs. These drugs are rapidly growing new class of medications used to treat type 2 diabetes. Growth is driven by indications that these medications can also help combat obesity with additional drug approvals and launches expected in the coming periods. Our components have been selected for use in this space on three blockbuster drugs to date. In our beauty segment, the team delivered solid volume growth of our dispensing solutions, especially in prestige fragrance with mass fragrance, color cosmetics, and sun care also driving positive results in the quarter. We are continuing to receive good feedback from our beauty customers on our new product pipeline. Moving to slide four and ESG, during the quarter we received again a number of awards and also commemorated a major milestone. Last week we celebrated our 30th anniversary as a public company and rang the closing bell at the New York Stock Exchange. Recognition for our ESG efforts continue as well. APTAR has again been named one of Barron's 100 most sustainable companies for the fifth consecutive year, ranking number 55 for 2023. We were also named to the CDP Supplier Engagement Leaderboard for the third consecutive year. APTAR is among the top 8% assessed for supply engagement on climate change based on its 2022 CDP disclosures and was cited for its contribution to emissions reduction throughout the value chain. Increasingly, we believe that sustainable companies, in addition to helping safeguard the environment, will also have a competitive advantage. This differentiated focus is apparent in the innovative and sustainable technologies we are developing and launching, such as our recyclable pumps in Pharma and Beauty, as well as our pump-free fragrance pump with soft actuation. Now I would like to update you on some of our key priorities. Across APTAR, we continue to work on identifying new avenues to increase our operational efficiencies. Our primary objective is to deliver on our long-term margin targets, which we expect to achieve through a combined effort of driving top-line growth, increasing productivity, and better leveraging our fixed cost base. both in operations but also in SG&A. As discussed last time, we have engaged in bargaining discussions with pan-European and national labor representatives to discuss adjustments to our beauty segment in order to increase our competitiveness. We will update you once these discussions are concluded. A few weeks ago, we released recast financials for our closures and beauty segments. The goal of the segment realignment was to strengthen our commercial position for both closures and beauty, as well as enable bottom line improvements by streamlining operations and increasing capital efficiencies. We recognize that there is work to be done to achieve our long-term profit margins in both segments. We are in the process of reviewing our footprint and anticipate making changes to improve asset utilization. On slide five, I want to give an update on capital allocation. For 2023, we expect our capital expenditures to be now in the range of 280 to 300 million. Due to additional accelerated investment, we will be making to increase production capacity for our proprietary farmer dispensing devices to meet rapidly growing customer demand. In the first quarter of 2023, we had capital expenditures of approximately 78 million. The majority of these expenditures were in our pharma segment, including our expansions in the U.S., France, and China. We returned approximately $45 million to shareholders in the quarter through dividends and share repurchases. Before I turn the call over to Bob to share further details on Q1, I want to speak about innovation and highlight recent technologies and product launches as shown on slide 6. Turning to our pharma business. In addition to the ramp-up of Narcan and the use of our elastomeric components on GLP-1 injectable medications that I mentioned previously, I would like to highlight that our proprietary nasal spray device is the delivery solution for a new migraine treatment that has received FDA approval in the U.S. Johnson & Johnson's Pravato, featuring our proprietary by-dose device, has also been approved in China for treatment-resistant depression. Our proprietary nasal spray pumps are featured on a growing number of allergy medications with notable new launches in Latin America and Europe. Our proprietary Ophthalmic Squeeze Dispenser is contributing to our growth in several launches in Europe, including OQ-Tears Hydro Plus by Thunten and in Brazil, Viofta by EMS. In the beauty segment in Europe, our pumps for Prestige Fragrance contributed to beauty's growth in the quarter and our solutions are featured on perfume launches for brands like Gucci, Guerlain, Boss, Tommy Hilfiger, and more. Our dispensing pump is the solution for the Revlon Illuminance Foundation in North America, and StarDrop, which provides precise dispensing, is being used for a new skincare product in China. Finally, our monomaterial, fully recyclable pump continues to be featured on new products including Avene's new dermaceutical skincare product, Zeracalm, in Europe. Turning to our closures business, our custom inverted closure with a self-healing flow control valve is the dispensing solution for the launch of another inverted dish soap brand by a leading CPG company. In the North America personal care market, we are providing desktop closures for two Unilever brands. Now I would like to turn the call over to Bob. Bob.