AptarGroup, Inc.

Attention everyone. Thank you for your patience. Please remain holding as the call will begin shortly. Once again, please remain holding. The call will begin shortly. Thank you. Bye. Ladies and gentlemen, thank you for standing by. Welcome to APTAR's 2024 first 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 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. Our press release and accompanying slide deck have been posted on our website under the Investor Relations page. During this call, we will be discussing certain non-GAAP financial measures. These measures are reconciled to the most directly comparable GAAP financial measure and the reconciliations are set forth in the press release. Please refer to the press release disseminated yesterday for reconciliations of non-GAAP measures to the most comparable GAAP measures discussed during this earnings call. As always, we will also post a replay of this call on our website. And now, I would like to turn the conference call over to Stephon.

Thank you, Mary, and good morning, everyone. We appreciate you joining us on the call today. I will begin my remarks by highlighting our first quarter results. Later in the call, Bob Kuhn, our CFO, will provide additional details on key drivers for the quarter. Starting on slide three, for the first quarter, I'm pleased to report that AFTAR achieved core sales growth of 5% and delivered adjusted EPS of $1.26, and more than 30% increase over the prior year quarter. Strong demand for our pharma segment's proprietary drug delivery systems and improved performance for the injectables unit as well as the recovery in North American consumer ed markets contributed positively to our quarterly results. Our pharma segment continued to see robust sales of our proprietary drug delivery systems with high single digit core sales growth in the quarter following more than 30% core growth in the first quarter of 2023. Demand was broad based with growth in every region and across several market categories from emergency medicines to allergy treatments and central nervous system therapeutics. As a reminder, our proprietary portfolio of drug delivery systems is expected to grow within our 7 to 11 long term core sales range target also this year after strong double digit core sales growth in 2023. The injectables unit saw a marked improvement over the prior year quarter as the ERP system implementation headwind from the first quarter of 2023 did not repeat, and demand for elastomeric components for the biologics market continued to grow nicely. 2024 continues to be a built-out year for injectables as the final phases of the capacity expansions announced in 2020 for France and the U.S. come online and are expected to be validated for commercialization in early 2025. In our beauty segment, first quarter core sales growth was basically flat year over year with a challenging comparison of a strong first quarter 2023 that was driven by exceptional sales in Europe for fragrance dispensing. As a reminder, last year, market growth was driven by a boom in fragrance launches post-COVID. As previously mentioned, we expect continued growth for fragrance dispensing solutions for the year, but at a more measured pace. Even as sales in Europe normalize, adjusted EBITDA margins for the region were well within the beauty segment's long-term EBITDA margin range. Turning now to North America, while some end markets remain soft, overall the region is showing clear signs that the widespread destocking is coming to an end. We continue to expect that recovery will not be linear and will be different end market by end market across our beauty enclosure segments. Our focus on footprint rationalization and reducing fixed costs remains a top priority in 2024. Over the last several quarters, we have improved margins. As a reminder, since 2022, we initiated formal cost reduction programs in several European countries, including two social plans in France. We are reducing the beauty segments European workforce by about 5%. And as previously mentioned, the closing of a facility in France that serves closures is expected to be finalized by mid-year. This is in addition to the facility that was closed last year in North America. Additionally, quarter over quarter, we have reduced selling general and administrative of an SG&A as a percentage of sales by 50 basis points. Looking ahead in the second half of the year, we plan to close our manufacturing operations in Argentina for beauty and foreclosures, but maintain our pharma manufacturing operations in the country. We will continue to review and streamline our footprint to increase operational leverage while meeting market demand. Now moving to slide four, highlighting recent corporate awards and recognitions. We firmly believe operating in a sustainable manner and developing more sustainable product solution is an important competitive advantage for Aptor. As a reflection of our progress during the quarter, we were named one of Barron's most sustainable U.S. companies for the sixth consecutive year, ranked number 29 out of 100 companies for 2024. CDP, formerly known as the Carbon Disclosure Project, also named us as a supplier engagement leader for the fourth consecutive year due to our contributions to emission reductions throughout the value chain, a recognition that is highly valued by many of our customers. Lastly, Capital Magazine identified APTA as one of the 2024 best employers in France, where we are now number 14 in the healthcare and pharmaceuticals category. Before I turn the call over to Bob to share further details on quarter one, I want to speak about innovation and highlight recent technologies and product launches as shown in slide five. Starting with several launches in our pharma segment, our airless plus system is the drug delivery solution used to treat rosacea, recently approved by the National Medical Products Administration in China. Our proprietary ophthalmic squeeze dispenser is used for Apwee's Refresh brand of an over-the-counter lubricant eye drop treatment in the U.S., Next, our Pure Hail technology is used to dispense Frida Baby's ultra-fine natural sterile saline mist in children's cough and cold. Finally, in Turkey, our nasal spray pump is used to deliver a new allergic rhinitis treatment. Turning to beauty, Cody's new Marc Jacobs Daisy Wild Fragrance features our fragrance pump, custom overcup, and green colored dip tubes. Aptar's recyclable airless dispensing system is the delivery solution for Avene's dermocosmetic rosacea lotion. Our reloadable airless technology is featured on a skincare launch by Chinese beauty brand Zubin, and our fully recyclable lotion pump is featured on a new men's skincare line in the U.S. Moving to closures, our sports cap is the dispensing solution for PepsiCo's new Gatorade water. And our monomaterial, temper-evident closure is featured on a line of boss water, both found here in the U.S. Our fully recycled tube top is used for Unilever's St. Ives brand skin scrub. Finally, our temper-evident snap top closure that features a customizable in-molded scoop is featured on NutraFarm's protein supplement in Latin America. Now I would like to turn the call over to Bob.