Q1 2023 AptarGroup Inc Earnings Call
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 and several launches in Europe , including acute tiers hydro plus buy something and in Brazil, while stopped by E. M. S. In the beauty segment in Europe , our pumps for prestige fragrance contributed debuted its growth in the quarter and our.
<unk> are featured on perfume launches for brands like Gucci yellow box, Tommy Hilfiger and more.
They spent the pump is the solution for the Revlon Illuminance Foundation in North America, and Star Group, which provides precise dispensing is being used for our new skin care product in China.
Finally, our mono material fully recyclable pump continues to be featured our new products, including arena, New Derma Sudekum skincare product zero com in Europe , turning to our closures business are accustomed anywhere to closure with a self healing flow control, though is the dispensing solutions for the launch of another.
In addition soap brand by a leading CPG company in the North America personal care market. We are providing is tough closures for two Unilever brands.
Now I would like to turn the call over to Bob.
Bob.
Thank you Stefan and good morning, everyone.
Starting on slide seven I would like to summarize the quarter.
Our reported sales increased 2%.
When we neutralized for currencies and acquisitions.
Core sales grew 4%, primarily due to strong demand for our pharma and beauty solutions.
Shown on slide eight we reported first quarter adjusted earnings per share of <unk> 95.
This represents a 2% increase over the prior year adjusted EPS.
We achieved adjusted EBITDA of $154 million, which is a decrease of 2% from the prior year's first quarter.
We delivered strong core sales growth despite the difficult comparison to the prior year quarter due to substantial sales of active film used for at home COVID-19 test kits, which did not repeat.
Lower adjusted EBITDA was also negatively impacted due to startup costs for our capacity expansion and an enterprise resource planning system implementation and our Injectables Division.
Turning to some of the details by segment for the quarter, our pharma segments core sales increased 7% approximately 4% of the continued growth came from increased volumes, especially for our proprietary dispensing devices and a prescription and consumer health care divisions, where sales were up across the board.
Looking at sales in the pharma segment by market prescription core sales increased 37%, primarily due to strength in demand for allergic rhinitis, asthma, and depression therapies and emergency medicine devices.
Consumer health care core sales increased 24% on strong demand for cough, and cold eyecare nasal decongestant and ceiling wrenches.
Core sales for our elastomer solutions for the Injectables market decreased 34%, primarily due to the ERP system migration, leaving our Injectables division with a shipping bottleneck and fewer shipping days for the quarter.
The impact of the ERP system implementation is transitory as demand for biologic applications remained strong.
Turning to our active material science solutions core sales decreased 32%.
As a reminder, this was against a difficult comparison to the prior year quarter of active an active film sales that did not repeat.
Farmers adjusted EBITDA margin was 31%, which included start up cost for the Injectables division capacity expansion and ERP system implementation of approximately $12 million in the second quarter, we expect a $4 million to $6 million impact as factory operations normalize post ERP implementation and the startup costs from the capacity expansion.
<unk>.
We expect these costs to moderate to about $2 million to $3 million per quarter for the remainder of the year.
Our beauty segment's core sales increased 9% due to a mix of pricing and volume growth. We saw volume growth in our prestige and mass fragrance Sun care and color cosmetic solutions regionally Europe , and Latin America had solid growth in North America, we are seeing green shoots of demand recovery for our personal care multicomponent dispensing.
<unk> solutions from our small to midsized customers, who had built up less inventory in.
In China sales have been negatively affected due to its reopening and the resurgence of COVID-19 infections. However throughout the quarter, we started to see signs that the Chinese consumer is coming back.
Looking at the beauty segment by market.
Beauty core sales increased 17% driven by higher sales in both prestige and mass fragrance and color cosmetic solutions personal care core sales were flat with decreased demand in several end use categories. However, sun care dispensing solutions continued to increase.
Homecare core sales decreased 16% due to lower sales in the air care and surface disinfecting categories.
The segment's adjusted EBITDA margin for the quarter was 11%.
The closure segment's core sales decreased 8% compared with the prior year's quarter, primarily due to the pass through of lower resin prices as well as lower volumes in personal care and home care as customers continued to work through their inventory levels, primarily in North America and Latin America.
Food dispensing was the first to show gradual signs of recovery at the end of last year and the order book continued to improve through the first quarter.
Looking at the closure segment by market food core sales decreased 7%, primarily due to lower tooling sales and lower demand for sauces, and condiments, while foodservice products continued to increase.
Beverage core sales increased 4% driven by higher sales in juices and slight increases for bottled water and sports drinks.
Europe drove the sales increase and it is our largest beverage market.
Personal care core sales decreased 19%, primarily due to decreased sales in the hair care and body care categories.
And our fourth category, which includes beauty home care and health care core sales decreased 9% on lower demand for laundry care solutions, while this care sales increased.
The segment's adjusted EBITDA margin was 15%.
In Q1, 2023 cash flow from operations was $98 million up from the $92 million in Q1 2022 due to improvements in working capital management for our three large capital projects are injectables capacity expansion projects, our state of the art beauty site in France, and our new site in China that will serve us.
All three of our segments, we spent about $19 million in the quarter.
As we have mentioned two of our three large capital projects will come online in the first half of 2023.
Reported depreciation and amortization expense was roughly flat quarter over quarter at approximately $59 million or 7% of sales.
Moving to slide nine which summarizes our outlook for the second quarter, we anticipate a strong momentum to continue and expect second quarter adjusted earnings per share, excluding any restructuring expenses acquisition costs and changes in the unrealized fair value of equity investments to be in the range of $1 11 to $1 19 per share.
The estimated tax rate range for the second quarter is 26% to 28%.
In the second quarter, we will have about a four to six cent impact and startup costs from our Injectables expansion program and ERP implementation.
We expect these costs to taper off to about two to three per quarter for the remainder of the year. Additionally, we are expecting some currency tailwind compared to the prior year. For example, the euro rate for the prior year second quarter was 1.6 and our guidance for the coming second quarter is assuming a 1.08 euro rate, we have said that roughly for every one.
Move in the euro rate that equates to roughly <unk> <unk> per share for the full year. So for the coming quarter. We are looking at approximately a <unk> <unk> currency benefit on earnings compared to the prior year.
We currently estimate depreciation and amortization for 2023 to be between $230 million to $240 million as Stefan mentioned, we expect our capital expenditures in 2023 net of any government grants to be between 280 and $300 million, including a capacity expansion investment.
For our proprietary pharma dispensing devices and.
In closing we continue to have a strong balance sheet with a leverage ratio of one eight which allows us to continue to invest in the business pursue strategic opportunities and continue to return value to shareholders in the form of dividends and repurchases. In addition to our cash dividend payments to shareholders, which totaled $25 million in the quarter, we repurchased approximately.
171000 shares for approximately $20 million at this time Stefan will provide a few closing comments before we move to Q&A.
Thanks, Paul.
In closing as we emerge from the challenging operating environment over the last few years looking ahead for 2023 after is energized for the future and well positioned to create continued long term value for all our stakeholders. Our recent realignment of our beauty and close this segment presents opportunities to break into.
The new market and is already helping us capture new corners of existing markets with our differentiated technologies and strong intellectual property. The distinctive advantage of our proprietary products. This is especially true for our pharma business, which operate in highly regulated markets our pipeline for proprietary pharma to act.
<unk> remained strong as we continue to support the conversion of drugs to our nasal delivery devices, such as epinephrine and medicines for migraines. Additionally, this year, we'll see several key investments come online furthering our efforts to streamline operations and increased capital efficiencies by leveraging common assets.
Our drive to leverage our fixed cost base and reduce our SG&A as a percentage of sales remains a key focus in 2023 and beyond.
We look forward to sharing our progress in the coming quarters.
Before I open the call up for questions and I want to touch on the announcement, we made earlier today.
Our director candidates Matthews has been elected by her appears to be the next independent chair of <unk> Board of directors, succeeding Georgia, Titus who has served as our independent chair for the last five years.
We're very fortunate to have benefited from Georgia CEO experience financial expertise. His wisdom is unflappable demeanor and his extensive understanding of <unk> businesses, all of which have contributed greatly to our overall success and the creation of shareholder value and I'm happy to note that we will continue to benefit from Georgia Council.
As he will remain on our board since joining the board two years ago candidates has become an invaluable contributor to our board with deep experience across each of our end use markets.
<unk> has held leadership roles at Amway, Novartis, Boston loan L'oreal, and Coca Cola amongst others I very much look forward to working even closer with Candace in her new role as independent chair and leveraging our deep global operating experience.
Her extensive knowledge of our markets for sound judgment and inclusive leadership with that I would like to open up the call for your questions.
Yes.
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Yeah.
Our first question today comes from the line of.
Ghansham Panjabi from Baird. Please go ahead. Your line is now anything.
Yeah.
Hi, Good morning, everyone. This is Matt Krieger filling in for Ghansham. Thanks, Thanks, a lot for taking the time to answer our questions.
I guess I just wanted to start off on the on the Capex front. So capex has been elevated since 2021.
Wanted to see what's the timeline that we can expect this investment to really translate into tangible operating income and what's the expected return threshold on elevated spending that we've seen over this time horizon.
Yes, good morning that so as you know we have three major projects coming online successively.
And.
I mean, roughly you can say about the one year. After they come online you will start to see things dropping to the bottom line, but they are not all the same I think you will see the.
Leading best in class custom beauty side.
Start to contribute.
Already in the second quarter and then progressively.
The China plant will come.
<unk> online.
In the second half and start contributing towards the end of the year and then of course Injectables next year.
We've taken down our capital expenditure this year from prior year, but given the extremely brisk demand in our proprietary dispensing devices that are in their very strong order book.
We felt it prudent to accelerate some of the capacity increases.
Usually our returns on our new capacity well above 20%.
<unk> probably will be.
Other than that.
Given the economics of our proprietary devices.
Yes, maybe I can just mention a little bit on the capital return. So we don't while we don't disclose return specifically project by project I think we.
We've said in the past that for the for the French custom beauty, where essentially consolidating five different.
Business units of workshops, rather into one one facility, obviously in a much more efficient efficient manner custom.
Custom beauty for us is a strategic investment in <unk>.
Difficult to pin exactly what that return is going to be on that other than the cost savings involved but it leads to new projects. It leads to additional dispensing solutions et cetera, China is similar in that there is multiple different factories that we're operating under today.
Now, we're putting it all under one roof, a large part of that facility is really to.
Supply the growth that we see on the horizon for the pharma business. There. So and then obviously the big the Big one that's the fund was referring to on the Injectables.
You can expect injectable like margins on that business.
Got it that sounds that's really helpful. That's great context, and then just as a follow up.
Can you talk about any.
Impact that you've seen or you expect to see from from Narcan or similar products entering the OTC retail channel.
Would you expect any <unk>.
One or two quarters to see a significant.
From a stocking period and then just given that this is a product line that you've highlighted very frequently in the past could you could you maybe talk about any potential financial benefit to apcar, more specifically or any sort of general market opportunity.
It'd be really helpful. Thanks.
Yeah.
As I mentioned.
Earlier in my remarks clearly.
We do anticipate that both in quarter, one and quarter two some of the sales for generic and contribute to filling the pipeline for going over the counter.
And that then.
Growth will kind of normalize and general Narcan is a lumpy business.
Many non traditional distribution channels.
So it is a contributor to growth, but keep in mind.
All emergency medicine medicines, including Narcan, but also others make up maybe about 15% of our prescription units.
While it is growing nicely and it might be lumpy and some inventory build in the context of the overall pharma business is still relatively small.
Got it that's that's great. That's it for me. Thank you very much.
Okay.
Thank you. The next question today comes from the line of George Staphos from Bank of America. Please go ahead. Your line is now open.
Good morning, Hope, you're all doing well Stefan Maria Bob Thanks for the details.
Two questions one on operations and then the second on Injectables more from a market where development standpoint to the extent you can comment so on operations Stefan or Bob can you just relayed why the ERP system takes through the end of the year to fully implement kind of what are the.
The steps were the mile markers, where analysts were just seeing from outside to the extent that you can relay. What do you have to do from management standpoint to implement this and along the timeline that you have relatedly you talked a bit about how you're trying to.
Maximize efficiency.
Both in terms of margin and also capital.
Can you talk a bit recognizing its difficult life Mike.
In terms of what that might mean for footprint and then the second question. Just can you remind us again on the expansion that youre seeing in Injectables, but some of your newer elastomer products are allowing you to do in terms of new product development and the end markets that youre getting into you mentioned a couple earlier in the call. If you can provide a couple of details there. Thank you guys.
Sure.
Let's let the tech team.
Our beef up and then I'll come back on capital. So just to put this in context most.
Let me say this <unk> is one of the few companies who has a single instance, where the global.
SAP.
Integrated system.
Most of the time when we do any.
Project, it's an upgrade from a previous version to a new version of the site and frankly, usually it's not a big deal in this case, we're taking basically a business. That's been built on a manual processes in the pharma environment from that to the fully integrated system and.
You you plan everything out, but you never plan for everything so this is really.
Getting making this huge leap.
Bringing the business in the 20 <unk> century from them.
ERP point of view now to your question. So basically in quarter. One we had a number of days the plant being down for that.
Project implementation and then the systems, starting up and the process is being.
Ironed out so that led to a significantly fewer invoice days.
With that the fewer sales.
So.
We are now very much on the other end of the ERP implementation just to give you one one highlight I mean our.
Invoiced revenue in April was about 25% higher than it was in March so we're getting back to normal steady state, but we have this lost revenue from the first quarter and we will not recover that loss revenue until we are through the year, because we have to keep supplying the ongoing business.
Our customers, obviously pick the stuff at the moment is ready to go.
So.
Thats really what the catch up is all about yes, there will still be some inefficiency in quarter two.
Rob gave you a range for that but as far as the ERP implementation is concerned most of that is behind us.
Maybe Bob you add and we'll come back to the capital Yes, No I mean, I think you summarized it well as to fund I mean, obviously the.
The Injectables business is different from our normal legacy pharma business. So there were more processes more stages in the production.
As defensive being that had pharma.
We had an abundance of caution to make sure that everything was operating.
The way it should be so.
There's no concerns there going forward it is just that.
It was a little bit more than what we had anticipated going into the quarter, but the trend is in the right direction as current pointed out in terms of April so the remainder of the year is more tied to the two to three in.
In Q3, and Q4 is more tied to the capacity increase and the new technology than it is at all with the ERP.
On your question on footprint.
And the expansion that lets bifurcate this.
Clearly, we continue to examine our footprint, especially also in beauty and closures to see for additional optimization opportunities as I mentioned earlier.
And once we are ready to discuss as we will.
Of course also often subject to <unk>.
Labor negotiations those are ongoing.
And once we have a wide smoke we will inform you.
In terms of the expansion.
Uh huh.
On the expansion and the kind of product yes.
I highlighted that.
<unk> one because that's a very good example of the kind of biologics that benefit from our premium products.
You know this is a rapidly growing category multiple elastomer components going through each auto injector and multiple CMO was very involved that supply. The three drugs that are on the market and of course, our multiple drugs are in clinical trials and approval processes for additional indications whether it's.
Obesity or.
Non alcoholics.
Hepatitis or non alcoholic fatty liver disease. So we see this as a very.
Strong growth platform and those are going to do a lot of good for people.
That's just one example, clearly.
Some of the the vaccine business is a much weaker, especially since China did not rollout.
A booster.
But on the other hand, you also see some of the smaller molecules.
We need to grow so overall, we feel well positioned to take advantage of the projects that we have in the pipeline and the projects that are in front of us.
Yes building.
<unk> to take advantage of that.
Thank you for all the thoughts and good luck on the quarter guys.
Thanks George.
Thank you.
Our next question today comes from the line of Angel Castillo from Morgan Stanley . Please go ahead. Your line is now open.
Good morning, this is actually Stefan sitting in for Angel. Thanks for taking my question.
I was just wondering if you could provide some detail on what youre seeing across the supply chain.
I know you called out maybe some destocking fails to work there.
Typically enclosures and in North America.
Sure. So it is indeed more of a closure topic and as you know we supply into the food side of things into beverages and into personal care and home care.
See the food side, and the condiments side starting to normalize.
Beverages is also very strong that's more in Europe to be honest in the in the U S.
And then personal care home care is still in a destocking mode, and we expect that to normalize in the second half.
I've said it previously, but it's still boggles the mind, how much the North America supply chain have been impacted by multiple whiplash as up and down. So this is still an inexact science.
To quote one customer.
Who should know all this they can't reconcile it but thats what we see.
Great. Thanks for the color.
Then would you be able to provide a.
Year over year EPS Bridge, I know you called out.
To be a slight tailwind and maybe the tax rate will be another tailwind as the rest of that disturbing for them.
Volume and price or what are you expecting.
Are you referring to the outlook are you referring to the Q1.
I'm just referring to the outlook for example last year you guys did 98 and now Youre guiding to.
One 111th 2019, what are some of the puts and takes there.
Sure. So I mean, the easiest way to do this the fund would be start to start with the first quarter and <unk> 95 for this year.
In Q1, we typically have some higher <unk>.
<unk> comp expense due to subsequent vesting that was about five.
More in Q1 that are being Q2.
We talked about the ERP 12 cent 12.
$12 million negative.
Moving to four to six so if you take the 95 you add those two you are getting closer to the range and as we've said.
The order book looks good in both prescription and consumer health care as well as it does in beauty. So.
We feel that Thats.
Thats, an achievable range for Q2.
Yes from an FX trading.
Trading to dangerous waters here, we still had a headwind in quarter, one quarter two might be neutral, maybe a little tailwind and of course, if we stay at this FX.
It will flip to a tailwind in the second half.
Great. Thanks for the color guys.
Thank you.
The next question today comes from the line of Daniel Rizzo from Jefferies. Please go ahead. Your line is now with it.
Good morning, Thank you for taking my question.
If we think about pharma margins going forward past this year I know, there's some cost with injectable startups, but I was just wondering if.
If kind of the margin squeeze we've been seeing is is something thats going to occur over the next couple of years or if there is an inflection point, where I mean with the new products, you're launching you would see things.
Our margins I should say rebounding within the segment.
Yes.
In general.
This is of course, all mix dependent remember our proprietary devices across our <unk> THC.
The most profitable.
<unk>.
And then comes active materials in Injectables so if.
Like we have right now.
A priority advisers grow rapidly.
The positive effect of course in quarter, one that's been.
Eaten up by the ERP in Injectables.
<unk>.
So it is all mix dependent.
Last piece of departments of course digital health.
Which this year should that be a drag of about eight to 10.
On an EPS basis for the year and as that starts to improve and become contributing.
We certainly stand by our EBITDA range.
Okay. Thank you and then you mentioned the Narcan filling the pipeline is kind of.
Providing a short term boost can you provide what that means in terms of sales at least for the first and second quarter.
Well.
We don't break.
We don't give you that much information, but as I said before.
And I think Bob said Rx was growing.
30 plus percent.
And clearly.
Narcan is part of that but overall emergency medicine, which mark Mark and it's a big part of it but not everything is about 15% of Rx.
Okay. Thank you very much.
Thank you.
The next question today comes from the line of Kyle White from Deutsche Bank. Please go ahead. Your line is now open.
Hey, good morning, Thanks for taking the question on the segment realignment now that you have completed that action just curious any any kind of early learnings.
Or opportunities that you see whether on the commercial side or on the cost savings side and then how should we think about you have previously the long term targets for your segments. So how should we think about the core sales growth or maybe the EBITDA margin target for the new segment you'd enclosures.
Yeah, maybe I'll start with that we don't expect the aggregate long term.
Target ranges to change for the company.
May fine tune, the beauty and closures targeted ranges.
We have our capital markets day.
In September we do want to go through a full cycle of five year planning before we do that.
On the first part of your questions.
Reaction has been really positive both externally and internally.
Customers feel like they're getting more attention on the closures now that it's part of that organization.
A bit keener on getting new business.
As I mentioned earlier, we have some thoughts on footprint optimization already.
You may have seen a very small deals we made in the middle east that will free up some capacity in.
In Europe .
No.
It's just.
The optimization over that.
The four corners of closure is looking to be promising.
Both topline and Bottomline and the beauty business is also benefiting as we expected from further focusing on what they need to get done.
Got it and then some peers called out headwinds related to resin on the beauty side did you guys see any headwinds in the quarter as it relates to your lag in the pass through of resin.
<unk> anything in the second quarter, and maybe just broadly what's your outlook for RASM going forward.
Sure I can.
I can take that so.
To start with the resin is impacting now more the closures business right in the past we had a portion obviously of closures inside of beauty and home.
Now within beauty. It is one of the raw materials, but it is not.
It is not significant enough that their pass throughs or it does not have a material impact on some of the more complex multi component system, but as we as we speak to resin yes.
Probably about 6% of our 8% decline in core sales and closures was due to the pass through of the lower resin prices now we typically have much shorter.
Pass through terms and our legacy food and beverage business than we did on our beauty and home closures business. So we're looking to to try to bring those more in line.
And shorten that cycle, but net net for us it hit the top line didn't have a significant impact on the gross EBITDA dollars, but it did have as we would anticipate a margin expansion effect on EBITDA percentages of sales and.
And going forward.
We are expecting still resident to decline year on year.
And last year, obviously was at much much higher rates, so we're anticipating lower rates for.
For the remainder of the year until maybe we get to Q4, then we lap some of the lower Q4 wasn't rates.
Got it thank you I'll turn it over.
Thank you.
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Next question today comes from the line of Gabe Haiti from Wells Fargo Securities. Please go ahead. Your line is now open.
Good morning, Stefan Murray.
I guess I wanted to revisit the Capex question.
I guess, the incremental $20 million.
Given that is associated with sort of legacy products I'm, assuming that's more equipment.
And things that are going with an existing footprint.
That would maybe yield a little bit of a quicker return.
Maybe if that's a fair characterization.
No I think I think that's.
That's a fair characterization gave I mean, when you look at these types of investments they are capacity related they are related to our proprietary dispensing systems.
These capacity increases don't happen overnight right. So.
We're looking at the pipeline of what we have we're looking at our capacity constraints that we have on horizon, we triangulate with five year plan et cetera, et cetera, and we feel it's the right time to increase capacity on some of those product lines. So they won't contribute until a year later from now, but if we don't we would find ourselves.
Potentially capacity constrained situation down the road, but you're absolutely right, they're going to existing facilities. So no construction of new plants or anything like that.
Okay and then.
Maybe I'll rattle off all the risks.
Reason why I'm not a good analyst so.
With the re segmentation and saw the seasonality not being.
What we're accustomed to over the past three years.
And then kind of this ERP implementation.
If we were to sort of look at even just bridging into the second half you talked about.
I'll call it the easy one ERP implementation kind of go into two or three.
It sounds like there is really no resin headwind in the second quarter is there anything else that we should think about from a seasonality standpoint.
Sure.
Projects ramping up things like that.
That would sort of.
Cause you to deviate from historical trends.
In the back half.
No I would I would say.
Typically Q2 and Q3.
Historically have been a little bit stronger than Q1, and Q4, but you know.
Theres always some exceptions to it I think what we're seeing is the momentum and the strength in Q1, continuing on into Q2, but as it relates to maybe some of the closures business.
Clearly beverage is a big driver in the closures business for for Q2 and Q3.
But I don't think thats, having a material effect on them.
On what we see going forward.
The effect is really coming from the pharma business and the continuing strength of the beauty business right now.
Okay. Thank you.
Thank you.
The next question today comes from the line of Matt <unk> from William Blair. Please go ahead. Your line is now open.
Yes, hi, good morning.
On the GOP, one opportunity you referenced participation.
The product could you just maybe share how you are.
Dissipating as it is it the same with each of the products that we'll be on the market.
Sort of what.
What that sort of per unit.
Opportunity it looks like relative to a typical <unk>.
I'll ask one opportunity.
Okay. So.
I think you asked about <unk>, but you were kind of cutting out is that correct.
That is yes, I just wanted to understand.
How you're participating in each of the three.
Products, if it's the same.
Yes.
For competitive reasons.
Not going to disclose that but when you look at these auto injectors.
The principles are all the same they have a.
<unk> injection mechanism.
Plunger.
Have a cap with a needle shields.
Have some plastic parts.
And.
Multiple CMO supplier each of the two major players.
<unk> and Eli Lilly.
And.
So there are multiple opportunities to participate and we participate in each of those three blockbusters.
And anticipate also.
Participating in the the ones that will be launched in the future. So overall this is a very interesting area and a good margin opportunity for us.
Okay, and then as we think about just.
The rapid and maybe potential future.
Approvals are additional indications.
Should we think about the opportunity we have been essentially in line with end market script growth or are you anticipating any sort of lumpiness.
As products that go.
No I think thats a good assumption, we certainly wouldn't provide anything else.
Alright, thank you.
Thank you.
There were no additional questions waiting so I would like to pass the conference back over to Mr. <unk> for any closing remarks.
Great I appreciate everybody's questions and interest.
Just take a moment to zoom out.
If we look at quarter, one we clearly have very brisk demand.
In our proprietary dispensing devices across Rx and C C.
And that's reflective of a very strong order book I mean, both.
The continuous expansion of allergies that needs emergency medications.
The discovery of the nose.
An integral part of personal.
Grooming routine.
Is really the driver behind that and we are very.
Bullish about continued growth for those two categories.
The decline we had in Injectables and active materials of course, we are both transitory topics that will abate for quarter two and beyond.
We had good growth in beauty in Europe , and Latin America, some trepidation in the U S and China with China, improving and of course, we had the additional cost for substitute resting so as we look at Q2.
Proprietary devices and pharma will continue to pull very strongly injectables and active material normalize on a year over year basis beauty will keep pulling from what we see from the order book.
On a more normal in North America, and we expect that China will start pulling again.
Enclosures are starting to normalize the corporate cost headwinds.
Going away and on a more normal and of course.
Foreign exchange may be awash for quarter, two and then as we look out over the second half.
Some of the restaurants will come online and contribute.
We are focused on executing our growth plans some of the cost actions that will start to contribute.
Exchange rate stays where they are that will flip to a tailwind. So overall, we feel very energized for 2023.
Thank you and looking forward to talk to you on the road.
This concludes today's conference call. Thank you for your participation you may now disconnect your lines.
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