Q1 2025 AptarGroup Inc Earnings Call

May 2, 2025

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Unknown Executive: Ladies and gentlemen, thank you for standing by.

Ladies and gentlemen.

Starting by.

Mary Skafidas: Welcome to Aptar's 2025 first quarter results conference call. At this time, all participants are in a listen-only mode.

Welcome to <unk> 2025 first quarter results conference call.

At this time all participants are in a listen only mode.

Mary Skafidas: Later we will conduct a question and answer session.

Later, we will conduct a question and answer session.

Mary Skafidas: Introducing today's conference call is Mrs Mary Skafidas, Senior Vice President, Investor Relations and Communications. Please go ahead. Thank you.

Speaker Change: Introducing today's conference call is Mrs married Cathetus Senior Vice President Investor Relations and Communications. Please go ahead.

Speaker Change: Thank you Hello, everyone and thanks for being with US today, our speakers for the call are Stefan tender, our president and CEO and Vanessa Canoe.

Mary Skafidas: Hello everyone. And thanks for being with us today.

Mary Skafidas: Our speakers for the call are Stephan Tanda, our president and CEO, and Vanessa Kanu, our executive vice president and CFO.

Vanessa Canoe: Executive Vice President and CFO.

Mary Skafidas: A 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.

Vanessa Canoe: Our press release and accompanying slide deck has been posted on our website under the Investor Relations page.

Vanessa Canoe: During this call we will be discussing certain non-GAAP financial measures.

Vanessa Canoe: 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 all.

Mary Skafidas: As always, we will also post a replay of this call on our website.

Vanessa Canoe: So post a replay of this call on our website.

Mary Skafidas: I would now like to turn the call over to Stephan. Stephan, over to you.

Vanessa Canoe: I'd now like to turn the call over to Stefan Stefan over to you.

Stephan Tanda: 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.

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 first quarter results later in the call Vanessa <unk>, our CFO, who will provide additional details on key drivers for the quarter.

Stephan Tanda: Later in the call, Vanessa Kanu, our CFO, will provide additional details on key drivers for the quarter. Starting on slide three, for the first quarter, we delivered adjusted earnings per share of $1.20. Neutralizing for currency effects and tax, earnings per share would have increased approximately 5% over the prior year period. We felt solid demand for our pharma segment's proprietary drug delivery systems, especially technologies for emergency medicines, central nervous system therapeutics, asthma, COPD, and ophthalmic treatments. Additionally, strong active material sales in diabetes solutions and royalties contributed positively to our quarterly results. Core sales for our proprietary drug delivery systems grew 4% in the quarter following high single-digit core sales growth in the prior year period.

Stefan: Starting on slide three for the first quarter, we delivered adjusted earnings per share of $1 20, neutralizing for currency effects and tax earnings per share would have increased approximately 5% over the prior year period.

Stefan: We saw solid demand for our pharma segment's proprietary drug delivery systems, especially technologies for emergency medicine central nervous system therapeutics asthma, COPD and ophthalmic treatments. Additionally, strong active material sales in diabetes solutions and royalties contributed positively to our quarter.

Stefan: Early results.

Stefan: Core sales for our proprietary drug delivery systems grew 4% in the quarter following high single digit core sales growth in the prior year period, as we expected quarter. One 2025 was impacted by softer demand for dispensing technologies Amazing saline.

Stephan Tanda: As we expected, quarter one 2025 was impacted by softer demand for dispensing technologies in nasal saline and nasal decongestant. The strong cold and flu season is helping to deplete some of the inventory build-up. At this time, aside from the U.S., we are not yet seeing an inflection point in our order book, indicating that there is still inventory in the system. Our proprietary drug delivery systems reported sales have grown over the prior year period for 12 quarters in a row, growing double digits in six of those quarters. We are very proud of the success of the team, fueled by record launches, new innovations, and the quality and reliability of our products, essential in administering life-saving medication.

Stefan: Nasal decongestants.

Stefan: The strong cold and flu season is helping to deplete some of the inventory buildup at this time aside from the U S. We are not yet seeing an inflection point in our order book, indicating that there is still inventory in the system.

Stefan: Our proprietary drug delivery systems reported sales have grown over the prior year period for 12 quarters in a row growing double digits in six of those quarters.

Stefan: We are very proud of the success of the team fueled by record launches new innovations and the quality and the reliability of our products essential in administering lifesaving medications.

Stephan Tanda: And while we anticipate there will be phases of rapid growth and more moderate growth, we remain confident in our growth prospect. Our long-term growth is driven by strong macro trends, such as the decentralization of healthcare, growth of generic medicines, the switch of drugs to over-the-counter markets, and always-worsening allergies. The injectables division had a challenging comparison over the prior year period. Our order book for injectables in 2025 is robust, and we expect to continue to see good demand from GLP-1 and Biologic. We continue to ramp up equipment capacities and our validation efforts to service the attractive growth in this end market.

Stefan: And while we anticipate there will be phases of rapid growth and more moderate growth, we remain confident in our growth prospects.

Stefan: Our long term growth is driven by strong macro trends such as the decentralization of health care growth of generic medicines, the switch of drugs to over the counter markets.

Stefan: And always worsening allergies.

Stefan: The Injectables Division had a challenging comparison over the prior year period, our order book for Injectables in 2025 is robust and we expect to continue to see good demand from <unk> and biologics, we continue to ramp up equipment capacity and our validation efforts to service the attractive growth.

Stefan: In this end market.

Stephan Tanda: In our beauty segment, prestige fragrance and facial skin care markets remain challenged. However, we saw sequential improvement in sales, including in Europe from certain fragrance companies and progressive improvement in China. Turning to the closure segment, the solid product sales results in the quarter were offset primarily by meaningfully lower tooling sales and the discontinuation of activities in Argentina. Improving utilization rates and continuous cost management efforts, coupled with our strong innovation pipeline, are contributing to top line and bottom line results.

Stefan: In our beauty segment prestige fragrance and facial skin care market remains challenged however, we saw sequential improvement in sales, including in Europe from circuit fragrance companies.

Stefan: And progressive improvement in China.

Stefan: Turning to the closure segment.

Stefan: <unk> product sales results in the quarter were offset primarily a meaningfully lower tooling sales and the discontinuation of activities in Argentina improving.

Stefan: Improving utilization rates and continuous cost management efforts, coupled with our strong innovation pipeline are contributing to topline and bottom line results.

Stephan Tanda: Moving to slide four, I am proud to highlight recent corporate awards and recognition. We believe operating in a sustainable manner and developing more sustainable product solutions is an important competitive advantage for Aptar.

Stefan: Moving to slide four I am proud to highlight recent corporate awards and recognitions.

Stefan: We believe operating in a sustainable manner and developing more sustainable product solutions is an important competitive advantage for <unk>.

Stephan Tanda: As a reflection of our progress during the quarter, we were named one of Barron's most sustainable U.S. companies for the seventh consecutive year. We also achieved the coveted Echo Rating Platinum Level Rating in recognition of our sustainability efforts for the fifth consecutive year. The Platinum rating places us among the top 1% of more than 150,000 companies rated by AccoValues across all industries.

Stefan: As a reflection of our progress during the quarter. We were named one of Barron's most sustainable U S companies for the seventh consecutive year. We also achieved a coveted activates platinum level rating in recognition of our sustainability efforts for the fifth consecutive year.

Stefan: Platinum rating places us among the top 1% of more than 150000 companies rated by activated across all industries.

Stephan Tanda: Turning to innovation, I want to highlight a few recent technologies and product launches as shown on slide five. Starting with our pharma segment, our nasal delivery system is the solution for nasal saline rinse in Germany. In China, our ophthalmic squeeze dispenser is the solution for the multi-dose preservative-free drops by VisionX Lab. Last but not least, we recently announced a clinical validation study for our SmartTrack services platform. After almost a decade of development, aiming to reduce the need for clinical trials in generic inhaled drug approvals by leveraging in-vitro, in-silico methods to predict clinical outcomes. The validation study is scheduled for the second quarter of 2025 and is a key step forward in proving the platform's effectiveness.

Stefan: Turning to innovation I want to highlight a few recent technologies and product launches as shown on slide five starting with our pharma segment, our nasal delivery system is the solution for nasal saline rinse in Germany in China, Our ophthalmic squeeze dispenser is the solution for the multi dose preservative free drops by vision next lab.

Stefan: Last but not least.

Stefan: We recently announced a clinical validation study for our Smart Trek services platform. After almost a decade of development aiming to reduce the need for clinical trials in generic inhaled drug approvals by leveraging in vitro in silicon methods to predict clinical outcomes.

Stefan: The Asian study is scheduled for the second quarter of 2025 and is a key step forward improving the platform's effectiveness.

Stephan Tanda: We expect that SmartTrack will help our customers speed up ANDA approvals and make generic inhaled medicines more accessible to patients. We anticipate the study to also support efforts such as creating low global warming potential powder meter dose inhaler formulations, developing new drug combinations, repurposing drugs, and advancing new chemical entities.

Stefan: We expect that smart Trek will help our customers to speed up anda approvals and make generic medicines more accessible to patients.

Stefan: <unk>. The study to also support efforts such as creating low global warming potential powder metered dose inhaler formulations.

Stefan: <unk>, new drug combinations, repurposing drugs, and advancing new chemical entities.

Stephan Tanda: In beauty, our refillable fragrance pump is the dispensing solution for L'Oreal's new Yves Saint Laurent fragrance in Europe. In Latin America, O Boticario has selected our pump for a new men's fragrance, and our custom dispensing pump is on the Beiersdorf Eucerin brand lotion. In Asia, our customized cosmetics pump is used in P&G's Olay Serum Facial Skin Care products. Our buildable drop-by-drop dispenser is featured on the Boima Suncare brand in the U.S.

Stefan: In beauty, our refillable fragrance pump is the dispensing solution for <unk>, New E. Standalone fragrance in Europe, and Latin America or put the carrier has selected our pumps for a new mens fragrance and our custom dispensing pump is on the bias you Syrian brand lotion.

Stefan: In Asia, our customized cosmetics pump is Houston P&g's, Alicia on facial skincare product.

Stefan: Buildable drop by drop dispenser is featured on the <unk> Sun care brand in the U S.

Stephan Tanda: Moving to closures. Hidden Valley Ranch inverted salad dressing features our new lightweight closure with fully recyclable valve. Now on the grocery store shelves in North America. In Latin America, L'Oreal is featuring our fully recyclable e-commerce capable disc top solution on its Garnier Practice hair care product. And in China, our sports closure is featured on the New Lean brand sports drink.

Stefan: Moving to closures hidden Valley ranch inverted salad dressing features our new lightweight closure with fully recyclable valve.

Stefan: Now on the grocery store shelves in North America, and Latin America, L'oreal is featuring a fully recyclable e-commerce capable of desktop solution on <unk> practice hair care products.

Stefan: Uh huh.

Stefan: Sports closure is featured on the new lean brand sports drink.

Stephan Tanda: Before I turn the call over to Vanessa to share further details on the quarter, I want to highlight that we ramped up our share repurchases in the first quarter, repurchasing more than half a million shares for about $80 million. Our share repurchases underscore our belief in the future trajectory of the company.

Stefan: Before I turn the call over to an asset to share further details on the quarter I want to highlight that we ramped up our share repurchases in the first quarter repurchasing more than half a million shares for about $80 million.

Vanessa Canoe: Share repurchases underscore our belief in the future trajectory of the company now I will turn the call over to Vanessa <unk>.

Vanessa Kanu: Now I will turn the call over to Vanessa. Thank you, Stephan, and good morning, everyone. Let me begin by summarizing the highlights for the quarter. Starting on slide 6, our reported sales decreased 3%, which included a foreign currency translation headwind of approximately 3%. Therefore, course sales were flat compared to the prior year period. As shown on slide 7, we achieved adjusted EBITDA of $183 million, an increase of 3% from the prior year period. We reported adjusted deleted earnings per share of $1.20. versus the prior years $1.22 at comparable The effective tax rate for the first quarter was 25.8% compared to 20.5% in the year prior.

Vanessa Canoe: Thank you Stefan and good morning, everyone.

Vanessa Canoe: Let me begin by summarizing the highlights for the quarter.

Vanessa Canoe: Starting on slide six our reported sales decreased 3%, which included a foreign currency translation headwind of approximately 3%.

Vanessa Canoe: Therefore core sales were flat compared to the prior year period.

Vanessa Canoe: As shown on slide seven we achieved adjusted EBITDA of $183 million, an increase of 3% from the prior year period.

Vanessa Canoe: Reported adjusted diluted earnings per share of $1 20.

Vanessa Canoe: Versus the prior year of $1 22 at comparable exchange rates.

Vanessa Canoe: The effective tax rate for the first quarter was 25, 8% compared to 25% in the year prior.

Vanessa Kanu: The higher effective tax rate reflects the estimated impact of the temporary 2025 surtax enacted in France during the quarter. Lower tax benefits from share-based compensation and certain non-recurring incentives received in the prior year quarter. If we were to adjust Q1 2024 earnings per share, keeping tax rates constant, the comparable adjusted EPS would be $1.40. Neutralizing for currency effects and tax, EPS would have increased 5% over the prior year quarter.

Vanessa Canoe: The higher effective tax rate reflects the estimated impact of the temporary 2025 star tax and lasted in France during the quarter.

Vanessa Canoe: Lower tax benefits from share based compensation and certain nonrecurring incentives received in the prior year quarter.

Vanessa Canoe: If we were to adjust Q1 2024 earnings per share keeping tax rates constant the comparable adjusted EPS would be $1 14.

Vanessa Canoe: Neutralizing for currency effects and tax EPS would have increased 5% over the prior year quarter.

Vanessa Kanu: With those high level comments, let's take a closer look at segment performance. Our Pharma segments core sales increased 3%. Let me break that down by market starting with our proprietary drug delivery. Prescription core sales increased 10%, primarily due to continued strong demand for dosing and dispensing technologies for emergency medicines, as well as central nervous system, asthma, and COPD therapy. Consumer Healthcare core sales decreased 10% driven by softer demand for nasal decongestants, nasal saline rinse solutions, as well as cough and cold medicines as inventory management continued at the customer level. The continued growth in sales for ophthalmic solutions could not offset Injectables core sales decreased 8% due to a tough comparison from the prior year's quarter, a catch-up quarter post the division's implementation of its enterprise resource planning.

Vanessa Canoe: With those high level comments, let's take a closer look at segment performance.

Vanessa Canoe: Our pharma segment's core sales increased 3%.

Vanessa Canoe: Let me break that down by market, starting with our proprietary drug delivery system.

Vanessa Canoe: Prescription core sales increased 10%.

Vanessa Canoe: Due to continued strong demand for dosing and dispensing technologies for emergency medicine.

Vanessa Canoe: A central nervous system asthma and COPD therapeutics.

Vanessa Canoe: Consumer health care core sales decreased 10% driven by softer demand for nasal decongestant nasal saline solutions as well as cough and cold medicines.

Vanessa Canoe: Inventory management continued at the customer level.

Vanessa Canoe: The continued growth in sales for ophthalmic solutions could not offset this decline.

Vanessa Canoe: Injectables core sales decreased 8% due to a tough comparison from the prior year's quarter, a catch up quarter post the division's implementation of its enterprise resource planning system.

Vanessa Kanu: And for our active material science solutions, core sales increased 11% driven by increased demand for our diabetes and probiotic In addition, we benefited from higher tooling sales in the course. Pharma's adjusted EBITDA margin for the quarter was 34.8%, a 230 basis points improvement from the prior year. The margin improvement was driven by increased sales of higher value products and services, including royalties and continued cost efficiency initiatives. Moving to our beauty segment, core sales decreased 3% in the quarter.

Vanessa Canoe: And for our active material science solutions core sales increased 11% driven by increased demand for our diabetes and probiotic solution.

Vanessa Canoe: In addition, we benefited from higher tooling sales in the quarter.

Vanessa Canoe: Pharmacy, adjusted EBITDA margin for the quarter was 34, 8%, a 230 basis point improvement from the prior year.

Vanessa Canoe: The margin improvement was driven by increased sales of higher value products and services, including royalties and continued cost efficiency initiatives.

Vanessa Canoe: Moving to our beauty segment core sales decreased 3% in the quarter.

Vanessa Kanu: Looking at the beauty segment by market. Fragrance, Facial Skin Care, and Color Cosmetics core sales decreased 11%, due largely to lower sales of higher value prestige fragrance products, particularly in Europe. While core sales of Mastige Fragrance grew double digits, it could not upset the software demand for dispensing solutions in Prestige Fragrance and facial skin care. Although we do believe that sales for dispensing technologies in these end markets should start to improve progressively. Personal care core sales increased 9% with continued demand for body care and hair care opportunities. Homecare core sales increased 15% primarily due to continued growth of air care applications and surface cleaning products.

Vanessa Canoe: Looking at the beauty segment by market.

Vanessa Canoe: Fragrance facial skincare and color cosmetics core sales decreased 11% due largely to lower sales of higher value prestige fragrance products, particularly in Europe.

Vanessa Canoe: While core sales of Masstige fragrance grew double digits, it could not offset the softer demand for dispensing solutions in prestige fragrance and facial skincare.

Vanessa Canoe: Although we do believe that sales for dispensing technologies in these end market should start to improve progressively.

Vanessa Canoe: Personal care core sales increased 9% with continued demand for body care and hair care applications.

Vanessa Canoe: Home care core sales increased 15%, primarily due to continued growth of air care applications and surface cleaning products.

Vanessa Kanu: This segment's adjusted EBITDA margin for the quarter was 12.1%, a decline of 50 basis points, largely driven by lower Prestige Fragrance volume.

Vanessa Canoe: This segment's adjusted EBITDA margin for the quarter was 12, 1% a decline of 50 basis points, largely driven by lower prestige fragrance volumes.

Vanessa Kanu: In the closure segment, core sales decreased by 2% compared with the priority. The segment saw product sales growth in virtually all end markets. These positive results were offset by lower tooling sales and unprofitable sales that the company chose to no longer service. Without these headwinds, course sales would have increased by 3%. When looking at the market field foreclosures. food court sales were flat. higher product sales were offset by significantly lower tooling sales compared to the prior year period. Product sales for food were driven by increased demand for granular powder, Asian sauces, and salad dressing, somewhat offset by a decline in sales for food protection.

Vanessa Canoe: And the closer of segments.

Vanessa Canoe: Our sales decreased by 2% compared with the prior year.

Vanessa Canoe: The segment saw product sales growth in virtually all end markets.

Vanessa Canoe: These positive results were offset by lower tooling sales and unprofitable sales that the company chose to no longer service.

Vanessa Canoe: Without these headwinds core sales would have increased by 3%.

Vanessa Canoe: When looking at the market feels for closures.

Vanessa Canoe: Food core sales were flat.

Higher product sales were offset by significantly lower tooling sales compared to the prior year period.

Vanessa Canoe: Product sales for food were driven by increased demand for granular powder Asian, sauces, and salad dressing somewhat offset by a decline in sales for food protection.

Vanessa Kanu: beverage core sales were flat. As with food, the higher beverage product sales were offset by significantly lower tooling sales compared to the prior year. product sales growth was driven by increased demand for functional drinks and Personal care course sales decreased 15% due to software demand in two of its larger categories, body skin care and hair care products. While in our other category, which includes beauty, home care and health care, horse sales increased 7% given by higher sales for dish care and laundry care. This segment's adjusted EBITDA margin was 15.8%, representing an 80 basic points improvement over the prior year, primarily due to product volume growth and continuing cost management.

Vanessa Canoe: <unk> core sales were flat.

Vanessa Canoe: As a food.

Vanessa Canoe: Higher beverage product sales were offset by significantly lower tooling sales compared to the prior year.

Vanessa Canoe: Product sales growth was driven by increased demand for functional drinks and concentrate.

Vanessa Canoe: Personal care core sales decreased 15% due to softer demand in two of its larger categories body skincare and hair care products.

Vanessa Canoe: While in our other category, which includes beauty home care and health care core sales increased 7% driven by higher sales for dish care and laundry care solutions.

Vanessa Canoe: This segment's adjusted EBITDA margin was 15, 8%, representing an 80 basis point improvement over the prior year, primarily due to product volume growth and continuing cost management.

Vanessa Kanu: The contribution from our segments resulted in our consolidated growth margins expanding by 160 basis points, while consolidated adjusted EBITDA margins expanded by 120 basis points to 20.7% compared to 19.5% in the prior year period. Indeed, driven by improved revenue mix and the positive impact from our ongoing cost improvement and productivity.

Vanessa Canoe: The contribution from our segments resulted in our consolidated gross margin expanding by 160 basis points, while consolidated adjusted EBITDA margins expanded by 120 basis points to 27% compared to 19, 5% in the prior year period.

Vanessa Canoe: Indeed, driven by improved revenue mix and the positive impacts from our ongoing cost improvements and productivity efforts.

Vanessa Kanu: Moving over to cash. Free cash flow was $26 million for the quarter, resulting from cash from operations of $83 million net of capital expenditures of $57 million. Free cash flow increased by $9 million from the prior year quarter.

Vanessa Canoe: Moving over to cash flow free.

Vanessa Canoe: Free cash flow was $26 million for the quarter, resulting from cash from operations of $83 million net of capital expenditures of $57 million.

Vanessa Canoe: Free cash flow increased by $9 million from the prior year quarter.

Vanessa Kanu: As Stephan mentioned, we stepped up our share repurchases in the quarter and returned approximately $110 million to shareholders in the form of roughly $30 million in dividends and $80 million in share repurchases. You may recall that in October of 2024, our board authorized the repurchase of up to $500 million of common stock. As of the end of Q1, there was approximately $383 million of authorized share repurchases remaining under the existing authorization.

As Stefan mentioned, we stepped up our share repurchases in the quarter and returned approximately $110 million to shareholders in the form of roughly $30 million in dividends and $80 million and share repurchases.

Vanessa Canoe: You may recall that in October of 2024, our board authorized the repurchase of up to $500 million of common stock.

Vanessa Canoe: As of the end of Q1, there was approximately $383 million of authorized share repurchases remaining under the existing authorization.

Vanessa Kanu: Finally, we ended the quarter with a strong balance sheet once again, reflecting a cash balance of $126 million as of March 31, net debt of $870 million, and a leverage ratio of 1.1%.

Vanessa Canoe: Finally, we ended the quarter with a strong balance sheet once again, reflecting a cash balance of $126 million as of March 31.

Vanessa Canoe: Net debt of $870 million and a leverage ratio of 116.

Vanessa Kanu: Now moving on to Outlook. Slide 8 summarizes our outlook for the second quarter.

Vanessa Canoe: Now moving on to outlook.

Vanessa Canoe: <unk> eight summarizes our outlook for the second quarter.

Vanessa Kanu: We anticipate second quarter adjusted earnings per share, which, as a reminder, excludes any restructuring expenses, acquisition costs, and changes in the unrealized fair value of equity investments to be in the range of $1.56 to $1.64 per share. Our effective tax rate range for the second quarter is 19 to 21%, primarily due to a one-time tax benefit, as well as ongoing tax optimization planning.

Vanessa Canoe: We anticipate second quarter adjusted earnings per share, which as a reminder, excludes any restructuring expenses acquisition costs and changes in the unrealized fair value of equity investments to be in the range of $1 56 to $1 64 per share.

Vanessa Canoe: Our effective tax rate range for the second quarter is 19% to 21% primarily due to a one time tax benefits as well as ongoing tax optimization planning.

Vanessa Kanu: Additionally, I wanted to touch on tariffs before handing over the call to Stephan. with the evolving tariff situation, we are closely monitoring potential impact. At this point in time, the net effect is expected to be limited. In our portfolio, we have some pharma products exported from Europe, while our beauty and closure segments have more exposure to Mexico. both in terms of manufacturing and material sources.

Vanessa Canoe: Additionally, I wanted to touch on tariffs before handing over the call to Stephane.

Stephane: Well the evolving tariff situation, we are closely monitoring potential impacts.

Stephane: At this point in time, the net effect is expected to be limited.

Stephane: In our portfolio, we have some form of product export it from Europe, while our beauty and closure segments have more exposure to Mexico, both in terms of manufacturing and material sourcing.

Vanessa Kanu: Given how quickly things are changing, it's difficult to draw definitive conclusions. Once the landscape settles, we expect supply chains will adapt as they have in the past. What positions us well is our truly global.

Stephane: Given how quickly things are changing it's difficult to draw definitive conclusions at this stage.

Stephane: Once the landscape settles, we expect supply chain will adopt as they have in the past.

Stephane: What positions us well is our truly global footprint.

Stephan Tanda: operating in 20 countries with around 49 manufacturing sites, giving us the flexibility to shift and respond as At this time, Stephan will provide a few closing comments before we move to Q&A. Thank you, Vanessa. In times of economic uncertainty, our resilience becomes our greatest asset. At Aptar, we are dedicated to providing the essential products that keep our community strong and healthy. Our position as a leader in dosing, dispensing and protection technologies across a number of resilient end markets, including medications to treat chronic conditions and consumer staples that are relied on by millions of people every day underpin our business.

Stephane: Operating in 20 countries with around 49 manufacturing site.

Stephane: Giving us the flexibility to shift and respond as needed.

Stephane: At this time, Stefan who will provide a few closing comments before we move to Q&A.

Stefan: Thank you Vanessa.

Stefan: In times of economic uncertainty, our resilience becomes our greatest asset.

Speaker Change: After we are dedicated to providing the essential products to keep our community is strong and healthy.

Speaker Change: Our position as the leader in dosing dispensing and protection technologies across a number of resilient end markets, including medications to treat chronic conditions and consumer staples that are relied on by millions of people every day underpinning our business. Additionally, our robust largely.

Stephan Tanda: Additionally, our robust, largely in-region, for-region supply chain structure that we adopted decades ago allows us to adapt with agility and flexibility to the changing needs of our customers. Regarding tariffs, while we need to remain watchful, changing dynamics also bring opportunities, especially with our strong North American footprint. As a reminder, we have 11 plants in North America, nine of those in the US and two in Mexico, giving us a competitive edge in production capacity across each of our segments. Our large and unique North American footprint strengthens our reliability and responsibility. Additionally, we are expanding distribution opportunities for our beauty segment as market demand increases, particularly in response to tariff-related concerns, leading to a notable rise in sample requests.

Speaker Change: In region for region supply chain structure that we adopted decades ago allows us to adapt with agility and flexibility to the changing needs of our customers.

Speaker Change: Regarding tariffs, where we need to remain watchful.

Speaker Change: Changing dynamics also bring opportunities, especially with our strong North American footprint. As a reminder, we have 11 plants in North America nine of those in the U S and two in Mexico, giving us a competitive edge in production capacity across each of our segments.

Speaker Change: A large and unique north American footprint strengthens our reliability and responsiveness.

Speaker Change: Additionally, we are expanding distribution opportunities for our beauty segment is.

Speaker Change: Market demand increases, particularly in response to tariff related concerns leading to a notable rise and sample requests.

Stephan Tanda: And when it comes to our closure segment, our mostly localized approach ensures proximity to customers, enhancing service and efficiency. The environment around us continues to change almost daily, and while we will remain vigilant, we are also aware of the opportunities that this disruption will bring. Looking ahead, we expect a strong second quarter with positive contributions from all three segments. In addition to the contribution from our strong pharma franchise, we anticipate a stronger quarter two for beauty and foreclosures. We are excited and encouraged by the order book and by our innovations that are winning the hearts and minds of our customers, patients, and consumers.

Speaker Change: And when it comes to our closures segment are mostly localized approach insurance proximity to customers enhancing service and efficiency.

Speaker Change: The environment around us continues to change almost daily and why we will remain vigilant were also aware of the opportunities that this disruption will bring.

Speaker Change: Looking ahead, we expect a strong second quarter with positive contributions from all three segments. In addition to the contribution from our strong pharma franchise, we anticipate a stronger quarter two for beauty and foreclosures.

Speaker Change: We are excited and encouraged by the order book and by our innovations that are winning the hearts and minds of our customers patients and consumers as we navigate the challenges and opportunities ahead, we remain committed to supporting and investing in this fundamental needs that have propelled our company's growth.

Stephan Tanda: As we navigate the challenges and opportunities ahead, we remain committed to supporting and investing in these fundamental needs that have propelled our company's growth.

Stephan Tanda: With that, I would like to open up the call for your questions. Thank you, Stephan.

Speaker Change: I would like to open up the call for your questions.

Stefan: Thank you Stefan.

Unknown Executive: We will now begin the question and answer session. If you would like to ask a question, please press star followed by 1 on your telephone keypad. If you change your mind and would like to remove that request, you can do so by pressing star then 2. And as a reminder, that is star followed by 1 to ask any questions.

Stefan: We will now begin the question answer session. If you would like to ask a question. Please press star followed by one on your kind of think keypad.

Stefan: If you change your mind and would like to meet that request you can do say, but taking styling and tea.

Stefan: And as a reminder, distyle Phillip island to ask any questions.

Unknown Executive: We'll close here briefly while questions are registered.

Speaker Change: Well close it briefly last question Bob I just did.

Stefan: Okay.

George Staphos: Your first question comes from George Staphos with Bank of America. Please go ahead. Hi, everyone. Good morning. Hope you're doing well. Thanks for the details.

Stefan: Your first question comes from.

Stefan: George Staphos with Bank of America. Please go ahead.

Stefan: Okay.

Speaker Change: Hi, everyone. Good morning, I hope you're doing well thanks for the details.

George Staphos: I guess first question I had, Stephan, if you can give us a little bit more color in terms of what you're seeing in terms of order patterns and inventory levels. You mentioned that you haven't gotten past perhaps inflection point in farm and restocking on CHC. Add and amend as you wish there, just appreciate a bit more color there.

Speaker Change: I guess first question I had stephane, if you can give us a little bit more color in terms of what youre seeing in terms of order patterns and inventory levels.

Speaker Change: You mentioned that you haven't gotten past, perhaps inflection point.

Speaker Change: In pharma and restocking on THC.

Speaker Change:

Speaker Change: And.

Speaker Change: And as you wish there just appreciate a bit more color there.

George Staphos: And then can you give us a bit more color in terms of what's happening with GLP-1s and how that's helping injectables? I don't know if you're going to be in a position to quantify, but if you can give a bit more color there, that would be helpful. and the Add1File. Great.

Speaker Change: And then can you give us a bit more color in terms of what's happening with <unk> and how that's helping injectables.

Speaker Change: I don't know if you're gonna be inefficient to quantify but if you can give a bit more color there that'd be helpful too.

Speaker Change: One follow on.

Speaker Change: Yeah.

Speaker Change: Great.

Stephan Tanda: Good morning, George. General sense is that the companies, after a somewhat slow Q4 and Q1, are re-accelerating into Q2 across a broad range of end users. So we see good poised new orders and new projects in beauty, we see continuing good strong size demand enclosures. On the pharma side, proprietary drug delivery engine is humming along, injectables is doing well, good demand, frankly it's more about us ramping up our capability and validating equipment and then as you saw active material is doing well. Indeed the notable exception is cold and cough, we certainly see that U.S. inventories have been not depleted but come to a more normal level based on the strong U.S.

Speaker Change: Good morning, George.

Speaker Change: The use of funds.

Speaker Change: General sense is that.

Speaker Change: Companies.

Speaker Change: Terry somewhat slow Q4, and Q1 are re accelerating into Q2 across a broad range of end users.

Speaker Change: So we see good.

Speaker Change: Poison new orders and new projects in beauty, we see cookies, a good strong demand in closures.

Speaker Change: The pharma side, our proprietary drug delivery engine is humming along.

Speaker Change: Injectables is doing well.

Speaker Change: Good demand frankly, it's more about the ramping up of our capability and validating equipment and then these are active material is doing well.

Speaker Change: Indeed, the notable exception is cold and cough.

Speaker Change: We certainly see that U S inventories have been.

Speaker Change: Not depleted become the more normal level based on the strong U.

Speaker Change: Cold and flu season, we have not seen that yet.

Stephan Tanda: flu season. We have not seen that yet in other areas and at this point we probably see another quarter of the stocking, the visibility is not great, we'll know more in the next quarter.

Speaker Change: Other areas.

Speaker Change: At this point, we'd probably see another quarter of Destocking the visibility is not great.

Speaker Change: We'll know more.

Speaker Change: And the next quarter.

Speaker Change:

Stephan Tanda: Having said all that, let me get in the inventory. build up and then destocking cycles. It's a non trivial exercise to tease apart all the variables and just for argument's sake, let's say We are short a particular SKU and cannot meet demand for customer, short shift the customer. Then next time the customer places an order, they add a little extra for good measure. We didn't expect an additional demand, so we again cannot meet. And then the story keeps going on until the customer is hoarded a bunch without obviously telling us, otherwise they're concerned that we short shift them even more.

Speaker Change: Having said all that.

When we get in the inventory.

Speaker Change: <unk>.

Speaker Change: Buildup, and then Destocking cycles, yeah, its a non trivial exercise to piece apart all the variables.

Speaker Change: Just for argument's sake, let's see.

Speaker Change: We are sure to particular to you and you cannot meet demand for customer ensure chip that customer then next on the customer places an order they add a little extra for good measure we didn't expect.

Speaker Change: I expect that additional demand. So we again cannot meet and then the story keeps going on until the customers, who ordered a bunch without obviously, telling us otherwise they're concerned that vishal chips anymore, and then you have the multiplied by four levels in the value chain. So.

Stephan Tanda: And then you have this multiplied by four levels in the value chain. So, of course, we track retail sales in the US, but we don't see IQVA comes out with a significant lag. And so it's not a non-trivial exercise. We're not trying to be evasive here or that is an excuse, but more of an explanation. Usually, the supply chains are pretty steady, but here with cold and cough, it's a little tricky. Now, coming on the GLP-1, we see very, very strong demand and continue to ramp up capability. I think you've seen one of our lines run, see that run in Le Baudroy, so we continue to meet the demand.

Speaker Change: Of course, we track retail sales in the U S, where we don't see a <unk> comes out there's a significant lag.

Speaker Change: And.

Speaker Change: So its a non trivial exercise.

Speaker Change: We're trying to be evasive.

Speaker Change: Evasive here or have that as an excuse but more of an explanation.

Speaker Change: Usually the supply chains are pretty steady growth here.

Speaker Change: Cold and cough, a little tricky now coming.

Speaker Change: Coming on the <unk>.

Speaker Change: It'd be very very strong demand.

Speaker Change: And continued to ramp up capability I think you've seen one of our lines run.

Speaker Change: You see that running laboratory.

Speaker Change: So we continue to meet the demand we get good traction with.

Stephan Tanda: We get good traction with customers. and yeah, generally positive on that.

Speaker Change: Customers.

Speaker Change: Yeah generally positive on that.

George Staphos: Point of clarification, you said other areas haven't seen it yet, so meaning outside of the U.S. you haven't seen cough and cold inventories necessarily depleted, you know, you don't have to go into detail, I just want to make sure I got that right.

Speaker Change: You had a follow up point.

Speaker Change: A point of clarification, you said other areas haven't seen it yet so meaning outside of the U S. You havent seen cough and cold.

Speaker Change: Inventories necessarily depleted.

Speaker Change: You don't have to go into detail I, just want to make sure I got that right and then yeah, I know tax rates kind of circular.

George Staphos: And then, Vanessa, I know tax rate's kind of circular, thank you so much, I know tax rate's circular because it relies on the full year and you don't cut on the full year, but if you're in our seats and we need to model Aptar, what tax rate would you use broadly for second half of the year? Thank you.

Speaker Change: Thank you so much I know tax rate circular because it relies on a full year and you don't go out on a full year, but.

Speaker Change: If you were in our seats and we need to model laptop what tax rate would you use broadly for second half of the year.

Speaker Change: Thank you.

Vanessa Kanu: So, George, thank you, George. Thanks for the question.

Speaker Change: George.

Speaker Change: Thank you George Thanks for the question, maybe before I dive into that I'll just quickly touch on the Q2 guidance tax rate them, because I'm certain somebody would ask what's driving the Q2 guide.

Vanessa Kanu: Maybe before I dive into that, I'll just quickly touch on the Q2 guide tax rate then, because I'm certain somebody would ask, you know, what's driving the Q2 guide. We did guide 19 to 21%, so 20% at the midpoint. And we did mention that that was largely due to a one-time expected tax benefit. And really where that's coming from is, you know, the expected realization of deferred tax assets that were previously not recognized. And so we're now in a position, through all the work that we've been doing around increasing profitability, et cetera, and certain of our entities that were previously lost making, we can now recognize that tax asset.

Speaker Change: We did guide, 19% to 21% or 20% at the midpoint and we did mention that that was largely due to a one time expected tax benefit and really where that's coming from it.

Speaker Change: The expected realization of deferred tax assets that were previously not recognized and so we're now in a position through all the work that we've been doing around increasing profitability et cetera, and in certain of our entities that were previously loss, making we can now recognize that tax asset. So that's really what is driving that for Q2 and that is a big anomaly.

Vanessa Kanu: So that's really what is driving that for Q2, and that is a big anomaly.

Vanessa Kanu: If I think about, you know, the balance of the year and sort of isolate this one-time impact, but also other ongoing tax planning work that we're doing, I would expect, you know, somewhere in the sort of, you know, 22% to 24% ETR rate. Thank you very much. Thank you.

Speaker Change: If I think about the balance of the year and sort of isolate this onetime impact but also other ongoing tax planning work that we're doing I would expect somewhere in that sort of 20% to 24%.

Speaker Change: Our range Okay.

Speaker Change: Thank you very much.

Speaker Change: Thank you.

Ghansham Panjabi: Your next question comes from Ghansham Panjabi with Baird. Please go ahead. Thank you, operator. Good morning, everybody. Just following up on George's questions, you know, on the cold and cough, where do you think the inventory lies? Is it in distribution? Is it in, you know, the upstream in terms of production at the pharmaceutical level? Just any any color there? And what is the realistic sort of timeline for that inflection if you kind of look at parallels in the past with the company's gone? It's very hard to tell. I think the color we can give you is that in terms of our order book, we've seen the inflection happen in the U.S.

Speaker Change: Your next question comes from Ghansham Panjabi with.

Speaker Change: Please go ahead.

Ghansham Panjabi: Thank you operator, good morning, everybody.

Speaker Change: Just following up on George's questions.

Ghansham Panjabi: On the cold and cough.

Speaker Change: Where do you think the inventory lies is it in distribution is it in the upstream in terms of production of its pharmaceutical level, just any any color there and what is the real estate sort of timeline for.

Speaker Change: That inflection if you kind of look at parallels in the past with the company has gone through these before as well.

Speaker Change: It's very hard to tell.

Speaker Change: I think the color. We can give you is that in terms of our order book, we have seen an inflection happening in the U S. We.

Stephan Tanda: We have not seen it yet outside the U.S. And as you can imagine, the visibility at the different levels of the supply chain is even lower outside of the U.S.

Speaker Change: We have not seen it yet outside the U S.

Speaker Change: And as you can imagine the visibility of the different levels of the supply chain is even lower outside of the U S.

Speaker Change: So oh, but the call right now is Uh huh.

Ghansham Panjabi: So our best call right now is that we extend this for another quarter, and we'll give you an update at the next Q. I mean, even when it was extreme, I think we rarely had this extent for more than a year. Yeah, so we have now what, by summer we'll be three quarters into it. And so the US was how many quarters? You mentioned an inflection. So how many quarters was the correction? Well, I would say two quarters in the U.S., so quarter four and quarter one, and I think now we've quoted. Got it. Okay, thank you for that.

Speaker Change: Extend this for another quarter and he will give you an update.

Speaker Change: The next Q.

Speaker Change: I mean, even when it was extreme I think we rarely has this extends for more than a year.

Speaker Change: So right now but.

But some are really three quarters into it.

Speaker Change: Okay.

Speaker Change: And so the U S was how many quarters you mentioned an inflection so many quarters was the.

Speaker Change: Correction do you think.

Well I would say two quarters in the U S. So quarter four in quarter one.

Speaker Change: No.

Speaker Change: Yes.

Speaker Change: Got it okay. Thank you for that and then in terms of the <unk>, one and yet your targets you outlined a couple of years ago at your analyst meeting about doubling the sales base et cetera.

Ghansham Panjabi: And then in terms of, you know, GLP-1 and your targets you outlined a couple years ago at your analyst meeting about, you know, doubling the sales base, etc.

Stephan Tanda: How does the, you know, potential for an oral pill change the calculus of that, if at all? Projections. Yes, certainly the way we think about this is this is not a short term prospect. You have a lot of capacity going in for auto injectors for CMO capacity. There's a lot of consumer. adaptation to do these auto injectors. So I don't think anybody will abandon these investments. And in the end, it's a decision by customers what to launch, not to launch. And in addition, you've seen distribution growing for some of these auto injectors with the novel telehealth investment.

Speaker Change: You know what.

Speaker Change: Potential for an oral pill change the calculus of that if at all.

Speaker Change: Yes, certainly.

Speaker Change: The way we think about this is this is not a short term prospect.

Speaker Change: Have a lot of capacity going in.

Speaker Change: For auto injectors for CMO capacity, there's a lot of consumer.

Speaker Change: <unk>.

Speaker Change: Adaptation to do these auto injector, so I don't think anybody little abandoned these investments and in the end. It's a decision by customers are open long enough.

Speaker Change: To launch.

Speaker Change: And <unk> and.

In addition, you've seen distribution growing for some of these auto injectors with the de Novo telehealth.

Speaker Change: Investment.

Ghansham Panjabi: So For the next few years, I would not look at that. And then personally, I would expect it to be maybe more of a sequential thing. First, you know, you get the weight off with the auto injector, and then the oral will be more of a maintenance regime. But I'm speculating at this point, but certainly nothing that our customers flag in the foreseeable So Got it.

Speaker Change: So.

Speaker Change: For the next few years I would not look at that and then.

Speaker Change: Personally I would expect it to be maybe more of a sequential thing first you know you get the way off with the auto injector in the oral will be more of a maintenance regime, but.

Speaker Change: Speculating at this point, but certainly nothing that our customers are.

Speaker Change: Flag in the foreseeable future.

Speaker Change: Got it and just one final one.

Ghansham Panjabi: And just one final one, you know, the divergence in Sales between Mastige Fragrances and Prestige, is that just a bit more color on that in terms of your share position? Is it obviously different one versus the other, or is it just the market conditions that may be causing it? Well, it's more what our customers decisions went to to do launches and clearly coming out of COVID. The first big swing was with prestige fragrances. And we're almost lapping that. where as Mastiche came later. Of course, it's always a question, are you on the launches that are successful?

Speaker Change: Divergence in.

Speaker Change: Sales between Masstige fragrances and prestige is that just.

Speaker Change: Just a bit more color on that in terms of your share position is it obviously different one versus the other or is it just the market conditions and maybe customer mix.

Speaker Change: Well, it's more what our customers' decisions went to do launches and could clearly coming out of Covid. The first big.

Greenwood: Greenwood with prestige fragrances.

Greenwood: And we're almost lapping that.

Greenwood: Sure.

Greenwood: Whereas the Masstige came later of course, it's always the question of are you on the launches are successful in terms of <unk>.

Stephan Tanda: In terms of share position, we feel very good. So certainly, if you ask our teams, they are positive and maybe even saying that they're gaining share. You know, you're talking to sales people, no disrespect. But we have a pretty sophisticated tracking, so I'm confident that we are certainly gaining a bit of ground there. And as we indicated, going into the second quarter, we think some of the prestige launches coming back, especially also in Europe. And on the broader beauty picture, we also see the Chinese consumer coming back. You know, the overall sense has been quite positive there.

Greenwood: Share position, we feel very good.

Greenwood: So certainly.

Greenwood: You ask our teams there are positive and maybe even saying that they are gaining share.

Greenwood: Talking to salespeople.

Greenwood: And with respect.

Greenwood: But we have a pretty sophisticated tracking so I'm confident that we are certainly gaining a bit of ground there.

Greenwood: And as we indicated going into the second quarter, we see some of the prestige launches coming back.

Greenwood: Especially also in Europe.

Greenwood: And on the broader beauty picture, we also see the Chinese consumer coming back.

Greenwood: The overall sense.

Greenwood: Has been quite positive there who knows what the whole.

Stephan Tanda: Now, who knows what the whole... trade and negotiations will do to that. But for now, it looks pretty good.

Greenwood: Trade and negotiations with due to that but for now it looks pretty good.

Greenwood: Okay perfect. Thank you so much.

Unknown Executive: Perfect.

Unknown Executive: Thank you so much.

Greenwood: Yeah.

Unknown Executive: Thank you.

Greenwood: Thank you.

Matt Roberts: We now have a question from Matt Roberts with the Raymond Newsom. Hey, Stephan, Vanessa, Mary, good morning, everybody. If I could first expand on Ghansham's question there on the the Prestige fragrance, I believe you said it was. isolated to Europe. But are you seeing any early impacts of lower discretionary spending amongst that prestige income cohort? Or are your customers passing along interpolated price already that is being absorbed?

Speaker Change: We now have a question from Matt Roberts with Raymond James.

Greenwood: Okay.

Speaker Change: Hey, Stefan Vanessa Mary Good morning, everybody.

Speaker Change: If I could first expand on <unk> question, there on the prestige fragrance I believe you said it was.

Speaker Change: Isolated to Europe, but are you seeing any early impacts of lower discretionary spending amongst that prestige income cohort or are your customers passing along tariff related price already that is being absorbed and if so what would <unk> have to <unk>.

Matt Roberts: And if so, would Aptar have to share in any of that cost? Let's start with the second part of your question. When it comes to tariffs, we are mainly in Region 4 Region in terms of our supply chain setup. So while we have some tariff exposure, for example, for aluminum, and for some isolated cases, our Region 4 Region supply chain setup... makes us pretty resilient here, plus whatever terrorist we encounter, we pass on. We see a bit more muted engagement in terms of new launches, based on just the uncertainty that we may have compared to what we would have expected three months ago, but nevertheless we see a solid increase compared to prior year, and that's why we are confident about the Q2 contribution of beauty to growth.

Speaker Change: Share in any of that cost.

Speaker Change: Let's start.

With the second part of your question when it comes to tariffs.

Speaker Change: We are mainly in region for region in terms of our supply chain set up so while we have some tariff exposure for example for aluminum.

Speaker Change: And.

Speaker Change: Some isolated cases.

Speaker Change: Our region for region supply chain set up.

Speaker Change: It makes it pretty resilient plus whatever territory in Canada, we pass along.

Speaker Change: We see them.

Speaker Change: A bit more muted.

Gateway in terms of new launches based on just the uncertainty that we may have compared to what we would have expected three months ago, but nevertheless, we see a solid increase compared.

Speaker Change: To prior year.

Speaker Change: That's why we are confident about the.

Speaker Change: Q2 contribution of beauty to.

Speaker Change: To growth.

Stephan Tanda: Now, when it comes to what our customers do in terms of their sourcing decisions and where they send products.

Speaker Change: Now.

Speaker Change: When it comes to what our customers do.

Speaker Change: In terms of their.

Speaker Change: Dosing decisions and where they send product.

Stephan Tanda: Those are secondary and tertiary effects and those will take some time. More kind of CEO math, the Prestige products probably have the biggest room to pass on things. You know, remember the selling price is not a transfer price, and there's a lot of room in absorbing or passing on tariffs in the short term.

Speaker Change: The secondary and.

Speaker Change: Tertiary effect and that will take some time.

Speaker Change:

Speaker Change: More kind.

Speaker Change: Kind of a CEO math.

Speaker Change: <unk>.

Speaker Change: Prestige products, probably have the biggest.

Speaker Change: Room to pass on things.

Speaker Change: Remember the selling price isn't that a try.

Speaker Change: Thanks for price and there's a lot of room and absorbing or passing on tariffs in the short term.

Matt Roberts: And Staphos, Stephan, thank you.

Speaker Change: So both Stefan thank you.

Matt Roberts: Maybe if I could, I'd like to ask a... more holistic question because I can't keep up with regulatory agent headlines and whether the odds or pace of drug approval is any better or worse and I'm not sure you can make that easier for me but when you think about the longer term 7 to 11% core growth in pharma How does the evolving approach at regulatories change your conviction on that here in the medium term, maybe the next two to three years? Are there certain areas you're more or less comfortable with in the pipeline? Given your customers and you spend small biotech companies to very large pharma companies, how is each end of that customer range approaching?

Speaker Change: Maybe if I could ask them.

Speaker Change: More holistic question, because I can't keep up with regulatory agents headlines whether it be on our pace of drug approvals is there any better or worse and I'm not sure you can make that easier for me right.

Speaker Change: But when you think about the longer term, 7% to 11% core growth in pharma.

Speaker Change: Does the evolving approach of regulatory change your conviction on that here in the medium term maybe over the next two to three years are there certain areas youre more or less comfortable with in the pipeline.

Speaker Change: Given your customers any spend small biotech companies to very large pharma companies. How is each end about customer range of approaching it.

Matt Roberts: their respective pipelines.

Speaker Change: Their respective pipelines, thanks for taking the questions.

Stephan Tanda: Thanks for taking the questions. Yeah, so. As you know, our average project is about a decade, so if an approval process gets pushed out by 6 to 12 months, I'm not sure we will find it in the P&L. Most of our medications are treatment of chronic diseases, whether it's diabetes, whether it's COPD or asthma, and so we see that continue ongoing. Clearly, customers are concerned if the FDA is not as responsive as it used to be in terms of getting on cases, but so far we have not really seen a lot of evidence of that.

Speaker Change: Yeah. So.

Speaker Change: As you know our average project is about a decade so.

Speaker Change: And the approval process gets pushed out by six to 12 months I'm not sure we will find it in the P&L.

Speaker Change: Most of our medications treat ment of chronic diseases.

Speaker Change: Whether it's diabetes COPD or asthma.

Speaker Change: And.

Speaker Change: So we see that continuing.

Speaker Change: Continuing ongoing.

Speaker Change: Clearly customers are concerned if the FDA is not as responsive as it used to be.

Speaker Change: In.

Speaker Change: In terms of getting on cases, but so far we have not really seen a lot of evidence of that I think it's right now it's more concerns.

Stephan Tanda: I think that right now it's more concerned. Overall, pharma R&D budgets were up in 2024, and our pipeline continues to grow. I would let the dust settle here for a little bit before making any calls. We feel very good about the pipeline, and the long-term trends I referred to are really good.

Speaker Change: Overall pharma R&D budgets were up in 2024.

Speaker Change: So we and our pipeline continues to grow.

Speaker Change: So I would let the dust settle here for a little bit before making any coal.

Speaker Change: We feel very good about the pipeline there.

Speaker Change: Long term trends I referred to.

Speaker Change: A really good.

Stephan Tanda: I wanted to come back on your earlier point on beauty, though, and the terrorists. I would also like to point out, again, that that given our local presence in the U.S., and here the U.S. is particularly impacted, we see a lot more requests. In fact, our requests for new quotations are up 30% for people who need to switch away or want to switch away from having things coming from China. So for us, the terrorist situation is as much an opportunity as it is keeping us busy with passing on.

Speaker Change: I wanted to come back on your earlier point.

Speaker Change: On on beauty, though.

Speaker Change: And the tariffs.

Speaker Change: I would also like to point out again.

Speaker Change: Okay.

Speaker Change: Giving our local presence in the U S and he is the U S, particularly impacted.

Speaker Change: A lot more requests in fact.

Speaker Change: Request for quotations are up 30% for people, who need to switch away I want to future away from heavy things coming from China. So for us the tariff.

Speaker Change: IC patients as much of an opportunity is it is a.

Speaker Change: Keeping us busy with passing on things.

Speaker Change: Okay.

Speaker Change: Yeah.

Matt Roberts: Appreciate that and for providing a little comfort going into it again.

Speaker Change: I appreciate that and for providing a little comfort going to then again, thank you Stefan.

Matt Roberts: Thank you, Stephan.

Speaker Change: Yeah.

Unknown Executive: Thank you.

Speaker Change: Thank you.

Daniel Rizzo: We now have Daniel Rizzo with Jeffreys on the line. Hey, thank you for taking my question. And just to kind of, how are you doing? Just to kind of Go with the tariff thing. Is it also possible that the tariffs could have a benefit for I mean, from my understanding in beauty you produce in Europe or your end products are in Europe and they are shipped to China? Are we seeing or can we see that demand go up because of issues between the US and the rest of the world? Kind of follow what I'm saying.

Speaker Change: We now have Daniel Rizzo with Jefferies on the line.

Speaker Change: Hi, Thank you for taking my question and just to kind of.

Speaker Change: How are you doing.

Speaker Change: Just to kind of.

Speaker Change: Go go with the tariff thing is it also possible that <unk> could have a benefit for I mean, my understanding and beauty you produce in Europe or your end products are in Europe and are shipped to China or are we seeing or can we see that.

Speaker Change: That demand go up because of issues between U S and the rest of the world. If you kind of follow what I'm, saying.

Stephan Tanda: Sure.

Dan: Sure Hi, Dan.

Stephan Tanda: Hi, Dan. China is the Chinese market is evolving, I would say we certainly see more confidence, but we also see more patriotism, given geopolitics.

Speaker Change: <unk>.

Speaker Change: China is the Chinese market is evolving I would say we certainly.

Speaker Change: See more confidence, but we also see more patriotism.

Speaker Change: Given geopolitics so there is.

Stephan Tanda: So there is a webinar. The webinar will be observed by AptarGroup. I think it's a good hypothesis. I think it's too early to have data on that.

Speaker Change: Gaining of market share of local brands.

Speaker Change: Since we are in China, and producing for China.

Speaker Change: We are quite happy to both suppliers and local brands in some of the multinationals have local operations there.

Speaker Change: It's a big footprint.

Speaker Change: Foot print in China.

Speaker Change: Whether there is some rerouting from of luxury products, rather than shipping them to the U S going to China.

Speaker Change: I think it's a good hypothesis I think it's too early to do that.

Speaker Change: Data on that.

Stephan Tanda: Okay, and then you mentioned Tuff Thompson in injectables.

Speaker Change: Okay, and then you mentioned tough comps in Injectables I was wondering I think in Q1 I was wondering if that's something that's going to be kind of an issue or just someone who has highlighted for the remainder of the year.

Stephan Tanda: I was wondering, I think in Q1, I was wondering if that's something that's going to be kind of an issue or just a something that's highlighted for for the remainder of the year. No, I know it's some time ago. But remember, we had this ERP deployment where the entire year, we were almost not able to ship for, I think, half the quarter. And then last quarter one, we caught up with all that. And the comparison was, I think we were up like 56%. So we shipped for a quarter and a half last year. So when you compare to that, it starts to show growth.

Speaker Change: No I know, it's some time ago, but remember we had this ERP deployments where the.

Speaker Change: The prior year, we were almost not able to ship for half the quarter and then.

Speaker Change: Quarter, one we caught up with all of that in the comparison of the Iot I think we were up like 56%. So the ship for a quarter and a half last year. So when you compare to that it's tough to show growth but.

Stephan Tanda: But I Demand is not an issue in injectables, it's for us, the demand is there, we're catching our breath, our little window catching up with it, we're getting equipment installed, getting equipment validated. Okay.

Speaker Change: Right.

Speaker Change: Demand is not an issue and injectables.

Speaker Change: For us the demand is there we are there.

Speaker Change:

Speaker Change: Catching our breath or a little window catching up with it they are getting the equipment installed and getting equipment validated.

Speaker Change: Okay, and then finally with FX.

Vanessa Kanu: And then finally, with FX, you guided to 1.14. What was, I guess, the average rate in Q1? Was it like 108 or 109? What's the kind of the change or what's expected versus what was? Yeah, so if you're thinking of, you know, where we guided at the end of when we guided, you know, Q1, that was about $1.04. There's a little bit of an uptick. So January, February are pretty consistent with that March came in at about $1.08. And current spot rates are about $1.14. So that's, that's what we're guiding at right now. You know, so the impact of that, if you're thinking about sort of year over year is roughly about four.

You guided to one one for what was I guess the average rate in Q1 was it like 180 to $109, what's the kind of a change or.

Speaker Change: What's expected versus what was.

Speaker Change: Yeah, So if you're thinking of where we guided at the end of when we guided Q1 that was about $1 four.

Speaker Change: There's a little bit of an update for January February were pretty consistent with that in March came in at about $1 eight.

Speaker Change: And current spot rates of about $1 14, so thats what were guiding that right now.

Speaker Change: So that.

Speaker Change: Impact of that if you're thinking about sort of year over year is roughly about <unk>.

Vanessa Kanu: That's perfect. That's exactly what I was looking for. Thank you.

Speaker Change: That's perfect that's exactly I was looking for thank you.

Speaker Change: Yeah.

Thank you.

Matt Larew: We now have Matt Larew with William Blair. Good morning, I wanted to follow up on on growth in pharma. Obviously, you've called out the sort of the coffin called the stock. But you've also referenced on the call continued strength on the emergency med Narcan side. If I think about the last decade here, the CAGR is around 9%, so sort of right in that 7-11% range. But the quarters themselves, particularly over the last couple of years, have been much, much choppier. Maybe if we think about the next few quarters as The DSTOC ends. Do we get back to a more normal cadence?

Speaker Change: We now have Matt <unk> with William Blair.

Speaker Change: Yeah.

Speaker Change: Good morning, I wanted to follow up on growth in pharma.

Speaker Change: Obviously, you've called out the.

Speaker Change: The conference call Destock.

Speaker Change: Yeah.

Speaker Change: But you've also referenced on the call continued strength on the Enbridge the med <unk> side.

Speaker Change: If I think about the last decade here you. The CAGR is around 90% sort of right in that 711% range, but the quarters themselves, particularly over the last couple of years had battered much that's chop here.

Speaker Change: Maybe if we think about the next few quarters as.

Speaker Change: The destock and do we get back to a more normal cadence maybe as part of that answer would be good to hear an update on where emergency medicine stand as a percentage of sales.

Matt Larew: Maybe as part of that answer, we'll be good to hear an update on where emergency medicine stands as a percentage of.

Stephan Tanda: Hi Matt. Emergency medicines today are about 5% of overall company revenue. That's not only NARCAN, but NARCAN is an important part of that. And yeah, I can only agree with you. This is much more of a choppy business. Distribution chains are non-traditional. You're dealing with state harm reduction agencies. In addition to that, you have, after emergent, coming in a bunch of generics who fight for share and suck up, detox, and so on. So it's a much more choppy business, a lumpy business. But overall, as we mentioned before, with Deaths from opiate overdoses being clearly reduced through the availability and wide availability of Narcan and this having bipartisan support, we continue to expect this business to develop nicely, but I think it's also reasonable to expect that at some point it will kind of resume a more normal growth trajectory.

Speaker Change: Hi, Matt.

Speaker Change: Emergency medicine today are about 5%.

Speaker Change: Overall company revenue, that's not only narcan, but <unk> is an important part of that and E. Yeah, I can only agree with you.

Speaker Change: It is much more of a choppy business.

Speaker Change: Distribution chains are non traditional.

Speaker Change: You're dealing with states of harm reduction agencies. In addition to that you had.

Speaker Change:

Speaker Change: Emerging coming into a bunch of.

Speaker Change: Generic to fight for share and.

Speaker Change: Stock off the destock and so on so it's a much more choppy business is a lumpy business, but overall no.

Speaker Change: As we mentioned before.

Speaker Change: With.

Speaker Change: That's from opioid overdoses being clearly reduced through the availability of wide availability of Narcan and this had been bipartisan support.

Speaker Change: Continue to expect this business to.

Speaker Change: To develop nicely, but I think that those are reasonably expected at some point they will kind of resumed more normal growth trajectory.

Speaker Change:

Speaker Change: <unk>.

Stephan Tanda: Beyond that, of course, if you look at the last five years, we had the tremendous whiplash with the COVID supply chain. I think I would be prudent to say we don't guide for future quarters of the year, but we do stand by our long-term targets. We feel very good about the long-term growth trajectory, and as you mentioned, we will not hit it every quarter, we'll maybe not even hit it every year, but we feel good about the 7 to 11 percent, and over the longer period of time, we have shown that we do that, and if anything, it's driven by our pipeline, and our pipeline is in good shape.

Speaker Change: Beyond that of course, if you look at the last five years and he has a tremendous whiplash with COVID-19 supply chain. So.

Speaker Change:

Speaker Change: I think I would be prudent to say it.

Speaker Change: Okay.

Speaker Change: For the future.

Speaker Change: Quarters of the year, but reduced them by a long term target.

Speaker Change: We feel very good about.

Speaker Change: The long term growth trajectory.

Speaker Change: You mentioned that you will not hit it every quarter, but maybe not even hit it every year, but we feel good about the 17, 11% and Nova B.

Speaker Change: Longer periods of time, where you have shown that we do that and if anything it's driven by us, but by our pipeline and our pipeline is in good shape.

Speaker Change: Yeah.

Speaker Change: Okay very good and then.

Matt Larew: Okay, very good.

Matt Larew: And then, Vanessa, I just wanted to make sure on tariffs, you referenced that the net effect is expected to be limited.

Speaker Change: Vanessa I just wanted to make sure.

Ghansham Panjabi: On tariffs you referenced that the net effect is expected to be limited.

Vanessa Kanu: Does your Guidance, or at least what you're thinking about the year, incorporate that net effect or does it incorporate sort of a gross effect with an expectation you might mitigate? been this year. I think each company seems to be thinking about it differently. the impact they expect versus what they incorporate into their outlook. So I want to make sure we're clear about that.

Speaker Change: Your.

Speaker Change: Guidance or at least what you're thinking about the year incorporate that net effect or does it incorporate.

Speaker Change: Gross effect with an expectation you might mitigate.

Speaker Change: But the industry I think that is.

Speaker Change: Each company seems to be thinking about it differently in terms of.

Speaker Change: The impact to expect versus what they incorporate industry outlooks I want make sure we're clear about that.

Vanessa Kanu: Yes, thanks, Matt. So the we saw little to no impact in the Q1 results. In Q2, we are our guidance does incorporate the limited net effect. And for the balance of the year, we expect that to essentially be, you know, the same. Stephan mentioned earlier, you know, that, you know, where we are seeing, you know, an increase in tariffs, we are already passing it on. And he also talks about the fact that it's not only a potential headwind, but it's also a potential benefit, as well as there are other opportunities. available to us, depending on how all of this unfolds.

Speaker Change: Yes.

Speaker Change: Matt So we saw little to no impact in the Q1 results in Q2.

Speaker Change: Our guidance does incorporate the limited net effect.

Speaker Change: <unk>.

Speaker Change: For the balance of the year, we expect that to essentially be the same stuff I mentioned earlier that where we are seeing an increase in tariffs. We are already passing it on and you also talked about the fact that it's not only a potential headwind, but it is also a potential benefits as well as there are other opportunities available to us that depending on how all of this unfolds at.

Vanessa Kanu: So at this point in time, where we're expecting the net impact to be to be limited.

Speaker Change: This point in time, where we're expecting the net impact to be limited.

Speaker Change: Okay very good thank you for the questions.

Matt Larew: Very good. Thank you for the question.

Speaker Change: Thank you thank you Mark.

Gabe Hagey: Thank you. We have another question on the line from.

Speaker Change: We have a next question on the line from <unk>.

Gabe Hagey: Gabe Hagey with Wellfogger Stephan, Vanessa, good morning. Just one quick point of clarification and maybe a little data point for us. Consumer health care, you talked about some destocking and you were very transparent about it, but I think on your prepared remarks you said U.S. was actually starting to get back to normal in terms of rest of the world maybe not so much.

Gabe: Gabe <unk> with Wells Fargo.

Stefan: Stefan Vanessa good morning.

Stefan: Just one quick.

Stefan: A quick point of clarification.

Stefan: Hello.

Stefan: Point of clarification and.

Stefan: Maybe a little data point for us.

Stefan: Consumer healthcare you talked about some destocking with you we're very transparent about it.

Stefan: But I think on the timing.

Stefan: And then in your prepared remarks, you said.

Stefan: U S was actually starting to get back to normal in terms of order patterns rest of world maybe not so much.

Stephan Tanda: Again, we could probably sit here and speculate all day about how things move around and what the inventory supply chain looks like, but how big is that piece of business relative to U.S.? Yeah, I don't think we give you that detail, but you wouldn't be wrong to have the US share. at or maybe less than the company average, which is about 30% of the business. might be even a little bit less than that.

Stefan: Again, we could probably sit here and speculate all day about how things move around and what the inventory supply chain looks like but.

Stefan: How big is that piece of business relative to the U S.

Stefan: Yes, I don't think we give you that detail, but you wouldnt be wrong to.

Stefan: The U S share.

Stefan: Or maybe less than the company average, which is about 30% of the business.

Stefan: Might be even a little bit less than that.

Stefan: Okay.

Gabe Hagey: Okay, got it.

Stefan: Okay got it and then I guess in pharma, maybe what we're all trying to understand is it feels like there's been a little bit of noise.

Gabe Hagey: And then I guess in pharma, maybe what we're all trying to understand is, it feels like there's there's been a little bit of noise. across a couple of different product lines. And Vanessa, did you give us specifically the number, and I apologize if I missed it, injectables, what the volume was in Q1? But if I'm hearing you correct, we get through sort of this DSTOC and OTC slash consumer health care.

Stefan: <unk>.

Stefan: Across a couple of different product lines.

Stefan: And then also did you give us specifically the number and I apologize if I missed it injectable.

Stefan: The volume was in Q1.

Stefan: But if I'm hearing you correct, we get through sort of the destocking.

Stefan: T. He slash consumer health care.

Stephan Tanda: And is it fair to say, Stephan, that there's nothing that you see sort of over the next 12 to 18 months that would kind of prohibit you from from being in that long term window? Well, well, Vanessa looks up that information from injectables. Again, we don't guide for the year. If the last five years have taught us anything, it will be a full term. But we feel comfortable about the long-term targets and have demonstrated that.

Stefan: And is it fair to say just to find that there's nothing that you he sort of over the next 12 to 18 months that would kind.

Stefan: Prohibit you from being in that long term window.

Stefan: Well.

Stefan: As it looks out that information of Injectables.

Stefan: Yeah.

Stefan: Again, we don't guide for the year.

Stefan: If the past five years have taught us anything.

Stefan: Vehicles, and but we feel comfortable about the long term targets and have demonstrated that Ah I am not going to get into okay. It will be there in 18 months and it will be there in eight.

Stephan Tanda: I'm not going to get into, okay, it will be there in 18 months or it will be there in eight-and-a-half months. I do want to, though, remind you, next to the regional split of consumer health care that you asked about, also remind that consumer health care itself is maybe a bit over 20% of our total pharma sales. So that's why Rx is up 10%, consumer health care down 10%. That doesn't even tell about. We still have growth because Rx is a much bigger part of the proprietary drug delivery.

Stefan: Eight five months.

Stefan: I do want to remind you mix to the regional split of consumer health care.

Stefan: Ask about.

Stefan: Also a reminder, consumer healthcare itself, because maybe I'm a bit over 20% of total pharma sales. So that's why our X up 10% consumer healthcare down 10%. It doesn't even cover we still have growth.

Stefan: Because our acts as a much bigger part of our proprietary drug delivery systems.

Gabe Hagey: And Gabe, we did not talk about injectable volume. Got it.

Speaker Change: And Gabe we did not talk about.

Stefan: In depth at the bottom.

Stefan: Yeah.

Stefan: Got it thank you yeah.

Gabe Hagey: Thank you.

Stephan Tanda: But again, demand is not an issue in Turkey. It's our ramping up and validating of supply.

Stefan: But again the demand is not an issue and it kind of injectables.

Stefan: We're ramping up and validating of supply.

Stefan: Okay.

Unknown Executive: Thank you.

Stefan: Thank you.

George Staphos: We have another question from George Staphos with Bank of America, please go ahead when you are ready. Thanks so much. Two quick follow-ons from me. Stephan, to the extent that you have any view on this, and I realize it'd be very difficult to have one, with, you know, the pressure on the consumer that we keep, you know, hearing about, reading about. Obviously, you know, tariff considerations and what that might mean. for Supply Chains and Cost of Materials, you know, recognizing on that latter point, material costs usually aren't that big of a deal for you anyway.

Speaker Change: We have another question from George Staphos with Bank of America. Please go ahead, when you're ready.

Stefan: Okay.

George Staphos: Thanks, So much two quick follow ons from me.

Speaker Change: And Stefan to the extent that you have any view on this and I realize it would be very difficult.

George Staphos: To have one.

George Staphos: The pressure on the consumer that we keep hearing about reading about.

George Staphos: Obviously tariff considerations and what that might mean.

George Staphos: For supply chain and cost material recognizing on that latter point material costs, usually arent that big of a deal for you anyway.

George Staphos: Are you seeing any emerging trends in terms of the types of construction? that your customers are looking for across any of the key segments, maybe less of an issue in pharma, but perhaps in beauty and or enclosures. And then second question, and I'll turn it over. Overall, what's the outlook over the next? You know, quarter, two quarters. If you had a view for 25, we'd obviously love to hear it on sort of tooling and sort of the appetite for new products, new opportunities for you as measured by your tooling activity. Thanks and good luck in the quarter.

George Staphos: Are you seeing any emerging trend in terms of the types of constructions that your customers are looking for across any of the <unk>.

George Staphos: The key segments, maybe less of an issue in pharma, but.

George Staphos: Perhaps in.

George Staphos: Beauty <unk> enclosures, and then second question and I'll turn it over.

George Staphos: Overall.

George Staphos: What's the outlook over the next.

George Staphos: Quarter to quarter is if you had a view for 25, we'd obviously love to hear it.

George Staphos: [laughter] sort of tooling.

George Staphos: And sort of the appetite for.

George Staphos: New products, new new opportunities for you as measured by your tooling activity. Thanks, and good luck in the quarter.

George Staphos: Yeah.

Stephan Tanda: Thank you, George. Maybe best is to first say... In terms of recessions or lower consumer confidence, In general, Aptar is very well positioned. I mean, just as a reminder, we supply patients with their everyday medications to treat chronic diseases, asthma, COPD, allergic rhinitis, and diabetes, and so on, plus food staples, personal care, home care staples. Those are not the things people come back on. They may go to a private label brand, they may go to smaller sizes. All of those things are neutral to net positive for us. So we are not that concerned about a...

George Staphos: Thanks George.

George Staphos: <unk>.

George Staphos: Maybe the best is to first see.

In terms of recessions or lower consumer confidence.

George Staphos: In general after is very well positioned.

George Staphos: As a reminder, we supply patients with the everyday medications to treat chronic diseases asthma.

George Staphos: COPD.

George Staphos: Allergic rhinitis.

George Staphos: Yes.

George Staphos: And diabetes, and so on plus food Staples personal care home care state, but those are not the things people cut back on them.

George Staphos: Okay.

George Staphos: Go to a private label brand. They may go to smaller sizes all of those things are.

George Staphos: Neutral to net positive for us so we're not that concerned about it.

George Staphos: <unk>.

George Staphos:

Stephan Tanda: Garden Variety Recession, if that's even a thing that is possible. And those who go back to 2008-2009, remember Pharma was about 20% of the company at that time. Today it's almost half. So the consumer pressure, while clearly something that some people are forecasting in the U.S. is not causing big concern for us. And at the same time, the situation is pretty unique to the U.S. course the U.S. will impact the rest of the world in certain ways, but that recession talk is not as strong in other parts of the world. Latin America is doing really nicely.

George Staphos: The garden variety recession.

George Staphos: If that's even a thing that is possible.

George Staphos: Those who go back to 2008 2009.

George Staphos: Remember pharma was about 20% of the company at that time today. It's.

George Staphos: Almost 10 months so the.

George Staphos: The consumer pressure.

George Staphos: Clearly something that.

George Staphos: Some people are forecasting in the U S.

George Staphos: Not causing deep concern for us.

George Staphos: And at the same time, it's the situation is pretty unique to the U S.

George Staphos: Of course, the U S. It will impact the rest of the world and in certain ways, but.

George Staphos: The recession, probably is not as strong in other parts of the World Latin America is doing really nicely.

Stephan Tanda: As I said, China is much more on the front foot. Let's see how things develop over the next few months. Europe will invest a lot more in its defense, which means there's a lot more government spending that will stimulate economies. So I'm not so negative about the world at large. And having said that, even then in the recessionary environment, Aptar is very well positioned. Second, at the end of the day, our customers pay for our innovation. Yeah, we don't guide for the year, we don't guide for the quarter, but everything I just said tells me, you know, the votes are coming in after quarter two.

George Staphos: China is much more on the front foot, let's see how things develop over the next few months.

George Staphos: Europe and rest of up north in its defense, which means there is a lot more government spending that will stimulate the economy. So I'm not so negative about.

George Staphos: The world at large and having said that even in a recessionary environment.

George Staphos: Very well positioned.

George Staphos: Second at the end of the day, our customers pay for our innovation.

George Staphos: And.

George Staphos: They look to differentiate themselves.

George Staphos: What that way of differentiating as it might be a little bit different than the consumer money as they become a bit more tight.

George Staphos: But clearly customers look to continue to differentiate themselves and sometimes that with having a more lighter weight product are having changing product format and the end of the day.

George Staphos: Innovation that's project activity.

George Staphos: That is good for us.

George Staphos: Okay.

George Staphos: Yes, we don't guide for the year, we don't guide for the quarter, but everything I just said.

George Staphos: It tells me that.

George Staphos: We're going to end up the quarter too.

Stephan Tanda: I'm sorry, was that Stephan? So everything we just said means that tooling activity is probably doing fairly well given Customers are exploring different ways of continuing to differentiate, but in a very sort of quickly evolving world. Would that be a fair summary? Yeah, that's fair. And, you know, we certainly see tooling on the way up in the quarter to Thank you very much.

Speaker Change: I'm sorry, what was that Stefan so everything we just said means that tooling activity is probably doing fairly well given customer.

George Staphos: Customers are exploring different ways of continuing to differentiate but in a very quickly evolving world.

Speaker Change: To be fair summary.

George Staphos: Yeah, that's fair and.

Speaker Change: We certainly see tooling on the way up in quarter two.

George Staphos: Okay.

George Staphos: Thank you very much.

George Staphos: Okay.

Unknown Executive: Thank you.

Speaker Change: Thank you just as a quick reminder, that stoffel, if I want to ask any further questions today.

Unknown Executive: Just as a quick reminder that is staff followed by one to ask any further questions today.

Speaker Change: Okay.

Stephan Tanda: I can confirm that does conclude the question and answer session and I'd like to hand it back to Mr Stephan Tanda for some closing comments. Very good. Thanks for all your questions.

Speaker Change: I can confirm that does conclude the question and answer session I would like to hand, it back to Mr. Stefan <unk> for closing comments.

Stefan: Very good thanks for all your questions. Let me end the call by attempting to cut through the noise.

Stephan Tanda: Let me end the call by attempting to cut through the noise and remind us all of the bigger picture here. Our teams have delivered a very solid start to the year. While we started the year with softness in demand in certain end markets, as well as tax headwinds and foreign exchange headwinds, we now head into the second quarter with confidence based on a few points. First, we see a re-acceleration of demand in several end markets and geographies across all segments. I'll be, with the temporary exception of cough and cold. The profit engine and proprietary drug delivery systems is humming along smoothly, and the demand picture in injectables and active materials is solid.

Speaker Change: And remind us all of the bigger picture here.

Stefan: Our teams have developed.

Speaker Change: <unk> delivered a very solid start to the year.

Stefan: While we started the year with softness in demand in certain end markets.

Stefan: As well as tax headwind and foreign exchange headwinds, we now head into the second quarter with confidence based on a few points first we see a reacceleration of demand in several end markets.

Stefan: And geographies across all segments.

Stefan: Albeit with the temporary exception of cough and cold.

Stefan: The profit engine and proprietary drug delivery systems is humming along smoothly and the demand picture in Injectables.

Stefan: And active materials is solid.

Stephan Tanda: As we discussed, our long-term pharma and market trends are solid, and the pipeline is solid. Um Our team has found some innovative ways to mitigate the tax headwinds somewhat. and the effects have been largely abated, at least for the moment. And then importantly, our long standing local for local supply chain structure allows us to deal with the tariff and supply chain uncertainties with agility and equally important at the same time, they also it allows us to take advantage of opportunities as customers rethink their regional sourcing strategy.

Stefan: As he discussed our long term pharma end market trends are solid and the pipeline is solid.

Stefan:

Stefan: Our teams have found innovative ways to mitigate the tax headwind somewhat.

Stefan: And the FX headwinds have largely abated at least for the moment.

Stefan: And then importantly, our longstanding local for local supply chain structure allows us to deal with the tariffs and supply chain uncertainties with agility and.

Stefan: Equally important at the same time, we also it allows us to take advantage of opportunities as customers rethink their regional sourcing strategies.

Stephan Tanda: We didn't talk about it as much in the call today, but our teams are proudly focused on delivering productivity gains in all areas of the company through execution of ongoing projects, increasing automation, and developing additional ideas for future measures. Last but not least, as we just discussed, if you're forecasting for the U.S. or even a global recession, it's important to remember that Aptar is well-positioned across a number of resilient end markets, including medications for chronic diseases such as allergy, diabetes, asthma, COPD, emergency treatments that patients want to have at the ready, and consumer staples that people consume and use every day.

Stefan: We didn't talk about it as much on the call today, but our teams are proudly focused on delivering productivity gains in all areas of the company through execution of ongoing projects, increasing automation and developing additional ideas for future measures.

Stefan: But at least as we just discussed if you are forecasting for the U S or even the global recession.

Stefan: It's important to remember that after he is well positioned across a number of resilient end markets, including medications for chronic diseases such as allergy.

Stefan: <unk> asthma COPD emergency treatment with patients want to have it already and consumer staples that people consume and use every day.

Stephan Tanda: In times of economic uncertainty, our resilience becomes our greatest asset. Lastly, given the strength of our business, we accelerated returns to shareholders in Q1, while of course retaining the strategic optionality of our balance.

Stefan: Times of economic uncertainty, our resilient becomes our greatest asset.

Stefan: Lastly, given the strength of our business, we accelerated returns to shareholders in Q in quarter, one while of course, retaining the strategic optionality of our balance sheet with that thanks for attending the call and we look forward to follow up discussions.

Unknown Executive: With that, thanks for attending the call and we look forward to follow-up. Thank you all for joining.

Stefan: Okay.

Stefan: Thank you for joining I can confirm that does conclude today's conference call. You may now disconnect. Please enjoy the rest of your day.

Unknown Executive: I can confirm that does conclude today's conference call with Aptar. You may now disconnect and please enjoy the rest of your day.

Stefan: [music].

Stefan: Yes.

Stefan: Yeah.

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