AptarGroup, Inc. (NYSE:ATR) Q4 2023 Earnings Conference Call February 9, 2024 9:00 AM ET

Company Participants

Mary Skafidas - Investor Relations

Stephan Tanda - President and Chief Executive Officer

Bob Kuhn - Executive Vice President and Chief Financial Officer

Conference Call Participants

Ghansham Panjabi - Baird

George Staphos - Bank of America

Daniel Rizzo - Jefferies

Alexander Yee - Wells Fargo

Operator

Ladies and gentlemen. Thank you for standing by. Welcome to Aptar's 2023 Fourth Quarter Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session.

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

Mary Skafidas

Thank you. Hello, everyone, and thanks for being with us today. Joining me on today's call are Stephan Tanda, President and CEO at Aptar; and Bob Kuhn, Executive Vice President and CFO at Apt. Our press release and accompanying slide deck have been posted on our website under the Investor Relations page.

During this call, we will be discussing certain non-GAAP financial measures. These measures are reconciled to the most directly comparable GAAP financial measure and our reconciliation are set in the press release. Please to the press release disseminated yesterday for reconciliation of non-GAAP measures to the most comparable GAAP measures discussed during this earnings call. As always, we will also post a replay of this call on our website.

And I would now like to turn the conference over to Stephan.

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 results for the fourth quarter and the full year. Later in the call, Bob Kuhn, our CFO will provide additional details on the quarter and yearend results. Starting on slide 3 for the fourth quarter, Aptar achieved core sales growth of 2% and finished a year strong with adjusted EPS of $1.21 per share due to the record year for both our proprietary drug delivery systems as well as our fragrance dispensing technologies. We achieved significant margin improvement in the quarter with an adjusted EBITDA margin of more than 21%, a three point increase over the prior year's quarter. The margin improvement was driven by a strong focus on cost management across the company as well as rapid growth in the pharma end markets.

In quarter four, robust demand continued for proprietary pharma drug delivery systems which grew across several key applications such as emergency medicines, allergic rhinitis, central nervous system therapeutics, and natal decongestions. Solid growth from fragrance dispensing solutions also drove positive results in the quarter. Turning to slide 4 for the full year, Aptar delivered core sales growth of 3% with Pharma delivering 10% core sales growth, while Beauty was up 2% and Closures declined 7%. About half of the decrease for Closures was due to the passing through of lower resin costs to our customers. As a reminder, our Pharma business is a pipeline-driven business, its projects taking anywhere from 5 to 15 years to be ready for commercialization. In 2023, we had the highest number of new product launches since 2018, while adding an equal, risk-adjusted value of new project opportunities to the pipeline, which bodes well for continued solid growth.