AptarGroup(ATR) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights AptarGroup delivered strong financial results for both Q2 and year-to-date 2025, marked by sales growth, increased profitability, and significant shareholder returns Second Quarter 2025 Highlights AptarGroup reported strong second quarter 2025 results with positive contributions from all segments, particularly Pharma and Closures, driven by increased volumes and sales of higher value products. The company also returned $100 million to shareholders through dividends and share repurchases Second Quarter 2025 Key Financial Highlights | Metric | Value | Change (YoY) | | :-------------------------- | :---------- | :----------- | | Reported Sales Growth | 6% | +6% | | Core Sales Growth | 3% | +3% | | Reported Net Income | $112 million | +24% | | Adjusted EBITDA | $218 million | +13% | | Adjusted EBITDA Margin | 22.6% | +140 bps | | Reported Earnings Per Share | $1.67 | +25% | | Adjusted Earnings Per Share | $1.66 | +18% | | Shareholder Returns | $100 million | N/A | Six Months Year-to-Date 2025 Highlights For the first half of 2025, AptarGroup achieved reported and core sales growth of 2%, with significant increases in net income and adjusted EBITDA, and returned a total of $210 million to shareholders Six Months Year-to-Date 2025 Key Financial Highlights | Metric | Value | Change (YoY) | | :-------------------------- | :---------- | :----------- | | Reported Sales Growth | 2% | +2% | | Core Sales Growth | 2% | +2% | | Reported Net Income | $191 million | +10% | | Adjusted EBITDA | $402 million | +8% | | Reported Earnings Per Share | $2.83 | +10% | | Adjusted Earnings Per Share | $2.86 | +8% | | Shareholder Returns | $210 million | N/A | Second Quarter 2025 Financial Results AptarGroup's second quarter 2025 financial results show consolidated sales growth and strong performance across all segments, particularly Pharma and Closures Consolidated Performance AptarGroup's consolidated sales for Q2 2025 increased 6% to $966 million compared to the prior year, with core sales increasing 3%, demonstrating overall growth despite currency effects Second Quarter 2025 Consolidated Sales Analysis | Metric | Q2 2025 Sales | Q2 2024 Sales | Reported Sales Growth | Currency Effects | Acquisitions | Core Sales Growth | | :---------------- | :------------ | :------------ | :-------------------- | :--------------- | :----------- | :---------------- | | Total AptarGroup | $966 million | $910 million | 6% | (3)% | 0% | 3% | Segment Performance All Aptar segments contributed positively to Q2 2025 results, with Pharma and Closures driving growth through increased volumes and higher-value products, while Beauty saw modest core sales growth despite mixed market conditions Aptar Pharma Aptar Pharma achieved strong Q2 2025 sales and margin growth, driven by Prescription, Injectables, and Active Material Science - Reported sales increased 7% and core sales increased 3% in Q2 2025[7] - Growth was driven by strong demand in Prescription, Injectables (9% core sales growth), and Active Material Science (11% core sales growth), offsetting a decline in Consumer Healthcare[7] - Adjusted EBITDA margins grew 130 basis points to 35.4%, aided by royalty revenues[7] Aptar Beauty Aptar Beauty reported modest core sales growth in Q2 2025, supported by personal care, despite challenges in beauty dispensing technologies - Reported sales increased 4% and core sales were up 1% in Q2 2025, primarily due to higher tooling sales for personal care and beauty end markets[8] - Strong growth in personal care products partially offset lower demand in beauty dispensing technologies for fragrance and full pack solutions, impacted by subdued new fragrance launches and tariff-related uncertainties[8] - Adjusted EBITDA margins increased by 20 basis points to 14.1%[8] Aptar Closures Aptar Closures delivered strong Q2 2025 sales and margin improvements, fueled by increased demand in food and beverage markets - Reported sales increased 8% and core sales increased 7% in Q2 2025[9] - Solid product sales growth was mainly driven by increased demand in the food and beverage end markets across almost every region and various applications[9] - Adjusted EBITDA margins improved by 130 basis points to 16.9%[9] Earnings Per Share and Tax Rate Aptar's Q2 2025 reported earnings per share increased 25% to $1.67, and adjusted earnings per share increased 18% to $1.66, benefiting from a lower effective tax rate of 20.0% due to tax planning and greater tax benefits from share-based compensation Second Quarter Earnings Per Share and Tax Rate | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------- | :------ | :------ | :----------- | | Reported Earnings Per Share | $1.67 | $1.34 | +25% | | Adjusted Earnings Per Share | $1.66 | $1.41 | +18% | | Effective Tax Rate | 20.0% | 23.5% | -3.5 percentage points | Six Months Year-to-Date 2025 Financial Results AptarGroup's year-to-date 2025 financial results show consistent consolidated sales growth and increased profitability for the first half of the year Consolidated Performance For the six months ended June 30, 2025, AptarGroup's reported sales increased 2% to $1.85 billion, with core sales also up 2%, reflecting consistent growth across the company Six Months Year-to-Date 2025 Consolidated Sales Analysis | Metric | YTD 2025 Sales | YTD 2024 Sales | Reported Sales Growth | Currency Effects | Acquisitions | Core Sales Growth | | :---------------- | :------------- | :------------- | :-------------------- | :--------------- | :----------- | :---------------- | | Total AptarGroup | $1.85 billion | $1.83 billion | 2% | 0% | 0% | 2% | Earnings Per Share and Tax Rate Aptar's year-to-date reported earnings per share increased 10% to $2.83, and adjusted earnings per share rose 8% to $2.86, with the effective tax rate for the period at 22.5% Six Months Year-to-Date Earnings Per Share and Tax Rate | Metric | YTD 2025 | YTD 2024 | Change (YoY) | | :-------------------------- | :------- | :------- | :----------- | | Reported Earnings Per Share | $2.83 | $2.57 | +10% | | Adjusted Earnings Per Share | $2.86 | $2.64 | +8% | | Effective Tax Rate | 22.5% | 22.1% | +0.4 percentage points | Outlook and Shareholder Returns Aptar anticipates solid third-quarter 2025 performance, particularly in Pharma, while continuing to return capital to shareholders through dividends and share repurchases Third Quarter 2025 Outlook Aptar anticipates a solid Q3 2025, with continued strength in Pharma, particularly Injectables, driven by rising demand for higher value elastomeric components. The company expects adjusted earnings per share in the range of $1.53 to $1.61, factoring in higher legal fees and a lower effective tax rate - Expected adjusted earnings per share for Q3 2025: $1.53 to $1.61[14] - Guidance includes approximately 6 to 7 cents of higher legal fees associated with litigating pharma intellectual property rights[14] - Expected effective tax rate range for Q3 2025: 20.5% to 22.5%, primarily due to a one-time tax benefit, compared to 23.8% in Q3 2024[14] - Anticipates continued strength in Pharma, especially Injectables, driven by growth in biologics, GLP-1 therapies, and Annex 1 compliance requirements[14] - Expects challenges as naloxone sales begin to normalize and elevated cough and cold inventory in Europe persists[14] - Modest Q3 contributions are anticipated from Closures and Beauty segments, with a continued focus on cost discipline across all segments[14] Cash Dividends and Share Repurchases Aptar's Board of Directors approved a quarterly cash dividend of $0.45 per share. In the second quarter, the company repurchased 452 thousand shares for $70 million, contributing to a total of $210 million returned to shareholders in the first half of the year - Quarterly cash dividend approved: $0.45 per share, payable August 14, 2025[15] - Q2 2025 share repurchases: 452 thousand shares for $70 million[15] - Total returned to shareholders in the first half of 2025: $210 million[3][6][15] Company Information and Disclosures This section provides essential information about AptarGroup, including its business overview, conference call details, non-GAAP measure definitions, and forward-looking statement disclaimers About Aptar Aptar is a global leader in drug and consumer product dosing, dispensing, and protection technologies, serving diverse end markets including pharmaceutical, beauty, food, and personal care. The company is headquartered in Crystal Lake, Illinois, with over 13,000 employees in 20 countries - Global leader in drug and consumer product dosing, dispensing, and protection technologies[17] - Serves pharmaceutical, beauty, food, beverage, personal care, and home care markets[17] - Headquartered in Crystal Lake, Illinois, with more than 13,000 dedicated employees in 20 countries[17] Open Conference Call Aptar will host a conference call on Friday, August 1, 2025, at 8:00 a.m. Central Time to discuss the company's second quarter 2025 results. Interested parties can listen via live webcast or access a replay on the Investor Relations website - Conference call scheduled for Friday, August 1, 2025, at 8:00 a.m. Central Time[16] - Purpose: Discuss second quarter 2025 results[16] - Access: Live webcast and replay available on investors.aptar.com[16] Presentation of Non-GAAP Information This section defines non-GAAP financial measures used in the press release, such as adjusted earnings per share, adjusted EBITDA, and core sales. These measures exclude the impact of restructuring, acquisition costs, investment gains/losses, and foreign currency effects to provide a clearer period-over-period comparison of core operating performance for investors and management - Non-GAAP financial measures include adjusted earnings per share, adjusted EBITDA, adjusted EBITDA margin, and core sales[18] - These measures exclude items such as restructuring initiatives, acquisition-related costs, certain purchase accounting adjustments, net unrealized investment gains/losses, and foreign currency translation effects[18] - Rationale: Provide useful information for investors by allowing a better period-over-period comparison of operating results and reflecting core operating performance[18] - Free cash flow is calculated as cash provided by operating activities less capital expenditures plus proceeds from government grants related to capital expenditures[18] Forward-Looking Statements The press release contains forward-looking statements that are subject to various known and unknown risks and uncertainties, including geopolitical conflicts, cybersecurity threats, raw material availability, intellectual property litigation, economic conditions, competition, tariffs, and regulatory changes, which could cause actual results to differ materially from expectations - Forward-looking statements are based on beliefs and assumptions, and actual results may differ materially due to known or unknown risks and uncertainties[20] - Key risks include: geopolitical conflicts, cybersecurity threats, raw material and component availability, intellectual property rights litigation, economic conditions (inflation/recession), competition, tariffs, supply chain disruptions, foreign currency fluctuations, and changes in government regulation[20] - The company undertakes no obligation to update publicly any forward-looking statements, except as required by law[20] Contacts Provides contact information for investor relations and media inquiries - Investor Relations Contact: Mary Skafidas, mary.skafidas@aptar.com, 815-479-5530[21] - Media Contact: Katie Reardon, katie.reardon@aptar.com, 815-479-5671[21] Condensed Consolidated Financial Statements (Unaudited) This section presents AptarGroup's unaudited condensed consolidated financial statements, including statements of income and balance sheets, for the specified periods Consolidated Statements of Income The unaudited condensed consolidated statements of income present AptarGroup's financial performance for the three and six months ended June 30, 2025 and 2024, showing increases in net sales, operating income, and net income for both periods Consolidated Statements of Income (Unaudited) | Metric (In Thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Sales | $966,009 | $910,063 | $1,853,314 | $1,825,511 | | Operating Income | $144,393 | $126,010 | $257,841 | $238,093 | | Income before Income Taxes | $139,714 | $118,246 | $245,729 | $222,564 | | Net Income | $111,732 | $90,458 | $190,395 | $173,391 | | Diluted EPS | $1.67 | $1.34 | $2.83 | $2.57 | Consolidated Balance Sheets The unaudited consolidated balance sheets show AptarGroup's financial position as of June 30, 2025, compared to December 31, 2024, with total assets increasing to $4.87 billion and total stockholders' equity rising to $2.72 billion Consolidated Balance Sheets (Unaudited) | Metric (In Thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :-------------- | :---------------- | | Total Current Assets | $1,663,020 | $1,478,383 | | Property, Plant and Equipment, Net | $1,584,533 | $1,447,150 | | Goodwill | $996,489 | $936,256 | | Total Assets | $4,865,381 | $4,432,278 | | Total Current Liabilities | $1,368,884 | $1,068,281 | | Total Liabilities | $2,147,567 | $1,946,354 | | Total Stockholders' Equity | $2,717,814 | $2,485,924 | Non-GAAP Reconciliations (Unaudited) This section provides detailed reconciliations of GAAP to non-GAAP financial measures, including adjusted EBIT, EBITDA, and earnings per share, for transparent financial reporting Reconciliation of Adjusted EBIT and Adjusted EBITDA to Net Income This section provides detailed reconciliations of reported net income to adjusted EBIT and adjusted EBITDA for both the three and six months ended June 30, 2025 and 2024, highlighting adjustments for restructuring initiatives, net investment gains/losses, and transaction costs related to acquisitions Three Months Ended June 30, 2025 & 2024 This sub-section details the reconciliation of adjusted EBIT and EBITDA to net income for the second quarter of 2025 and 2024 Adjusted EBIT and EBITDA Reconciliation (Q2) | Metric (In Thousands) | Q2 2025 (Consolidated) | Q2 2024 (Consolidated) | | :-------------------------------------------------- | :--------------------- | :--------------------- | | Reported income before income taxes | $139,714 | $118,246 | | Adjustments (Restructuring, Net investment, Transaction costs) | (179) | 2,595 | | Adjusted earnings before income taxes | $139,535 | $120,841 | | Adjusted EBIT | $148,505 | $127,800 | | Adjusted EBITDA | $218,409 | $192,768 | | Adjusted EBITDA margins | 22.6% | 21.2% | Six Months Ended June 30, 2025 & 2024 This sub-section details the reconciliation of adjusted EBIT and EBITDA to net income for the six months ended June 30, 2025 and 2024 Adjusted EBIT and EBITDA Reconciliation (YTD) | Metric (In Thousands) | YTD 2025 (Consolidated) | YTD 2024 (Consolidated) | | :-------------------------------------------------- | :---------------------- | :---------------------- | | Reported income before income taxes | $245,729 | $222,564 | | Adjustments (Restructuring, Net investment, Transaction costs) | 2,959 | 5,483 | | Adjusted earnings before income taxes | $248,688 | $228,047 | | Adjusted EBIT | $266,195 | $242,283 | | Adjusted EBITDA | $401,746 | $371,600 | | Adjusted EBITDA margins | 21.7% | 20.4% | Reconciliation of Adjusted Earnings Per Diluted Share (Q2 & YTD) This reconciliation details the adjustments made to reported diluted earnings per share to arrive at adjusted diluted earnings per share for the three and six months ended June 30, 2025 and 2024, accounting for restructuring, net investment gains/losses, acquisition costs, and foreign currency effects Adjusted Earnings Per Diluted Share Reconciliation | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------------------------- | :------ | :------ | :------- | :------- | | Reported Net Income Attributable to AptarGroup, Inc. Per Diluted Share | $1.67 | $1.34 | $2.83 | $2.57 | | Adjustments (Restructuring, Net investment, Transaction costs, FX) | (0.01) | 0.07 | 0.03 | 0.07 | | Adjusted Net Income Attributable to AptarGroup, Inc. Per Diluted Share | $1.66 | $1.41 | $2.86 | $2.64 | Reconciliation of Free Cash Flow to Net Cash Provided by Operations This reconciliation shows AptarGroup's free cash flow for the three and six months ended June 30, 2025 and 2024, derived from net cash provided by operations after accounting for capital expenditures and proceeds from government grants Free Cash Flow Reconciliation (In Thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Cash Provided by Operations | $125,958 | $143,579 | $208,700 | $235,912 | | Capital Expenditures | (63,425) | (68,205) | (120,287) | (143,866) | | Proceeds from Government Grants | 3,308 | — | 3,308 | — | | Free Cash Flow | $65,841 | $75,374 | $91,721 | $92,046 | Reconciliation of Adjusted Earnings Per Diluted Share (Q3 2025 Outlook) This reconciliation provides the basis for Aptar's third quarter 2025 adjusted earnings per diluted share guidance of $1.53 to $1.61, detailing adjustments to the prior year's reported earnings for restructuring, investment gains, and foreign currency effects, and noting the expected effective tax rate range Adjusted Earnings Per Diluted Share Reconciliation (Q3 Outlook) | Metric | Expected Q3 2025 (Adjusted) | Q3 2024 (Adjusted) | | :-------------------------------------------------- | :-------------------------- | :----------------- | | Adjusted Net Income Attributable to AptarGroup, Inc. | $104,192 | $104,192 | | Adjusted Net Income Attributable to AptarGroup, Inc. Per Diluted Share | $1.53 - $1.61 | $1.54 | - The expected earnings per share range for Q3 2025 is based on an effective tax rate range of 20.5% to 22.5%, compared to the prior year's effective tax rate of 23.8%[34]