Core Viewpoint - Global New Materials International Holdings Limited plans to issue HKD 1 billion convertible bonds to support operational funding, refinance existing debts, and general corporate purposes, reflecting its strategic commitment to capitalize on opportunities in the new materials industry and deepen its global layout [1] Group 1: Convertible Bond Issuance - The convertible bonds will have a face value of HKD 2 billion, with actual net proceeds estimated at approximately HKD 981 million after estimated expenses [1] - The initial conversion price is set at HKD 10.19 per share, allowing for the potential conversion into approximately 98.13 million shares, representing 7.92% of the currently issued shares and 7.34% of the total shares post-conversion [1] - The issuance is managed by HSBC and Deutsche Bank, indicating international capital market recognition of the company's growth prospects [1] Group 2: Business Performance - For the first half of 2025, the company reported revenue of HKD 912 million, a year-on-year increase of 17.7%, maintaining a robust double-digit growth rate [2] - The net profit excluding non-recurring items reached HKD 260 million, a significant year-on-year increase of 54.4%, showcasing improved profitability [2] - The growth is attributed to the optimization of product structure, with a steady increase in the proportion of high-margin high-end products, aligning with industry trends towards high-end, green, and collaborative development [2] Group 3: Strategic Development - The company employs a dual strategy of external mergers and acquisitions alongside internal development, with a recent acquisition of Merck's surface solutions business enhancing its technological and market resources [3] - The management emphasizes a "materials + innovation + full scene" strategy to drive breakthroughs in core technologies and enhance international brand integration [3] - As the only leading player in pearl pigments on the Hong Kong stock market, the company is positioned for high-quality development amid a restructuring of valuation systems and accelerated domestic substitution in the new materials industry [3]

Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of $1.66, an increase of 18% compared to the prior year quarter [4] - Reported sales increased by 6%, with core sales growing by 3% year-over-year [15] - Adjusted EBITDA was $218 million, reflecting a 13% increase from the previous year [15] - The effective tax rate for the second quarter was 20%, down from 23.5% in the prior year [16] Business Segment Performance - The Pharma segment's core sales increased by 3%, with prescription sales up 8% and injectables up 9% [18] - Consumer Healthcare core sales decreased by 14% due to inventory management issues in Europe [18] - The Beauty segment saw core sales increase by 1%, driven by stronger tooling sales, while fragrance and skincare sales decreased by 4% [20] - The Closures segment's core sales increased by 7%, with food sales up 13% and beverage sales up 7% [22] Market Data and Key Metrics Changes - North America experienced solid growth in Consumer Healthcare, while Europe struggled with excess inventory from a weaker cold and flu season [6] - The company noted that the visibility into future European demand for cold and cough medications has not improved significantly [7] - The Prestige Beauty market faced headwinds from trade uncertainties, impacting demand recovery [10] Company Strategy and Industry Competition - The acquisition of Mod3 Pharma's clinical trial manufacturing capabilities is expected to enhance the company's position in the Pharma sector [8] - The company aims to expand its services into dermal, ophthalmic, injectable, and packaging solutions [9] - Cost management remains a priority across all segments, with ongoing initiatives to enhance earnings per share [34] Management's Comments on Operating Environment and Future Outlook - The management expressed confidence in the resilience and adaptability of the teams despite a complex macroeconomic backdrop [28] - The company anticipates challenges in the cough and cold markets in Europe and expects ongoing legal expenses related to intellectual property rights [30][32] - The management remains optimistic about the Pharma pipeline and the potential for systemic nasal drug delivery as a growth platform [31] Other Important Information - The company repurchased approximately 1 million shares for about $150 million in the first half of the year [14] - The company was recognized as one of Time Magazine's World Most Sustainable Companies for the second consecutive year [11] Q&A Session Summary Question: Can you provide more details on naloxone sales normalizing and its impact on core sales growth? - Management indicated that naloxone sales are expected to grow more mutedly in the coming quarters due to uncertainty and inventory issues [38] Question: What caused the significant inventory buildup in Consumer Healthcare? - Management explained that post-COVID demand spikes led to over-ordering, resulting in excess inventory that is now being worked off [52] Question: Can you elaborate on the legal expenditures related to intellectual property rights? - Management confirmed ongoing litigation to protect intellectual property, with expected legal costs of approximately $5 million to $6 million per quarter [82] Question: How is the acquisition in New Jersey expected to impact the business? - The acquisition is aimed at enhancing early-stage development capabilities, not for large-scale contract manufacturing [90] Question: What is the outlook for the Prestige Beauty market? - Management noted that while there are uncertainties, recent trade agreements may provide clarity for European clients, potentially boosting sales in the future [66]

Summary of the Conference Call Company Overview - The company discussed is Aptar, which operates primarily in the pharmaceutical, beauty, personal care, home care, food, and beverage sectors [2][3][5] - Approximately 46% of Aptar's business is in the pharmaceutical sector, which is the most profitable and rapidly growing segment [3][11] Key Business Segments Pharmaceutical Business - The pharmaceutical segment includes proprietary dispensing devices such as nasal sprays and injectables, notably GLP-1 [3][11] - The company has increased its core sales growth rate for the pharmaceutical business to 7-11% from a previous range of 6-10% [11] - The pharmaceutical business has a compound annual growth rate (CAGR) of about 8% over the last decade [11] - The segment contributes nearly 70% of the company's EBITDA [17] Beauty and Personal Care - The beauty segment has faced challenges but is expected to improve due to cost improvements and productivity enhancements [12][34] - China is a significant market for beauty products, with the average consumer basket containing twice as many beauty products compared to the West [34][55] - The company has undergone a significant renovation process in its beauty business, including upgrading assets and reducing non-competitive plants [34] Closures Business - The closures segment is known for innovative products like the upside-down ketchup bottle, which has expanded into various condiments and personal care products [36][38] - This segment is primarily US-focused and has been able to drive growth through converting markets to use Aptar's products [41] Financial Performance and Targets - The adjusted EBITDA target for the total company has been increased to 21-23% [11] - The return on invested capital target has been raised to 11-13% [11] - The company has returned nearly $800 million to shareholders through dividends and share buybacks from 2019 to 2024 [13] - The company maintains a strong balance sheet with a leverage ratio of 1.16, allowing for continued investment in growth opportunities [14] Sustainability and Competitive Advantage - Sustainability is a core part of Aptar's business model, providing a competitive advantage [7][15] - The company has received recognition for its sustainability efforts, including being in the top 1% of companies ranked by EcoVadis [15][16] Market Trends and Growth Drivers - There is a trend of repurposing existing drugs for nasal delivery, which is driving growth in the pharmaceutical segment [22][24] - The rise in allergic rhinitis cases, particularly in Asia, is another growth driver for the pharmaceutical business [24][25] - The company benefits from its intellectual property, allowing it to maintain revenue even when products go generic or over-the-counter [25][26] Customer Dynamics and Market Conditions - Customer conversations indicate a cautious approach to strategic actions due to ongoing tariff uncertainties [45][46] - The company has observed a resurgence in consumer confidence in China, which is expected to positively impact the beauty segment [54][55] Conclusion - Aptar is positioned for long-term growth with a focus on innovation, sustainability, and a strong balance sheet, despite facing challenges in certain segments [11][12][14]