AptarGroup, Inc. (NYSE:ATR) Q4 2022 Earnings Call Transcript

Kyle White: Hey good morning. Thanks for taking the question. I actually wanted to follow up on Dan’s question there earlier regarding pharma. There’s a lot of puts and takes in pharma on the volume side, the top line side. You have a pretty challenging comp year-over-year, but there’s a lot of positives that seem to be in the development, right? You mentioned the Narcan moving to over-the-counter. Is there any way to quantify the benefit of volumes you’re expecting from this? And then even longer-term, it seems like there’s a lot of developments being made for nasal delivery solutions of drug molecules and then you also have the injectables capacity expansion. So just trying to understand kind of your line of sight to hitting that 6% to 10% target for 2023? And then even longer-term, is that the right target given all the positives that seem to be in the development?

Stephan Tanda: Yes. Thanks Kyle. We discussed it I think when we had the Investor Day in Congers. You always have moving pieces, and this is a pipeline business. So everything that we start developing today really comes out of the pipeline 5 to 7 years from now. So it’s really our confidence in the pipeline that underpins the 6% to 10% growth. Clearly, right now, we are growing above that. This will be allergic rhinitis will revert back to me. No question. It’s going to keep growing at double digits. And yes, consumer health care is very strong at the moment. So we are quite comfortable with the 6% to 10%, not only this year, but for years to come but we’re also ready to raise it.

Kyle White: Got it. Is there any way — I mean, just to follow up, is there any to size the Narcan potential, what that means for you? And then my second question was going to be on pharma and the cost side. Can you just remind us the cost that you incurred this past year related to start-up costs and the ERP implementation? And then when do those costs go away. We’re just trying to get a better understanding of kind of the more run rate normalized earnings power of this business when those one-time costs are behind you?

Stephan Tanda: Sure. So I think Bob mentioned the quarter four and the quarter one numbers. Again, quarter one, it was $0.08 or $8 million, which will then go down to 2 to 3 for the balance of the year. And it will also continue in 2024, if 2024 comes on stream, but then it will go away. That’s as far as we see. I mean, it’s for this business, remember compared to some other company, it’s a small business, and we’re putting in substantial capital. So the rent is all takes quite a metric. And — we bought this business 10 years ago. And now we’re putting in our standard SAP system, which is also a major effort.

Robert Kuhn: Yes. I mean on relating to 2022, we had roughly a $0.02 to $0.03 as we began the validation in the expansion that was done in 2022. And then in Q4 of this year, we had about total of $0.03 to $0.04 related to the start-up and the ERP implementation. And then Stephan gave you the forward-looking part.

Kyle White: Sounds good. Good luck in the year.

Operator: Thank you, Kyle. Our next question comes from Gabe Hajde from Wells Fargo Securities. Gabe, your line is now open.

Gabe Hajde: Stephan, Bob very good morning. I just had one quick one. A lot of ground has been covered, just one quick one on corporate. It was a little bit higher than maybe what we were looking for — and it sounds like the ERP and start-up costs that were distributed to the segments. So I’m just curious if there’s anything in there and then maybe a little bit of view for what you’re expecting for 2023?