Investor Relations Presentation

Transcription

1 Investor Relations Presentation Delivering solutions, shaping the future. Beauty + Home Food + Beverage Pharma

2 Forward Looking Statements & Non-GAAP Financial Measures This presentation includes forward-looking statements. Forward-looking statements are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are based on management s beliefs and assumptions in light of information currently available to management. Accordingly, the Company s actual results may differ materially from those expressed or implied in such forward-looking statements due to known or unknown risks and uncertainties that exist in the Company s operations and business environment, including, among other factors, those described in documents filed by the Company with the Securities and Exchange Commission, specifically its Form 10-Ks and 10-Qs. The Company does not assume any obligation to update, amend or clarify such statements to reflect new events, information or circumstances after the date of this presentation. During the course of this presentation, certain non-gaap financial information will be presented. A reconciliation of those numbers to GAAP financial measures is available on the company s website at on the Investor s page (click on Events & Presentations / Presentations). 2

3 About Us Over 70 YEARS OF EXPERIENCE operating in the packaging industry The company debuts the name Aptar and continues its global expansion. Aptar becomes a public company in Today Revenues exceed $2.5 billion with +13,000 employees in 18 different countries History 70 year rich history of entrepreneurial spirit Culture of innovation Research and technology-driven Adaptive strategies Our entrepreneurial founding companies started in the U.S, France and Germany Pittway Corporation acquires the legacy companies and grows the company Evolving, growing geographic presence 3

4 We Operate in Attractive Markets Industrial Other Consumer Cosmetics Global Packaging Market $850B 3-4% CAGR to CAGR to 2020E 3.5% 3.1% 3.5% Aptar will also grow from conversion to dispensing and innovation We understand the regional differences across these markets Healthcare Beverage Food % 3.6% Focused on attractive applications within each 3.7% End Consumption Sources: PIRA; Plastic News; European Plastic News; McKinsey & Company; Aptar s internal data 4

5 Driving An Innovation-Centric Portfolio Innovation Focus: Closures with PCR Resin Sustainability Aging Population Packaging Megatrends Health & Wellness Ophthalmic Squeeze Dispenser Resealable Sport Closure Continued investment in R&D (on average 3% of annual revenues invested in R&D) Strengthening management of innovation projects and portfolio New products & services, new business models Partnerships, joint ventures, investments Connectivity & Digitalization Urbanization Metered Dose Inhaler E-Commerce Supply Chain Bonded Aluminum to Plastic Premade No-Spill Spouted Pouch 5

6 Business Segments 2017 Sales = $2.5B 6

7 Highlighting Products and Technologies Beauty + Home Connected Sample (EMEA) Fragrance Prestige Pump (North America) Fragrance Prestige Pumps (North America) Facial Skin Care Pump (North America) Double Wall Airless Serum Dispenser (China) Flip Cap Closure (China) 7

8 Highlighting Products and Technologies Pharma PureHale Portable, Upper Respiratory Delivery Solution (Marketing Globally) Ophthalmic Squeeze Dispenser (France) Injectables: Vial Stopper (United States) Bag-on-Valve (China) 8

9 Highlighting Products and Technologies Food + Beverage Flip Lid Closure that Stays with the Bottle (Marketing Globally) Sport Cap for Bottled Water (Latin America, North America) Closure with SimpliSqueeze Valve (North America) Custom Closure with Patented Drip Catcher (North America) Quick Flip Fitment for Stand Up Pouches (Latin America) 9

10 Sales by Region Year to Date 2018 North America 25% Europe 59% Asia 7% Global Manufacturing: GMP Manufacturing High-precision injection molding High-speed assembly Stamping, anodizing Latin America 9% Decoration Presence in 18 Countries 10

11 Consolidated Financial Targets Metric 3 Year Average 2017 YTD 2018 Long-term Target Core sales growth 1 2% 4% 9% 4-7% Adj. EBITDA 2 /Sales % 20% 19% 20% 20-22% ROIC 3 14% 14% 12% 14-16% Dividend Payout Ratio 38% 38% 41% 30-40% Leverage Ratio = 1X = 1X = 2X 1-3X 1 Excludes acquisitions and currency effects. 2 Earnings before net interest, taxes, depreciation and amortization; earnings exclude restructuring costs, acquisition costs, non-recurring purchase accounting adjustments, gain on insurance recovery and the effect of a change of inventory valuation methods made in the second quarter of Return on invested capital = adjusted earnings before net interest and taxes, less tax effect / average capital (average of beginning of year and end of year capital) [capital = equity plus debt less cash]. 11

12 Segment Financial Targets Metric 3 Year Average 2017 YTD 2018 Long-term Target Core sales growth 1-1% 2% 8% 3-6% Adj. EBITDA 2 /Sales % 14% 13% 13% 15-17% Core sales growth 1 7% 8% 11% 6-10% Adj. EBITDA 2 /Sales % 35% 34% 36% 32-36% Core sales growth 1 3% 6% 6% 6-10% Adj. EBITDA 2 /Sales % 19% 18% 16% 18-21% 1 Excludes acquisitions and currency effects. 2 Segment adjusted EBITDA is defined as Segment Income before depreciation and amortization, excluding restructuring costs and non-recurring purchase accounting adjustments. See accompanying slide titled: Forward Looking Statements & Non-GAAP Financial Measures. 12

13 Balanced Capital Allocation Investing in our business M&A Dividends Share repurchases Board recently approved additional capital projects to support our strong growth. In 2018, we completed 2 acquisitions and made an equity investment in a connected device partner. We increased our dividend 6% to $0.34 per quarter. This will be our 25 th consecutive year of paying an increased dividend. We are in the market from time to time with share repurchases. Balance sheet remains strong at 2X leverage. 13

14 Strategic Priorities 2017 Financial (five year avg) Sales Growth 3% EBITDA Margin 19% Acquisitions Strategic technologies in the US and EU Talent Evolving need for greater capabilities and diversity Geographic Focus Organic Growth added focus on high growth regions Talent & Leadership added focus on inclusion and diversity Innovation, Operations & Commercial Excellence Successful Transformation Beauty + Home & Corporate Functions 2022 Financial Sales Growth 4-7% EBITDA Margin 20-22% Acquisitions/Partners Global acquisitions, partnerships, incubators, new business models Talent Greater diversity, inclusion and global capabilities Geographic Focus Eastern Europe Americas EU Acquisitions & Partnerships Middle East Asia Added emphasis on High Growth Economies Macro Trends Aging Population Connectivity E-Commerce Supply Chain Health and Wellness Rise of Eastern Economies Shareholder Engagement Sustainability Urbanization 14

15 Corporate Sustainability Reports Report Highlights Report in accordance to Global Reporting Initiative (GRI) Standards: Core Options Incudes a GRI Index and assurance statements for absolute energy, carbon emissions and renewable purchases Provides examples of the work Aptar has done to: Reduce waste to landfill Source renewable energy Test and evaluate new, more efficient equipment Institute standardized management plans to reduce environmental impacts To view our Sustainability Report documents Conduct product life cycle assessments and explore sustainable materials Promote social initiatives in the communities where we live and work 15

16 Q & A 16

17 Appendix Purpose & Vision Third Quarter and YTD Results Segment Technologies & Results 17

18 Purpose, Vision, Core Values PURPOSE We reimagine packaging solutions to improve everyday life for people everywhere. VISION CORE VALUES We partner with our customers to help them win with differentiated solutions. We access the expertise of the world to innovate. We care for our planet. We have talented, passionate, diverse people who thrive in our inclusive culture. We always live our Core Values. We Respect and Trust People We believe in the self-worth of individuals regardless of their status. We strive for relationships that are based on openness, honesty, and feedback. We promote teamwork and cooperation at all levels. We challenge people to develop their potential and to take initiative. We practice business relationships that are based on responsibility and on long-term and mutual interests to all stakeholders. 18

19 The Way We Create Value: Think Local, Leverage Global At Aptar we use insights, design, engineering, and science & technology to partner with our customers in creating and delivering innovative packaging and product dispensing systems that build brand value and, in turn, make a meaningful difference in the lives, looks, homes and health of people around the world. Aptar Global Customer Aptar Local Mega Trends, Insights, Global Key Accounts, Product, Technology, Innovation Platforms Tailored Customer Solution Consumer Insights Customer Relationships Production Footprint Value Chain Ecosystem Consumer 19

20 $750 $700 $650 $600 $550 $500 $450 Third Quarter 2018 Results Reported Q3 Sales (in millions $) $624 $666 Q Q % Core Sales Growth* +7% -3% Currency Effects +3% Acquisitions $0.90 $0.80 $0.70 $0.60 $0.50 Reported Q3 EPS $0.83 * See accompanying slide titled: Forward Looking Statements & Non-GAAP Financial Measures. $0.60 Q Q % Q Reported Effective Tax Rate -28% 23% Q Reported Effective Tax Rate Prior year s adjusted EPS would have been approximately $0.02 lower had our current tax rate been applied (vs the 23% effective tax rate on adjusted EPS) $1.05 $0.95 $0.85 $0.75 $0.65 Adjusted Q3 EPS* $ % Q Effective Tax Rate Adjusted Earnings* +21% $0.99 Q Q % Q Effective Tax Rate Adjusted Earnings* Q3 Highlights Growth in each business segment and geographic region Beauty + Home aided by increased demand for facial care and hair care dispensing solutions Pharma experienced strong demand for our drug delivery devices for allergy, ophthalmic and dermal treatments and components for the injectables market Food + Beverage continued to grow across several categories including infant nutrition and bottled water Some operating leverage was offset by the negative effects of the challenging inflationary environment 20

21 YTD 2018 Results Prior year s adjusted EPS would have been approximately $0.12 lower had our current tax rate been applied (vs the 22% effective tax rate on adjusted EPS) $2,400 $2,000 $1,600 $1,200 $800 $400 $0 Reported YTD Sales (in millions $) $1,843 $2,080 YTD 2017 YTD % Core Sales Growth* +13% +3% Currency Effects +1% Acquisitions $2.80 $2.60 $2.40 $2.20 Reported YTD EPS $2.64 $2.38 YTD 2017 YTD % YTD 2017 Reported Effective Tax Rate -10% 26% YTD 2018 Reported Effective Tax Rate $3.00 $2.20 $1.40 $0.60 Adjusted YTD EPS* $2.77 $3.07 YTD 2017 YTD % YTD 2017 Effective Tax Rate Adjusted Earnings* +11% 26% YTD 2018 Effective Tax Rate Adjusted Earnings* YTD Highlights Robust growth across each segment and geographic region Significant progress on top line this year Excluding restructuring and acquisition costs, we have also delivered strong operating results for the year to date Continue to execute our strategy and our business transformation in parallel with market strength in several areas in which we are the leader * See accompanying slide titled: Forward Looking Statements & Non-GAAP Financial Measures. 21

22 Adjusted EBITDA Adjusted Q3 EBITDA* (in millions $) Adjusted YTD EBITDA* (in millions $) $140 $ % $134 $420 $340 $ % $410 $120 $118 $260 $110 $180 $100 Q Q $100 YTD 2017 YTD 2018 Adjustments: 2017: None 2018: Restructuring charges of $24 mil; Acquisition costs of $10 mil Adjustments: 2017: None 2018: Restructuring charges: $48 mil; Acquisition costs of $13 mil * See accompanying slide titled: Forward Looking Statements & Non-GAAP Financial Measures. 22

23 Fourth Quarter 2018 Outlook $0.90 $0.80 $0.70 $0.60 Earnings Per Share $0.77 Q Reported $0.78 Q Adjusted* Prior year s adjusted EPS would have been approximately $0.07 lower had our current guidance tax rate range been applied (vs the 24% effective tax rate on adjusted EPS) $0.81 $0.86 Q Outlook 30-32% Q4 expected tax rate range (prior year Q4 Adj. EPS effective tax rate = 24%) Guidance Fx Rates = Sept. 30, 2018, Spot Rates (Euro Rate = 1.16) Outlook Highlights Core sales growth over the prior year expected for each business segment Tax rate range includes estimated impacts of recent tax reform legislation Capital expenditures estimated range for 2018 is $190 - $210 million Depreciation & amortization estimate for 2018 is $170 million * See accompanying slide titled: Forward Looking Statements & Non-GAAP Financial Measures. 23

24 Business Snapshot Beauty + Home Customer Sample Products 21

25 Broad Technology Portfolio Beauty + Home Fine Mist Pumps SofTips Direct Application Fragrance Dispensing Airless Systems Precise Applicators Bag-on-valves Lotion Dispensers On The Go Metered Dose Valves Dispensing Closures Aerosol Valves Actuators Cosmetic Pumps Sampling + Promotion A leader in brand differentiating solutions and value-added convenience 25

26 Q Results Beauty + Home Sales Adjusted EBITDA Margin % $400 16% $320 $334 Reported +2% $342 12% 13% 12% $ in millions $240 $160 Core 5% Acquisitions 1% 8% $80 Currency Effects -4% 4% $0 Q Q % Q Q Adjusted EBITDA = Adjusted Earnings* Before Net Interest, Taxes, Depreciation and Amortization *2018 Earnings are adjusted to exclude restructuring costs and nonrecurring purchase accounting adjustments. 26

27 Year-to-Date 2018 Results Beauty + Home Sales Adjusted EBITDA Margin % $ in millions $1,200 $1,000 $800 $600 $400 $200 $978 Reported +11% Core 8% Acquisitions 0% Currency Effects 3% $1,088 16% 12% 8% 4% 13% 13% $0 YTD 2017 YTD % YTD 2017 YTD 2018 Adjusted EBITDA = Adjusted Earnings* Before Net Interest, Taxes, Depreciation and Amortization. * 2018 Earnings are adjusted to exclude restructuring costs and non-recurring purchase accounting adjustments. 27

28 Business Snapshot Pharma Customer Sample YTD 2018 Percent of Sales by Market 1% Products 18% 28% 53% Prescription Consumer Health Care Injectables Active Packaging 28

29 Broad Technology Portfolio Pharma Dermal Injectable Inhalation Nasal Eye Care Connected A leader in drug delivery systems with a broad range of innovations across all routes of administration 29

30 Q Results Pharma $280 Sales 40% Adjusted EBITDA Margin % 37% $240 $228 33% $ in millions $200 $160 $120 $80 $40 $200 Reported +14% Core 12% Acquisitions 5% Currency Effects -3% 30% 20% 10% $0 Q Q % Q Q Adjusted EBITDA = Adjusted Earnings* Before Net Interest, Taxes, Depreciation and Amortization * 2018 Earnings are adjusted to exclude restructuring costs and non-recurring purchase accounting adjustments. 30

31 Year-to-Date 2018 Results Pharma $800 $700 $600 $598 Sales Reported +17% $699 40% 30% Adjusted EBITDA Margin % 34% 36% $ in millions $500 $400 $300 Core 11% Acquisitions 1% 20% $200 $100 Currency Effects 5% 10% $0 YTD 2017 YTD % YTD 2017 YTD 2018 Adjusted EBITDA = Adjusted Earnings* Before Net Interest, Taxes, Depreciation and Amortization * 2018 Earnings are adjusted to exclude restructuring costs and non-recurring purchase accounting adjustments. 31

32 Business Snapshot Food + Beverage Customer Sample Products 32

33 Broad Technology Portfolio Food + Beverage BAP Bonded Aluminum to Plastic SimpliSqueeze SimpliSqueeze BOV Bag On Valve Pouch Fitments Pumps Dispensing Closures Beverage Closures A leader in market intelligence-driven dispensing and sealing innovations 33

34 Q Results Food + Beverage Sales Adjusted EBITDA Margin % $120 24% $ in millions $100 $80 $60 $40 $91 Reported +6% Core 4% Acquisitions 4% $97 18% 12% 20% 16% $20 Currency Effects -2% 6% $0 Q Q % Q Q Adjusted EBITDA = Adjusted Earnings* Before Net Interest, Taxes, Depreciation and Amortization * 2018 Earnings are adjusted to exclude restructuring costs and non-recurring purchase accounting adjustments. 34

35 Year-to-Date 2018 Results Food + Beverage Sales Adjusted EBITDA Margin % $300 $267 $292 20% 19% $ in millions $240 $180 $120 $60 Reported +10% Core 6% Acquisitions 2% Currency Effects 2% 15% 10% 5% 16% $0 YTD 2017 YTD % YTD 2017 YTD 2018 Adjusted EBITDA = Adjusted Earnings* Before Net Interest, Taxes, Depreciation and Amortization * 2018 Earnings are adjusted to exclude restructuring costs and non-recurring purchase accounting adjustments. 35