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APTARGROUP, INC. (ATR)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered adjusted EPS of $1.20 (+5% ex-FX and tax) on sales of $887.3M, with adjusted EBITDA up 3% to $183.3M and margin expansion to 20.7% (+120 bps) .
  • Results vs consensus: EPS beat (+$0.05) and EBITDA beat; revenue modestly below Street; Q2 EPS guidance of $1.56–$1.64 implies sequential strength across segments . Values retrieved from S&P Global*.
  • Segment mix: Pharma core +3% on strength in emergency/CNS therapies and Active Materials; Beauty pressured by Europe prestige fragrance; Closures improved margins despite lower tooling sales and exit from Argentina .
  • Shareholder returns ramped: $80M buybacks (548k shares) and $0.45 dividend; net debt $870M and leverage 1.16x support flexibility .
  • Catalysts: EPS/EBITDA beat, margin gains, robust Q2 guide, accelerating tooling activity, and tariff-driven local sourcing opportunities in North America .

What Went Well and What Went Wrong

What Went Well

  • Pharma margin expansion to 34.8% (+230 bps), supported by higher-value mix and royalties; proprietary drug delivery systems core +4% with 12 straight quarters of reported growth .
  • Consolidated adjusted EBITDA margin expanded to 20.7% (+120 bps), gross margin +160 bps, driven by improved revenue mix and cost productivity .
  • Strong shareholder returns: $110M returned ($80M repurchases); CFO highlighted balance sheet strength (net debt $870M; leverage 1.16x) .
  • Quote: “We expect to build on our solid start…with positive contributions from all three segments” — CEO Stephan Tanda .

What Went Wrong

  • Beauty: prestige fragrance weakness in Europe; segment core -3%, adjusted EBITDA margin down 50 bps to 12.1% .
  • Closures: core -2% due to meaningfully lower tooling and cessation of unprofitable Argentina sales (otherwise core +3%); margin improvement but topline headwind .
  • Consumer Healthcare destocking (nasal decongestants/saline/cough & cold) outside U.S. persisted; management expects at least “another quarter” before inflection .
  • Higher effective tax rate (26% vs 20% LY) pressured reported EPS; France 2025 surtax and lower share-based comp benefits cited .

Financial Results

Consolidated Performance vs Prior Two Quarters

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$909.3 $848.1 $887.3
Diluted EPS ($)$1.48 $1.49 $1.17
Adjusted EPS ($)$1.49 $1.52 $1.20
Adjusted EBITDA ($USD Millions)$208.4 $194.9 $183.3
Adjusted EBITDA Margin %22.9% 23.0% 20.7%

Q1 2025 Actuals vs Wall Street Consensus

MetricActualConsensusSurprise
EPS ($)1.201.155*+$0.045*
Revenue ($USD Millions)887.3898.6*-$11.3*
EBITDA ($USD Millions)183.3180.3*+$3.0*
Values retrieved from S&P Global*.

KPI Trends

MetricQ3 2024Q4 2024Q1 2025
Cash from Operations ($USD Millions)$229.3 $178.2 $82.7
Capital Expenditures ($USD Millions)$66.6 $66.1 $56.9
Free Cash Flow ($USD Millions)$162.7 $112.2 $25.9
Share Repurchases ($USD Millions)$14 $37 $80
Dividend per Share ($)$0.45 $0.45 $0.45

Segment Breakdown

Segment Net Sales ($USD Millions)Q3 2024Q4 2024Q1 2025
Aptar Pharma$420.6 $400.7 $409.5
Aptar Beauty$302.9 $274.1 $305.7
Aptar Closures$185.8 $173.3 $172.1
Segment Adjusted EBITDA Margin %Q3 2024Q4 2024Q1 2025
Aptar Pharma36.0% 35.7% 34.8%
Aptar Beauty13.3% 12.4% 12.1%
Aptar Closures17.2% 16.1% 15.8%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EPS ($)Q1 2025$1.11–$1.19 (guided on Feb 6) Delivered $1.20 Above midpoint (execution)
Adjusted EPS ($)Q2 2025N/A$1.56–$1.64 New; strong sequential guide
Effective Tax Rate (%)Q2 2025N/A19%–21% (one-time benefit) Temporary ETR tailwind
Currency AssumptionsQ2 2025N/ABased on current spot rates Clarified FX basis
Quarterly Dividend ($/share)Q2 2025 (declared in Q1)$0.45 (prior) $0.45 (pay 5/22, record 5/1) Maintained
Share Repurchases ($)2025 Program$500M authorization (Oct 2024) remaining ~$383M as of Q1 Ongoing; $80M in Q1 Active deployment

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Consumer Healthcare inventorySeasonal right-sizing noted; beauty and cough & cold Nasal decongestants/saline decline; weaker cold/flu season U.S. normalizing; rest-of-world destocking continues; another quarter likely Improving in U.S.; ROW lagging
Injectables & GLP-1 demand/capacityPharma strength; pipeline growth Pharma margins at top end; robust demand Robust order book; ramping equipment/validation; GLP-1 sustained; oral pill unlikely near-term impact Capacity ramp; positive demand
Emergency medicine (Narcan)Double-digit proprietary drug delivery growth Pharma franchise growth +8% FY ~5% of company revenue; lumpy but supportive long-term Structural growth; volatility
Beauty prestige vs masstigePrestige softness; personal/home care growth; China soft Mix/tooling headwinds; masstige growth Prestige weakness in Europe; masstige double-digit growth; China progressive improvement Gradual improvement; mix shift
Tariffs & supply chainLocal-for-local footprint resiliency (implied) —Net effect limited; passing through; NA footprint (11 plants) creates opportunity; RFQs up ~30% for US-local sourcing Manageable headwind; opportunity
Digital health / SmartTrack——Clinical validation study to reduce generic inhaled trials via in-vitro/in-silico methods Strategic innovation progressing

Management Commentary

  • CEO: “We expect to build on our solid start to the year…positive contributions from all three segments.”
  • CEO on resilience and tariffs: “Our robust in-region, for-region supply chain…allows us to adapt with agility…changing dynamics also bring opportunities, especially with our strong North American footprint.”
  • CFO on tax rate: “Q1 ETR was 25.8%…temporary 2025 surtax in France…lower tax benefits from share-based compensation.”
  • CFO on Q2 guide: “Adjusted EPS $1.56–$1.64; ETR 19–21% due to a onetime tax benefit…ongoing tax optimization.”
  • CEO on CHC destocking: “U.S. inventories…more normal…outside the U.S.…probably another quarter of destocking.”
  • CEO on tooling: “We certainly see tooling on the way up in quarter 2.”

Q&A Highlights

  • Inventory/Order patterns: U.S. CHC improving; ROW still destocking; visibility limited across supply chain layers .
  • GLP-1 impact: Strong ongoing demand; investments in auto-injectors unlikely to be abandoned; oral formulations seen as more sequential (maintenance regime) in longer term .
  • Tax modeling: Q2 ETR midpoint ~20% from deferred tax asset recognition; back half ETR ~22–24% expected ex one-time .
  • FX commentary: EUR/USD spot ~1.14; year-over-year impact ~$0.04 on EPS .
  • Tariffs: Net impact limited; pass-throughs; increased RFQs for U.S.-local sourcing; China market evolving with local brands gaining share .

Estimates Context

  • Q1 2025 vs consensus: EPS $1.20 beat vs $1.155*; revenue $887.3M slight miss vs $898.6M*; EBITDA $183.3M beat vs $180.3M*. Values retrieved from S&P Global*.
  • Q2 2025 guidance $1.56–$1.64 vs consensus EPS $1.586* suggests potential upward revisions on near-term earnings; margin trajectory and tooling normalization support H1 strength . Values retrieved from S&P Global*.

Key Takeaways for Investors

  • Margin story intact: consolidated adjusted EBITDA margin up to 20.7% with segment mix/royalties and cost productivity; Pharma remains the profit engine .
  • Near-term setup constructive: Q2 guide ($1.56–$1.64) signals sequential improvement across Beauty and Closures as tooling improves and prestige headwinds gradually abate .
  • Pharma growth drivers diversified: emergency/CNS therapies, Active Materials (diabetes/probiotics), and robust Injectables pipeline tied to GLP-1/biologics .
  • CHC destocking largely U.S.-resolved; ROW likely one more quarter; watch for order book inflection internationally .
  • Tariff dynamics are a strategic positive: in-region footprint and NA capacity enable share capture; RFQs trending higher in U.S. .
  • Capital returns accelerating with buybacks ($80M in Q1) and stable dividend; leverage ~1.16x provides flexibility for continued returns and investment .
  • Actionable: Position for beat-and-raise dynamics into Q2, margin tailwinds, and potential estimate revisions; monitor Beauty prestige recovery in Europe and CHC normalization ex-U.S. for upside optionality .

Citations:

  • Q1 2025 press release/8-K:
  • Q1 2025 earnings call transcript: –
  • Q4 2024 press release: –
  • Q3 2024 press release: –
  • Additional press release (Q1 dividend): –

Estimates:

  • Values retrieved from S&P Global* via analyst consensus.