AptarGroup (ATR) Q4 2023 earnings summary

Executive summary

• FY 2023 sales were $3.487B, up 5% reported and 3% core; adjusted EPS rose 24% to $4.78 and adjusted EBITDA increased 15% to $708M.

• Q4 sales rose 5% to $838M, with 2% core growth; net income reached $62M, up 6% YoY.

• Proprietary Pharma drug delivery and fragrance dispensing drove growth; all three segments expanded margins YoY.

Financial highlights

• Q4 reported EPS was $0.93 versus $0.89; adjusted EPS rose 27% to $1.21 from $0.95.

• Q4 adjusted EBITDA increased 22% to $179M from $147M; adjusted EBITDA margin was 21.4%, up from 18.4%.

• FY reported net income rose 19% to $284M; reported EPS was $4.25 versus $3.59.

• FY adjusted EBITDA rose 15% to $708M from $617M; adjusted EPS increased 24% to $4.78 from $3.87.

• Record FY operating cash flow was $575M versus $479M; free cash flow reached $263M versus $196M.

Outlook and guidance

• Q1 2024 adjusted EPS guidance is $1.10–$1.18; the expected tax rate is 24.5%–26.5%, with a euro exchange-rate assumption of 1.08.

• Q1 currency assumptions imply a $0.01 per-share YoY tailwind, based on spot rates at January-end.

• 2024 outlook calls for continued growth in proprietary Pharma systems and biologics elastomeric components; Beauty and Closures are expected to benefit from progressive North American recovery.

• 2024 depreciation and amortization is expected at $260M–$270M; capital expenditures net of government grants at $280M–$300M. Cost priorities include lower SG&A as a share of sales and reduced fixed costs.