Earnings Call Insights: AptarGroup (ATR) Q3 2025
Management View
CEO Stephan Tanda reported adjusted earnings per share of $1.62 for the third quarter, highlighting, "growth in our Pharma segment was driven by solid demand for proprietary drug delivery systems for central nervous system therapeutics, asthma, COPD and ophthalmic treatments." He noted significant growth in injectables due to "increased demand for elastomeric components for GLP-1 medications and solid growth in our Active Materials Science division." Tanda also announced the acquisition agreement for Sommaplast, a Brazil-based pharma packaging provider, expected to close later in the year, aiming to reinforce Aptar’s regional footprint and capitalize on growth in Brazil's oral dosing and over-the-counter markets.
In the Beauty segment, Tanda observed "revenue growth in a number of regions over the previous year quarter, such as Asia, Latin America and certain end markets in North America," though European sales remained flat due to "softness in our higher-value products such as facial skin care and in certain prestige fragrance end markets." He also cited a recently announced 7% dividend increase to $0.48 per share and emphasized sustained share repurchases: “2025 has been a banner year for share repurchases, and we plan to lean in more.”
CFO Vanessa Kanu stated, “Our reported sales increased 6% and core sales... grew 1% compared to the prior year period.” Kanu highlighted a $27 million gain related to the BTY transaction and $4 million in litigation costs affecting net income, both excluded from adjusted earnings measures. She detailed that the Pharma segment’s adjusted EBITDA margin reached 37.2%, a 120 basis point improvement, and that, “for the first 9 months, free cash flow was $206 million.” Kanu also announced the board-approved share repurchase program, with $270 million remaining authorized.
Outlook
Kanu stated, "For Q4 2025, we expect a more pronounced deceleration mainly due to elevated inventory levels at a large customer and expect revenue contribution for the full year 2025 to be about 5% of total sales." She projected a 35% year-over-year decline in emergency medicine revenues for 2026 compared to 2025 due to inventory normalization at key customers, anticipating a compressing effect on overall margins. For Q4, the company expects adjusted earnings per share between $1.20 and $1.28 and an effective tax rate of 19.5% to 21.5%.
Tanda emphasized, “Looking ahead, we expect our pharma pipeline to continue to be strong and robust... contributing 7% to 10% of revenue annually.” He noted that growth in injectables will be “high single-digit, low double-digit rates for the coming period,” with Consumer Healthcare and active materials expected to return to growth.
Financial Results
Kanu reported consolidated adjusted EBITDA margins increased by 30 basis points to 23.2%. Adjusted earnings per share was $1.62, up 4% year-over-year on comparable foreign exchange rates. She stated, “reported sales increased 3% and core sales increased 1%” for the year-to-date.
The company ended September with cash and short-term investments of $265 million, net debt of $936 million, and a leverage ratio of 1.22. Shareholder returns reached $279 million through buybacks and dividends in the first nine months, with 1.3 million shares repurchased for $190 million.
Q&A
Ghansham Panjabi, Baird: Asked about 2026 growth drivers in pharma and emergency medicine’s impact. Tanda clarified, “The 7% to 10% comment... was not meant to give you a guidance for '26.” Kanu added that emergency medicine will be “in that 10%, 11% range of revenue... goes down about 35%.”
Paul Knight, KeyBanc: Inquired about GLP-1 and Annex 1 growth. Tanda responded, “GLP-1 is a solid driver... top one driver of growth. Annex 1 closely behind.” Kanu noted GLP-1 growth “up over 40% compared to the prior year.”
George Staphos, BofA: Asked about margin improvement in Beauty and volume trends. Tanda said, “#1, 2 and 3 for beauty is volume... Europe is already well in its target range... China is also doing well. Where we are currently held back is North America.”
Daniel Rizzo, Jefferies: Asked about margin differences in emergency medicine. Kanu stated, “There is a significant margin differential... emergency medicine being a high-value life-saving product... amongst the highest of our margin products.”
Matthew Roberts, Raymond James: Queried about inventory and market shifts in Personal Care. Tanda said, “Don't hear a lot of noise around inventory or destocking in Personal Care. It's more of a rotation in formats.”
Takeaway
AptarGroup’s third quarter was marked by continued strength in injectables, innovation-driven product launches, and a strategic expansion into Brazil. However, the company signaled a sharp 35% decline in emergency medicine revenues for 2026, which will compress margins and impact overall growth. Management underscored the resilience of its core Pharma pipeline and operational discipline, while confirming that headwinds in emergency medicine are expected to be temporary and that capital returns to shareholders remain a priority.
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