AptarGroup reported higher third-quarter sales, with growth across its Pharma, Beauty and Closures businesses, but lower adjusted earnings per share and a narrower adjusted EBITDA margin than a year earlier. The company also said its reported net income and earnings per share were affected by the deconsolidation of its Russian subsidiary.
The board approved a higher quarterly dividend after the quarter ended, raising it to 50 cents per share from 48 cents.
Key details
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Sales rose 6% to $1.02 billion from $961 million a year earlier. Core sales, which exclude the effects of currency movements and acquisitions or deconsolidations, increased 5%.
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All three segments recorded core sales growth:
- Pharma’s reported sales rose 2%, while core sales increased 1%. The company said growth in several therapy and drug-delivery markets was partly offset by lower emergency-medicine sales. Excluding emergency-medicine destocking, Pharma’s core sales grew 8%.
- Beauty’s reported sales increased 9% and core sales rose 8%.
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Closures’ reported and core sales both increased 11%.
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Pharma’s adjusted EBITDA margin was 36.4%, down 80 basis points from a year earlier. Aptar attributed the decline in part to an unfavorable product mix related to emergency-medicine destocking. It said the margin remained above its long-term target range and that royalties and productivity gains supported profitability.
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Adjusted earnings per share were $1.52, compared with $1.62 in the year-earlier quarter at comparable exchange rates. Aptar said the result was at the higher end of its guidance range. The company reported net income of $33 million and reported EPS of 51 cents, both affected by the deconsolidation of its Russian subsidiary.
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Adjusted EBITDA margin for the company overall was 21.3%, compared with 23.2% in the prior-year quarter.
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Aptar returned $61 million to shareholders during the quarter through share repurchases and dividends. Year-to-date returns through those channels totaled $272 million.
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The quarterly dividend will rise to 50 cents per share from 48 cents. The board approved the increase after the quarter ended.
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CEO Gael Touya said the company’s priorities are to strengthen customer relationships, speed innovation, improve execution consistency and allocate capital thoughtfully. He cited growth in Pharma markets including central nervous system therapies, pulmonary, injectables and consumer healthcare, as well as momentum in Closures’ beverage-dispensing innovations.
What changes for investors
The dividend increase lifts Aptar’s quarterly cash payout per share. The results also show that sales growth was broad-based, while adjusted earnings and margins were lower year over year; reported net income and EPS were additionally affected by the Russian subsidiary deconsolidation.