Ladies and gentlemen, thank you for standing by, and welcome to Aptar's 2021 First Quarter Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Introducing today's conference call is Mr. Matt DellaMaria, Senior Vice President, Investor Relations and Communications. Please go ahead, sir. Thank you. Hello, everyone. Thanks for being with us today. Joining me on today's call are Stephan Tanda, President and CEO, Bob Kuhn, Executive Vice President and CFO. Our press release and accompanying slide deck have been posted on our website. If you are following along on our website, you can advance the slides by hovering over the presentation screen and clicking on the arrows on the right and left. As always, we will post a replay of this call on our website. Today's call includes some forward-looking statements. Please refer to our SEC filings to review factors that could cause actual results to differ materially from what we are discussing today. I would now like to turn the conference call over to Stephan. Thank you, Matt, and good morning, everyone. I hope that you are doing well. Starting on slide three, you will find a few highlights from the quarter. We serve patients and consumers across a variety of end markets, and this makes Aptar a resilient business through economic cycles, and the most recent period is no exception. We have the industry's widest range of dispensing systems, Active material science solutions, and drug delivery technologies and services that we leverage across our reporting segments. Our customers benefit from our commitment to research and development and the new innovations that allow us to help them grow their own businesses. We have also maintained our strong focus on sustainability, and Aptar was recently named among the top 10 companies for reducing environmental impact by Just Capital, alongside Dell, IBM, Microsoft, Mastercard, and several other large companies. As you saw in our press release issued yesterday, reported sales increased 8% and core sales increased 1%. This is, of course, compared to the first quarter of 2020, when COVID-19 was not yet a major factor in our quarterly results. We also achieved an adjusted EBITDA margin comparable to the prior year while absorbing the mix shift within our pharma segment and the relative mix across our three segments. Our food and beverage segment delivered a stellar performance this quarter as consumers continued to cook at home during the pandemic, driving strong demand for our innovative food dispensing closures. Price increases also contributed to our top-line growth as we are passing on increased resin costs to our customers. Demand from the beverage market was below the prior year, though sales grew modestly on the resin price adjustments. In pharma, the increased demand for our injectable components, including supplying some of the COVID-19 vaccine distributions, and increased demand for our Active Material Science solution, including those for COVID-19 test kits, offset declines in the prescription drug and consumer healthcare markets. As we had mentioned when giving guidance for the quarter, fewer non-critical doctor visits and the lower incidence of cold and flu illnesses have resulted in certain pharma customers drawing down inventory levels of allergy and other respiratory treatment delivery devices. We continue to be well-positioned in niche healthcare sectors and we see these pandemic-related supply chain adjustments as transitory. In Beauty and Home, sales to the personal care and home care markets increased, while sales to the beauty market declined due to the continued low level of retail beauty activity related to the ongoing pandemic-related lockdowns. We are cautiously optimistic that the second half of the year will show a recovery in the beauty market. We are also maintaining initiatives to contain costs and manage inflation that includes raising prices to offset increases in raw material and other costs while investing in key growth areas, including adding capacity to supply the beauty market in China. Many of our customers remain optimistic that consumers are harboring pent-up demand for the beauty products that will help bring a feeling of normalcy to their lives post-pandemic. In addition to the beauty market, we also expect the haircare category to recover as more consumers go outside and move about, and we are already seeing small but positive trends in sun care in the U.S. Turning to slide four and new product launches, I would like to briefly comment on several product introductions that will highlight the breadth of our offerings. In pharma, our Active Material Science technology was selected to protect two new at-home COVID-19 tests that recently received emergency use authorization from the FDA. These tests provide convenient access to testing without the need to visit a doctor's office. Our technology is integrated into these diagnostic kits to protect against moisture and other environmental conditions that would otherwise impact test accuracy. In the prescription drug market, our UDS powder device is being used in a pivotal trial of intranasal powder-based naloxone by Nasus Pharma. Glenmark's new nasal spray treatment, which combines an antihistamine with a steroid to treat allergic rhinitis, was recently approved in Europe with our nasal spray device. This confirms that the ongoing conversion to nasal delivery continues in this important area. In the injectables market, we continue to support various COVID-19 vaccine distributions in all regions, with the most recent projects being added in India and Latin America. In beauty and home, our e-commerce capable high-flow pump was chosen by P&G for their new indie brand shampoo called Native. Our post-consumer recycled resin closure was selected by P&G for their Planet KIND Refreshing Face Wash. We are also supplying a PCR solution to Unilever for their Dove brand purifying charcoal and clove hydrating body wash. In Europe, we are providing the pumps for in-store refillable personal care products in aluminum bottles for The Body Shop. Our fragrance pump is featured on the Flora and Guilty Gucci perfumes by Coty. Finally, L'Oréal is using our airless jar for its Revitalift facial skincare product in China. In food and beverage, Aptar's infant nutrition closure was selected for Crème de la Cream instant enriched milk powder for Europe and for HiPP Combiotic in China. Our closures with valves for inverted condiments are the dispensing solutions for several barbecue, mayonnaise, ketchup, and jelly products in Brazil. Also in the condiment aisle, our dispensing food closures are featured on Mike's Hot Honey Original Sauce and Burman's Original Hot Sauce here in the U.S.. Finally, in the beverage market, our sports closure is featured on two new flavors of a well-known functional drink beverage in China. With that, I will now turn it over to Bob, who will provide additional comments on our results. Bob? Thank you, Stephan, good morning, everyone. I will walk through some of the details around the first quarter performance, starting with slide five. As Stephan stated, for the first quarter, we reported sales growth of 8% with core sales up 1%. I will go into our growth by market shortly, want to comment on our earnings first. We reported earnings per share of $1.24, which is an increase of 48% over the prior year. Current period reported earnings included a non-cash pre-tax gain of $17 million, or $0.19 per share, related to an increase in the fair value of an equity investment. This investment happens to be our investment in PureCycle Technologies, our strategic partner pursuing ultra-pure post-consumer resin that will one day be part of our circular economy. Turning to slide six, first quarter adjusted earnings per share, excluding restructuring expenses and the gain on the equity investment, increased 10% to $1.09 per share on a comparable basis with the prior year, including adjusting for currency effects. Our earnings also reflect certain tax benefits, including the tax deduction that we receive from stock-based compensation that, as you know, can fluctuate from quarter to quarter. Aptar's adjusted EBITDA increased 6% to $152 million compared to the prior year. This included the positive effects of currency translation rates, as well as the impact of the shift in business across our markets and resin cost increases. Briefly summarizing our segment results, our Pharma business performance was mixed across the different divisions, with total segment core sales even with the prior year and an adjusted EBITDA margin of approximately 35%. Looking at sales growth by market compared to the prior year, core sales to the prescription market decreased 8%, and core sales to the consumer healthcare market decreased 1% for the reasons that Stephan mentioned earlier. Core sales to the injectables market increased 14%, with higher demand for our vaccine components. Price accounted for approximately 2% of the total growth and about 1/3 of the remaining growth is from COVID-related sales, mostly to supply vaccine distributions. Core sales of our Active Material Science solutions increased 5%, primarily due to increased sales of our active containers used for probiotics. Turning to our Beauty and Home segment, core sales decreased 3% and the segment's adjusted EBITDA margin was 10% in the quarter and was negatively impacted by increased resin and other raw material costs, which are passed through where possible, albeit through a process that has typically been on a 60- to 90-day lag. Looking at sales growth by market on a core basis, core sales to the beauty market decreased 10% due to continued localized lockdowns, especially in Europe and global travel restrictions, which have caused a significant reduction in traditional retail and duty-free sales. Core sales to the personal care market increased 2% due to continued strong demand for our hand sanitizer and liquid soap dispensers. Core sales to the home care market increased 13% on strong demand for our cleaners and disinfectants and some automotive products. Turning to our food and beverage segment, which had a solid performance, core sales increased 14% and the segment achieved adjusted EBITDA margin of 17%, primarily due to the ongoing strength in the food market. Looking at each market, core sales to the food market increased 19% as consumers continued the dine-at-home trend because of the pandemic. Core sales to the beverage market increased 2%, primarily due to the pass-through of higher resin prices. Moving to slide seven, which summarizes our outlook for the second quarter, current underlying demand conditions in most of our markets are not expected to change dramatically from what we experienced in the first quarter. We anticipate that demand for our prescription drug and consumer healthcare devices will remain under pressure compared to the prior year as customers continue to work off existing inventories. However, in some of our other markets, including beauty, we will have easier comparisons to the prior year's second quarter, which was the most difficult period when you consider the impact of pandemic lockdowns. We expect our second quarter adjusted earnings per share, excluding restructuring and any change in the fair value of equity investments, to be in the range of $0.91-$0.99 per share. The estimated tax rate range for the second quarter is 26%-28%. In closing, we continue to have a strong balance sheet with a leverage ratio of 1.4. On a gross basis, debt to capital was approximately 37%, while on the net basis, it was approximately 31%. In addition, we continue to invest in innovative growth projects, and we are confirming our forecasted range of capital expenditures for the year at a range of $300 million-$330 million. At this time, Stephan Tanda will provide a few closing comments before we move to Q&A. Thank you, Bob. In closing, on slide eight, I'd like to mention that the broad range of end markets that we serve makes Aptar a very resilient company through economic cycles, and the most recent period was no exception. The wide variety of technologies and solutions that we provide, combined with our commitment to R&D and new innovative solutions, will further build upon our solid customer pipeline. We have a profound respect for the environment that drives lower energy consumption, landfill-free facilities, and sustainable product designs. We will continue to advocate for a circular economy in which packaging is reused and recycled. Our positive mid- and long-term view is unchanged, and when we look past this global pandemic-induced crisis, the future is quite promising. We look forward to growing Aptar for the long-term benefit of all stakeholders. With that, I would like to open up the call for your questions. Thank you. To ask a question, please press star and the number one on your telephone keypad. In the interest of time and fairness to all participants, please limit yourself to two questions and one follow-up question. Come back into the queue if you have more questions as time allows. Your first response is from George Staphos of Bank of America Securities. Please go ahead. Thanks very much. Hi, guys. Thanks for taking my question. Hope you're doing well. Thanks for the details. I guess the first question I had is really more a point of clarification. Bob and Stephan, when you talk about not much change in trends in Q2 versus what you saw in 1Q, I assume you're talking about the year-on-year change that you saw in 1Q in terms of volumes more or less occurring at the same rate in 2Q. You're not saying the volumes are flat 2Q versus 1Q. Just want to clarify on that. Yeah, that's correct. Basically, when you look sequentially, the pattern that we've laid out, I think we will continue to see some destocking on the pharma side and the recovery in beauty and home, which really depends on Europe reopening, will not be in full swing yet. Of course, sequentially improving and compared to quarter two of last year, which was the bottom, very strong growth. The overall demand pattern, similar to what we saw in Q1. Okay. I appreciate the additional color there, Stephan. If we talk about pharma and both consumer health and Rx, we're still going through the destocking. Is there anything that's unique about this destocking period that we're going through relative to others that you've seen in the past? If you can remind us, whatever that context might be then, when you think we'd begin to see some inflection on the volumes in those categories as well? Yeah. I think Bob can speak a bit to history, but what I've learned is that when these happen, it usually is a two-quarter affair. We certainly expect this to be behind us in the third quarter. You see, of course, potential inventory buildups at multiple levels at our direct customers, at the drug manufacturers, in the trades, in the homes. Clearly, in hindsight, there has been some buildup as people were getting ready for the pandemic, making sure everybody stocked. Now we see the result with a nonexistent flu season, a muted allergy season last year as people were staying indoors and masking up. On the other hand, it will run its course. You may hear from my voice, I can personally attest, the allergy season is in full bloom and strong, and as people go outside, they will be affected. We have no doubt that unfortunately, flu season will also come back as people are running out and about. You saw that with the Glenmark approval. We continue to see conversion to nasal delivery in the allergic rhinitis category. Of course, on top of that, we have a strong central nervous system franchise. There's no reason not to believe that the long-term growth rate of around 6% for this category and 6%-10% for pharma overall will not return. Maybe Bob can speak a bit more to history. Yeah, no, I think you nailed it, Stephan. Typically, two quarters is about what we've seen in the past perspective. I think that Stephan mentioned, we do see us returning to growth starting in Q3. I don't see anything unusual about this stock compared to any others. Thanks, Bob. Thanks, Stephan. My last one quickly, just you mentioned that beverage was relatively flat. Could you talk about the regional trends there? Are we still seeing the lingering weakness in Asia come back, or was that a non-event in the quarter? Thank you, guys. Yeah. Actually, China, as you know, has reopened already a year ago, so they're in full swing and there the beverage category is no exception. Clearly, what we're missing is the on-the-go beverages in Europe and still also in the U.S., a s the U.S. is really reopening just now, I think New York's going back to normal in the coming weeks, and Europe is really a quarter to four months behind the U.S.. Now, thankfully, we see more and more definition also in Europe that things are coming together. Germany is getting its act together around vaccines. The U.K. is doing better. France is going to reopen on May 15. Hopefully, that's going to stay open. We certainly have some confidence that Europe will reopen about a quarter, maybe four months behind the U.S., and that will be very good also for the on-the-go beverage business. Thank you very much. Yeah, I would just- Go ahead, Bob, sorry. Add a little more color on the geographic side. Really, beverage was up in every region except for Europe. If we just look, generally speaking, across all the segments, Europe was either flat or down in Europe for the other segments. I think that the remarks about mid-quarter Europe reopening are going to be very helpful and beneficial across all three segments. Thank you. Mid-year you mean, or mid-quarter? Mid-year. Well, on May 15th in Europe reopening, so mid-quarter, we'll start to see things turn around. Your next response is from John Kreger of William Blair. Please go ahead. Hi. Thanks very much. Stephan, could you just maybe go back to your I know you quickly just sort of reiterated your long-term expectation for the pharma business. Maybe just kind of reset that a little bit. What is the pipeline of opportunities that you guys have been seeing recently tell you about the various components within the pharma business and what you think that'll kind of do long term as we get beyond the pandemic? Yeah. If we just walk through the categories, the punchline is we really don't see any change to the 6%-10% long term. You then start with allergic rhinitis, clearly the base allergy business is kind of low single digit, but you will have additional conversions going on. See the Glenmark approval. You have geographic growth in that business as allergy is obviously not just a Western phenomenon. Continuing in Rx, of course, the central nervous system category continues to grow nicely. We called out the clinical trial with the [powder] naloxone. Just this morning, Hikma got approval for a higher dose naloxone drug called KLOXXADO. We see good project flow in the central nervous system category. You go with the consumer healthcare, of course, decongestants, saline, ophthalmic, all target-rich environment. Injectables, as we've discussed on calls before, we've been really heartened by the new project activity and kind of the recognition of Aptar's capability as part of the whole vetting of the COVID supply chain. We're still a small player in this large market, but we see good project activity and continued good growth there. The active packaging, we're calling out the approval of the in-home COVID tests. That is another proof point for the powerful technology that our Active Materials Solutions business provides for important tests whether it's diabetes, whether it's COVID. Of course, the probiotic healthcare continues to grow. Across the board, a lot of reasons to support the 6%-10%. As you know, we've been for a number of quarters, well above that. Clearly, this inventory drawdown normalizes some of that, but no reason not to continue to see that 6%-10% growth. That's helpful. Thank you. Then maybe for a follow-up, can you just talk a little bit about any supply chain pressures you're seeing and how you're managing it, both from the standpoint of raw materials and also just sort of labor and productivity across your facilities? Yeah, I think you touched on all the things. Clearly, there are friction losses as the economy starts to sputter up to higher speed again, whether that's logistics availability, freight rates, air freight rates, labor availability in pricing. Clearly, as we have to hire people, train them, there is more cost there. We, of course, are working hard to pass that on. Clearly, we are very cognizant of a more inflationary environment, and I'm making sure that we pass that on. We have price increases slotted in for later in the quarter. Some of those will be announced, some of them will just be put through. Clearly, as I said, I think last time, you don't just push a button and the economy goes back to full speed. There are friction losses, but we're working through those, and so do our suppliers, and so do our customers. Great. Thank you. Thank you. Your next response is from Mark Wilde of BMO Capital Markets. Morning, Stephan, Bob, Matt. Good morning. Stephan, I wondered, just to start out, if you could give us a little more color on what you're hearing from your beauty and fragrance customers. Earlier in the week, one of your peers was suggesting that they were starting to see some pickup in fragrance activity, and you sound a little more cautious about that. I wondered if you can just update us on what you're seeing kind of around the world in beauty and fragrance. Sure. Of course, it always also depends on what you're comparing to. If you compare to quarter two of last year, of course it's better. you're comparing to the abyss with quarter two of last year. If we walk around the world, China is in full steam. Very happy, for example, with this L'Oréal project that we highlight, where eclipsed pre-pandemic level within some time and project activity is good. India is a bit worrisome. while it's not a big factor in our numbers, clearly, the pandemic there is fully active with significant impacts, and that will also impact a bit our beauty business there, less so the pharma business. Latin America has remained quite resilient through the pandemic and obviously very concerning what's going on there, but it hasn't impacted consumptions level as much as it has in other regions. In the U.S., clearly, we start to see the opening now, so we see improvement there. The key question for us is Europe, and of course, that's for us a very important question because that's where a significant part of our business is. Europe is not where the U.S. is in terms of reopening. As I said, we expect a three to four months lag in the reopening of Europe. That puts it squarely in the second half. For us, in addition, of course, it's very important that travel activity resumes and that impulse purchase in the duty-free aisle gets triggered. Customers are very positive. They have a bunch of launches in their planning. We are working with them. They're not going to pull the final trigger until the travel activity resumes. Certainly, we're not going to hit Mother's Day in Europe. The next big events are in the fall in China and end of year, Christmas in the Western world. Okay, that's helpful. Bob, just a couple of financial items as a follow-on. Can you first of all, give us some sense of how big you estimate the resin headwind to be in both the first quarter and second quarter? Can you just talk briefly about the tax rate? It's been dancing around a lot in recent quarters. Sure. On the resin side, roughly we had about six million across all segments, kind of negative impact on EBITDA. The majority of that was going to be inside beauty and home. The majority of that relates to resin increases. There's also other substrate increases that would seem like aluminum and metal as well that are contributing there. We're actually anticipating approximately the same impact in Q2. If you think about it, we'll be passing on the price increases that Stephan mentioned, but essentially, we'll be catching up for Q1. While we believe that the input costs are going to continue to increase in Q2. It'll be the second half of the year before we can catch on the Q2 increases, again, assuming some stability in input costs for the second half of the year. On the tax rate, so there's a couple items. The most significant was the additional benefit we get from stock-based compensation, which really is the delta between the in-the-money exercise price for legacy options versus book expense. Those are virtually impossible to forecast. As you can see with the share price having the run-up that it's had, you do tend to get additional option exercises. In Q1, we had some RSU vestings as well. It's the benefit of the increase in share price that's triggering outside tax deductions. That's a good thing. That's a real cash saving. Yeah, we'll take that. Absolutely. Right. That's not a deferred benefit. That's a true cost savings. We did also see some state tax law apportionment changes in Alabama, which benefits our active material solutions business down there, but that was lesser impact on the tax rate. You see that we guided slightly lower than we typically have for tax rate of 26% to 28%, and that was merely kind of looking at exercises to date already and kind of putting that already baked into the rate. Okay. Really helpful on the details. Yeah. It's really challenging to forecast what those exercises are going to be because it relates to things that are kind of outside of our control. Okay. Thanks so much, Bob. Yep. Thank you. Your next response is from Ghansham Panjabi with Baird. Please go ahead. Morning, everybody. Hey, Ghansham. Ghansham. Hi. On the beauty and home segment, so I'm just looking at our model. It looks like volumes have been down on a year-over-year basis for about eight quarters. Obviously, a ton has happened in between there in terms of COVID and so on and so forth, channel destocking, et cetera. Stephan, how would you benchmark that progression relative to the end markets over that time period? On the flip side of that, as vaccines get deployed in some of the bigger markets such that you're exposed to in Europe, et cetera, will we see a commensurate rebound that's actually faster than maybe appears just as a consequence of coming out of the flip side of this COVID issue? Yeah. Overall, I think with the exception of some personal care, hair care misses in the U.S. before we went into the pandemic, I think we certainly have been in line with market. There are other areas where I would certainly hear from our people that we've gained market share. On balance, I would say those things cancel each other at least out and certainly think that we are in line with market. On the speed of recovery, it's whatever assumptions you're making about the reopening of Europe and the travel assumptions, I think the commensurate bounce back of especially fragrant sales, but also duty-free sales will go with it. I'm not sure how much color I can give you there, but maybe Bob, you have a different way of describing it. No, I don't. I think you've adequately described it, Stephan. Okay, for the second question, in terms of your customers, clearly you're seeing the velocity increase for beauty products in China as they came on the flip side of COVID, et cetera. Can you just touch on activity level for maybe your larger customers specific to B&H as they position in front of the vaccine deployment and potential reopening of Europe? A separate question on Active Material. You called out some of the technology being used for COVID tests and stuff like that. Are there other opportunities associated with active material that you can sort of leverage into other future growth verticals within testing and so on and so forth for pharma? Sure. I'm going to let Bob address the Active Materials. Let me take the first part of the question. Project activity in China is very brisk. While I wish we had a much larger footprint there and therefore larger share of the growth, given our current footprint and given our current activity level is very high. As I mentioned before, customers appreciate, of course, our global capability to execute, especially on projects that are cross-regional. While many customers are in the middle of shifting some of their filling and execution capability to Asia, there's still a lot being filled in Europe that is for China. Very happy with the activity level in China. In Europe, I think you need a different analogy. I think basically all the horses are in the gates, and they're waiting for the gates to open. clearly, people have not launched new fragrances during the pandemic, but they have new launches ready. having said all that, the proof of the pudding is in the reopening, and we need the reopening in Europe to happen. On the Active Material Solution. we've also had a presence in the diagnostic category. If you think of diabetes test strips, obviously, that's a form of diagnostics. There's also some applications in Europe that are using our technology on DNA test kits as well. this whole new in-home COVID testing is really interesting and exciting for us. We're also on customers' flu kit, and that was even pre-pandemic as well. we do like this space a lot. The technology certainly is increasing at warp speed in this space, and it will be a crowded space, right? You already see some in-home COVID test kits that are out there, but you have a lot of people talking about this as just the beginning of being able to provide more than just COVID testing. You can imagine a diagnostic meter in the home where you could have separate strips for flu, for bronchitis, for you name it, and that could be the first step before you reach out to your doctor. We'll see how it all plays out. Definitely, we like this space, and we think it's going to continue to progress. Thanks so much. Thank you. In the interest of time and fairness to all participants, please limit yourself to two questions and one follow-up question then come back in the queue if you have more questions, as time allows. Your next response is from Gabe Hajde with Wells Fargo. Please go ahead. Stephan, Bob, Matt, good morning. Good morning. I was curious if you guys could comment at all on how some of the joint ventures/minority interests are performing. I'm kind of thinking about Kali Care and maybe some of the connected devices, and I appreciate that they're relatively small and still embryonic, but I think this is an area where Aptar has been successful in the past in terms of nurturing and cultivating these technologies. once they're more widely adopted, being able to leverage your distribution and global footprint. Just anything that stands out to you, I guess. Sure. Maybe just as context for everybody, we look at M&A and venturing really to complement our organic activities, complement organic growth with bolt-on acquisitions and complement our in-house R&D and innovation with venturing investments. These venturing investments are really there not to necessarily drive an internal venture capital business, but really get a front-row seat of innovations. Usually with a venturing investment, we combine board seat or some kind of license or rights. Things that make good linkage with our business. You mentioned Kali Care. Of course, we've done Propeller, which then was sold, and we made a good gain on. We've had Sonmol also in the connected device space. In the food area, we've looked at, or we've invested in Loop and in a second system in Eastern Europe in terms of refillable containers at retail. In between the bolt-on M&A and the venturing investments, joint ventures and sometimes those joint ventures are acquisitions in stages. Mainly I would highlight BTY in China, which really is an acquisition in stages. We are already now leveraging their capability to build our beauty project pipeline in China. By and large, this is a very rewarding area. Sometimes you win from a capital gain point of view. I mentioned already Propeller. Of course, we recorded a big paper gain this quarter, but that's not the main purpose. The main purpose is really to make sure that these innovations happen. If we stick with PureCycle for a moment, the main purpose for PureCycle investment was really to make sure that food-grade, post-consumer recycled polypropylene becomes a reality, because that's what we need. We certainly have no intention of getting into the basic materials business, but we need food-grade, fully recycled polypropylene, and the PureCycle technology certainly has seemed very promising when we did our due diligence, and certainly it seems like the capital market agrees. That's really the purpose of these investments, and if we make a gain on them, that's also great, but the purpose is really to advance the innovations and advance our organic efforts. Thank you. I guess my next question comes down to the transformation plan or restructuring that you guys kind of initiated three years ago, give or take. I think it was supposed to yield $80 million in savings, and obviously the pandemic kind of threw a wrench in that. I think you guys had delayed some footprint consolidation efforts. I was curious if you could update us on how those are progressing, I guess, given a little bit more stability in the operating environment. Then, again, I guess just for us in the outside world to understand that you would still envision came back to mid-teens margins and Beauty & Home, again, assuming some sort of normal volume environment. The short answer to that last point is yes, that is the expectation. Certainly also with there, use the analogy of the horse being ready and the gates ready to go. On your question on the delay, yes, we have delayed the North American footprint optimization. With the pandemic, moving equipment around, starting up equipment in different locations proved more challenging. That will be with us through the middle of this year, but we should be done by the middle of the year. Certainly, between raw material being a drag of about a margin point and the delay in North American footprint optimization, another margin point, those are transitory and will go away, and specifically on the footprint optimization, that should be done by the middle of the year. Thank you, guys. Good luck. Thanks, Gabe. The next response is from Adam Josephson, KeyBanc. Please go ahead. Thanks. Good morning, everyone. I hope the Justin Fields pick went over well in Crystal Lake last evening. We won't be commenting on that for several years, but uh. Stephan, just on Beauty & Home, just to follow up on a couple of Gabe's questions. Appreciating that Beauty and Fragrance is not coming roaring back as yet and Europe is still on lockdown, and you have the resin-related hits concentrated in Beauty & Home. What do you think is a reasonable expectation in terms of when you can either get back to mid-teens EBITDA margins or recover a good chunk of, say, the $50 million EBITDA that you lost last year? I think the best guidance I can give is what we said before. In a normal post-COVID volume environment, we should get back to that 15 range and build from there. The question is when is that post-COVID normal volume environment? I'm not going to put a pin in the calendar. We've all sat here a year ago, were never expecting that this pandemic would still be with us a year later. We're standing by that guidance. The resin pass-through, yes, it's slower in the Beauty & Home business than it is in the food and beverage business, but it will happen. That I'm very confident about, in addition to passing on the other inflationary increases, and as I mentioned, the North American footprint optimization will be done by middle of the year. Got it, Stephan. Thank you. also following up on one of Gabe's questions on the restructuring in Beauty & Home. That was over three years ago. Much has happened in terms of currency, COVID, personal care issues, et cetera. what have you learned since then, compared to what you were initially expecting in terms of generating that $80 million of savings? What has gone as you expected it to, what has gone differently, and what lessons have you learned since then? If you go through the different elements, so in terms of restructuring the front end of the business, you can really divide it up in two things. One is creating smaller, accountable entrepreneurial units with dedicated sales forces. advancing the practices to contemporary best practices in terms of sales force management, customer project management, customer project conversion tracking, moving from longer cadences to a weekly cadence, and then making sure the car doesn't go in the ditch and you course-correct before. I think by and large, I'm very happy with what we did there. You're never finished with this. You need to keep training those muscles. For example, the price increase muscle, again, needs to be trained here as we enter this period but by larger, from the commercial front end very happy and we keep building there. We have much stronger leaders in place in those small entrepreneurial units and very happy with that. I think I spoke earlier about the learnings on the operational improvements. Some of those took longer and in a few cases, we had to go back and do it again. Those of you who are schooled in Six Sigma know that with each project there at the end, there's a control plan to make sure you don't slip back. In some cases, the control plan was not as good as I would have hoped. That is probably a lifelong learning. The changes you make for them to stick, you got to make sure that those changes are irreversible and don't move out the door with the next organization change or people change. That's a painful learning you make every time, but that's par for the course, I guess. At this moment, I'm quite happy with the operational performance of those sites. The KPI is in the right place. Over the same period of time, our safety performance, just to use one benchmark, moved from being much worse than industry average to being now close to world-class. That is just one indicator how we've improved how we do these operations. Of course, we need the volume to go through them. When you get to the fixed cost improvements, I think there we are quite happy with what Bob's done in building up a shared service center in the Czech Republic, in streamlining the back office. Only partially happy with the fixed cost reduction in Europe. The learning certainly is that work council in France are not the easiest to deal with, but we make progress piece by piece by piece, and that continues. Now, having said all that, the operational improvements, though, have been quite significant enough that we were able to take plants offline sooner than we thought. In Europe, for example, the plant in Ireland, the plant in Spain. In the U.S., we got hit by the pandemic, but certainly going into the transformation, we were not expecting to take three plants offline in the Northeast, which we will now be doing. There's also some positive surprises. I think overlay of all that is, of course, the massive shift of growth to the East, and we're never done, and we will have to continue to make sure that we are very well positioned to capture the growth in the East. It's kind of a long answer, but to your question- No, thank you, Stephan. I appreciate it. Your next response is from Neel Kumar with Morgan Stanley. Please go ahead. Great. Thanks for taking my question. In food, you've had a few quarters of very strong growth. You think that some of that strength can carry through into the second half of the year as at-home consumption starts to come down? Do you see any structural changes in the market post-COVID that Aptar can benefit from? Well, the food team is really doing an excellent job. It's probably a bit under-reported with all the attention to beauty and home, but we have a strong team in place there. The growth is not only a mathematical result of the pandemic and in-home consumption, but competitive wins for new projects, strong expansion in Asia. Certainly with beverage coming back, I have no doubt that they will continue to grow also in the second half. [Inaudible] I would say on the post-COVID advantages, we're going to get some puts and takes. I think what's important that we're keeping an eye on is how robust does the sanitizer and the cleansing environment, the washing of hands, is that going to stay? Is that here to stay? But certainly as people move out of the lockdown into getting out and vacationing more, we would expect categories like sunscreen and things like that to improve, even if people are dining out more on the food side, and we see a little bit of a pullback on some of that in-home consumption. Remember that you've got a struggling part of our food business, which is food safety, that we should see a rebound on. So you know, as one goes up, the other one may, i f one goes down, rather, the other one's come up. Certainly, we talked about an improving beverage situation once people are back out traveling on the go, in gyms, and things like that. Okay. In terms of some of the input inflation you're seeing, are the non-resin raw materials also contractually passed through at a similar 15- to 90-day lag of resin, or does that work differently? From a cash flow perspective, do you expect the higher resin and raw material prices to negatively impact working capital? On the other substrate increases, those are more, in general, in many cases, you're talking about complex multi-component products like pumps and aerosol valves and things like that. It tends to be a little bit more of a basket of goods approach. When we trip certain thresholds, yes, we'll pass it on, and certainly with some of those increases that we've seen, we have tripped some of those. That is kind of an additional pass-through on that. On your cash flow question, I would say the $15 million decrease in free cash flow that we saw last year, first quarter to this year is primarily coming from slightly higher inventory levels. That I would think, partially could be due to slightly higher costs, but I think is probably more due to some of the supply chain disruptions that we experienced in Q1. Not having containers to ship internationally, some issues in truck capacity and things like that. We were carrying a little bit higher levels of work in process and finished goods in some of our plants than we have in the past. I see that as also transitory. Great. Thank you. Thank you. Your next response is from Salvatore Tiano with Seaport Global. Please go ahead. Yeah. Hi, Stephan, Bob and Matt. Firstly, I want to touch base a little bit on personal care, where I think you mentioned that the core sales growth year on year was 2%. If I remember correctly, last year, you should have been comping this year against the destocking you saw. I'm wondering if that 2% growth shows that there's acceleration in personal care demand now. Not sure I can follow your question. From Yeah. All right. I was just going to say, just give a little bit more color on personal care. We're still very strong from a product category in our lotion product category, and that's typically products that you would see for personal cleansing, sanitizers and body lotions. We're still suffering a little bit on the haircare side and a little bit on the sun care side. That's needing somewhat that growth coming from personal cleansing category. Okay, perfect. My second question is if you can provide, I think, some more color on what was the price contribution in food and beverage and core sales growth, and also if there was any meaningful price in Q1 for beauty and health and pharma as well? Yeah. Let me start at the top. Overall, for the company as a whole, it was about a 1% positive impact on the core sales growth. It had a stronger impact on food and beverage. It was about 6% positive of the 14% positive, and then it was less than a% positive on beauty and home. about a half a%, roughly. Okay, perfect. Just my last question. When we look at pharma, and obviously you have Q1 and also Q2 with softer prescription and consumer healthcare demand. my understanding is, for example, last quarter, I guess injectable growth got 400 basis points roughly from COVID tailwinds. when we put everything together over the past year, how would you judge COVID's effect on pharma's bottom line when we take into account demand, margins, everything? I'm going to yield to my CFO on that one. It's tough, right? We haven't gone through that math. Again, it's similar to what I was just discussing in personal care, right? We are getting a positive on the injectable side of the business. We're getting a positive on the active material side of the business. Really, those are smaller divisions compared to the total Rx and PHC contribution. It depends on how you categorize it, right? If COVID is responsible for the lower incidence of cold and flu, that's a negative on the nasal decon. If less doctor visits and primary care visits is leading to the allergy and asthma-related products destocking, then that's a negative. That's about all. We really haven't gone into that level of granularity on the pharma business. Just as a reminder, if you zoom out, overall, the prescription unit has by far the highest margin, followed by the consumer healthcare. comes active packaging, and injectable is in line with the industry, but in this line up, the lowest in terms of profitability. certainly, as the top line mix moves so does the profitability. We've been able to absorb a good part of that this quarter. certainly, if you have the top line in mind, I think you can approximate the bottom-line impact. Okay, perfect. That's very helpful. Thank you. There are no further questions in the queue at this time. I will now turn the call back over to Mr. Tanda. Thank you very much. This concludes our call today. Certainly, this year will be a story of two halves. We're very optimistic about the second half of the year, and I would like to thank everyone for joining us. Thank you. This concludes today's conference call. You may now disconnect and have a good day.