Ladies and gentlemen, thank you for standing by. Welcome to Aptar's 2022 second 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 of Investor Relations and Communications. Please go ahead, sir. Thank you. Hello, everyone, and thanks for being with us today. Joining me on today's call are Stephan Tanda, President and CEO, and 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. We appreciate you joining us on our call today. Some of you may be aware that Matt will be retiring at the end of this year after 32 years of dedicated service to Aptar. We are thankful for Matt's leadership and will have time to wish him well over the coming months as he transitions his role to the experienced and very capable hands of Mary Skafidas, who joined us just a little over a month ago. Mary joins us from the Lowe's Companies, where she most recently served as the Head of Investor Relations, Corporate Communications, and ESG for many years, and has prior leadership experience with McGraw Hill and Toyota Motor. Now let's turn to slide three. As you can see, Aptar delivered a strong second quarter. Each of our segments contributed positively to our top-line growth for the quarter, as well as for the first half of the year. Growth in our second quarter was achieved by increased volumes and pricing initiatives. Our team achieved this solid performance during an exceptionally dynamic and uncertain period. I think it is important to note that we are very well positioned for continued growth. The areas of our business that were negatively impacted by the pandemic, such as our prescription drug, consumer healthcare, and beauty solutions, are now recovering. We are investing in capacity in our Pharma and Beauty segments following our regional manufacturing strategy that will allow us to grow with our customers as they also benefit from life returning to a new normal. Our CFO, Bob Kuhn, will review some details from the quarter later on in this call. First, I would like to touch on some highlights. Aptar Pharma achieved double-digit core sales growth with increased volumes across all our major healthcare markets. Our prescription business has worked through the 2021 destocking situation and is ramping up toward pre-pandemic levels. Higher sales of our delivery devices for allergy, emergency, and pulmonary medicines drove the growth in the prescription drug market. As many people around the world experience colds and cold-like symptoms, including from COVID-19 Omicron infections, demand for nasal decongestants and other cough and cold treatments increased briskly in the consumer healthcare market. Demand also increased for our injectable medications components and active material science solutions, even with tough year-on-year comparisons. Profitability in our Pharma segment is within our target range and includes the previously anticipated dilutive impact from our recent digital healthcare acquisitions and some startup costs related to our expansion of our elastomer components capacity, which is on schedule and expected to progressively come on stream starting in late 2022, throughout 2023, and into early 2024. In our Beauty and Home segment, increased demand from the Beauty and personal care markets as well as our pricing initiatives contributed to double-digit core sales growth. We saw significant year-over-year sales increases in prestige fragrance, facial skincare, color cosmetics, hair care, and sun care. Beauty and Home margins are recovering in Europe and China, but are being held back by continued labor shortages in North America and uneven demand in Latin America. We will not be satisfied until we move within our long-term target range, and we will continue to diligently manage our costs while we prepare to implement further price adjustments to recover the input cost inflation. Finally, growth in our Food and Beverage segment was driven primarily by pricing with volumes up slightly. A softening of demand in the food market, especially in the U.S., following a period of strong growth, was offset by increased volumes in beverage. Margins reflect the weaker food volumes as well as the effects from inflation. Turning to slide four, I want to take a moment to talk about a key priority for Aptar, capital allocation. We deployed over $3 billion in the past five and a half years, balanced across investing in our business, making acquisitions, and returning capital to shareholders in the form of dividends and share repurchases. In the first half of 2022, we had capital expenditures of approximately $150 million. The majority of these expenditures were in our Pharma segment, including expansions in the U.S., France, and China. We also returned over $100 million to shareholders through dividends and share repurchases. We are in our 29th year of paying an increased annual dividend total, and we have repurchased shares every year since 1999, except of course for 2020. Moving to slide five, another steadfast focus has been ESG. We are pleased to share the many milestones and achievements surrounding our progress in 2021 with the release of our annual corporate sustainability/ESG report, which is prepared in accordance with the Global Reporting Initiative Standards and shows our alignment to the UN Sustainable Development Goals. We also published our second UN Global Compact Communication on Progress Report. In addition to publishing new summaries for SASB, the Sustainability Accounting Standards Board, and TCFD, the Task Force on Climate-related Financial Disclosures, we are actively working toward a more sustainable future for all as we develop faster ways to deliver critical medicines, enable families to recycle more plastic, and improve our operations to reduce greenhouse gas emissions. This priority is not only good for our planet, but it's good for business, helping us mitigate enterprise risk, and I am convinced helps us to future-proof the company. Aptar is known for its focus on innovation, quality, and services that go far beyond drug delivery, dispensing, or packaging. Our technologies are often used across a number of markets we serve, and we participate in a number of new product introductions each quarter. Turning to slide six, our Pharma segment continues to supply nasal delivery devices for the administration of emergency medicines, such as the opioid overdose antidote naloxone, where we supply the leading brand as well as several generic players. A new acne dermal medication recently came to market with our airless pump system. Also, our components for injectable medications have been chosen for use with a variety of drugs in the U.S. As shown on slide seven, in the Beauty market, we supplied solutions for several new launches in the quarter, including multiple new fragrance launches in Europe and Latin America, and facial skincare and haircare product in Asia. Regarding China specifically, our multinational Western customers who are doing business there, as well as our local customers, are quite bullish as things begin to open up, and we were encouraged with the level of activity we saw in the quarter. Also on slide seven, in the Food and Beverage markets, we continue to see squeezable formats come to market using our custom pouch closures and flow control closures. While we helped a local Chinese food company launch a new powdered milk infant formula using our sealing and dispense closure. We also are encouraged by demand for our food service tray technology, which can enhance freshness and extend shelf life and have been adopted by a major fast food chain in the U.S. This latest product is from Aptar CSP Technologies, a company we acquired in 2018. Many of our shareholders know this part of the business because of the extraordinary growth it achieved during COVID, supplying test kit manufacturers with its active film technology. Another application of its film is for protecting and extending the shelf life of food. This is a great example of selling one technology across multiple- end markets. These are but a few examples of some of the new applications brought to market with our solutions in the quarter. With that, I will now turn it over to Bob, who will share some additional comments on our quarterly results. Bob. Thank you, Stephan, and good morning, everyone. I would like to summarize the quarter starting on slide eight. Even with the considerable currency impact this quarter, our reported sales grew by 4%. When you equalize the effects of currencies, Aptar had solid core growth of 10%. Approximately half of the increase was driven by volumes and the remainder driven by price initiatives implemented across the majority of our markets. While sales were positively impacted by these pricing initiatives, margins remain compressed as costs are being passed through on a one-for-one basis. As shown on slide nine, we achieved adjusted earnings per share of $0.96 and adjusted EBITDA of $160 million. We continued to face ongoing inflation, supply chain disruptions, and labor shortages primarily in the U.S. If we isolate the net inflation impact, including the margin compression impact from passing on the higher cost, our consolidated adjusted EBITDA margin of roughly 19% would have been approximately 100 basis points higher in the quarter compared to the prior year. While we continue to make progress with our pricing initiatives, we have not yet fully recovered the prior year's cost increases. For a more balanced comparison, keeping exchange rates constant with the current year and adjusting for restructuring and acquisition costs, the prior year's second quarter earnings per share would have been $0.85 per share compared to our adjusted EPS of $0.96 for the second quarter of 2022. The year-over-year improvement was driven by strong results in our Pharma segment and continued recovery in Beauty and Home. Slides 10 and 11 cover our year-to-date performance and show the 11% core sales growth and our adjusted earnings per share, which were $1.92 compared to $1.89 a year ago, including comparable exchange rates. Turning to some of the details by segment for the quarter. Our Pharma segment's core sales increased 12%, with approximately 9% coming from strong demand and 3% coming from price adjustments related to inflation cost recovery. Pharma's adjusted EBITDA margin was 33%. Looking at sales in each Pharma market, prescription core sales increased 15%, primarily due to the continued recovery and demand for allergy, emergency medicine, and pulmonary drug delivery devices. Consumer healthcare costs increased 13% on strong demand for devices used primarily with nasal decongestants. Our elastomer solutions for the injectables market grew core sales 9%, primarily due to higher volumes, including for biologics and pricing initiatives. Turning to our active material science solutions, core sales grew 5% on demand across a variety of applications, led by active material science technology for probiotics and oral solid dose solutions. Turning to our Beauty and Home segment, core sales increased 10% over the prior- year first quarter, with 7% of the growth coming from price adjustments related to inflation cost recovery, as well as good volume increases in certain markets. This segment's adjusted EBITDA margin for the quarter was 12%, slightly higher than the prior year, and included a net- negative inflation effect of approximately $1 million in the quarter, which is already on top of a very high level of inflation in the prior year. Neutralizing the negative effects of passing through the cost inflation, EBITDA margins would have been approximately 120 basis points higher in the quarter compared to the prior year. Looking at each Beauty and Home market, Beauty market core sales increased 19% due to very strong demand for our pumps, especially in the prestige fragrance and facial skincare markets. Personal care core sales increased 6% due to higher demand for hair care and sun care dispensing systems. Home care sales decreased 17%, primarily due to a reduction in tooling sales and lower demand for household cleaner dispensing solutions. Turning to the Food and Beverage segment, this segment achieved core sales growth of 8% in the quarter. Pricing initiatives related to cost pass-throughs contributed approximately 6% of the core sales growth in the quarter. This segment's adjusted EBITDA margin was 13% in the quarter and was impacted by softer demand for food dispensing closures and the resulting lower productivity, primarily in North America, following a period of strong growth in the prior year. Although the inflation impact was offset by lower resin costs in the quarter, we still have not fully recovered the inflationary effects from the prior year. Looking at each market, food core sales increased 8% due to price adjustments and increased demand, primarily for food service solutions, including food trays. Beverage core sales increased 11% due to price adjustments and demand for our bottled water dispensing closures. Interest cost in the current quarter was approximately $12 million, versus approximately $7 million in Q2 2021. The increase was driven mainly from our first quarter $400 million, 3.6% bond offering and higher interest rates from some of our local foreign borrowings. Additionally, we incurred approximately $400,000 in prepayment charges for a $75 million private placement issuance that was set to mature in Q3. Going forward, we expect our interest costs to be lower than Q2 by approximately $1.3 million. Year-to-date, cash flow from operations of $177 million and free cash flow of $42 million are slightly ahead of the prior year levels. Moving to slide 12, which summarizes our outlook for the third quarter, we expect currency headwinds to continue, reflecting the continued strengthening of the U.S. dollar. With the majority of our sales coming from outside of the U.S., this impacts us significantly. Although we are seeing some recent relief in resin prices, other input costs remain challenging. Additionally, supply chain issues and the very tight labor market, primarily in the U.S., puts additional pressure on our Beauty and Home and Food and Beverage businesses. The Euro rate for the prior year third quarter was EUR 1.18, and our guidance for the coming third quarter is assuming a EUR 1.02 rate. As a reminder, we have said that roughly for every $0.01 move in the Euro rate, that equates to approximately $0.02 per share for the full year. For the coming quarter, we could be looking at approximately a $0.08 currency drag on earnings compared to the prior year. We expect our third quarter adjusted earnings per share to be in the range of $0.90-$1.00 per share using an estimated tax rate range of 28%-30%. The midpoint of our guidance range represents a 10% increase over the prior year third quarter adjusted earnings per share when currency translation effects are equalized. Looking to our current estimate for depreciation and amortization, we currently expect $230 million-$240 million for the year 2022. For capital expenditures net of any government grants, we currently expect between $290 million and $320 million. In closing, we remain committed to maintaining strong balance sheet. Our current leverage ratio of 1.8 allows us to continue to grow shareholder value by selectively investing in our business as well as weather challenging economic environments. At this time, Stephan will provide a few closing comments before we move to Q&A. Thank you, Bob. In closing on slide 13, we have started to emerge from the effects of COVID, only to find ourselves facing new economic uncertainties. Having exposure across multiple end markets such as prescription drugs, beauty, personal care, food, and over-the-counter pharmacy products, and with a presence in 20 countries, makes us more resilient to shifting cycles and downturns. We understand that capital allocation is especially paramount in times like these. Our strong balance sheet allows us to help mitigate the effects of a potential downturn in the global economy as we selectively and prudently look to allocate capital to grow our business. In the decade prior to the pandemic, our Pharma business delivered an average core sales growth of 8%. This segment is now a much larger part of our business today than it was in 2009 when we navigated the global financial crisis in good form. We are particularly encouraged by the current recovery of our prescription drug and consumer healthcare market, and our order book supports the expectation of continued strong momentum in the second half of the year. In addition, our project pipeline continues to strengthen in both number of opportunities and in value. As stringent regulatory standards increase and as our customers continue to explore new ways to deliver medicines, our investment in R&D as well as laboratory analytical services have positioned us at the forefront of drug delivery innovation. Whether it be liquid, powder, single dose, multi-dose, and via routes such as nasal, pulmonary, ophthalmic, dermal, oral, or injected, our broad portfolio of innovative devices, components, and active material solutions will enable us to grow consistently in the healthcare sector for many years to come. The Beauty business is expected to continue to recover and our customer-centric focus with a deep history of innovation positions us to take advantage of the evolving and growing facial skincare markets in both Western markets and in Asia. We will remain focused on pricing initiatives to help offset continued rising input costs and managing our expenses. I'm confident that we can achieve our long-term profit margins across each of the businesses as we move forward in the new post-pandemic era. Our broad portfolio of innovative solutions and services, diverse market presence, and our solid balance sheets give me the confidence that we will be able to continue to navigate turbulent waters, return value to shareholders in the form of dividends and share repurchases, as well as take advantage of growth opportunities that present themselves. With that, I would like to open the call up for questions. As a reminder, if you'd like to register a question, please press star followed by one on your telephone keypad. If you change your mind, please press star followed by two, and please ensure you're unmuted when speaking. In the interest of time and fairness to all participants, please limit yourselves to two questions and then come back into the queue if you have more questions as time allows. Our first question comes from George Staphos of Bank of America. George, please go ahead. Yes. Hi, everybody. Good morning. Thanks for the details. My two questions, one is on startup costs, particularly around Pharma, and then I had a question on the operating leverage in Food and Beverage. Stephan, Bob, could you tell us what level of startup cost you might have had in the businesses in 2Q, and as you look out to 2022, what your expectations are? In particular, if you could provide some granularity on Pharma, particularly as regards injectables. On Food and Beverage, obviously, you know, some really good core revenue growth. A lot of that is pricing, we get it. But I was a little bit interested in the lack of operating leverage in Food and B everage, despite the growth, despite the pricing, EBITDA was down there. If you could provide us a bit more color in terms of what was going on underneath the hood there? Thank you. Sure. Good morning, George. Look, as you know, we are deploying about $180 million in capital in our injectable divisions, and that's over a number of years. We're starting up capacity latter part of this year, all next year, and into the following year. We will have to the tune of a couple million dollars every quarter of startup costs as you prove out the equipment, as you validate it with customers, bring on labor ahead of revenue stream. I think that's about the order of magnitude. In Food and Beverage, it is really this is a double whammy. One is if you have lower volume, the efficiencies in the plants really go down, especially in North America that are tuned to high volumes. That's really what you see. I mean, can you just give us a bit more color into what was going on within food? You had commented in the past that you were encouraged by the pickup in food. There's kind of a delayed improvement there during the COVID cycle, and you were encouraged, I think, in total about that level of activity being able to continue going forward. Are you suggesting now that that probably was a one-off bump that comes down? If so, sorry for the double dip here, how do you deal with that? Thank you, guys. I'll turn it over. Yeah. Let's separate the demand picture from the margin in the quarter. From the demand picture, clearly, we benefited from much more in-home consumption of food, in-home cooking, and that boosted our condiment segment. On the flip side, the lack of moving around dented our on-the-go beverage. Now we're kind of finding a balance in the new normal. The balance is, yeah, that clearly in condiments, we're tapping the brakes. The market's tapping the brakes. I don't think it will revert completely. As we all know, the new normal is hybrid work, so people do spend a significant amount at home, but they also go out and eat out more. I think this is just an adjustment to a new demand pattern. On Beverages, clearly people being out and about, we see that growth in Beverages. Okay. Congrats to Matt Della Maria as well. Matt, it's been great working with you. Thank you, sir. Thanks, George. Same. Our next question comes from Mark Wilde of BMO. Mark, the line is yours. Thanks. Stephan, I wondered if you could just update us on what you're seeing in terms of European activity. Your commentary, during the prepared comments made Europe sound a little better than I might have expected. If you could also just talk about what you and your customers are doing to prepare for potentially a rough winter from an energy perspective in Europe. Sure. Let me tag team with Bob here, but let me kick it off. Let's first separate the demand pictures from the cost picture. From the demand side, we're really encouraged by what we're seeing. We have a very strong order book in Pharma in our most profitable divisions, prescription drug as well as consumer healthcare. We see that continuing in the second half of the year for sure in quarter three. We also see good demand pickup in Beauty. Now remember, not all, and maybe by a long shot, what we sell to our European customers is for European consumption. A lot of the finished products get exported to Asia, get exported in part also to the U.S. That is really driven by demand around the world for things like luxury fragrances, prestige fragrances, skincare. While we record and comment on the demand in Europe, it is really a demand that benefits from just overall people being out and about more, traveling more, travel retail picking back up. That really helps us. Now on the cost side, clearly Europe is in the throes of substantial inflation. That really comes in. It's different than in the U.S. One is energy. Maybe Bob can talk to how we manage our own energy costs. But that's not the whole picture. Of course, most of our suppliers are less sophisticated and effective with their energy purchases. We just get it in the form of additional input costs on the supply side, anything from metal springs to aluminum parts to transportation. There's this energy-triggered inflation in Europe is substantial. The second part is wages. We actually anticipate higher wage costs in quarter three. Some of that is one-off. Maybe I just remind everybody, we employ about 2,500 people in the U.S., but we employ more than 8,000 people in Europe, 5,000 of those alone in France. All of those employees have representation, and labor relations are very tense as massive inflation is putting strains on household budgets, especially for entry-level workers, low wage earners. In the U.S., you've heard us say that we had to raise entry-level wages by 30%. In Europe, we anticipate one-time payments in quarter three. Some of them are strongly encouraged by the government, for example, the French government. Yes, if you look out, maybe we will not have these one-time payments in quarter four, but this is a taste of things to come. Most wages and salaries are adjusted on a calendar- year basis. We'll have some one-time impact in quarter three included in our guidance. Clearly, wage inflation is a topic, and maybe it's a stronger topic in Europe than it is in the U.S. Now, maybe Bob, you can highlight some of our own energy setup and purchases. Sure. Maybe Mark, before I do that, I'll give you a little bit of quantitative color on the first part of your question, which was Europe and the strength. In fact, you know, if I look at all of our regions, we were up in core sales in all the regions, but Europe was actually up about 15% in the quarter on a consolidated basis. It actually was up double digits if I look at each segment in Europe. Europe was definitely strong in the quarter for us. Turning to the energy situation, you know, particularly in Germany, which seems to be the biggest focus these days, we've got essentially guaranteed supply for all of our electricity in Germany. I think the government itself has certain backup possibilities, as it turns to the electricity front. The real question is around gas. For us, we only use natural gas to primarily heat the facilities with a few small exceptions in some of our plants on some decorating machines and things like that. For the most part, gas for us is primarily used for heating. In theory, you know, the machines themselves, injection molding machines, they do throw off a certain amount of heat. Now as Stephan said, we cannot control what, you know, is how our suppliers are run and the indirect impact that'll have on that. We look at this risk as low to minimal for us in the second half of the year. Our next question comes from Kyle White of Deutsche Bank. Kyle, please go ahead. Hey, good morning. Thanks for taking the question. Just two parts real quick on that one. I was wondering if you could actually quantify that one-time payment that you expect in the third quarter that's included in your guidance. Related, just on price cost, looks like price cost does continue to improve here sequentially, but you still noted that you haven't recovered last year's cost increases. When do you expect that to be recovered, and how should we think about price cost going into the second half? Yeah, maybe on the first one, we baked in about $0.05 in the third quarter guidance of that one-time payment. I can take the point on the net- price cost impact. We were slightly positive in this quarter, which is again the cumulative effects of the pricing initiatives that we started last year, as well as, I would say, a little bit of a flattening of the raw material curve. We're still in the hole by, I would say, roughly about $30 million. Last year, we had about $28 million of a net- negative. We had another $5 million in the second quarter. Now, of course, this $0.05 that Stephan is referring to will also be another inflationary impact. A lot is gonna depend on what happens around the raw material prices going forward. We're gonna continue to be very diligent in passing those through. We've been very transparent with our customers on that. It's impossible for me to tell you when we will recover that, you know, that delta of about $32 million. It's hard for us to quantify with all the uncertainty that's out there right now. Got it. A follow-up. Is that $0.05, is that mostly in Beauty and Home? Is this something that you expect to have to pay as a one-time payment next year as well? This is really spread across all of our business. When you look at our geographic footprint, obviously, we have many more Pharma and Beauty facilities in France than we have in some of the other countries, but it's in principle, it's spread across all the businesses that are active in Europe. No, I think this will be all baked into whatever the outcome of wage negotiation is with unions and works council, and this is done on a site-by-site and country-by-country basis. To ensure continuity of operation for us, this year, in the context of European and country labor relations, this is required. As I said, in some cases, the government basically holds your hand very strongly to do this. Thank you. I'll turn it over. Our next question comes from Ghansham Panjabi of Baird. Ghansham, please go ahead. Yeah, thanks. Good morning, everyone. Matt, big congrats to you. It really has been a pleasure working with you over the years, and congrats on your retirement. Thanks, Ghansham. Yeah, thanks, Matt. Maybe you could just disaggregate for us the various end markets within Beauty and Home, and, you know, give us a sense as to where they are from a volume standpoint relative to the pre-COVID baseline. Sure, I can tackle that one, Ghansham. If you looked at the Beauty was up about 19% in the quarter, and again, that was on the strength of the prestige side of the business, although mass prestige was also up, primarily fragrance, facial skincare. We are seeing improvements in color cosmetics as well. We're not yet at 2019 volume levels, but we're getting very close. If you look at total sales dollars, of course, we're above 2019 because of the pricing. We're very encouraged by the volume growth that we're seeing. We talked about the 7% of the 10% being pricing in Beauty and Home, which then naturally leaves 3% for volume. That 3% is muted a little bit by a decrease in tooling sales in the quarter. Just as a reminder, you know, when I announce core sales growth, that's ex acquisition, not including acquisitions. The actual product sales on the Beauty and Home side, you know, excluding that tooling negative impact would've been, you know, closer to 5%. Again, very encouraged by the volume growth, and if that continues, you know, we should start to see us surpass the 2019 volume levels when we get to the second half of the year. Personal care is still growing. It's up about 6%. There we see again, like we did in the first quarter, a slight shift, right? We're seeing a lot more in hair care and sunscreen demand as people are out vacationing, and obviously lower around the hand sanitizer and those types of products. Again, we're encouraged by the personal care side. Household is down, but household is down primarily, and that's where the big tooling sale came last year on a new introduction product that we had. Then we do have some disinfectant cleaners that are also down, as you might expect, similar to what the hand sanitizer is in the personal care. Got it. Very helpful. Then for my second question, you know, as it relates to just global consumer elasticity and the enormity of inflation that everybody's facing and the choices that are being made, and some of your customers are talking about, you know, elasticity, which is a very different message from three months ago. Just curious as to, you know, what you're seeing from a real-time standpoint as it relates to new product development. Have things slowed? And if you could just give us some insight into which categories specifically may have slowed or may, maybe everything is stable. Thank you. Yeah. I mean, let's start with Pharma, which is about 40% of our business there. We don't see any impact, and in fact, we see a very strong order book both in prescription and consumer healthcare. Consumer healthcare, you know, the cold and cough is back as it mentions, in part, also because Omicron presents with symptoms that are more cold and cough-like, and so basically it doesn't apply there. On the Beauty and Home side, clearly, right now we're filling pent-up demand. People are out and about again, traveling again. Right now we don't see a lot of price sensitivity in the luxury and prestige category. Clearly, we're on the lookout, what's gonna happen in masstige as inflation bites on consumer wallets. On food, I think there, we do anticipate that what we've seen in previous slowdowns, a rotation to larger format, a rotation to club store type setups. Not all of them have the high-q uality closures with our valves in them, and down trading to private label. Again, there, that's another one-for-one. While we supply private label, not all of these closures are of the same quality as branded closures. We anticipate there could be some impact there, in addition to just the demand pattern that we talked about earlier. Okay. Thank you, Stephan. Matt, congrats again. Thanks, Ghansham. Our next question comes from Adam Josephson of KeyBanc. Adam, the line is yours. Stephan, Bob, good morning. I'd just like to echo Ghansham's comments, Matt, that it's been a pleasure and a privilege working with you all these years, so thank you for everything. Thanks, Adam. Thanks. Bob. Thanks, Matt. Yep. Bob, couple questions on guidance. One on guidance. Firstly, if I look historically, your fourth quarter earnings are typically lower than your third quarter earnings for seasonality reasons. Is there anything. I know, I know you don't guide to 4 Q, but is there anything this year that might be different than the normal historical seasonal pattern whereby earnings typically are lowest in the first and fourth quarter? You know, that's hard to say. I mean, we are in unusual times, right? Yep Anything can really happen. I think the biggest factor that I see is that $0.05 that Stephan referred to that we baked into Q3, we're not expecting anything like that in Q4. Although, as Stephan mentioned as well- Yep We're gonna see the new labor rates kick in in Q1. You do have that on the horizon that I can see between Q3 and Q4. We'll have to see what currency's gonna do, right? I mean, if you look at it, that's $0.08 just comparatively with our Q3 results of last year. You take that all in, you got the $0.08 and the $0.05 for Q3, that's $0.13. Now, last year's Euro rate in Q4 was starting to come down, so the impact, assuming we hold at $1.02, is gonna be slightly less, but there's still gonna be a pretty big delta. For me, those are probably the biggest factors that I see that could influence the Q4. As far as volume demand and anything else, you know, the Pharma business, as Stephan said, is both the Rx and the CHC business looks really strong for the remainder of the year. I haven't gone back and looked at what that has been in past fourth quarters, but that's one thing that looks really solid for Q4. Then you have kind of the outlier- Yeah Scenario. You know, what if there is an additional variant pickup or what that does can be both positive and negative depending on how it plays out. Of course, there's the wild card of an energy upset in Europe beyond what we've seen here at this moment. Yep. No, I appreciate that, Stephan. Bob, one more in terms of your guidance range. I think the last two quarters it's been wider than it used to be. It's been a $0.10 range, whereas before then it was an $0.08-r ange. Correct me if I'm wrong there. Are you thinking about this as the new width of the range, just given how uncertain just about everything is? Do you view this as temporary and you want to get back to an $0.08 r ange? Any thoughts you've had along those lines? Yeah. I mean, I would love to get back to a tighter range, 'cause a tighter range means there's a little bit more certainty on the horizon. Yeah, no, I think the $0.10 range that we've kept for Q3 is really indicative of the uncertainties that are surrounding us right now. I would love to be able to get back to an $0.08 range in the near future. That just means that things are becoming, you know, more certain and predictable. Yeah. Bob, just one last one on the labor tightness, particularly in the U.S. Can you help us with how long it's been this bad for? Is it getting any better? Is it getting worse? What are you seeing on the horizon? Just any better understanding of what's going on there would be helpful. Thanks very much. Yeah. Let me take that, Adam. I would say it's certainly been the worst earlier this year. But you know, if you talk about uncertainty, we've certainly been surprised how persistent this has been, and it's certainly been worse in Q2 than we thought when we guided, and then other factors were better. I would say it is getting better. I think on the last earnings call, I said on any day we're missing 20% of the workforce in the Midwest. Now it's probably around 15% and dropping a bit. You know, a slowdown in the overall economy may help, but that's certainly the picture. It hits us, of course, in two ways. One is just the inefficiency of manufacturing, the constant rescheduling, lower yields, but then secondly also with missed sales opportunities. Because you know, if you have lead times that are not satisfactory, you miss that revenue. It is getting better, but it is getting better at the slower rate than any of us would like to see. Thanks very much, Stephan. Our next question comes from Justin Lin of William Blair. Justin, please go ahead. Hi. Good morning. Can you talk about the cadence of your Pharma growth across the four business units for the rest of the year-e nd, you know, as we start seeing some tougher comp in certain markets? I guess, what are you saying about, you know, the Pharma margin progression for the coming quarters? Yeah. We really don't guide to that detail. Qualitatively, you know, we are very comfortable with our 6%-10% range for the segment. Then when you look at where we are versus 2019, prescription is pulling even now with 2019, and certainly we'll finish the year well ahead of 2019, kind of getting back to that 8% kind of growth rate over the long- term. Consumer healthcare clearly has a very strong rebound and continued growth now. We're well ahead of 2019 levels already and expect a strong second half. Injectables is already showing great growth on tough comps. As you know, we're bringing on more capacity. We feel very good about the pipeline as well as the mix of the pipeline as we shift more and more of our sales towards PremiumCoat as that capacity comes on stream. For us, we did participate a little bit in the COVID vaccine, but for us, COVID, with respect to injectables, was really all about establishing a much broader visibility on that business and its capabilities, which has been good for that pipeline. The one business that will have a very tough comp in quarter four is, of course, our Active Material Science because we had a big business in at-home COVID test kits. Right now we don't see that repeating, but you know, we're talking pretty far out. Now as you heard in my prepared remarks, we feel very good about the growth prospects of our Pharma business. It's hitting on most cylinders again, and we see good acceleration. Now part of that is just because for prescription, the comps are quote "easy" in the first half, but we see continued pulling ahead here in the second half. Overall feel very good about the growth across all divisions. Thank you. That's really good detail. I'm gonna zoom out a little bit and, you know, you touched on your Pharma project pipeline. Can you just elaborate on that a little bit more and maybe highlight the opportunities you're most excited about in the foreseeable future? Yeah. We really cannot disclose individual projects. We tried to give you a sense that, you know, both the number of opportunities and that the risk-weighted value of the pipeline keeps going up. We talked earlier that clearly emergency treatment, central nervous system is a great growth driver in addition to allergic rhinitis in the prescription area. In consumer healthcare, it's really all of the above. We have decongestants, we have ophthalmic, we have dermal treatments. And significant geographic growth opportunities in consumer healthcare. In injectables it's biologics. Biologics is really driving the pipeline. We are now close to 40% of the sales in injectables being biologics and climbing. In Active Material Science, it's just a field that keeps surprising us in terms of problems we can solve for customers, including for oral solid dose, drug deliveries, especially drugs that are a bit more sensitive to, you know, being exposed to oxygen or moisture or, depending on the drug. All of these things go in the pipeline. The fact that we have now a much more capable service capability, including training devices, allows us to engage much earlier in the development cycle with our customers, make money on the services, and then obviously have the device of choice. The other one we are continuing to be excited about is digital therapeutics. We see projects being in the pipeline, contracts being signed. While this is a drag on earnings at the moment, we certainly see that reversing over the coming years. Appreciated, Stephan. Thank you so much. Our next question comes from Gabe Hajde of Wells Fargo Securities. Gabriel, please go ahead. Stephan, Bob, good morning. Matt, echo what everyone else has said. Pleasure working with you. Thanks, Gabe. I haven't heard much about the decorating facility in France. I was curious if you can kind of give us an update on where that sits and maybe remind us kind of the objective there. I know it was going to enable you to better service your customers on time in full delivery, stuff like that. Maybe expand some of your capabilities there. Just, you know, the facility. I think there was a little bit of plant consolidation going on there too. Just where we're at with that and, you know, when we can expect that to contribute to competing at home. Yeah. Good morning, Gabe. Yeah, so, this is a project that really I think is unprecedented in that part in that region where we had five very small facilities grouped around the village where we make this you know high-end decorating production or for the lack of a better word that you see in high-end product. This is really the challenging part. Now, doing this across five sites, shipping products back and forth in the back of a van, so to speak, it just isn't efficient and contemporary. We're consolidating that into a state-of-the-art facility that will open in the spring of next year. Our customers are very excited about it. They see the potential in it. I would even lean out the window saying some of the win rates that you see is that people see, hey, Aptar is really jumping on the next generation here, and committed to this. In addition, it is a very sustainable facility. It has a much lower carbon footprint than of course five individual facilities plus the transportations. It kind of kicking off that new next innovation wave for us. Yes, it is significant investment, but we are very confident that this will pay off. All right. Thank you. I was curious, there have been some articles out there on nasally delivered vaccines. I think in the past, you guys really haven't talked about that much in a way, in terms of opportunity for you. I'm just curious if there's anything in the development pipeline that is different today than it was before, or we should just not get very excited about it. Well, you know, like everything in Pharma, things take many years. A lot of these are in early-stage clinical trials using sometimes very rudimentary devices that have nothing to do with how it eventually would get commercialized. Yeah, if you're in that part and you finally have a candidate that you know moves to phase III and looks good, you kinda look for a commercialization and industrial partner who's got experience in this field. We are aware of these. I cannot get into where we are participating and not, but clearly that would be very exciting prospect. Great. Thank you. Our next question comes from Angel Castillo of Morgan Stanley. Angel, please go ahead. Hi. Thanks for taking my question. Just wanted to quickly circle back to the discussion around, you know, recessions. As you mentioned, lots has changed for the portfolio from restructuring as well as, you know, Pharma being bigger and a number of end- markets perhaps being closer to, the low- end of where they should be. So as you think about recession planning or, you know, just scenario analysis internally, how would you kind of frame, you know, the potential downside to sales or EBITDA from current levels, based on everything that we have? Yeah. What we've said basically is if you look at how we did in 2008, I think, that is a good guidance with the one exception that back then Pharma used to be 20% of the company, now it's 40% of the company top- line. And of course, we all know much more bottom line. The things that are in a classical downturn, you know, you will see down- trading, and we talked about this early in the call, especially in the food area, to more club stores to maybe less- premium format. That will impact us a little bit. If prestige fragrances are more impacted, if people travel a lot less, you will see an impact on Beauty. Mm-hmm. No question about it, but it will be a muted impact and certainly something for the overall company we can manage. You know, the COVID downturn, if we can call it that, certainly wasn't a typical pullback because it's almost like a rifle shot, you know, targeted our prescription business, our consumer healthcare business, and now that's behind us. That's those things will keep going. In a normal recession, everybody takes their drugs and you know, have breakfast, lunch and dinner. We're fairly resilient. Now, having said that, we're not complacent. We very much look at cost, look how we can pull further corporate services into shared service centers, streamline the back office, further invest in automation to lower cost in the plants and so on. We're not done with that at all. We are very aware of what's coming in terms of potential slower demand plus a higher cost that we again discussed earlier and working hard to find the productivity to mitigate some of these impacts. Got it. That's helpful. Thank you. Then I wanna touch on sustainable solutions. Wondering if you could give us an update on, you know, what. How are you seeing the uptake from a consumer standpoint in terms of, or your customer standpoint in terms of, you know, receptivity to, sustainable solutions and in particular if you've seen any shifts in that dynamic, you know, as we get closer to the years that they've set targets for. At the same time, you know, perhaps customers being more price sensitive with the ongoing inflation. Curious what you're seeing there. Yeah. There's really not one answer. I mean, first of all, we're very much focused and proud of the work we're doing with our own operations and you see that in our sustainability report and in the recognitions and ratings we get. We will continue to drive that. That is very important because it not only is it the right thing to do but most of our branded customers say, "Hey you get it. You are at the table, a real important partner to us because you get it, when we need to think about our Scope 3 emissions, we can count on Aptar to help us with that." That's number one. Number two, clearly, recycled content, higher recyclability, PCR content is important, but where in which country to which brand varies greatly. It won't surprise you that, in some European countries, this is a lot more a hot topic than it is in some other countries. It varies greatly. We are at the ready having products with up to 100% PCR content, having products that are mono-material that are very much in demand, for example, our mono-material pump. I will not hide, sometimes we are a bit disappointed that people think they're done when they make their primary container recyclable and the dispensing cap or pump then doesn't get as much attention. Clearly, if customers are serious about the commitments they've made, they also have to pick up more of these sustainable dispensing devices. We are ready to go here and continue to make investments in those innovations. Thank you and wishing you all the best, Matt. Thanks. Great. Thanks, Angel Castillo. Our next question comes from Daniel Rizzo of Jefferies. Daniel, please go ahead. Hi. Just to talk a little bit more about sustainable solutions. Is it mostly outside of Pharma? I mean, are Pharma products using recyclable material or sustainable products as well? Yeah. This is a great example where we leverage things across the whole company. Clearly, initially this was a big topic for branded consumer goods, but it has migrated and is migrating into Pharma. You would not be surprised it's the first place it is in consumer healthcare. Our consumer healthcare customers are more and more demanding fully recycled or mono-material solutions, which of course we have at the ready because we developed them for the consumer products already. Also in prescription drugs, there will be in the next few years a shift in propellant from the current generation to one that has an even lower greenhouse gas and ozone depleting impact, which is very important to our customers. I would say it is, it started on the consumer side, but it is rapidly moving into the Pharma space. Are we seeing a restocking tailwind, or are customers being a little more cautious given the volatility, particularly in Europe? Through the first half, we do not see significant restocking. There might be a situation here or there, but clearly, given the order books we have and the lead times we have, customers kind of sell the stuff as soon as they get it, and fill it. Whether some of the demands for the second half of the year will go to more normalization, we'll see. Currently, we cannot say that we see significant restocking. Okay. All right. Thank you very much. We have no further questions on the line, so I'll hand back to Stephan Tanda. Very good. Thanks for all your questions. We look forward to see you on the road. This concludes today's call. Thank you for joining. You may now disconnect your line.