AptarGroup, Inc. (NYSE:ATR) Q4 2022 Earnings Call Transcript

Robert Kuhn: Sure. So how we define personal care and how our customers define personal care are two different things. There are things that we call personal care that they consider beauty. But the way we look at personal care and home care prior to the breakup realignment of the segments, rather, it was about 43% to 45% of the total Beauty and Home segment. So then you take out the closures piece of the Personal Care and Home Care, which Stephan mentioned is about $200 million. So we’re probably somewhere between 35% and roughly 40%, I would think, as we would define personal care and home care.

George Staphos: Thanks Bob. Should we assume, if you can’t quantify at this juncture than directionally that you will give us at some point, the benefits you expect to get from both initiatives to margin?

Stephan Tanda: Sure. One — go ahead.

George Staphos: And then my related question — or my second question is just how long can you keep at these CapEx levels, which are quite a nice step down from where we’ve been? Thanks guys.

Stephan Tanda: Yes. So sure. Once we have reached agreements with the labor representatives and can kind of mark in both the onetime costs and the implementation time line we will share with you the related savings. But look at that towards the second half of the year, these processes are nominally long. And on the CapEx as well, we have concurrently executed on 3 large projects, 2 of which are coming to fruition. We’re opening the really state-of-the-art custom beauty facility in France and the China facility comes on stream. So as that comes out, I’m not saying that we will never have big project anymore. But clearly we want to live within our means and these CapEx levels makes a lot more sense at the moment once you take those large projects out.

Robert Kuhn: Yes. And I would just add that some of the plant consolidations that we’ve gone through over the last several years, should lead to a little bit less on the maintenance side. But as a company, I think a good use of our balance sheet is going to be to continue to automate in the factories, right, to get more efficient, to automate where we can. These new state-of-the-art facilities are one example of that. So we always have a run out of activities over the years. So we’ve got some new technologies, which are coming on stream. And I would hope that we continue to invest in new innovative products like some of the sustainable pumps that Stephan was mentioning that his type certainly in the pharma said all that requires CapEx to keep going.

George Staphos: Thank you very much.

Operator: Thank you George. Our next question comes from Angel Castillo from Morgan Stanley. Angel, your line is now open.

Unidentified Analyst: Hello, thanks for taking my questions. This is actually Stefan Diaz sitting in for Angel. Real quickly on the European Works Council. Would you be able to give any more details on your tentative strategy and any potential time line on the potential initiatives?

Stephan Tanda: Sure. Thanks for the question, Stefan. For those who are interested in this, so if you operate across multiple countries, and if it’s requested by more than one country, you have to have legally what’s called the European Works Council. We have that since a few years. So any restructuring that you do that spans multiple countries, you first have to do consultation with the European work counsel. In our case, we have big operations in France, Germany and Italy. So you already have three countries that are affected. And then — this is very well regulated, what you need to cover and how you need to cover it. The books with hundreds and hundreds of pages. And then you have to, in parallel, negotiate with the National works councils and unions.