AptarGroup, Inc. (ATR)

ATR 
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Aptargroup, Inc. (ATR)

Analyst Day

September 8, 2011 08:00 ET

Executives

Matt DellaMaria – Vice President, Corporate Communications

Peter Pfeiffer – President and Chief Executive Officer

Steve Hagge – Chief Operating Officer

Bob Kuhn – Chief Financial Officer

Pat Doherty – President, Aptar Beauty & Home

Olivier Fourment – President, Aptar Pharma

Erik Ruskoski – President, Aptar Food & Beverage

Analysts

Paul Eckley – State Farm

Presentation

Matt DellaMaria – Vice President, Corporate Communications

Good morning everyone. I’d like to welcome you to Aptargroup’s 2011 Analyst Day. I am Matt DellaMaria, Vice President of Corporate Communications. It’s nice to be in New York, a city where baseball is still a professional sport these days. So, I always appreciate coming to New York from Chicago. If we could turn our cell phones off or put them in silent mode, we would appreciate that throughout the presentation. We can take a minute to do that.

I’d like to refer to our Safe Harbor slide. Many of you are familiar with this language. If you want to look up additional information about Aptargroup or risks and uncertainties that relate to Aptargroup, please visit our website. All of our SEC filings are there. Today’s presentation will be webcast and the slides will also be on the website for downloading if you wish.

At this time, I would like to turn it over to Peter Pfeiffer, our President and Chief Executive Officer.

Peter Pfeiffer – President and Chief Executive Officer

Good morning ladies and gentlemen. Welcome to our today’s Analyst Day here in New York. Thank you, Matt for introducing me.

Today, ladies and gentlemen, you will have the possibility to listen and also to speak to the senior management of Aptargroup. Today with us is Steve Hagge, our Chief Operating Officer. You might have heard about this that Steve will succeed me when I am going into retirement as the CEO. With us too is the CFO, Bob Kuhn, who will speak to you together with the three Presidents of the Aptargroup segments. Pat Doherty, our President of Aptar Beauty & Home; Olivier Fourment, President of Aptar Pharma; and Erik Ruskoski, President of Aptar Food & Beverage.

I would like to take the opportunity also to introduce to you three other people, which are with us today here in New York. First of all, Ralph Poltermann, Executive Vice President of Aptargroup. You all may be knowing him, because he is in touch with the analysts for many, many years already.

The second one is Ursula Saint-Leger. Ursula is Vice President, Human Resources of Aptargroup. She has joined our company about the year ago and she in her early career she was a consultant of the Hewitt Associates specialized on compensation and organizational efficiency. Together with the President, the CFO, Ursula is completing our management executive committee. She before joining Aptargroup, she was with two companies, Umicore, a multinational company and also TAQA, another multinational company.

The third person I wanted to introduce is Eldon Schaffer. Eldon succeeds Eric Ruskoski as the President of Food & Beverage when Eric is going in retirement at the end of the year. Eldon is with us since now more than 20 years. He has quite a lot of experience in our Pharma Closure segment of Aptar on many places around the world. Eldon today is the President of North American Operations of Beauty & Home.

Now, I certainly note that most of you know Aptargroup pretty well. Anyway, I wanted to point out that most of you if not all of you have products of Aptargroup at your home at the moment. And I am pretty sure that some of you even have used some of our products this morning.

Aptargroup is the leading company in the dispensing systems niche of the overall packaging universe. We, by the way, do not see us as an ordinary packaging company. We are the only pure-play dispensing systems global company worldwide.

We are offering to our customers solutions in this field. Aptargroup has ages, decades of experience in manufacturing and designing dispensing systems and also to support our customers when it comes to improve their products and their brands. So, we are a trusted partner to our customers.

Aptargroup is also a very stable company. Aptargroup is running the business since many years with a long-term strategy and we are pretty well aware that stability in those times today financially and also in the management is very important to the markets, especially in economic difficult times, which we are facing today or may face in the near future.

Let’s, I mean, talk a little bit about the long-term issues of Aptargroup. In this slide, you can see the performance of Aptargroup since we have become a publicly traded company in 1993. The compounded growth rate of sales in these times were about 10%. The growth below the line at the same timeframe was 13%.

Although we are facing our day-by-day issues and short-term issues, we are a company which had the long-term focus I mentioned this already. We are trying to have a long-term view for our business and this long-term view not only includes our shareholders, it includes all our stakeholders, our customers, our employees, our suppliers. So, our long-term focus is very important for us.

The outcome of this long-term focus, you can see on this slide, the return to our shareholders compared with the Standard & Poor 500 companies, there is always the saying a picture tells you more than a 1000 words. I think this picture here shows why many of our shareholders like the long-term focus of our company.

With this, I pass it over to Steve.

Steve Hagge – Chief Operating Officer

Thanks Peter and good morning everyone. I am going to take couple of minutes and talk about Aptar’s strategy.

Now, as Peter talked about, we operate in the niche of the overall packaging industry. And I think if you take a look at the slide here, the overall packaging industry is estimated to be about $500 billion. But within that, we’re part of really a subset of that, so if you come down to that Caps & Closures market on a worldwide basis, that’s estimated to be about $32 billion, and breaking that down further, we really play in the dispensing part of that Caps & Closures market, the dispensing systems part. That represents about $8 billion in revenue.

Now, Aptar is the largest player in that representing about 25% of that dispensing systems niche. Now, when we look at overall growth for Aptar, I think it’s good to step back and say how has Aptar been able to grow? When you look at consumer products companies, it’s been generally a GDP growth company. Aptar is really a GDP plus growth company over the last 30 years and a good deal of that is converting. It’s converting from non-dispensing to dispensing systems. So, as we look to do that, I mean, those were significant growth opportunities and we will talk a little bit about that.

One of the ways we do that is helping our customers differentiate their package and also convert from non-dispensing to dispensing systems. So, the next slide, if you take a look is an excellent example of this. This is Coppertone. If you go back to Coppertone on the far left part of this slide, Coppertone was in a glass jar with the screw of metal cap like in the 60s and 70s. You don’t know how tough it was to find that picture by the way.

So, I mean, we started – if you come back, we didn’t sell anything to Coppertone at that point. They ended up coming back and making their package much easier that is not breakable taking to the beach in terms of a plastic bottle and the dispensing closures that was our cap. Over the last couple of years and actually taken out to the next level making it a spray system, which again adds more value to the package and sprays today in the sun care market with the leading dispenser sun care in the whole marketplace today.

Another example this is differentiation, when you look at differentiation these give you kind of three different examples. Our customers really want to be different on the self. So, on this side, on the left side you have Gillette in terms of a body wash on an inverted closure you have method, which is the target brand on a lotion pump in terms of kind of Embossed top on there is and then you can see you have got a fragrance package on the right side of the, Biotherm on the right side of the package so again very different look.

Now back in the 1990s basically Aptar was a pre-product company, valves, closures, dispensing closures and pumps. And today those still are our core parts of our product today, but it was actually still much broader than what’s you might think. We have expanded dispensing systems to be a wide variety of dispensing systems that we offer to the market today.

In last year, we have talked about at this meeting, we have talked about the realignment that Aptar have gone through at the beginning of 2010. We have realignment our business to really propel us for more future growth and more innovation. So, what we have done is we now have a completely market based organization. We have three different brands and Peter talked about those and you will hear from a little bit more about what are some of the drivers in those brand with Aptar Pharma, Aptar Beauty & Home and Aptar Food & Beverage. All of these segments today also all of Aptar products and are developing future products for Aptar.

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