AptarGroup, Inc. (ATR) Bundle
Understanding AptarGroup, Inc. (ATR) Revenue Streams
Understanding AptarGroup, Inc.’s Revenue Streams
The revenue streams of AptarGroup, Inc. are diversified across various segments, including pharmaceuticals, beauty, and closures. Below is a detailed breakdown of their primary revenue sources and year-over-year growth.
Breakdown of Primary Revenue Sources
- Aptar Pharma: Reported net sales for the first nine months of 2024 reached $1.24 billion, reflecting a 9% increase from $1.14 billion in the same period of 2023.
- Aptar Beauty: Net sales decreased to $951.7 million in the first nine months of 2024, down from $979.9 million in 2023, a decline of 3%.
- Aptar Closures: Net sales for the first nine months of 2024 were $540.7 million, up from $533.1 million in 2023, indicating a growth of 1%.
Year-over-Year Revenue Growth Rate
For the first nine months of 2024, AptarGroup reported total net sales of $2.73 billion, which is a 3% increase compared to $2.65 billion in the same period of 2023.
| Segment | 2024 Net Sales | 2023 Net Sales | Year-over-Year Growth |
|---|---|---|---|
| Aptar Pharma | $1.24 billion | $1.14 billion | 9% |
| Aptar Beauty | $951.7 million | $979.9 million | -3% |
| Aptar Closures | $540.7 million | $533.1 million | 1% |
| Total | $2.73 billion | $2.65 billion | 3% |
Contribution of Different Business Segments to Overall Revenue
In the first nine months of 2024, the contributions of each segment to total revenue were as follows:
- Aptar Pharma: 45.5%
- Aptar Beauty: 34.8%
- Aptar Closures: 19.8%
Analysis of Significant Changes in Revenue Streams
Core sales, excluding acquisitions and currency effects, increased by 3% in the first nine months of 2024. The growth was primarily driven by:
- Strong demand in the prescription drug market, with core sales increasing by 16%.
- Higher sales in the active material science solutions, which grew by 10%.
- Declines in the beauty segment, which saw a 7% decrease in core sales due to lower tooling sales and challenging comparisons to the previous year.
Overall, AptarGroup continues to see varied growth across its segments, with the pharmaceutical division leading the way in revenue generation while the beauty segment faces challenges.
A Deep Dive into AptarGroup, Inc. (ATR) Profitability
A Deep Dive into AptarGroup, Inc.'s Profitability
Gross Profit Margin: For the nine months ended September 30, 2024, the gross profit margin was 37.5%, compared to 36.5% for the same period in 2023. The gross profit for the nine-month period was $1.025 billion against $964 million in 2023.
Operating Profit Margin: The operating profit margin for the nine months ended September 30, 2024, stood at 13.8%, reflecting an increase from 12.1% in the previous year. Operating income was reported at $376.4 million, up from $319.8 million in 2023 .
Net Profit Margin: The net profit margin for the third quarter of 2024 was 11.0%, compared to 9.4% in the third quarter of 2023. The net income attributable to the company was $100.0 million in Q3 2024, up from $84.3 million in Q3 2023 .
Trends in Profitability Over Time
Over the past year, the profitability metrics have shown a positive trend. The net income for the first nine months of 2024 was $273.3 million, compared to $221.9 million in the same period of 2023, marking an increase of 23.2%.
Adjusted EBITDA for the nine months ended September 30, 2024, was $425.3 million, up 14% from $371.5 million in the same period last year. This indicates a steady improvement in operational efficiency and profitability .
Comparison of Profitability Ratios with Industry Averages
The following table compares the profitability ratios of the company with industry averages:
| Metric | AptarGroup, Inc. (2024) | Industry Average |
|---|---|---|
| Gross Profit Margin | 37.5% | 35.0% |
| Operating Profit Margin | 13.8% | 12.5% |
| Net Profit Margin | 11.0% | 9.5% |
| Adjusted EBITDA Margin | 34.2% | 30.0% |
Analysis of Operational Efficiency
Cost management initiatives have played a significant role in improving operational efficiency. The cost of sales as a percentage of net sales decreased to 62.5% in the first nine months of 2024 from 64.1% in the previous year. This reduction in costs contributed to the increase in gross margin .
Additionally, the company has reported an increase in its Adjusted EBITDA margin from 32.7% in the first nine months of 2023 to 34.2% in the same period of 2024, highlighting effective cost control and operational improvements .
Debt vs. Equity: How AptarGroup, Inc. (ATR) Finances Its Growth
Debt vs. Equity: How AptarGroup, Inc. Finances Its Growth
Total short and long-term interest-bearing debt for AptarGroup, Inc. decreased from $1.14 billion at December 31, 2023, to $1.08 billion at September 30, 2024.
The ratio of Net Debt (interest-bearing debt less cash and cash equivalents) to Net Capital (stockholders’ equity plus Net Debt) decreased to 22.7% at September 30, 2024, from 28.3% at December 31, 2023.
Debt-to-Equity Ratio
The debt-to-equity ratio for AptarGroup, Inc. is calculated based on the total debt of $1.08 billion and total stockholders' equity of $2.55 billion as of September 30, 2024. This results in a debt-to-equity ratio of 0.42.
Recent Debt Issuances and Refinancing Activity
In the first nine months of 2024, the company engaged in significant refinancing activities, including:
- $100 million of Senior Unsecured Notes refinanced in Q1 2024
- €200 million of Senior Unsecured Notes refinanced in Q2 2024
- $50 million of Senior Unsecured Notes refinanced in Q3 2024
Additionally, a new term loan of $166 million was secured, and borrowings on the amended revolving credit facility increased by $14.5 million.
Credit Ratings
The company maintains a strong credit profile, with recent activities reflecting a proactive approach to managing its debt obligations amid fluctuating interest rates.
Balancing Debt Financing and Equity Funding
AptarGroup, Inc. utilizes a balanced approach between debt financing and equity funding to support its growth strategy. The company leverages cash flow from operations, revolving credit facilities, and stock options to manage liquidity. The net cash provided from operations was approximately $465.2 million for the first nine months of 2024.
| Financial Metric | Value |
|---|---|
| Total Debt (Sept 30, 2024) | $1.08 billion |
| Total Stockholders' Equity (Sept 30, 2024) | $2.55 billion |
| Debt-to-Equity Ratio | 0.42 |
| Net Debt to Net Capital Ratio | 22.7% |
| Net Cash Provided by Operations (9M 2024) | $465.2 million |
| Recent Debt Refinancing (Total) | $350 million (Q1-Q3 2024) |
| New Term Loan Secured | $166 million |
Assessing AptarGroup, Inc. (ATR) Liquidity
Assessing Liquidity and Solvency
Current Ratio: As of September 30, 2024, the current ratio is 1.5, calculated as current assets of $1.08 billion divided by current liabilities of $720 million.
Quick Ratio: The quick ratio stands at 1.2, with quick assets at $900 million and current liabilities remaining at $720 million.
Working Capital Trends
Working capital has shown a positive trend, increasing from $360 million at December 31, 2023, to $360 million as of September 30, 2024. This is indicative of improved operational efficiency and cash management.
Cash Flow Statements Overview
For the nine months ended September 30, 2024, cash flow from operating activities was $465.2 million, up from $355.6 million in the same period of 2023. This reflects strong operational performance and better working capital management.
Cash used in investing activities was $225.7 million in the first nine months of 2024, compared to $239.3 million in the prior year. The decrease is attributed to lower capital expenditures as larger projects were completed in the previous year.
Financing activities consumed $137.7 million during the same period, up from $94.0 million in 2023, reflecting increased debt refinancing activities.
Potential Liquidity Concerns or Strengths
As of September 30, 2024, cash and equivalents increased to $325.5 million from $223.6 million at December 31, 2023. Total short and long-term interest-bearing debt decreased from $1.14 billion to $1.08 billion during the same period, improving the liquidity position.
The ratio of net debt to net capital has decreased to 22.7% from 28.3%, indicating a stronger balance sheet and enhanced solvency.
| Cash Flow Item | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Cash Flow from Operating Activities | $465.2 | $355.6 |
| Cash Used in Investing Activities | $225.7 | $239.3 |
| Cash Used in Financing Activities | $137.7 | $94.0 |
Total stockholders' equity as of September 30, 2024, is $2.55 billion, reflecting a stable financial position to meet both short-term and long-term obligations.
Is AptarGroup, Inc. (ATR) Overvalued or Undervalued?
Valuation Analysis
The valuation analysis of AptarGroup, Inc. (ATR) involves examining key financial ratios and stock performance metrics to determine whether the company is overvalued or undervalued.
Price-to-Earnings (P/E) Ratio
The current P/E ratio for AptarGroup is 28.3. This figure reflects the market's expectations of the company's future earnings potential relative to its current earnings.
Price-to-Book (P/B) Ratio
AptarGroup's P/B ratio stands at 3.8, indicating that the stock is trading at a premium compared to its book value, which may suggest overvaluation.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is currently 16.5. This ratio provides insight into the company's overall financial health and valuation relative to its earnings before interest, taxes, depreciation, and amortization.
Stock Price Trends
Over the past 12 months, AptarGroup's stock price has experienced fluctuations:
- 12 months ago: $112.50
- Current stock price: $99.75
- 52-week high: $120.00
- 52-week low: $90.00
Dividend Yield and Payout Ratios
The current dividend yield for AptarGroup is 1.15%. The payout ratio is approximately 30%, indicating a sustainable level of dividend distribution relative to earnings.
Analyst Consensus on Stock Valuation
Analysts are moderately bullish on AptarGroup, with the following consensus ratings:
- Buy: 4 analysts
- Hold: 6 analysts
- Sell: 1 analyst
Summary Table of Key Valuation Metrics
| Metric | Value |
|---|---|
| P/E Ratio | 28.3 |
| P/B Ratio | 3.8 |
| EV/EBITDA Ratio | 16.5 |
| Current Stock Price | $99.75 |
| Dividend Yield | 1.15% |
| Payout Ratio | 30% |
| Analyst Buy Ratings | 4 |
| Analyst Hold Ratings | 6 |
| Analyst Sell Ratings | 1 |
Key Risks Facing AptarGroup, Inc. (ATR)
Key Risks Facing AptarGroup, Inc.
In 2024, AptarGroup faces several internal and external risks that may impact its financial health. These risks encompass industry competition, regulatory changes, and fluctuating market conditions.
Industry Competition
The competitive landscape within the packaging industry is intensifying, with numerous companies vying for market share. This competition can lead to price pressures, impacting profit margins. For instance, the company's reported net sales for the third quarter of 2024 decreased by 7% to $302.9 million, compared to $324.0 million in the same quarter of the previous year.
Regulatory Changes
Regulatory compliance poses a significant risk, especially in pharmaceutical and healthcare sectors where standards are stringent. Changes in regulations can lead to increased operational costs or delays in product launches. The effective tax rate for the three months ended September 30, 2024, was 23.8%, slightly up from 23.4% in the same period of 2023, indicating potential regulatory impacts.
Market Conditions
Fluctuations in market demand can adversely affect revenues. For the first nine months of 2024, reported net sales increased by only 3% to $2.73 billion compared to $2.65 billion in the same period of 2023. The company noted that core sales, excluding acquisitions and currency effects, also grew by 3% during this timeframe, demonstrating the nuanced impact of market conditions.
Operational Risks
Operational risks include supply chain disruptions and increased raw material costs. The company's cost of sales as a percentage of net sales improved to 61.4% in Q3 2024 from 63.5% in Q3 2023, suggesting effective cost management despite rising input costs.
Financial Risks
Financial risks encompass interest rate fluctuations and debt management. Total short and long-term interest-bearing debt decreased from $1.14 billion at December 31, 2023, to $1.08 billion at September 30, 2024. The ratio of net debt to net capital decreased to 22.7% from 28.3% over the same period, indicating improved financial leverage.
Strategic Risks
Strategic risks can arise from acquisitions and market positioning. The company utilized approximately $225.7 million for investing activities in the first nine months of 2024, compared to $239.3 million during the same period in 2023. This reflects a strategic approach to capital allocation amid changing market dynamics.
Mitigation Strategies
AptarGroup has implemented various mitigation strategies to address these risks. The company has focused on improving operational efficiencies and managing costs effectively. Adjusted EBITDA in the first nine months of 2024 increased by 14% to $425.3 million from $371.5 million in the prior year. This improvement indicates the company's proactive stance in addressing financial challenges.
| Risk Factor | Impact on Financial Health | Recent Financial Data |
|---|---|---|
| Industry Competition | Price pressures and margin impacts | Net sales decreased by 7% to $302.9 million |
| Regulatory Changes | Increased operational costs | Effective tax rate at 23.8% |
| Market Conditions | Fluctuating demand affecting revenues | Reported net sales increased by 3% to $2.73 billion |
| Operational Risks | Supply chain disruptions | Cost of sales improved to 61.4% |
| Financial Risks | Interest rate fluctuations | Debt decreased to $1.08 billion |
| Strategic Risks | Risks from acquisitions | Investing activities amounted to $225.7 million |
Future Growth Prospects for AptarGroup, Inc. (ATR)
Future Growth Prospects for AptarGroup, Inc.
Analysis of Key Growth Drivers
Key growth drivers for the company include:
- Product Innovations: The Aptar Pharma segment reported net sales of $420.6 million in Q3 2024, an increase of 8% from Q3 2023. Core sales in the prescription drug market increased by 20%.
- Market Expansions: The company experienced a 3% increase in net sales for the first nine months of 2024, reaching $2.73 billion compared to $2.65 billion for the same period in 2023.
- Acquisitions: The acquisition of iD SCENT and Gulf Closures contributed to the company’s growth, with no significant impact on consolidated results during the first nine months of 2024.
Future Revenue Growth Projections and Earnings Estimates
Future revenue growth projections indicate:
- Adjusted EBITDA for Q3 2024 increased by 11% to $151.6 million compared to $136.3 million in Q3 2023.
- Net income for the nine months ended September 30, 2024, was $273.3 million, up from $221.9 million in the previous year.
- Projected earnings per share for 2024 is expected to be around $4.13 compared to $3.39 in 2023.
Strategic Initiatives or Partnerships That May Drive Future Growth
Strategic initiatives include:
- Partnerships in Digital Health: The digital health market is growing, with current revenues from this sector showing a positive trend.
- Investment in Active Material Science: The active material science solutions segment saw a sales increase of 10% in Q3 2024.
Competitive Advantages That Position the Company for Growth
The company’s competitive advantages include:
- Diverse Product Portfolio: The product mix across Pharma, Beauty, and Closures segments mitigates risks associated with market fluctuations.
- Strong R&D Capabilities: Ongoing investments in research and development enhance product offerings and market responsiveness.
- Global Presence: The company operates in various international markets, reducing dependency on any single economy.
Financial Overview
| Metric | Q3 2024 | Q3 2023 | 9 Months 2024 | 9 Months 2023 |
|---|---|---|---|---|
| Net Sales | $909.3 million | $892.997 million | $2.734 billion | $2.649 billion |
| Net Income | $99.9 million | $84.3 million | $273.3 million | $221.9 million |
| Adjusted EBITDA | $151.6 million | $136.3 million | $425.3 million | $371.5 million |
| Adjusted EBITDA Margin | 36.0% | 35.0% | 34.2% | 32.7% |
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Article updated on 8 Nov 2024
Resources:
- AptarGroup, Inc. (ATR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of AptarGroup, Inc. (ATR)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View AptarGroup, Inc. (ATR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.