Ladies and gentlemen, thank you for standing by. Welcome to AptarGroup's 2014 Fourth Quarter Conference Call. At this time all participants are in listen-only mode. Later, we will conduct a question-and-answer session. Introducing today's conference call is Mr. Matt DellaMaria, Vice President-Investor Relations. Please go ahead, sir.

Thank you Jonathan and welcome everyone. Participating on the call today are Steve Hagge, President and Chief Executive Officer; and Bob Kuhn, Executive Vice President, Chief Financial Officer and Secretary. Steve will begin our call with an overview of our quarterly and annual performance. Bob will then discuss our financial results in greater detail, after which we'll open it up for questions. Information that will be discussed on today's call includes some forward-looking comments. Actual results or outcomes could differ from those projected or contained in the forward-looking statements. Please refer to AptarGroup's SEC filings to review factors that could cause actual results to differ materially from those projected or contained in the forward-looking statements. We will post a replay of this conference call on our website. AptarGroup undertakes no obligation to update the forward-looking information contained therein. I would now like to turn the conference over to Steve.

Thanks and good morning everyone. Yesterday, we reported our fourth quarter and full year results. Despite some challenges, we’re able to grow our top-line on a core basis and achieve record fourth quarter earnings per share. The strong performance of our Pharma segment offset softness in our Beauty and Home and Food and Beverage segments. Now looking at each of the segments; first for our Pharma segment, which had an excellent quarter, reporting core sales gains in each end market and geographic region along with strong operating results. In the prescription drug market, demand was particularly strong for our metered dose inhaler valves for various asthma and COPD treatments, including new generic launches in the developing regions. We also continue to see a strong demand from the consumer health care market for innovative Ophthalmic Squeeze Dispenser with new launches of preservative free eye care solutions in Europe. Also one of our airless systems, which chosen for a new dermal wound care product and after a couple of quarters of soft demand for syringe components in part due to some inventory destocking, sales to the injectables market increased over the prior year. We also continue to be well positioned to help our customers, adapt to the changing healthcare landscape, including generics as well as prescription drugs going over the counter. Just this month, GlaxoSmithKline’s well know allergy treatment Flonase, which utilizes our proven nasal delivery system is launching in the U.S. over the counter market. Over the counter market is increasing the excess debt to prescription grade medicines that will previously only available with a visit to the doctor’s office and we believe that the near-term impact should continue to be positive for us. Now turning to our Beauty and Home segment. Sales decreased in the quarter primarily due to anticipated…

Thank you Steve and good morning everyone. As Steve mentioned, changes in currency exchange rates had a significant negative impact on our translated results in the quarter compared to the prior year. Excluding the impact of currency exchange rates, our core sales increased by 1%. We also reported record fourth quarter earnings per share of $0.63. Comparable adjusted earnings per share were $0.59 in the prior year. In the fourth quarter, our Beauty and Home segment recognized approximately $1.3 million of expense related to the Brazilian facility fire of last year. These specific expenses are expected to be reimbursed in future periods by insurance proceeds, which will be recognized in the period that they are realizable in accordance with the accounting rules. Our cash flow in the quarter was strong. Cash flow from operations this quarter totaled a $114 million compared to $91 million a year ago. Capital expenditures this quarter were approximately $36 million compared to approximately $41 million in the prior year. Therefore, free cash flow which we define as cash flow from operations, less capital expenditures were $78 million in the quarter, compared to $50 million in the prior year. Looking at our balance sheet capitalization; at the end of the year on a gross basis debt to capital was approximately 43%, well on a net basis it was approximately 29%. Turning to our quarterly market details by business segment, I’ll start with our Beauty and Home segment. Core sales excluding the effects of changes in currency exchange rates decreased 1% over the prior year. Looking at our markets on a core basis compared to the prior year, sales to the beauty market decreased 3%, sales to the personal care market increased 1% and sales to the home care market decreased 7%. Our Pharma segments core sales…

[Operator Instruction] Our first question comes from the line of Ghansham Panjabi from Robert W. Baird. Your question please?

Good morning. It’s actually Mehul Dalia sitting in for Ghansham. How are you guys?

Good. How are you doing?

Good. How are you doing?

Great. Was the inventory destocking that you cited surprised you in food and beverage? Just trying to see how you know its inventory de-stocking and not something else. And have volumes returned in 1Q?

It’s a good question. Essentially, it was not a big surprise to us. I think if you go back and take a look at our third quarter; beverage volumes were up about - a little over 40%, now there was some tooling in that, but even stripping that up volumes in the third quarter in the beverage part of our business was up 30. That’s higher than certainly the annual consumption. So as we got into the quarter, we expected some inventory destocking. We think that will actually continue a bit also into the first quarter, but when we start taking look at projects and anticipated volumes, we see the second quarter, third quarter getting back to the normal growth rates we’ve had in the past.

Okay, great. And my second question is what steps are you taking to improve your competitive positioning in Beauty and Home especially in the U.S. It seems like there has been a structural change there in profitability for that business?

It’s been an issue for us over the last couple of years in terms of some of the decline as you say particularly in North America. But I’m very pleased we’ve changed some management structure in North America as we got to the middle of the year to the second half of the year. I’m really pleased to see what we’re doing productivity. We’ve taken a significant amount of cost out of the business. We’re running more efficiently. What hurt us in the fourth quarter was frankly a lack of volume. We saw our customers holding back on some volume on new products. In terms of the cost structure, we’re continuing to refocus on cost. We have a $10 million annual goal to take cost out of North America and we’re well on the way to achieving that. So I look forward North America operationally to continue to improve and as particularly as we get into the second quarter and third quarter, overall sales we expect to also come back given the projects that we’re working on with our customers.

Great, thanks.

Thank you. Our next question comes from the line of George Staphos from Bank of America Merrill Lynch. Your question please.

Hi, everyone. Good morning.

Good morning, George.

Thanks for the details. How are you? I guess, the first question I had was on destocking in beverage. So I don’t recall. Did you specifically point out in the third quarter that there would be some destocking in the fourth quarter? And then if I heard you Steve correctly you’re saying some of this is continue into the first quarter. Will your customers typically buy over a quarters worth of inventory if conditions allow and why would they have stocked up in the first place in the third quarter?

Well, some, George, is going to dependent on where the seasons end up. So when you get at the end of the third, they’re going to evaluate how much they had coming over in the Northern hemisphere from how - how warm or how cool the summers were. We found that when we start to talking to customers. And this occurred in the U.S. as well as in Asia, but they had some inventory - higher inventories and they had anticipated given some of the weather conditions. We didn’t know how much they were going to do and certainly as we get into the fourth quarter that’s always the more difficult one to estimate. So in terms of what we’re looking at now having the same conservation, we’re still seeing at least in the early part of the quarter some continued destocking, but we see that continuing to build. We’ve gone back. There has been no loss of business. We’re basically so spect on several of these products that we’re on. So we’re doing well with the customer. It’s more of what they’re doing in the marketplace. And they tend to be very optimistic particularly as we get to the end of the first and end of the second and third quarter.

Okay, thank you for that. And then in Beauty and Home, I think last quarter just going back from my notes here. You had indicated that you would like to be up year-on-year from a margin standpoint. And I don’t think you were lock tight and concrete on that goal but it was more aspirational recognizing that there were some noise in the quarter as well and volume was a little bit weaker. Were there any other factors that prevented you from getting to that goal, if in fact it was really a firm goal as opposed to just being something you would have hope to have gone to, it would have been a nice achievement if you could have gone to it.

I think it was an aspirational goal and certainly its one that we want to look at. The other issue that I point out is that in the quarter we took a hit on expenses of about $1.3 million on the fire and because of the accounting rules while we fully anticipate recovering those expenses here in 2015 because the accounting rules require, you’d take the expense until you get the recovery. And that was one we didn’t anticipate. We thought we might have been able to actually get some of the recovery on that in 2014 and that’s lapped over into 2015.

Okay, so you thought the expense would show up in 2014 when you got the insurance recovery in 2015 instead that showed up in the fourth quarter because of what the accounts told you to do?

That’s correct.

Okay, thanks. I will turn it over.

Thank you. Our next question comes from the line of Adam Josephson from KeyBanc. Your question please.

Thanks. Good morning Steve and Bob.

Hi, Adam.

Steve, if that to be in home for a second, you talked about what you’re doing in terms of taking out cost, you obviously replaced the management there and in this quarter volume was the real problem. Are you banking on volume picking up in the quarters to come and just more broadly in the terms of the CapEx that’s going into that business? The business still accounts for more than half your CapEx and obviously you’re generating returns well below what you’re generating in your Pharma business. Is there a way you can reduce the capital requirements of your Beauty and Home business? Or how are you thinking about issue of capital going into Beauty and Home versus Pharma in the years to come?

Okay, Adam, let me try to take both, let me try to compartmentalize the answer to that. So in terms of what we’re looking at going forward, we’re aggressively looking at all the costs we have in Beauty and Home North America, Europe, Asia, and Latin America. That focus is continuing. What we’re still finding is our customers are a bit hesitant given the worldwide market today on their product introduction. They are not negative, they are more cautious. When we are looking at projects that we’re working on, I think that will be more second half of the first quarter and into the second quarter for Beauty and Home, but we do fully anticipate volume to begin increasing as we get particularly into the second quarter and third quarter. So the cost element is something we focus on day to day. I think we’ve done an excellent job particularly in North America. We’ve taken out over a 100 different heads in terms of productivity. We’ve increased productivity. We’ve reduced the labor content. So as volumes pick-up, I think we’re doing well. The developing regions are also coming back, remember we invested quite a bit last year in Latin America building a new facility and I’ll touch on that in a minute when I talk capital. Those again - by the time we get into the second quarter and third quarter, it should be coming back and flipping from negative to a positive. Now your question on capital is a good question. I’d like to come back and point out and when we get to a couple of years, one of things we’ve talked about is to try to take some volatile out of our business is try to produce as much locally as we can. So in Beauty and Home, we frankly have been under investing in North America, Europe and to some degree over investing in the developing markets. That was particularly true last year with Columbia, Brazil, and finally an expansion we did in Mexico. Those as Bob talked about, if you look that, we’re going to actually be looking to spend around depreciation in Aptar as a whole. We will actually be spending considerable both the load depreciation in terms of Beauty and Home focusing exactly what you’re about. But we’re taking less capital going into that segment.

Got it, thank you for that. And I guess this is for Bob, just in terms of the earnings cadence here. So you did $0.63 in the fourth quarter, you’re guiding to around the same. My understanding is typically first quarter is lower than the others just because of the options dilution. Bob, you talked about the FX hit, right. I think you - basically you’re indicating that earnings would have been a $0.11 higher where it is not for the recent changes in foreign currency. But can you help us with kind of the cadence of earnings this year and how much lower one could reasonably expect the first quarter to be than the subsequent three quarters on a count of options related to dilution?

$0.06 is pretty spot on and that just relates to - how that kind of growth make us recognize those options. So I mean it’s about $0.06 higher in Q1 than it would be in Q2, Q3 and Q4.

$.06 lower, you mean?

No, but $0.06 higher in Q1 right - Q2, Q3 and Q4 lower, right.

So all I’ll see grow your earnings in the subsequent three quarters it would be about $0.06 higher. So - but there is nothing unusual otherwise about the first quarter of this year.

One thing to keep in mind though Adam and remember the average for the fourth quarter just using the Euro was about a 125 exchange rates. Depending on where the Euro goes, its running anywhere from 113 to 114 today. That is a fourth quarter to first quarter is an element we also have to take a look at. So from translation - when you compare to that where we’re at in the fourth to the first that scenario you need to also consider.

Got it. Thanks a lot, Steve. I’ll get back in the queue.

Thank you. Our next question comes from the line of Alex Ovshey from Goldman Sachs. Your question please?

Thank you. Good morning guys.

Good morning.

Good morning.

You talked about productivity in North America, Beauty and Home of $10 million. Would you be able to provide some more color around how you’re thinking about productivity in other parts of Beauty and Home, as well as in the Pharma and Beverage division?

Well, again in - I would tell you in productivity, the North America, we brought up because it’s been an issue for us, so we’ve kind of highlighted what we were looking to do there. In terms of productivity across all of Aptar, it is a major focus for us every year whether that is Pharma which today is running at reasonable margins or Food and Beverage or Beauty and Home. So we have specific actions to take a look at how effective our labor is, what equipment we’re bringing in to take a labor back out, how we take a look at materials, can we resource materials, what we’re looking to do. So there is a multitude of actions Alex that we take. And I think we’re pretty aggressive now across all of the regions, all of the segments. So when I have highlighted North America, its more in reaction to a specific issue that we had in North America, but we take a very hard look across all Aptar - those issues.

Makes sense, Steve. Okay, and just one more. On the leverage ratio, it has come up with the buyback. Can you just remind us how you are thinking about the optimal leverage level for the business?

I mean we talked back at the Analyst Day that we look at it on the net debt to net capital basis. And as I mentioned, we’re about 29% at the end of the year. Our target is to stay in that 25% range, but we will be comfortable in moving that much higher for the right deals. So…

Got you. Okay. That's helpful. Thank you.

Thank you. Our next question comes from the line of Mark Wilde from BMO Capital Markets.

Hi, Bob, I wondered, could you talk a little bit just broad brush about the overall impact of FX if we think across your portfolio, because you produce and sell within Europe, but I think you also export some components out of Europe into your other operations, so if you can just sort of give us the big FX puts and takes?

Sure. So over the years, as Steve mentioned, we’ve been investing more in the regions where we’re growing at and effectively increasing our localized production, which in fact then reduces the amount of our transaction exposure that you’re talking about of shipping components and finished goods from one region to the next. It’s going to vary depending on activity in each quarter, but what we’ve seen really over the last several quarters is that all the pluses and minuses on transactions across the world have been somewhat netting out to zero and what we see on the translation impact is what’s dropping to the bottom line. So if we just try to use a very board based numbers, if you look at about 58% of our businesses in euro and you look at looking out and we’ll take Q1 for the example. Q1 the euro rate last year was about $1.37. If I were to use today’s rates and they’re hovering around $1.14, it have about $0.09 per share impact dropping to the bottom line assuming a 12% margin. That’s only focusing on the euro. So as you know Pharma is a big part of our European business, so the margins are slightly higher and we also have movements in some of the other currencies. So that gets you really from the $0.71 reported last year to what we indicated would be more comparable to today’s exchange rate environment of $0.60 a share.

Okay. And then, kind of along with FX, one of the other things that's moving a lot right now is just the price of resin. So what are you - how are you thinking about these lower resin prices and how that flows through your earnings this year?

Well, I think you’re right. I mean right now the resin environment is going down and the expectation as we’ll see decreases going into the first quarter. As Bob pointed out in one of his - we actually passed through the resin, particularly on our dispensing closure business pretty quickly. So in the fourth quarter in terms of food and beverage, which is largely a closure business, that negatively impacted sales by about 1.5% in terms of their sales side. So we expect resin to be a positive for us in the first quarter. But that’s also going to get mitigated. We’re seeing some increases in other raw materials such as aluminum, some of the tin plate costs that we’ve got. So it’s not a - while resin should be positive. We’ve also got some other raw materials, which will have a bit of a negative. Net, net we think it’s a positive raw material environment certainly through the first quarter.

Okay. I will pass it on. Thanks, Bob.

Thanks.

Thank you. Our next question comes from the line of Jason Rodgers from Great Lakes Review. Your question please.

Good morning.

Good morning.

Good morning.

I wonder if you could talk about any change in pricing or your competition specifically in the beauty and home segment.

Well, I mean, I think that’s always been a very competitive segment for us and think all of our business has been competitive. What we’ve done when we look at pricing our goal is, is if we have to be doing something in pricing, what we’re trying to do is balance that against long-term commitments from our customers or volume increases. So those types of actions are going on. Certainly when volume does not continue to grow, our customers tend to be more aggressive on the price side. But those - again I would tell you that’s not - it’s not something that we’re new to, that’s something that continues to go on a day to day basis for us.

And just looking at the environment for acquisitions, any opportunities you’re looking at or any changes in your thoughts of deals that might be coming up?

Well I mean that - I think if - we talked about this on the last call. I think the pipeline of potential transactions continues to be pretty robust. The debt market today in terms of interest levels is positive. And I think if an acquisition - so we continue to be actively engaged and looking at potential transactions, but there is nothing specific we’ll be commenting on today.

Thank you.

Thanks

Thank you. Our next question comes from the line of Brian Rafn from Morgan Dempsey. Your question please.

Good morning, Steve and Bob.

Hi, Brian.

I got apologize Steve your operator made a problem with my last name, even though its four letters. So I missed your opening call. What - from the standpoint of kind of your sense of the global demand from a project standpoint, you mentioned the word hesitancy. Are you seeing global project launches declining at all in unit volumes or going from international launches to more national or regional? Could you give me just a little bit more color on what you are seeing for kind of the project pipeline as we go into 2015?

Brian, let me come back and be maybe a little bit more specific because I want to deal by segment, because when I was mentioning kind of hesitant that would be much more on the Beauty and Home side. Our Pharma side continues to be very aggressive and active in projects and frankly in our Food and Beverage, we’re seeing quite a few very interesting projects. Where Beauty and Home has a lot of projects that they’re looking at, it tends to be more of when they put those into play. So instead of starting in the first quarter January 1, they’re starting in more of the end of March and into April. So again I want to put it in context. When I look at our customers, what we are seeing a bit in Beauty and Home because it’s - for on the Prestige side, it’s an export business. How they see these developing regions whether that’s Latin America or that’s Asia. What’s going to be the impact their product going into these - some of these markets that are showing some macroeconomic slowing and they’re trying to evaluate what that’s going to do to their business. Offsetting that the strong dollar, when you produce in Europe an export has the potential for actually a positive to their margins and may actually make their marketing more aggressive, particularly as we go on to the year if we stabilize at a certain Euro point.

Okay. I appreciate that. Being that we’re through the holidays, what was your sense of the kind of the holiday/Christmas impact for the cosmetic/perfume side?

On the high-end, I think we’re going to see our customers showing kind of single - lower single digit growth from what we’re understanding. When you get to the math side, when you get Avon and some of the other customers like that they’ve been somewhat stressed depending on the market they’re in. So overall I would say was it okay, holiday seasons, but it wasn’t strictly the best or the worse that we’ve seen over the last three to five years.

Yes, okay. And then I will just ask you, from the standpoint the last couple of years you've had some very nice applications of taking niche technologies and rolling them out in new products, bonded aluminum plastic, Bag-On-Valve. When you mention linerless hot beverage and then pen applicators, are those more niche applications or how robust can you be in actually rolling them out across multiple business lines?

The pen application is going to be more targeted towards the upscale cosmetic market. So that’s probably a bit more niche. That being said it’s got some very interesting projects that we’re working on. The linerless hot fill, given that’s in the beverage side has potential for some larger volume side. So it’s nice that we’re on that and actually has been on one of the major - that’s the Gatorade brand that we down in Mexico. So it’s actually being adopted in one of the regions for them. So there is a potential for that having a much bigger impact on a year-on-year basis.

Thanks, guys.

Thank you.

Our next question comes from the line of Albert Kabili from Macquarie Capital, your question, please?

Yes, hi, thanks. Good morning. I guess the first question is on beauty and home. You mentioned feeling good about the $10 million annual cost savings. I was wondering if you were seeing any of that in the fourth quarter or if your guidance reflects in the first quarter any ramp up in that objective, and how should we think about the ramp up there?

Well, what we’re seeing is we’re starting to see some of that in the fourth quarter, but what we - again what we got hurt by was lack of volume. So frankly our fixed cost elements had a negative impact on us on the fourth. I think as we go into the first - all of the plans we have in place are progressing according to the schedule. It’s going to be largely volume dependent to see how much of that’s going to actually fall to the bottom line. So I’m very comfortable with the operational side we’re going forward. We need the revenue growth. And again what I’m looking at with our customers and what our Beauty and Home folks are looking at is probably a more second half of the first quarter into the second quarter and third quarter in terms of that volume move.

Okay, okay that is helpful. So it sounds like you do need a little bit of volume to get to that $10 million. It's not just a pure cost takeout where you're going to get the $10 million irrespective of even if volumes don't improve, if I heard you're right.

I think you’re going to need some volume because part of that is also productivity. So I mean when you get to the productivity, if you’re on a lower volume, you don’t sense it as much. So in fact, it’s a little of both. The $10 million, a lot of that is cost base, so we’ll see more and more that, but the volume tends to mask if we’re not getting some kind of volume increase, you still got to cover all the traditional depreciation and fixed cost and that - those type of costs.

Okay, okay thank you. That's helpful. And I guess just a final follow-up for me is on the Pharma business, which had a good performance this quarter, was there any appreciable under absorption headwinds from the Stelmi expansion in there, so that it would have even been better than what you reported? And if so, if you can just size that up for us and when we see that headwind abating there.

I think, the Pharma business had an excellent quarter again across all of the markets. If I look at what we’re doing with the Stelmi, first of all the project is preceding pretty much according to the timeline we had in cost projections, so I’m very positive to that. We’re probably getting a little cost build up because we’re starting to add people there, but frankly, it’s not material and I don’t see that having a big issue and that had a big negative issue in the quarter. Timing of this though as we said we’ll probably start to see equipment and facilities are to get completed as we get to the mid year, end of the summer, and then we’ve got to get everything qualified, so it is late 2015, but more 2016 issue. One of the other things in that area that we’re continuing to look at is giving additional structure outside of just France for doing expansion where we want to look at doing additional production. So we’re looking at different areas around the world that we might be able to cost effectively expand the production of elastomer line, which today is solely being produced in France.

Okay. All right got it. That’s helpful thanks and I’ll turn it over. Good luck.

Thank you.

Thank you.

Thank you. Our next question comes from the line of Debbie Jones from Deutsche Bank. Your question please.

Hi, good morning.

Hi, Debbie

Hi, Debbie.

If we look at food and beverage, if you continue to grow in developing markets, how big do you think this business could be for you over the next two to three years? And then, do you think you can maintain your level of - at current profitability if you continue to expand?

Yes. I think the business - we’ve got internal targets. We’ve said that we think we can continue to grow this business at a 10% plus level. I’m very optimistic that that can continue. And certainly if you look at the last of couple of years that’s where we been. One of thing that helps us with that growth, the margin target we have is 12% or better. If you look at where we’re at today, we’re within a point or so of that margin target. So again I’m comfortable over the next three to five years. Yes, we can continue to get to the 10% growth. And these are all ex-acquisition and constant currency and also get to the margin levels that we’ve kind of addressed in our long-term outlook.

Okay. That's helpful. And then, maybe there is a simple answer to this question, but you highlighted the weaknesses in fragrances in your release, but it appears the cosmetic categories are doing pretty well. I would think these would be somewhat similar in trends. What’s really driving the divergence here? Is there any potential that you are losing any share in the fragrance business or is this just lumpiness in new product development?

Overall I think it’s a good question. We’ve looked pretty closely at this. I mean our overall by the way beauty sales level for the year, while it was a challenging fourth quarter. We’re up about 4% on a year-on-year basis. So if I look at the market, we’re very comfortable that A) we haven’t lost and maybe even gained a little share in terms of the fragrance market. But there is a bit of difference I think and that the fragrance is a bit more matured than the - let’s call it cosmetic lotion. So you find people looking at skin coloring or skin protection is still something that is a growing market whether that’s anti-aging or skin making you look younger, those type of issues. That’s growing. And for us that’s a trend that’s been growing probably for the last three to five years and we’re seeing more and more. I think all we have to do is go down to - either to a more of a luxury store or even to a drug store and you’ll see quite a few products that are aimed at skin care.

Thank you, that’s helpful. I’ll pass it on.

Thank you.

Thank you. Our next question comes from the line of Jon Andersen from William Blair. Your question please.

Hi, good morning guys.

Hi Jon.

Hi Jon.

Just two quick ones. I was hoping you could talk a little bit more about the recovery in the injectable business and what’s driving that and your expectations for growth going forward. And then, Bob, I think you mentioned that that Asia's constant-currency sales were down 12%, so again there, just looking for a little bit more color around that dynamic in the quarter and thoughts on that that region going forward. Thanks.

I’ll deal with the Elastomer business in terms of where we’re coming back. What we saw in the earlier parts of 2014 was again when we pretty much know what we’ve been specified on and our customers had excess inventory and we’re in the process of destocking to that. We had anticipated that that actually stopped or pretty much started to slow down in the fourth quarter and that’s why we started to see year-on-year growth. In terms of target for us excluding kind of new regions that we may go in, right now our target for growth is in that 6% to 10% area and we’ve gone back just as recently as going to our last budget cycle and we would reaffirm that we still are comfortable on the Elastomer business to be able to stay within those areas.

And then Jon to answer your question on Asia, I mean, let me start by saying that it is our smallest region. So its only represents 7% of our overall turnover. So any swings in sales there obviously have a more dramatic impact when we talk about terms of percentages. But beauty was weak in Asia in the quarter and as we highlighted in the press release, beverage was also weak. So those were the two contributing factors to the 12% quarter decline.

And is that - just a quick follow-up, do you think that - is that driven by a slowdown in end demand or consumption in the categories, or do you see that as - is it a de-stocking issue or just more caution on the part of some of your customers there?

No, I mean on the beverage side as Steve alluded to earlier, it’s really more of a destocking issue. I mean we’re very close to the market, the market is still - the customers are still very positive looking out. We have plenty of new projects. We’re starting to make some really good inroads in the food business. I mean we’re pretty good on food and some other areas. So we see a fairly significant amount of new projects in the regions in that region in particular and we think that it’s just really a temporary destocking.

I mean I think on the beauty side going back just to round that out a little bit, Jon, I actually think we’re continuing to expand because what we’ve done over 2014 and into 2015. We’re now going not only to the multinationals, but to that second tier national account and we’re seeing very good growth as the quality of products that that second tier - I use that second tier as below the multinational, but the local accounts are doing. So we see good growth continuing to grow also in the beauty - in the beauty side in addition to the food and beverage side.

Great, really helpful. Thanks guys.

Thanks.

Thank you. Our next question comes from the line of Chris Manuel from Wells Fargo. Your question please.

Good morning, gentlemen.

Good morning, Chris.

Wanted to - a couple questions. First, if we could talk about currency for a second. I heard you say $0.11 would have been the comparable adjustment for 1Q and I know you don't like to give guidance necessarily on a full year, but if you could just help us maybe with frame up or size up what the currency component might be over the balance of the year. If I look at 2Q, it is actually even potentially a bigger headwind. Could you maybe help us? If we stayed at a $1.13, $1.14-ish range where we are today, what the differential might be, or how to think about 2Q, 3Q, and 4Q as the headwind?

So, Chris. I mean, you’re right. It’s almost - it’s impossible to estimate where we see the currency rates are going to go beyond Q1. But if - you have to look at the average quarterly rates, when you look at it, so the average quarterly rate in Q1 was $1.37 as I indicated. The average quarterly rate for Q2 is also $1.37. So all else being equal, you would say that the $0.11 impact that we saw in Q1 assuming we stay at a €1.14 rate in Q2, there is no reason to believe that it would be any different than $0.11 in Q1. Now, looking at Q3, average was about $1.32 rate and Q4 was about a $1.25 rate. So we should see it abating, but who knows where the actual euro rate is going to be in the second half.

Okay. Well, I mean, I guess from the perspective of your 2Q earnings are typically, from a seasonal perspective, a bigger quarter, $0.11 is a number - I would have thought it might have been even be a little worse, considering you are starting from a bigger base, but that is fair. I get your point. Second question I had was you mentioned Stelmi is on track kind of mid-year to get stuff in and it sounded like qualifications would potentially even take into 2016. Can you talk about where you are in the process of beginning to - I appreciate sort of a chicken or the egg thing - but sell out or begin to sell the capacity as you feel confident and comfortable that is coming up. Have you begun that process? Where do you sit with respect to how you feel a ramp-up might be from a revenue perspective in 2016 for that?

We’ve started the process in that. We’re talking to customers that we’re adding on additional capacity. We’ve had very positive response from the customer base because that in fact it’s going to alleviate some of the bottlenecks that exist out there today. The difficulty with qualification - you can really do qualification until you have the equipment in place and the facility. So what we’re doing is trying to get our customers geared up - so once we’ve got the facility and we’ve got the equipment that we can start running that. So I think we’re doing everything we can do right now, but to be honest with you, somewhat limited until you get the equipment there. In terms of the revenue growth, we’re going to - that one we’re going to have to see, we got - again it depends on where you get qualified. We’ll probably begin shipping product not initially to the U.S. because there is more time consuming to get qualified in the states and start to see where some of the other region. So I’m going to have to defer. I don’t really have a good revenue target at this point. So we get a little farther down the line.

Okay, that's helpful. And then the last kind of follow-up along those lines is you mentioned potentially doing some sort of mini add-ons of - not a full scale plant like you have over there in France, but some other adds in different areas globally. Have you targeted or thought about potentially certain regions? Would that be North America, Latin America, etc., where you are considering that?

Again, this goes back to the initial strategy when we acquire Stelmi that we wanted to use our platform to be able to try to grow the business. We’ve kind of looked at the markets I would tell you the focus for us will probably initially be in North America that’s where the bulk of the volumes are so it’s probably more North American centric but we’re also taking a look at India and Asia to see where that would other potential other. But frankly, probably, North America would have a stronger initial push for us and you would see in the only markets.

Okay, that’s helpful. Good luck guys.

Thank you.

Thanks Chris.

Thank you. Our next question is a follow-up from the line of George Staphos from Bank of America Merrill Lynch. Your question please.

Hi, thanks. Guys I just want to clarify a couple of things. I forget who had asked the question on beauty and home, but I remember a number being put out as up 4% and I wasn't sure what that reconciled to, if I heard it correctly, because obviously in aggregate you were down there on a core sales basis. Can you remind us what was in that plus 4%?

Let met come back what I was I think it goes back on in the beauty part of Beauty and Home for the full year Beauty was up 4% it was down in the quarter, in fact it was down in the quarter about which is taking over down 3% in the quarter but for the full year it was up 4%. So apologize if I confuse you. So again when you look at the Beauty sales and this kind of tied back George, if you look at Beauty sales in the first quarter of 2014 we were up 10% over the previous year. So you saw some its really strong comparisons in the first quarter. So when you get to the full year that was what I was mentioning on the floor.

That's fair. I'm sure you said it clearly; I just wasn't keeping up as quickly in my notes as I would have liked. Secondly, to the extent that you can ballpark this, and I recognize there is no official tracking service like Nielsen that looks at this, what do you think your market share in launches is if we look at it broadly food and beverage, beauty, and personal care?

Well, I would say, it's going to I would tell you – again it’s going to be very different George – it’s a good question but a difficult one because we tend to be in niches like in food and beverage you would find us being a niches of the market. We properly have most of the launches in the ketchup area, condiment area and not as much if you get into salad, oil or salad dressings. Prestige we – if I look at Prestige Fragrance we’re going to be well above 50% of new launches to that. So again I apologize I really don’t have a good number for you on a broad base.

Okay. Part of the reason why I asked the question is it's got to be part of your process of your evaluation of whether you are gaining, maintaining, or losing market share, so I guess if it is hard to gauge how you are doing in new product launches, how do you then gauge how you're doing in overall market share? And I guess that's my follow-on and I had one last question on Stelmi.

Well. Let me come back and let me try to pick as what we do follow pretty closely, but what I was giving you for example on Prestige launches. We follow that very closely we follow mass market launches on fragrances very closely. We follow hairspray very closely. But we’re into niche-to-niche-to-niche as opposed to the overall, what I gave you in the Beauty side that somebody ask if we lose market share if I kind of add up all those niches we are still looks like we are from our perspective growing our share and what we would have been – what we consider the beauty part of our Beauty and Home side.

Okay. I appreciate the additional color there. And then, just last question on Stelmi and I think Chris was asking this; I just want to be clear. So you said that there may be some cost build-up now as you are loading in the facility that had the revenue showing up, but you don't think it's going to be significant. So I guess the question is, should we be baking in any kind of cost build-up, whether it is 2Q, 3Q, or 4Q, in advance of the revenue showing up, or should we treat it as insignificant? Thanks, guys, and good luck in the quarter.

Thanks George. What I would tell you that from a labor perspective. I don’t think it’s going to be material. The only thing that you will start to get that maybe a pop would be depreciation that you might get on the equipment when we start to run it before the volume. Outside of that labor side I don’t think we are going to have – today we don’t think there is going to be a material impact to that.

Okay, thank you very much.

Thank you. Our next question comes from the line of – is a follow-up from Adam Josephson with KeyBanc. Your question please.

Thanks for taking my follow ups. Just two, Steve, you talked about macro softness related to consumer spending affecting beauty and home, obviously. Are you seeing any improvement on account of the recent fall in gas prices and improving jobs data? And how would you compare today's spending patterns to those you saw a year ago, two years ago, pre-recession, just for perspective?

Again, we’re probably one step below that if we are kind of relying where our customers are at. I don’t – I think the and again I’m giving you my personal opinion as opposed to maybe a broad based intellectual effect. I think people feel better particularly in North America, about the reduction in gas prices, I’m not sure that’s translating to people buying more of our stuff, of our customer stuff yet. So I think there is a general feeling it’s a plus. Now again then if you take that to Europe and you get some of these other areas, you got some other macroeconomic issues that are going to impact that. So again, oil for us overall is in that positive, it’s very difficult for us to try to quantify it.

I got you there. And in terms of – just one broader question, in terms of the – given the recent weakness that you’ve seen in numerous economies, numerous foreign currencies, are you taking any view regarding the long-term health of those – the countries in which you operate? And how is that informing your capital-spending thoughts in those regions in the next year, two years, three years, et cetera?

I mean one of the things that we do Adam is – we’re typically in countries close to where our customers are filling the product, so not necessarily to where the end consumption is going to go. So, I mean, we’ll continue to invest in those regions that we see our customers growing and adding additional filling capabilities et cetera. So I mean right now that we’re not in a region that – that’s ended the pressed economic type of situation. We’re going to be more tied where our customers are going to be filling their product.

Thanks a lot Bob, appreciate it.

Thank you, our next question is a follow-up from the line of Mark Wilde from BMO Capital Markets. Your question please.

Yes, I want to just come back to two things real briefly on the Pharma segment. One, it sounds to me like 2016 will be much less than kind of a full year in terms of the benefit from the Stelmi ramp-up because it sounds like it’s kind of late this year into next year when you're doing qualifications. Can you guys confirm that?

Yes, I think, maybe by the way, I think that’s true on anytime, you see a ramp up, it’s very and by the way just it’s probably even relates more to Pharma. But even in our Beauty and Home and our Food and Beverage, any time you get to a new facility to fill that, it doesn’t like turn the switch and then you’re on. Pharma it will take us a little time and it won’t be from January 1, 2016 running full out. So there will still be back years, Mark there will still be a bit of a ramp as you get into 2016.

And Bob, can you just – or sorry, Steve, can you just help us size how you would think about the benefit from that Stelmi expansion in 2016 versus kind of the potential when it’s all loaded?

Yes, when we are adding Stelmi in terms of the French side, we said that we were going to be additional capacity between 30%, 35%. Just from the mix in type of capability we’ve got up to 40%. So we need to also add other parts around that. So it’s not 40 day one, we are going to be incrementalizing that up. So the potential is Stelmi is about a $120 million to $150 million business, you get an additional potential 30% on top of that as you ramp that up. So, but again, I want to be careful that people don’t come back and take away from that, that in 2016 we get that full benefit. We’re still going to have to ramp that up, get qualified and then we are also going to be relying on the market growth.

Yes. So is it possible, actually, that there is not any incremental earnings contribution in 2016?

I would think, we will get some earnings contribution, I just don’t know how much it is at this point. But for 2016 as a whole, I am very comfortable, we’ll have incremental earnings. I just don’t know what the amount will be, Mark.

Yes, okay. That's what I wanted to get. And then secondly, on Pharma, can you just talk a little bit about some of the expansion you’ve done out in Asia, and sort of what type of traction you're getting off of that and whether you are at a point where you need to think about even expanding beyond that? I think you are mainly in India at this point?

Well, actually, we got two relatively significant operations. We are in China, serving the Chinese market out of our Suzhou operation and we are in Mumbai, serving the India operation. What’s been nice about both of those, the margin characteristics of both of those of the products we sell, carry consistent margins that we have worldwide. So in terms of India, probably even more so, we’re seeing good growth, because India is becoming the generic manufacturer for a lot of other parts of the world. What we see in China is some very good local growth in terms of our local pharmaceutical customers, growing well. So between both of those, I don’t think, we will be needing to do any physical expansion of our facilities in the next year or two, depending on where the growth comes.

Okay. Super. That’s really helpful, Steve. Thank you very much.

Thank you. This does conclude the question-and-answer session of today’s program. I would like to hand this program back to Mr. Hagge for any closing comments.

Thank you very much that concludes our call today and I’d like to thank everyone for joining us. Have a good day.