Good morning. My name is Mary Skafidas. I head up Investor Relations and Communications for Aptar, and I'm absolutely delighted to welcome you to Aptar's Investor Day 2025. I am just going to first stop on our Investor Day tour at, of course, our disclosures page. This is for our General Counsel. It's up there. I just want to take a few seconds to give you some background on Aptar for those of you that might not know us as well. Aptar reports in three segments. At our core, we are a technology company. Our innovations shape markets through our proprietary drug delivery and protection technologies through our Pharma segment, our precision dispensing technologies through our Beauty segment, and our Dispensing Closures segment. While we report in three segments, we actually serve diverse and attractive end markets.
On this page, you'll be able to see our revenue and adjusted EBITDA by segment and also by end market. Our proprietary drug delivery systems for the respiratory, ophthalmic, and dermal delivery route are our largest end market. We are global. That is not an understatement. Our customers and operations span the globe. Europe represents our largest revenue base, as well as employee presence, and our customers really are the who's who of the Pharma and CPG industries. This is just a few of our innovations from our Pharma segment, and Pharma enables many delivery routes. You'll be able to see some of those at the Pharma innovation table following the Q&A. For those interested, we have a few lingos, which have our active material science technology within it.
This is if you want to monitor your glucose levels because you want to get healthier, we have a few of these for you. The same innovation and reliability we use for our consumer end markets. You'll be able to see some of our new technologies over here and our consumer innovation after the Q&A. I want to remind you that the products in front of you are water bottle for closures, eye care. Eye care is not a statement for anyone. It's just new on the market. We wanted to share it with you. We think all of your eyes and under eyes look wonderful. Theraflu, which I am using because allergies are alive and well this time in the U.S., and of course our Mio to add a little flavor to your water. Last but not least, our executive team, they're all here in the front row.
You'll be hearing from many of them throughout the presentation. You'll have a chance, if you're here in person, to be able to mingle with them during our innovation display and also during the lunch. Our schedule for the day includes hearing from our CEO and our CFO, the heads of each of our segments, and we're also going to do a special deep dive for our proprietary drug delivery systems. Now, without further delay, I'm going to introduce our CEO, Stephan Tanda, who will walk you through our relentless pursuit of profitable growth. Do you want a glucose monitor?
No, I think I'm good. All right. Good morning, everybody. Microphone on? Just checking. All right. Special thanks for making your way to New York, whether it was across the country or across the street. Also a warm welcome to those who are joining by listening via the webcast. Whenever we talk about the company, these are some of the themes that you are interested in, that we're discussing. Of course, we serve highly attractive end markets that are advantaged from a demographic point of view. We have a world-class leading Pharma business that we're very proud of, and for the most part, built organically over the decades. We are an innovation leader, driving constantly towards a richer mix, higher value profile of the business.
In recent years, we really doubled down on operational efficiency, productivity, cost management, capital efficiency, and we're proud of what we achieved over the last few years. For more than a decade, we've been the sustainability leader because it is good business. It's also the right thing to do. It is good business. It enables our customers to drive share, win markets, win over consumers. You are here because you know our strong balance sheet gives us strategic flexibility and peace of mind. It also does that for our customers who deal with us for many decades in developing and growing products. When you summarize it all, that kind of brings us to our value creation framework.
Those are the four points listed here at the top: leading positioning, key categories, technology innovation leader, driving differentiation, very deliberate capital allocation towards the more profitable, faster-growing businesses, strong operations and productivity management, and the balance sheet. In case you've missed it, we reassured you last night that we are raising the dividend again this year with an almost 7% increase. Two years ago, these are the targets we discussed. We had raised the ROIC target and the EBITDA margin target. Here we are two years later, and we're very proud of what the teams have achieved with increased margins and return on invested capital, as well as a growing dividend. Now, let's peel back the onion a little bit more. This is kind of looking back over the last two years.
Revenue up 8%, 3% core sales growth on average, significant EBITDA growth, almost 50% adjusted EPS growth over the two years. You see the rest here, returns up 40%, free cash flow up 87%. Again, the team did a fantastic job. Top team is here up front, and they all will be happy to answer your questions later on. Of course, the Pharma growth is a significant component of that, but not only. We have returned significant funds to shareholders. Now, let's talk about the first half in Q2. The first half, of course, growth a little bit slower, but EBITDA growth 8%, EPS growth 8% within the long-term target of EBITDA margins. Just following up on some of the points we made on the Q2 call. First, Narcan or naloxone distribution. Recall that this is a very unique set of circumstances.
We had the originator, Emergent BioSolutions, and then a rapid succession of generics coming in, a handful of generics players, and getting OTC approval that allowed the states to procure directly. There was a massive filling of the pipeline of end users and also the generics getting ready to compete for them. All of them thought, of course, they will get the lion's share. Not all of them did. There is inventory in the chain. We see customers pulling back. In Q2, we had just picked up that the administration is not in favor of all these harm reduction strategies. Since then, it has been clarified by the administration that that does not include naloxone. The administration fully supports naloxone and will continue to fund naloxone. Most of the money anyway is at state level and from the opioid overdose settlements.
What they don't like is needle exchange programs, shelters, and all that. Naloxone is supported. That doesn't take away the whole supply chain pile-up and the intransparency of how much is there, where the inventory levels are. Certainly, it will take some time for naloxone sales to normalize. I want to remind you that the injectable teams have hit their stride with product sales. It took us some time to get the factories up and running, get the equipment fully validated. We feel very good now with high single-digit, low double-digit growth rates from a product sale point of view in injectables, of course, also supported by the GLP-1 growth. Cold and cough is kind of our COVID pendants to pay, so to speak. We think that will normalize by Q4. Our consumer healthcare business is much broader than that and continues to develop very nicely. The legal fees.
Intellectual property, confidential information is at the core of what we do. Remember, everything we sell is our own creation, is our own intellectual property, and we guard that vigorously. Every once in a while, there is a need to defend that. We've done it in the past, but it doesn't happen every year. When we do it, we go all in. That's what we've disclosed to you. As a shareholder, and I'm also a shareholder, you got to look at this really as an investment in future revenue and profit streams to defend our intellectual property. Our batting average in legal is pretty good. This is a very clear investment to make sure that our intellectual property is safeguarded. Now, let's talk a little bit about how we see the next five years or so unfold around this profitable growth journey. Of course, we start with Pharma.
You will hear Gael and Alex talk more about our pipeline. The pipeline continues to grow. You should think about, on average, the pipeline adds about 7%- 10% of revenue every year. That doesn't sound very much. You got to realize, and you do, that this is not innovation that adds or replaces previous products. We are not in a business where you have these product life cycles where the next one's got to replace the one that fell off. Basically, our revenue stream in Pharma, for the most part, is a growing perpetuity. The innovation is on top of that. That is because of how we work with our clients. We do have our combination medicines in the drug master file, and it's almost impossible to dislodge them. Second, I already talked about injectable growth. The team's hitting its stride. We got plenty of capacity, headroom.
We see good growth in injectables. A little teaser, Alex will talk to you more about what we see, the kind of indications and applications that we see in our pipeline developing. That's really exciting. Everything from cardiovascular or emergency treatments for heart issues to central nervous system drugs. There's so much in that pipeline that makes us really excited about the future. Of course, our service business, including digital, reinforces the moat around all of these businesses because it gets us in the door very early. It gets us in the door at the C level, and it ensures that the pipeline keeps filling. Closures are doing very well. That reorganization that we unveiled two years ago has paid off and is paying off by strong growth and good innovation traction.
Of course, Beauty has lowered its cost position, has lowered its break-even point, has a very competitive footprint now, and we'll be leveraging growth with that position. From an operational efficiency cost management perspective, these muscles are now trained. It's part of our culture. When that is the case, you continue to have ideas, whether that is more global talent center use, whether that is more automation, and we have further room for automation, or just plain old cost management. At the end of the day, what this does is it forces the organization to focus. If you're the innovation leader, you're tempted to do everything for everybody. That's, of course, not good business. This cost focus, this productivity focus, makes sure we focus on the best opportunities. Last but not least, of course, a keen eye on shareholder returns, on strategic capital allocation, and bolt-ons.
Bolt-ons is really our sweet spot. Our M&A track record is very good, especially the bigger ones, and that allows us to build and complement our organic growth with M&A growth. Now, this is the slide you're all waiting for. What about those targets? A little legend here: in light green are the targets we changed last time or raised last time, raising the growth targets for Pharma by 100 basis points and the adjusted EBITDA margin for the company. We also raised the ROIC last time. Given the track record, given the productivity, we are raising our ROIC target again by 100 basis points to 12%- 14%. The execution plan of all this is, of course, guided by our strategic priorities that have been around for quite some time. You will see them at all the plants on the wall.
They are basically reinforcing that we execute on our value creation model. Let's double-click on each of the value creation drivers with some additional information on the key elements of that. Number one, on the growth. Let's remember that delivery of drugs through the nose is a very recent trend when you talk about Pharma pipelines. Given the time a Pharma project takes, six, 12 years, we just now see the pipeline exploding with that. You'll hear more about that. We see, in general, nasal drug sales continue to grow at least 7% over the next five years. A trend that you all know well is acceleration in biologics. We find ourselves having now very good cards in that game, having high-value products, shifting the mix, on par with the industry leader, and of course, underpinned by all the obesity drugs and the diabetes drugs. Allergies are not going away.
In fact, that is a continuously growing franchise, many more combination products. Allergy seasons keep expanding in time. As more people join the middle class, they also have more access to these medications. One trend that we did not talk in detail before is the emergence of decentralized health care, which basically means they send you home from the hospital and you need to deal with it yourself. Self-care at home, self-care in community health centers, and online virtual platforms. We are very well positioned with our devices to take advantage of that trend. That really also drives, again, the pipeline as our customers want to participate in health care that way. We stop for hydration. On the consumer side, it's all about category conversion. We are not running out of categories to convert. There are plenty more to convert.
You have the geographic growth aspect that I will come back to. Here are just some examples: the soap, skincare, and you will hear a lot more about all of these. Even if the category you're dealing with is a category that grows at GDP, maybe doesn't grow, maybe even declines like infant nutrition, if you convert large categories, you drive a lot of growth. That's really the growth model for our consumer-facing businesses. That is enhanced with our sustainability leadership. At the end of the day, we enable our clients to drive preference, to gain share, and consumers prefer solutions that are not only great solutions, but also are manufactured in the right way and are sustainable. In addition, of course, it's a great retention tool for employees. Our sustainability leadership enhances all of these innovations. Now, let's talk about geographic growth.
As Mary showed you, we're active around the globe. It is in our genes. Everybody here has significant international experience. We've even more come to appreciate our in-region for region supply chain philosophy. That is not new. We've been in Asia for 30 years, but it's always been in Asia for Asia, the same in Europe and the U.S. That also means we have great leaders in those places who really know their markets. That allows us to drive geographic growth. We've got Bichat now in the Middle East with Gulf Closures in Bahrain and 7,000,000 in Turkey, pushing more into Southeast Asia. Of course, we've made tremendous progress in the large markets of China and India with not only significant growth, but also substantial profitability. Let's talk about technology and innovation. As a reminder, we report our results, if you want, in the vertical columns.
The businesses evolve really by technology platform, whether it's fine mist pumps, airless technology, or bag-on-valve aerosol. That is because we share common technologies across the company. All of you know, our Pharma business was built organically out of the beauty business, so it's leveraging these technology platforms. On the next two-minute video, indulge me, you'll see all the common technology platforms that we practice. Of course, it's injection molding, very precise injection molding, small parts, all tracked with our manufacturing execution system, and then followed by high-speed rotary assembly. Here are just some examples. There's a nice spin stack tool in Pharma for injection molding, some needle shields. It goes through the segments. Our high-speed continuous motion rotary assembly is another example. Sometimes I tell the story. Elon Musk says, "Hey, we discovered high-speed motion, continuous high-speed continuous motion rotary assembly.
We've done it for decades." It's 500, 600, 700 parts per minute across the company. AI-assisted vision system-based quality control is used again across the company. Increasingly, with more automation also in the logistics that bring product to these highly automated machines and take it from them. All made very interconnected and transparent with our online manufacturing execution system. That allows us to bring improvements from plant to plant to plant in quick succession. All right. Let's talk about innovation. 7,300 patents. We own the intellectual property of everything we make. It is a core tenet, and we defend that intellectual property. Intellectual property is not just patents. It is confidential information. It is know-how. That really drives the returns, that drives the attractiveness of Pharma and Aptar in general for our customers. We also have increasingly built up service know-how, human factor expertise. You will hear more about that.
There are many different noses out there. There are many different hands out there. There are many different sizes. We have ergonomic experts on how to optimize design. Again, capability we leverage across the company. Not all of our innovation comes from in-house. We collaborate very much with external universities around the world and have innovation centers that we bring customers to and co-create with them. I invite all of you to visit one of our innovation centers, whether it's in Shanghai, whether it's Paris, or up the road here in Connecticut. At the end of the day, we help our customers shape markets, create categories, and win market share, and then get a small reward for that help. Last but not least, sustainability. It is something that's in our genes. We've done it for many years, more than a decade.
It is, of course, crucial for our clients to have recyclability, recycled content, refillable formats, reusable formats. It helps them win in the marketplace. What is, from my point of view, also essential is that it underpins Aptar as a purpose-driven company. It helps tremendously to recruit above our weight class, to attract people who really want to work for a company not only that makes great everyday products, but makes them in the right way. We are an academy company in our industry. That also means sometimes our competitors try really, really hard to get our people. Many people have come back to Aptar because of that, because the grass is not so green on the other side.
I will not go through all the accolades and awards, but that is, of course, nice, but it is a competitive weapon in the war for talent and is an important part of the company. Capital allocation. We have a keen eye on preferably investing in our higher returning and faster-growing businesses, especially Pharma, but not only. A keen eye on shareholder returns. Roughly about 70% of the capital is reinvested into the company. 30% is returned to shareholders in the form of dividends. Somebody picked 2017 as a base. I don't know why. This is kind of the evolution of capital deployment, sales, and EBITDA. There is a correlation there. We feel really good about all our businesses, but optimize returns by directed and strategic capital allocation. The dividends, very proud of that track record. It's not that we are hyper-focused on the dividend.
Our payout ratio is 30%- 40%. We're kind of towards the lower end of that. Given the performance of the company, the board felt really good supporting us with another dividend increase that we announced last night. Very, very proud of this. Of course, it's the right thing to do. Now, let me brag on our board of directors for a few minutes. It's a very well-curated, very effective board. Deep experience in our end users. Seven of our 10 directors have Pharma experience. Many of them have consumer product experience, regional expertise, whether it's Asia, whether it's Europe, four current or former public company CEOs, many of them in private equity. Very robust discussions, the right discussions, whether it's about people succession, whether it's about portfolio, whether it's about investment. We keep a keen eye on board refreshment. Average tenure now is eight years.
It's a highly, highly effective board. Also, very proud, of course, of our executive team. Not all of them will talk, but if I just pick on Gael and Marc, experience in all three segments, multiple functions, multiple regions. Alex and Heidi, experience in two segments, multiple regions. Vanessa, of course, coming from a different industry, bringing a whole different set of rigor to the financial function and a whole lot of experience. You're in for a treat. With that, I will hand over to Gael.
Thank you, Stephan. Checking the mic. Is that okay? Good morning, everyone. For the next 45 minutes with Alex, the Head of Pharma Prescription for this segment, we would like to give you a deeper understanding of Aptar Pharma and how our business model is generating great value for the ecosystem, not only for our shareholders, but also our customers and the many millions of patients using on a daily basis one of our solutions. My intention this morning is to give you a clear understanding of why we believe we are a reliable value generator. We shifted our strategy some years back from a pure supplier of devices through our drug delivery solutions to become what I call an indispensable partner of the industry.
We partner with the industry, creating value with them during, one, their drug development program, two, during their drug lifecycle management program, but also during their patient engagement programs. All these companies want to work with us because we have demonstrated, one, that we clearly understand the science behind the development of their drug products all the way through approval. They also want to work with us due to the fact that we clearly understand how a patient is interacting with their product. This patient knowledge is key to drive patient adherence. Patient adherence, the patient will stay the course of the prescription, okay? This patient adherence is probably one of the single most important criteria to drive patient outcome. Patient outcome, better patient outcome, this is the quest for all the Pharma industry. Let me now turn to part one.
Part one is all about our building blocks for growth, our element of differentiation. We are going to spend some time around our pipeline. Stephan mentioned that in Pharma, pipeline build and pipeline conversion are critical. Take this slide as a kind of teaser, sharing some of our element of differentiation. We are a leader in drug delivery devices solutions operating in a highly regulated space. We have a solid and growing IP portfolio. Remember, we are not a contract manufacturing company. Everything we commercialize has been developed, manufactured by Aptar. We have a pretty diverse set of portfolio with no dependency at all on a single drug, a single customer, or a single technical platform. Our services upstream and downstream are positioning Aptar Pharma as the partner of choice of the industry. Last, we have a very solid balance sheet.
This balance sheet is giving us optionalities to self-invest in our business, innovation, capability expansion, but also to look at inorganic growth. Take a moment and look at this broad range of Aptar Pharma portfolio. We've got quite a lot. I mean, from, I would say, spray pump to airless system to injectable component to a digital healthcare solution, training devices. Guess what? All those products are leveraging one of our many patents. We leverage for Pharma, Aptar Pharma, over 4,500+ approved or pending patents. We have done such with a fantastic track record. Over the last 10 years, we grew annually between 8% and profitability at 9%. Let me now spend the next two slides to explain to you where we play and how we look at the market. This slide represents the total drug sales market.
It's a $1.7 trillion market, growing in the 3%- 4% on a year-to-year basis. Somebody asked me this morning, how much does represent CHE? I've been checking, 15% of the overall Pharma space is CHE. You've got the different routes of delivery. Aptar is the leading company in the respiratory field, in the ophthalmic space, in the dermal application field. It represents 11%, 12% of the overall markets. With 43%, this is the injectables route of delivery. This segment is growing way faster than the overall segment, the overall market, in the 8%, 9%. Some of the categories are even growing faster. We are, in a way, a newcomer in that space after the acquisition back in 2012 of Aptar Stelmi. We are a component player.
We don't control the dose, but we've got a critical component player. You are going to find us with our stopper on multi-dose vials or within PFS, prefilled syringe with our plunger or needle shield protection. Our market intel is telling us we are the number three player. With 45% of the overall market, this is the overall route of delivery, solid or liquid forms. There, we are really a new player after the acquisition of CSP back in 2018. Aptar CSP is only focusing on sensitive drugs, how to better protect sensitive drugs, biologics, GLP-1, peptide, nucleic acid, mRNA type drug development. Aptar CSP has been the largest acquisition of Aptar and is generating an annual growth rate of 10% for 8% reported EBITDA. This is the same view, but this is the view of our addressable market, the Pharma packaging market.
If you look on the left-hand corner, you see $165 billion. It's a pretty sizable market. We believe this market will keep on growing at a 7% year-over-year basis. I'm going to spend a little bit of time on those building blocks for our growth. On the upper left corner, this is our pipeline, pipeline build, pipeline conversion. We've got a strong pipeline and a growing pipeline. The pipeline conversion represents in the 7%- 10% of our revenue, meaning that 90% of our growth is coming from repeat growing orders. On the far upper left corner, the converting story. It's not only in CPG. It's also in Pharma. In Pharma, we are converting drugs to a new route of delivery. The naloxone example was first introduced in the market back in the mid-1970s, 1974, with an injectable drug delivery device.
We are now dispensing naloxone, the molecule, through the nose. Baqsimi for glucagon for severe hypoglycemia patients, same story. Neffy epinephrine was the EpiPen approved by the FDA last year, last summer, through the nose, and many others. We convert drugs through our new delivery platform. The best example is one of the products you've got on your table with a customer called Helion. Helion is one of the largest consumer healthcare players in the market. Helion introduced our new innovation from CHE, from our consumer healthcare, that we call LCS, lateral control system. That's a push button. We help Helion in their lifecycle management to convert from a traditional vertical stroke pump to a push button, way more comfortable for patients on their daily usage. We converted for a non-preserved formulation from blowfill and seal to our multi-dose preservative-free solution that we call VOSD.
That's really the essence of Aptar Pharma, to convert markets. On the bottom left corner, this is really the large investment we've done for the injectable divisions for high-value products, the premium code for biologics, for example. Not only because we have invested a lot in capacity expansion to get our presence and footprint in the U.S. and China, but also through improvement of our processes, high-value processes to really match regulatory requirements. Our services are really supporting the customer to accelerate and de-risk their pipeline. Our patient engagement expertise is really giving us the ability to deeply interact with our customers. Remember, better patient outcome is really, really what all Pharma companies are looking for. How a patient behaves with a drug, how you are going to onboard a patient, how you are going to remotely monitor that patient is front and center for our customer strategies.
The next slide will be about our pipeline. We shared already the 7%, 10% top line coming from pipeline conversion, so 90% coming from a repeat growing order. We have a very disciplined way of looking and managing our pipeline. In the last years, we did 1,200 launches with one of our proprietary drug delivery solutions. It's a lot, a lot of activities behind, and in very different tiers, therapeutic areas, using one of our solutions. I'm going to let Alex later on give you more detail about the quality of our pipeline and be more specific around different tiers. This slide is the one that we have been keeping sharing. Our pipeline is healthy, has been growing in the last years by 54% in terms of de-risk value of the pipeline. We have + 46% of new opportunities in the pipeline. Why is such? We are navigating the ecosystem.
We are supporting our customers in the early stage of their development, all the way through approval, even during their remote monitoring for their patients. That's a new slide. This one I'm going to spend some time on. That's a real example of a nasally delivered drug leveraging one of our drug delivery devices. I won't share the molecule, the name of the customers behind, but that's a real example. If you closely look at the first time we introduced that drug with one of our solutions, that was back in 1994. Thirty-one years after, we continue year after year after year to generate revenues. If you look precisely, that's a 30x increase in revenue since 1994. Why? We have been the drug delivery partner with the originator when they first introduced that product to be delivered through the nose.
During the lifecycle of that drug, it moved with a generic company. Guess what? We have been the drug delivery devices partner of this transition. Years after, branded companies and generic companies, they went OTC. Guess what? We are the drug delivery partner for this transition. That's the beauty of the Aptar Pharma model. Our pipeline is not only delivering new launches on a year-over-year basis, but it's also a long-term contributor. Next part, part two, will be all about our strategy and our chosen strategy. First, we spend a tremendous amount of time to really understand market trends, having a real impact for our business. Then we dug deeply into our customer strategies and the way we could at best support them during either their drug development program, their lifecycle management program, and the way they interact with their patients. In response, we build a very unique value proposition.
We build or we acquire assets so that they match exactly where Pharma companies need their partner. We develop, we build new capabilities and new expertise in such a way that they really answer to the need of our customers during their different programs. In response, I believe we've got a unique value proposition built around the formulation to patient journey that is, I would say, one of the best value propositions in the market. This one will keep on delivering long-term targets. Let me jump first in the very first element you need to remember. If you want to understand our Pharma business in the space of drug delivery systems, you need to remember three things. Number one, market trends. market trends for us are really supporting our value model. First, small-sized, mid-sized companies are the ones going to approval in most of the cases.
63% or 65% of all approvals on Earth are coming from a small-sized company, mid-sized company. They don't have the breadth of expertise of the big Pharmaco, and they are looking, obviously, for the right partner to support them. On top of those small, mid-sized companies, on a worldwide basis, regulatory complexities are just keeping increasing year after year after year. To navigate such complexity, we believe we are well positioned to support our customers. You combine one and two, you understand that we are playing a different role with our customers, not only through our product solutions, but also the way we support them during their development. Second element you need to understand is how you build a moat to give you the ability to be considered as a long-term partner to the industry.
This slide represents the drug development process, the different, the many steps from early stage formulation development up to a market launch and post-market launch. The gray bar, vertical bar, where it's written core business, this is where we started from. This is where we are recognized with our solutions. We enter in that process at the manufacturing stage. They need a system to dispense the drug. That's where we started working with them. Looking at the way they are developing their programs, we've decided to come as early as possible to work with them during their formulation development. That's why we went to acquire a company called Nanopharm, Nanopharm being a CRO, a contract research organization specialized for any formulation to be delivered through the nose or through the lungs. Once they develop the formulation, they need to generate data. They're going to do early stage validation.
They're going to go through phase one, phase two, phase three, and so on. You need to give them the right analytical support for them to face the regulatory bodies to get the approval. We have done the acquisition of a company called Gateway. We've done recently the acquisition of a company called Mod3 , giving us that ability to provide them the right support from an analytical standpoint up to the ability to supply samples for their phase one and phase two clinical testing. We strengthen our regulatory capabilities because they're going to be facing the many regulatory bodies on a worldwide basis. Obviously, we've got our product. The sooner you are in the development process, the sooner you can spec your product, obviously. We provide them support later on once the product is on the market. Number three, you need to understand how patients behave with your product.
We've decided to put the patient at the center of everything we are doing. Why is such? You need to support our customers the day they look at the user experience. How am I reacting, interacting with a new drug delivery device? Is it easy to use? Is it complex? What about the instruction for use? You need also to support the Pharma company the day they onboard a patient for patient adherence. Once you are at home alone facing your new drug delivery devices or your prescription, you need to provide remote monitoring support. That's what we are doing. Our value proposition by now is really from formulation to patient to be the partner of choice of your drug delivery devices and solutions. We move to the next part, and I'm going to call Alex to join me.
We're going to have a deep dive into each of our divisions. We've got four divisions in Aptar Pharma. Alex will cover first what we call the proprietary drug delivery devices. This is the prescription and the CHE world. I will come back then to speak about injectables, Aptar active material, and the digital patient engagement capabilities. Okay? Alex?
Thank you, Gael. Good morning, everybody. My first time presenting here at the Investor Day. I think I've met a lot of you through different visits and interactions, but happy to be here with you today. As Gael said, I'm going to talk to you today about proprietary drug delivery systems, which is not actually an operating division of Aptar. Internally, we're actually organized under the Prescription division, Consumer Healthcare division. An additional nuance there is that over the last decade or so, a lot of the products that were prescription-based have been transitioning to the OTC market, especially here in the U.S. Almost all of the allergy drugs that have become quite popular, Narcan, that we'll talk about soon, has also transitioned over to the OTC market.
The important thing here is that when the FDA authorizes a product to switch OTC, they continue to regulate it in the same way that they regulate true prescription products, no difference whatsoever. For us, it means we have access to a broader customer base, increased volumes, but we continue to enjoy also the regulatory hurdles that are known for the prescription basis. In terms of the percentage of Aptar sales, the two divisions combined account for about 72%. I was going to talk about proprietary because that is important for us. A lot of our competitors, a lot of our capabilities would allow us to make devices for other people, and that's a request we get on a regular basis, but we choose to manufacture only our own IP, our own devices.
This gives you an overview of the breadth of the technology platforms that make up proprietary drug delivery systems. At the heart, at the origin of Aptar, multi-dose nasal pumps and MDI metering valves were the core aspects of our Pharma beginnings. Interestingly, both of those product lines originated from our Beauty. Those pumps used to deliver fragrance. Somebody had the bright idea to flip the spray from a horizontal one to a vertical one, and the nasal spray was born. Same thing with the metering valves in the pressurized container also used to be used for fragrances. It was flipped upside down. It became an asthma inhaler. Our beginnings, going back 30, 40 years, really started with those technology platforms from our Beauty segment. Over time, we've gone beyond that. This also shows you the delivery routes that each of those platforms covers.
You see a lot of nasal there. We're going to talk a lot about nasal today, a little bit about pulmonary as well, topical transdermal delivery systems that we don't often talk about, but that are also borrowed from our Beauty colleagues. Finally, the ophthalmic squeeze dispenser for eye care, eye delivery. Basically, we're covering here all of the different delivery routes that are not included in injectables and orals. Those are handled through other divisions. 30+ years of experience and know-how. We were the pioneer of this market and continue to be the leader by far today. I'm jumping straight into emergency medicines and more specifically Narcan. Stephan and Gael talked a little bit about those, but there's been a lot of chatter about that business and whether it's still growing for us. This is a very unique drug, Narcan, naloxone in particular.
Unless you've been living under a rock, you know that there's been a significant opioid crisis here in this country. Naloxone is an old drug. It's been around for decades, being given intravenously. First responders discovered that at some point, if you just mix it differently and put it into a Windex bottle, spray it up your nose, it's actually quite effective, faster and easier to deliver to patients. Over time, it was used more and more through the nasal route, even though there wasn't an actual approved product for it. One of our customers, Adapt, now called Emergent, actually developed an approved pharmaceutical product using our device technology. For a while, the first couple of years, this product was a nice product for us, but nothing special. All of a sudden, post-COVID, opioid deaths exploded to the point where it peaked in 2023.
100,000 people per year were dying of opioid overdoses. This became a very politically charged, high-priority issue. Narcan is literally a miracle drug. If you look up on YouTube, you have people that are dead flat on the ground. They get one spray up your nose. Within a minute or two, they're walking around. It's quite a very fast-acting and effective drug. The FDA and politicians decided that there should be Narcan, naloxone available everywhere. They approved generics. It was switched to OTC. All of a sudden, all of these channels were filled. They wanted Narcan to be available literally everywhere. We enjoyed significant growth. What we're saying now is that there's going to be some normalizations to that business. I'll talk about some of the other nasal drug delivery products that we have out there.
What makes this one particularly special is not just the financial or economics of it, but the first year that Narcan was available so widely over the counter, we saw the first drop in deaths from about 100,000 people per year to 70,000 people per year. That's something that we're enormously proud of. You know, when I started, nasal delivery was for congestion and allergies. Now we're literally saving lives. There have been millions of doses of Narcan given just over the past few years, and easily several hundred thousand people are alive today because of this drug. That's something we're very proud of. Narcan is just one of the drugs that's in our portfolio. I've listed here a couple of drugs that use similar delivery systems and that go through the nose, but to treat conditions elsewhere in the body.
Most of these drugs here have been launched in the past couple of years to treat migraines, to treat epileptic seizures, to treat depression, to treat hypoglycemia, to treat food allergies with epinephrine, and so on. These are much less known products, but nonetheless have been launched in just a couple of years, in the past couple of years, and are just in their infancy and continue to grow nicely. Taking a bit of a step back to explain how we got there, I see really three building blocks in terms of how we started, where we are, and where we're going. A little bit of physiology. The original drugs that were in nasal sprays were acting locally. You spray them in the nose to treat a condition in the nose. One of the products you see in that first green box is migraines.
Obviously, you spray it in your nose, but the problem is elsewhere. The first inklings that maybe nasal delivery could be used to treat systemic conditions. That took time to take off. These migraine drugs have been around for 20 years, but bit by bit, there was a lot of research being done to the point where now we're seeing the explosion of what we call systemic nasal drug delivery. You spray it up your nose, and it treats a condition elsewhere. It gets absorbed into your bloodstream. Emergency medicines, CNS treatments, pain managements, all kinds of things are now on the market and bringing growth in that area. As Stephan and Gael accurately pointed out, our original building blocks continue to grow and grow nicely. You add another one on there, and that compounds the growth.
What we're seeing in the future now, we're going from to the nose to through the nose to now directly to the brain. One area that we're very excited about is what we're calling nose to brain, the delivery of more complex, larger molecules and directly to the brain as opposed to going via the bloodstream. What do we mean by nose to brain? Basically, your brain is protected by what we call the blood-brain barrier. It allows oxygen to pass through your bloodstream, but it tries to block everything else from getting in there. We have a lot of companies that have been investing a lot of money trying to find ways to get drugs through this blood-brain barrier. It's very difficult. What nose to brain seems to offer is a more direct pathway to get completely around this blood-brain barrier.
If you can do that, there are diseases and conditions like Parkinson's, like Alzheimer's that are today very difficult to treat because you can't get drugs to the right places. We've partnered with Wake Forest School of Medicine. At this point, it's not trying to prove that a compound treats a certain condition. It's trying to confirm that the pathway exists. By spraying something up the nose, you're trying to show that drugs are actually reaching parts of the brain where they need to go. The Wake Forest School of Medicine paper showed that they were able to develop imaging techniques because proving where they go is not easy and that they were able to reach critical areas of the brain using insulin in this case. There's no reason to think that that wouldn't work for other drugs.
As we start looking now at extending our pipeline with our customers into more complex areas like nose to brain, we also have to adapt our technology platforms. The traditional ones that we've used aren't necessarily always well adapted to be able to reach those difficult-to-reach places with larger, more complex molecules. We've been quietly acquiring or developing internally platforms that look from the outside pretty similar to the ones we have today, but are actually developed to be more targeted to specific areas, delivered to specific areas, are able to accommodate larger, more complex molecules. The big difference here is that the expectation in the future with these programs is not that you can take a drug and put it into any old off-the-shelf device. The device and the drug need to be developed in parallel, and the two being adjusted at the same time.
As Gael said, we've made acquisitions also with Nanopharm, who have a formulation technology. We're helping our customers develop our drug. They come to us with a compound. We help them formulate it in a way that can be delivered to the right places. At the same time, we're also tweaking our devices to be able to do that. The acquisition that we made up here in New Jersey for a company called Mod3 will help us now go from the once you have the device and you have the drug, you need to fill it and package it and put it out into clinical trials. That's their expertise and what they're able to help us with. I talked a lot about the more highly regulated world of prescription drugs, taking a step back also now to talk about our consumer healthcare division.
This is a world that's pretty different from the patient-centric world of prescription drugs and more into the FMCG type world and consumer-based innovation. Lifecycles tend to be quite a bit, development cycles tend to be quite a bit shorter and faster. Lifecycles, they still enjoy quite a few years, if not decades, of life. Otriven, for example, is a pretty old brand. It doesn't exist in the U.S., but does in Canada and Europe. It's been revived by its owner, Helion, with a brand new delivery system. I think you guys have boxes there on the table to use them. A side button that's able to gently and quickly deliver a nice tight dose of the decongestant. We're excited about this innovation. Ophthalmic squeeze delivery for us falls under our consumer healthcare division. Most of the products that were launched in Europe are over the counter.
Here, the key is that if you want to use an eye drop in a multi-dose format that does not have a preservative, most of our eye drops today have preservatives, and that's the sting, the bite that you feel when you put the drop in your eye. The only way that you can use a multi-dose container without a preservative is by using one of those ophthalmic squeeze dispensers. Today, the alternative is to use those liquid unit dose vials, and obviously creates a lot of waste as opposed to our reusable container. Following on that, additional recent innovations, we've got PureHale, which is a very convenient system to deliver a nice soft mist, for example, to an infant. That product was launched just last year, so very recent, but the uptake on the market has been very, very positive.
The Futurity line of products is something else that we've borrowed from our Beauty colleagues who were on this sooner than we were. The idea is to have fully recyclable packaging for pharmaceutical products. We've got a nasal version of that as well as a dermal dispenser.
A little bit about the stickiness of our business and the regulatory hurdles. The important thing to retain here is that most, almost all of our products are not standalone medical devices. They're part of what we call combination products. They don't get approved as a standalone device. What's even more interesting is that they are filed as combination products with our customers' submissions, and they become inextricably linked to the drug product. Switching out of that device to something else becomes very complicated. It's always in contact with the drug product on stability. The way that it's dispensed and delivered is also critical. Any changes that you make post-launch, post-approval, become risky, costly, and customers usually choose to stay with it throughout the life of the product. Even more interesting, when generic companies come along, they don't want to take any risks.
If we're able to, we supply the same device that the innovator or brand has, and it de-risks and accelerates their development timelines. With the advent of these life-saving drugs, we're now at an even higher level, what we call the five nines, highest levels of reliability. The expectation is that they work every single time. We like to say there's no such thing as zero defects, but this is as close as you can come to zero defects. The agency is imposing these types of reliability on any life-saving drug. It's an exercise that starts with design, specifications, statistics, and calculations. It's one thing to be able to show that you can meet this on paper, but Aptar is the only company that can say that we've got millions and tens of millions of units out there that have been used in these life-saving situations.
We've got real-world evidence to back up that fact. No other company can even come close to saying that. The rest of our pipeline, now, keep in mind, development times tend to be long. Yes, once we have a product on the market, it's there for decades. Development times do tend to take five, seven, ten plus years. I always caution people when I talk about our pipeline. The number of things, these are all things, and it's not exhaustive, that is being worked on by us and by our customers in terms of future pipeline growth at different stages of development. There's a couple of things. For example, in terms of cardiovascular, we've got two customers that are expecting approval this year, one for edemas, to treat edemas from congestive heart failure, another one to treat irregular heartbeats.
Nasal sprays that are treating cardiovasculars should be approved later this year. We're very excited about that. Some of the things that you see there are MAVS and mRNA. Molecules that under the right conditions can be delivered nasally, either directly to the brain or for other parts of the body, and quite a bit of research happening there as well. At the very top, obesity. We've got one of our customers that published initial results just last week of a GLP-1 semaglutide, in this case, the active ingredient for Ozempic. They've successfully shown that it is able to be sprayed in the nose and absorbed into the body. We're quite excited with the future promise of having GLP-1s delivered nasally. Finally, I want to leave you with this. You know that you've hit the big time when you're featured on South Park.
Those little devices are the ones that are used for Spravato. I'll spare you the storyline. You can check it out yourselves. You know you've hit the big time, or the mainstream, when you're being featured on South Park. That's it for me. Back to Gael.
Okay, so after the proprietary drug delivery franchise, let's go to the injectable divisions first. This is a growing and strategic part of our business. This being said, that's 17% of the overall business, but a growing part of our business. We are a component player. As I was explaining, we supply the stopper, the plunger, the needle shield protection, and we are the number three player. We play in different application fields, from biologics to vaccines to small molecules, antithrombotics. You know that we have invested a lot in that division right after COVID. The objective was really to enhance our capabilities and capacity. We've got footprints in the U.S., in China. We've got now a technology called Premium Coats, giving us the ability to supply our customers in their sensitive drug development, all the biologics behind.
Not only this technical platform, we have invested a lot around our processes, and we are talking about premium feel. What is premium feel? Premium vision. This is the way to characterize within your quality specification the level of authorized potential contamination. We've got a very clear sterilization strategy. We've got a very clear production environment for matching the regulatory requirements and to comply in the ways. We are talking about the Annex 1 in Europe, and that's where we are fully in line with them. What is important with this slide and what Aptar has done in the recent years is to keep on investing where the pharma industries are growing and investing. We're going to keep on growing with biologics and sensitive drugs, GLP-1 being one of them. We are also growing by supporting our customers through their lifecycle management. They start with a multi-dose vial.
They want the same formulation once they go with a prefilled syringe, and this prefilled syringe will be in an auto-injector. They want to make sure they've got the same formulation. They just want a different component, no longer a stopper. They're going to be looking for the same formulation for a plunger, and that's where we are supporting them. Small molecule is still an important part of the R&D pipeline for the markets, and there we are really optimizing our production. We have invested a lot in our facilities, and we've got a lot of automation to reduce as much as possible any human touch for better quality, their efficiency, and obviously having a better profitability profile. Regulatory complexity, I just discussed that one. We offer the premium feel, but also what we call the ready-to-use. You've got product delivered to the pharma companies.
They don't have to go for any internal sterilization process. We've done it for them. They take our product, and they're going to go straight away for their filling operation. Some key elements, the growth of biologics, including GLP-1s, in the last two years grew by more than 50%. We talk about margin expansion for the injectable division. This margin expansion is coming from a better mix and a better part of what we call the high-value product or high-value process. Those HVP grew by 42% in the last two years. Moving to the active materials science division, it represents 11% of our business. Remember, this is the acquisition back in 2018 of the company called CSP. We call it now Aptar Pharma Active Materials Science Solutions. What they are doing is really to protect the efficiency of a drug, any sensitive drug, as a certain shelf life.
Our technology embedded in the different delivery solutions will protect at length the stability of those drugs. We play in different application fields. Started first in the diabetes care, but also in the oral solid care, in the dermal drug delivery, in the diagnostic, you know, the glucose control monitoring system with Abbott. Embed this technology in their device. Some of the products from Alyx for powder formulation, very sensitive to moisture. We embed that technology within our drug delivery devices solution. Since the acquisition, this business grew on a CAGR growth rate by 10%, profitability by 8%. It has been a huge contributor to the performance of the segment, but also adding an element of differentiation whenever we are engaging in conversation with our customers. Innovation from active materials science, three examples. I will start with the one on the left side of the corner. We call it ActivShield.
What is ActivShield doing? ActivShield, without an energy source, will sterilize a medical device. Could be very interesting in military environments. Could be very interesting in countries where the reliability of a source of energy is not a given or on any remote environments. We are expecting a 510(k) approval for the second half of next year. The second technology in the center, we call it Activ-Blisters, applied for sensitive drug, peptide, GLP-1. At the same time, we've got a dual action. We're going to control moisture, and we're going to control oxygen within the dead space of a blister. That's the way we are embedding this technology into the blister type formats. The last one on the right is what we call N-Sorb. What is N-Sorb doing? Preventing the formation of nitrosamine.
That's a pressing issue all over the place where the formulation tends to degrade and to form nitrosamine. This technology, preventing the formation of nitrosamine, will eliminate the need for the formulators within the big Pharma or the Pharmaco environment to reformulate. There are very strict regulatory guidelines. If you reach a certain level of nitrosamine, you have to reformulate. To reformulate, guess what? It's a lengthy, costly process where you need to be back in front of the regulatory bodies by proving the efficacy and the safety profile of your drug. Last slide and last presentation is everything around digital. You know that we acquire different types of companies, Cohero, Voluntees, Healint. Why such? Because getting the patient knowledge is really critical for any pharma company.
To better understand the way they interact, the way you onboard them, the way you remote monitor their treatment will boost patient outcome, will improve the quality of life and the quality of treatment for patients. You generate data that you can then, after, monetize back with your pharma company because they are interested to really understand at scale in a real-world environment how patients are behaving. What are we doing within the divisions? We develop software, but software as a medical device regulated by the different agencies. You need to prove based upon clinically relevant data that you have an efficacy impact on the outcome of the patient. We develop connected devices. You put a sensor into one of our proprietary drug delivery devices, and you track basically whether or not the patient has been using this product.
You send the information to the software application that's going to compute the elements, and based upon some real-time events, could trigger a real-time prescription. We embed this digital expertise in our patient engagement solutions at scale. This is across different therapeutical areas in oncology, neurology, diabetes, rare disease, respiratory, name them, wherever you want to better understand your patient, you're going to be looking at having some kind of connectivity around. We do it globally. Our software applications approved by the market are already over 100+ countries, and we've got 4 million+ patients using one of our solutions. Those solutions are 100% Aptar solutions. We own the IP behind the algorithm, behind the sensors, behind the approach that we share with our customers. Remote patient engagement and monitoring, either in a clinical environment or in a real-life environment, is more and more crucial for a company.
That's why we went there, and that's why our overall value proposition is from formulation with a deep science behind, embedded with our drug delivery solutions, combined with the patient expertise. To conclude, we are confident on our long-term target, the 7%- 11% top line growth long-term target, with a profitability profile between 32% and 36%, depending on the mix. We've got solid building blocks, solid competitive advantage that you've heard from Alex and I. If there's one thing I'd like you to remember this morning, we're going to keep on winning in the marketplace because we are a partner of choice of the Pharma industry in their drug development program, in their lifecycle management programs, and also in their patient engagement programs. Thank you very much. I'm going to turn the mic to you, Marc.
Thank you, Gael. Check the microphones. That's fine. Yeah, all good. Okay, thanks. Good morning, everyone. Let's talk about beauty. After that long time spent on Pharma, let's switch to another segment. Two parts in my presentation. First part is about the market, where we play, trends, and competitive advantages we bring to the market. The second part is what we did mostly in the past two years to improve that business and to make it more profitable and drive profitable growth today and tomorrow. Okay. This beauty segment is a sizable part of the sales of Aptar, a little bit more than $1.2 billion in sales. What we call beauty, sometimes fragrance, facial skincare, and color cosmetic, representing around 60% of it. We play beyond this, and we have an extensive definition of beauty. We play also in the personal care space for 35% of the total.
We have a tiny portion that we call home care, tiny but profitable. In terms of a geographical repartition of the sales, and this is historical, we have a large portion of our sales made in Europe. This is because our customers are filling many of their products in Europe, being fragrance, being skincare, and they export these products ultimately outside of Europe for around half of it. Half of what we sell in Europe ultimately ends up as a finished product outside of Europe. The second largest region where we produce locally is North America, about 20% of the total, very closely followed by the growing Latin America. We have Asia at 7%, mainly China and India for the time being, but a territory where we expect to grow faster in the coming years.
Talking about customers, we have been serving small, local, medium-sized, multinational, global customers, many of them for more than 25, 30 years, building very strong and productive relationships. They value what we bring to the market for sure. In terms of financials, in the past few quarters, we faced some adverse situations on the market that were denting our growth of the top line. Nevertheless, with what we did to improve the profitability of the segment, we were able to maintain the profitability and improve the profitability during this temporary difficult period. We have one of the largest and most innovative portfolios of products and solutions that we bring to the market. This is considered as a fantastic competitive advantage by our customers. Of course, we operate this at scale in each of the regions, but globally at scale.
To deliver this to the market, you understand that you need to have very strong capabilities in each of the regions, R&D capabilities, but also operational capabilities. Hopefully, you can recognize some of the products that you use or your family is using every day. In terms of capabilities and also services, we bring a lot to the table because we go way beyond just providing products. Let me, I like a few of them, consumer insights and customer ideation. Stephan was showing you different innovation centers in the world. For Beauty, we have four ideation centers in the world, one in Europe, one in North America, one in LatAm, and one in China, where we bring customers together with us and we co-create and we co-develop the idea.
As we have the capabilities with 3D printing, with fast prototyping to create the mockups or even some functional products, you will see at the end of the presentation how we can, in North America, in Connecticut, within a day, from the ideation, create a tooling to inject and to create a functional product within a day or two. This is unique and has been blowing away our customers that have been using it. We can help the customer to speed their time to market and bring innovation to life much faster than before. We are also, of course, paying attention to the user experience and here leveraging, for instance, some synergies with Pharma. They recently acquired a company named MetaPhase that is focusing on ergonomics. It was for Pharma, but we are using it now in Beauty with a lot of success.
When you look at these capabilities, the strengths, the set of products and solutions, and you put this in regards to the market we play in, we are definitely very strategically positioned to support and benefit from the growth of these markets. Historically, Beauty has been a growing market, very steadily, with some up and downs, but very steadily. This is also a market that is calling for innovation. It's a big engine for the Beauty market, customization, and also sustainable solutions. We play in different categories. Facial skincare, which is a very big category for us, historically, the number one market for facial skincare, you may know, is China. The second very large franchise, historical category for us, is Fragrance, Fragrance Prestige, Fragrance Mass. North America is the number one market for fragrance, even though they are mainly made and filled in Europe.
In personal care, we have three big categories: hair care, body care, and sun care. You see, we play in all these large categories of the market with different levels of market shares, and we bring, of course, innovative solutions in all these categories. It's nice to talk about the current situation or even the past situation, but it's even better to look at the future and what are the trends and how these trends should be captured to create the growth or generate the growth. Before COVID, the beauty market was evolving, let's say, nicely, but very slowly in terms of trends. Post-COVID, we saw a lot of movements, of course, much more uncertainty, but very interesting trends that are very solid now and are generating the growth that we need to capture and we keep capturing. The first one is sustainability.
As of today, in beauty, Aptar Beauty, 100% of our innovative solutions have all the sustainability features. There is not an innovation that is going to the market without sustainability features. We are also progressively converting the existing products to these innovative solutions with sustainable features. It was something to have in the past, nice to have. Now it's mandatory to have to do business. Dermocosmetics is a submarket of the facial skincare, but it's a market that is growing faster than the rest. It's a kind of a new blue ocean. Here we play and we team up with Pharma, especially the Pharma consumer healthcare division, to create a set of new solutions to even shape the market altogether and benefit from the growth.
We have some products, existing products, but as we discover and shape the market, we bring our knowledge from Pharma to help our beauty customers to get more into the dermocosmetics Pharma-like. Last point on that slide is the personalization. We call it also customization. The brands are looking at something that is differentiating. They want to differentiate. The consumer wants to differentiate as well. We have now everywhere in the world the capabilities to deliver this to our customers at scale. It's not just a boutique. We can do it in an industrial way in China, in Europe, or in the U.S., or even in LatAm. That is a very strong market for customization. Talking about the beauty market, I told you it has been historically growing steadily in the 3, 5% if you look at the past 15 or even 20 years.
The consensus for the years in front of us is to keep growing with some hiccups that we saw in the post-COVID, but keep growing in the range of 4%- 5%, let's say mid 4.5%. Of course, that growth is different and has different drivers region by region. Not going into details, the fact that we are organized regionally, that we have regional teams, we produce regionally, is helping us to capture these regional trends and, of course, to generate the growth. If you look in the other dimension, I told you, we have one of the largest portfolios of products. We are all made regionally, locally, and we can capture the market from, let's say, the access mass, low price points of our customers, to the ultra prestige and niche, and, of course, going through the premium and mass niche.
We can capture a full range of the market. With what we added in China, and I will come back to this, we can definitely capture even a broader set of that market. In the past quarters, you heard Stephan and Vanessa talking about the fragrance, the distilling in Fragrance Prestige in particular. Let me drive you through what happened because this is historically a market that, a part of the market that has been very steady, 4%, 3%, 4% growth on an average every year. What happened post-COVID is back in 2022, most of the customers decided to launch new SKUs. They wanted to restock because they were anticipating a fantastic rebound of the market, retail market. We benefited from it.
We add in units, and what you see here on the slides are shots in units, not in value, because the market put a lot of price in the retail, but not so many units. What you see here is units. We saw the growth. We benefited from that growth just to end up last year and beginning of this year in a distilling situation because actually the retail market was not taking all that growth that was forecasted by our customers. We are coming to an end of it. We forecasted this to end Q2, Q3. It takes a little bit longer, but depending on the customers, depending on the SKUs, we see this now normalizing, and we expect that to be behind us by the end of the year. Hopefully, the EU-U.S.
trade deal is going to remove some uncertainty because this was not helping, knowing that a large portion of these fragrances are filled and made in Europe and exported to the U.S. That's an important slide because I was two years ago standing in front of you saying, we are going to improve the cost base. We are going to launch many initiatives to make beauty more agile, more cost-effective, and capture more growth in a profitable way. We did a lot. Actually, we did even more than what we thought at that time. It started before two years ago. If you want to have a few examples, we closed 10 sites and locations in the past four years. In the past two years, we reduced the size of the workforce globally for Aptar Beauty by 11%. This was never done before.
We did it still serving the market with efficiency. We also reorganized, restructured our two largest regions, North America and EMEA, without an impact to our customers. We also started and accelerated the shift of some of the very transactional activities away from high-cost countries to more lower-cost countries and global business services. This is an ongoing process because we shift progressively more processes to these locations, being Czech Republic for Europe or Mexico for the Americas. We kept pulling costs out, efficiency in the factories, digitalization of the factories, automation of the factories. This is not stopping. We keep doing it. We have 25 factories in the world. We permanently make them more efficient. This is not only helping the cost, but also creating a competitive advantage because as we do this, we become more agile, more responsive to markets that are fluctuating faster and more than before.
We also improved the R&D efficiency. We have to be faster to the market, more cost-effective to the market. In the past two years, we reduced by 30% our time to market. It's a good start. It's not enough. Part of that acceleration is coming from the China ecosystem we built as well. I will come back to this. We are improving the R&D. We want to reduce, and we started reducing the number of SKUs. It's a very complex business where we have a number of SKUs. For us, we need also to keep reducing and containing these SKUs and the complexity of the business. All that translated into 60 basis points improvement in the past two years. As you can see on the curve on the bottom right side, even with sales not growing recently, we preserve the bottom line.
We created a business that is first and foremost more resilient and then ready to generate more bottom line as the growth is pushed forward. What makes, what are the key blocks when we look at how to drive the profitable growth and leverage the strengths we created in the past two to three years? Three blocks here. As we look at protecting and growing the core of our business, which is our bread and butter, we will continue to push our innovation pipeline to the market. We have a very strong, well recalibrated innovation pipeline. You will have the time at the end of the presentation to see the innovation we are bringing to the market. They are so well received by the market that several of our customers are asking for exclusivity for it, which was not happening before. It's a changing market. It's the engine of beauty.
You need to bring innovation, and that innovation must be a sustainable innovation. The second big block for us is the go-to-market, being faster, better, more focused on the go-to-market. This is what we started already more than a year ago. We see the benefits of this now. As we leverage our strengths, it is helping to drive more go-to-market strategies. The last one that has been said forever is the financial discipline, the operational efficiency. There is never an end to this. The minute you start doing it, and Stephan was saying it, once you do it, once you see the outcome of it, you keep doing it because it's a never-ending story. It's continuous improvement and financial discipline. This would be only the core. It's nice.
What we realized is with that new setup, very solid setup, we could, with limited cost, limited effort, go into adjacencies, adjacencies that are new geographies, such as India, that is booming now in beauty. We are present in India, but we want to be even more present in India, Middle East, and Africa. We started doing it, and it's like fishing and getting the fishes one after the other. There are regional expansions that will bring the profitable growth, and definitely, of course, Southeast Asia. We are also expanding the customer base. We can serve more customers than we were serving today because we are operating at scale with agility, and we see markets that we were and customers we were not serving before. We want to accelerate customers that are also growing faster than the average, such as fillers, for instance. The market is changing.
We need to adapt to that market. On custom, we can make custom everywhere. I told you about the differentiation, personalization. This is one of the biggest needs of the market, but you have to deliver it at cost and operate at scale. Of course, this is one of the adjacencies we are pushing for. The last one I mentioned, especially on dermocosmetics, the synergies between Pharma and Beauty have never been so strong, and we intend to make them even stronger. China ecosystem, of course, we have been operating for the past 25 years in China. We built, we have very strong teams. We operate every day in China. In the past two years, we created a very different, more stronger ecosystem. I have to say a large portion of the credit to that change is going to my ex-comp colleague, Xiangwei.
She had especially a lot of fun in dealing with joint ventures creation in China in the past years. Thank you, Xiangwei. What we created here is a set of partners, suppliers around our base of Aptar that we leverage to have a China for China, China for Asia growth strategy. Asia is growing faster than the rest of the world, and there are many untouched territories that we can touch now with that ecosystem. Two big drivers of that ecosystem are the joint ventures we created, the one with BTY. We started with a minority. We moved now to a majority and Goldran. They bring at scale a set of capabilities between mold making to a set of products that are cost-effective that we can push and use in Asia, and in some cases even beyond Asia, of course, in other regions. That's a fantastic ecosystem.
It's maybe not unique, but for us, it's a very, very strong competitive advantage. You see on the right-hand side some of the products, innovative products, custom products, or even the last one, a fragrance pump from Goldran that we sell in India, something we could not do before. India is booming. We have the proper setup in China to support India. That's something that was not existing two years ago. To conclude, big blocks for growth for beauty, how we recalibrated this. We are focusing on dispensing systems and only on this. This is enough. It's a very large market. We will keep driving cost out, being very financially driven in our decisions, driving operational efficiencies in all our factories, and we still have a good run rate for this. We will leverage, and we started this. It's only the beginning.
The China ecosystem I was describing to you, this is a huge lever that we didn't have two years ago. Of course, as we do this, we will continue to push our innovation pipeline, innovation, innovation, innovation with sustainable features. That's the future of the beauty segment. All that is our strong foundation that we will now leverage and pivoting from all the restructuring we did, all the adjustments we did to push the top line, the go-to-market, accelerate the top line growth because we can make it more profitable than before. This, of course, already started. We saw it, but it deserves now an acceleration, and we know how to do it. This is why we believe in our long-term targets, top line, bottom line. We also believe in them because several regions of the Beauty segment have been in these targets for several quarters already.
We need all the regions to be within the targets, to have the segment at the target, but it's not something that is like a dream. It has been executed in several regions, and the setup we put in place now is allowing us to believe in this and to deliver it in the future. I think with this, I pass it to Hedi.
Thank you, Marc. Good morning. We created this Closures segment in 2023. It was a consolidation of our various Closures businesses that we had in Food and Beverage and in Personal Care under Beauty leadership. I'm very happy because we are seeing some nice progress and that I will share with you. Of course, I try to take you with me through this growth trajectory that we're seeing on the Closures side. I'll start with this. First of all, very happy to reach the $700 million mark. Yes, we are the smallest segment, but we're proud of that because we think we can grow and we can grow fast with the agility that we need. We are now in the long-term target from an EBITDA standpoint for a few quarters. We're very happy, and we're very happy to be there.
You can see that for our first part of the year, we were at 16.4%. Really at the lower part of the range, but within the range and consistently. This is what we will try to do on a very regular basis. On the left-hand side, I think there is a key message here. Stephan shared one element, which is we are local for local or regional for regional. Our objective is to manufacture in the region for the region. From a tariff standpoint, for example, for us was a non-event because our objective is to produce in the U.S. for the U.S. We have two big factories here, very happy to have them. We also have one factory that is doing the elastomeric flow control. You will see the valves that are also located in Midland in Michigan. For us here, you will see that it's local for local.
The always different from the rest of the segment is that we're doing 50% of our business in the U.S. If you look to Aptar, it's the other way around. For us, the U.S. and North America are very important. These numbers don't include Mexico. It's really our U.S. business. You can see that Europe is the second zone for us. EMEA, I would say, is a very important part of our business for one reason, not necessarily for Europe, but more for the EMEA part of it, which is Middle East and Africa. You know that we acquired the company Bahrain to deal with the Middle East. We're also very proud that we have been the first sport closure company on a special neck finish that was validated by Coca-Cola for their large South African operations. For us, Middle East and Africa will drive growth.
I'm saying this now because we'll talk about the growth and how we anticipate to exceed the growth of the market. If you look at who we work with, of course, some of the names you know, the P&Gs of the world, L'Oréal, Coca-Cola. We deal with all these companies. What we also do is that we work with many what we call local champions, big CPGs that you know, but also companies that you don't know, like Fehu, like Maspex, that are big players in their region. This is what we call our technology platform. You can see a lot of products. They all look the same for you. For us, they don't. This is why we're agnostic of the package on which the closure goes. We're agnostic of the market in which they're sold.
You can see that, for example, on inverted tops, you will have products that are for Chick-fil-A, so sauces, and also for products for Olay and P&G. We can use what we call product platforms across multiple end markets. This is why the way we're organized is very important, meaning that, of course, technology is important for us, closure, meaning injection and high-speed assembly. Our ability to understand the markets in which we serve is essential for us because, yes, it is a closure, but the need can be different for a consumer that is using a shampoo and a consumer that is using a sauce. It's really very important to understand how it works. It starts by this. For us, consumer insights are key, like patient insights are key for Gael and his team. We need to understand how our product is used.
We also need to understand the customer because I remember one of the conversations I had with a customer and they said, "Hey, don't talk to me about consumer. I want you to talk to me about me. I'm your customer. How can you help me? You know I know my consumer." It's interesting because we had this conversation. We need to understand the consumer, but we also need to understand the customer. I'll give you an example. Today, companies like P&G, Unilever are paying fees consistently to Amazon because their product is leaking. They're paying fees for the package to be repackaged. That's a cost for them. How can I help them avoid that cost? This is how we create value because, yes, this has no impact on the consumer at the end, but it has an impact on our customer.
Our ability to, at the same time, understand the consumer and understand the customer makes us different today on the market. We'll talk about also innovation and how do we extract value out of the $1 that these guys are saving per pack. How much is coming to me as Aptar and how much we're taking? What's our share of that when we solve a problem of this nature? If we look, the second part is really research and development. In that, I will include also the material science, regulatory support, durability. Once we understand what the consumer is requesting or what the customer is requesting, we then, of course, do research and development. It sounds very difficult, but that's our job. This is where we create value.
At the end of the day, we will be, of course, having patents around what we do in IP because we also have a lot of IP. More than 2,000 patents are today used in the closure area. For us, what's important is how then we customize it to our customers. How do we make sure that every customer has the impression that the closure is unique to him or to her? That's the key. This is how we do it. We rely to do this, of course, on our understanding of our customers, but most importantly, on world-class manufacturing capabilities. Once we have a product, we need to be able to scale it in all the parts of the world and to scale it consistently. We cannot have differences in the way we operate by region. The last one is technical support.
People underestimate the impact of that, but just to give you a sense, the bottle that you have in front of you can be filled at 1,200 bottles per minute. If your product is not at the level of quality that is expected, if you're not able to support your customer from a technical standpoint, they will not be able to run it at 1,200 parts. This is also a differentiator for us because we are able to provide the quality that is needed. To summarize, we understand what consumers' habits are. We understand what customers are requesting. We try to design the proper solution for them. We try to scale manufacturing with a high level of quality, and we need to support our customers to make sure that they can operate their filling lines at the best of their ability. This is the market that we serve, $7 billion.
I feel very small today compared to my colleagues. What's important here is that we really have a good understanding of each of the markets that you see here because we have marketing people and what we call market leaders that are really specifically working on the market that they need to approach. There is a newcomer here that you're seeing. It's called Wellness and Healthcare. We're working with Gael and his team to see how we can use more and more closure into the healthcare industry. This is how we cross-pollinate and how we make sure that we can use our knowledge without starting from scratch around healthcare and what needs to be done. You see, this is for us a big effort. Some of the things that are important here is we believe that we are on a growing market.
You see that here I'm talking about markets by region. You have two regions that will be growing a little bit slower than the others. Not surprising, these are mature markets, North America, EMEA. In EMEA, I would make a difference between Europe and Middle East and Africa. I think that the growth rate is completely different between the two regions. You have, of course, LatAm and Asia, where we expect to see growth more around 3.1%, 3.2% in the coming years. We can say, yeah, Hedi, but that's not enough compared to your long-term targets. You're saying that you can grow between 4% and 7%. My message is more on the left part of this slide. Our Aptar Food and Beverage, when we were only food and beverage, we outgrew the market.
For me, this is the key of all the story of closure, is how do we make exactly the same thing that we did on food and beverage on the other part of the market, which is personal care, home care, and hopefully tomorrow healthcare. We delivered on that part of the market, and we have proven that we can do it. Now is how do we use the same recipe and apply it to other markets that we serve? Over the years, we probably lost market share into personal care and home care. How do we regain that with the same recipe? What's the recipe? A very easy one. I remember having the same conversation in front of you two years ago. I always say two things. For me, we walk on two legs. The first leg is innovation, growth. We are an innovation company and a growth company.
This is the first part. This is the first part of it. I spare you the details because for me, it's in the slide. The story is the following. I can only do that also if I'm competitive. I can only do that if my second leg, which is about cost management, is working. We have demonstrated over the last two years our ability to generate savings, to better use our assets. You can see the numbers on the bottom right side of the slide. We know how to do it. We know how to understand the market. As a consequence, you can see that we increased our EBITDA by 430 basis points. That is 4.3 percentage points of increase in EBITDA in two years. This is how we do it. It can seem simple. It's a lot of effort from the teams.
The good news is that when you see results, it fuels even more energy around what we're doing. This is why I'm very proud of the team. I think we can exactly do the same thing in all the markets that we serve. I promise this is the only ketchup Heinz picture that you'll see. I know that we've shown you this many, many times, but I think you'll see five examples. I needed to start with this one because if you go now to a supermarket, all your sauces aisle is inverted. We believe we can do that. There is one element here that for me is important that you will see in all the slides: how much did they increase the price when they inverted, and how much did I get from that? I'm helping them to invert. I'm helping them to sell per ounce more expensive.
Can I get some of that? Can I extract some value of that? There is exactly the same thing here that we've done with various things. This is sour cream. You'll see, and Susan will show you some of our products. Here it is interesting because the price went up, but the category was completely changed. Here it's not only the story about increasing price, but they increased their share with our product. Here it's a double whammy, the double effect of us winning because of the price increase, but also because of share gain. Next example, far away from here. This is in China with a product that is oyster sauce. This is where I can tell you that product platform is important because we did not reinvent this for China. We used a platform that was existing here in the U.S.
and in Europe, and we just adapted it to another sauce or another product that was in China. Same here. I won't spend more time on this one. You saw it, I think, on the, well, how do you call it, the big game because I'm not supposed to say it to say the word. For me, what's important is that you will see some advertisement that we've done. Here we premiumized the whole aisle. This was a flat market. Dishcare was a flat market. With this product, the company that we started with, you know, was growing 4.5%, 5% on a flat market. This is the last one, Hidden Valley. You know this product, and it's exactly the same, 12.1% increase per ounce. You know, we helped them grow their sales by 5%.
Again, we're looking into this of prices and share and share gain because this is how we believe we can extract value with these numbers. These are Nielsen numbers. These are Walmart prices. It's not us making up any numbers, but this is, you know, how we look at the market in the way we operate in closures. We're very disciplined in the way we look at innovation. You see on the top part, you have all the market needs that we're trying to fulfill in a way. They're very diverse. You know, you have premiumization. You have enhanced dosing. When we look at it from a functionality standpoint, from an Aptar solution standpoint, we look at sustainability or sustainable monomaterial. We look at flow control, inclusive design, tamper evidence sealing, lightweighting, and durability. How do I make my product ISTA 6, meaning that can be shipped without damage?
One of the successes of this segment coming together is on the bottom part of this slide. We increased by almost 50% the number of developments that today we have in our pipeline. Gael talked about pipeline conversion. It's the same for us. Pipeline conversion is key. This is why we're also happy to see that our pipeline grew by 50% between 2023 and today, meaning in two years. It comes from our understanding of, of course, the market and what our customers are expecting from us. I'll finish with this. Nothing new. I will repeat myself. I'm sorry for that. For us, what's important is the focus on innovation and how do we convert categories. Category conversion is key for us. We take an aisle and we want it all to be inverted and we want it all to be with closures.
The second element that I would like to convey is regional growth. This is a key driver for us. We started in the Middle East. I think, you know, Africa could be the next for us, but Eastern Europe could be the next. We have opportunities for us to continue to grow and only using the technologies that we know. I think this is why it's important, that we're not reinventing anything. We're going there. We know there is a market and we know how to get that market. Utilize IP and also the know-how in Pharma. This is more related to what we want to go and we would like to spend more time in the healthcare part of the business for us for closure. This is really something that we intend to do and we do that with the support, of course, of our Pharma colleague.
The fourth pillar that is very important is operational efficiencies. We can, of course, innovate, but that's not enough. We need to innovate, being very cost-conscious and being very strong on cost management. I'll finish with our long-term targets. I said to you that we are consistently now in the 16%- 18% range in terms of adjusted EBITDA margin. Our target is to continue to stay there, consistently there, and we're confident that we will. The other one is, of course, our core sales growth that is 4%- 7%. Again, we show that it's possible with food and beverage around 6%. How do we, in a way, do exactly the same on our personal care, home care, and also hopefully tomorrow healthcare part of our business? This is our closure presentation. Now I'll pass it on to Vanessa.
Okay. This is much better. Good to meet you all. I did have the benefit of meeting many of you virtually and some of you in person over the last several months with the organization. Thank you to those that I've met. I have received your feedback and your thoughts about the organization. For those that I haven't met, I do look forward to making your acquaintance and certainly look forward to hearing your feedback as well as I continue in my tenure. Over the last several months, I've also had the opportunity to really get to know my Aptar colleagues much, much better at a much deeper level and just to really see firsthand the level of entrepreneurialism, I would say, across the organization. Dare I even say, competitive, healthy team spirit. Everybody wants to do better. Of course, just a really good level of innovation.
You've seen that across the presentations today. The culture and the values come to life across the organization. Certainly, those are reasons that I joined the company, along with the great growth profile that you've heard about this morning. It's just been really terrific to see all of that come together over the last several months. I'm really certainly very happy to be here with you this morning. Now that I'm here, what are my priorities? My priorities are unsurprisingly aligned with growing long-term returns for the organization, for our shareholders. Each one of these items is a significant value driver for the organization. My presentation today is actually aligned to each one of these priorities. It starts with top line growth because Aptar is a growth company.
What that means for me is to do what I can with my finance organization to help augment that growth, but to augment that growth in a way that continues to enhance profitability, driving earnings per share growth faster than revenue growth. My ex-comp colleagues and myself, what that means for us is, of course, EBITDA margin and EBITDA margin expansion is super important. However, it doesn't stop at EBITDA. Our focus on driving profitability doesn't stop at EBITDA. We are focused on all the other below-the-line items that impact our profitability because earnings per share growth is what drives the value for the organization. You'll hear me talk a little bit more about that later on. Particularly, we'll be zeroing in on cost management and some of the things that we've been doing along that front. Near and dear to my heart, healthy and optimized free cash flow generation.
When I joined and I had some of these early meetings with many of you, some of you were quite vocal in talking about free cash flow, particularly in the earlier years. If you kind of go back to the early 2020s, 2021-ish, maybe early 2022 time horizon, we were in a very heavy CapEx investment mode at the time, all for great reasons. Of course, when you're doing a lot of CapEx, then that does tend to have an impact on free cash flow. Many of you were quite vocal about driving growth in the free cash flow. I think we've done a really good job of that. You can see that in the numbers. You saw in Stephan's slide earlier, free cash flow was up 87% over the last couple of years. We're certainly on a right trajectory. That doesn't mean we can stop there.
Particularly with earnings growth and continuing to optimize working capital, we can continue to grow free cash flow. Certainly, one of my key priorities, of course, disciplined capital allocation and growing the ROIC. We just increased the ROIC target by another 100 basis points. Clearly, we have confidence in our ability to get there. That is obviously as we continue to prioritize higher return investments, we'll continue to see the earnings growth. Of course, that's showing up in our ROIC metric. Last but not least, balance sheet strength. We do have a very strong balance sheet. We need that to kind of go with us along all the different cycles. You heard Gael and Alex talk earlier about the product development cycles in Pharma, for example. Those can be as long as seven to 15 years.
For our customers, working with a supplier who's got the balance sheet strength to be able to partner with them through that cycle is not only important, frankly, it's a competitive advantage for us. Continuing to optimize the balance sheet, leaving it very strong, and managing our liquidity is a key priority. Again, all of these come back to driving returns for our shareholders. Double-clicking a little bit now into the growth priority. You saw this earlier in each of the segment presentations where we talked about the large total addressable market. What I'm doing now is just aggregating it together now for you. You heard Gael talk earlier about the Pharma market being $165 billion. There is a $1.7 trillion drug sales market that's growing. Then you've got the $165 billion total addressable market for Pharma packaging, which is what we play in.
That's growing at a compound annual growth or expected to grow, projected to grow at a compound annual growth rate of 7%. That's not Aptar projections. That's market projections. Certainly well supported there. You heard Marc talk about the addressable market in beauty, beauty packaging, $38 billion market that's growing about 4%, just a little bit over 4% at a compound annual growth rate. Closures, $7 billion, Hedi, is not that small. That's a pretty, you know, that's a market that we can go after. We're well positioned in that market as well. That is also growing, right? When you kind of look at the total addressable market for all of the different Aptar segments, you bring that all together. If you do the weighted average math, which I'm sure some of you have done, I certainly did that weighted average math.
What you'll see there is our total company long-term target revenue growth rate of 4%- 7% is very well supported, very well supported by the underlying market dynamics. As you've already heard from each of the segments, we have very strong franchises in each and every one of these markets. That's just market growth rates. You also heard from the different segments each of the things that they're doing to drive growth at or above market. Just going from Hedi's presentation, because you were the last to go, innovation, very much an innovation-driven growth story, premiumization, expansion into new geographic markets, converting categories, which also includes Pharma as new drug delivery routes come to market for the existing, you know, molecules and so on. That is a form of category conversion, right?
These are all strategies we've employed to grow at and beyond, at and beyond the market growth rate. We'll continue to do that. This is what makes me super excited. Yes, we have to execute, but we can, we have, and we will. We've got the right strategies to get there. The other thing that makes me super excited is it's not a growth story that is reliant on one particular product. It's a very diverse model. Of course, all the products add together, but this is not a one-widget, two-widget story. This is a highly diversified model. No single product is going to make or break the long-term growth trajectory of the organization. There is a lot to be excited about there. Of course, it's not just about growth. It's about profitable growth.
As we talk about profitable growth, you heard me say earlier that one of the key
Priorities, along with my colleagues here at the front, are to grow earnings per share faster than revenue. When you look at the last couple of years, certainly that's been our trajectory. From 2022 to 2024, you see the big numbers there. We've continued that trajectory in the first half as well, and we plan to continue to do that. That will be across multiple fronts. As we look to grow EPS faster than revenue, clearly adjusted EBITDA margin is part of that. Of course, we want to expand our margins, and we will continue to expand our margins. That's coming from your top line growth, your mix improvements, and cost optimization will continue to add to the margin expansion story. Again, as I said, we're going also below the line, below just EBITDA.
Depreciation and amortization expenses are directly tied to our organic and inorganic capital decisions that we make, so making sure that we're optimized from that front as well. Interest expense is obviously directly tied to our debt management strategies, as well as other capital priorities, for example, share buybacks, which will impact that. Last but not least, our tax strategies. While of course we don't control tax legislation globally, what we do control, however, is we can continue to optimize our tax position, continue to optimize what we can do, how we can structure certain transactions, obviously within parameters that make sense to make sure that we're taking the best advantage of our tax position, which also helps to drive earnings per share growth. You've seen that a bit in the last several quarters. Some of you have asked me, what's up with tax?
You guys are a little low on the tax side while we're optimizing, where as we've done some transactions recently, we've actually taken advantage of some tax vehicles to help us get a better tax position there. All of these components will drive EPS growth, again, with the priority there to grow EPS faster than revenue. We talk a lot about cost savings. What I wanted to do was really just kind of bring it to life for all of you, because as much as the organization has done such a great job, I don't think we've actually ever put numbers in front of you, right? Numbers make things come to life, and numbers make things credible. You've seen it in the margin profile, but there's a lot of things that go into margins.
Over the last couple of years, including up to June 30th of this year , we have taken out $110 million of cost out of the organization. That is a pretty significant number. You can see here that is between not only SG&A, but also cost of sales. Roughly $50 million of that being SG&A, the other $60 million being cost of sales. You see here the segment contributions, beauty, just tying back to what Marc, the comments that Marc made, trying to lower the break-even point, obviously having a big share of that lift. Not only beauty, look at how much has been contributed by closures, by Pharma. Even the corporate functions have all had to contribute to these cost reduction efforts, right? How did we do that?
Obviously continuing to streamline our operations, moving more cost to our lower cost offshore locations, rationalizing our footprint, and all of those different initiatives that have contributed to our cost optimization. What I will also say is we also have a very strong governance framework around this. We've got scorecards internally. Again, everybody's got a target that they have to, a productivity target that they have to manage. We've got weekly meetings, monthly meetings, as we kind of look at how we're doing against those targets. We've put incentives around it. If you look at our incentive plan, our incentive plan is actually not only on revenue growth, it's on EBITDA growth, as well as cost optimization initiatives as well. All of these ways to ensure that we continue this and really have this inbuilt into our DNA as an organization.
Focusing on improving productivity, this is again just to bring to life what we talk about. You see the headline numbers around how much we've grown revenue, how much we've grown profitability. As we look at productivity, one of the biggest line items on any company's P&L is people-related cost, headcount cost. What you see here, just to sort of really highlight our focus on productivity, is as we have grown revenue over the last couple of years, we've actually kept the headcount flat. Again, proof points that automation, et cetera, we're doing more with less, and we're moving more things towards the automation cycle and less manual labor where we can. Now, you look at 2022- 2024, same thing, revenue grew 8%, we kept headcount flat. You look at first half 2025, revenue grew 2%, we kept headcount flat.
That's a very, very important indicator of how we're driving productivity across the organization. Not only that, when you look at the mix of where that headcount is, you're seeing here an intentional shift to better cost countries. If you go back to 2024, about 20% of our headcount was in what we call better cost countries. Fast forward to just six months later, we're about 25% in better cost countries. That optimization will continue, and these are all ways that we're continuing to enhance our cost structure, which will help drive that EPS growth that I just talked about. You see all this in the margins. Gross margin has improved significantly in the last couple of years, and we've continued that trajectory in the first half of 2025. There are a lot of things in gross margin. You've got your volume, your mix, and other things.
The cost reductions, you saw the cost of sales reductions in the previous slide, that has directly contributed to this gross margin expansion. Similarly, the SG&A reductions that you just saw in the previous slides have also contributed to the EBITDA margin expansion in addition to the cost of sales. Clearly, you're seeing this reflected in our numbers. We are already in our long-term target. As of end of Q2 of this year, we're at the adjusted EBITDA margin of 21.7%. Our long-term target is 21%- 23%. We're already comfortably in the long-term target. We see a very credible path to get to the higher end of that top line target, right? How do we get there? Clearly, volume revenue growth is going to be a key part of that. You just heard that we're a growth story. Hopefully, you now understand why we're a growth story.
That volume growth will also help to continue to drive EBITDA margin expansion towards the higher end. Obviously, with additional volume comes better asset utilization, better absorption of fixed costs. That will continue to be a key driver. Revenue mix, higher margin product and services. Let's not forget services. Gael talked earlier about some of the services that Pharma is driving, particularly as we look to service the segment of the market that requires that help from our teams. Services, high margin services will be a key part of that mix trajectory as well, in addition to the product mix and the segment mix. Operational efficiencies, you know, the $110 million shows that we can do it because we've done it. We're still doing it. Some of the questions many of you asked me when I first joined were, "OK, yeah, you guys do cost reductions.
You talk about it, but are you done?" My response is, "We're never done. We're never done. We can't ever be done." When you get to 8% better, then the next question is, "Great, how do we get to 10% better?" The next question is, "How do we get to 12% better?" We're never really done. We talk about, I think it was Marc who talked about digitization in the factory operations. Hopefully, those of you that joined us in France in Q4 of last year, I was a guest with a company, and I was on that tour with many of you. Hopefully, you got to see truly how automated and digitized our factories are. It's just, it's phenomenal. Phenomenal, right? That's part of why we have such strong gross margins.
As much as we're so advanced in terms of digitizing our manufacturing operations, I would say, and my colleagues would agree, that we still have a long way to go in the back office. A long way to go. Are we done? No, there's still a lot of room to continue to optimize our back office processes, continue to do more automation of those back office processes, continue to digitize, make better use of AI tools in our back office. That will also drive ongoing cost efficiencies. I would also say our shared services centers, I think it was also Marc who mentioned Chesca Bordavice and Querétaro in Mexico, we've moved a lot to our shared services centers. We're still in the early innings. There's a lot of processes that have not yet moved to the shared services centers.
Yes, we've got some foundations that we need to build and work with our business partners in each of the segments to sort of put our arms around additional processes that can move. That is also in the works, right? When we say we're not done, this is not just without substance. There are tangible projects and initiatives that we can and continue to optimize to move more of our cost structure, either more automated or more to lower cost offshore locations. Those ongoing operational efficiencies will continue to drive EBITDA margin expansion. Again, we see a very credible path to get to the high end of our target range. We spent a lot of time talking about earnings, right? Let's just shift gears to capital, free cash flow, and our very strong and disciplined balance sheet. I mentioned this a little bit earlier.
When you go back to some of the earlier years, 2020, 2021, maybe early 2022, we were in a very sort of heavy CapEx investment mode for very good reasons. Now you're seeing those earnings show up in our ROIC. As you look at that, a lot of those big build-outs have been completed. You're seeing now the capital intensity coming down a little bit more in more recent years, including H1 of 2025. Those large build-outs are largely done. Of course, capital investments are an ongoing thing. We'll continue to focus on near-term capacity expansions, adding additional production lines, et cetera. As we kind of think long term, how are we thinking about capital intensity? Not a target, but a guideline. I would say somewhere in the 7%- 9% range is a pretty healthy guideline. Not all segments are equal.
You've seen us and you've heard us say that most of our capital does go to Pharma. How we think about that 7%- 9% sort of guideline is Pharma being, again, a much more capital-intensive business, cleanrooms, high regulatory requirements, 5/9 of reliability and quality, right? All of that drives a higher capital intensity profile. Of course, the returns in Pharma, that margin profile is there to drive higher returns. I think of Pharma sort of in the high single digit to low double digit in terms of percentage of revenue. For beauty and closures, I would think of that as more in that sort of mid single- digit range. The one thing I will say is we're not capital constrained.
However, every business and every function, because we also fund our corporate functions, such as our global technology infrastructure that supports all segments, every segment and every function has to earn its right to capital. We have a very rigorous internal capital review process. We look at hurdle rates. We look at return on investments. In fact, if you kind of look across our entire capital investments, we're probably about 20%+ in returns and in ROI. Of course, that's the blended view. If you actually look at only the growth projects and take out the maintenance projects, which don't really drive an ROI, that's north of 30%. Very good returns and very much a focus on capital discipline. What are we investing in? What's the expected return? What's the expected payback of these investments?
As we look forward, I would continue to expect, as it's been historically, that about 2/3 of our capital would be growth-related, whereas about a third will be required for the ongoing maintenance and replenishment of our key assets. I talked about free cash flow being a key priority. How I would think about free cash flow. If you kind of look at the longer-term horizon over the last several years, we've converted about 80% of adjusted EBITDA is what converts to cash from operations. Your CFO, cash flow from operations, roughly 80% of EBITDA converts to cash from operations. That's sort of been, again, not a single quarter, but over a longer-term horizon. Of course, from that, we've got the CapEx investments. I just talked about the 7%- 9% as a good guideline for the future.
When you look at our history, certainly we've been tracking around 40% of EBITDA converting to free cash flow overall after the CapEx investments. Clearly, we see additional opportunities to continue to grow that free cash flow. We've been very focused on working capital improvements. Marc, for example, heads up operational excellence for the organization. I mention that because operational excellence also looks at things like supply chain and inventory management. As we look at working capital initiatives to drive the free cash flow, working with the OE team is a key aspect of what the finance organization does to make sure that we continue to optimize working capital. With those improvements, certainly we do see a very credible path to go above the 40%-ish that we've been and approach 50% of EBITDA over the longer term. On the capital stewardship front, Stephan talked about this already.
I won't belabor it too much. What I would say is this is really our capital allocation is really across, call it four dimensions, right? Investing for organic growth, organic investments in our business, which is largely the CapEx that I just talked about. We're investing for innovation, investing in capacity expansions, investing in new product introductions, investing in technology to drive our effectiveness and those future cost reductions that I just talked about. Then, of course, augmenting the organic investments with inorganic investments in M&A. Also a key priority for our capital allocation. When you put those two together, investing in our business has accounted for roughly 70% of capital deployed. We have very strong returns on those investments. If you look over to the right, you see the trend in return on invested capital.
When you look at the last couple of years, of course, with interest rates rising, our weighted average cost of capital has also gone up with rising interest rates. Our ROIC has increased at a faster rate than our WACC has increased. As we continue to drive increased investments on higher return projects, we do expect to see that ROIC continue to increase, which again is part of why we raised the ROIC target earlier today. Of course, returning cash back to shareholders, roughly 30% of our capital in the last several years has been returned to shareholders. Dividends, of course, being a very key part of that. We did raise the dividends. We're very committed to our dividend profile, 30%- 40% of earnings coming back in the form of dividends. We raised the dividends earlier, as well, as Stephan mentioned this morning.
That continues to demonstrate our commitments to the dividend growth. Share buybacks, which continue to be discretionary, are also a key part of our capital allocation profile. I won't spend too much time on this, but I do get questions, or we get questions sometimes about M&A. What are your criteria? What are you looking for, right? The most important thing I would say is strategic fit. There has to be a very, very strong strategic fit, because ultimately the end result of every M&A is to eventually drive value from that M&A. Strategic fit is super important. Does it strengthen the core business? Is it giving us access to certain geographies or new adjacencies? Or is it a new technology that perhaps it makes more sense to buy versus build in terms of time to market, et cetera?
We have also got some pretty rigorous financial priorities that go along with that. How quickly is it going to be accretive to EPS? You've got to be accretive to EPS within one year. How quickly do we make sure that this potential target is accretive from an ROIC perspective, i.e., generating greater than WACC? You've got to get there within three years. Synergies, of course, being super important. A very, very tight integration playbook. The one thing I'll say that's not here, and probably should be there, but I would say it spans everything, cultural fit, super important. We all know that a lot of M&As across the globe are not as successful. Aptar has had a very successful track record. I would say one of the key differentiators is cultural fit. You can have the best financial models in the world.
If there's not a cultural fit, that M&A will not be successful, right? As we look at strategic priorities and financial priorities, we're also looking, I would say, more as a horizontal across all of it, making sure that we've got a good cultural fit for all of our acquisitions. You guys already know we have a strong balance sheet. All I'll say here is low debt leverage. We've got a corridor of 1: 3. We're currently at 1.2x. We hope to continue with a strong balance sheet. Investment grade credit rating, you would have seen earlier this year, we got two upgrades from Moody's, as well as from S&P. Ample liquidity, $1.9 billion of borrowing capacity. We do have some debt coming due, not large amounts. We've got about $125 million coming due in Q4 and another $125 million coming due in Q1.
We will seek to refinance that. Of course, just given our financial profile, no issues expected. Those will go pretty well. This brings us back to the long-term targets. You've already heard a lot of this from Stephan. In the interest of time, I'll move on and come back to our value creation framework. We're a growth company. We're serving attractive end markets, right? We're focused on ESG. We're a leader in sustainability. You've seen all the awards and all the accolades that Aptar has received, not only recently, but frankly, for the last number of years, several years. This is not a new thing in terms of our leadership in ESG and sustainability. We are an innovation leader. You've seen that throughout the presentations today. You'll see that when you look at the demos earlier. All of those things combined support our 4%- 7% core sales growth.
Our focus on cost management and operational leverage, combined with continuing to make intentional capital allocation decisions and driving more capital to higher return projects, will help to drive our EBITDA towards the higher end of that 21%- 23% EBITDA margin range and also help to generate 12%- 14% ROIC. Last but not least, the very strong balance sheet and healthy free cash flows will continue to support returning cash to shareholders, particularly ensuring that we stay within our commitment of 30%- 40% dividend payout ratio. With that, I'll pass it back to Stephan.
How are we doing on the mic? All good? All right. Thank you, Vanessa. Thank you to all my previous co-speakers, and of course, the ExCom. Let me just summarize how we drive to profitable growth and value. Of course, one of it is all around driving the top line. We covered quite in detail the pipeline, how the pipeline converts to revenue, 7%- 10% annually, importantly, on top of a stable growing base. That is the unique nature of our business model, serving the originator, the generic, over-the-counter. These revenues don't go away. There might be some supply chain, value chain hiccups now and again, but the fundamental model is if you have chronic diseases, you have a treatment that works. That doesn't go away. Then, of course, IP, IP, IP. We create these products.
We watch the IP, the know-how, like a hawk, including legal means if necessary. Very happy with hitting our strides in injectables. If you're not taking anything more away from Alex's talk, it is the plethora of new indications and applications. They will take time. If you start talking about treating cardiovascular situations, if you're treating Alzheimer's, Parkinson's, these are really, really big markets. Yes, they will take time. Now, large molecules like semaglutide being able to be delivered through the nose, these are major, major big deals. Again, long timelines, but very exciting to us. We have differentiated services that ensure that the pipeline keeps being filled, that ensure that the switching barriers get increased, not decreased. They are businesses in their own right. Very nice track record with Closures recently, and Beauty is ready to deliver with increased profitability as the volume comes in.
We talked about the balance sheet and the strategic shift in capital allocation. Last, not least, productivity management to drive focus and margins. With that, our formal remarks are concluded. I will ask our fellow speakers to come up on stage, and we will go to the Q&A portion. For those listening on the webcast, there is an area on the website where you can enter your questions. We will also take questions from the internet. In the room, we have mics. Please be sure that you wait for the mic before you ask your questions so that folks listening online can hear the question as well. I'll play the moderator of the questions. All right, go ahead. First microphone.
Thank you.
Sorry.
George Staphos, Bank of America. Thank you for the presentation. I mean, some wonderful slides there. Two questions I'll turn over out of respect. One, Vanessa, great slides, particularly like slide 109, where you did the derivation of free cash flow. Basically, you're going to generate about 10% free cash to sales is what those numbers work out to, which is where you're at right now. Would it be fair to assume that your free cash flow growth over the next few years is going to be 4%- 7%? If so, should we have that as a target? Related question, it doesn't sound like you have anything big right now. Are there any sort of bigger capital investment projects that are going to come up, say, in year three, year four, that we need to be mindful of?
When is kind of the horizon where CapEx is going to start to rise? The last question, I'll turn over. Again, great presentations from everybody. In Pharma, given the fact that injectables are going to be growing at a quicker rate, should we not expect that mix over time in Pharma is going to trend towards the lower end of the range? Why or why not? Thank you.
Do you want to take the capital timing, or do you want me to take that?
OK, why don't we turn it around? On your last question.
Basically, the Pharma mix.
Yeah, exactly. Let me pick that first. We address it in reverse order. On the Pharma mix, yes, of course, injectable from all the pieces we talk about, the lower end of the profitability range, but increasing. On the other hand, you have things like royalty helping the overall mix. Mathematically, you're correct. If we have a quarter where injectable grows 20% and the rest doesn't, yes, mathematically, that will have a negative mix effect. There are many puts and takes in this equation, including royalties. That's why we feel comfortable with the range. Now, on the CapEx timing, some of you have heard me disrespectfully talk about big boxes to fill. For the foreseeable future, we're done with building big boxes. There was the big plant in Oyena, France. There was the big expansion for injectable in France.
Then a brand new site in China, which hopefully one day you can all visit, the state of the art for all three businesses. We don't see another one on the visible horizon. It's all about now creeping in capacity, creeping investment, filling those boxes with investment. Those big ones are $2 million, $3 million. The biggest investment this year is $5 million. That's why our capital intensity for a period of time might be a little bit lower than it was when we built the big boxes, so to speak. Now, I'll hand it back to you, Vanessa.
Yeah, thank you. George, I thought it was important for Stephan to give that color on the capital because it obviously comes back to how we're thinking about free cash flow. You're right. We're in that sort of 10% range, but we just got there, right? We just got there. If you kind of go back for the last few years, we were trailing that number. What you're hearing from me is we would now expect to be more consistently in that number, and we can drive growth from that number. To the extent that our CapEx profile for the next several years will be largely in that range that Stephan just talked about, of course, yes, we can drive north of that as well.
Ghansham.
Good morning. Ghansham Panjabi, Robert W. Baird. Thanks again for the presentation. Maybe just to follow up. In the 2023 analyst day, I think you highlighted the $180 million investment with the target to double your injectables revenue by 2027. Just give us a sense as to where you are relative to that target.
Yeah, I think it will take us a couple of years longer, simply because there was a dry spell, partly related to the value chain, partly related to our own ability to ramp up. As I said, we feel good now about the growth rates of product growth and the richer product mix.
As it relates to your, obviously, you have a lot of confidence on your Pharma target, right? 7%- 11% long-term target. This year is going to track, at least in the first half, at half the rate of the lower end of the range, right? You're commenting about some of the issues with Narcan and inventory overhangs and so on and so forth. As it relates to the timeline of the inventory overhang, how should we think about that as it relates to 2026 and the multiple quarter event? Thank you.
First of all, there are long-term targets and quarterly targets, not even annual targets. Indeed, after a period of way above average growth, we now have a period below average growth. That will correct. We're not guiding for 2026 at this point. We give you a lot of color on what the different puts and takes are. There's a question over here.
Thank you, Matt DellaMaria from Wambler. Vanessa, for you, so EBITDA margins are up about 250 basis points in the last couple of years. TTM, they're 22.3%, so approaching that 23% number. I guess the question would be, given you've done that during a time when Closures and Beauty have been under pressure, why can't that target be higher? Related to that, again, two years ago, you set a target to hit 16% SG&A as a percentage of sales. You're close to that, but haven't hit that number. If I go a decade ago, Aptar was kind of in the mid 14% range. In some of your Pharma packaging peers, it's mo re like 10%- 12%. Why actually can't that number, given the mix continues to shift to Pharma, why can't 16% be much lower over time?
I'll start with the EBITDA margin. Actually, maybe I'll start with SG&A, and I'll come back to EBITDA margin. I think SG&A was more a guideline than a hard target. I'll tell you, my focus is driving profit improvement and not necessarily disincentivizing where the savings come from. Is it SG&A? Is it cost of sales? As you saw from our slides, we've done a tremendous amount of work in terms of driving cost out across the full spectrum of the P&L. That's what we're continuing to focus on as an organization, where does it make sense to take cost out and not necessarily being delivered to one particular P&L line item. That being said, as you see, cost reduction is a pretty intensive focus for the organization. I think some of our peers do bucketize certain costs differently. I don't want to get into benchmarks.
As I've looked at it, some of the things that some people have in cost of sales, we've got in SG&A and vice versa. For me, I'm looking at what's the net profitability and what's our EBITDA margin and how do we continue to drive margin expansion? What's the overall profitability and what's the growth profile of that profitability look like? Of course, incentivizing cost reductions across the spectrum and not focusing on one particular line item over the other. I think you see that across the entirety of the P&L. I'm super proud of that, and we'll continue to do that. On the EBITDA margin front, yes, we are in the long-term target range. Yes, of course, when you look at the improvements in EBITDA over the last couple of years, you see a pretty significant growth trajectory.
What I would say is we just raised the EBITDA targets at the last investor day. Yes, we are in the range, but we need some time to be consistently in the range, and we expect to get there now. Let's see what the next investor day brings. Today, we wanted to maintain those targets and, of course, present you a path to get to the high end and a path that we feel very good about.
Let me add one point on the SG&A. First, we are very focused on fixed cost reduction, meaning cost that walks on two feet, whether it's in the factory or in the offices. Having said that, we have a significant service business. We have a significant digital business. Those are different benchmarks. It is not an either/or. Of course, those activities have a tremendous accretive impact on the profitability of our Pharma business. Next question. I think you were next there. Mary? Yeah.
Hi, thank you. This is Anna Snoepkowski from KeyBanc. I work with Paul Knight. Maybe just starting on the long-term targets, specifically for Pharma, could you walk us through some of the levers and assumptions to get you towards that higher end of the range for both revenue and EBITDA? I have one follow-up.
Sure. Look, you saw the pipeline. No single product launch moves the needle for the whole company. Of course, if you hit home runs several times in a row, that will get you to the higher end versus more towards the lower end. That's a big part of the assumption.
My second question is just looking at your overall portfolio in terms of end markets. Right now, what do you view as the most visible? On the other hand, what do you view as the least visible in the near term?
In terms of end markets?
Yes.
Can you ask the question behind the question?
Maybe in terms of Pharma, Closures, and Beauty, are there any end markets that you see struggling in the near term, specifically Beauty?
I mean, we've been quite transparent, I think, in the quarters. Clearly, cough and cold, especially still in Europe, where we have inventory in multiple levels in the chain, that one's struggling. With naloxone and Narcan, there's just an enormous amount of uncertainty about how the channel will, and the channels, plural, will empty, refill, how the share position between the different generics and the originator will develop, and what that ultimately means to our sales volume. I think those are the two that are iffy. On the flip side, injectables are doing very, very well. The non-Narcan nasal products are doing well. We see fragrance returning as this whole trade dispute has hopefully settled out until the next news conference. Anyway, without being cynical, I think the EU-U.S. set of rules is clear, and that will give our customers more confidence to launch again in the U.S.
From a geographic point of view, clearly, the U.S. economy is important, even though Europe is our largest market. A lot of the products we sell in Europe end up also in the U.S. Asia is doing very well. India is booming. China is booming. We feel pretty good about the growth there. Some of that growth will come to our European customers that then export to Asia. Latin America actually has done quite well for the beauty market. I think those are kind of overall color. Gabe?
Sorry about that. I think this is the first time that I've kind of heard you guys talk about cardiovascular in the pipeline. I appreciate it's tough in a forum like this, you don't want to front-run customers. Just give us a little bit more color in terms of are those administered at home, potentially in a medical facility or something like that? I guess dimensionalized, if you can, maybe the potential that you see over the three to five-year period, does it look like GLP-1, which I think you've talked about being 3% of revenue, emergency medicine being 5%? Completely separately, I think the second time you guys talked about bumping ROIC target, does it say anything about the M&A environment and maybe what you see as potential targets out there or that as a way to grow? Thank you.
Yeah, let me address the M&A, and then Alex and Gael, you take the cardiovascular, which I'm also very excited about, by the way. Our M&A engine continues to run. The sweet spot for us is bolt-on acquisitions, CSP plus kind of range with good management that wants to come and work for us and grow together. That's really our history. Sometimes we add some technologies, like we did with SipNose or CRO activities that we talked about, and regional expansion. We continue to look at targets, have private discussion, do due diligence. As usual, you look at 10 deals, one happens. This continues to be a focus for us to complement the organic growth. Sometimes we do some adjacent things, like with CSP. When you look at the CSP factory, it looks like any other Aptar factory.
It's just the know-how, the technology on what they inject is very, very special. I would not read too much that the raising of the return on invested capital slows down our M&A activity. That is par for the course. If you find an attractive target, you go for it, and you deal with how it works through the metrics afterwards.
Yeah, can you hear me?
Yeah.
Yeah, look at a company, a product called Enbumist. I mean, they are looking for FDA approval about next week. What else?
Can you say the name again?
Enbumist. They are claiming it's not oral. It's not IV. It's Enbumist. What is it? It's to remove excess body fluid that leads to liver or kidney disease or to a cardiovascular issue. Basically, they want to go there with a nasally delivered drug instead of going to a hospital with an intravenous or to take an oral pill. Back to my conversation around the converting process, to deliver through the nose because your nose is quite vascular. It goes through the blood system 35% faster than when you take a pill to treat this excess body fluid. That's one of the elements. You've got additional claims from the GLP-1 player, for example, saying that after diabetes, it does have an impact for obesity treatment, but also for cardiovascular, I mean, better cardiovascular environment for the patient. You share an example, but you didn't go deeply in.
The tachycardia could be one of them.