Good morning, everyone. We'd like to begin our program today. I see some familiar faces and some new ones. For those of you who don't know me, I'm Matt Della Maria. I'm responsible for investor relations and communications at Aptar. A very warm welcome to all of you joining us here in New York, and a warm welcome to those of you joining on the webcast. We're very excited today to talk to you about our continuing global growth story. A few housekeeping items before we start. For those of you here with me in New York, the exits are clearly marked here on your left-hand side. We're on the eighth floor of the Marriott Marquis, and just outside in the atrium, there are staircases and elevators and escalators should we need to exit. Just a little bit of a safety mention there.
If you haven't had a chance to see some of the products we have displayed in the back, I encourage you to do that maybe after the event. We have some sustainable solutions back there also, and you'll see in our presentation today, sustainability is very important to us. We have some sustainable solutions in the back, then we're very fortunate to have our Global Leader of our Environmental Health, Safety, and Sustainability, Beth Holland, joining us today. Beth, would you want to stand up? If you have an interest in that topic and would like to speak further about it after the event, please see Beth afterwards. We're very happy she could join us today. On the tables in front of you see a few other solutions.
We have the popular Fiji Water with our beverage closure solution, and then maybe equally or more important, you have the M&M'S Minis, with a CSP solution. Feel free to open those, share those, and take those with you when you leave. For those of you joining me after our event here today, we're going to meet on the first floor, near the Starbucks. That, I think you have instructions on that, but see me afterwards if you have any questions. With that, our agenda, you're going to hear from our senior leadership team today. After our remarks, we'll have our standard Q&A. This is our obligatory safe harbor language. Please see our SEC filings for risks and uncertainties about our financial results. The senior leadership team today, we're very happy to have everyone with us.
This is our senior executive committee, the top leaders in the company. You know many of them or maybe all of them, but some of you, a few faces will be new. Really presenting at this type of event for the first time, we have Marc Prieur, who's president of our food and beverage segment, Xiangwei Gong, who's president of Aptar Asia, and Shiela Vinczeller, who's our Chief Human Resources Officer. We're very excited to have the full breadth of the leadership team here with us today. For those of you on the webcast, there is an ability for you to answer questions when we answer the Q&A session, and we'll do our best to get to those later today. With that, I'll turn it over to Stephan.
Thank you, Matt. Good morning, everybody in the room and on the webcast. I'm really delighted to spend this morning with our owners, with our shareholders. Often there's a debate, are shareholders really owners? Yeah, in our case, there's no doubt. Many of you have been with us for a decade or more and some even decades. We really appreciate that opportunity to update you on the business, on the company, and on the growth story. That's really the key point that I want to make today. We are a growth story, we have been a growth story, and we are positioning ourselves to continue to be a growth story for decades to come. We are blessed that we are operating in attractive markets that are advantaged from a macro trend point of view, from a demographics point of view.
Those trends don't change from one day to the next. We win in those markets with solutions that make a difference in consumers' lives and in patients' lives, and save lives at times. If you take nothing else away from today, it's really these three points. In addition to updating you on the what, and we'll talk a lot about the what we do, today will be a little bit different from prior events because we will also discuss with you how we do it. Kind of give you a feel for the, some people call the smell of the place, the feel of the place, that you get a sense of what is the culture of the company. That's why I thought it would be good to start actually, what is our purpose? We discussed this a lot with employees, and it is pretty ambitious.
It's really improving everyday life for people everywhere with innovative, reimagined packaging solutions. We do that really by partnering with customers to help them win in their respective marketplace. Of course, we are a B2B company, but often what we do has a significant impact on the consumer experience, how the consumer experiences the product, the drug delivery, and the efficacy of the product. We are not a not invented here company. A lot of the innovations we source from the outside. Of course, we're very proud of the inventions we make on the inside. We do that sometimes with acquisitions, sometimes with venturing investments. You just saw one a couple days ago with PureCycle. We'll come back to that. Wherever the best ideas are, we grab them, and we convert them into solutions that make a difference for our customers' brands. We do it in a sustainable way.
We didn't invent sustainability the last 18 months. We have been in this for a long time. If you track back our history, if you talk to Beth, that we feel very prepared to take advantage of the current wave of sustainability interest from consumers and customers. We're a global company. Please remember, 75% of our people are outside of the U.S., and everyone up here on this stage has lived in a different continent, maybe more than one, and brings that global experience to bear to drive the growth of the business. Last not least, we stayed true to our core values, and I will not go through them. The first one is maybe we respect and trust people. We didn't invent those core values yesterday. They've been with us for the last 20 years, unchanged.
Those of us who visit some of our older plants, you will find those core values a little faded. They're still on the plant wall, and we stay true to them, and they are as relevant today as they were 20 years ago. What are our strategic priorities? If you want, this is our strategy on one page. Very simple, we show you the same strategy that we show to our people, that we show to our customer. It's everywhere the same. It's very simple. Where are we coming from? What are the macro trends that are relevant to us? Where are we going, how do we get there? Where are we going is very clear. You know our published targets.
We are strongly affirming those, being maybe a bit more acquisitive, amping up the talent pool and the development of talents, and adding the high-growth economies to our mix. Let's talk a little bit more specific. The company is very much focused on growth. We're not only talking about it here. People are incented on it. The annual incentive is based 35% on a core growth. There's a focus on growth, on new product development, and new customer acquisition, and we have added the high-growth economies to that. Organizationally, mindset-wise, we're by far not done, but clearly tilting the company that we go where the growth is and not where the growth was. We're not cutting any ties with any places, but we're adding. It's a big world out there. Secondly, I already talked about talent and leadership, very important to raise the bar.
I'll talk about some examples in a minute. We're a manufacturing business, three areas, three functions we put particular emphasis on. How will you come up with new products? Do we make them efficiently? Do we get the right price for it? When we talk about core functions or functional excellence, we talk about those three things, innovation, operations, and commercial. You all know, we'll have a discussion around where we are on the transformation of our Beauty + Home business and of our corporate support functions. Very important that we implement this project well. Last not least, acquisition and partnerships. A few updates. Organic growth, you know last year, we had 8% organic growth. This year to date, it's 5%. On the talent and leadership, let's start at the board.
Over the last two years, we've added three new board members or refreshed the board with three board members. Isabel Marey-Semper, great addition, former executive committee member from L'Oréal, former CFO of Peugeot Citroën. Intimately familiar with industry. Before Peugeot, she's been in this space. Great addition to the board. Jesse Wu, former chair of Johnson & Johnson's Consumer Healthcare business and currently with Carlyle. Craig Owens, formerly with Campbell Soup, and before that, operating executive with Coca-Cola. Great additions to the board, all of them significant international experience. Of course, our board is also a global board, and half of our board meetings are outside of the U.S. In the senior team, Matt already mentioned, added Shiela Vinczeller, a first-class CHRO. Xiangwei Gong, our president of Asia, deep experience. You will hear from both of them. We've strengthened the M&A group.
Thierry is somewhere in the room, back there. A lot of the activity that you've seen, he's been involved with. We strengthened innovation, sales, operations, and so on. Coming back to functional excellence, one important aspect is always to know what good looks like. What we brought in is really a benchmarking. How are our plants, how is our sales process, our innovations practices compare to world-class, not only in our industry but on an absolute level? Our operational excellence leaders have done a good job developing the roadmaps in upping the game, particularly in those areas where we are not as strong. Transformation, quite simply designed to bring Aptar Beauty + Home back to its top-line target and its EBITDA profitability, and with that, not only expand the margin of Aptar Beauty + Home, but also of Aptar. Last not least, a brief update on the acquisition agenda.
Of course, CSP Technologies is a very large acquisition for us. Matthew and Bob will update you on that. It's going very well. Reboul on the other end, very small, but our first step into color cosmetics, a significant growth area. Nanopharm and Gateway Analytical designed to build the pharma services business or build out the pharma services business. Gael will talk about that. A couple of days ago, we took a venturing stake in PureCycle Technologies. PureCycle Technologies is, as far as we know, the only source of ultra-pure recycled polypropylene that can come in contact with food. It's very important 90% of the plastics we buy are polypropylene, so we need an ultra-pure source. Early tests look very good, so we're very excited about that, have a front row seat as this venture develops. Another venture that we took a stake in is Loop.
You see the tote there in the very back. It's one of the many pilots on how to get closer to a circular economy, get products back from consumers, get them refilled. We are part of that. If you think, well, if it's reusable, that's not your schtick. It's not true. We can make products reusable. We can make them 100% recyclable. In the case of Loop, the aluminum can comes back. They put the new dispenser on it. The dispenser is recyclable. Last but not least, a partnership with Nippon Closures Co., Ltd. It's just a brief update on kind of the areas of progress on our strategy on a page. Of course, our investors are recognizing the growth story. The vast majority of our shareholders are growth or GARP shareholders, and of course, you have the index investors and a few value.
It is a long-term compounding growth story. You see here 4% sales growth over a 10-year period, 6% adjusted EPS, 9-plus % dividend growth. If you did an adjusted free cash flow, that would also be around 9%-10% over the 10-year period. You know this better than we do. Of course, a 10-year look on TSR. Okay, we did 10 and a half years. We cheated a little bit. The message is that we are performing better than our peers and the S&P. Why is that? Coming back, powerful macro trends that are driving or enabling the growth in our markets. Sustainability, we get a lot of questions, and I'm sure we will have the questions here today. Isn't that a killer of your business?
The reality is it's actually helping us to come up with new innovative solutions, help customers address the sustainability issue. We are agnostic whether our product is on top of a glass bottle, an aluminum container, a reusable plastic container, or a recycled plastic container. We are mostly engaged with the consumer experience of experiencing the product, getting it out of the container in a way that is convenient, in a way that allows the consumer to experience the product in the best possible way or deliver the drug. We can make those dispensing devices from recycled material. We can make them in a durable way so they can be cleaned and returned. That's what our customers and what the consumers are looking for. Of course, health and wellness, big driver, not only in pharma, but also in the nutritional area of the business.
Connectivity, where Pharma really does lead the way with connected devices, having everything on your app, tracking. We're not quite sure yet how this will work in different countries, but we are at the forefront on that. Urbanization, a huge driver of growth in Asia because hundreds of millions of people coming not only to the cities but into the middle class and becoming consumers of our products. Changing demographics. In addition to the Asia equation, of course, you have a huge young population in some parts of Asia and a significant aging population, even more rapidly aging in Asia than you have in this part of the world. E-commerce, I don't need to get into, clearly also driver of innovation for us.
That all ends up with our markets growing nicely GDP plus. We put a couple percentage points on top of that with our innovation and with the conversion from non-dispensing to dispensing or from non-active to active packaging, resulting in the top-line growth targets that we've published and that we stand by. We serve many different customers. As little customer concentration as business and increasingly global and diversified set of customers. We do that with a diverse business model, both in terms of end markets and in geography. The big share of Europe here is a little bit misleading. We don't have better numbers for you. Please keep in mind that most of the high-end luxury beauty, skincare products are today filled in Europe. We sell in Europe, but the end product ends up in a mall in China or in travel retail.
We see a trend where this supply chain is reorganizing itself, where it will increasingly be made in Asia for Asia, Xiangwei will talk more about that later on, and it's important that we get organized against that shift and catch it on the other end. A broad set of technologies. While they have all different colors, there's a lot of commonality, whether it's pumps, valves, they go across all three of our segments, whether it's active packaging technology. Bob will talk about that. When you look at the unit operations, they're very similar that we can leverage a lot of the technology operating practices across all three segments. In the end, it all results in consumers having a better experience in consuming products, in getting drugs into their system that are beneficial. Let me give you two examples.
One, you saw the commercial before, what seems very mundane, a tub of sour cream. Very simple. Cannot be simpler. Put it in a pouch, put it upside down, the brand gets a 70% revenue boost, including a nice margin expansion. That's a good example of a conversion from one delivery mechanism to another. Another one may be more sobering. Of course, NARCAN, the solution that reverses opioid overdose. The molecule naloxone has been around for a long time. In our Unidose system, it can be administered by any one of us, don't have to be trained, and it has saved many, many lives. Of course, it creates a significant business opportunity. Here is an example of sustainability. I already talked about being agnostic about the container, but this is an example where we have post-consumer recycled content of 50% in a solution that is a refillable washing up liquid.
On sustainability, as I mentioned, we've been engaged in this for a very long time. We are part of world-leading institutions like the World Business Council for Sustainable Development. We've made public commitments, like with the Ellen MacArthur Foundation's New Plastics Economy. We are actually putting our money in solutions that are critical for us, like PureCycle and Loop. Also, you see a number of examples here on a regional basis. It is very important for us to be able to steer the conversation, but it's also very important for our customers because they take us really seriously. "Hey, you guys know what you're talking about." It's not just lip service when you talk about food-grade, food-contact polypropylene. You know what the tests are. You know what is required to make it happen. Let me sum up. It is a growth story. It has been a growth story.
It will continue to be a growth story because we're operating in attractive markets, and we're executing innovative solutions that help our customers improve and save lives. Before I hand it over to Shiela, I just wanted also to say a few words around innovation. Jean-Marc Pardonge, who's here, he's been instrumental in amping up our innovation culture, the way we track pipelines, advance our science agenda. Just recently, he took the leadership team and about 100 of us to Silicon Valley to really be immersed in that innovation infrastructure and visit many innovators out there. They are not just software companies, 3D printing companies that do a lot of material innovation, sustainable polymers. It was really good to get our innovation teams around the world connected to that.
We're part of a number of these innovating companies where we can get better deal flow that result in things like the PureCycle investment. One of the things that also came out of that is that we're going to put in customer co-creation experience centers in major regions. We're going to start next year with one in Paris, and I'll just show you a little mood video, and after that, Shiela will come up. Thank you.
Good morning, everyone. It's great to be here. I joined Aptar 10 months ago, and I'm very pleased to be part of this fantastic team. Even more, I'm very excited to cover with you all that we are doing in the important strategic priority of investing in our people. First of all, as Stephan already referenced, this is our universe. We have 14,000 employees in 18 countries. Our center of gravity is mainly outside the U.S. We've got huge employee population in EMEA, a growing group in Asia and South America, and of course, we have our teams in North America with our global headquarters being in Crystal Lake, just outside Chicago. Having such a global footprint, of course, is important in many ways. One of them being having global assignments, international job opportunities for our employees is critical. People grow tremendously through crucible assignments and global mobility.
Having experience working and living outside your home country is a critical expectation if someone wants to aspire for the top positions at Aptar. Stephan already showed you a picture of our ex-com, so now I'm showing you a picture of our board of directors. Just a few things to mention. Diversity, global diversity, cultural diversity is very important for us. Our board of directors come from six different countries, six different nationalities. Talked about the diversity of women, 40% women on the board, and all of our committees are chaired by women. This is important, again, in a whole bunch of different ways, one of them being the support for diversity and inclusion.
The tone at the top for any such initiative is absolutely paramount. We're very fortunate that both our Board of Directors and all of us in the ex-com are deeply committed to forwarding a culture of diversity and inclusion. Why is that so important? You would say it's common sense, it's the right thing to do. Also, research experience shows that diverse and inclusive companies perform better, they're more innovative, and produce better financial results. Here are a couple of things that we have accomplished. Just recently, we've been included in the S&P Gender Equality & Inclusion Equal Weight Index. We're pretty excited about that. We have partnered with the Catalyst organization to build out our roadmap for the next coming years. We are going through a survey internally to learn more about some of the challenges and some of the opportunities.
Everything that we do at Aptar is guided by our core values of respect and believing in the self-worth of every individual, regardless of where they come from or regardless of the many different ways that we are unique. This space is extremely active. Of course, this is a couple of examples on gender diversity work, but we are approaching D&I as a broad topic. Of course, we will be focusing and working on all the other various aspects of the way we can be diverse and inclusive. Straight after we talk about diversity and inclusion, having an inclusive workplace increases employee engagement a thousandfold. Employee engagement is that magic that happens at the intersection of great leadership, good performance, and having a great company identity, meaning caring about the organization, caring about its purpose, caring about its performance.
We do that through a lot of high touch, people-to-people interaction. You see a couple of pictures here, town halls, site visits, quarterly reviews, roundtables, and a whole host of other things through which leadership engages in dialogue with our colleagues around the world. This dialogue often involves talking about our strategy, talking about our priorities, roles, what our role is, so everybody knows how they contribute to the overall Aptar results. We also have a recurring employee survey. Now we are entering into the third cycle, which is also very important because through this, we keep our finger on the pulse of the organization, and employees have taken it very seriously.
We consistently get over 78% participation and over 20,000 unique comments, which, of course, is great feedback for us and provides us the opportunity to put together actions and continue to build out our environment and make Aptar a great place to work. When we talk about engagement, of course, number 1 focus is safety. Safety is not a priority for us. It is a core value, and it's built on the mindset and philosophy that everybody should go home from work the same way they came to work. Being safe provides an opportunity to engage further, feel good about the environment that you work in. We also adopted and introduced a globally relevant standard, EHS system, which means that everyone has the exact same level of expectations towards working in a safe environment. That really yielded a lot of great results.
More sites are being ISO certified, and our safety results have improved as well. Of course, we take time to celebrate some of the safety milestones, and you see a few of these pictures. For example, in our Aptar Chieti in Italy, we celebrated three years without incidents, and you see a couple of other examples there. On the right-hand side, the eight critical EHS rules which are valid, relevant across the universe of Aptar, no matter which geography people work in. Again, these are all posted all over when you walk around in Aptar. Safety first mindset. I talked about D&I, talked about engagement and creating a culture of inclusion, diversity, and engagement. Important component of that is how we think about development. We take the long view on talent and development skills. Leadership is, of course, a big part of that.
We're building on the mentality of the founders of Aptar, again, going back decades on a very distinctive style of leadership, which is entrepreneurship, risk-taking, and agility. Our corporate university delivers training on a whole portfolio of topics, skill development, change management, project management, and many others. The items I wanted to highlight today was our flagship leadership development programs. CASA is a global program. Platita and Greenhouse are regional, and La Fabrica is a local program. I might mention, we're very proud they're award-winning programs with very unique, inspirational content. For example, in CASA, we take our leadership team, three times one-week program, to the vast slums of Mumbai, to the fast-paced, entrepreneurial-minded, big metropolis of Shanghai. In two weeks' time, the last component, we are taking our team to the Navajo community in Arizona.
These programs are meant to instill and develop compassion, agility, risk-taking, self-reflection, and in an ever-changing environment, how we continuously adapt. We talked about leadership at a higher level in the organization. Another very important component is development as it relates to our technical skills. This is an area which is in a skill and talent group that is very hard to recruit, very hard to retain. What we do is growing our own. Building on the great examples of proven successful German apprenticeship programs, we have now opened the doors to our first North America Technical Excellence Center, where the idea is that we are developing our own technical skilled operators through 6-12-month program in eight modules of six weeks. It's a combination of classroom and workshop training, and we just started last week with the first 19 participants.
Very excited about this and of course, have very grandiose plans to continue to roll this out across the U.S. and other locations in Aptar. This is, quite frankly, I believe it's part of our sustainability, how we continue to retain the skills we need and make Aptar successful. As I wrap up, our key takeaways, I wanted to use this picture because it somehow gives us a glimpse into the future. This is a group of our trainees in one of our facilities this summer. We had a great time, and we had a really great group of students. As a couple of takeaways, number one, focused on safety at the top of the house. It's one standard for all. Through diversity and inclusion, we continue to engage and inspire our colleagues for continued success.
Again, taking the long view on talent development, continuing to make sure that we develop careers, we retain talent, and grow leadership for the future success of Aptar. That's my story, and I'm sticking to it, and I'm going to hand over to Xiangwei.
Great. Good morning. I'm very happy to be here, and I'm very happy that you're here. I'm very happy that I have the privilege to take you on our Aptar Asia journey. It's the right place at the right time. We are in Asia. We have a very meaningful presence. We are in Indonesia. We are in Thailand. Actually, our most important assets are in India and in China. In India, our Pharma facility is in Mumbai, and our B&H and food and beverage facility is in Hyderabad. We are expanding in Hyderabad. As you see here, this was the beginning of the year when our CEO, Stephan, laid the foundation for a new facility. We are growing double digits there, and we are excited to be able to move into the new facility end of the year.
In China, we have the biggest assets are in Suzhou. Suzhou in relation to Shanghai is a little bit like Philadelphia to New York. Very close, one hour by train. Only 10 million people. It boasts to be the fourth most important city for trade. It has the most important national-level industrial park in collaboration with the Singapore government. We have had our Aptar presence in Suzhou in the past 24 years. We also have a very important facility here in the south of China in Guangzhou, and this is in close proximity to Hong Kong. As you see here, this is the new facility that we are open to operate at the end of the year as well. We will produce for B&H as well as food and beverage, and also our CSP is going to invest a new line.
You see here a sample of our customers that cover both global customers that are very big in Asia as well as local champions in all three segments. We are committed to long-term growth in Asia. As a very important gesture, we have had our first-ever board meeting in Asia in April, and that was in Guangzhou. Sorry, in Suzhou. You see our chairman having a very important meeting with the mayor of Suzhou that I just talked about. Our ex-com and board members have unveiled our new Aptar China investment company. Also visiting our globally most important customer, L'Oréal, its facility in Suzhou, and it's a really, really impressive facility as L'Oréal continues to grow their business in China. This is a Chinese company called Jala, whose products I'm going to talk a little bit later.
This is our own facility and our own employees. Why we want to be in Asia and what are the major drivers? We all want to be beautiful, and we want to be beautiful every day, every moment. We take pictures anytime. This is a very significant driver. Skincare gives us intrinsic beauty. Color cosmetics is like right now, makeup. Asia has a huge population. Huge young population, huge older population, but don't want to look old. I'll talk about that later. Really big opportunities there. That's why if you read the reports of our customers, they're all there. The exciting points right now are Asia. While we have a lot of young population, but the rapidly aging population is a real significant phenomenon in Asia.
We know that Japan has been leading to enter the aged society, and China is actually following the footsteps, which gives us huge opportunities. In my family, we were three kids. My generation, we have one kid in the family. It actually gives enormous social challenges, but also enormous opportunities for us. From food, from healthcare, from the way we want to look, we want to live, we want to feel. These are all opportunities for us. Why made in Asia for Asia is important and important now. 40, 30 years ago, you probably would not be able to imagine that GM would build their biggest facility in Shanghai. What's the brand? It skips my mind now. Anyway, the most impressive facilities and the biggest sale in China. In the beginning, people import, and then there is import tariff.
Does this sound familiar? What happens? They build the biggest plant in China. Why is Tesla building the biggest facility in Shanghai? Think about what our customers are going to do. As the consumers want to have these products, and they want it fast. They want it to have fast change of style and color and feel. All this really gives you some opportunity to act. As our customers are acting, we have to act as well. The most important trend, or it's not a trend, it's really just the sheer fact that it's the size, it's the scale. When you talk about Asia, you talk about the population, this is just the most fundamental fact that we have to see. China and India will be the biggest rising economies, as well as ASEAN, actually.
Many countries in ASEAN are entering the most stable period and really sheer size that is just breathtaking. Now you see this picture. It's maybe a little unsettling. All of a sudden, in 2030, China will be the largest economy by total size, not per capita. Per capita, it takes still a long way, and this is why actually we are so excited because it still gives us opportunity. India as well. U.S. is here. You will read it faster. This gives us all these opportunities with the rising age of rising population and the largest aggregate growth in the income-driving premiumization. Middle class. People have more money. They need to spend.
Even if you talk about a little bit of recession, maybe people don't buy a car, another house tomorrow, but they can buy something that makes them feel good, which will be skincare, color cosmetic, better foods, better healthcare. The need for convenience and to be quick and to be easy and to have the right nutrition, the right delivery format, and it's really fueled by the urbanization. Another point that I want to mention that I didn't say earlier, is about now the really relative geographic stability in the region. China and Japan have entered into the best relationship since I remember. That is actually very, very meaningful. Most Asians look to Japan, look to South Korea as the leading countries with better quality of life and better quality standard for everything, whether it's car, whether it's beauty products, whether it's foods.
This gives us real good opportunity to leverage. This is one picture to highlight the aging population and why it is very significant for us. As we know, our Pharma business continues to grow. This is actually something, if we do it right to shape the infrastructure, shape the way people age. It's quite empowering. Relatively speaking, the spend per family on healthcare is still very small compared to some of the developed countries, like Western Europe or like America. In the old days, our parents' generation, they stay at home. They have a lot of children to take care of them. Imagine now in our generation, we have a lot of us, but we have only one child in the family. You need to really have institutionalized the facility, and you need to have professional service.
You need to have much better social infrastructure to take care of this aging population, and therefore, really huge opportunity for us. Our customers, they are growing by leaps and bounds. It's only a beginning. This is one product that I want to highlight. This Jala that I mentioned earlier. Actually, I got the email today. We are shipping the first orders for them. When you want to have functional ingredients, very often strong antioxidants or anti-aging ingredients, very often you have challenges with this formulation. You put them in the product. Anything that contains water may have shelf life problem. We have this really patented technology to put the booster, the functional ingredient, whether it's serum, whether it's vitamin C, whether it's something you want. They actually put the formula here and to highlight to the consumers what's in it.
It's very high percentage ingredients that really functions. Normally you cannot put in the formula, but by putting in a separate chamber, these are two chambers. This is the base, and this is the booster. Two separate chambers. You mix actually in your hand. It comes from two different channels. It comes to your hand, and you will see two streams of products, and you mix it. It's fun, and it gives you really something to play with. Also real good high empowering function. In the future, you can actually change the booster as well. We're very excited. We launched with one Chinese national brand, and we're excited that this will become a major product for us in China. We have a lot to talk about in Asia, but I just want to give you now these few takeaways.
Just remember, Asia is big, Asia is only at the beginning, and we have a lot to do there. To start, we want to have local capabilities. We want to have strong local teams and local innovation for our local consumers. It requires us to act now, to be agile, and to really capture the momentum. We need to have efficient operational model and to be in Asia for Asia, whether it's in color cosmetics, for healthcare, for skincare, for also our beverage and food markets. We will grow our business organically as well as inorganically. We are going to look really ambitiously and with real strong focus to grow in Asia, also through strategic partnerships as well as acquisitions.
Last but not least, our strategy is really aligned with the strategy of our customers as well as consumers, but especially our customers, also aligned with the initiatives of the government policymakers and regulatory bodies, and this is a very important message as well. With that, I think it's time for us to maybe take a little break. We can fill our coffee, bathroom, or dance. Three minutes. After that, our President of Aptar Pharma, Gael, he will come on stage. Thank you.
I'm just calling people to come back. We're going to be starting, gentlemen. Yeah. Good luck to attract people. Good morning, everyone. I'm trying to tease people to come. You want me to go ahead? Okay. Good morning, everyone, and welcome back from the 3-minute break. With this slide, you will have a snapshot of our Pharma business as of today. I will be starting with the upper left corner, and I will go clockwise. From a business sense by region, 67% of our business today is coming from Europe, followed by the U.S., 27%, and whenever you combine LATAM and Asia, we reach 6%. It's important to notice that some of our customers, depending on markets, are filling in Europe and delivering product to the U.S. or the other regions. From a customer's perspective, we are dealing and partnering with all the big names.
The Sanofi, the AstraZeneca, the Amgen, the GSK of the world, big generic companies as well, and more and more with biotech and startups. Aptar Pharma has been always heavily IP-focused. We are leveraging over 700 different patent families in order to provide the right dispensing solutions to our customers. We never manufacture other products. We always manufacture our own product, and this gives to our customers an additional layer of IP protection. Aptar is the engine of innovation dispensing solution in the pharma space. We have been partnering and supporting more than 150 prescribed medicine on the market, 30-plus NDA, new drug application, 65-plus ANDA or generic products. We manufacture per year over 8 billion solutions between components and drug delivery devices.
Our sales by market, prescription is the largest market for us, 51%, followed by CHC, consumer healthcare, 23%, injectable 16%, and Aptar CSP in the active packaging is bringing 10% of our overall revenue. From a financial performance, the segment is doing pretty well, 18% top-line growth comparison first half of 2018 to reach over $550 million. Core-wise, we are +12%, and our profitability, EBITDA margin, is moving up from 35%-36%. Our long-term target will remain 6%-10% top-line-wise and between 32% and 36% from a profitability perspective. Looking at the Aptar Pharma growth drivers. I will start with the first one, conversion and life cycle management. The overall story of Aptar Pharma is to convert from non-dispensing to dispensing solutions, or put it another way, from non-so-convenient drug delivery devices to patient-friendly delivery devices.
From tube to a airless product or drug dermal product. From, let's say, blow-fill-and-seal ophthalmic product to a non-preserved, multi-dose, eye care delivery system with our OSD product. From solid oral form to intranasal drug delivery solutions. Two, we are looking at entering and strengthening our presence in what we call new application field for us. CNS, standing for central nervous system, the pen market, but also biologics. We are strengthening our service capabilities in order to partner with our different customers from formulation to post-market launch. Last but not least, our legacy application field, allergy rhinitis, asthma COPD, nasal saline or nasal decongestant are key for us, and we will continue to strengthen and grow our presence in those markets. The first deep dive I like to make this morning is around the pen and the CNS market, the central nervous market.
If you step back and you look at the overall market, the value of those markets are relatively flattish. Unit wise, we are at plus 2%, but the overall story for Aptar is to focus and look at niche product conversion from traditional delivery format to intranasal drug delivery. As we speak, in the first eight months of 2019, the FDA approved five submissions using our intranasal drug delivery solutions. Month of March, Johnson & Johnson came to market with the FDA approval for SPRAVATO for severe depression treatment. Teva for naloxone generic. Dr. Reddy's for sumatriptan using our Unidose. More recently, Eli Lilly with glucagon for hyperglycemia treatments. The interest for those players, big pharma co, biotech, startup, to repurpose drug is to look at the intranasal delivery form, helping them to have a faster onset of action. You've got a close connection, those two brand.
You've got a fast intake in the bloodstream, also to lower the development cost. You repurpose a molecule already approved and proven efficiency by the different regulatory bodies. You lower also your development cost, and more importantly, you allow those player, and we allow our customers to reclaim patent protection with combination products. The formulation with the complex drug delivery device. Whenever you discuss with the marketing people of Johnson & Johnson for SPRAVATO, the name of SPRAVATO has been done because you hear the word spray. SPRAVATO, spray. Formulation combined with an efficient drug delivery devices make the success of the product. Pharma service expansion. The month of May, we announced two acquisition, Nanopharm in the U.K., Gateway Analytical in the U.S. The overall objective for us is to strengthen our value added differentiated offer to the different players.
In other words, to help them from formulation through analytical support, regulatory support to fast track their submission, combined with the Next Breath. Next Breath is part of the Aptar family for a long time, plus our legacy Aptar Pharma services capabilities around extractables and leachables, regulatory support. We are offering our customers a way to de-risk and accelerate their programs. There's a huge value beyond that one. For Aptar, it allow us to strengthen our pipeline of project. I was discussing with one of you this morning around our pharma pipeline. That's a way for us to strengthen our pipeline, to de-risk and accelerate this pipeline, but also to be early on for any new project. Last, this is a way for us to extract additional value. You know that we are in a business cycle where it could take time.
SPRAVATO to be on the market, we've been working with Johnson & Johnson for the last 12 years. Being able to supply and provide service capabilities early on, from a formulation perspective to analytical support, it's a way also for us to extract value on top of our device and tooling sales. Asthma, COPD, legacy market for Aptar Pharma. The numbers you've got are for all drug formats. The important message, this is a market which is growing volume and value-wise. Within this overall market, Aptar is having a leading position in a sub-segment for portable inhaler. We will continue to grow with the market, and we will strengthen our investment to improve the reliability of our product and the regulatory bodies every day are raising the bar.
Coming for innovation solutions, coming from service support, from formulation to fast-tracking their submission, and also to look at sustainability as we are committed to reduce the carbon footprint of our drug delivery devices in the asthma space. Last but not least, Aptar Pharma is heavily invested in the connected devices space. As we speak, we've got a fully dedicated team doing nothing else but looking at developing our product portfolio, add-on devices or integrated devices, not only for the asthma COPD market, but also whenever the therapeutic areas bring value for the overall system. Two, to work on manufacturing and scalability capability in order to ramp up. There we are leveraging our core capabilities around supply chain, quality, project management, and manufacturing operational expertise.
Three, to partner with the right data and digital platform in order to connect the overall ecosystem between the patient and the physician, but also with the pharmaceuticals and also with the payers and the PBM. The non-adherence cost for the industry is huge. Pharmacos are losing in the range of $188 billion due to low adherence. 60% of the patients do not respect fully the prescription given by their physician. The overall ecosystem and the key stakeholders have interest to push the digitalization of medicines and treatments. Stephan presented that our innovations are there to improve lives, but also to save lives. Month of July, the FDA approved Baqsimi from Eli Lilly. Baqsimi, the first needle-free rescue treatment for severe hypoglycemia for adult and children of the age of four and plus. They are leveraging and they are using our Bidose technology for powder treatments.
Because it's a powder, it's important to notice that we are combining this technical platform, Bidose powder, with the Aptar CSP Technologies container that will allow to protect moisture ingress. Three takeaways I'd like you to remember. The first one, from a solid right to play market, allergy, rhinitis, nasal decongestant, asthma, COPD. Aptar is gaining flexibility in the value chain in order to offer our customers additional service capabilities to fast-track and de-risk their product submission. Two, we are heavily invested, whatever application field, legacy or new one, to continue to invest in our products, innovation, product reliability, product capacity expansion. As we speak, before the end of the year, we're going to be fully localized in Russia. We are localizing more and more production in Asia, in the U.S.
For the one going to Congress this afternoon, you're going to see this is a different Congress with different SKUs locally produced. Digital transformation for us. Last, Aptar Pharma enjoy having a very highly experienced leadership team, global leadership team, and the one going to Congress will have the opportunity to interact with them. Thank you very much. With this, I hand over to Eldon.
Great. Thank you, Gael. Good morning, everybody. I'm excited to talk to you today and share some insights into our Beauty + Home business. Let's get started. If you look at the chart here on the left-hand side, you can see in the upper left-hand corner that we are well-represented around the world in all the different regions. Europe is our largest region, followed by North America, while China and Latin America represent about 18% of our sales. Stephan highlighted before as well as being a leading supplier in Europe in the Beauty business, that several of those products, whether they're fragrances or facial skincare products, are shipped outside of the region and go into the likes of China as well as into travel retail, which are two fast-growing areas for our customers.
From a market perspective, about 90% of our sales are between beauty as well as personal care. Today we have over 6,000 customers, with a significant portion of our customers being large global players like P&G, L'Oréal, and Unilever. We also have good representation with large local regional players like L Brands here in the U.S., Pechoin in China, as well as Boticário in Brazil. While Aptar Beauty + Home may not be a household name, we are literally in millions and millions of households around the world, as we supply over 16 billion solutions on an annual basis. From an innovation perspective, we focus on helping our customers differentiate in the marketplace. We also deliver convenience to the end consumer. With this, we leverage IP and patents, and we have over 400 patent families that encompass all of our products.
Now, not all of our products have IP or patents, but you can see some of our innovations down here below. One of them is a twist-to-open actuator on an aerosol valve that allows the consumer to select between two different doses. We also helped Avon launch one of their new perfumes, and we collaborated with L'Oréal on a shampoo that is utilizing a paper-based bottle. From a results standpoint, year-to-date, on a core sales basis, our sales are even with prior year. Our beauty business is continuing to grow. Our home care business is continuing to grow. As we mentioned in our recent analyst call, we are seeing some headwinds, some market headwinds in personal care, specifically in North America. We also, from an adjusted EBITDA standpoint, despite the fact that our sales are even with prior year, are demonstrating improvements in EBITDA from 13% to 14%.
Within Beauty + Home, we have several growth drivers. Today, we're going to focus on four and share those with you. First of all, from a sustainability standpoint, our customers and consumers are looking for more sustainable solutions. E-commerce. E-commerce is a fast-growing channel, our customers are looking for solutions in supplying that e-commerce channel. Color cosmetics is a newer application field for us and presents some opportunities for further growth. As Xiangwei had highlighted, we see opportunities to grow geographically in Asia, specifically in China. Starting first with sustainability. We work with the entire ecosystem to come up with a variety of solutions. We're looking at leveraging post-consumer recycled materials, developing reusable solutions, as well as designing, developing, and engineering new mono-material solutions that are easily recycled. Some examples that you can see up there on the bottom of the chart.
First of all is our partnership with Loop. Stephan highlighted that a little bit earlier, and some of the samples are in the back of the products that we supply. We also have launched a 100% post-consumer recycled material product line in closures. Lastly is a picture of our lotion pump, which is a mono-material pump that is highly easily recycled. From an e-commerce perspective, e-commerce today represents about 14% of the retail channel and is projected to grow to exceed 20%. This is a very important retail channel for our customers. Today, in a recent earnings release at L'Oréal, they talked about half of their global growth is going through e-commerce. They also identified that 50% of their sales in China's mass market are being distributed through e-commerce today. You can see the importance of the e-commerce channel. What are customers looking for?
They're actually looking for an omni-channel solution because they're not sure where these products are going to be shipped. They may ship it to Walmart, and Walmart may decide whether it's going through an e-commerce channel or it may go directly to the retail stores. They're looking for an omni-channel solution that can withstand the rigors of a very challenging distribution channel through e-commerce. Also, we are working with the various e-tailers out there, like Amazon and others, to make sure that we can meet their requirements. Examples of different products that we have launched include E-Latch for a tube top, Disc Top Go, and also a new lotion design we came up with to be e-commerce friendly. Moving on to color cosmetics. This is a newer application field for Aptar.
You can see that in this chart that historically it has grown very fast, and it's projected to continue that fast growth. We plan on continuing to leverage some of the products, ideas, technologies, customer relationships coming out of skincare to help us penetrate this market. Examples include our pumps and tube closures to be sold into liquid foundation and also targeting premium lipstick, leveraging our technology from Reboul, one of our recent acquisitions that Stephan highlighted earlier.
The skincare market is extremely important for Aptar. This is an example where we developed an innovation and partnered with Clarins to bring it to market. Clarins came to us with a unique challenge and said, "Hey, we are looking for a unique, attractive airless system which allows us to dispense two different serums, keep them separate until it reaches the consumer's hand, while also allowing the consumer the option of two different doses depending on their specific needs." By the way, one other thing, we'd like you to incorporate some post-consumer recycled material in that as well. Certainly a tall challenge, but nevertheless, we were able to collaborate with them and jointly partner and bring this to market. Today, Clarins has been extremely successful with this product. We supply two different sizes of packages for them and across a number of different serums.
A very successful innovation indeed for not only ourselves, but for clients and which really demonstrates that if we help our customers win, we will also win. Moving on to our business transformation. We've spoken several times with you the importance of business transformation for our Beauty + Home segment. We literally have hundreds of initiatives that are being executed by thousands of employees around the world. We're about the midpoint as we're working through our business transformation, and we certainly still have more work to do, but I can say that we are in a much better place to deliver on our long-term growth goals than we were when we initiated this program at the end of 2017. Our business transformation is delivering. We do have some headwinds.
Our business transformation, as we calculate, has delivered in the first 18 months between $25 million and $30 million of incremental EBITDA. You may look and say, "Hey, Eldon, we looked. You're only about $16 million reported. How does that work?" I did mention that we have a few headwinds. Some of them include the losses that we've attained in the startup of Reboul. This wasn't part of our original business transformation plan. We still nevertheless see that a very important acquisition. Secondly, currency headwinds that we have. Third, some increases in SG&A, including some severance costs that are not part of restructuring. All three of those total somewhere between $12 million and $15 million.
If there's one message that I'd like you to take away from this slide on business transformation is that we expect business transformation to help us deliver on our continued sales growth goals and our EBITDA goals. In conclusion, Beauty and Home is a growth story. It is absolutely a growth story. The more that we help our customers grow, the more that we are going to grow. The Clarins example is a great example. We see opportunities for growth in skincare and color cosmetics. We see opportunities as we help our customers in sustainability, as we help our customers with e-commerce. We see opportunities for growth in Asia, specifically in China. Finally, from a business transformation perspective, we expect that by executing our business transformation, we will be able to deliver the ongoing sales growth as well as our EBITDA margins.
With that, I'd like to hand it over to Marc Prieur, our President of Food and Beverage. Marc?
Thank you. Good job. Good morning, everyone. Are you ready for our food and beverage update? Still awake? Okay, good. Over the past few years, Aptar established itself as one of the key players in the food and beverage packaging market. We play in that market by delivering product conversion to dispensing systems, leveraging innovation and our global presence. This brings us to a business of around $400 million. Half of it is in North America, followed by Europe, then Asia and Latin. That are the growing places. It's well-balanced between food and beverage, two-third, one-third. In that market, we deliver, of course, the big international companies that you know very well, the Kraft Heinz, Nestlé, Danone, Coca-Cola, Pepsi, of that world. But we are also very successful with the local or regional champions like Conagra in North America, Maspex in Europe, and Yili in China.
What we deliver to those customers is a wide range of well-targeted solutions, starting with our Flip-Top closure, and you can experience one of the samples of them with the Fiji Water you have in front of you. Hopefully, you like it. To the tin top closure for the infant formula, and not to forget the iconic inverted closure with the dosing valve that we deliver to the sauce and condiments application field. The main and the most important example being the Kraft Heinz ketchup inverted bottle. Of course, all these solutions are supported with a very strong IP. We have 150 patent families, and we are very well targeted. Looking at the first half of the year, we were able to grow the sales by 14%.
If you exclude the CSP acquisition, it was a core sales growth of 7%, coming from all the regions, with the exception of Europe, where the very long winter until the end of May almost, has been reducing a bit the beverage season. Therefore, the growth was coming mostly from the food side of the business. We were able to grow the bottom line by 1% to 17% EBITDA. If you look at the bottom of the slide, we have the long-term market guidance, 6%-10% core sales growth, 18%-21% for the EBITDA, and we are confident that we can deliver and achieve those targets. In a way, are we confident that we can achieve those targets because we have several key growth drivers, and I will introduce four of them today.
One is conversion, second is innovation, third is sustainability, last is geographical expansion. On the conversion, this is the storyline of the segment. This is our DNA. This is what we do every day, we have been doing for several years, delivering innovative solutions to our customers, helping them to grow their sales faster than the average of the market pace. On the innovation, of course, we continue to innovate and to introduce innovations to our existing and strong application fields like the sauce and condiments. We are also innovating and leveraging our technologies like CSP or Bag-on-Valve to enter new application fields like the dairy or the infant formula or the instant coffee. Sustainability, as you heard this morning, is a big topic. Of course, it's obvious that it could be disruptive for our business.
This has the potential to be disruptive, but we decided to turn it into a competitive advantage. Building on what Stephan was presenting to you at the very beginning, I can add that we have centrally, a network of material scientists, people capable of designing our products for recyclability, capable of validating new resins. We are leveraging all these forces that we have internally now to deliver to our customers really tailor-made solutions and to customers that have today made public commitments to increase their proportion of recycled materials, and they are running short of solutions, actually. Geographies. We had conversion success stories in Europe, in North America, and actually, we see a level of maturity in some markets, like in Asia or to a lesser extent in Latin, calling for a replication of that story of conversion.
This is exactly what we intend to do, is to go to those markets, leveraging our technology, our innovation, tweaking a bit our products for sure, to be adapted to the local markets, replicating that conversion success story. I will give you three examples on how we do it. The first one is the infant formula, baby milk, powder milk. We started entering that field several years ago in Europe very quickly moved to China, became today, the market leader in China. What we are delivering to the consumer, not to our customers, but to the consumer, is safety, which is the most important thing in infant formula, two, convenience, third, an experience in the premium brand, because we stay on the high end of the market.
As that market is growing, what we foresee for the midterm, long term is very interesting development with connected devices, leveraging some of the technologies Gael was mentioning to you, and data generation and sending those data back to the parents, for instance. The second example is how we can combine innovation and sustainability. 15 years ago, we started on the market to promote the Flip-Top closure that were not existing at that time. Today, we are the market leader worldwide in a very niche segment, a portion of the market that is growing at least 2 times the speed of the average of the market. We converted a market, and we created a portion of the market that is growing faster.
When we look at the big $500 billion in retail sales of these soft drinks, and we look at the trends that you know for sure, the carbonated drinks going a little bit down, the bottled water going up big time, the growth, very strong double-digit growth in Asia or in Middle East and Africa. Adding to this, the new directives in Europe, the sustainability concerns, in Europe with the Single-Use Plastics Directive, all the plastic cups must be staying attached to the container for any container below 3 liters. We see a potential for us leveraging our innovative solutions like Flip-Top, you have an example of Flip-Top at the back of the room, or the recent partnership we signed with NCC in Japan with a very specific technology. We believe we can, again, bring value to that market, convert a portion of that market.
Of course, not the entire market, but a small portion of that market, the same way we did it 15 years ago with the Flip-Top. One last example, which is maybe the best example where you combine innovation, sustainability, market conversion, and customer sales growth. Echoing what Stephan was presenting on Daisy. This is another example of our StandCap and flexible solution, moving from a glass bottle this time to a flexible solution, of course, saving a lot on the carbon footprint. And what is interesting with that one is it was launched in July, and we got an article in The Washington Post that triggered a tsunami of requests to us and to our partners.
We see now a real trend on the market, and we got small and very big customers that were not so much interested before in this, coming to us saying, "This is a very interesting solution." We see a real trend, mostly in North America, but also in Latin America. Actually, we are very proud of that solution, and we believe it's going to be a significant business over the coming years. Again, on sustainability, we play, and we use different components to deliver our sustainable solutions. Of course, we try to reduce the weight of our products. We work on the materials. We design solutions that are compliant with the new regulations. If you look at the [Flip-It solution], which is the green picture.
If you bring that solution to an existing bottle, you have to reduce the bottleneck. This is equivalent to 1,000 tons of resin saving every 500 million units, which is a direct saving for our customer. We can bring a conversion of the market, an innovative solution, compliance with the regulation, and bringing savings to the customers. Of course, as mentioned before, we have Loop. We have also PureCycle. There is no polypropylene food-grade contact, permanent contact on the market today. PureCycle is one of the promising solution. This is reshaping the market. It's our duty to make sure that we secure partnerships with these innovative companies that will be delivering the resins we need for the future in our business. In conclusion, what we do best to grow our business, and we will continue to do, is conversion. We convert markets.
We do it with innovative solutions that are bringing safety and convenience to the consumers. We do it in different geographies, and we want to enter and convert new geographies, namely, Asia, for sure. Last but not least, leveraging all our knowledge and sustainable solutions. We want to club all that together and win more profitable business. Thank you very much. With this, I pass it to Mr. Bob Kuhn. Oops, sorry. Good.
Thank you.
Take the click.
All right. Thank you, Marc. Good morning, everyone. Before I touch on some of our recent financial performance, I'd like to give all of you an update on Aptar's largest acquisition to date, which we've rebranded as Aptar CSP Technologies. Hopefully, at the end of this, you'll have a better appreciation for some of the synergies and some of the things we saw when acquiring this unique technology. Now, some of you may have been familiar with CSP Technologies prior to Aptar's acquisition, and you may have associated it to just a desiccant or a moisture absorption company. While that is true for a significant portion of the current business today. Hopefully, you'll see in the following slides that there's much more to offer than just moisture absorption technologies.
Even though they are noted for moisture absorption or desiccant, their solution truly is a differentiated solution from what is on the market today. Most of us are familiar with the standard bottle on the left. You think of, in the U.S. market, a bottle of aspirin. Typically, in a bottle of aspirin, you have that annoying little canister or sachet, which takes away the moisture. In a standard bottle application, the moisture passes through the tablets or whatever's in the package itself before being trapped by the canister. The Aptar CSP solution truly is an integrated active polymer approach, where the desiccant material is molded directly inside the lining wall of either the vial or the bottle.
In that way, moisture cannot penetrate through the product, and thus improves the integrity of the package contents, and all the moisture is absorbed in the lining of the vial prior to the moisture entering the headspace. You're going to hear me refer to the technology as a 3-phase technology. Why do we call it a 3-phase technology? They start with the base polymer, to which they then add a channeling agent, and the third phase then is the active ingredient. In this example, that would be moisture absorption. It can do a lot more than that. I think the takeaway from this slide here, and I'll show you some examples in the coming slides, is that it can also, in addition to moisture and oxygen absorption, it can remove gases, it can remove odors.
As you'll see on one of the slides, it actually can act as a release agent. Aptar CSP today has three factories. Two of which are in the United States, and which will account for about 75% of today's turnover. The third factory is located in France, representing the remainder. Now, Jean-Noël already mentioned to you, one of the synergies is that, post-closing last year, we're working on setting up an Aptar CSP line in our new facility in Guangzhou, China. The split roughly year-to-date has been about 60/40 pharma, food, and beverage. Traditionally, it's been more 70/30. You'll see based on some of the project pipeline, we expect the final numbers to be closer to that 70/30.I'm not going to touch on each one of these innovative solutions because we'll talk about that later on as we go through the presentation.
What are some of the key growth drivers that we see for CSP? One is in the transdermal area. I'm going to talk to you a little bit about microneedle patches. This is an area that today, Aptar, previous to the acquisition, did not have any presence in. Second one, and very important one, is in the food safety business. Marc talked about our food and our beverage application. Food safety typically is dealing with food service companies and a very different large part of the overall food and beverage market. What CSP is today noted for really is the diabetes vials to protect glucose monitoring test strips. If you're familiar with the glucose test strip, this is giving the diabetic a glucose reading of their sugar level at any one point in time.
Any moisture into that test strip can significantly impact the reading of that. For a diabetic, that's very important because it's the indicator as to how much insulin to take or how much sugar that they need to intake. There's a lot of movement today. You see in the market, a lot of improvements around the management of diabetes, particularly around continuous glucose monitoring. Even with continuous glucose monitoring, the patient still needs to use glucose test strips on a daily basis to continue to calibrate the monitoring system. What we're excited about is one of those products on the market today is a product by Abbott called FreeStyle Libre, it's been a huge success in the market. Why are we excited about it is because those continuous glucose monitoring systems also are very concerned about moisture.
Aptar CSP provides an element to the complete solution that is critical for that monitoring system to work. Last is the active blister market. When we talk about active blister, we think of oral solid dose. The pill market. You've not heard Aptar talk about pills in the past. That's partially because we didn't have any solutions that were value-added in this space. I'll share with you one that we currently have an active project on. Even beyond that, those four areas, what we're most excited about is some of the synergies that this technology can bring to Aptar's legacy products. Gael shared one of those with you as we move more into our Aptar Pharma space into powder device systems. It's a natural add-on of secondary packaging to be able to protect the device before it's used.
I'll share with you later on another example when we talk about food safety that we think has applicability even in the Beauty + Home market. Oral solid dose, think of tablets and capsules. Huge market. Huge market, right. We're focusing on some of the higher value, very expensive applications in this market. Think HIV and oncology. We estimate that this addressable market today is nearly $12 billion. Okay. These products are very sensitive to moisture and to oxygen, and these are very expensive products to the patients. One pill can range anywhere between $500 to $3,000 per pill, which is why they have converted from being offered in a standard prescription package into a blister application for ease of use and for compliance. Even a blister application does not necessarily protect the product or this tablet from moisture and oxygen.
Through Aptar CSP's proprietary heat staking technology, we're able to put a layer on that blister package, which once the tablet or the capsule is filled and inserted, you get a complete moisture protection and oxygen protection system. Very important. Now, this is not a dream or an idea, right? This is an actual project that with one of our customers, they've actually received first FDA approval last month, and they anticipate to be on the market in the first quarter of 2020. Transdermal microneedle dissolving patches. Patch deliveries have been around for a long time, and in fact, again, this is a good example. It's an existing market. It's $5.7 billion as of last year. This market is growing at about a 4.5% rate and is expected to exceed $7 billion by the year 2023. What makes this market unique and interesting to AptarGroup?
One, we don't participate in it today. Two, it is also sensitive, inherently sensitive to moisture and oxygen. It is high-value products, typically dealing with large soluble molecules, particularly think biotech. The current configuration today, while the current solution today is adequate, the configuration itself is really not. You heard all the other segments talk about conversion. Think of this as a conversion opportunity. The current solutions really have a separation between the patch and the delivery mechanism. With the Aptar CSP Technologies, you can see in the picture in the corner, it is a complete molded solution incorporating the desiccant technology, which again, using typical Aptar words, ease of use, convenience. We are seeing a lot of activity from the major players in this market seeking information on this technology.
The last example I want to go through, and again, I ask you to remember releasing as opposed to absorbing, right? One application that we see a huge potential for and one that we think improves lives is around antimicrobial technology. In the U.S., there isn't a month that goes by that we don't hear about some form of product recall, whether that's in a retail space or in a restaurant chain. Typically, we hear of E. coli or salmonella contamination or listeria. These are big issues when they come on the market, and they cause significant loss of value for restaurant chains and retail stores. Every time you see an article on that, pay attention because what they talk about is what is the origin of the outbreak? Where did that pathogen begin? We're coming at it from a completely different angle.
We're saying you will never be completely free of pathogens no matter how good your food processing plant is. We see those examples pop up every day. What we can do is with the three-phase technology, we can add a layer that releases antimicrobial gases into the product, which are not harmful to the product, right? Once the product leaves the processing plant, in this case it's a sliced tomato example destined for a restaurant, it has been proven to knock down the pathogens 99.9%. Think of it as an insurance policy, not only for the food processing plants, but also for the restaurant chains and potentially eventually for the retail market. Antimicrobial is not just for the food market.
One of the interests and inquiries we're getting from the Beauty + Home segment is, "Hey, I have cosmetic customers that are dealing with very sensitive cosmetic bulk products. One of my concerns is once the package is open, think of a jar with a cream, I get microorganisms into the package. Can Aptar CSP's antimicrobial help in this matter?" Those are one of the active projects that we see in leveraging their three-phase technology across beyond just the Pharma and the food and beverage segment. What are the key takeaways? The integration has gone extremely well, and they're delivering on the business case plans that we had forecasted. We do have a strong pipeline of Aptar Synergistic products. Talked a little bit about the secondary packaging devices with Pharma, the expansion in Guangzhou, and the antimicrobial technology potential applications in Beauty + Home.
There's many more than that. I think the important takeaway from this is, this technology acquisition has enabled us to enter into currently existing high value-added spaces like transdermal, like oral solid dose, and food safety. Again, very nice pathway to some new markets that we didn't participate in before. Moving on now to the Aptar financials. Six months to date, our core and our reported sales were 5%. That's because acquisitions added 6% and completely offset the headwinds that we saw in currencies. Our adjusted EPS is up 13% for the first six months, and that's with a higher tax rate of 29% versus 26% last year. Had we neutralized prior year numbers for a similar tax rate, last year's EPS would've been about $0.06 less than what's shown here on the screen. Touch on our consolidated financial targets.
Our core sales growth on a consolidated basis remains the same at 4%-7%. You can see here the three columns that give you the three-year average. Last year and where we are year to date, we're solidly in the middle of the range, for our core sales target. Adjusted EBITDA as a percentage of sales is still 20%-22%. Again, inside the range in those three categories. The one target that we did revise is the return on invested capital. Previously, we were at 14%-16%. We did reduce it by 1% to 13.15% as we become more acquisitive with acquisitions like CSP, Nanopharm, and Gateway, right? We've reduced that 1% down to 13%-15%. Our dividend payout ratio has remained the same. Like to mention that this is our 26th year consecutively of paying an increased dividend.
Our leverage ratio is one to three, and that hasn't changed. As of the end of June, we're slightly above 1.5, actually 1.7 from a leverage perspective. We hear a lot of discussion in the market today about a recession and if and when we're gonna enter in one. We felt it was important to demonstrate how Aptar performs typically through a recessionary cycle. The best example of that that we have is the last recessionary cycle, 2008, 2009. The bars here represent the EBITDA margin during that period. While we saw a slight decline 2007, 2008, 2009, which is the most impacted, we saw an increase. Okay. The lines you see is the share price performance. The light blue line at the top is Aptar share performance, and the other two are the S&P 500 and our peer group.
Of all the markets that we serve, one can deduce that the most economically sensitive is the fragrance market or the beauty market, and we certainly did see that happen in the first half of 2009. Our least economically sensitive is our Pharma market, which performed well during that period. People still need to take their life-saving medication. What helped us through that last crisis was a strong balance sheet. Fast-forward to today, where are we? We still have a very strong balance sheet. The Pharma business is a larger portion of our overall business than it was back in 2008 and 2009. We often talk about our balanced capital allocation approach, investing in ourselves, whether it's capital expenditures or acquisitions, share buybacks, and the last leg is dividends.
We took a 5-year look back and looked at how much have we spent on those activities. We spent nearly $2.6 billion over the last 5 years. It actually is very well evenly spread with acquisitions, CapEx, and repurchases all between $700 million and $800 million, and the fourth leg of dividends being $400 million. Very balanced capital approach. With that, I would like to turn the presentation over to Stephan for some concluding remarks.
Thank you, Bob. Just a few points to wrap up. I'm incredibly proud of this team. You met them all. You will get to grill them here in a minute with your questions. I think you get not only what we're doing, but how we're doing and how we're doing it together. We are a growth business taking advantage of growing markets with our innovative solutions. There's a lot of synergies across the portfolio technology platform operations, whether it's active packaging, whether it's the pumps, the valves. Asia both represents a tremendous opportunity, but frankly also an imperative. You got to go where the growth is, and that's where the growth is. An engaged workforce, whether we're talking about the top leaders, whether we're talking about the maintenance technicians, is key. We're doing everything we can to make sure we have an engaged and well-skilled workforce.
Our balance sheet, we take not for granted. We are good stewards of your capital. Bob just went through that. Yes, we have a more proactive acquisition agenda, but we're a disciplined acquirer. There are many more deals that we say no to, or in the end, don't go to the final stretch in the auction than you actually see announced. We are confirming our long-term growth and margins targets. With that, I would ask my colleagues to come up here and show you a little video while we get organized.
Yeah, this is Paul Eckley from State Farm Insurance. Stephan, obviously you've been at the company two and a half years, could you give us your perspective on the Asia opportunity, particularly China and the color cosmetics. Why was that slow to develop, what are we going to do about it now?
Let's first talk about what we're doing about it now. It is getting after it in a hurry, developing solutions, and amping up the organization. You heard from Xiangwei. In consumer-facing businesses and also in the B2B to B2C business, so when you supply consumer-facing businesses, it's very important that you live and work and breathe in the market that you serve to really understand what's going on, what are the trends. Maybe in hindsight, we didn't ramp up early enough the leadership talent in the region to kind of ring the bell in the company and come across with the passion that you've witnessed with Xiangwei, why we need to get organized around that faster. The good news is it's not too late. A combination of inorganic and organic steps, we think we can participate in that.
I think if you take Latin America, there we were early in. We are a part of the fabric of the industry. We've taken good advantage. In Asia, maybe because it was culturally a little bit further away, we have to catch up. Maybe you want to add anything. Paul, you've been here longer.
The one thing I could add is, Paul, we had obviously, way back when, a much stricter product scope around dispensing solutions, and there was a lot of debates over the years at the boardroom level. Is mascara, is lipstick, is that a dispensing device, right? Particularly in the lipstick market, the mechanism is very critical to be able to gain share of the business. I think what you've seen over the years is we've loosened a little bit that product scope. Aptar CSP is one example of that, and it's around technologies. I think Stephan highlighted maybe some of our talent in the region wasn't quite ready for that. I think it's a combination of maybe a more narrow product scope
A slight opening of that product scope to get into some of the more faster-growing markets.
Eldon Rodriguez, UBS. This is for either Stephan or Gael. You've made a couple of acquisitions, both in acquisitions in pharma over the past couple of years. Are there still holes in the portfolio you still need to fill, or are you good where you are right now? What does the pipelines look like?
Let me take the general and then Gael can complete that. We have an active pipeline for each of the segments and cross-spanning technologies, and we're not done in pharma by any stretch. There is a good pipeline. Now in pharma, just as in others, valuation is always a big topic, and not all of those that you follow you're going to get, but maybe you want to add to that.
Gael. What I wanted to tell you to answer your questions, we're actively looking at the best way to strengthen our service and offering capabilities. Any time we're going to be looking at acquisition or partnership or licensing, that's going to be around our right to play strength, where we are really strong and where we're going to be really bringing value through the overall value chain. We won't be looking at acquisitions being the one-fit-all-type market approach. We're going to be looking where it's going to strengthen our pipeline of projects. You know that in the pharma industry, everything is around pipeline of projects and how to make the pipeline be more robust and to de-risk and accelerate your pipeline through the finish line.
George Staphos, Bank of America Merrill Lynch. First of all, thank you for the presentation. As always, great forum, and congratulations on the performance over the last number of years. My two questions are going to be initially on sustainability. I think, Stephan, you had mentioned that you're agnostic as to whether your customer's package will be metal, plastic, paper, glass, relative to your dispensing device. Those other materials other than plastic tend not to lend themselves to dispensing, because they're not flexible, it's hard to actuate. In those applications where it would move to something other than plastic, are the devices that you'd be selling more complex, less complex, higher margin, lower margin? Are you in fact seeing moves by your customers away from plastic to those other materials? Question number one. Relatedly, again, the tethered cap is a great device.
There's been a lot, though, talked about in the media the last couple months about water and what material it's going to be in over the next number of years from some of the larger beverage companies. How do you see that shaking out, and what does it mean for your closures business? Thank you.
Let me take a stab at both Marc and Eldon, should add. Have we seen a switch today to different containers? The answer is no. We see pilots and we just showed you the video on Loop. By the way, the Pantene shampoo that you see there in the back is in a beautiful aluminum container. Guess what? It's got a pump on it. The preference is for that pump to either be reusable, so that it can be washed many times. Different polymer choices can be done, no problem. Different price point. For that pump to be mono material and to be fully recyclable. Again, the container can change, but you still got to get the product out in a way that enhances the consumer experience. You don't want to get tissue, pour out the dish soap like that. That's one.
Two, on bottled water, of course, we've seen the various-- We are not in bottled water today. Let me be very clear. What we do see is the sustainability angle gives us an opportunity to capture some space, whether it's the tethered cap, whether it's the flip lid, taking advantage of that. It is really early days to see which portfolio of solutions the consumer will adopt, whether it will be all to aluminum containers, which, by the way, for the world would be terrible, the consumer is the consumer. Over there, it will be a mixture of different solutions. Our pipeline of volume in terms of having new development projects with customers that we didn't have before, has certainly gone up in that matter of sustainability.
Maybe just from a Beauty + Home standpoint, then we'll hand it back over to Marc. We're looking at trying to come up with a variety of solutions. We don't know which direction it's going to go. Our customers are already out there making commitments by 2025 and some even earlier, where they are going to have all of their materials either be recyclable, made of recycled plastics, or be reusable. We're going down all of those paths simultaneously. We're staying close with the entire ecosystem, as we talked earlier. The customer, the end consumer, the recyclers, the people like Loop that are reusing the packages and washing, and coming up with unique designs around all three of them.
To be clear, do you see this as neutral or positive for business?
Absolutely. We see it as Marc mentioned it as well. It is an opportunity or it's a threat. For us, and in fact, we've sat across the table from our customers, and they're not sure how they're going to get there with the commitments they've made, and they're saying, "Help.
What can you do? How can we work together to come up with unique solutions?
Yeah. Your question was targeting the bottled water. As Stephan said, we are not in yet, but we want to be in. On the real trends of the market, you saw the Danone announcement a few weeks ago. You will see these back and forth, but what we get from our customers and what we understand from the market is going to stay mostly with PET bottles. You will not see a big shift back to metal or glass for many reasons. We have insight for sure. We deliver with our customers, like Coca-Cola. They will stay with the PET bottle for the majority of their volumes, and this is where we want to play. To add to this, so to extend beyond just bottled water, for sure, it's important for the food and beverage to be ready with the new materials.
Before we get PCR resins on a bottle of water, it will take some time because you have the compliance, the organoleptics issues, and so on. It's first going for the Tetra Pak cap, and then certainly moving into recycled resins later on. You will see different steps, and this is why we stay very open in our solutions, because today it's very difficult to say which solution will take the lead or not. Same for your business, I guess, Eldon.
To be very specific to your question, net, net positives to the top line, much more project volume and the positives to the bottom line.
Thank you.
Yeah.
Hey. Matt Krueger here with Baird. Thanks a lot for taking our questions. Just wanted to dig a little deeper into the Beauty + Home and overall transformation initiatives. I think you mentioned that you're about halfway done from the Beauty + Home perspective. First of all, does that apply for the corporate side of the efforts as well? I was hoping that you could talk a little bit about what some of the differences are from the first half of the execution phase on the transformation initiatives versus this upcoming second half of the phase, and any difficulties associated with progressing along that timeline.
Okay. I'll take the overall picture, then maybe, Bob, you can talk about corporate and Eldon about the business. The big three pieces, if you like, first was to get the whole commercial excellence and front end of the business tuned to be much more in a rapid cadence, project conversion, and tracking. Address the top line. I think we are performing there much better. Current market situation notwithstanding, good cadence and good follow-up on customer project conversion. The second one is deal with operational issues, underperforming sites. We've been transparent about a number of sites. Our N.C. site startup, our decorative site in France, the Ripoll acquisition, and a couple sites in North America. We are wading through those. Some of them have come out on the other stage inside is doing well now. The other ones are starting to improve.
We're in the middle of that. That proves harder than we thought, or it's not harder, but it takes longer. No insurmountable obstacles. Then the third phase is about headcount, fixed costs. Those things are quote in the pipeline, but given that we have large European base with all that means around headcount approval and all that, it should work its way through the system. With that kind of overall setup, maybe you talk about the corporate things.
When we're talking about the corporate services, we're primarily talking about information systems, finance, and HR. On the information system front, we're more or less complete with the initiatives that we had targeted and set out to do. On the finance side, there was a fair amount of work that had to be done moving us into an insourced global business service center. We have now created that global business service center for our European operations, and we're in the process right now of migrating the transactional accounting aspects into that business service center. We expect to be complete middle of next year with our European operations. On the HR side, we've had some very good initiatives, but with Shiela being new to the organization, we didn't launch a more transactional shared service approach to HR.
We'll take a look at that as we head into 2020 and see what other things we can accomplish. Overall, we set out a target for the three year of our cost saving initiatives. We're tracking or exceeding in all cases, and we're on time with the majority of the corporate services.
Moving back to Beauty + Home. As Stephan mentioned, and I mentioned in the presentation, certainly from a commercial standpoint, we do have momentum going again. Our Beauty business is continuing to grow. Our Home Care business is growing. We have a little bit of lumpiness, I would say, in our Personal Care business today. I've talked with a few of you prior to this. We don't see this as a market issue. As an example, in North America, the sun care market was very slow in the start because we had a long, cold, wet spring that certainly diminished the sales. We're not going to make those up. In terms of the hair care business, it's a little bit softer, but you can hear that and our customers say the same thing. Going back to Stephan's comment earlier, we do have a great cadence.
We have a great project pipeline, and we're continuing to follow those. We're continuing to launch new products. We talked about those related to sustainability, e-commerce, where we're getting some.
Traction in that area as well. Operationally, Stephan highlighted, we do have a couple that are behind us with Annecy, with our decorative French facility also showing levels of improvement. We're also seeing improvement in our other sites a little bit slower. We're continuing to invest in taking out non-value-added costs, improving automation, improving throughput in our facilities. Those projects are also continuing. Lastly, in terms of our overall overhead, we do have programs in place to take out costs as well. We are working through the works councils in Europe. One other thing that we did recently, we sold one of our injection molding sites here in North America to a company by the name of Flex.
We're still going to leverage that facility as an injection molding site for us, but we've moved a fixed cost now to a variable cost, providing an opportunity for us to continue to flex up and down as our volume changes. Historically, we've done that, and this is another opportunity for us to continue to leverage that capability. Yep.
Hi, Neel Kumar from Morgan Stanley. You mentioned that Beauty + Home, particularly fragrance, is the most economically sensitive of the three businesses. I was just curious as to how the business and the Beauty + Home portfolio has evolved to better withstand a downturn since the last recession.
I would say certainly the Asian consumer, whether it's China, whether it's travel retail, plays a much larger role. If you want, the one unknown versus the prior recession is it going to be a synchronized recession? Are we going to see that? How is the Asian consumer going to react to that maybe different than the European luxury consumer? I think that's the biggest change. We have now started to develop a position in color cosmetics, but it's still very small, so fragrance is still going to be the big indicator.
No, I fully agree with Stephan's comment. If we look back at 2009 from a geographic perspective, both Asia and Latin America grew during that recessionary time. Now that Beauty + Home has a larger presence in Asia for that, I would expect that to also be a mitigating factor.
Maybe one other comment. In our European factories also, we have gone to a system manufacturing process that allows us to manufacture shorter runs, faster changeovers. That certainly is going to help us be much more flexible and adaptable in a tougher economic environment. Yep.
Gabe Hajde, Wells Fargo. Stephan, team, thank you for all the detail. Another sustainability question, it's obviously thematic at this point. Is there anything unique, or presumably there is, proprietary with the, I know it's early days, the PureCycle investment? From a strategic perspective, how are you thinking about that in terms of just being able to in-source your own post-consumer resin or what have you, and/or is there any IP that protects the process? I guess from my understanding, scalability is something that's kind of limited this technology up to now. Is there an investment required, and would that be borne by yourself or a co-investment or what have you?
Maybe bigger picture. The way we think about venturing investments is, there's an entrepreneur out there who is coming up with a great idea, and they're running 100 miles an hour, but it's kind of really interesting and relevant for us. How do we get a front-row seat to that? You take 5%, 10% stake. Maybe you get a board seat, you get some preferential rights, and you follow that. That's what it is. It's not the intention to buy the company. Maybe you want to license the technology. Maybe you want to execute the preferential rights. We think about that in the venturing investment the same way we make a venturing investment in connected devices as what we do with PureCycle. The reason for PureCycle is get a front-row seat, get secured access.
If these guys are successful with the food-grade polypropylene, we have access to it from day one. Maybe get some good pricing with that, be the first ones to test it out. We're not going to build a polypropylene plant. No intention of doing that. We do have some good company. Procter & Gamble is there. Some other large companies are there, now we have a front-row seat.
Yeah, no.
that's how we think about it. If they want to build a big plant, we're not going to invest in that.
Okay, perhaps one quick one, again, on sustainability curiosity. Are you getting any or having more dialogue with some of your pharma customers versus some of the food and beverage applications? That seemingly is more in the light right now as opposed to pharma.
Okay. I would say from a Pharma perspective, we are starting to have discussions, but in no comparison with the food and beverage and the Beauty + Home customers. In the consumer healthcare, yes, customers are talking about sustainability, but step by step and still at a very long distance. The one active subjects we've got is in the asthma COPD, where we are heavily working with our customers and different partners to reduce the carbon footprint of our aerosol division. Apart from that one and being very active on this one, that's not the huge pressure from the market. It will come. We are sure from that one. We will leverage, obviously, the overall work done by the other segments and the sustainability and the innovation group.
Maybe a good example, Bob helped me with the history here. Last time there was this switch in aerosol in the pharma market from everyone that it was very ozone depleting to one that's a little or much less ozone depleting. Aptar actually managed to get a significant part of the market in that shift. These discontinuities, if you play them right, also are a big opportunity. That's how we look at the whole sustainability field. It's just a reminder.
You have it perfect.
Nothing else there.
Paul.
Yeah. Paul Eckley from State Farm Insurance again. Shiela, it's rare when we have the HR person at a company give us a presentation, and thank you for that. If I could just ask, when you came to Aptar, what was it that you saw that needed to be fixed?
Well, thank you very much, Paul.
You can say, "Where do I start?
Yeah, as Stephan said, Shiela added to your long list. We've got plenty of opportunities. It really is our preparation for sort of this next level of the evolution of Aptar. With all my 10 months of experience and knowledge in the organization, I really see us truly evolving from a combination of extremely well-run organizations with very matching and fitting cultural philosophies, how we now really truly organize and become a truly global player. In order for us to do that, we really have to truly roll out an integrated talent management strategy, where really we look at talent development, acquisition, retention, and development across horizontally and vertically. Digging deep in the organization to make sure we know who our talent is, who will be in our positions 10, 15, 20 years down the road. That is, to me, the biggest opportunity.
We have very many pockets of excellence, this all needs to connect, come together, and be very intentional in working through that. To me in a way, it's a sustainability strategy and how we make sure we are ready with our leadership of tomorrow starting today.
Part of it is also just making it scalable. My predecessor did a great job. Look at the guys up here. Their career has been developed over the years, Bob, spent time in France, Gael in China, Marc in China. As you grow, as you become more complex, you need to make sure that you keep developing these leaders for the future to be replicable and sustainable on a larger scale, and become more inclusive also of Asia in our whole talent approach. Everybody needs to feel this is a meritocracy, I can make it in this company no matter where I come from, and do that at scale. For that, you need to start to professionalize the systems that when we were a smaller company, could just be done by a few people.
Yeah.
Thanks. I want to piggyback off of Paul's question too a bit. From the internal survey work that you've done so far, Shiela and Stephan, what have you found in terms of the single biggest positive that most of your employees have about Aptar? What are you finding is the most repeated comment that you need to work on, the biggest challenge for Aptar internally as an organization, away from developing the management and the talent to grow? That's question number 1. Question number 2, you mentioned that you're doing, if I heard you correctly, more in the way of benchmarking across your facilities, which is fantastic. The nature of Aptar is such where you wouldn't think naturally of benchmarking from one facility to the other, given the disparity and the uniqueness of each of the products.
What are you finding from your benchmarking in terms of, again, the single biggest opportunity for Aptar across myriad manufacturing processes and facilities? Thank you.
Maybe you can take this first one, Shiela. Then Marc talk about particularly the operational excellence benchmarking.
Yeah. In the spirit of true transparency, our biggest sort of positive or the biggest improvement that comes through really across all parts of the organization through the survey is the clarity around strategy, around vision, mission. That's really due to a lot of good work that has been put in place with communication, key messaging, engaging directly with everyone. I really find that there's a very strong company identity. It's also built on our great legacy throughout the founder's work and with the current leadership. Lots of positive aspects there. Also very positive on our philosophy and our drive for innovation and continuing to build a culture of innovation. Lots of good initiatives there and good feedback.
In terms of the challenges, and I don't know whether it's surprising or not, it's one of these things that we know it's sort of easy to do, but we still sometimes miss it, is this opportunity for reward and recognition. Again, the true spirit of transparency is something that is always very startling when you look at it. Because many times it's not the monetary recognition, it's really that one-to-one engagement, the thank yous and just real-time recognition. That was one thing that is, in a way, easy to fix. It takes intent, it takes that thoughtfulness. We've got a number of things, activities that we've started engaging in, and already we see the feedback coming back on that.
The other one is very universal in today's connected world and kind of hyflex work environment, is how we manage the work-life balance aspect. One of my work streams we're looking at is really how we continue to develop more workplace flexibility and other ways of connecting and engaging with, where appropriate, engaging with the task at hand. This is all very, very helpful and good feedback and really feeds our action plans and our action items. We look forward to our next round, which is coming up in a few months, and see what we learn next.
Yes, operations. Your question was about the benchmark for our factories and how we manage efficiency. We have, across the three segments plus Aptar CSP, more than 50 factories in the world with different level of maturity and systems. What we did first is to implement one system, one internal benchmark with the usual KPIs you can have, and rolling this out to bring all the factories at the same minimum level. Now what we do is we go to the next steps. We are implementing the Six Sigma activities to reduce our variability, to improve the performance.
We are also, in some cases, like safety, benchmarking ourselves with the outside world because you have norms and references telling you today, for instance, on safety, which is a long journey, we were able to bring Aptar to the average of the industry, and we are now looking at going to best in class. We have a set of KPIs and systems that are reporting these KPIs, and the aim is to bring all these factories to the highest level of efficiency, especially for Eldon.
One thing I would like to highlight, though, too, is that transparency, because there wasn't as much transparency across the different sites, and that linkage and that openness, so that people can learn from one another. Marc and the operational excellence team have really done a great job in that area.
If I can build on this, we want to create one floor minimum level and improving from this. The next steps are, for instance, the Industry 4.0, where we are going to bring more innovative solutions, more data collection, data-driven processes. This is what we are currently doing to go to the next steps and for sure not staying where we are.
Yeah.
Sorry. Just wanted to build on one comment you made that, hey, these are different operations. How can they benchmark? Actually, the unit operations are very similar in manufacturing KPIs, uptime throughput, change over time, yield, safety. Those are universal definitions. You can actually, once you have the system put in place, very easily benchmark and track improvements, and then do project-by-project improvements. Some sites take the lead, like in Industry 4.0, using artificial intelligence. Maybe you can say a few words about that, Gael. Aptar Pharma takes the lead, and once we got it to a certain maturity, we leverage over to other sites.
Yes.
That's what I wanted to bring to you. We've got a pilot program in some of our Aptar Pharma facility, and basically where we digitalized the overall process. Having the ability to get a complete electronic batch release instead of getting piles of documents. How to track and follow our performance digitally speaking, I mean, moving screens, getting the overall team, having real data reality. Around artificial intelligence or machine learning, right now in our laboratory facility in France, we've got machine learning and artificial intelligence around visual inspection because zero defect is a requirement in Aptar Pharma. Piloting an Industry 4.0 project in Aptar Pharma, and obviously leveraging the organization in order to make sure that we're going to replicate and share best practices around the organization. Yes.
Hi, Anojja Shah, Bank of Montreal. I have two questions. One is just a follow-up on the recession question that we asked before. I know in your 2Q earnings call, you said you weren't actually seeing any slowing yet in fragrance and the more economically sensitive. Has that changed since then or is that still the case? That's number one. Number two, in this digital healthcare focus that you have, how receptive is the healthcare provider community, and do you even need them to be involved?
On the first one, we haven't seen it in fragrance, but we were very clear we have seen a slowdown in the personal care market.
Yeah.
Particularly in the U.S., a little bit also in Europe.
Would you say that's recession-based?
There is a lot of humming and hawing around it, whether that's being prudent around working capital, supply chain tightening. Some of it is related to one of major product launch last year, not repeating and not actually going as well at one of our customers. I wouldn't rule it out, at least that the trade is getting ready. It's not related to the luxury fragrance that we called out in 2009.
To answer your question around the digital aspect, all the key stakeholders will have to get a part in order to build the digitalized ecosystem. The care provider will have to be part of that one, like the pharmacologist, like the physician, like the patients, like the payers. The only way for us as an industry to be successful, to make sure that we are all connected for digital medicine providing support. The answer is yes. Agility, different business model are popping up and so on. That's why we've got in pharma a fully dedicated organization looking at digital healthcare, how to come with solutions. Because one solutions in one country for a certain therapeutic area will be different for another regions or another therapeutic area.
We need that flexibility, that agility, that ability also in that space to learn, to fail fast, to learn from, and to adjust our business model. Yes, all the key stakeholders will have to be part of this transformation, this digital transformation.
Let me also be very clear. The revenue from digital in our P&L today is zero. This is obviously a very important segment for us, and everybody's trying to figure it out, and we want to be sure that we are part of the figuring it out and picking the solution. None of us know how the patient healthcare provider insurance data privacy equation's going to work, and it's for sure is going to be different by country. Healthcare systems are completely different by country. Yeah, George.
George Staphos, BofA. Last two, I promise. First question for Xiangwei and Stephan. We've heard a lot about the risks, the issues in producing in China and Asia more broadly, and the puts and takes on protecting intellectual property. Can you tell us from your vantage point what the urban legend is relative to the reality, and how you manage obviously a great suite of technologies for growth in a market that might be a little bit more challenging from a protection standpoint? That's question number 1. Question number 2, Stephan, you had mentioned it in your discussion. One, you lowered your return on capital hurdle, in your long-term target. We understand why. We noticed that within the segments, you're no longer providing that segment EBIT to invested capital goal. We assume that's probably the same reason you're going to be a little bit more acquisitive.
One, can you comment on that? Two, how do you continue to expect to manage the return on capital as well as it has been when you're growing more acquisitively? How do you prevent the horses from leaving the stable, so to speak? Thank you very much and good luck in the quarter.
Maybe let me start with the second one first. Rob, you chime in, and then we'll go back to the China topic. As you know, we changed the whole incentive comp structure, both for short-term incentive and long-term incentive. Short-term incentive, we had kind of a three-year moving average of a number of metrics, and we replaced it with very simple metrics, revenue growth 35%, EBITDA growth 65%. Recognizing that we need to bring the return on capital equation in differently, we put that into the long-term incentive. In our long-term incentive, that's now driven the variable portion by total shareholder return and return on invested capital over a three-year period. Since we shifted the short-term incentive from EBIT to EBITDA, and for the reasons you already mentioned, acquisition and that we do a lot of divvying up of capital at shared sites.
We said, okay, let's not have another metric in the short-term incentive around EBIT, the segment capital. We are tracking, of course, the return by segment internally. I don't know if you want to add anything, Rob.
No, you always say exactly what I was going to say. We talked a lot about the synergies, right, and the shared facilities, and we want to encourage that. Inherently, doing a return on invested capital by segment has a fair amount of assumptions involved in that, right? By focusing at the top level internally and all by one metric, we're actually encouraging the segment to leverage those assets and those sites. We didn't want to get into intercompany bickering over, "Oh, well, now you put more in my production facility. I'm going to shift part of my balance sheet to you now because you're using my assets." We wanted to focus more on the value add and the bigger picture and get everybody focused on increasing the overall consolidated return.
On IP, the urban legend is, of course, we bring our great technology, they steal it, and we go home with no money. The reality is, the last two parties that sued for intellectual property infringements were in this country, and won. Of course, you have to be judicious, China is no different than other countries. You have to protect your information, compartmentalize where necessary. The reality is, our Achilles' heel is speed. Everything in China moves at three to four times the speed here. We call it China speed. It's real. We don't make it up. It's even in our own company. Things that we can do in three months or six months in China will take us 18 months, two years in France. It's just a reality. It's not a value judgment, it's a reality. That's our Achilles' heel.
If we're not fast enough in China, we lose the game. Intellectual property, I don't lose a lot of sleep over. Of course, we got to practice the same best practices as we do everywhere else. The bigger picture is, of course, what you read, is now that more and more China has become an innovation hub, they have an enormous interest to protect intellectual property, and the systems become much, much more robust and akin to what we have around patent rights, enforceability, and so on.
You can see, Xiangwei, jump in just one second. You can also see that in China, the commitment to our customers. You can go read the last earnings release of L'Oréal or the last earnings release of Estée Lauder, they have a very firm commitment to not just the selling of the product there, but also to speed.
Thank you. I feel really protected in the new world. It's wonderful. You hear a lot of sound bites, and we are not in that most exciting space of real technology that a lot of people are concerned about. What we do really, and how we innovate, a lot has to do with the way we work together, the way we bring the product actually to the market, the way we execute. This is not something that you can easily replicate. That's one. Number 2, if you look at our customers, they are really putting their largest innovation centers in China. Whether it is P&G, whether it's Unilever, whether it's Estée Lauder, L'Oréal.
Even if Estée Lauder doesn't make anything in China, they have 100 people in R&D to collect consumer insights to try to create products that bring to New York, that will be maybe made in New York, but bring back to China. This is what is actually driving behind all the growth of our customers, and it's very important, and we cannot forget that. I really echo what Stephan said, is we're not concerned about that. It's really about how we innovate and how we bring the product to market, in the most agile way.
The other thing, of course, I don't want to invalidate because many of those experiences are true. If you're Siemens, you sell high-speed trains, and now you see your technology riding around made in China. That's a real experience. We're not making high-speed trains, what Xiangwei said. The government does not put their thumb on the scales on who makes the lipstick or who makes the makeup. It's our ability to execute.
Hi, Gavin Horian from Palisade Capital. First, wanted to make sure I'm hearing things or interpreting what I'm hearing correctly. It seems like broadly speaking, the company as an organization is trying to move from what may have been a little bit more, and I'm sure this is a term you don't want to hear, but like silos into more of a overall integrated whole. I just wanted to confirm if that's accurate from what I'm hearing. Maybe related to that, Asia seems to have its own leadership. How does that interact with the three segment leaders? It doesn't sound like there are independent leaders, at least for the other regions. I'm trying to understand that part of how the organization's structured.
Thank you. Thank you. A wonderful question. Actually, I'm a big believer in small entrepreneurial units. It is not one whole. In fact, we're going back to earlier days, we celebrate our founder's generation and our founder's mentality that was consisting of small entrepreneurial units. The way we scope these small entrepreneurial units is on a regional product market combination where there's a logical grouping of assets, products, markets. For example, our $800 million Beauty + Home business in Europe is today four P&L units. The fragrance unit, the skincare and color cosmetics unit, the personal care and the home care unit. With their own P&L leaders who have their bottom line, who are single accountable for that, who have their sales force. We share things that they shouldn't do themselves, like invent new accounting practices or new people practices.
They should use the corporate system. Leverage across the world, what we should do together across the world, but actually reinforce the entrepreneurial drive and focus. Xiangwei just went through a model where in China, there are also 3 P&L units that drive the business and are incented to that. I'm not a big corporate guy. I love our small office at Crystal Lake. We will not grow in a big corporate machine.
I'd just like to add, we have been sure of this living when we come in China. I've spent nearly seven years in China, with kids born and raised in China, and so on. Having discussion with Xiangwei about the market, the dynamic, the agility, the different market and so on, that's natural because I've been through that one.
That's a good point. You can have a lot of charts and Abbott and who's on first and who's on second, you can just have a team that works together to grow the business. I have not a lot of patience when they start bickering about who's now accountable. Is it me first or she first and me second? The P&L lead in China, for that sake, that's the person who's on first.
Yes, step first.
Sorry, I just want to add. This is a great question, actually. I think we benefit from this great Aptar culture that we are used to working together. I joined this company as a new kid, but already immediately integrated into the company, into the company culture, from day one. Secondly, we actually have this very strong motto of act local, think region, leverage global. We have a lot of global technology and assets in our technology, in our capabilities, in our people. That is really, really valuable. We would be foolish in the region to start everything from scratch. How we execute and how we take the accountability of delivering those targets is very crucial.
Now having me there, of course, it raised a little bit of the profile of Asia and actually not a little bit, a lot, let me say. If you look at our charts, our biggest businesses are in Europe and in the U.S., and this is how it has been. When you think about how important this one customer, let's say GSK or L'Oréal, could be bigger than a whole country, and what do they worry about? They spend 95% of the time, of course, on this biggest account, and maybe Friday evening they say, "Oh, Asia." Even if no bad intention. They all want Asia to be successful, but you only have 24 hours a day. It's not a priority.
Having me there, of course, I'm going to be the guardian of Asia and make sure that the Asian topic comes to stage, comes to ex-com agenda, whether it's talent, the profile of our talent. It has to do with the talent, really very, very crucial. Priorities, resources, allocation, how we innovate. This is actually a beautiful challenge so far, and I really love also how it's working out with our segment leaders to take Asia to the next step.
Maybe just add one last thing. Seems like you've opened a big thing that we're passionate about. In terms of the kind of stuff I made earlier, we're not sitting here trying to go, okay, what's the org chart look like? How are we dividing this up? We focus on the business, and then how are we going to grow the business? We focus on the customer, and what's the customer needs, and how do we solve that? That's the priority. Everything else, we will figure out.
Okay. I cannot not say.
I was going to say something, but I'll let you go.
Okay. It's two things. One is it's absolutely true. It's that the org chart cannot drive how you work, basically. I really see the value that I mentioned in my presentation as well, that everybody here has lived and worked in another country, many times in each other's countries. I really see the value coming through that in terms of how this team cooperates. That's one. The other important thing is really the act local, leverage global. That's very, very important from a people perspective, because that's a huge value proposition for our team members. You join Aptar in one part of the organization, and we don't just hire people for a job. We hire them for a career. You think about the plethora of opportunities there are as you look across the segments and the regions.
The global aspect comes into play in a big way like that.
I was just going to say, you can see the passion that she brings for the region. Having her on the executive committee, I can confirm that there has been a certain amount of passion as we're discussing resources and capital allocation, and she's definitely the one voicing and leveraging the resources and making sure we stay true to what our targets are and what our strategy is. If we want to get bigger in Asia, we need this. We have to have that. I think that's really important for the organization.
Great question.
Paul.
Paul Eckley at State Farm. Stephan, could you give us some idea, quantitatively or qualitatively, about how much business you guys do in Japan and Korea?
That's hard. Directly, we do nothing in Japan. Nothing-ish. We import something via China, where we have a joint venture. Be very about this. My fifth global business, the first time I don't have anything in Japan. It needs to be addressed. We are looking at ways of addressing that. If for no other reason than this Asia for Asia trend will make that an imperative because certain countries have a certain luxury connotation. Right now, made in France is a luxury connotation. Made in Japan is right behind that. The luxury producers, whether it's Estée Lauder, whether it's L'Oréal, whether LVMH says, "Well, I cannot react fast enough from New York or from Paris with my supply chain. I need to be in region, but I still want this luxury cachet.
The next best thing, I make it in Japan, made in Japan, and sell it into China.
For no other reason, for that reason, we need to be in Japan. Of course, Japan is fourth or fifth largest economy in the world. It's not something huge. By the way, a very rich one with a lot of role model for Asia in terms of products for the elderly. Yes, it's hard to get into, but once you're in, you make good money. In that sense, very similar to pharma. Korea is a different story, very important for the beauty business. Again, as a role model, particularly in skincare. We have some homework to do in Asia.
We're doing that, actually. We're doing that. It's a great question. We do sell to Japan and Korea via China mostly, but also some from Europe. For example, P&G's SK-II is made in Japan, and we do sell to SK-II. We see actually increase in needs of our global customers shifting their manufacturing to Japan, and also innovation center in Japan and Korea. We definitely want to leverage that. Also even for pharma, we see a lot of interest in technology that we could try to build on to. We have interest in technology for them and their part. We just have to figure out the way to partner the business model. The example Marc talked about, the licensing, cross-licensing with NCC is a very significant step for us, and it's something we definitely want to also build on for pharma, for example.
For Pharma, in certain application field, we are market leader in Japan because products are filled outside Japan. Allergy, rhinitis, no Japanese players is filling in Japan. Products are coming from the outside. Asthma, COPD, the same. There are many application field where we've got strong interest, where we will have to develop partnership licensing and looking at the best way to sell this market.
We definitely want you to ask this question again next time. That's what I would like to say.
All right. It looks like we are going once, going twice. I'll hand it back to Matt. Thank you very much.
Thank you.
Thank you.
Great. Really like to thank everyone, especially those of you who traveled to join us today. Thanks to everyone joining on the webcast. That concludes our event. If you have any questions, we'll be available shortly here for a little bit for coffee afterwards. Those of you meeting with me, we're going to meet on the first floor near Starbucks, and I would encourage everyone to make our way down there. Thank you again. Appreciate it. Have a great day.