STVN - Earnings call 4 2023 | Stevanato Group S.p.A.

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Operator

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Stevanato Group Fourth Quarter and Year-End 2023 Financial Results Earnings Call.

As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. to conference like to would Instructions]I turn over the Ms. [Operator's IR. Senior Vice Miles, President Lisa and Please ahead, go madam.

Lisa Miles

Frank Marco and us. is Chairman; With morning, me CEO; Good thank today Franco you Stevanato, Lago, CFO. Dal for joining Moro, and Executive

today's a page Investor website, can accompany our the under on be the You can found to Financial results find which presentation Relations of Results tab.

assume XD only a presentation. recent meaningful may revise harbor may to as The obligation statements presentation with Today's reflect company internal being safe entitled Form face, financial discussed moment Risk forward-looking this events the Factors report of and filed our believes today's are trends be be in in comparisons. this investors information differ we update read to of statements required or information statement the the included its made a and in company's results analyses XX-F and take subsequent to as will some annual predictions. today and reminder, most in SEC. any including does circumstances, events except the quality informative results a also information. in result providing financial Management our gauging performance, contain these of in our law. forward-looking uses Please not As risks to of non-GAAP Item on front identifying may materially in Actual by period-to-period nature or results those

over Stevanato opening measures, press release. And will For the now I please the earnings to for of recent with a see Franco reconciliation the call company's remarks. non-GAAP that, most hand

Franco Stevanato

solid with XX% growth constant or basis. on closed positive out very Thank you, XX% was Lisa. for year currency a another us. XXXX We

time, near-term mix industry-wide high-value same continue expect and We successfully solutions. projects growth. favorable chain XXXX, growing macro and chain for of execute we ongoing challenges high-value while and capacity demand issues our we our fit environment in drive uncertainty, expansion inflation curity At some a solutions, still the of industry double-digit will during ongoing white navigated objectives to of delivering supply continued issues our which dynamic advancing from tailwinds, our to cast supply secular

same capacity the investing have been the to at time, meet expanding market in heavily While demand. we

of that in organic midterm will where The expect investments we We exploit opportunities we invested remain in in leverage drive range high-growth front broad the capital like markets these our fundamentals as business end biologics, growth We see opportunities. of the operate us. strong. of our efficiently to a

favor cartridges the recent My syringes, set on market As in integrated several quality towards with global well visits right our leader standard growth biologics on customers positioned in of game that enviable trend solutions, set. pen with and continued are path, position we an prefillable administration of unique the largest capitalize our in proposition and the the differentiated we footprint, global and end-to-end are value of the to optimism our customers, medicine. our our one product

the right we Marco. will focusing you. succeed now solid growth the creating portfolio the Thank believe to strategy, and shareholder product long-term we have through are I and We hand as we call future right and toward over driving driving team right to the value. execution, on work

Marco Dal Lago

Thanks, Franco.

fourth we guidance put of slightly below and expectations range. Before in otherwise specified. comparisons I to on the changes begin, Starting I growth that XXXX at the quarter, unless delivered all double-digit our was year-over-year which to X, low want refer clarify us Page end our

inventories of the high We inventories, manage but and non-COVID-XX stock limited is across supply a The they results mitigate at to built industry. stockpile pandemic. long fiscal XXXX in who with customers, uncertainty customers the differences work demand higher the are due supply chain mostly were XXXX and volumes guidance as customers However, our believe of to to the vial during not actual temporary imbalance lower COV-XX-related pandemic. and up the lead this applications also times down

market indications resulting to in improvement, fiscal our but in starting some recovery vial of rate for demand, a X% XXXX are lower We assumes XXXX. a guidance of XX% see early growth to

in XXXX, maintaining XX% of we of target of XX%. we are beyond targets anticipate double-digit our growth high-value XX%, in XXXX, EBITDA still adjusted margin XXXX. an and Looking midterm starting low In range approximately solutions the

on by be in a to tied results solutions. or about revenue my approximately was will basis, a segment. currency the increasing XXX.X biopharmaceutical higher Growth turn Solutions offset mix of segments. driven our high-value on evenly million EUR attention EUR Slide XX.X growth by which internal bit Diagnostic and to X constant by of volumes million, XX% XX% a COVID-XX. related split X, and focus of a expectations the EUR quarter to revenue across was to our Let's fourth total comments. increased quarter Fourth little which below Nevertheless, decline was million

the Excluding revenue in XX%. COVID-XX, fourth would have quarter been growth

We of offer high-value total generated have our the managing from high-value sales XX% record solutions. XXXX, time, of which their we been growing revenue. same the represented related In products, at to while COVID-XX of mix revenue fourth quarter

of XXXX that quarter XX.X% X the quarter strong gross reminder, decreased was expected, profit for fourth benefits exceptionally fourth As repeat. As margin to not the XXXX an included of did and quarter a

was offset the largest inefficiencies facilities. unfavorably Gross short-term tempered And and were more from during of higher instituted and the some lower currency adjustments a the phase. and also we increase price mix predominantly utilization recover was easy prior to costs contributors solutions. inflationary high-value profit additional by favorable First, field periods, segment. the to which X BDS virals, the to translation by industrial revenue -- second, to margin in ramp-up we costs, naturally the This continues start-up to higher from step effects high-value within in recognized the led be profit by impacted tied These depreciation including solutions. down. new partially

and of due R&D the mainly with the our For quarter lower performance-based compared program. year, prior bonus a were SG&A expenses management to for accrual lower fourth XXXX,

the to headwinds. to margin to income. gross in short-term counterbalance decrease we other XXX management addition, lower due profit cost the points temporary In mainly profit basis XX%, and have initiatives Operating prudent decreased

the net we net XX.X EUR XX%. of On $X.XX adjusted diluted profit of of margin line, XXXX, of quarter profit adjusted for an EBITDA EBITDA generated adjusted million or EUR adjusted earnings or bottom million, and share. of totaling the $X.XX reflecting million EPS of fourth diluted per $XX.X XX.X

on quarter in revenue Covid-XX review Solutions destocking. Diagnostic X. and growth segment strong industry-wide The inventory a steep segment Let's despite the decline results biopharmaceutical in Page delivered and

offset XX% the constant currency due of due of and quarter to of short-term representing a field fourth margin XX% in plants. on revenue high-value BDS XXX.X from growth a quarter to new decline of lower XXXX, revenue to million, XX.X% containment vials other segment by EUR XX% in core solutions. million, revenue. EUR revenue X% by grew and For our volumes, XX% delivery XXXX, solutions the profit segment Gross solutions This tied the XXXX, to grew of In fourth in start-up inefficiencies fourth was currency business. and quarter XXX.X drug basis the driven easy to mainly containment decreased to translation

lines. short-term to vial Additionally, led some on volumes underutilization have lower

the quarter consistent segment last XX.X same the For of year. Engineering XXXX, revenue EUR period totaled million, fourth with which was

basis to last margin profit compared same the quarter XXXX, fourth for points gross decreased of Engineering the the XX.X% segment with year. For XX period

managing are large We of work a progress. in through volume

cash we Our executing of had XX, Page expectations. were main million million December million. priority and is net million our in lead full for XXXX, $XX.X was EUR as debt line shortening XXXX expenditures in quarter in our EUR XX, of of projects XX.X equivalents and and year, and with fourth the these Capital on EUR times. On cash XXX.X which the XXX.X

investments Our in capacity market expanding are meet high-value solutions essential demand. in to expected

EUR million. XXXX, the equipment EUR operating flow working intangible million, reflects million, needs quarter For used and was purchase growth. current plant the organic which our negative was cash of XX support assets Cash EUR in of free property, capital fourth of and flow to XX.X which XX.X from resulted cash for activities

few XX to fund we have Over business, and growth. needs we the the We additional to the loans X months, XXX midterm support that financing options million, strengthened and with our explore sheet million. totaling EUR continue will adequate liquidity of drew believe EUR approximately future we past balance new down to

revenue EPS introducing million of EBITDA to we estimate Page CapEx are that EUR range in expect of guidance. XXXX, XX, our of We In full XXX.X range range between XX% the EUR X.XX and X.XXX our $X.XX guidance. and based we XX% adjusted diluted $X.XX. on the to of million will midpoint year currently of billion, revenue revenue Lastly, and billion total EUR range on XXX.X in the XXXX in the EUR adjusted

stronger call following: operating this as and XXXX Our first be full with are quarter remain current slightly we engineering XXXX will period half. expect the that quarter focus the inventory than the half, segment flat second of in the be the unchanged. Despite midterm our will year. will be this, growth, The the lastly, XX% last down QX, EUR the year than you. work pandemic engineering first on years, with million solutions we estimating still guidance XXXX for the compared the down half a wane, will on And of ongoing progress. total revenue XXXX in a as a in year We XXXX the prior Overall, assumes currently first environment the to XX% be of mid-single-digit in while I Franco. executing expect decline a segment in continues of the QX of we on outlook growth remains hand XXXX. assumes compared the stronger Thank we consistent in revenue the million. dynamic High-value revenue X first still BDS will revenue. the and XXXX. in X to In headwind compared of are we normalization. same range EUR step our with to approximately the currency to to believe Also, quarter with flat first with will

Franco Moro

Marco. Thanks,

our growth double-digit XX% increased fiscal XXXX, solutions total last of top For and year. up achieved high-value revenue, we to XX% of mix from line

as convergence engineering made capacity the challenges Nevertheless, the that enhanced continue a faced manage. XX, of disclosed, integrated proposition. we Slide On we we impacting year, our see meaningful During segment. also progress value expansion the our factors in to previously we and

Over the the demand. for strong times timely mostly on to to from challenged but deliver and long months, resources components shore the upsized engineering machinery, the demand last needed the execution we to have XX electronic been with up benefited due for lead we time

segment the some take is time. impact but will better negatively As better prioritize in We we resources balance term, we business it to may this growth the these we that demand, attractive bring path completion. execution for right to action on projects to believe position will believe we quarter, the and path believe the success. discussed are last short This most but with long-term

XX. approximately to XX% has the up throughout Despite cautiously segment, increasingly and XXXX. chain And X% the from converted for slower will begin see and to year. BDS segment in biologics configurations of market. demand headwinds revenue, -- expand the believe than the the flow Turning the expect our flexibility. currently COVID-XX, revenue vial we and ready-to-use the with excluding buyers opportunities from represented of normalization our from order syringe of We on that ready-to-use recovery the underlying market see in compared ready-to-use enhance rise. Biologics, the we the We term, second many demand of Today, of adoption in Slide the are cartridges. In the year. vial BDS that Customers half last less continue to path supply temporary. leveraging our to advantages optimistic risk, to continues of quality a segment destocking, XX% up is XX% to cartridge reduce format. pick Longer will

of XX% based lines on fill market processing fact, is increased in estimated buyers finish have In the number cartridges sterilized and of XXXX. data, to capable and

the is portfolio that diversity will galvanize adoption regulatory us The changing navigate impacts the believe decade. from COVID-XX. lingering in also our We over helping product landscape next

demand for demand products, lagging, be short-term been continues syringes, has glass higher particularly to robust. why So other

such syringes In fact, XXXX, record drove in biologics of high-value year Nexa. a in as sales

backlog to order new on Page now intake Turning and XX.

we demand And and fourth New with backlog biologics. of result, as of backlog EUR intake quarterly XXX XX% in fluctuation order because analysis we heavily million often approximately a XXX the view million, weighted the metrics EUR trends. intake, exited approximately quarter. these increased order more provides year experience towards -- annual a that believe we accurate of to in

and backlog intake On in Page will we rather than on order beginning fiscal an XXXX, provide So basis quarterly. XX. annual

are In coming revenue a in production Our have we and that fourth a ramps. we the steady commercial multiyear and capital syringe years. expect Latina, quarter, launched ramp the volume projects multiyear over investments

be lines our continue proposition. are commercial production commercial In of track support later biologics. to refine volume continue the anticipate this revenue production value project XXXX a lines On The will to is year, into of validation integrated long-term on currently Fishers, customer when our other addition, XXXX. XX, end until but begin to stabilized ramping to facility productivity as by we for a back catheter contribution offerings And these enhance XXXX from Fisher hit do installing We transition a part we we'll not remain will expected expected meaningful Slide full in ready-to-use GLP-Xs up beginning XXXX. to and to planned. to activities begin supply In as cartridges. a customer

Our in during Italy and system serve Fill-and-finish for interaction as development. line drug any after recently to and identify batch the process. between and allow the fill-and-finish supporting front container the launched small services These centers possible excellence services customers non-GMP drug in early-stage We the Boston technology operations.

engagement, Our on entire helps XXXX gain closing, our priorities. operational centers flawless early which us life In supporting is the throughout in our cycle. XX, foothold priority #X strategic a customer foster of execution Slide them drug

the through on As remain of we high-value consider in to XX% XXXX, XXXX adjusted EBITDA medium-term expect beyond, and XXXX. achieve we approximately double-digit solutions to an And in still We range XX% revenue targets. growth of margin XX%. in and XXXX low bullish our

growth, strong confidence by investments in our are drive believe are seeing open mode, growth Our us, competitive long-term let's around Operator, to we for on is questions. we underpinned it value. deliver strong and capitalize increasingly we organic tailwinds, margins to positioned well and secular what continued durable including an biologics up shareholder expand fully

Lisa Miles

I press should like release. Operator, It be ready before clarification regarding as million would to million, one error are morning's an relates we for morning's backlog up, stated this have We this Thank XXXX. to to questions, jump into correct apologize.Okay, I we $XXX as release. you. press open it $XXX not in fiscal

Operator

now This is question session. with conference question-and-answer call the will operator. Operator, first [Operator's Donnelly Citi. we from is begin Patrick Instructions]The

Patrick Donnelly

Maybe a couple on stocking to start.

it of And and customers? you're it then Or visibility few going talk seeing in to higher of terms customers? Just more a about recovery end the pretty can concentration there. path just you broad-based? the of Is have products that the is and into concentrated with the is kind end you when this

Franco Moro

not your a to few here but players. the Yes. it's by risk Thank we It's on main just points, situation the Marco's talk concentrated about highly player good not situation you statement taking many with question, good is chain, the of some shares of -- very the due commentary, of impact as and built in the only this talk you market had you. in supply others a see but a general consequence and just it part COVID, high point be that in

the of next the going be easy this inflection stated, second improvement terms now and but is situation In not we customers to in will interaction period. with the to are that support idea we with normal point, as of the half the state our information year to receiving have in some visibility, which

Patrick Donnelly

out-year should just obviously the seemingly That's weighed pieces targets. expansion maybe 'XX Because you the some the down just you look this the piece. the This headwinds little margin again, down about helpful. of Obviously, bit, reiterated stocking a year, on be weighed outlook. the moving strong. pretty talk And then like? by midterm little year a Can what bit

-- the there's and break in talk is nice this there there's on a it about So pieces just margins destocking you inflection piece when eases and Can inflection then an the year? moving out higher. headwinds margins maybe the

Marco Dal Lago

Thank you. Yes. Okay.

other ramp-up up in segment. the at lines level to to ramping facilities see slight slightly margin, or And the a this mainly bias gross slight our reduction can XXXX line For we of overall in XXXX, the same that at BDS And EBITDA the see we to see year point we profitability about -- basically, with on Engineering we in center the margin improve we expect cost adjusted compared are some decline segment, due on our new in X underutilization in side, bios. a still XXXX. profit

Operator

The next is Stephens. from question Jacob Johnson with

Jacob Johnson

first just Maybe segment. the on Engineering

demand the the demand understand pointing your Certainly that you're or seen supply Day of challenges outsized kind engineering a to whatever point point to? of number mentioned to there, the on to how today your maybe demand we've of for that you're chain in segment year Investor you kind announcements seeing do I'm want fill-finish recently. environment I year. but last segment. You and guess there, But expectations curious a flattish capacity compared Just

even So improved I'm more that's further just recently. curious if

Franco Moro

Yes. Thanks In Capital is are a business projects. based we The the for with answer that on at meet question. we aborad. delivered see demand Day. as line expectation Obviously, about the the growth single-digit Markets that's the talking our we in slight

So see the the your years. X we of are in growth a very we last that enjoyed healthy and used XX%. to the range want to drive I year to quarters also segment comparing 'XX, attention of to 'XX the But fact fluctuation some in

journey year the main at positive the solution our So really the to rate customer growth serving and for is is serve best. the our in part the partially changing in the in a of attention of that next success market the

Jacob Johnson

my then And just follow-up. guess it. I Got

a regulation One mentioned ago your this of competitors NX-X their Europe. on opportunity the couple weeks of in call from

and an regulatory of kind to landscape. increased mentioned you cartridges deck, ready-to-use your shift due in vials think I to

that your and guess NXX on I Stevanato. mean what for view curious So could kind I'm of

Franco Moro

the particle new applicable innovation, of in Videra's Isis of reduced one a because contamination products, market the lot refer to also secondary point linked cartage packaging, main to good our a the impact our and new possible is we filling very fill packaging in our innovative and very, if addressing is risk the sterile our syringe possible the easy in secondary a our It's for innovation that with technology, because we lines market. that the to

So we products. of the our entry that while is fact we inside are one on quality future reasons the increasing are barrier one expectation for main to term market in this confident new the and playing the of the are market innovation of

Operator

of Blair. is next from Larew Matt William The question

Matthew Larew

to wanted destocking just again. I on ask

So to would with to year of the this back first space, loaded, as by require guidance to, quarter guided the full half year-over-year does in flat I has it's Others in think. talked step the midpoint year the you the sort ending stocking well. back quarter, of second down as even reach right it up if about a alluded

quarter? So inventory by And just that the after to the of actual or get might level you on conversations when customer curious is down? do first are orders worked have in schedule for guidance based what that visibility rebound production around supported more

Franco Moro

Yes, that in said And quarters, to for And bias market. it's as more for you only is improving referring Yes, on business. the we I before, the to we start angle of next year-end. after expect mix. the but see have -- giving immediately. I not some sure, forecast a an a our portion

relying lines XXXX. this more to In that we of specifically obviously. will the from the to of are our be the have up visibility, more new product the year, is the linked on ramping other and to I in for expectation visibility and terms needs linked during also also That Latina facility, also stress customers,

Marco Dal Lago

second the our the compared a of we stronger About to half. half year first model, see

the are quarter quarter, installed Latina production the leveraging in in commercial and we in of business growing a also start the also place putting Fishers. So after capacity

Matthew Larew

called the challenge material Okay. to something the out were related the that last in And pricing prepared a you side take inflation. to on you raw the comp of from outsized years, remarks then was pricing able perspective couple

should just a be from what here... thinking about curious we pricing So perspective

forward? Looking

Marco Dal Lago

expanding for keep So between on our high-value In to XX% plan have XX% XXXX. products to first of we we model, high-value all, our products.

frequently We we in on see accordingly, the pricing in are say, a readjusting our and price our decline. as calculation price past, keeping cost model let's don't

Lisa Miles

gas last to the secure that just think I some raw price those pricing, more adjustments adjustments more Matt, as nature, reading address quarter spike, and year pass-through we the returned But to Those should through is think question adjustments. and materials. recoveries materials. your you're we other which of fourth for have our the in referred natural to were particularly to in cost price on in since pricing you really annualized the

Operator

is Bank from of De Bruin, Next America. Derik question

Derik De Bruin

what's year? this it, if embedded your for sorry but missed COVID-related expectation I'm I revenues

Marco Dal Lago

We year. don't consider we any revenues model more our in core the for negligible the because it

to you see XXXX, amount QX As small. very, the can related in old very was

our -- shift areas news I good to model XXXX, don't think Covid. from our excluding in the is that having we to ability growing QX, for revenues therapeutic XX% a Covid.

Derik De Bruin

on I what margin commentary. was spiking. back -- That's Great. the going of And on some

capacity So of margin just some overhead you've the pacing throughout particularly gross through? dynamics talk can going got on, you coming given year sort the as about

Marco Dal Lago

Yes.

we in mentioned, more of second Engineering expansion in the see segment, part As year. the the

I part because we we'd situation a of of underutilization I expect obviously, mean, year, some expecting. the Nevertheless, during of the the in headwind market the the is reason recover For mentioned some line, half see we effect, had first year the as reason as before, temporary that of second buyers mentioned. but the obviously I the to the

Derik De Bruin

the Got XX% was your for is I mean, and it. XX.X% -- guide revenue Street And it. of like midpoint your looking the

it's in in between line. your guide, your guess X much So XX revenue the so what's the I difference But or delta?

Marco Dal Lago

the delta with based we is backlog on XX%. covered are XX% our between -- The to Yes.

the restart to the other X mainly uncertainty customers complement. of We to The is have from market. related

to the associated inflation point so destocking. And

Lisa Miles

pace Derek, recovery vial within different basically, a the it's market. of So

Derik De Bruin

Got you.

do the some it? to of right still see recovery where you to goes just get see it are recovery, market now, is to doesn't stays have it X% really Is the at it end? that and Or So if still there? confident you the sort that point in

Marco Dal Lago

yes. is answer The

Lisa Miles

still X%, Eric, The in clarify. to yes, answer just the we're is confident

Operator

Securities. The CJS Larry is Solow, from next question

Lawrence Solow

question, just we supply guess growth some kind I in first important. nice But should of now sort year-over-year? mentioned the to with this kind -- of of now, expect had has you backlog year-over-year. is Obviously, or flattish be orders backlog Are you a and kind annual look kind we just on how number going we of order of more forward, is chain go-forward end demand the line and mostly that plus normalized backlog minus basis? should market quarter

Marco Dal Lago

So backlog in their compared the in the to partners chain. is our was, situation, to prepandemic secure much order higher. And pandemic our mainly the to opinion, supply from related customer peak our

situation. believe a reliable So as more is number. is on the than yearly we fundamic. figures a to the by the how we normalization that have basis rather on order backlog the a the toward it's commentary, and can Franco, the during after mentioned believe provide we pattern fluctuation see the basis quarterly This going number with And a

Franco Moro

because have only you we it's that, consider to backlog, the indicators with the forecast. put but committed we we one only have also that of those order commercial details, demand of top on a for have And just

material a have We agreement.

-- the So a to couple the intake. real with without at the but demand our of able customers. as represent It's useful that are cannot we consider indicators backlog they past, we look landscape in we just order and delivered in

Lawrence Solow

margin going maybe least impact full cadence how at much on in you at D&A can year, of Okay. is higher operating or margin, And on that a depreciation just us just rising, to some least terms year-over-year basis? the give idea

Marco Dal Lago

to depreciation XXXX, In Yes, we increased percentage percentage sure. XX XXXX, about revenue of similar of as as a revenue. XXXX depreciation a a points. we basis level compared expect of by

euro amount XX% about more to means compared it XXXX. So in

Lawrence Solow

on some growing there's the there. And just clarify, sounds It segment. to like pains Engineering

segment. So a just bit growth that manufacturing you also of mentioned do right? and that's and that a you hear -- you I still step still execution. back I also think in of bit little mentioned taking correct, but little a of expect 'XX expansion bit But margin in little Did a shoring up

Marco Dal Lago

yes. we is Yes, what This expect.

but We push the situation after growth expect And overall we that significantly. rate the on In of are compare underline XX% and had yes, to a sales annual our improve compound the right, on activities. also growing need to in XXXX. projects of you to about to are fact we engineering, top it if growth, we more we

So the is still is this in have to fluctuation, trajectory normal we there. believe some project business, but

Lawrence Solow

Got it.

vitro diagnostics, Okay. you the a And in vials the on that the a is the -- or bunch in demand. normalize? on there's vitro of in bit just vial I lastly, know 'XX. a that piece, also moving down specifically little in that diagnostics -- driver, Has on demand think of was less into is expect Do lingering I vials just just also 'XX? parts to Or the that

Franco Moro

Yes, the is same situation the not exactly in virus.

our have be completely part in that expect we of a are normal the of seen XXXX, We kind normalize guidance have and we not will business at this situation but will in expect expectation to last that last year, But already still later. some positive signals in upside. the in situation recovery the embedded

Operator

is at The next Dave Jefferies. from question Windley

David Windley

activity in or fruition. you Am are them there backlog in not in favor on Larry's start few. focusing I now? the you're that follow-up the engineering sales and on the that a on bringing business that I I management question part. to Marco, projects sales on particularly, as correctly of believe to adding to understanding to have that hearing engineering, adding kind current and a say tamping I want down right of I'm to orders

Marco Dal Lago

focused of deliver are to we in to customers time. basically, this our No, period really

So the -- remember that revenue please approach. recognition a is to cost-to-cost based

projects, to third prior of capacity parties year. expect are and to Latina. flat growing, we our and that focused fact are The growing Fishers for revenue segment terms is the we our a complete overall compared leveraging for So mainly also mainly, in we to near --

our expectation for this So is XXXX.

Franco Moro

not David, the on mean putting we because it future focused growth engineering the are segment that are of doesn't resources. we more

We our chain. supply are optimizing

-- industrial setup. are the also We and

new So stepping just are to according business be the for down about want possibility future very having is we we from expectation it's to not deliver. the that conscious to because

David Windley

Understood.

topic Second margin. is question, second around

So in which are are and particularly or -- Nexa I BDS, ready out to ready-to-use "high the specifically, called syringes, value, to but overall, use more value syringes understand high-value particularly mean, in be I think would vials understand I vials would margins. you understand higher vials also higher with I want that deck the headwind. more than ready-to-use but a

why mix? percentage you've pressure is the you did question the see highest in BDS margin ever the So with recorded, in actually high-value given

Marco Dal Lago

right. are you David, Yes,

profit XX%. XX% gross As mentioned range times, many between margin value to of the in products is

a I how quite And we the mix say, one is can The a mix reason. big So within have, impact. this can range.

The and is other efficiency a underutilization bulk temporary our P&L. underutilization, mentioned, can is one, temporary And more the our and lines. obviously, bring cost in underutilization of to as that

So some fishes together those already the and our X euro reasons cost sales dollars. footprint other the complete headwind, ramp-up the cost to the with the get with in as just on a model, we with currency startup manufacturing And in respect validation U.S., to for Europe where very have the and growing the are side, compared anticipated know have expect stronger and main model, picture in Latina partially also to we our more U.S. in the you sales in are, in U.S. well, today, of dollar. growing Mexico we

our products. slight high So a decline offset another by mix obviously we the we the the have shift BDS, partially effect in this expect value in is explain in to to model

Lisa Miles

it year point other we performance QX for I the that, margin relates as vials, one just one relates BDS. those customer those and of of that for, to fill out to was color and out deliver accretive. was extraordinary piece Dave, to last of highly And it easy specific that as want that it

David Windley

Okay.

second Okay. pick bit not earlier you're is Last addressed you the and kind this will a half, order also remarks, going the an pickup say of the to elaborate in that provide helps to the early how harder in and committed the revenue number rather order a second to half around the in picture little flattish year-over-year 'XX little revenue, if XXXX. you until picture, I'd obviously end gets pick range. you it I instead heard growth. but committed implies flat of on a which that because Marco, to impact that to But XX% bit look in love earnest me quarterly, from question expect starting orders orders you on low for -- track prepared up a that be more book orders kind at really to probably and mid-'XX I revenue year, and up of of Fishers you overall contribution later in doesn't doesn't

Marco Dal Lago

order forecast also model. visibility to is the our will also customer to translated again, pandemic. in orders not see from from with tool have we Well, customers have, our this different reiterate that line be our we partner only into a I fact the that of we the want compared

to in compared 'XX reality, much EUR got X.XX our 'XX order the orders much billion pandemic, customers 'XX. was During is lead compared in chain. main to compared in X.XX advance flat to delivery used reason higher This 'XX. our advance the the you revenue. the EUR the the supply in than But time of to X.XX 'XX EUR to the the in see We secure

So customer supply the book-to-bill habit of the was our the high secure to chain. due to

equation. So not one-to-one a it's

Franco Moro

was possibility as is terms on more Then year shortening. Marco to in to of time second we for the the the have order also book of first the lead half is the saying, lead in is the the year. the of average compared half time order have But

pandemic faster actual So during it reflect in than revenues.

Lisa Miles

actually remarks our prepared comment the And vial Dave, to within specific related recovery. that was

David Windley

the the to that later kind in in Fishers on Sorry ramp you were XXXX. Fisher's a is thinking But Fishers, year your say that for in basically before? than Or more as 'XX of material Is that all revenue provided activity the midyear what and start same later before? had remarks questions. you prepared comments the

Franco Moro

no. No,

line of validation the we in a are revenues. in expectations. are many with talking in we We complex project terms projects activities with about our variables line but with and are place, Obviously, with expectation previous in

Operator

is John Sourbeer question UBS. from next The

John Sourbeer

look First to be just how like specifically, the segment times Or normalized color there? the one what there year? here, on equipment? lead And you installing the a today just would expect normal range for on throughout be any Engineering what would that

Franco Moro

not one that at John, only are segment Obviously, a looking product. we single is

have serve months that project, inspection that they time. even simple years of more we some for the terms at we So the and assembly huge line completion complex of very for have may a system delivery vision X the ask full in

are is of terms in reliable, So the the longer because electronic that terms past is time now mix, are now of in pandemic. situation delivery of time considering in before early but the than we components longer than the availability the

now to the the So we more something past more in the considering But is situation ago. much control under at years compared X are than end.

John Sourbeer

mentioned Appreciate on prepared And remarks, within think products. I that. you ADS biologic of is your XX%

including products outlook just those Just in under point what's in on and 'XX? any And Are GLP-X of you guidance for clarification. included biologics? a thoughts

Franco Moro

are you tale at. biologics are we looking are right. GLP-Xs driver No, the

in So our on they and our of impact of in are share included our both readiness guidance. biologics also

John Sourbeer

for the on products or XXXX what outlook color for those your Any guys? are assumptions

Franco Moro

we number. understand share, could update be can impact are we and material 'XX But Obviously, in in beyond. more you call. the in the to final we of terms which see In the the process next

stated commentary mostly impact in I but have my is to a and beyond. solution expect XXXX biologics, revenues our capacity in where overweighted As fishers material high-value we in in about

Lisa Miles

the And to. John, revenue excluding KPI the Biologics that's on one embedded a numbers release. other that's COVID. the guide we not press And clarification in note BDS segment, for some that, Please that

Operator

from Paul question comes last KeyBanc. Our Knight,

Paul Knight

I better sure and Does is past and your in that your for Do Catalent terms think quickly as company help spend visibility group in think know Novo field? the more it now did. Is capitalization thinking how how world. investment -- Franco, something there your business the on your about the fill/finish Catalent occur. owning of have they visibility? you I have a of like think may Novo this an the businesses help more acquisition And to cash seen in where like presence also you Does on you well that with change in of what business Novo it accelerates.

Franco Moro

I Paul, can a because information you about agreement. cannot are customer any we have this answer by that from know bound confidentiality we the single

capacity other In player, terms risk linked some players. single because us is that to for a more landscape, of this there new provide in the the believe emerging of situation than reaction terms in capacity by opportunity needed I

Engineering for the with the first And share opportunities So opportunities we it the to biologics GLP-X. dealing are more biggest means specifically in emerging investment, player later and in segment. the more on, in market have of the

positive expect overall, impact more cannot on I specific detail. any but us, we comment So a

Operator

the this There you for any time. questions turn at to are more back conference no I registered remarks. closing

Lisa Miles

joining Fiscal further in engagement you us Thank for the and 'XX Call, Earnings Quarter Group's for Stevanato future. Fourth today Year-end forward and look to we

Operator

telephones. for gentlemen, joining. now is your and disconnect and Ladies you may over, conference The

Stevanato Group S.p.A. (STVN) 7 Mar 242023 Q4 Earnings call transcript