Stevanato Group S.p.A. (STVN) 19 Aug 212021 Q2 Earnings call transcript

Good morning and thank you for joining us. With me today to offer prepared remarks is Franco Stevanato, Executive Chairman; Franco Moro, Chief Executive Officer and Chief Operating Officer; and Marco Dal Lago, Chief Financial Officer.

We are also joined by Mauro Stocchi, Chief Business Officer; and Paolo Patri, Chief Technology Officer. I’d like to remind everyone that a number of statements being made today will be forward-looking in nature. Please remember that such statements are only predictions. filed may including as registration XX, those Form which results risks result statement XXXX. and and F-X, face, Securities we discussed was events differ on a materially of on Exchange Actual Commission the July with in our in F-X. We today review earnings to associated our you information contained with encourage our SEC in the release conjunction filings and by statements circumstances, any does to revise required forward-looking not except these or events assume obligation to Company subsequent The update reflect law. as or Today’s may information. presentation non-GAAP contain financial Management believes information providing quality and trends in in informative results uses identifying its this results the internal this to meaningful of period-to-period analyses of gauging be performance, our and our comparisons. financial information may in investors

document, release. the earnings to For recent quarterly with most And Franco please remarks. see the a the Stevanato in reconciliation of call press Company’s I’ll non-GAAP that, hand measures opening over for this presented

thank going the with joining Good Lisa. for us. you you, for consideration investment key I’m Today, some Group. Stevanato morning Thank off kick highlights and to at

over the with First, XX% of the same results half quarter first Revenue and XXXX. increased year of fiscal half financial I’m EBITDA XX% adjusted of period XXXX first our and last for grew year. second pleased the for

science our is operating and and serving the technology. life more Our pharma, reflects long DNA than performance biotech of core science of history XX our years industry. The

worldwide market high-growth customers. top and diagnostic Our pen the biopharma, leader the analytics engineering and unique in and as EZ-Fill solidify capability pharma helped global, We position cartridges have blue-chip, of serve vials. our

customer service, retention and customer into strong rate translated We track have a for has support record of XX%. which

the and and innovation, chain. growth. The XX to serve be geographical scientific in constant IPO customers proceeds drive in last investment will through long-term invested years, value business Over our recent sustainable pharmaceutical our from we to organic position expansion better have our the solidify grown the technical

On and sustain development creating driving solution; execute to Marco, three, of expansion; plan. the confident ability and decade one, management bring shareholder position has the the and experience expertise, commitment accelerate have the are Board the Company’s selected and their market to two, and of research we are we we place unparalleled are vision three M&A, Board, an the the against advance pillars taken steps management of Company growth the long-term to proud team investment our Franco, team shareholder geographical to strategic deep to achieving We are: with the value. XX Mauro believe priorities of long-term and goal goal building team top of which our in the Our and drive objectives. strategic and value. and keenly over family, in high-value The fundamental behalf next same right are the aligned the in years. long-term positive Paolo

will is value and at come. customer positive the to the to Moro, the Chief mission for of with Franco Executive increasing solutions pharmaceutical delivering remains heart market by I the Group call meet Our simple, need And hand driven environment. Stevanato chain patient-centric to macro to support that, decades now demand, Officer. our over

Thanks, and morning. Franco, good

For highlighted results, growth. financial revenue year-over-year delivered the we double-digit operating second quarter, by solid and

strong. importantly, in performance future key came More of the growth indicators particularly

high-value total second make in mix to revenue for solutions, quarter. in revenue which continue the to increasing of our of We a an steady accounted progress transitioning XX%

to reduced vials, higher-margin improved cost an on products our and pre-sterilized four key flexibility. of offers ownership, market, our quality cartridges The advantages, focused includes time solution solution value increased total lower customers with high-value and to Our increasing syringes.

high-value growing solutions. mix investment of be will to the future and Our focus much of our dedicated

€XXX This million million for future visibility current us highlighted second with €XXX guidance and backlog our revenues. order quarter backlog XXXX. backlog XX. the June significant The define intake revenue The handled the We by new into at second achieve of order provides We gives orders. of to quarter also in strong as ability confidence was a our intake. customer-committed total our

pleased new we term trends backlog. our and in This investment order with intake the plan the positive advantage way has our market on indicative XX are of the take demand. the focused executing positive years. last in are to of over strategic growth We the paved longer trend And momentum favorable double-digit consistent against today. for These today, the are

translated same and near term. to want is important initiative long our about expansion to Yet driving meet framework. precipitated will We that growth investment ahead. we investment element today. to the strategy years talk our the an term and continue In our has provide mind, the products growth plan and So the significantly XXXX, our and I I in other few over production catalyst space, context With accelerated to vaccine the significant This the been abroad, historical that to today, around cartridges. time, expansion able in by at launched particularly in and we still demand as in the vials increase yielding the last accretive in increase COVID. that and in years to sustainable, growth core this strategy, which in served double-digit investment are how Italy replicate outside

one will in our I remain market. number us methods pen key the increases example, highlight cartridge insulin investment this For to tied to effort. and also allowed capacity

sterile in the in syringes. double production XXXX, First, to syringe produced to expect we and triple our EZ-Fill compared in When to pre-fillable of output syringes XXXX up number output in XXXX. our the

we are cartridges, and expect more sterile vials produce to times In we XX XXXX, sterile to produce even to compared vials XX sterile compared more and XXXX. to And expect cartridges EZ-Fill to cartridges in our the vial up to impressive. XXXX, XXXX. and numbers up in Secondly, times

the EZ-Fill was investing. million, The CapEx between acceleration we the initiatives investment or cycle, this see capacity and €XXX The proven production expansion growth made the ahead unprecedented stay will future. response to solutions, to stage demonstrates enable and we demand. demand. optimizing to our high-value accretive of Equally in our continue on important, direct XXXX in we manner to recent Our is us our more our delivery investments investments. and customer of customers’ solutions. capital In invest near record timely of expect we our targeted organic are XXXX the our for in in rising to high-value a At approximate track term, life have demand this in roughly similar

our to supplementing line right our anticipating investment the is converting are new to our a ongoing to An element make globally demand time. been past to and investing important This it believe our right solution. strategy approach current in the expanded dedicate has capacity we with on is the and today. We continues in solutions. EZ-Fill for space our for investment high-value the now time expansion EZ-Fill Based at customer trends,

U.S. addressing will plans where we we and high expansion to the China believe current demand. in are levels experience continue customer of proactively Our

and future Our of perspective, life with investments in the sciences biotech plan our across end we China. currently China market industries. approximately in €XXX pharmaceutical, our advance the to the our enhance U.S. and geographies existing and This U.S. fastest-growing the spend expand in customers From plants will proximity markets. our the position and attractive a in customers footprint million to for CapEx

of already We revenue different. believe a in well-positioned record the we startup is a that the XXXX. and speed. biosimilars, followed in by break growth construction many a the of From China, approximately very backdrop the become the expect we is timing will biologics to market perspective, is larger to the or emerging. generation pace, XXXX. is anticipate end of We this you At As in customer biologics Indiana XXXX in and U.S. highly targeting months, a XX predominance are we the currently in of is take know, early at in around sophisticated, XXXX. market. pace There to player and market just ground begin validation In are fall

goal Our advantage movers. to to among of is first market the be timing take

We generation of second which puts revenue early in estimated begin in our XXXX, are construction that the estimating half XXXX. will

discipline are with with this and these investments. new investments execution to the ambition We as past strategy, approaching replicate

and of our customers. overall advancement driving Our value our of increasing broadening a cornerstone and approach scientific reach the our technological to geographical capacity, in servicing embedding portfolio is

and in We These with scientific entry centers service helping analytical developed services in are our boosting point our investments are our early us Italy. a development capabilities. are technology significant research in emphasis customers. centers with in evident also technology in The efforts Boston our an gain and

come. the to In expand the We confluence to a capitalize population, all the the together, events the seeking to expect care their parallel, these pipeline new this for in with their presence challenge conditions of macro coming significant aging to Above own expanding aimed urgent for that tailwinds solutions trends stage across and the patients condition set see rates, health drugs. portfolio the current biologic are we these our believe complexity are need favorable access We efforts we underlying increasing well-positioned to home manage environment. in all, currently product at of shift help on and will believe an lines. closer trends. decades proprietary and of comorbidity tackle of and environment our in We

is in call the to to and is philosophy which in over support I the solution, Marco priority to patient-centric to will financials detail. delivering central Our hand customers our our and vision. creating cover more

Franco. Thanks,

a constant geographies. revenue grew million by and currency €XXX last in compared same to XX% segments second both on the period For growth company basis increases total Top XX.X% to year. and quarter, were driven line the all

expanding solution of As on our Franco focus high-value noted, our the mix remains in portfolio. the sales

of between currently a has COVID-XX full-year to drug accounted solutions. continues for containment the and high-value For demand pandemic XX%. The approximately contribution from total solutions XX% range We to solutions quarter, and high-value tailwind company increased second be revenue. our XX% for expect

second approximately rollout world. the playing of revenue pandemic. the was the The year. we to This is to are role fight a still estimate the in key excluding a of the solutions. linked pandemic. a compared products core in demand against products the quarter, we our takeaway vaccination and And to gross around high-value growth second is double-digit the quarter We are for robust achieved meaningful that XX% shift solid that supporting result last our In COVID,

for from XXXX. consistent. We currently XX% attributable and estimate rest we year, to approximately contribution remain pandemic between XX% range gross expect that the will COVID to For the the revenue of

In aim due XXX XX.X% basis margin EBITDA basis margin was quarter, margin XXX basis in our we of continue and as profit investment the €X.X XX sustain high-value operating benefit the of to expansion and in total year €X.X solutions. points million of and net It certain we to gross diluted profit profit, The R&D improved Also, share. million this focus cost expenses. overhead is last thanks XX.X%. activities mainly to and For plan. is to per period million to EBIT Operating the gross company termination management related of same year adjusted high-value €XX.X second over efficient profit the onetime the XX.X%, quarter, of incentive to earnings solutions. second and the improved include compared a adjusted million to or €XX €X.XX majority to parallel, on accelerate points last stock points gross to pipeline by which of grew a increase of of

€X.XX. As diluted earnings €X.XX share diluted were share second was quarter earnings a result, and per per adjusted

Moving segment BDS segment. the starting on with results,

year-over-year XX% solutions Diagnostic This year. basis, same unfavorable and in and revenue foreign from increase segment XX%. constant revenue in high-value containment of in XX% delivery compared revenue increased over last translation. benefited On a period quarter XX% year, to solutions our despite segment Biopharmaceutical the was growth and currency prior currency Solutions Second our

XXXX, efficiencies. due gross Second and principally to in and more solution improved quarter increase an accretive operating improved margin to high-value compared margin

the and activities packaging synergies systems For network. customers all Segment compared improve and across the the prior by after-sales experienced to glass inspection million manufacturing from second segment including and an period in business in the expansion XX% our quarter, across in third to over parties last visual revenue lines, grew by machines, converting year. year driven Margin quarter assembly machines. derived support This increase to €XX.X Engineering growth was

€XXX.X cash balance We quarter totaled sheet XXXX, position. items. and solid a cash million. XX, flow the on equivalents in and financial At to June Moving ended cash

the from activities second to cash €XX.X quarter, increased operating For million.

debt totaled X.X capital We flow to XX, during €XX.X the in future to to growth. investment as X at net end million. And ratio our million was such, €XX.X At Free quarter the quarter. second expenditures prioritize continue cash improved June our XXXX. March of the in compared

will as end and compared leverage at under that current cash and the current operating financial XXXX. of trailing we net debt minus cash improved net activities, other needs. nutshell, financial from the a adequate facilities IPO XX cash future proceeds EBITDA to Our between existing generation We believe define In debt receivables, months and availability liquidity equivalents. future assets, our from had debt be to liabilities, and our cash, and non-current to our X.X X the financial address

terms in increase measured same solutions second, open full-year past, we of guidance. €XXX portfolio, are our the expects that in prior recap, In high-value with where earnings this we but remains XX% over press We existing of million there demand the €X.XX; capacity, share products; approach complement book of view and for core research the the And of organic businesses. prudent our This current finally, of million, are to approach allocation range and up the disciplined. today. €X.XX to let’s in represent quality established investment it The represent release, approach a capital and major first, will period. XXXX to morning solution that, our construct between natural lastly, adjusted €XXX to no three to is year-over-year driving million. strategy, adjusted highest priorities diluted between in maintain market-leading believe per currently growth our highlighted to EBITDA our been in our development offering questions. to sustain Company a of in and €XXX to our growth it markets million top will expansion the see which as position, remains much accelerate range XX%; XX% range in selective, in and competencies. high; Operator? needed are: revenue gaps the This growth. especially and high-value and lastly, our €XXX We and pipeline And of has M&A M&A To extensions the XX% our year in

question KeyBanc first Our comes from from Paul Knight Instructions] [Operator Capital Markets.

The that the core the and -- -- what trend the backlog? the for -- quarter. on it business terms -- value-add Congratulations be in can color very talk demand to talk the you about looks around high ex-COVID, you backlog can of about solutions was

Paul, your thanks for question.

demand. are to For sure, capacity good, facing backlog satisfy have our the to we are we very very this trends to that robust accordingly and our and target deploy customer

this we talk we terms very also of we about color we about committed the efficient way. can match the the talking to customers. in terms us of next COVID-related backlog, that in year So, visibility visibility is the coming sure, by capacity when expand to that COVID are of we backlog, -- about investing for our we and allowed plan can are And orders -- the upside we a utilization current say demand the impacted in demand capacity to Nevertheless, in state the some for the additional and have from year. the the

a since of in vaccines. you business a term, normal vaccine we player decades. to in longer transition a that the we And are know to well-established space have the For envision terms

Do tight supply customer you it demand? right have or is now of capacity,

the the upside the our factor in reiterate solutions because not differentiating our I future engineering match to competition also of be asset but match else for than the response is for are our the solutions terms to we internal an capability amazing we because important anybody the to want demand. drug high-value most that have COVID faster demand. took faster to to -- suitable of the a specification And to technical in capacity really situation have high-value also that their proved only for the are

about from we that the have our we in also the capacity we China. now, our we ready world. you deploy position and sure, in capacity, but to good the capacity advance very also take to high-value we CapEx but to Europe demand this and are care -- only in around market, terms In the solution, the to of the U.S. as capacity additional adjust are coming mentioned, for constraints a EZ-Fill not are And move in

David comes question Jefferies. next Our from Windley from

or this kind there? much I And comment is influencing borrowing COVID evening kind high-value from little for you -- overlap results to you how of my Paul’s question on sales, if you And you. I a this could morning appreciate that on solutions question. evolve? is Thank your do for wondered taking Hi. of how the expect bit there you

Thank for the you, David, question.

So, a space. not in that the in vaccine this to have message are stage, refer we to the I newcomer

with the in player market the case. working that We are is biggest the

of our for terms to and solutions, the we amazing the we we example, So, intimacy containment choice linked solutions COVID that customers, our chain technicalities are for chain for the in best linked, with the drug And production -- the to vaccine. such proved adjust request supply for the to future. the can high-value thanks also

that we for next that for COVID after think land the we end normal business year, So, treatment. vaccine more or the at this less a and in year the vaccine

On backlog, number Okay. for believe I QX a don’t comparable the of I have XXXX. your

digits the was to revenue be it’s you’ve it. what the already quite willing it spirit you’d that backlog to It If your visibility is seems based quarter. visibility I’d like this and of love like your year than looks on of then is get year. substantial second first first the the is it quarter year’s mentioned quarter, backlog But high. last substantially give And double in this to probably from the to better sequentially growth year-over-year question that, is

understand the revenue conservative and/or are giving guess, for if year question, into greater of you is hopefully. backlog I I so, And that this wanted you how understand how assumptions much to XXXX, your visibility

-- and then Marco maybe your question. you comment hope financial. give Yes. the the we picture, general about the may I I full understand

very is to very the very our is and for the supply very planning and to to because Demand investments to all the impacted some meet demand the our activities business is allow has have the answer and in of a market us time us the is visibility right that customers, allow customers. we then our building and to linked our us with the Nevertheless, and the customer give sure, chain right anticipate the lead level some right for robustness expectations. to answer strong. is growing, line time strong high that to their that the factor robust production For

the For is fair sure, very possibility very is expectation aggressive. fully... We Marco have to year easy have provided is very for high, It the not good. is There it coverage guidance say year. this fair, now upside. the not we an are this may too that prudent, too for to the that more believe

to year, same million the had of €XXX backlog. David, about Just last answer, complete we period,

know, now €XXX million went of to end of million the you €XXX are at at and million. end we As at QX, up €XXX we the XXXX,

So, already next better building cover And visibility, the expected of in between the we year. also backlog by year, saying, sales are realized the for backlog we we coming have Franco much half second the XX%. the starting as and from was sales

next from Our Fargo. question comes from Dan Leonard Wells

Thank you.

So, could demand customers talking XXXX, Are with hoping customer discussions I you business, needs Any and far you on offer. into some conversations you’re insight the how could in about having COVID advance you XXXX? was insight your offer nowadays.

our, very the our customers our that to manufacturing many, years, thank not built important platform, offering in technologies leveraging also offering. embedded only question. intimacy for important the scientific the we very but It’s is the integrated that we’re since It’s say with you on -- many

anticipating ‘XX vial early also single-dose there the what multi-dose in visibility the transition because vial, general and ‘XX and is linked to But, maybe the to to very needs. work in the terms other on. so really happened transition is it So, of the uncertainty for potential we the them level also to and syringes boosters to state of to the And about for try sure, view. some for expectation their with all

full but is years. good So, a the next visibility, that about visibility state have the in impact can we we also COVID there few

year follow-up. Marco, for color. Okay. a expectation XXXX? tax just what’s And rate helpful quick your for That’s the

to -- because we tax the We The had by million due tax But, with normalized Italian XX%. said authority, patent We to normalized onetimer benefiting is is first I €X.X one box event. positive an law. quarter, of the Italian the a XX%. according had in reached tax normalized agreement saving one

from from comes Juan America. question Avendano of Bank Next

Thanks on I morning. a plans. the details capacity on Good for your you. of have questions Thank topic. expansion a this lot couple

capacity First, last I’m to the what five might how utilization is helped utilization added years, network? but reach for long aware it that XXXX, your of current did capacity since your have COVID take over utilization, level average the current level? across

And thanks good to they COVID to capacity in It’s faster. a amazing a to because in the question. us our an lot some this [indiscernible] And need. COVID. are after we helped faster we expanding engineering investments accelerated emerging provide our response very colleagues And started, to be

of terms robust for for utilization, have to customers. or the chain practices supply certainty to In sake downtime to in standard we we stuff enough the are that our the our plan make used of the and preventive -- accordingly maintenance,

at So, your level But to utilization. time of utilization maintain setup, level much very And the both and of very in we much vials much we our is need this how high needed point, we because don’t have a reach to very are about need EZ-Fill we This because sterile we [ph] time, question of interesting occupation. this them level -- now. used so how answering in of we tricky point worldwide, the configuration. engineering good

very the when are to expand So, have fast. we capacity, we

need the we then capacity utilization. ramping So, establish time long the don’t up to and

need. than anybody much because very are We capacity to we the of the else close tune the can faster emerging expansion

to a is the could I’m defined the around necessary accounting it’s If utilized? Would in XX%, you changeover. Typically, a for. level, for just could and that at that’s you full utilization looking if XX% that, downtime the you And put number say number you. on low-XXs. Thank what put XX%, industry,

of XX%, XX%. the lines, production different on we range are in Depending

Donnelly Citi. Our Patrick from question from next comes

next going the revenue talked ramped generation look guess, ‘XX. Can you to know talk up? until margins, two Indiana, in think spend about the about expansion to impact spend, I next the I stay how few topic. is just the you we over on the years, what should ‘XX, China they’re years? over about like fully may Maybe the be more on facility

first Patrick. the for investment, to to we’ll you solution U.S. your money is, have our you you of the this more China. And give is million. in add The I’ll range total coming may invest plant idea Thank question. the Marco And we revenue on revenue amount ready €XXX generation of The are to ‘XX, years. more network total X first mentioned, less, six X.X, ‘XX, to picture, of late to months have as color in high-value beginning have generation manufacturing from financials. the deploy more and at expand in or and least the

there figures We comparable, that to things million are of many expect they in -- that you tune in can adjust execution but the the investments. generation have range also long different. two €XXX these at and best the are is during But know, of run the are revenue a as we

can from are beginning some in would doing X, to in not details about we And be provide the -- if start investment. terms for year, something say. we financial sure, And this now, U.S. So, easy in X years news started of right more already have already have helpful. you of we are next position we China. it’s Marco, the But to

to complement. just Yes,

EZ-Fill. investment we already in we done have replicating all, of are first Italy So, here with

in we Italy, north prepare rate technology in experienced well China we know the steps of in the facilities. our products. are investment, EZ-Fill order done here to good So, we the and of a in and Measuring XX%. of two high-value also very very to investment be internal the new targeting return And the return U.S.,

high-teens So, plants. in we These our expectations. internal return two these of are expect rate new

with helpful. on the I’ll That’s And stay you Marco, margin piece. maybe,

on just there margin Just what different anything profile Can revenue trying -- obviously, could year through to if the around us that COVID any like. core? a refresh like next questions Is could kind the you a number what than or of few it’s the business? look that. been bigger like of look COVID, that think have Just

for you question, the Thank Patrick.

line if solutions. sell we same COVID and experiencing product margin So, solution, I level the different are high-value of not margin. are the we non-COVID same products, gross product experiencing by line, for mean, we between

wouldn’t say related have we COVID. different to I a profile margin So,

high-value was Sometimes is saying pushing are Franco mix apple, more as but not different apple margin. the toward with solutions, before, experiencing we

next Justin Lin [ph] comes question Our Blair. William from from

calling the questions. Good thank on And in John taking for the today. Kreger morning, Congrats guys. I’m you quarter. for

about in multi-dose you format? the lot of you’ve moving previously, what So U.S. there still on were it a vials. of rollout talks large-scale the COVID the anticipated vaccines sort heard, to booster do keep single-dose shots based case that Is of or think the in likely will

help And trying about I with evolution supply some to our in customers to interesting. the -- you this Thank give this the to add for vaccine scenario. the chain space the It’s to to ask adjust full are for monitor can players very important relationship Mauro together have we question. colors the needs. you most with major we future

to is customer to faster actually, with Franco. a relationship patient Yes, a and solution we so in are the reach also Sure. just we from our Thank our what you, maybe one a road good to with in way. come reasons said because the have development starting during intimate so back show, why the phase of them bit -- the we

in customer you tell before, could trends we some too with the mentioned of really be as what COVID. partnering couple. But, to continuing a major providing indication is future mentioned Franco is of can early now, So which it that the our say future. the And is

single go to single same some a the something have solution is dose the to at market happening the dose and for to time, to evaluating multi-dose from customer. is, also sure, ready which for order in syringe So,

our lot this engineering the trend, respond market the customer positioned really market. of a movement order that very to is So, moving this actually specifically request well parts what kind also business, say in to can fast we very responding emerging in we thanks is of today. to are the to of and which part But in

I Understood. Thank front. just, one capacity you. on the And follow-up guess, question

review expansion projects stand your outside ongoing right U.S. And can you So, do where facility they and of the now? China?

platform in are our the around some best network expansion, of we are needs in the focused answer now, But [ph] Europe. in to that of facilities investment high-value and And we production expanding business we also expansion vials capacity the really solutions smaller the in have our in U.S. The our also customers. world. will in plastic investing deliver

So, the we in are some investment years. the the to new next on are will our production investments we that meantime, the for with U.S. really four in to capacity geographies China. in three, year, in And next the of and also move this from us help Italy bridging the focused execution Italy

Instructions] question [Operator Morgan Drew next Stanley. Our comes from from Ranieri

taking Thanks questions. Hi, everyone. for the

Just days just Thank down maybe current at just discuss good is customers backlog just backlog you year, your back of partial you new or new the customer for versus have to expansion relationships visibility you. -- today, on break as for But, maybe it geographic backlog XXXX. look expansion? go you for early broadening what can geographic sounds or from visibility like moment, the a this some partnerships,

Okay, for sure.

some some to Mauro really you some important time, need with you important our commercial in a is current very I point new to we for on may this the very engaged projects. early the but new a that very linked backlog because Most touched add established market, case, of business know production, will You think products is pipeline. project, also in are of obviously color additional that. well this And deliver that future. our customers in develop the and Pipeline

Thank Franco. you,

So space solutions biotech pipeline, to the is right the future. our proud that through present also We biosimilar today choose beginning. providing position yes, growth of in really because critical in since what in in visibility were in the to main tech we pipeline this to specifically support of say really services are to for containment the provide been Italy the is, one and and the drug sustaining help our reasons our for can them has able Boston customers the of space really course, and order drug our that and

really we scientific in customer lot and a areas. supporting technology-related in this, So, are growing our

five And high-value with can years, today. segment. today positioned are really than have to projects, molecules, we are say X,XXX in we in the more past different that the doubled future So, in different we we this which in our molecules in the grow well

you. would you. for And might there second in mean year, like question the gross more out the of on just But, half a third or Thank be this just then, the gross at be your a not sounds margins trends. it step Thank from out later in there. back be CapEx hit comfortable you full I reason XXXX? it be down Okay. But, any curious high-value Marco. margin you quarter on facility cash quarter number mix, the trends margin look would be might current flow fourth solution quarter for putting And for or Just build so having might just gross year, free would this as that a levels?

question. the for you Thank Yes.

to margin is guidance, QX We XX%. consistent and say. in expect our with QX This so be let’s second above gross quarter, in

positive, the to consistent mix what are experiencing. is And back so, we the with backlog, going it’s

reply, more and and we Pacific. high-value we We in Asia are moving more more solutions. to are more Geographically, didn’t but growing

America. the see went year, of half XX% can in first you and we the As Pacific Asia XX% in in up North

move So, toward the trend we and are confirming more areas. more to those

end the in compared and start robust margin flow, we QX balance it, X gross question the now very net top start consistent saying the On with that EBITDA. with leverage with second with a of expect me last sheet cash about QX XX the a had million with of months we of of because QX of we primary About €XXX as the let So, debt we received quarter. proceeds.

we now we net are €XXX of million have position in a positive So, financial position. where

to in the outflow thing measured important The will of for be CapEx. be next the money months

year, and U.S. our China €XXX with net financial expect position in investing capacity. expanding million of positive Worst €XXX a are current million landing for we cash €XXX EZ-Fill the we case, times, many position. CapEx for mentioned of million, As

before. mentioned in in nutshell, my we position, a safer are during So, a as speech

Thank you.

UBS. comes question Our from Sourbeer John from final

on today. that just times is areas question. levered future one what provide? is on target a leverage taking X can bit I Thanks looking the have for Could little you Does my M&A. talk the the a guess around and Company’s Company Company long-term at, you

the May say because again, I to ask a bit... line was little just

Sure.

Just target can Company you provide? Does leverage the that M&A, Company the long-term what And on levered. a future areas X is company then, the time looking have is at?

very -- much That Yes. was clear.

you to have, some and existing exploring existing we I injection you potential all, we first to something about we technologies U.S. molding the want platform production We terms are to to integrated we opportunities know, microfluidics. can is of mentioned mention solution Sorry different Well, EZ-Fill parties BDS, broader focused the of offering. monitoring robust. offering very and as is in intellectual And third expand property a some that really expand -- also are can of Nevertheless, geographies. that repeat. several powerful all capabilities of in integrated the our our our ask and with China. times, complement like on

have in any our but customer potential see to explore the to as our also interesting the integrated design for terms These if to are opportunities pressure of opportunities, diagnostic, to to or and don’t value M&A CDMO. design We offer solution the company execute the our to not are M&A, molecular right you shareholders. in have condition under we of new some

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if containment, IVD on the BDS? and subsegments and closed ask trends And quarter Can across a follow-up. BDS little just growth talk the one it. maybe some in of bit I Got you could

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and are We in growing line. each product line business

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So, more is are this rapidly, growing we consistently with our where plans.

final our was question. That

So, for to remarks. the I management hand it team closing back

morning. Franco Yes. Stevanato speaking. Good

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today, our the fully committed to is customer. organization with strategy So all to grow our together execute order to continue in

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