Stevanato Group S.p.A. (STVN) 6 Aug 242024 Q2 Earnings call transcript

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Stevanato Group Second Quarter 2024 Earnings Call.

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

and Financial and Good of Relations morning, Officer. to is be Chairman accompany today can us. This our With Executive Results and thank find under on found you website, Franco for morning, you today's Stevanato, which a Chief results Dal page Lago, Marco joining tab. can me Chief the Financial Officer; presentation Executive Investor the

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

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

the on quarter an for will ongoing Today, thanks initiatives we our share and meet on review us. update our and performance, second objectives. Thank dynamics insights challenges some you, to the Lisa, and provide market joining

our forecast margins than bit of to in driven costs led projects. in growth segment, where quarter, segment, the BDS but little second a engineering was fell our delays the For better expectation, higher revenue certain short X% by on the

increased second combined the incurred the guidance. the address related of the also to factors for main These revision these reason taken XXXX actions our in are expenses to We quarter delays.

experienced to components the prevented projects of to are the over As last than you The us and operation more related X and projects. this has years. planned. electronic segment highly the as supply the its certain our limited operations support revenue growth, We certain doubling from significant our of delays large complexity challenges persistent work, of are delivery engineering in scaled know, to but volume Denmark mostly customized

Our #X will priority to bring some But today is projects this work and take in to advance of completion. this large time. these volume progress

X. Moving to Slide

harmonize We strategies. extensive footprint, are efforts and and processes to engineering industrial optimize chain logistics supply our undergoing enhance our

Italy. This our Denmark inspection in also these activities the our our same example so the plan will Danish that we're the you technologies on a and implementing and better cross-site Let Denmark, At X vision technical technologies. of the a our production sites a into we of of of the advancement teams engineering processes concrete assembly team to focus packaging consolidated increase me give different standardization in with In efforts. across support single location segment. specialists time, can

for joins This Annex secure supply Stevanato of fast-growing our primary the we responsibility of the requirements with organizations Not ongoing such in that remains they expenses to leadership optimize include believe Officer, the initiatives maximize in under who projects. secure only us over moving and brings Diasorin. Ugo but these structure, shift help landscape of align our Gay, experience as is our operational the While operations also will Chief of XX and commercial demand success favorable. industry infrastructure Group one March. biologics, industry, performance, financial the upgrade manufacturing is and we better years for impact to One. having held see the an at to will Operating capacity increasing Long-term, both XXXX positions engineering Ugo efficiencies of chains areas

in In addition such Latin of navigating the markets, engineering we we smaller in a destocking. market to gradual effects see segment, improving signals expect still vial starting the to in materialize the still larger In America. our certain through as more execution are recovery. We orders positive markets with

that XXXX, forecasts of vials. we optimistic are we sharing production are at bulk and customers the pick demand, that up beginning are planning. improving begin starting orders to point with Accordingly, Our vial tail-end to will

on progressing to of expansion midst year, challenges a Last important are capacity completed our audits. Dese expansion, cycle. customer and CapEx continuing In large and ramp-up Italy. through going Piombino working successfully set we first that and Latina, validation note of Moving we Fishers, are our to Fishers, are these Indiana projects projects are we in as demand-driven plant the planned, is our of multiyear our Slide the It expansion in activities we X. through our

second underway. are we syringe to launch track on third installation importantly, of and lines production commercial Most Fishers from in the and quarter and first During of generate revenue qualification we our quarter, delivery the commercial and took third XXXX. our activities are

plant the look manufacturing in facility. solutions a our customers we quarter, of for to at the first hosted Latina high-value new give them second the new During opening XX

production Latina. We part expect to of multi-year to expand continue ramp in our up our as syringes

X at our Latina We campus. plants have manufacturing

expand Activities an next the phase the to on this operations to anchor to designed X This sites. The to expansion disclosed, year. next the easy bulk This in expansion bulk concentrated support EZ-Fill the previously Latina is of our customer. will products and harmonize transition from times our the new strategy capacity includes cartridge launch is tied As and and the in between project ready-to-use for wider plant offer capacity, reduce efficiency to installation the lines of new of of our upgrade and Latina cartridge is premium lines of field solutions. ready part plant. approach production original lead enhance operational in the

in teams the we expected, activities on focus XX our the facilities Marco inefficiencies decided for are of coming With any to months. elaborate resulting X the temporary China new in postpone additional further and ramp-up Fishers, Latina our in further. expansion on execution which will As

a markets As change Latina region. support to shifting accommodate to challenges successfully some growing. us, preference to changed. CapEx In this Demand not we Slide the regional consequence, we confident we X. for that and navigate are serve are a healthy we we our that a of through of on The in fundamentals end products squarely can Accordingly, believe manufacturing have in strong. our sufficient On core focused front we're customer. and capacity in for the summary, execution. are improving business our of remain the demand we large have The

Our with are we our resonate an customers, integrated in environment with operating solutions favorable tailwinds. and secular

path durable by front growth driven Biologics. We continue a us, to of in see mainly profitable

half first XXXX, in the now a record in is over high BDS fact, hand strong of I In the demand, of high-value hit call will especially of XX% which solutions. to Biologics creating revenues, Marco.

Thanks, Franco.

comparisons want immaterial. otherwise XXXX, Before I unless I of quarter, in all currency begin, second And clarify quarter was to the second specified. refer foreign the to that

XX. all exclude Starting on comparisons revenue So, translation. Page currency

the quarter was Engineering the by XXX second Diagnostic decline of million. growth segment. driven in X% the a which expected XXXX, This and in increased Solutions For to the X% offset Biopharmaceutical revenue EUR segment,

vials, was the quarter revenue offset adversely of high-value represented of XX% affected solutions the which mix our solutions, in second which was expand EZ-fill XX% increase headwinds. X helped grew diversity and also product profit revenue quarter. in margin from high-value approximately favorable solutions. lower to This profit by Our mix The within gross in the Gross high-value tempered total margin.

cost second First, the profit in segment the effect had gross the higher-than-anticipated on in margin Engineering the quarter. biggest

of vial to destocking, the lines. And from the phase causing impact the ramp-up our tied lastly, new our facilities. underutilization Second, vial of inefficiencies

important margin As a temporary headwinds gradually believe gross to in these profit headwinds, XX%. result to expect point temporary that that we these are will decreased we margins. subside. In a step-up is out of turn, and It

driven of Day, better solutions, our scale to during the and expansion mix assets of outlined and is Markets shift leverage we efficiencies. our As margin high-value expected benefit Capital operational the to be fixed by

For basis, on margin XX.X%. a the was XX.X%. profit lower to decline in second adjusted margin And to profit gross led quarter, an operating operating profit

second profit share On the EUR EUR and were XX.X and million, XX.X diluted diluted XX X.XX. EBITDA earnings share adjusted was X.XX. EUR of quarter were per million, totaled adjusted profit per adjusted million, was margin XXXX, earnings XX.X%. For net net an was EBITDA and Adjusted basis,

on to segment Moving XX. Page results

XXX increased revenue syringes. X% helped high-performance in while our quarter, solutions high-value of mostly XXXX, EUR growth solutions revenue to and BDS the XXX.X quarter diversity decreased by driven For from vials. to the X% drive to portfolio related second product containment revenue in to million, from XX% XXX.X decrease million. in from segment the EUR in X% EUR a grew The despite delivery growth million XX% other second Revenue

As expected, in benefited normalize to gross by high-value startup segment profit in impacted margins effects to Latin unfavorably and the of inventories continue be continue ongoing but as increase Fishers. and the margin, customer destocking solutions inefficiencies

that the revenue levels. expenses under productivity These these absorption the inefficiencies as reminder, a As of reflect volumes, target phases occurred are progressively natural the to and reach during grow inefficiencies early operations. of

improve impact that mature, this As will these and facilities we accordingly. decrease margins that believe will

year. basis profit margin compared point of segment represented in a prior gross second As This the quarter result, XXXX, the BDS XXX XX.X%. decrease to was

second margin to for same operating profit decreased year. XX.X% quarter, the the period XX.X% segment For last from the in BDS

XXXX, Engineering segment million. to second EUR from For quarter of the XX.X the XX% revenue decreased

process. certain noted, higher Frank to complex delays costs As have in customized on and highly projects led

margin market-leading in profit continued to It's the important mention X.X% As that quarter. our decreased profit interest a declined currently XX.X% operating strong for see we result, second to gross innovative to technologies. and margin

and a sheet actions growth next drive to improvements have segment the slide the review balance a turn Please to to for the the this necessary trajectory. we and that bring we With financial cash we can return to items. completion, performance of project believe flow improve ongoing, profitable

of support to continue carefully our manage growth capital We working business. to trade the

in through inventories XX to liquidity U.S. We are receivables. million, inventory in future of of additional from including generated on the products We and the our quarter, the operations, second our XXX.X have hand, the with XX.X adequate This that in months. our establishment trade priorities a million that and cash in available Italy, new baseline cash lines, to combination strategic ended financing. of operational our to we next levels by to mainly collections expected, equivalents customers due be debt net cash ability expected fund plants over partially credit cash and the and believe to our As of EUR assess EUR delivered and offset increased was quarter of quarters.

the In second quarter capital as of totaled cash million, expected, the activities of our expenditures million. XXXX, XX.X for net demand-driven quarter EUR operating XX.X ramp. As EUR totaled continue investments from second XXXX to

used During the quarter, the proceeds to initiatives XX.X efficiencies. flow of XX.X our Denmark cash of received as for resulted and second second in operational and Cash footprint equipment sale we intangible purchase of in plant property, of and optimize in in million. assets This building gain was our free EUR EUR million X negative of quarter. the part EUR a million the

XXXX. guidance on fiscal Lastly, for Slide updating XX, we are

Let to with me changes. approximately XXXX XX% which decrease with the now compared estimate XX% through revision. segment, Starting is walk you the year. for fiscal a main the the revenue We for reason last Engineering of

Turning to segment. BDS the

of the last current mid-single-digit with XXXX, segment. for fiscal remain the XXX continue consensus we EUR with we growth revenue compared to year, For estimate comfortable anticipate revenue and million

we in in X.XXX the million, range add EUR EUR the XXX expect X.XX when EUR all the billion. range X.XX billion So, of X.XX. and to to range XXXX, adjusted for now this EUR of EUR Adjusted fiscal diluted up in EPS to you million EBITDA XXX revenue of

right the to trajectory, Day. Capital place unchanged. consider We to and expand growth Markets return growth the we ingredients have margins as double-digit outlined construct long-term we our As remains our believe at in future

favorable particularly year, syringes, in Looking positive tailwind. segment, BDS is which solutions, high-value in a to in the momentum next we have

are This headwinds. On of tempered we the may our recovery is taking be factor, that currently segment. anticipate for the of by we the vials, side, the the EZ-fill the which in pace Engineering the bulk the corrective and includes and effect current other of largest growth actions timing

call provide We confident to will in in long-term on our we guidance Franco. our We Thank the and will back in will going but forward. you. our prospects continue growth update March. you remain to strategy I hand progress, formal

XX. In you, Thank Marco. closing, on Slide

solutions. focus in We our high-value direction. our still on are are Despite and confident primarily growth objectives, long-term maintaining headwinds, the delivering organic we strategic we are in

the Engineering In in a with return dynamic includes we portfolio operate ideally market Latina, our shareholder sharpen trends, our we we are our that well-positioned our of secular in and Fisher, these in remain are customer double-digit meeting favorable meet on to a strong. near-term, suited This solid and across and and the tailwinds. activities margins is and delivery fundamentals have products We determined to We and main Demand growth, in right expand The customer and growing needs. is our investing We priorities. execution that business drive segment. the ongoing the ramp-up on commitments our to demand. must organic robust, areas business improving the capitalize long-term durable value. are to expansion deliver on project of and focus believe

stakeholders, had employees including few Over I months, meet our the the many with to key investors. and customers, opportunity past of

will open objectives. that up for long-term achieve a our it I'm As questions. we let's confident Operator, CEO,

is you. Chorus conference Thank Call This the operator.

begin Instructions]. [Operator now will session. question-and-answer the We

question of Johnson Stephens. Please ahead. is first from go Jacob The

the just your issues and grew business. We've softening within equipment supply you demand in is about that you're Or weakness seeing engineering in the environment. the equipment? control? chain few on Do for rapidly Maybe in think this business around any there demand largely This is years. heard engineering current some past capital

you, Thank Jacob, Franco it's speaking.

we is strong on our action challenges Those our some pressure to more the context schedule So more Denmark we in this predominantly temporary operation on and projects customized chain late and are order of putting development. of what Today, highly stage in of to to than on performance expected, And new than division, in the the isolated the revenue previously context, and last doubled today, certain improve are business. supply the in our in have the engineering we years, at shortages. the we are taking particular, put pandemic in recover projects the behind complex situation. middle

by through our big that portfolio next few in in the the the successfully confident of is order can quarters. in is challenges the front in with we are biologics. solid, We temporary And navigate in us strong these of division engineering customer, way, particular

Got it. on And one ask Fishers. I maybe, guess, then I'll

in slight seeing You think about of assumed Was XQ, should prior was online kind -- guys always we of talked revenues guidance? XQ. what I contribution is in a as is versus we about this commercial expectations? think that those about benefit Or modest? coming guess in kind And this Fishers initial being

activity Validation as planned. progress Jacob. Correct,

revenue year. track launch to with third production perform of of So in quarter we U.S.-based to is the all the the customers. a commercial expect practically, this focus on all validation we organization and are in big XXXX, also to our Today, big attention, generate QX our audit commercial on

in are revenue provided. the guidance, the invested On guidance our we

is question Paul next from Knight KeyBanc. of The

is XXXX? Frank, I do system grow you engineering in this year. expect obviously, mean, a to reorg

some provided We Marco colors. speaking.

It's a color about our Paul. next year. guidance. early to provide Sorry, some We provided folks little XXXX preliminary about bit

tell you and Alba, What after strong in syringes, provide for we in a and this can demand guidance tailwind. today, high-value good call. suitable that we QX see usual Nexa biologics, again, will earnings as is We is

side, the see actions timing the and about the we we On effect are timing of vials, of taking of for some the the uncertainty engineering. of the other recovery

bit on As before, engineering. complete Franco is we impairing on our our technology testing advance bring a on see mentioned demand and little projects. and to we strong to project, Unfortunately, highly-customized contracts this are for new struggling some the the in ability

engineering bit XXXX. is this little to So, about talk a early specifically for

and referring to the that that XXXX in time months. if was, Marco are inspection, assembling further particular, technology is average bigger you our on new lead give where some line This Paul, up can elements. complex technology more I is customers

at So, Also, end a equipment. are stage machinery projects faced later some of the of at are challenges these we acceptance of important that the of our May test customers and that line our now multiple long-term for specify June. kind part have it's first of to the

and in next a deliver of big put inspection. the our the be the our These for they first Demark are field line, Gay, side you cartridges assembly to asking in one If automatically, for back line syringes, sophisticated Ugo in all under see? new are on you high to same But to customers demand the and order ready on recover do to what see So, on track increase already is some challenge. leadership actions to few and new facing temporary place organization in quarters. also

a was of just And -- the expansion X planned then a down had us it second lot What is years know there from been has another ago. you an that seems what? recently. Could Latina, question you to update be to which of seems transfer expansion give lot on was I Latina, -- bigger opening

Practically, became X, for the our Latina second if Nexa -- in we Latina to in And customers this ahead big by quarters are Paul. have with syringes. is X way, was Yes, order today. our serve why, compare hub we Fisher, decided Europe it the you

We anchor are commercial cartridge customers, increase technology, in to one this new decided customers generating of Today, this revenue. capacity our major -- fill. have straight for we have already many to for Latina

we know big expansion. Today, this reason for In cartridges, the also cartridge want there big You a in technology. have to demand more that have site bulk, and and customers. particular, to in customers we -- Europe, leader is fill in we capacity this on this market on from the bio all of in cartridges from these Latin, further see is more both particular a

Blair. Matt is question from William next of Larew The

BDS, year. on largely quarter, communicated you're trying I when outlook for that be destocking, second for you maintaining our the guidance quarter like beat, did Last to that conservative you and And think, were it there. sounds for you took you the down expectations

similar the approach in encountered you communicating terms a issues trying to those that you challenges way in you've now are of to investors? that are take engineering, Now

Yes, in again, the mentioned year. Engineering reasons X industry. guidance. down Vial than twice detect in to are for beginning But the recognized at size we is drop different different the change the situation, of why vial whereas the we We they of this reasons. a about we destocking reason we didn't X explained, different in year-over-year XX% for affecting the you to more adjusting the all And had very QX. year, is for the guidance the review the guidance had specific doubled our demand. Franco And business. very is

some We customized taking are ugly projects.

fact, customers because to some and of we resources complete they delaying specific Matter test acceptance matter really we in June staff. the We of May, fact, are one. time are equipment. spending from a add to the projects more had to customized As more are

customized of this for those a same our is with and why on profitability more As approach we fact, projects, fiscal we took and conservative matter At second in time in this in also projects, XXXX. our are new spending reason the main quarter. are the a bringing reviewing the people is we time, more affecting guidance

color if answer Matt, Marco. of to some give I the more can

our destocking return Latin perspective, the gain engineering new from if expect the operation in should these to be will will temporary that mentioned Marco in growth in and quarter. leverage the isolate Fisher, vial challenges, Also, profitable and from facts will scale his segment to from our of remarks, next you're So, we we like going behind us.

good in that confidence us will are give we a future. So, the this excited

quarters. in to the the return coming We clarification. to Matt, next engineering growth expect It will don't quarter. one profitable be segment

on year expected another then to obviously year. CapEx of given, But I I Took is the up Okay. think just lines? range just on little the least XXX high of million. Fisher's to the several of you fill This end last big And CapEx. sort us EUR be those next an a following continue starting quarters you're over validation just street to outlook CapEx think, expectations. out of maybe there, with as with provide here at to bit Could facilities

the with year. are Yes, we plan CapEx line for in our

year reiterate between million XXX EUR to our for the million. EUR guidance we XXX So,

respect we below we plan, big So, year the and means year. our It be the the cash will are to about out, of not half slightly first the talking the to of everything is half second going differences but that to of according reiterate with compared year first guidance. half

Michael of Riskin Bank question Next from America. of is

as talking This to a sort products the regions? you for appreciate in, what of Hello. John the expectation planning is about vials? come all board, coming to time then across expect the to for in afternoon. production can Good coming Michael. Is line bulk in the elsewhere, hear that of would comments. destocking on Latin after orders happen, in. there's talked And Great And I we America. if that Kim those And about customers

thank question. your So, you for

We gradual materialize markets expect that effects mentioned point with production We our to recovery, a the but from customers are still see improving market planning. vial This reinforces still begin of the of certain to bulk positive forecast beginning we sign, starting vial America. starting like destocking. pick tail-end today XXXX I such at and you orders navigating demand markets, larger market to our the in will through in vials. Latin up In all the more to the sharing confidence are they are smaller

market. all we the starting to sign from are overall So, positive see

take now XXXX XX% progress sales, Great. over And target. laid XX%. the to and update expect up was that's for already But XX% to your of -- high-value fiscal solutions, the that in that XQ take today, towards out you the 'XX total you making guide

that if 'XX could wondering I'm So, target higher? fiscal even be

about is This guidance today our XXXX.

from reiterate in mentioned we We solutions. vials, high-value demand, syringes. pronounced can but confirm guidance strong initial overall, absolute as seen we high-value we Obviously, revenue in have in to the our mentioned, total see sterile the coming of Compared going Franco, as percentage in growth to or with see feel value, the reduction XX% guidance, numbers. XXXX by years So, to mentioned by About total get to as down temporary engineering, the midterm XX% consequently we confident revenue. view, so, are the we we increased destocking. bias in the

bulk So, vials growing we in in expect both sterile. start and to

and ramp-up product only not to lines value We expect products. other

is from Donnelly question Patrick Citi. of next The

just Franco, on through think about asking just And be quickly just the front Can that helpful. the facility, the talk the way about customers, our what commitment year? you're maybe hearing upfront. would you X piece. expectations timing work on and how we on region the then destocking just the from visibility second, and to to just I'm China as that

Patrick, clarify little So a just hear was your hard to it question, to you.

first destocking the asking the question our Your Is was on on and into And question second to forecast? and customer that about related China correct? timing visibility China.

Yes.

to regarding a bulk So, just market around year give numbers, size per vial number some pre-pandemic. the consumption. This destocking, is EUR a a has approximately market that vials billion XX

We some destocking the are this starting year. in to with face issue XXXX, also

destocking So we are see facing we we all international all our Today, inventory do other the what for practically, vials second a build year COVID, the therapeutic for drugs. are that huge regional customers, issue. customers, they entering where practically customers, -- this

are Now our moving customers this situation destocking. of

are is chain XXXX. they What discuss starting, -- forecast to to to related to lean more they of demand supply still for starting in smaller particularly customers, are where like soft they We I the on XXXX, but in customers order. see, have reactivation mentioned starting more international before, are

we're So, market. positive on this the see an starting is to vial sign overall reason why

our the by in modular. next Stevanato the customer because in by make model very China, a are to the biosimilars in our Asia-Pacific are true we It's we is Group, come. requested particular is a we in China, flexible customers. terms where still see investments our Stevanato Also, remain way, demand the request, of big addressing very that strategic year to in also follow for opportunity Regarding market

increasing we they sufficient Italy. of particularly capacity to in enforce So we is have our we major us of because today asked needs one and the the that China anchor the what Also, why reallocated capacity market. have partially investment, Latina. -- our capacity reallocated further just to from into serve we satisfy customer, our Asia. are in plants their have is They've This

The next question Windley David Jefferies. of is from

some kind math then half little It half, to a Hopefully, need in from the complexity margins percentage this you incremental midpoint of to like your hear have projects, projects incremental been of range. you new guidance margins been in some from negative. margins hit bit in I the of of me. the can affected. about I've understand delays first mid-XXs scratch incurred, I'm XX costs the you've mean, here. I and clearly, have with margins And effectively, ask; to in that done EBITDA or of something negatively second the XX% the the these trying looks your wanted the

to But to wanted see wondering incremental from actually of get that of you cost how would margins business? the taking half? investing like first sounds the you Are EBITDA It help second you're in you're Just the progression half? to business understand those out cost to half again, to much if into. the taking support higher out high targets the second

of QX respect David. growing similar last with QX, and growth, sequential to path We between year question, see for the a Thanks QX.

what in year. need have higher engineering we we in we took we are, second to All the basically, last cost So hit of overall, say, the done let's repeat quarter.

of particularly on with in Latina. ramp-up leverage first the products, comfort grow Will in more a and half P&L year, painful this you of have ramp-up structure expect in can we we We and all syringes, the Fishers especially place. the perspective good the give because Latina value was the in from to mix the

planning. significantly start a plan generating half Differently some second of ramp-up Latina, first in and the we year, of information logistic in commercial for part we in the in year. small generated And the We controlling, to future. have of revenue quality technology, revenue amount place,

repeat guidance, we So, the this to one basically in of to driver is last do embedded year. what of have everything the been And is our growth. able

of try plant efficiency Group, It to maximize to will order are the also under improvement bring Gay, and in complement a of make function. the lot internally extremely answer a new of Operating the can the really full lot lot making to a Also, to efficient. I in attention David, making of attention in become in Chief Stevanato Marco. leadership the of Officer, full Ugo we

starting next will to are the put the attention. So, also an that this of we is a a activity ongoing it for negative By year. side be way, lot

you that a sense sense of the don't the the you us give Maybe revenue between for did twist year slight it, in it. Got the some Would of question. to but updated missed think of on sorry split. be and split I contribution engineering? if BDS I'm I willing guidance.

Yes.

XX% in EUR between decline are consensus with say, a BDS. of mentioned compared That current to around that million. with we growth In mid-single-digit respect line BDS, engineering, year. means in XX% we Let's to XXX expect last

ask that's if margin then one for to long-term. your of longer-term the we've And thinking And that more change, targets could last profitable high-value are vials about one come kind you. I quite Okay. understand so and

think you dependent on X the that of percentage the your achievement were overall vials, said targets maybe of vials years they or I were, recovering business year same a XX%. say, longer-term your Is ago? down

of continue Nexa. XX% Today, This on David, solution product plants, today, adjusted greenfield once Latin and in confident and XX, are new X growing to in match we will syringe target. between scale XX% the range Fisher, is stay shared up where we to we really particular we that our are we on target our high-value that lot about EBITDA XX%. high-value to we a

our pipeline good a Alba on have technology. We

more ready-to-fill. have will with but We that program a we lot we on trend industry mid, into more Also, bypass. anchor on and turn with of program fill on to see customer, have a syringes the big small cartridge cartridges some

are shared that the we that we on confident overall, you. with So number

see in the vial destocking. disappear we medium-term, the In

was to strong the be on for to cartridges action conversion the conversion, acceleration the engineering. demand the saying we taking very sterile. back of Capital track are to Markets syringes. compared And in Franco of see Day, the We

EZ-fill, also we but direction. risk in drive are some offsetting the confident growth are in we the to same So,

from The Larry of is CJS Securities. question Solow next

questions my the guess of on lot A I a on Great. follow-up been David's asked. just question vial.

little to that that But a maybe certain we get less a it say don't respect, confidence all just maybe to it stick and out that your you diminished and get or recovery. you're 'XX, fair levels confident Is 'XX feel So, in kind feel want starting the get necessarily hopeful doesn't it of as your seen neck just maybe also it bit to not that feels of a percent out. sum some back on maybe of and guide same does positive you you though, signs you will would you've potential that has fair like we to signs in you're But up like some for a those bit confident thought or recovery the yet? see. to maybe that overall to, positive like we're way? at were further that make is vials little But

industry. the It's We vial the are is for format confident necessary Long-term, market there. a

timing XXXX, the level little because uncertainty we a monitoring it, expect. January be are For at will point that the early but about of the inflation bit we say the it's to X

are our many dialogue only move can our constant a on have we program. with we because programs vial, customers to we syringes Today, involved BDS not customers, with cartridge

of also stock. normalize So one main intense today, chain their an because we to level have on level to discussion the -- their of supply it's concern reduce

sites. This prudent. discussion see positive like with today. have mentioned We something the customer, practically they week overall, before customer back more we is are when our trend more a The normalized. I are is that intimate are they positive. they multiple sign chain, constant small all that in to So, bigger But every there that going have we supply complex are customers,

there, up out there market, us the a some color? your But us year. give just bit could some last so are have not. just And -- seeing cartridge It's you know you on too? a been destocking smaller I give the market. by But stuff capacity you anything there any mentioned there? little capability telling update any customers we probably Can on manufacturing a more little built

seeing you're in effects clarify also to we're if just the destocking question, cartridges? asking Larry,

any -- any not of in just update destocking, Or qualitatively just terms

We because engineering now high-speed users. is have build Nexa internal to syringes, with signed big a for increase to in were not our individual is demand fill. revenue line demand technology this in in Most for and place, generate the we in later changement see the we that stage in customers. of an demand more that phase on complex Cartridge a something strong put the EZ-fill will cartridge see our

in all So, is robust in and biologics really moment. is this the demand overall, strong

expectations. quick question make cash If just flow a on last just I can

light -- more on you balance will plans? EUR I about can us year? your was any thoughts like maybe think you this think your in CapEx raise need any just XX And million I looks of currently. cash any It Any that on to give more, thoughts financing that?

So as million mentioned, cash we EUR of XX have on hand.

We -- have free cash flow we flow positive from and availability have on from credit lines, cash operations.

the the working then months. next for ahead, the to finance in at looking least for we believe we the plan on are And XX are still So, growth XXXX. position we

detailed are obviously working in to balance CapEx our cost rate invest than for the still further see the internal on return is capital. 'XX. a leverage, with so We to We have the we products, can provided higher high-value a in of opportunity leverage small sheet of a plan budget

question next from is of The Dan UBS. Leonard

comment align to One seeing on elaborate with more shift infrastructure You an you're better that you Annex Could made increasing upgrade a that? requirements. a to bit

is pharmaceutical new One is to try risk asking avoid industry in the put of that a their to danger put type process Annex all in sterility Practically, the all to Yes. practically any product. recommendation place overall of that some

So is this. practically, answer Stevanato Group of the on which

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think help revenue. boost reason EZ-fill medium-term, why to can we at of in that the is this in our stem the order the adoption vials So,

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think in overall, next Stevanato the medium-term, be for So our favorable that will one Group. we

some as discuss or a of mentioned customer point concerns capacity Is due an then a about was from that from regional that change And you that from bio-secure could of that customer. result a to Could preference anchor more? Latina follow-up, China to you Sure. bit the to? shift the CapEx anything you specific

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is from question Paribas. of Moiles next Curtis BNP The

wanted I come back on Engineering margin to the one, segment. just for gross the First

a think the gross should heard margin of I kind are you biggest normalized I impact we in that the you Does year, say QX. bounce half that cost back what Or of see higher level? mean of the there? that that you second in more to expecting took the

before our still Back engineering. the on projects second a sequential in projects. in profitability complete Nevertheless, quarters more XX to we field improvement still expect people have the customers. need the that, for the quarter project, the going took put order to We in and and engineering. navigate satisfy back to and some normal on We we to satisfy do those to big And the more customers. effort

you event. most operational you, Today, if Rafael Pazzi that Officer, I met the Chief under the and Ugo Operating new Gay, Gay, can leadership also give of of only clarification some the Ugo not past in

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we results next So, front have There the have in governance, of few place. put particular, we these the that a in from to the are us. clear all starting in is first count actions in quarters Denmark, and

changing in were indicate helpful. full to And Or lower the end China shifting million? year just range I us at question, million that CapEx That's you expansion of you're the over XXX then to to EUR XXX and Latina, really come in earlier there? going of how of EUR that is nothing you were talking kind think. the postponing about to second Does again, Okay.

changing the we not expect be big a between million is will EUR guidance XXXX. for not an CapEx, difference considered XXX It's to guidance. in making million not EUR for It's we XXX impact XXXX

can we future. some no But Today, for excited say organization the company if the also more I are word. is also, maybe these is temporary in are because the squarely focused challenges. final to working question, we meantime, there also in face If all the

in high a concentration with greenfield is This EZ-fill. we'll is to organization every to goal commitment there try have all the we these the a in do the we long-term new motivation Europe, our to customer. the is that around matter cartridge that of no plants. only deliver it in if have the So, program deliver, Today, company this amazing agreement particular This States, with day. the big business United is that plan thing

KeyBanc. follow-up a Instructions]. is from of next [Operator Knight The Paul question

in obviously for of that supply Is that? It been have yourself? On inspection what's to is the third-party intercompany item, line seems that internal systems What well. as huge exactly?

to the forming and we is Paul, our there machines have Latina expand segment to glass providing that Engineering our Fishers capacity.

Thank you. Okay. Completely sense. makes

That joining. was The you over. now question. gentlemen, for and thank the last Ladies conference is

may disconnect Thank You telephones. your you.