Stevanato Group S.p.A. (STVN) 5 Nov 242024 Q3 Earnings call transcript

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Stevanato Group Third Quarter 2024 Earnings Call. [Operator Instructions] At this time, I would like to turn the conference over to Ms. Lisa Miles, Senior Vice President and Investor Relations. madam. ahead, go Please

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

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

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

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

review and for an performance, objectives. ongoing everyone, to discuss update meet and will on Lisa, you, joining quarter us. dynamics, thanks, provide Today, initiatives our the market third Thank our we

expectations. For the in below was revenue but our line, third were margins quarter,

optimization increase are validation as diluted costs plan and our our factors full Engineering we As in the segment adjusted activities. The in we a EPS. higher the lesser a XXXX our higher guidance extent, adjusted as for implement result, costs year we and main to lowering EBITDA are U.S.

Let's engineering. start with

starting to execution and the benefits from we taken are performance. We initial have see to recently some improve business actions

early key third were still that we completed previously in for quarter it's days, several have the customers projects delayed. complex While successfully

Engineering Segment the underpinned of for believe optimization can reminder, success. We we high we improve taking we address structure all, the long-term and we designed: launched to a remains devices, segment As lead and an harmonizing and are long-term biologics that remain some as a towards to position the tailwinds X in the and with steps business return growth. The current the demand focused as that profitable position operational regulatory believe on the plan health challenges, gains to will adoption strategy, the processes. Together, by drug are structure landscape drive the our move segment the like business, improved Annex to optimizing for productivity. confident of rightsizing main such cost our favorable, standards systems. in action savings operational the ready-to-use alignment trend this we industrial that this Above both will in and Italy, rise delivery to engineering the our footprint product activities overall

of turn mind investors. to destocking, remains which vial top Let's for many

up remains gradual with vial at see Our in begin year XXXX. still a expect the thoughts orders recovery to this We end on recovery same. of the the pick to

strategies see we dynamics weakness our view. Nevertheless, as high-performance in demand. which the grew We and towards the solutions primary continued our our year. The our market momentum customer for expand customers increasing in the positive are last continue collaboration year-to-date for demand down we XX% market, quarter, customers the in high-value investment with signals third are to capacity working to continue this Despite trend that such strong different current our reaffirmed and vials, biologics to rates. solutions, inventories packaging during high-value with compared match at see reinforces

Moving projects capacity Slide to X. expansion our on

commercial on projects of both relevant facilities, a to in Fishers, the the phased quarter milestone ramp-up multiyear successful progress Latina. our launch continue into a achieved installation with lines generating our and In customer are third commercial and expansion planned the Fishers of the manufacturing XXXX of make throughout to we validation be major revenue. We production, and in first ongoing XXXX. In

completed During high-speed of our manufacturing line. installation the we second the quarter,

We utilization are customers, of we the activities also beginning on. are rest third became at Marco production, profitable continue the gain more with And the several in gross key validation project to will quarter, profit started later the improving details and scaling for Latina, the year. In level. which provide expected efficiencies. to Latina

to is and industry initiative Turning the of stakeholders. a has the purpose It vials pharmaceutical a generated recently other The other customers We sterilized industry of consider launch interest the together this X. for the to across RTU as to Slide cartridges. from industry customers announced players. industry to Alliance with educate of transition lot

enhanced to syringe efficiency, the believe continue ready-to-use vial a with simplifying adopt will Annex to compliance replicating has products years, for contamination in we to reducing shift saw cartridge what and the and mostly by syringe market. RTU demand filling customers industry last ready-to-use production growing market and converted facilitate quality can that the Over XX the the greater solutions, solutions We sterilized product faster process X. Furthermore, solutions. risks. meet times

process supporting webinars We assessment decision-making white scientific are and research through customers and paper. symposiums, through the with

FDA to will produce using the strategic portfolio. We recently spray We the continue on a make that supply recently vials progress summary, agreement, good we progress, are device. In we tangible to approval. remain execution. our premium epinephrine we high-value on first wider Under received nasal micro our agreement and neffy focused making needle-free support the solutions won

and in are call over completed destocking the quarter plan and to investments to projects quarter. vial optimization several In of starting throughout growth inventories. I demand previously XXXX, was are effects Fishers profitable Latina to executing the commercial improve ramping. started hand revenue. as down are third of gradually opened Our some our work we are the in Marco. the we Engineering, the expected customers now see in vial stabilization while And generating

Thanks, Franco.

begin, that clarify want on unless otherwise to X. to third XXXX, all I of specified. Starting refer comparisons page I the quarter Before

last high-value from total grew XX% product revenue Revenue lesser driven by of and high-value For growth represented to the Solutions XX% Segment. quarter the offset revenue decline other quarter which of XX% and Engineering third approximately the XXXX, XXX.X High-value grew Diagnostic in currency X% the solutions and constant driven EUR extent a X% X% syringes to Biopharmaceutical expected solutions Segment, categories. basis the in year. a by on million, in versus

We high-value are solutions. strong fourth currently a forecasting quarter for

XX% due including engineering. more impact lines in cost in we we accretive tied So Indiana for to XX.X% in to XXXX the year vials, from solutions vial the of as XXXX, EZ-fill our vial to scale temporary XX% XX% higher full higher expect ongoing of versus the estimation will revenue total quarter underutilization to inefficiencies lower XX%. costs ramp-up margin revenue of activities, destocking, validation represent of third that approximately to: prior for and high-value well and Gross as Fishers, decreased now profit The our as

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

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

inefficiencies Before gross illustrates that review plant it the we to be segment dive tied on phasing new we slide start-up typically example. the we an experience during expected manufacturing their to impact results, trajectory. a phase This as manufacturing timing useful of into a profit the thought the and temporary new would margins deeper and site,

acquired started revenue the the brownfield from in in commercial site building Latina, in XXXX. QX For XXXX. We generating new QX production we

well noted, the under third current as early benefit we the product gradually to abate, group's was site and of inefficiencies margin. the higher Franco project the experiencing we of from the will in temporary support unfavorable slightly mix and impact reflect that progressively As capacity activities production expect capacity, the But productivity better absorption to scale. as and The we contributor of multiyear the will phase as are quarter ongoing utilization, that expenses in positive the a XXXX, revenue ramp-up. increase,

Let's review segment on Page results XX.

other products. EZ-fill XX% pronounced solutions syringes the approximately and extent, of related million, grew to revenue X% vials. by quarter more XXXX, vials, grew drop high-value a of lesser a and EUR Top line the by For in to on high-value decline XX% was was to of and from by: solutions offset Revenue EUR growth X% third the million BDS X% the effects quarter, a tempered destocking, basis constant segment in costs other and was to including in underabsorption growth predominantly containment was driven of BDS revenue XXX.X XXX.X XXX more lower the accretive costs vials, for year and in revenue the margin prior and and some with million the consistent while EZ-fill underutilization higher overhead from EUR segment inefficiencies period. Gross ongoing third Fishers. of revenue and start-up from profit delivery vial currency

profit compared for period profit operating year. margin declined for with segment third XXXX, margin same result, a gross quarter the BDS XX.X% As and of to the XX% to the last decreased

margin to to expenses and the related third mixed XX% with packaging. to our in business Engineering $XX.X decrease plan. of declined revenue expected declines growth quarter higher optimization to conversion and XX.X% third visual in was margin the was highly quarter. Gross complex million. Performance for XX.X% the in and The driven For by XXXX, projects, margin profit decreased inspection, decreased business assembly and in costs revenue to tied certain operating offsetting glass the from profit segment

operational with noted, improvement, We Franco but better and to execute continue opportunities. we take will will As time. set position future we believe making the the are path financial we for optimization capture and it some continued expect segment progress to which plan, have our

to turn sheet items. balance next a cash for the Please and flow review slide of

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

were access and compared additional a XXX.X in our fund part in from of XXXX, cash XX strategic quarter cash of of our available XX operational next due assets debt financing, XX, with advancement on net projects cash that available of million we months. equivalents ability we and to levels September As contract the inventory over Through Engineering combination December to third our XX, cash higher segment. We to the to decreased credit priorities the of liquidity lines, ended believe generated while EUR and hand, the have operations million. EUR and

assets the In cash Fishers million, quarter of third intangible resulted to was used net EUR for flow XX.X as Cash meet third activities free expenditures the operating of XXXX, we quarter totaled million. Latina XX.X demand. negative property, the in of plant, to in continue ramp This capital EUR and EUR XXXX expected, cash up quarter. XX.X of million totaled EUR purchase As million. in and XX.X the third market from equipment in

XX, Slide Lastly, on guidance.

maintaining EBITDA our guidance are lower XXXX, We and our revenue adjusted outlook EPS. adjusted diluted for for in but

are includes that plan, in mentioned, extent, activities the as engineering to additional U.S. Franco with our our costs increase underway As actions with costs higher validation our lesser the guidance now a optimization we and

of For of million range of X.XX. million we X.XXX EUR to in in the EUR X.XX EPS fiscal XXXX, diluted and range range EBITDA billion. the EUR we the And X.XXX to expect XXX still billion now EUR EUR expect adjusted in adjusted revenue XXX to EUR

cartridges, that near the thoughts term. unchanged, factor remain As bulk the and of largest DDS. syringes pace high-performance in we XXXX, of and said, That level IVD other vials the consider recovery strong product to will also EZ-fill swing our we year. particularly expect demand, be the categories next and remain see as growth such We in for in still we and cautious continue

in our also implementation optimization alongside We anticipate Engineering improvement the segment the plan. of

will guidance intend you. I in the Franco. to back call hand always, formal As we provide to Thank March.

direction. and you, Thank markets achieving has execution secular XXXX to closing, challenges, in several on end In are with presented we tailwinds, be have we confident our strategic operate Marco. and our favorable growing while in reasons long-term focused many We objectives.

to by high-value long-range main our we First, growth, driven construct. pillar of deliver solutions, organic continue the

the in investing are to demand. customer meet We right areas growing

our benefit Second, Italy ramp-up drive advance we profitable growth. we capacity expect new U.S. from to activities and the increasingly and in the as

optimistic continues stabilize, the return the historical continues to Third, as will market rates. a remain we signs. and show growth wire volumes we market And demand positive to see to that

actionable strong are drive durable for execution near plan and drive the us the Finally, the questions. margins of in the and long-term team, Engineering it growth, we business in up and and commitment expand our segment. This, to high shareholder value. Operator, set double-digit term, clear open operations our stage optimize the a fundamentals organic coupled together, of for implementing with to improve the let's

we the for webcast technical we all, side. from had issues apologize our of the First on

The first of is from Instructions] Bank [Operator America. Michael Ryskin, question

you single-digit growth long-term you've line Mike. Engineering fiscal Avantika for guidance XQ on reiterated is XX%. 'XX but for you starting formal call, on is your modeling This the XXXX 'XX Street I segment, good the I year to is of high that construct the for in but had will understand destocking in on headwinds today? and this as that we 'XX, stand the top mid- understand from point for provide a

the Yes. Yes, Thanks question. you for right. are

bulk pace recovery and we This during today. quarter. uncertainty. provide What I mentioned formal see vials. is summary to of is uncertainty the we next will guidance the EZ-fill the commentary in of We the vials mean, what is the related

we continue diagnostic favorable other like cartridges, to side, see categories syringes, particularly but other delivery in system. the in vitro tailwinds, still also high-performance product On in drug

We in business also of alongside optimization segment anticipate the Engineering improvement implementation the our plan.

Finally, pressure improved performances leveraging we expenses as under phase. start-up the are the in increase expect during revenue, increase our and Fishers capacity fixed we our and better of level financial that Latina

So end, assumption. see reasonable a we in the

of The Matt question William next Larew is from Blair.

just to ask about easing. of I sort wanted to destocking visibility

getting you'd conversations quarter, some back smaller in countries customers. last ordering think positive referenced some I with customers maybe larger to

has had of in what are increased? customer and is Just curious group conversations the positive if to customer if you by progress bucket of group, the each making sort number each like

for Based question. Thank the customer on normalizing. our would conversations, characterize market we as your you

positive Customers are different some at mixed it's While through working see still we signal, a bag. inventories rates.

in vial cautious uncertain, in the indicate we compared half of of second in vials orders timing the we XXXX. said, In half. work first pace terms also but that doing orders, forecast customers us started we're to optimism XXXX increased and see customer in seeing to remain improvements gradual But with the XXXX. for our being are demand the That recovery give to

clarify Franco asking can also just Matt, additional that. to it were versus color about you question, smaller your larger think I I'll on customers, think here. to chime we relate add ask on as to customers some I may in

Yes.

to starting in through particular. orders in markets America in larger are are going in the We And things right Latin coming smaller our like direction. see market,

forecasts demand customers update to seen point increasing have We vials XXXX. that in

signal are month month. we starting overall, all So to see positive after

under if then extent, a maybe sort issue, control. is of market the engineering is And issue destocking to issue the Okay. perhaps some your more internal or

also or that your of curious waiting new your Just components or control, customer and outlook, to of when versus under how the ability things the earlier perhaps on is sort that's control, whether were are much optimization your for changes? out completing guide your program of dealing you hit with projects like the expectations

okay. of can if or it's So situation, if picture numbers, drive start more the overview through you you Marco I want, an and can maybe give the to

engineering, address return launched growth. benefits plan position the are We an initial footprint short-term optimization the the starting in improve we challenges, from designed have to we recently and actions some to taken. So segment the to to current profitable see

First, we quarter complex completed key in have successfully for the third projects customers.

are we alignment engineering product focused on Second, footprint our optimizing strategies. with in our

trend profitable to Third, can productivity. savings improving that actions taking in ready-to-use the tailwinds the and for are we biologics, towards the and of by can to some middle segment and today, adoption to like Annex of return new long-term long-term drive remains device in the but believe are delivery X the in demand results. The and growth operational favorable such systems. gain boost structure year, We the as segment expected next regulatory we more cost Engineering drive both we more rise are drug by the particular,

in Yes. of QX of our engineering and and the is main driver change guidance The to in related XXXX QX.

the Latina. the we as this with Franco this had advantage year. Besides And action of future to sustainable related order taking also we some today. we for was in working to change driver action ramp-up take of guidance future the cost way. are that, hard saying, we the are a profitability is So But our regain validation the taking changes in are again, to main in

closeout on And Matt, comment final a that. just

correct. from We late to it execution engineering. You're as had control after longer really wins our challenges in relates the record XXXX. the the supply is we It suffering segment that really in no within and largely that are we chain on early felt that

those actions -- characterize business control. advance optimization we our would So today, plan them our largely as as are within we

from The Larry Securities. CJS is next question Solow,

just question, the on first guess some BDS, parts. of moving I

with XX%. like -- on your And curious within granularity to sound bit started Was little that down in Or that, but all? a that bulk the still piece. were just has, has vials expectations? is little it just It line -- bit RTU worse? mentioned the was doesn't come at You was vial back it a more

the for thanks question. speaking, Marco

So it's our in and see we QX. revenue can expected Basically, also expectations. with and I of today level mean after QX, changed we guidance our we QX. line steady QX in

We in that more vials We situation, impacting pronounced are but more in that is orders Franco. us. margin XXXX in because to in can some is XX% was very in We for rather signals EZ-fill are it's accretive for improvement revenue overall good see QX can than down see intake, our generated XXXX. be they

still see steady in situation a XXXX. we So

I on the ramp. -- just Latina the chart And illustrative it. Got appreciate

update we we 'XX just profit? a Is losing and Fishers assume that on I that? that Just start When can give like years you Fishers you I thoughts curious, Any are couple so. just today? a out. think do money 'XX, us ramp a reaching target? actually there? breakeven imagine obviously, an where on in still stand a of Can similar Fishers, turn

question, the point. sure on start complement and Franco then the will operational margin I'll for with business

So now of margin way. from can you view, are the the the started in revenues graph, -- we we see as commercial standpoint now have illustrative

obviously validating point we the of lines the activities the customer the we putting production, are immediately lower profitability the ramp-up testing and installation. validation in are because with together after So with of our the of

next say. So started point, that plant we believe greenfield. it after with quarter expect also turning expect improvement Latina, we larger sides, in I quarter. Bear both compared we we would is a have and in a the Fishers in is Nevertheless, mind improvement quarter the

in and expected So that's that the be side. are in XXXX, financial Latina also Fishers to on QX, mentioned positive performances before the why I in but

If some are doing maybe the I capacity Fishers can further about expansion Latina. give we and color between

make continue We greenfield progress in the plants. to both

in with So in manufacturing today and ongoing revenue. And the Fishers, production. a a during both Latina, level. partnership In customers. of activity validation start key are the we completed quarter, became facilities, started validation And commercial line. of several gross we profit generate first the high-speed the are a our manufacturing intense production commercial to started we customer with installation and very profitable them. high third we track And on In plant line also in together at the we quarter, quarter, the this second the activity installation with our scaling

we and conclusion, in particularly Europe. invest high-value for Fishers to in So solutions in demand strong driven biologics. the this reinforced our momentum strong And in decision in to see continue by strategically

The next from Patrick Citi. question is Donnelly,

you stability mostly guys Any that's of the there? talk over risks behind order it's be on moving rearview little expectations a talk I you're you be bit talk talked there the we're based very Franco, destocking Marco, in -- seeing the some what Can about that Or you the margin maybe the and helpful piece recovery? would there? piece. a you forward. And just I can obviously just would have leg bit. are ask on little dragged It guys? both that mean, at what the just engineering feeling Obviously, another level of going side, just in about level I'll then just once. the and patterns, pieces through to about confidence confident the them X, to

still that like is of destocking XXXX. market And patients. more through order idea, most recover. will question a temporary start treatment vial effect. market deliver XX one are approximately the containment different is that And also vial Vials vials than different most world. used Every to pharmaceutical destocking to year, in the different was when a at inventory temporary to are the around the The regions therapeutic globally. normalization through just all in to painful the billion headwind if I This adapted or the is It's question give the areas an format -- dynamic. the would just a the had this That's will recover. is of the a clarify companies you to not we

confidence strong a vials markets pre-pandemic healthy the return that and have end are to will we So its demand volume.

are today, XXXX information, Just vials to give normalization to effect. And is we demand this an us, you another below inventory clearly level.

many customers, top bigger the small both and our part reactivating On to sharing positive forecast of second see continue XXXX. order we of for from XXXX international this, of customers signal new are the in that that are customers

by cautious step direction. we going right are So to we optimism have step, that a the

And got Patrick, asked Engineering about also. I if Engineering, you about correctly,

some mentioned, the are So projects. last doubling the explained the terms with revenue we after size of some and specific complex to segment in XXXX, XXXX highly of we as challenges customized quarter from facing people basically

are the good We them. in direction fix to

able This we Nevertheless, and growth. been the the for As and another quarters them our this we are X we we the stage our to have take profitability. complete segment, embedded the in expect in of taking to normalize is to X fully Franco in are quarter. taking action optimize and action future hard to area guidance, order an obviously, to where mentioned, is working some will it set

Johnson, is question from next Stephens. The Jacob

on margin sticking front. the Maybe

a seem step-up margins in Your imply would EBITDA to sequentially. decent guidance

expansion to versus gross of Just think terms curious in sequentially leverage? how margin about operating that

in driven margin mainly gross by is profit It QX.

is leverage The mix expected We in volumes. to expect to better improve QX.

firm covered bit the customers committed there. we because increased As guidance little for you largely -- see, by orders products can are of we the a from high-value

and And in confidence volumes is mix. slightly in expect Fishers to QX. both on we Latina performance finally, compared and better QX the So

business than So mainly operational rather improvement cost reduction. and

maybe And due you lowered it. the sticking Fishers. guys guide on and just Got some for costs to incremental the side, Engineering cost

we about engineering where return any just costs, ramp and potential recovery the those do it? benefit accelerate the costs to maybe way money think the at about just is that going As think Or help and incremental those in on Fishers? the from

Yes.

Let's Fishers, improve are lines to and situation. the are investing profitability as very in future. know, validating customers. I we say, production, we the now you mean, the the situation different in They are ramping the up with

is commented, we the to our this see as production more we to for driven the strong plan future. be willing it and future. capacity execute by to are in in is customers future optimization our profitable business more In the So Engineering, demand and validate leverage the

I confirm. Yes,

a to competitive this to right to now increase in in future decided productivity. set apply new platform our the have build in We decision to order more cost order

Jefferies. is Windley, from next question Dave The

the with that loss as correctly? in revenue should would get better. Fishers we to asked a and about operating that incremental I understand Larry revenue, think bit how but there you're slightly that that this expect at I And where you how that say provided. illustrative related stand to you I understand to in understand Did Did maximum you to better question, hoping the increased Fishers? was improves we -- little slide margin

production started QX. commercial in We

line validation, more and so more So revenues increase after our with so expectation on installed, is quarter to forth. the quarter

will leverage grow the as up. production expect our to steadily fixed soon as expenses we So better

lower this our quarter and is higher point We touched with associated costs So with assumption. we in installation. the validation the the this believe

a It's Correct. similar journey we with very had Latina.

we run, with produce happened because have we commercial the in In the Latina Alba even wide today. and line. line. already will again, same long we in are going performing Also the more also installed started path will auto-injector validation, some the the have second with continue Fishers, to we product some it to this we In next deliver -- we Now quarter, technology, also also are second parallel, technology. similar revenue with what portfolio

wider will the in at long So point, be Latina. it run, Fishers and in than long certain even the bigger period,

Okay.

the 'XX, say Should a to line to in assume of So in straight somewhat means? we from there? Or when pick you recovery to for point it gradual destocking, you us? translate here about from can destocking recovery a half what and gradual of just vials to help talk in second here that again, of the in 'XX 'XX impact the what again, there negative lessening I'll does define

Dave, let start. me quickly just

I as is be that timing the the we swing growth next think to earlier in of commented recovery largest pace Marco tied and that vials. going factor have to really year for

that as sufficient market capacity so today. And know you a there is amount of on the

may so necessarily compelled orders as are they to historically. And customers place not quickly as have

today. just And add or like. if that speculate And we're a I don't move think Marco in it early I we would they'd XXXX, Franco could and so position as be into And to additional the timing pace color think that. of

Exactly this.

the want a organizations. it want to be customers, year. they international not their month, a still, small that we more be and forecast right on XXXX, exchange the year optimism that will understand only cautious they have particular, But to are the month most the will when transparency our with end that we increase for constant of give the to have by to And normalization. we the in big XXXX see to We customer be recover. at that prudent going We way

in and additional Okay. for Since validation in a the different one, around didn't me costs is the Fishers to let mark, optimization engineering. which that one move hit

-- be For to the previous expectation related those you that Can about the in are your customers expected? you're requiring to out those optimization than costs. So Fishers, is plans similarly, These challenging more in you requires to talk what those. for plan you example, more additional were validating expected? place what has are that than relative adding previously proving deviated validation costs set previously you adding Are cost you before you're and that engineering, in And is additional before? from costs?

we as the The ramp-up and activities advancing are are planned, program. happy about

validation. to related are Fishers for cost higher have We

taking And and to is their sometimes customer with not longer it's activities. every the validation respect approach, same process customer the depending on

you We are high-value targeting products. as know, here,

So level. very validating orders, the line we really the the requirements already so to are that by willing are very plant gained the in happy and way, the often are first are, about Anyway, we success with committed they very us. the start important customers with

related that is segment, the what is the taking Engineering actions are one optimization review our of to main our in plan footprint. For we

activity we example, we operational some and some of have structure, rightsizing For to moved done have Italy. our

order We for decision to in our have decided increase costs. the reduce to order floor to build the move productivity with next this in type growth our of and

have today this We for order gain now in -- in in do middle -- to to back investment more to marginality be XXXX. on of regular right the and next decided next

next Paul The KeyBanc Capital Markets. is Knight at question from

you customer talk from request, Was what could Indianapolis would faster? be What why coming it online a payment? is later were we dynamics XXXX thought Franco, customer start-up? the

line X No, expectation. to the with mean we Latina. revenue our I in about commercial in was X, start after are it quarters our plan

there. the line in plan are our it's to... exactly the line in are better with plan. a But activities up and matter Obviously, the costs we exactly in and revenue fixed with now we our have we ramping order honestly, leverage So of there

also plant. Paul, during moment additional the and plant. enlarged greenfield the we have Remember, plant, a the greenfield BARDA, to opportunities like plants from we the do the a some brownfield greenfield was other Fishers we decided IPO orders is Latina received that that the And also that

Europe let's and is say, this quarters of we States. between this, few United a have why So difference

of from then efficiencies with the fixing it Europe? the there, be Denmark, at want you Northern Where And to the is Okay. believe? Northern engineering turnaround in done in I in we engineering group, Europe, terms are where within operations

product. by goal build original Denmark to excellence also for today, So center to -- have in system in in to particular, of already Italy, idea a is and our Bologna. our in excellence for each inspection is And have --

plan this -- action is place. this in So

We us. will front in a require few also of quarters

be the of in be middle back marginality. on to expectation Our year certain to next

XXX training basis XXX in range you EBITDA is or point data of XXX? And people you it gross Indiana, XXX? had costs, capacity formula impact range that's give margin? start-up the of and front what do be the a training like of a question starting personnel think on would Or last costs? on to a Can Latina, like Is it hiring a

What of gross in tell negative I and in the you, Fisher Paul, this quarter, we combination Latina. can that having profit are is

combination is gross targeting graph we products positive not above but the high-value in will overall, the we final average the And since the the So be are profit expect we margin X of still company. at are illustrative, of gross profit the here, margin.

ramp-up the covered we you magnitude But customers' X we the it doing can of future the with today see suffering profitability So for again, the of are by facilities. delta are demand.

is question Dan Leonard, next The from UBS.

point understand have a basis QX improvement question just XXX at follow-up QX. better correct? seem sequential margin incremental levels sequential Jacob's does looking expansion. to And margin. from trying to I the number earlier. mean, I'm inconsistent a QX it margin with into I gross I'm Is from historical that

would that buckets better help could me So the wondering if I understand drive that. was you

Yes. Thanks for question. the

at targeting than we point XXX in of the EUR revenue million QX. are more So center

are on revenue We good, of committed and Latina the be better the And the better committed covered the the we covered is fixed expected in we are expected reason it, mix. and top fixed soon point step mix pretty of QX. as and and orders Fishers up products by financial to orders as expecting is are expenses both we for help with by the the guidance the growing again, view, coverage The performances And of largely. of leverage to volumes expenses. why from that's we and mix increased high-value from largely customers the in and

delivering So the in for events QX. guidance us these the is confidence of combination giving

Okay.

could bit I Franco, better. to By XXXX a to And the much? if a if wondering demand was better And just think I you possible how returned understand dimension levels. follow-up. that you quick trying of magnitude below is revenue comment vial I'm better demand understand I that levels. XXXX made lift merely

Yes, Marco speaking.

business XX% XX%, year down coming we clearly, to $XX the mainly last vials. in And year 'XX. a As are vials to million by $XX declined after in that is this compared we disclosed COVID million was we where

below the a between I for expect place the and smaller X putting combination demand. What give the and to are variables of need years the about decline to disclosed customers of also in the think all assess is large us XXXX. that the easy uncertainty put it's XXXX condition guidance of we So by we not future, combination to customers geographical is together we This all and area. precise probability Obviously, XXXX. you for today address main in to

Curtis Moiles, Exane. Paribas next The BNP is from question

that anywhere to kind fiscal like implications X% you increase it QX, at it's guidance, X% in Just year out for range looks have a the from a the looking for there QX. of the decline

wanted I you the there. than a other helpful. engineering? Or parts better to going any of in be moving would Or idea do and one color is the BDS expecting what get So other? to an better are improvement Are

the expectation Fishers is the products, the BDS QX volumes mainly leveraging in segment, basically ramp-up Our improve we Latina. to are higher of and where and high-value

about mainly it's segment So the BDS improvement.

back And the helpful. going also then That's to Okay. just destocking.

end Should to You're year. kind revenue calling out on to delayed going earliest vial or up that be orders is the of in until improve we Or at impact expect pick the QX? time? expected of by the XXXX any

are normalization Franco we and not We improvement see of as gaining vials. some saying, in than the of yet 'XX. XXXX are was QX of for orders orders. the in Orders level rather mainly beginning traction Again,

to is the about And order strategy if I may of XXXX and also in in give isolate eventually our sort long-term XXXX. behind confidence situation what

need some destocking important clear. be So Stevanato challenger that the This Vial took Group. we headwind We faced year. for industry to 'XX surprise is will around. temporary by turn painful was and this

a are future. And in doing Fishers control, investment we taking feel we the confident for cycle action also in the investment is are Engineering, in high and this deliver of Latina, and that are this within our We we results. but will

fundamentals is profitable tailwinds. On long in growth. short, changed. we In have the robust, solutions, sustained particular, [indiscernible]. At side, syringes, landscape we see demand Alba, secular the The on the end not for day, cartridges have and we other the for of demand high-value are positioned

XXXX. Fishers So be and us, range we should continued growth. ability will in segment Engineering of we operation to our and while of achieve from from would an high-value that in to us adjusted gain margin team. Latina give XX% we return This solutions as expect consider profitable have to and our XX% behavior leadership confidence scaling our XX% that This the today will is in we behind the perspective, the leverage in EBITDA with new XXXX, destocking the

we questions? other have Operator, do any

there time. this Miles, at registered Ms. no more questions Instructions] are [Operator

us thank much. a wonderful day. everyone Thank joining to have We you and today, very for want

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