Stevanato Group S.p.A. Q1 FY2025 earnings call

• Started fiscal 2025 with 9% revenue growth and improved gross profit margin, driven by strong BDS Segment performance from capacity expansion at Latina and Fishers facilities and high-value solutions mix. - Engineering Segment faced soft performance but made operational progress on legacy projects. - Capital investment projects in Fishers and Latina: Fishers ramping up commercial syringe production and device manufacturing area construction; Latina scaling commercial production for high-value syringes. - Task force working to mitigate tariff exposure, expecting most tariff-related costs to be absorbed by customers.

In the first quarter of 2025, the BDS Segment saw revenue increase 11% to EUR 220.8 million, driven by strong growth in high-value syringes. High-value solutions accounted for 50% of the segment revenue, growing 25% to EUR 110.3 million, and gross profit margin increased 420 basis points to 31.3%, with operating profit margin rising to 18.8%. The Engineering Segment had revenue decrease 4% to EUR 35.7 million, with gross profit margin at 10.7% and operating profit margin declining to 4.7%.

• Revenue expected in range of EUR 1.160 billion to EUR 1.190 billion. - Adjusted EBITDA between EUR 288.5 million and EUR 301.8 million, adjusted diluted EPS between EUR 0.50 to EUR 0.54. - Assumes 10% tariff rate, absorption of supplier price increases, and no change in U.S. policy, with tariff-related impact of approx. EUR 4.5 million to operating profit. - Second half of fiscal 2025 expected stronger than first half, with BDS mid-single to high single-digit growth and Engineering neutral to low single-digit growth.

• Tariff exposure remains a risk despite mitigation efforts. - Impact of legacy projects on Engineering segment margin until completion. - Potential fluctuations in free cash flow due to capital expenditures and tax payments.

Q: Follow-up on tariffs, percentage of U.S. demand serviced by U.S.-based manufacturing today and future plans?

A: Marco and Franco discuss tariff mitigation efforts, mention Ontario and Fishers facilities, with Fishers expected to help offset tariffs.

Q: Update on vial recovery outlook?

A: Franco states positive signal in vial market, double-digit growth in order intake, with EZ-fill and bulk vials both recovering.

Q: Revenue potential from Latina and Fishers?

A: Franco mentions Fishers planned to generate EUR 0.5 billion revenue by end of 2028, Latina progressing well with increased commercial production and validation.

Q: Tariff impact in 2026 and Engineering segment margin recovery?

A: Marco and Franco discuss tariff mitigation via Fishers ramp-up, Engineering segment expected to see margin improvement as legacy projects complete.

Q: GLP-1 specific exposure and vial margin drivers?

A: Marco and Franco mention GLP-1 is part of biologics growth, margin improvement driven by Latina and Fishers ramp-up and high-value solution mix.

Q: Vendor consolidation and wallet share opportunity?

A: Franco discusses Stevanato's complementary solutions and U.S. reshoring efforts as opportunities for gaining wallet share.

Q: Customer ordering patterns and margin improvement breakdown?

A: Franco states customer orders in line with past, margin improvement driven by Latina and Fishers ramp-up and high-value solution mix.

Q: Second half progression and China presence?

A: Marco mentions second half expected stronger, Franco discusses focus on Latina and Fishers with Asia remaining strategic.

Q: Guidance and free cash flow?

A: Marco confirms guidance reflects current outlook, reiterates free cash flow expectations with fluctuations due to CapEx and taxes.