Financial Data and Key Metrics Changes - In Q2 2025, revenue increased by 8% to $280 million, driven by a 10% growth in the BDS segment, offsetting a 2% decline in the Engineering segment [16][19] - Adjusted EBITDA rose to $65.1 million, resulting in an adjusted EBITDA margin of 23.2% for 2025, a 240 basis point improvement [18][22] - Net profit totaled $29.7 million, with diluted earnings per share of $0.11, while adjusted net profit was $31.3 million with adjusted diluted EPS also at $0.11 [18][22] Business Line Data and Key Metrics Changes - BDS segment revenue grew 10% to $243.5 million, with high value solutions accounting for 42% of total revenue, driven by strong demand for high value syringes [19][20] - Engineering segment revenue decreased by 2% to $36.5 million, with gross profit margin declining to 6.6% due to a higher mix of legacy projects [20][21] - High value solutions revenue increased by 13% to $116.8 million, primarily from high value syringes, easy fill cartridges, and easy fill vials [17][19] Market Data and Key Metrics Changes - Biologics represented 39% of BDS revenue in 2025, up from 25% in the same periods of fiscal 2024 and 2023 [13] - The company is experiencing stabilization in vial demand as destocking effects ease, with a projected mid to high single-digit growth for vials in 2025 [36][38] - The company anticipates continued strong demand due to trends such as the increase in self-administration of medicine and the rise in biologics [10][27] Company Strategy and Development Direction - The company is focused on executing its multiyear investment optimization plans, enhancing commercial strategy, and positioning itself for long-term growth opportunities [26][27] - The company is evaluating a second location in Bologna, Italy, to support its innovation hub and optimize its footprint [9][10] - The strategic focus remains on high value solutions, with expectations of continued strong demand in the biologics market [10][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year guidance, citing healthy market demand and operational improvements [26][27] - The company is well-positioned to benefit from onshoring initiatives announced by several pharma and biotech customers, particularly in the U.S. [100] - Management noted that the biologics market is heavily investing in new technology, indicating strong future demand [33][51] Other Important Information - The company announced a $200 million financing to support expansion in syringe production and capacity for ready-to-use cartridges [22][46] - Capital expenditures totaled $69.1 million for 2025, with a significant year-over-year improvement in free cash flow [22] - The company reiterated its fiscal 2025 guidance, expecting revenue between $1.16 billion and $1.19 billion [23] Q&A Session Summary Question: Are delays in new orders related to customer decision-making due to tariffs? - Management clarified that delays are primarily due to timing and customer CapEx decision-making, not lost negotiations [30][32] Question: Is there continued improvement in vial demand? - Management confirmed a 3% increase in vial demand compared to the same period last year, with confidence in mid to high single-digit growth for 2025 [36][38] Question: Are tariffs impacting customer behavior? - Management indicated that they have not seen significant pull-forward behavior due to tariffs and have been able to offset tariff impacts through customer conversations and leveraging their global footprint [42][45] Question: What is the expected growth trajectory for the Engineering segment? - Management expects a rebound in growth and margins in the Engineering segment as legacy projects are completed and new contracts are secured [74][76] Question: How is the company positioned to benefit from onshoring initiatives? - Management noted that they are seeing increased interest from clients in the U.S. for engineering offerings and technology sales due to onshoring strategies [100][101]

Core Insights - Stevanato Group (STVN) reported quarterly earnings of $0.12 per share, exceeding the Zacks Consensus Estimate of $0.11 per share, and showing an increase from $0.10 per share a year ago, resulting in an earnings surprise of +9.09% [1] - The company achieved revenues of $317.7 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 4.91% and increasing from $279.44 million year-over-year [2] - Stevanato shares have increased approximately 17.4% year-to-date, outperforming the S&P 500's gain of 7.6% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.16 on revenues of $338.76 million, and for the current fiscal year, it is $0.57 on revenues of $1.34 billion [7] - The estimate revisions trend for Stevanato was favorable prior to the earnings release, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Medical - Drugs industry, to which Stevanato belongs, is currently ranked in the top 37% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Performance - Revenue grew by 8% year-over-year in Q2 2025, driven by a 10% increase in the BDS (Biopharmaceutical and Diagnostic Solutions) segment, offsetting a 2% decline in the Engineering segment[12, 30] - High-Value Solutions (HVS) accounted for 42% of total revenue in Q2 2025[12] and increased 13% year-over-year to €116.8 million[30] - Gross profit margin increased by 210 bps to 28.1%[31] - Adjusted EBITDA increased to €65.1 million, with an adjusted EBITDA margin increase of 240 bps to 23.2%[31] - Net profit was €29.7 million, or €0.11 of diluted EPS[31] Segment Performance - BDS segment revenue increased by 10% to €244 million, with a gross profit margin increase of 350 bps to 31.2%[33, 34, 35] - Engineering segment revenue decreased by 2% to €36.5 million, with a gross profit margin decrease to 6.6%[36, 37] Capacity Expansion and Investments - Capital expenditure (CAPEX) in Q2 2025 was €69.1 million[40] - Net cash generated from operations in Q2 2025 was €44.9 million[40] - Free cash flow in Q2 2025 was negative €13.0 million[40] - The company announced financing agreements totaling €200 million to support capacity expansion in Latina and Fishers facilities[40] Outlook - The company maintains its FY 2025 revenue guidance of €1.160 billion - €1.190 billion, representing a year-over-year growth of 5% to 8%[42] - The company expects HVS to account for 40% to 42% of revenue in FY 2025[42] - Adjusted diluted EPS is projected to be €0.50 - €0.54 for FY 2025[42] - Adjusted EBITDA is projected to be €288.5 million - €301.8 million for FY 2025[42]

Core Viewpoint - Stevanato Group (STVN) is anticipated to report a year-over-year increase in earnings driven by higher revenues, with the actual results being a significant factor influencing its near-term stock price [1][2]. Earnings Expectations - The upcoming earnings report is expected to be released on August 5, with a consensus estimate of quarterly earnings at $0.11 per share, reflecting a +10% year-over-year change [3]. - Revenues are projected to reach $302.83 million, representing an 8.4% increase from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating that analysts have not significantly altered their initial projections during this period [4]. - The Most Accurate Estimate for Stevanato is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +20.93%, suggesting a bullish outlook from analysts [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive Earnings ESP is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [10]. - Stevanato currently holds a Zacks Rank of 2, which, along with the positive Earnings ESP, suggests a high likelihood of beating the consensus EPS estimate [12]. Historical Performance - In the last reported quarter, Stevanato exceeded the expected earnings of $0.10 per share, achieving actual earnings of $0.11, resulting in a surprise of +10% [13]. - Over the past four quarters, the company has only beaten consensus EPS estimates once [14].

Core Insights - Investors are evaluating Merck KGaA (MKKGY) and Stevanato Group (STVN) for potential value opportunities in the Medical - Drugs sector [1] - Both companies currently hold a Zacks Rank of 2 (Buy), indicating a positive earnings outlook due to favorable analyst estimate revisions [3] Valuation Metrics - MKKGY has a forward P/E ratio of 13.54, significantly lower than STVN's forward P/E of 49.21, suggesting MKKGY may be undervalued [5] - The PEG ratio for MKKGY is 2.13, while STVN's PEG ratio is higher at 2.80, indicating MKKGY's expected earnings growth is more favorable relative to its valuation [5] - MKKGY's P/B ratio stands at 0.55, compared to STVN's P/B of 5.67, further supporting the notion that MKKGY is a more attractive value option [6] - Based on these valuation metrics, MKKGY is assigned a Value grade of A, while STVN receives a Value grade of C, highlighting MKKGY as the superior value investment at this time [6]

Company Overview - Stevanato Group (STVN) shares increased by 10% to close at $27.95, with notable trading volume compared to typical sessions, contrasting with a 0.6% gain over the past four weeks [1] - The rise in stock price indicates growing investor confidence in the company's revenue outlook, particularly from its high-value solutions segment [2] Financial Performance - Stevanato is expected to report quarterly earnings of $0.11 per share, reflecting a year-over-year increase of 10%, with revenues projected at $302.83 million, an 8.4% increase from the previous year [3] - The consensus EPS estimate for the quarter has remained unchanged over the last 30 days, suggesting that stock price movements may not continue without trends in earnings estimate revisions [4] Industry Context - Stevanato operates within the Zacks Medical - Drugs industry, which includes other companies like BeOne Medicines Ltd. - Sponsored ADR, which saw a 0.6% increase in its stock price [4] - BeOne Medicines Ltd. has experienced a significant change in its EPS estimate, dropping by 51.3% over the past month, but still showing a year-over-year increase of 141.7% [5]

Group 1 - The company Stevanato (NYSE: STVN) is rated with a Buy rating, indicating a positive outlook for the upcoming years [1] - A new facility in the U.S. is expected to generate significant revenue for the company [1] Group 2 - The analyst Daniel Mellado has a background in economics and statistics, with experience in analyzing agricultural commodities and managing trading and data analysis teams [1] - The trading team under his management invested in bonds, equities, and ETFs, showcasing a diverse investment strategy [1] - Future analysis and valuation will focus on sectors including commodities, banking, technology, and pharmaceuticals [1]

Group 1 - The Q1 results in Diversified Tools and Pharma Services showed modest outperformance despite multiple guidance revisions [1] - The revisions reflect a more challenging macroeconomic environment, including tariffs and NIH-related disruptions [1] - There is a more cautious stance on biopharma spending noted in the current analysis [1]

Summary of Stevanato Group Conference Call Company Overview - **Company**: Stevanato Group - **Industry**: Pharmaceutical packaging and delivery systems - **CEO**: Franco Sveinato - **Experience**: Over 75 years in the industry, with a focus on pharmaceutical and biologics customers for the last 30 years [3][4] Core Business Segments - **BDS Segment**: Accounts for approximately 85% of revenue, focusing on injectable products such as vials, cartridges, and syringes [4] - **Engineering Division**: Provides inspection machines and assembly technology for pharmaceutical clients [5][6] Financial Performance - **Revenue Growth**: Revenue has doubled over the last five years, with a 15% CAGR [7][8] - **High Value Products**: Increased from 17% to 38% of total revenue [8] - **EBITDA Growth**: EBITDA has also shown significant improvement during the same period [8] Market Dynamics - **Demand Recovery**: The demand for vials is recovering after a soft period during COVID-19, with a robust demand expected in 2025 [9][10] - **Investment in Capacity**: Significant investments are being made in Italy and the U.S. to enhance production capabilities, including a €500 million investment in Fisher [10][11] Production Facilities - **Latina Facility**: Expected to contribute significantly to revenue in 2025, with ongoing expansions for cartridge production [15][17] - **Fisher Facility**: Currently ramping up production, with a target of €500 million in revenue by the end of 2028 [22][23] Product Strategy - **Biologics Focus**: Biologics represented approximately 43% of revenue in the BDS segment in Q1, with GLP-1 drugs being a significant contributor [32][33] - **Device Strategy**: Stevanato aims to become a key player in the device market, developing proprietary technologies and engaging in selective contract manufacturing [36][41] Engineering Projects - **Project Delivery**: On track to deliver critical engineering projects, with a focus on optimizing margins and efficiency [52][53] - **Specialization**: Plants are being specialized for different product lines to enhance operational efficiency [54] Capital Position - **Debt Management**: Current debt is 1.2 times EBITDA, with room to increase borrowing [59] - **Future Financing**: Options include debt financing or potential equity offerings to fund growth [60] Conclusion - **Growth Outlook**: Stevanato Group is positioned for continued growth with a focus on biologics, injectable products, and device capabilities, supported by significant investments in production capacity and engineering excellence [45][46]

Summary of Stevanato Group (STVN) FY Conference Call Company Overview - **Company**: Stevanato Group (STVN) - **Industry**: Pharmaceutical packaging and engineering solutions - **History**: Established over 75 years ago, originally focused on glass containers for various applications, now a leader in the pharmaceutical industry [5][6] Key Points and Arguments Market Position and Growth - Stevanato Group is a market leader in pen cartridges and ready-to-fill vials, and the second player in syringes globally [7] - The company has achieved a revenue growth of 15% per year over the last five years, doubling its revenue to €1.1 billion in 2024, with a focus on the pharmaceutical industry [8][38] - The addressable market for Stevanato is estimated at $13 billion per year, growing at high single-digit to low double-digit rates [22] Business Segments - The company operates two main business units: - **BDS Segment**: Represents over 80% of revenue, focusing on drug containment solutions and biologics [9][22] - **Engineering Segment**: Growing rapidly, with an addressable market of $1.5 billion [24] Investment and Capacity Expansion - Stevanato has invested over €1 billion post-IPO to increase capacity, particularly in Europe and the United States [19][45] - A significant investment of €500 million is being made in a greenfield plant outside Indianapolis, expected to generate €500 million in revenue by 2028 [20][47] - The company is focused on high-value products, with gross margins targeted between 40% to 70% [33] Technological Advancements - Stevanato has developed patented technologies such as EZFill for syringes and vials, enhancing value and security for clients [16] - The company has tech centers in Italy and Boston, employing 80 engineers to support clients from preclinical stages to FDA filing [11][21] Market Trends and Client Demand - The pharmaceutical industry is increasingly outsourcing non-core competencies, allowing Stevanato to provide services like washing, sterilization, and preassembly [16][31] - There is a robust pipeline of new drugs in phases II and III, with a focus on biologics and self-administration devices [27][61] - The demand for injectable drugs is expected to grow, countering concerns about the shift to oral medications [62][63] Financial Performance and Future Outlook - The company faced destocking issues related to COVID-19 but is now seeing a normalization in orders from clients [55][58] - Q1 2025 showed a positive growth of 9%, with expectations for continued growth throughout the year [41][42] - Stevanato aims to maintain a high single-digit to low double-digit growth rate in the coming years, supported by ongoing investments [45] Additional Important Insights - The company emphasizes a strong leadership team and board of directors with experience in the pharmaceutical and packaging industries [17] - Stevanato's strategy includes a focus on digitalization to enhance operational efficiency [53] - The company aims to be recognized as a proactive partner for its clients, focusing on high-value products and solid contracts [54] This summary encapsulates the key points discussed during the Stevanato Group FY conference call, highlighting the company's market position, growth strategies, technological advancements, and future outlook.