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.

[Unaudited Interim Condensed Consolidated Financial Statements](index=7&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited interim condensed consolidated financial statements, including the income statement, financial position, and cash flows for the period ended March 31, 2025 [Interim Consolidated Income Statement](index=7&type=section&id=Interim%20consolidated%20income%20statement) For the three months ended March 31, 2025, Stevanato Group reported revenue of €256.6 million, an 8.7% increase year-over-year, with net profit attributable to equity holders rising by 40.9% to €26.5 million Income Statement Highlights (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (EUR million) | Q1 2024 (EUR million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 256.6 | 236.0 | 8.7% | | Gross Profit | 69.9 | 62.2 | 12.4% | | Operating Profit | 34.6 | 25.3 | 36.9% | | Profit Before Tax | 35.1 | 25.7 | 36.7% | | Net Profit (attributable to parent) | 26.5 | 18.8 | 40.9% | | Diluted EPS (in EUR) | 0.10 | 0.07 | 42.9% | [Interim Consolidated Statement of Financial Position](index=9&type=section&id=Interim%20consolidated%20statement%20of%20financial%20position) As of March 31, 2025, the Group's total assets were €2.324 billion, a slight decrease from year-end 2024, while total equity increased to €1.416 billion, reflecting a stable financial position Statement of Financial Position (As of March 31, 2025) | Metric | March 31, 2025 (EUR million) | Dec 31, 2024 (EUR million) | | :--- | :--- | :--- | | Total Assets | 2,324.2 | 2,328.8 | | Total Liabilities | 908.3 | 924.4 | | Total Equity | 1,415.9 | 1,404.4 | [Interim Consolidated Statement of Cash Flows](index=12&type=section&id=Interim%20consolidated%20statements%20of%20cash%20flows) For the first three months of 2025, the Group generated €99.8 million in cash from operating activities, a significant increase from the prior year, while cash used in investing activities decreased Cash Flow Summary (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (EUR million) | Q1 2024 (EUR million) | | :--- | :--- | :--- | | Net Cash Flows from operating activities | 99.8 | 71.6 | | Net Cash Flows used in investing activities | (70.7) | (102.1) | | Net Cash Flows (used in)/ from financing activities | (35.8) | 146.9 | | Net change in cash and cash equivalents | (6.6) | 116.3 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=51&type=section&id=Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's discussion and analysis of the company's financial condition, operational results, liquidity, and key non-GAAP performance indicators for the period [Overview](index=51&type=section&id=Overview) Stevanato Group is a global provider of integrated solutions for the pharmaceutical, biotech, and life sciences industries, expanding its global footprint while navigating market challenges - The company operates in two segments: Biopharmaceutical and Diagnostic Solutions (containment and delivery solutions) and Engineering (manufacturing equipment and technology)[167](index=167&type=chunk)[179](index=179&type=chunk) - The Group is expanding its global capacity for high-value solutions, with ongoing projects in Fishers, Indiana (U.S.) and Latina, Italy, where commercial production has started at both sites[23](index=23&type=chunk)[166](index=166&type=chunk) - The company is experiencing challenges from customer destocking of glass vials post-pandemic, temporary inefficiencies from new plant ramp-ups, and increased costs on certain delayed projects in its Denmark-based Engineering operations[170](index=170&type=chunk)[171](index=171&type=chunk)[173](index=173&type=chunk) [Results of Operations (Q1 2025 vs Q1 2024)](index=58&type=section&id=Results%20of%20Operations) In Q1 2025, revenue grew 8.7% to €256.6 million, driven by an 11.0% increase in the Biopharmaceutical and Diagnostic Solutions segment, particularly a 25.4% rise in high-value solutions Consolidated Results of Operations (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (EUR million) | Q1 2024 (EUR million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 256.6 | 236.0 | 8.7% | | Gross Profit | 69.9 | 62.2 | 12.4% | | Operating Profit | 34.6 | 25.3 | 36.9% | | Net Profit | 26.5 | 18.8 | 40.9% | Revenue by Segment (Q1 2025 vs Q1 2024) | Segment | Q1 2025 Revenue (EUR million) | Q1 2024 Revenue (EUR million) | Change (%) | | :--- | :--- | :--- | :--- | | **Biopharmaceutical and Diagnostic Solutions** | **220.8** | **198.9** | **11.0%** | | - High-value solutions | 110.3 | 88.0 | 25.4% | | - Other containment and delivery solutions | 110.5 | 111.0 | (0.4)% | | **Engineering** | **35.7** | **37.1** | **(3.5)%** | - Gross profit margin for the Biopharmaceutical and Diagnostic Solutions segment increased to **31.3%** from 27.1% YoY, driven by improvements in new facilities and a higher mix of high-value solutions[199](index=199&type=chunk) - Research and Development expenses decreased by **44.8%** to **€5.9 million**, attributed to cost management, project optimization, and non-recurring severance payments from the prior year[205](index=205&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk) [Liquidity and Capital Resources](index=64&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a solid liquidity position, financing operations through cash flow, debt, and equity, with capital expenditures primarily directed towards capacity expansion in the U.S. and Italy - As of March 31, 2025, the company had cash and cash equivalents of **€90.7 million**[221](index=221&type=chunk) - Capital expenditures for Q1 2025 were **€69.7 million**, with **€64.1 million** dedicated to growth and capacity expansion, mainly for EZ-Fill® production lines in Fishers, Indiana, and Latina, Italy[226](index=226&type=chunk) - In February 2025, the company secured a new **€20.0 million** loan with a five-year tenor to support capital investments in its growth platforms[225](index=225&type=chunk) Cash Flow Summary (Q1 2025) | Metric | Q1 2025 (EUR million) | | :--- | :--- | | Cash flows from operating activities | 99.8 | | Cash flows used in investing activities | (70.7) | | Cash flows used in financing activities | (35.7) | [Key Indicators of Performance and Financial Condition (Non-GAAP)](index=68&type=section&id=Key%20Indicators%20of%20Performance%20and%20Financial%20Condition) The company uses several non-GAAP measures to evaluate performance, with Adjusted EBITDA increasing by 13.4% to €57.4 million and Adjusted Diluted EPS at €0.10 for Q1 2025 Adjusted EBITDA Reconciliation (Q1 2025 vs Q1 2024) | Metric (EUR million) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Profit | 26.5 | 18.8 | | (+) Income taxes | 8.6 | 6.9 | | (-) Finance income | (6.0) | (2.7) | | (+) Finance expense | 5.5 | 2.3 | | **Operating Profit** | **34.6** | **25.3** | | (+) Depreciation & amortization | 20.6 | 21.7 | | **EBITDA** | **55.3** | **47.0** | | (+) Adjusting items | 2.1 | 3.6 | | **Adjusted EBITDA** | **57.4** | **50.6** | | **Adjusted EBITDA Margin** | **22.4%** | **21.4%** | Adjusted Operating Profit and Net Profit Reconciliation (Q1 2025) | Metric (EUR million) | Reported | Adjustments | Adjusted | | :--- | :--- | :--- | :--- | | Operating Profit | 34.6 | 2.1 | 36.7 | | Income Taxes | 8.6 | 0.5 | 9.1 | | Net Profit | 26.5 | 1.6 | 28.1 | | Diluted EPS (EUR) | 0.10 | | 0.10 | - Free Cash Flow for Q1 2025 was **€29.7 million**, a significant improvement from a negative €30.6 million in Q1 2024[252](index=252&type=chunk) - Net Debt decreased to **€300.2 million** at March 31, 2025, from €335.0 million at December 31, 2024[254](index=254&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=75&type=section&id=Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) The Group is exposed to financial market risks, including foreign currency, interest rate, liquidity, credit, and commodity risks, which are managed through formal hedging policies and central liquidity management - The main financial risks identified are foreign currency exchange rates, interest rates, liquidity, credit, and commodity price fluctuations[259](index=259&type=chunk)[268](index=268&type=chunk) Exchange Rate Sensitivity on Operating Profit | Currency Pair | Change | Effect on Operating Profit (EUR millions) | | :--- | :--- | :--- | | EUR/USD | +5% / -5% | (4.7) / 5.2 | | EUR/MXN | +5% / -5% | (0.6) / 0.6 | | EUR/CNY | +5% / -5% | 0.9 / (1.0) | Interest Rate Sensitivity on Profit Before Tax | Change in Interest Rate | Effect on Profit Before Tax (EUR millions) | | :--- | :--- | | +50 BP | (0.4) | | -50 BP | 0.4 | | +100 BP | (0.8) | | -100 BP | 0.8 | - The Group actively hedges against commodity price volatility for natural gas and electricity using commodity swap contracts[286](index=286&type=chunk)[287](index=287&type=chunk) [Controls and Procedures](index=81&type=section&id=Controls%20and%20Procedures) The company acknowledges material weaknesses in internal control over financial reporting as of December 31, 2024, and is implementing a remediation plan to address these deficiencies - The company's disclosure controls and procedures were deemed not effective as of December 31, 2024, due to previously reported material weaknesses[291](index=291&type=chunk) - A remediation plan is underway to address the material weaknesses, with progress made during Q1 2025, focusing on enhancing financial reporting procedures, internal control awareness, segregation of duties, and IT controls[292](index=292&type=chunk)[293](index=293&type=chunk) [Legal Proceedings](index=82&type=section&id=Legal%20Proceedings) The company is involved in various legal proceedings incidental to its business, but management does not expect a material impact on its financial condition or results of operations - Management does not expect current legal proceedings to have a material impact on the company's business or financial condition[297](index=297&type=chunk) [Risk Factors](index=82&type=section&id=Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 20-F for the year ended December 31, 2024 - No material changes have occurred in the risk factors since the filing of the 2024 Annual Report on Form 20-F[298](index=298&type=chunk)

Financial Data and Key Metrics Changes - The company reported a 9% revenue growth in the first quarter of 2025, reaching €256.6 million, with an 8% increase on a constant currency basis [16][17] - Gross profit margin improved by 80 basis points to 27.2%, driven by strong performance in the biopharmaceutical and diagnostic solutions (BDS) segment [6][17] - Net profit totaled €26.5 million, with diluted earnings per share at €0.10, and adjusted EBITDA increased to €57.4 million, with an adjusted EBITDA margin of 22.4% [19][22] Business Line Data and Key Metrics Changes - Revenue from the BDS segment increased by 11% to €220.8 million, driven by strong demand for high-value syringes, which grew by 25% [19][20] - The engineering segment experienced a 4% revenue decline to €35.7 million, primarily due to lower sales from legacy projects in Denmark [21][22] - High-value solutions accounted for 43% of total revenue, reflecting a favorable mix and increased capacity in Latina and Fishers [17][20] Market Data and Key Metrics Changes - The company noted signs of stabilization in vial demand as destocking effects subside, with expectations of mid to high single-digit growth in vials for the year [39][41] - The demand for engineering manufacturing lines is expected to grow due to rising patient adoption of drug delivery devices [10][30] Company Strategy and Development Direction - The company is focused on ongoing capacity expansion for high-value solutions to meet elevated market demand, particularly in biologics [29][30] - Investments in U.S. manufacturing are expected to reinforce the company's competitive position, mitigating tariff impacts [15][30] - The company aims for a return to low double-digit revenue growth and margin expansion in the long term [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for high-value solutions and the recovery in vial demand, indicating a positive trajectory for 2025 [29][39] - The company is actively working on mitigating tariff impacts through various strategies, including customer surcharges and supply chain optimization [14][26] Other Important Information - Capital expenditures for the first quarter totaled €69.7 million, with over 90% allocated to growth investments [23] - The company ended the quarter with cash and cash equivalents of €90.7 million and net debt of €300.2 million, indicating adequate liquidity for strategic priorities [22] Q&A Session Summary Question: Clarification on Tariffs and Guidance - Management confirmed that the guidance incorporates the gross impact of tariffs, with ongoing efforts to mitigate costs through various strategies [33][36] Question: Revenue Potential from New Facilities - The company anticipates significant revenue potential from the Latina and Fishers facilities, aiming for €500 million in revenue from Fisher by 2028 [46][47] Question: Engineering Segment Performance - Management acknowledged lower margins in the engineering segment due to legacy projects but expects sequential improvement throughout the year [56][59] Question: Vial Recovery and Demand - Management confirmed that both bulk and easy fill vials are showing positive growth, with expectations for continued recovery [66][67] Question: Free Cash Flow Outlook - The company reiterated guidance for negative free cash flow of €40 million to €60 million for the year, with fluctuations expected based on CapEx and tax payments [101]

Financial Data and Key Metrics Changes - The company reported a 9% revenue growth in Q1 2025, reaching €256.6 million, with an 8% increase on a constant currency basis [17] - Gross profit margin improved by 80 basis points to 27.2%, driven by strong performance in the BDS segment [17][18] - Net profit totaled €26.5 million, with diluted earnings per share at €0.10, and adjusted EBITDA increased to €57.4 million, with an adjusted EBITDA margin of 22.4% [19][24] Business Line Data and Key Metrics Changes - Revenue from the BDS segment increased by 11% to €220.8 million, driven by strong growth in high-value syringes [20] - High-value solutions revenue grew by 25% to €110.3 million, accounting for 43% of total revenue [17][21] - The engineering segment saw a 4% revenue decline to €35.7 million, primarily due to lower sales from legacy projects [22] Market Data and Key Metrics Changes - The company observed a stabilization in vial demand as destocking effects began to ease, with expectations of mid to high single-digit growth in vials for the year [39][41] - The demand for drug delivery devices is increasing, supporting long-term growth in engineering manufacturing lines [9][30] Company Strategy and Development Direction - The company is focused on ongoing capacity expansion for high-value solutions to meet elevated market demand, particularly in biologics [30] - Investments in U.S. manufacturing are expected to reinforce the company's competitive position amid tariff challenges [14][30] - The company aims for a return to low double-digit revenue growth and margin expansion in the long term [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for high-value solutions and the ongoing recovery in vial demand [29][30] - The company is committed to executing its key priorities and long-term objectives, with a robust pipeline of opportunities supported by favorable industry trends [30] Other Important Information - The company expects a tariff-related impact of approximately €4.5 million on operating profit for 2025, with mitigation strategies in place [26] - Capital expenditures for Q1 2025 totaled €69.7 million, with over 90% allocated to growth investments [24] Q&A Session Summary Question: Clarification on tariff impact and U.S. demand - Management confirmed that the guidance incorporates the gross impact of tariffs and that ongoing discussions with customers are constructive [33][35] Question: Outlook for vial demand recovery - Management reiterated expectations for mid to high single-digit growth in vials for 2025, supported by increasing order intake [39][41] Question: Revenue potential from new facilities - The company aims to generate €500 million in revenue from the Fisher facility by 2028, with Latina also progressing well [44][46] Question: Engineering segment performance and legacy projects - Management indicated that legacy projects are on track for completion in 2025, with expectations for sequential margin improvement [56][58] Question: Free cash flow outlook - The company expects negative free cash flow of €40 million to €60 million for the year, with fluctuations based on CapEx and tax payments [100]

Company Performance - Stevanato Group reported quarterly earnings of $0.11 per share, exceeding the Zacks Consensus Estimate of $0.10 per share, and up from $0.09 per share a year ago, representing an earnings surprise of 10% [1] - The company posted revenues of $269.93 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.23%, and an increase from $256.24 million year-over-year [2] - Over the last four quarters, Stevanato has topped consensus revenue estimates four times, but has surpassed consensus EPS estimates only once [2] Future Outlook - The sustainability of the stock's price movement will depend on management's commentary during the earnings call and the company's earnings outlook [3][4] - Current consensus EPS estimate for the coming quarter is $0.12 on revenues of $297.06 million, and for the current fiscal year, it is $0.56 on revenues of $1.27 billion [7] - The estimate revisions trend for Stevanato is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Medical - Drugs industry, to which Stevanato belongs, is currently in the top 26% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Stevanato's stock performance [5]

Q1 2025 Financial Performance - Revenue increased by 9% to €256.6 million, driven by an 11% growth in the Biopharmaceutical and Diagnostic Solutions (BDS) segment, offsetting a 4% decline in the Engineering segment[27, 30, 36, 57] - High Value Solutions (HVS) increased 25% year-over-year to €110 million, representing 43% of total revenue, fueled by strong demand for high-value PFS and a partial recovery in EZ-fill® vials[12, 30] - Adjusted EBITDA increased 13% to €57.4 million, with the adjusted EBITDA margin increasing 100 bps to 22.4%[31] - Net profit was €26.5 million, or €0.10 of diluted EPS, while adjusted net profit was €28.1 million, or €0.10 of adjusted diluted EPS[31] Segment Trends - BDS segment revenue increased 11% to €221 million, with a gross profit margin increase of 420 bps to 31.3%, driven by improvements in Latina and Fishers facilities and a higher mix of accretive HVS[33, 34] - Engineering segment revenue decreased 4% to €35.7 million, with a gross profit margin decrease to 10.7%, impacted by project mix as the company prioritized the completion of legacy projects in Denmark[35, 36] Balance Sheet and Cash Flow - Total cash and cash equivalents stood at €90.7 million, with net debt at €300.2 million[39] - Capital expenditures (CAPEX) amounted to €69.7 million, with net cash generated from operations at €99.8 million and free cash flow at €29.7 million[39] FY 2025 Guidance - Revenue is projected to be between €1.160 billion and €1.190 billion, implying a revenue growth of 5% to 8%[41] - Adjusted diluted EPS is expected to be between €0.50 and €0.54, with adjusted EBITDA between €288.5 million and €301.8 million[41]

Group 1 - The article emphasizes the importance of fundamental, income-oriented, long-term analysis conducted by buy-side hedge professionals across various sectors in developed markets globally [1] - It invites readers to engage in discussions regarding investment ideas, highlighting a collaborative approach to investment analysis [1] Group 2 - The article does not provide specific company or industry insights, focusing instead on the general practices of hedge fund professionals [2][3]

Risks and Challenges - The company faces significant risks related to product quality, which could lead to lost sales, delayed market acceptance, and increased costs[57]. - The company is highly dependent on maintaining relationships with suppliers and service providers, which impacts its financial condition and results[58]. - The company is exposed to international market risks, including geopolitical tensions, which could materially affect its liquidity and financial condition[58]. - The company may face challenges in attracting and retaining skilled employees due to intense competition in the labor market[58]. - The company’s financial performance could be adversely affected by fluctuations in currency exchange rates and interest rates[58]. - The ongoing conflict between Russia and Ukraine has caused significant fluctuations in energy prices, impacting the company's ability to source materials at reasonable terms[81]. - The company is subject to tax laws and potential audits across multiple jurisdictions, which could materially affect financial results[88]. - The company faces risks related to supplier relationships, including potential disruptions that could adversely affect financial results and operations[79]. - The ongoing military conflict in Israel and Gaza may impact the company's ability to receive materials and distribute products[156]. - The company is subject to various laws and regulations, including those related to environmental protection, which could require significant compliance costs[132]. - The company may face unexpected liabilities from acquisition agreements due to limited indemnification provisions[167]. - The company is exposed to credit risk on accounts receivable and certain prepayments made in the normal course of business[153]. - The company may face increased compliance costs due to new data protection regulations in China, which could impact operations[127]. - The company is vulnerable to data breaches and regulatory enforcement actions, which could result in significant fines and reputational damage[190]. Market and Competitive Landscape - The company must continuously develop and acquire new products and services to remain competitive in a rapidly changing technological landscape[66]. - Significant competition exists in the market, with competitors potentially having greater resources to respond to customer needs and emerging technologies[91]. - The company’s ability to innovate and respond to customer needs is crucial, as failure to do so may result in loss of market share to competitors[67]. - The company emphasizes the importance of maintaining and enhancing its brand and reputation to ensure business success, which is crucial for customer retention and acquisition[73]. - The demand for COVID-19 related products is expected to decrease as the transition from pandemic to endemic status continues[193]. - There is uncertainty regarding the long-term impact of COVID-19 on product demand, with contributions expected to decrease and potentially integrate into traditional vaccination business[194]. Financial Performance and Revenue - The company's backlog may not accurately predict future revenue, as contracts can be terminated or delayed, affecting revenue timing[70]. - The backlog as of December 31, 2024, was approximately €853 million, down from €945 million at December 31, 2023, indicating a decrease of about 9.7%[72]. - Fluctuations in backlog levels may not be indicative of future direct revenue due to factors such as project size, complexity, and customer ordering patterns[72]. - 51.4% of the company's revenues derive from its top ten customers, with one individual customer representing 10.3% of revenues in 2024[98]. - The average day sales outstanding for 2024 has increased to approximately 75 days, compared to approximately 67 days for 2023[153]. - A significant majority of outstanding trade receivables are not covered by collateral or credit insurance[153]. - The company has historically paid dividends over the last three years, but future declarations are uncertain and depend on various factors including financial performance and board decisions[245]. Strategic Initiatives and Growth - The company is pursuing various strategies to maintain and improve revenue growth, although success is not guaranteed[93]. - The company plans to expand its global market position in primary drug containment systems and increase its investments in R&D to address unmet market needs[96]. - The company aims to selectively pursue acquisitions and technology collaborations to augment its product and service portfolio[96]. - The company has delayed its investment in China to focus on new manufacturing facilities in the U.S. and Italy[103]. - The establishment of new production plants for EZ-Fill® products is a priority to mitigate risks associated with current manufacturing facilities[107]. - The company is expanding its manufacturing capacity for high-value solutions primarily in North America and Europe[96]. Regulatory and Compliance Issues - The company’s operations are subject to various regulatory requirements, and failure to comply could result in significant penalties[62]. - The Golden Power Decree in Italy may restrict foreign investments and acquisitions in the healthcare sector, potentially impacting the company's strategic decisions[139]. - The evolving regulatory landscape may require additional investments in compliance programs, impacting business strategies and operational costs[187]. - Compliance with evolving data protection regulations, such as GDPR and UK GDPR, could result in fines up to €20 million or 4% of total worldwide annual turnover[180]. - Climate change legislation could lead to increased operational costs and business interruptions, affecting financial decisions and capital expenditures[191]. Intellectual Property and Legal Risks - The company relies on trade secrets and confidential know-how to protect its technology, which may be difficult to safeguard[196]. - The patent prosecution process is complex and costly, potentially hindering the ability to secure necessary patent protections[200]. - The company may face challenges in maintaining and enforcing its intellectual property rights, which could impact its competitive position[203]. - Third-party claims of patent infringement could result in substantial costs and delays in product development and commercialization[210]. - The company may need to redesign products to avoid infringement, which could lead to significant costs or delays[214]. - Public announcements related to litigation could negatively affect the company's stock price and market perception[216]. - The company may face expensive and time-consuming lawsuits to protect its intellectual property, which could adversely affect its business success[217]. - Loss of patent protection due to successful invalidity claims could allow third parties to commercialize the company's technology without compensation, impacting its competitive position[219]. Governance and Shareholder Matters - The concentrated voting control held by Stevanato Holding S.r.l. (93.11% of voting rights) may impact shareholder decisions and the company's governance[237]. - Future sales of a substantial number of shares could adversely affect the market price of the company's ordinary shares[239]. - The company may issue additional securities to raise capital for investments, which could constitute a material portion of its outstanding shares[241]. - Claims of U.S. civil liabilities may not be enforceable against the company due to its incorporation under Italian law and the location of its assets[244]. - As a foreign private issuer, the company is exempt from certain SEC rules, resulting in potentially less publicly available information compared to U.S. domestic issuers[246]. - The company follows home country practices for corporate governance, which may lead to a board composition that lacks a majority of independent directors, differing from NYSE standards[247].