Stevanato Group(STVN) - 2022 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q3 2022, revenue increased by 14% to €245.3 million compared to the previous year, driven by growth in the Biopharmaceutical and Diagnostic Solutions segment and favorable currency translation [24] - Adjusted EBITDA margin was reported at 26.8% [26] - Gross profit margin increased by 210 basis points to 31.6%, primarily due to a strategic shift towards high-value solutions [25] - Net profit for Q3 2022 was €36.3 million, or €0.14 diluted earnings per share [26] Business Line Data and Key Metrics Changes - Revenue from the Biopharmaceutical and Diagnostic Solutions segment increased by 20% to €207.1 million, with high-value solutions growing by 54% to €74.4 million [27] - The Engineering segment saw a revenue decrease of 9% to €38.2 million, attributed to project timing [29] Market Data and Key Metrics Changes - New order intake for Q3 totaled €247 million, with a year-over-year decrease due to a drop in COVID-19 orders; excluding COVID, new order intake increased by approximately 6% [14] - Committed backlog increased by 21% to just over €1 billion [14] Company Strategy and Development Direction - The company is focused on advancing global capacity expansion, growing the mix of high-value solutions, investing in R&D, and building a multi-year pipeline of new opportunities [36] - The introduction of the EZ-Fill Smart platform aims to enhance productivity and reduce contamination risks, aligning with the company's long-term strategy of providing integrated solutions [15][18] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about demand trends, particularly in the context of the growing pipeline for new treatments, with approximately 60% tied to injectable delivery [8] - The company is proactively managing inflationary pressures and supply chain complexities, with expectations of continued strong demand for high-value solutions [13][14] Other Important Information - The company has a strong balance sheet with a positive net financial position of €49.6 million and cash and cash equivalents of €259.9 million as of September 30 [31] - Capital expenditures for Q3 were €71.1 million, reflecting ongoing investments in strategic global expansion plans [31] Q&A Session Summary Question: Update on COVID revenue contribution - Management confirmed that COVID-related revenue is still expected to be around 10% for the year [43] Question: Demand for non-COVID products - Management indicated that demand remains strong, with an increase in order intake year-over-year, particularly for high-value solutions [46] Question: EZ-Fill Smart collaboration structure - Revenue from EZ-Fill products will be independent, with potential shared licensing fees if technology is licensed to third parties [53] Question: Margin dynamics with high-value solutions - Management stated that margins for COVID and non-COVID products are similar, and they are successfully replacing COVID orders with strong demand for other therapeutic areas [65] Question: Capacity expansion timelines - Construction of the Indiana facility is on track, with no anticipated delays in revenue recognition [72] Question: Pricing and inflationary cost pushback - Management noted that they have passed on costs to customers but are focused on long-term relationships rather than immediate gains [74]