- Reiterates Full Year 2023 Guidance
-
Stevanato Group S.p.A. (NYSE: STVN), a leading global provider
of drug containment, drug delivery, and diagnostic solutions to the
pharmaceutical, biotechnology, and life sciences industries, today
announced its financial results for the third quarter of 2023.
Third Quarter 2023 Highlights (compared with the same period
last year)
- Third quarter revenue increased 11% to €271.4 million.
- Revenue from high-value solutions increased to 32% of total
revenue.
- Net profit increased 4% to €37.9 million, and diluted earnings
per share were €0.14.
- Adjusted net profit increased 6% to €40.1 million, and adjusted
diluted earnings per share were €0.15.
- Adjusted EBITDA margin increased 70 basis points to 27.5%.
- The Company is reiterating its full year 2023 guidance and
continues to expect revenue in the range of €1.085 billion to
€1.115 billion, adjusted EBITDA in the range of €291.8 million to
€303.8 million, and adjusted diluted EPS between €0.58 and
€0.62.
Third Quarter 2023 Results
Revenue for the third quarter of 2023 increased 11% to €271.4
million (approximately 13% on a constant currency basis), compared
with the same period last year, driven by growth in both of the
Company's business segments. This was lower than expected due to
the timing of revenue on certain engineering projects, and the
Company expects to recognize revenue from these projects in the
fourth quarter of 2023.
For the third quarter of 2023, revenue from high-value solutions
increased to 32% of total revenue, compared with 30% in the same
period last year, driven by demand for high-performance and
ready-to-use products. For the third quarter of 2023, revenue
related to Covid-19 decreased 84% and represented approximately 2%
of revenue, compared with approximately 13% of revenue for the same
period last year. Excluding revenue contributions from Covid-19,
revenue grew approximately 25% in the third quarter of 2023.
For the third quarter of 2023, gross profit margin decreased to
30.5%, resulting from lower marginality on certain engineering
projects, the ongoing start-up activities related to the Company's
new EZ-fill® manufacturing plants, and higher depreciation. This
decrease was partially offset by the increased mix of more
accretive high-value solutions. Operating profit margin for the
third quarter of 2023 decreased 60 basis points to 18.8%, and
adjusted operating profit margin was 20%, which was consistent with
the same period last year.
Adjusted EBITDA margin increased 70 basis points to 27.5% in the
third quarter of 2023, compared with the third quarter of 2022.
For the third quarter of 2023, net profit increased to €37.9
million, or €0.14 of diluted earnings per share, and on an adjusted
basis, net profit increased 6% to €40.1 million, or €0.15 of
diluted earnings per share, compared with the same period last
year.
Franco Moro, Chief Executive Officer, stated, “While Engineering
Segment revenue was below our internal expectations due to the
timing on specific projects, the Biopharmaceutical and Diagnostics
Solutions Segment continues to perform well. In our core drug
containment business, current demand remains robust and our
capacity expansion investments in high-value solutions are designed
to capitalize on the demand in biologics and satisfy customers'
needs. We continue to expect that the increase in biologics,
including GLP1s, monoclonal antibodies, mRNA applications, and
biosimilars will help drive durable organic revenue growth."
Biopharmaceutical and Diagnostic Solutions Segment
(BDS)
For the third quarter of 2023, BDS Segment revenue grew 6% to
€218.9 million (approximately 8% on a constant currency basis),
compared with the same period last year, driven by growth in the
Company's core Drug Containment Solutions (DCS) business. For the
third quarter of 2023, revenue from high-value solutions increased
16% to €86.2 million, while revenue from other containment and
delivery solutions was €132.8 million and consistent with the same
period last year.
As expected, growth in high-value solutions partially offset the
temporary effect of the Company's start-up activities and
associated costs for its new EZ-fill® manufacturing plants and
higher depreciation. This led to gross profit margin of 32.7% and
operating profit margin of 21.2% for the third quarter of 2023.
Engineering Segment
Revenue from the Engineering Segment increased 37% to €52.5
million for the third quarter of 2023, compared with the same
period last year, driven by growth in all business lines. This was
below the Company's expectations due to the timing of revenue on
certain engineering projects.
A combination of increased demand and the gradual recovery in
the supply chain for electronic components, has created a temporary
bottleneck of work, which unfavorably impacted margins on certain
projects in the third quarter of 2023. For the third quarter of
2023, gross profit margin for the Engineering Segment decreased to
18.5%, and operating profit margin was 11.2%, driven by lower
marginality on certain projects.
Balance Sheet and Cash Flow
As of September 30, 2023, the Company had net debt of €227.5
million, and cash and cash equivalents of €64.8 million. As
expected, capital expenditures for the third quarter increased to
€107.2 million, as the Company advances its strategic growth
investments in capacity expansion for high-value solutions to meet
customer demand.
For the third quarter of 2023, cash flow from operating
activities was €33.5 million. Cash flow used for the purchase of
property, plant, and equipment, and intangible assets totaled
€132.3 million, which resulted in negative free cash flow of €97.8
million in the third quarter of 2023.
New Order Intake and Backlog
For the third quarter of 2023, new order intake increased 4% to
approximately €256 million, compared with €247 million in the same
period last year. As of September 30, 2023, committed backlog
totaled approximately €924 million.
2023 Guidance
The Company is reiterating its full year 2023 guidance and still
expects:
- Revenue in the range of €1.085 billion to €1.115 billion,
- Adjusted EBITDA in the range of €291.8 million to €303.8
million, and
- Adjusted diluted EPS in the range of €0.58 to €0.62.
The Company continues to expect capital expenditures in the
range of 35% to 40% of total revenue for fiscal 2023, net of
contributions from third parties including the U.S. government’s
Biomedical Advanced Research and Development Authority (BARDA),
based on the mid-point of its revenue guidance range.
Executive Chairman, Franco Stevanato, concluded, "The
fundamentals of our business remain strong, and we are reiterating
guidance for the full year. For more than 50 years we have been
fully dedicated to serving pharmaceutical customers worldwide. We
are currently benefiting from macro trends such as aging
populations, the rise in biologics and biosimilars, and the shift
towards the self-administration of medicine. We operate in growing
end markets, particularly biologics where we have built a
leadership position. We currently expect that these favorable
tailwinds will fuel sustainable double-digit revenue growth in the
years to come."
Conference Call
The Company will host a conference call and webcast at 8:30 a.m.
(ET) on Tuesday, October 31, 2023 to discuss financial results.
During the call, management will refer to a slide presentation
which will be available on the day of the call on the “Financial
Results” page under the Company's Investor Relations section of its
website.
Pre-registration: Participants who pre-register will be
given a conference passcode and unique PIN to gain immediate access
to the call and bypass the live operator. We encourage participants
to pre-register for the call using the following link:
http://services.choruscall.it/DiamondPassRegistration/register?confirmationNumber=4544003&linkSecurityString=514976446
Webcast: A live, listen-only webcast of the call will be
available at the following link:
https://87399.choruscall.eu/links/stevanato231031.html
Dial in: Those who are unable to pre-register may dial in
by calling: Italy: +39 02 802 09 11 United Kingdom: +44 1 212
818004 United States: +1 718 705 8796 United States Toll Free: +1
855 265 6958
Participants who wish to ask questions during the call are
encouraged to use an HD webphone link:
https://hditalia.choruscall.com/?$Y2FsbHR5cGU9MiZpbmZvPWNvbXBhbnk=
Replay: The webcast will be archived for three months on
the Company’s Investor Relations section of its website at:
https://ir.stevanatogroup.com/financial-results.
Forward-Looking Statements
This press release may include forward-looking statements. The
words "expects," "reiterating,” “strong,” “expected,” "continues,"
"continue," “favorable,” "growth," "durable," “remain”,
“benefiting”, “expect”, “remains”, “demand”, “are designed”,
“drive”, “increased”, “created”, “advances”, “rise”, “shift”,
“growing”, “sustainable”, and similar expressions (or their
negative) identify certain of these forward-looking statements.
These forward-looking statements are statements regarding the
Company's intentions, beliefs or current expectations concerning,
among other things, investments the Company expects to make or
receive, the expansion of manufacturing capacity, the Company’s
plans regarding its presence in the U.S. and in other locations,
business strategies, the Company’s capacity to meet future market
demands and support preparedness for future public health
emergencies, and results of operations. The forward-looking
statements in this press release are based on numerous assumptions
regarding the Company’s present and future business strategies and
the environment in which the Company will operate in the future.
Forward-looking statements involve inherent known and unknown
risks, uncertainties and contingencies because they relate to
events and depend on circumstances that may or may not occur in the
future and may cause the actual results, performance or
achievements of the Company to be materially different from those
expressed or implied by such forward looking statements. Many of
these risks and uncertainties relate to factors that are beyond the
Company's ability to control or estimate precisely, such as future
market conditions, currency fluctuations, the behavior of other
market participants, the actions of regulators and other factors
such as the Company's ability to continue to obtain financing to
meet its liquidity needs, changes in the political, social and
regulatory framework in which the Company operates or in economic
or technological trends or conditions. For a description of the
risks that could cause the Company’s future results to differ from
those expressed in any such forward looking statements, refer to
the risk factors discussed in our most recent annual report on Form
20-F filed and our most recent filings with the U.S. Securities and
Exchange Commission. Readers should therefore not place undue
reliance on these statements, particularly not in connection with
any contract or investment decision. Except as required by law, the
company assumes no obligation to update any such forward-looking
statements.
Non-GAAP Financial Information
This press release contains non-GAAP financial measures. Please
refer to the tables included in this press release for a
reconciliation of non-GAAP financial measures.
Management monitors and evaluates our operating and financial
performance using several non-GAAP financial measures, including
Constant Currency Revenue, EBITDA, Adjusted EBITDA, Adjusted EBITDA
Margin, Adjusted Operating Profit, Adjusted Operating Profit
Margin, Adjusted Income Taxes, Adjusted Net Profit, Adjusted
Diluted EPS, Capital Employed, Net Cash/Net Debt, Free Cash Flow,
and CAPEX. We believe that these non-GAAP financial measures
provide useful and relevant information regarding our performance
and improve our ability to assess our financial condition. While
similar measures are widely used in the industry in which we
operate, the financial measures we use may not be comparable to
other similarly titled measures used by other companies, nor are
they intended to be substitutes for measures of financial
performance or financial position as prepared in accordance with
IFRS.
About Stevanato Group
Founded in 1949, Stevanato Group is a leading global provider of
drug containment, drug delivery and diagnostic solutions to the
pharmaceutical, biotechnology and life sciences industries. The
Group delivers an integrated, end-to-end portfolio of products,
processes, and services that address customer needs across the
entire drug life cycle at each of the development, clinical and
commercial stages. Stevanato Group’s core capabilities in
scientific research and development, its commitment to technical
innovation, and its engineering excellence are central to its
ability to offer value added solutions to clients. To learn more,
visit: www.stevanatogroup.com.
Consolidated Income
Statement
(Amounts in € millions, except
per share data)
For the three months
For the nine months
ended September 30,
ended September 30,
2023
%
2022
%
2023
%
2022
%
Revenue
271.4
100.0
%
245.3
100.0
%
764.7
100.0
%
691.6
100.0
%
Costs of sales
188.5
69.5
%
167.7
68.4
%
526.6
68.9
%
472.0
68.2
%
Gross Profit
82.9
30.5
%
77.5
31.6
%
238.1
31.1
%
219.6
31.8
%
Other operating Income
2.2
0.8
%
3.4
1.4
%
7.4
1.0
%
12.1
1.7
%
Selling and Marketing Expenses
5.0
1.8
%
5.9
2.4
%
17.8
2.3
%
17.8
2.6
%
Research and Development Expenses
8.7
3.2
%
7.6
3.1
%
25.6
3.3
%
23.8
3.4
%
General and Administrative Expenses
20.2
7.4
%
20.0
8.2
%
65.4
8.5
%
60.8
8.8
%
Operating Profit
51.2
18.8
%
47.5
19.4
%
136.7
17.9
%
129.3
18.7
%
Finance Income
4.8
1.8
%
6.7
2.7
%
15.9
2.1
%
17.2
2.5
%
Finance Expense
5.6
2.1
%
8.3
3.4
%
21.9
2.9
%
22.7
3.3
%
Profit Before Tax
50.4
18.6
%
46.0
18.8
%
130.7
17.1
%
123.8
17.9
%
Income Taxes
12.5
4.6
%
9.8
4.0
%
30.3
4.0
%
29.1
4.2
%
Net Profit
37.9
14.0
%
36.3
14.8
%
100.4
13.1
%
94.7
13.7
%
Earnings per share
Basic earnings per common share
0.14
0.14
0.38
0.36
Diluted earnings per common share
0.14
0.14
0.38
0.36
Average shares outstanding
264.9
264.7
264.8
264.7
Average shares assuming dilution
265.0
264.7
264.8
264.7
Reported Segment
Information
(Amounts in €
millions)
For the three months ended
September 30, 2023
Biopharmaceutical and
Diagnostic Solutions
Engineering
Adjustments, eliminations and
unallocated items
Consolidated
External Customers
218.9
52.5
—
271.4
Inter-Segment
0.6
33.9
(34.5
)
—
Revenue
219.5
86.4
(34.5
)
271.4
Gross Profit
71.8
16.0
(4.9
)
82.9
Gross Profit Margin
32.7
%
18.5
%
30.5
%
Operating Profit
46.6
9.7
(5.1
)
51.2
Operating Profit Margin
21.2
%
11.2
%
18.8
%
For the three months ended
September 30, 2022
Biopharmaceutical and
Diagnostic Solutions
Engineering
Adjustments, eliminations and
unallocated items
Consolidated
External Customers
207.1
38.2
—
245.3
Inter-Segment
0.4
32.5
(32.9
)
—
Revenue
207.5
70.7
(32.9
)
245.3
Gross Profit
67.8
15.2
(5.5
)
77.5
Gross Profit Margin
32.7
%
21.5
%
31.6
%
Operating Profit
47.3
9.9
(9.7
)
47.5
Operating Profit Margin
22.8
%
14.0
%
19.4
%
Reported Segment
Information
(Amounts in €
millions)
For the nine months ended
September 30, 2023
Biopharmaceutical and
Diagnostic Solutions
Engineering
Adjustments, eliminations and
unallocated items
Consolidated
External Customers
619.3
145.4
—
764.7
Inter-Segment
1.4
126.2
(127.6
)
—
Revenue
620.7
271.6
(127.6
)
764.7
Gross Profit
202.7
56.9
(21.5
)
238.1
Gross Profit Margin
32.7
%
20.9
%
31.1
%
Operating Profit
125.9
38.1
(27.4
)
136.7
Operating Profit Margin
20.3
%
14.0
%
17.9
%
For the nine months ended
September 30, 2022
Biopharmaceutical and
Diagnostic Solutions
Engineering
Adjustments, eliminations and
unallocated items
Consolidated
External Customers
568.1
123.4
—
691.6
Inter-Segment
1.0
83.7
(84.7
)
—
Revenue
569.1
207.1
(84.7
)
691.6
Gross Profit
188.2
45.1
(13.7
)
219.6
Gross Profit Margin
33.1
%
21.8
%
31.8
%
Operating Profit
127.6
30.0
(28.3
)
129.3
Operating Profit Margin
22.4
%
14.5
%
18.7
%
Cash Flow
(Amounts in €
millions)
For the three months ended
September 30,
For the nine months ended
September 30,
2023
2022
2023
2022
Cash flow from/ (used in) operating
activities
33.5
(3.8
)
95.0
43.6
Cash flow used in investing activities
(132.2
)
(43.2
)
(356.8
)
(174.1
)
Cash flow from/ (used in) financing
activities
101.7
(9.9
)
98.2
(25.9
)
Net change in cash and cash
equivalents
2.9
(57.0
)
(163.6
)
(156.5
)
Non GAAP Financial Information
This press release contains non-GAAP financial measures. Please
refer to "Non-GAAP Financial Information" and the tables included
in this press release for a reconciliation of non-GAAP financial
measures.
Reconciliation of Revenue to
Constant Currency Revenue
(Amounts in €
millions)
Three months ended September 30,
2023
Biopharmaceutical and
Diagnostic Solutions
Engineering
Reported Revenue (IFRS GAAP)
218.9
52.5
Effect of changes in currency translation
rates
5.1
—
Organic Revenue (Non-IFRS GAAP)
224.1
52.5
Nine months ended September 30,
2023
Biopharmaceutical and
Diagnostic Solutions
Engineering
Reported Revenue (IFRS GAAP)
619.3
145.4
Effect of changes in currency translation
rates
4.4
0.1
Organic Revenue (Non-IFRS GAAP)
623.7
145.5
Reconciliation of
EBITDA
(Amounts in €
millions)
For the three months ended
September 30,
Change
For the nine months ended
September 30,
Change
2023
2022
%
2023
2022
%
Net Profit
37.9
36.3
4.4
%
100.4
94.7
6.1
%
Income Taxes
12.5
9.8
28.2
%
30.3
29.1
4.0
%
Finance Income
(4.8
)
(6.7
)
(28.6
)%
(15.9
)
(17.2
)
(7.5
)%
Finance Expenses
5.6
8.2
(32.5
)%
21.9
22.7
(3.9
)%
Operating Profit
51.2
47.5
7.6
%
136.7
129.3
5.7
%
Depreciation and Amortization
20.5
16.7
22.8
%
58.4
47.8
22.2
%
EBITDA
71.7
64.2
11.7
%
195.1
177.1
10.2
%
Reconciliation of Reported and
Adjusted EBITDA, Operating Profit, Income Taxes,
Net Profit, and Diluted
EPS
(Amounts in € millions, except
per share data)
Three months ended September 30,
2023
EBITDA
Operating Profit
Income Taxes (3)
Net Profit
Diluted EPS
Reported
71.7
51.2
12.5
37.9
0.14
Adjusting items:
Start-up costs new plants (1)
2.8
2.8
0.7
2.1
0.01
Restructuring and related charges (2)
0.2
0.2
0.0
0.1
0.00
Adjusted
74.7
54.2
13.3
40.1
0.15
Adjusted Margin
27.5
%
20.0
%
Three months ended September 30,
2022
EBITDA
Operating Profit
Income Taxes (3)
Net Profit
Diluted EPS
Reported
64.2
47.5
9.8
36.3
0.14
Adjusting items:
Start-up costs new plants (1)
1.6
1.6
0.2
1.4
0.01
Adjusted
65.8
49.1
10.0
37.7
0.14
Adjusted Margin
26.8
%
20.0
%
Nine months ended September 30,
2023
EBITDA
Operating Profit
Income Taxes (3)
Net Profit
Diluted EPS
Reported
195.1
136.7
30.3
100.4
0.38
Adjusting items:
Start-up costs new plants (1)
9.4
9.4
2.5
6.9
0.03
Restructuring and related charges (2)
0.3
0.3
0.1
0.2
0.00
Adjusted
204.8
146.4
32.9
107.5
0.41
Adjusted Margin
26.8
%
19.1
%
Nine months ended September 30,
2022
EBITDA
Operating Profit
Income Taxes (3)
Net Profit
Diluted EPS
Reported
177.1
129.3
29.1
94.7
0.36
Adjusting items:
Start-up costs new plants (1)
4.6
4.6
1.1
3.5
0.01
Adjusted
181.7
133.9
30.2
98.2
0.36
Adjusted Margin
26.3
%
19.4
%
- During the three and the nine months ended September 30, 2023,
the Group recorded €2.8 million and €9.4 million, respectively, of
start-up costs for the new plants in Fishers, Indiana, United
States, and in Latina, Italy. These costs are primarily related to
labor costs incurred prior to the start-up of commercial operation
that are associated with the training and travel of personnel who
are employed in the production of our high value EZ fill products
which require specific knowledge. During the three months and nine
months ended September 30, 2022, the Group recorded €1.6 million
and €4.6 million, respectively, of start-up costs for the new
plants in Fishers, Indiana, United States, in Zhangjiagang, China,
and in Latina, Italy.
- During the three and the nine months ended September 30, 2023,
the Group recorded €0.2 million and €0.3 million, respectively, of
restructuring and related charges among general and administrative
expenses.
- The income tax adjustment is calculated by multiplying the
applicable nominal tax rate to the adjusting items.
Capital Employed
(Amounts in €
millions)
As of September 30, 2023
As of December 31, 2022
- Goodwill and intangible assets
75.8
79.4
- Right of Use assets
16.7
19.3
- Property, plant and equipment
968.0
641.4
- Financial assets - investments FVTPL
0.6
0.8
- Other non-current financial assets
3.1
1.0
- Deferred tax assets
71.6
69.2
Non-current assets
1,135.8
811.1
- Inventories
277.1
213.3
- Contract Assets
158.6
103.4
- Trade receivables
229.5
212.7
- Trade payables
(240.6
)
(239.2
)
- Advances from customers
(53.0
)
(26.6
)
- Contract Liabilities
(9.8
)
(14.8
)
Trade working capital
361.8
248.8
- Tax receivables and Other
receivables
56.1
54.0
- Tax payables and Other liabilities
(155.6
)
(111.1
)
Net working capital
262.3
191.7
- Deferred tax liabilities
(9.4
)
(21.0
)
- Employees benefits
(6.5
)
(8.3
)
- Provisions
(6.0
)
(5.5
)
- Other non-current liabilities
(52.1
)
(18.1
)
Total non-current liabilities and
provisions
(73.9
)
(52.9
)
Capital employed
1,324.2
949.9
Net (debt) /cash
(227.5
)
46.0
Total Equity
(1,096.7
)
(995.9
)
Total equity and net (debt)/
cash
(1,324.2
)
(949.9
)
Free Cash Flow
(Amounts in €
millions)
For the three months ended
September 30,
For the nine months ended
September 30,
2023
2022
2023
2022
Net Cash Flow from/(used in) Operating
Activities
33.5
(3.8
)
95.0
43.6
Interest paid
1.0
0.7
2.4
2.5
Interest received
(0.1
)
(0.1
)
(0.7
)
(0.5
)
Purchase of property, plant and
equipment
(131.3
)
(40.4
)
(351.2
)
(167.1
)
Proceeds from sale of property, plant and
equipment
0.1
—
0.1
0.5
Purchase of intangible assets
(1.0
)
(2.7
)
(3.6
)
(7.8
)
Free Cash Flow
(97.8
)
(46.3
)
(257.9
)
(128.8
)
Net Cash / (Net Debt)
(Amounts in €
millions)
As of September 30,
As of December 31,
2023
2022
Non-current financial liabilities
(196.3
)
(148.4
)
Current financial liabilities
(100.9
)
(70.7
)
Other non-current financial assets - Fair
value of derivatives financial instruments
2.4
2.8
Other current financial assets
2.4
33.6
Cash and cash equivalents
64.8
228.7
Net (Debt)/ Cash
(227.5
)
46.0
CAPEX
(Amounts in €
millions)
For the three months ended
September 30,
Change
For the nine months ended
September 30,
Change
2023
2022
€
2023
2022
€
Addition to Property, plants and
equipment
106.2
68.4
37.8
355.0
194.6
160.4
Addition to Intangible Assets
1.0
2.7
(1.7
)
3.6
7.8
(4.2
)
CAPEX
107.2
71.1
36.1
358.5
202.4
156.1
Reconciliation of 2023
Guidance (Updated)
Reported and Adjusted EBITDA,
Operating Profit, Net Profit, Diluted EPS
(Amounts in € millions, except
per share data)
Revenue
EBITDA
Operating Profit
Net Profit
Diluted EPS *
Reported
1,085.0 - 1,115.0
281.3 - 293.3
201.3 - 213.3
145.8 - 155.7
0.55 - 0.59
Adjusting items:
Start-up costs new plants
10.5
10.5
8.0
0.03
Adjusted
1,085.0 - 1,115.0
291.8 - 303.8
211.8 - 223.8
153.8 - 163.7
0.58 - 0.62
*May not add due to rounding
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231031118308/en/
Media Stevanato Group media@stevanatogroup.com
Investor Relations Lisa Miles
lisa.miles@stevanatogroup.com
Stevanato (NYSE:STVN)
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