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 first quarter of 2024.
First Quarter 2024 Highlights
- Revenue for the first quarter of 2024 decreased 1% to €236.0
million compared with the same period last year, and high-value
solutions represented 37% of total revenue.
- For the first quarter, diluted earnings per share were €0.07
and adjusted diluted earnings per share were €0.08.
- Adjusted EBITDA margin for the first quarter was 21.4%.
- The Company is updating its fiscal year 2024 guidance primarily
due to a more pronounced impact from the ongoing industry-wide
destocking in the first quarter and a more gradual recovery in
vials, as well as the postponement of expected orders from a key
customer. The Company now expects revenue in the range of €1,125
million to €1,155 million, adjusted EBITDA in the range of €277.9
million to €292.2 million, and adjusted diluted EPS between €0.51
and €0.55.
First Quarter 2024 Results
For the first quarter of 2024, revenue decreased 1% (40 basis
points on a constant currency basis) to €236.0 million, compared
with the same period last year. The change was due to (i) lower
revenue attributable to glass vials in the Biopharmaceutical and
Diagnostic Solutions Segment resulting from the ongoing destocking
of excess vial inventories that customers accumulated during the
pandemic, and (ii) lower revenue from the Engineering Segment.
Revenue from high-value solutions increased to 37% of total
revenue in the first quarter of 2024, compared with 32% for the
same period last year, driven by demand in syringes and cartridges.
Lower revenue from EZ-fill® vials unfavorably impacted the mix
within high-value solutions in the first quarter of 2024.
Gross profit margin for the first quarter of 2024 decreased to
26.4%, primarily due to product mix resulting from lower revenue
from EZ-fill® vials. In addition, gross profit margin was also
tempered by (i) the underutilization of vial lines, (ii) lower
gross profit from the Engineering Segment, (iii) temporary
inefficiencies related to the start-up of the Company's new
manufacturing facilities in Italy and the United States, and (iv)
higher depreciation. Additionally, the prior-year period benefited
from government grants to subsidize the rise in utility costs which
did not repeat in the first quarter of 2024.
For the first quarter of 2024, operating profit margin decreased
to 10.7%, compared with the same period last year, driven primarily
by lower gross profit.
Franco Moro, Chief Executive Officer, stated, "Industry-wide
vial destocking was more pronounced than previously expected in the
first quarter, especially in our more accretive EZ-fill® vials.
While we believe this is a transitory situation, we now expect a
more gradual recovery in vials, with orders beginning to pick up at
the end of 2024 and into the early part of 2025, with bulk vials
expected to recover first. This, coupled with the postponement of
expected orders related to a large customer, has caused us to take
a more cautious approach to our 2024 guidance. The fundamentals of
our business remain strong, underpinned by favorable secular
tailwinds. We operate in growing end markets with an increasing
presence in biologics, and these factors give us confidence that we
remain ideally positioned to return to higher growth rates once
customer inventories have normalized."
Biopharmaceutical and Diagnostic Solutions Segment
(BDS)
In the first quarter of 2024, revenue from the BDS Segment grew
2% to €198.9 million (2% on a constant currency basis), compared
with the same period last year. Revenue from high-value solutions
increased 15% to €88.0 million, while revenue from other
containment and delivery solutions declined 7% to €111.0 million,
compared with the same period last year.
The change in product mix due to lower revenue from EZ-fill®
vials had the greatest impact on gross profit margin, which
decreased to 27.1% for the first quarter of 2024, compared with the
same period last year. Gross profit margin was also tempered by the
(i) the underutilization on vial lines and associated labor costs,
(ii) temporary inefficiencies tied to the start-up phase of the
Company's new manufacturing facilities, and (iii) higher
depreciation. Additionally, the prior-year period benefited from
government grants to subsidize the rise in utility costs, which did
not repeat in the first quarter of 2024.
Engineering Segment
Revenue from the Engineering Segment decreased 13% to €37.1
million for the first quarter of 2024, compared with the same
period last year. The Company is continuing to focus on executing a
large volume of work currently in progress, and has taken steps to
shore up resources including hiring additional staff to support
these efforts as well as ongoing optimization of its industrial
footprint and streamlining processes to drive operational
efficiencies and shorten lead times.
Gross profit margin was 17.3% for the first quarter of 2024. The
decrease, compared with the same period last year, was driven by
lower marginality on specific projects in process.
Balance Sheet and Cash Flow
On March 26, 2024, the Company closed its underwritten follow-on
public offering of ordinary shares, raising net proceeds of €170.5
million which will be used for capital investment projects, working
capital, and general corporate purposes to ensure an appropriate
level of operating and strategic flexibility. As of March 31, 2024,
the Company had cash and cash equivalents of €186.3 million and net
debt of €186.9 million. As expected, capital expenditures for the
first quarter of 2024 totaled €71.9 million, as the Company
continues to advance its strategic growth investments in capacity
expansion for high-value solutions to meet customer demand.
For the first quarter of 2024, cash flow from operating
activities was €71.6 million. Cash flow used for the purchase of
property, plant, and equipment, and intangible assets totaled
€102.7 million, which were driven predominantly by capital
expenditures. This resulted in negative free cash flow of €30.6
million in the first quarter of 2024.
2024 Guidance
The Company is updating its full year 2024 guidance and now
expects:
- Revenue in the range of €1,125 million to €1,155 million,
- Adjusted EBITDA in the range of €277.9 million to €292.2
million, and
- Adjusted diluted EPS in the range of €0.51 to €0.55.
The Company is maintaining its mid-term targets for fiscal years
2025 to 2027 of low double-digit revenue growth and in 2027 a share
of high-value solutions between 40% and 45% of total revenue and an
adjusted EBITDA margin of approximately 30%.
Executive Chairman, Franco Stevanato, concluded, "We have
experienced significant growth over the last decade, and Stevanato
Group has established its leadership position as a mission-critical
partner in the pharmaceutical supply chain. Our number one priority
in 2024 is execution. We are laser focused on ramping up our new
capacity to meet rising customer demand for high-value solutions,
such as our Nexa syringes and EZ-fill® cartridges. We are
strengthening our processes and driving efficiencies across our
global operations to maximize future growth. We are confident that
we remain on the path to achieve our 2027 mid-term objectives."
Conference call: The Company will host a conference call
and webcast at 8:30 a.m. (ET) on Thursday, May 9, 2024, to discuss
financial results. During the call, management will refer to a
slide presentation which will be available on the morning of the
call on the “Financial Results” page under the Investor Relations
section of the Company's 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 conference call using the following link:
https://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://event.choruscall.com/mediaframe/webcast.html?webcastid=1nyYfUHM
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 "gradual," "expects," "continues," "expected," "remain,"
“drive,” "growing," "increasing," "growth," "continuing,"
"established," "strengthening," "driving," "rising," "will,"
"progress," "ensure," "believe," "meet," "maintaining," “expect,”
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, the Company's
future financial performance, including revenue, operating expenses
and ability to maintain profitability and operational and
commercial capabilities; the Company's expectations regarding the
development of the industry and the competitive environment in
which it operates; the expansion of the Company's plants and its
expectations to increase production capacity; the global supply
chain and the Company's committed orders; customer demand and
customers' ability to destock higher inventories accumulated during
the COVID-19 pandemic; the Company's geographical and industrial
footprint; and the Company's goals, strategies and investment
plans. 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 conditions in the U.S. capital markets, negative
global economic conditions, inflation, the impact of the conflict
between Russia and the Ukraine, the evolving events in Israel and
Gaza, supply chain and logistical challenges and other factors such
as the Company's ability to continue to obtain financing to meet
its liquidity needs, changes in the geopolitical, 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
ended March 31,
2024
%
2023
%
Revenue
236.0
100.0
%
238.0
100.0
%
Costs of sales
173.8
73.6
%
161.7
68.0
%
Gross Profit
62.2
26.4
%
76.3
32.0
%
Other operating Income
1.3
0.6
%
1.2
0.5
%
Selling and Marketing Expenses
5.8
2.5
%
6.1
2.5
%
Research and Development Expenses
10.7
4.6
%
8.6
3.6
%
General and Administrative Expenses
21.7
9.2
%
22.2
9.3
%
Operating Profit
25.3
10.7
%
40.6
17.1
%
Finance Income
4.2
1.8
%
4.4
1.8
%
Finance Expense
3.8
1.6
%
9.0
3.8
%
Profit Before Tax
25.7
10.9
%
36.0
15.1
%
Income Taxes
6.9
2.9
%
7.8
3.3
%
Net Profit
18.8
8.0
%
28.3
11.9
%
Earnings per share
Basic earnings per ordinary share
0.07
0.11
Diluted earnings per ordinary share
0.07
0.11
Average shares outstanding
265.9
264.7
Average shares assuming dilution
266.0
265.4
Reported Segment
Information
(Amounts in €
millions)
For the three months ended
March 31, 2024
Biopharmaceutical and
Diagnostic Solutions
Engineering
Adjustments, eliminations and
unallocated items
Consolidated
External Customers
198.9
37.1
—
236.0
Inter-Segment
0.5
40.3
(40.8
)
—
Revenue
199.4
77.3
(40.8
)
236.0
Gross Profit
54.1
13.4
(5.3
)
62.2
Gross Profit Margin
27.1
%
17.3
%
26.4
%
Operating Profit
28.2
5.2
(8.1
)
25.3
Operating Profit Margin
14.1
%
6.7
%
10.7
%
For the three months ended
March 31, 2023
Biopharmaceutical and
Diagnostic Solutions
Engineering
Adjustments, eliminations and
unallocated items
Consolidated
External Customers
195.5
42.4
—
238.0
Inter-Segment
0.4
49.4
(49.8
)
—
Revenue
196.0
91.8
(49.8
)
238.0
Gross Profit
66.0
19.9
(9.6
)
76.3
Gross Profit Margin
33.7
%
21.7
%
32.0
%
Operating Profit
38.7
14.0
(12.1
)
40.6
Operating Profit Margin
19.8
%
15.2
%
17.1
%
Cash Flow
(Amounts in €
millions)
For the three months ended
March 31,
2024
2023
Cash flow from operating activities
71.6
37.1
Cash flow used in investing activities
(102.1
)
(114.9
)
Cash flow from financing activities
146.9
8.0
Net change in cash and cash
equivalents
116.3
(69.7
)
Non GAAP Financial Information
This press release contains non-GAAP financial measures. Please
refer to "Non-GAAP Financial Information" on page 4 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 March 31,
2024
Biopharmaceutical and
Diagnostic Solutions
Engineering
Reported Revenue (IFRS GAAP)
198.9
37.1
Effect of changes in currency translation
rates
1.1
—
Organic Revenue (Non-IFRS GAAP)
200.0
37.1
Reconciliation of
EBITDA
(Amounts in €
millions)
For the three months ended
March 31,
Change
2024
2023
%
Net Profit
18.8
28.3
(33.5
)%
Income Taxes
6.9
7.8
(11.6
)%
Finance Income
(4.2
)
(4.4
)
(5.8
)%
Finance Expenses
3.8
9.0
(58.2
)%
Operating Profit
25.3
40.6
(37.8
)%
Depreciation and Amortization
21.7
18.4
17.9
%
EBITDA
47.0
59.0
(20.4
)%
Calculation of Net Profit
margin, Operating Profit Margin, Adjusted EBITDA Margin and
Adjusted Operating Profit Margin
(Amounts in €
millions)
For the three months ended
March 31,
2024
2023
Revenue
236.0
238.0
Net Profit Margin (Net Profit/
Revenue)
8.0
%
11.9
%
Operating Profit Margin (Operating Profit/
Revenue)
10.7
%
17.1
%
Adjusted EBITDA Margin (Adjusted EBITDA/
Revenue)
21.4
%
26.0
%
Adjusted Operating Profit Margin (Adjusted
Operating Profit/ Revenue)
12.3
%
18.3
%
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 March 31,
2024
EBITDA
Operating Profit
Income Taxes (3)
Net Profit
Diluted EPS
Reported
47.0
25.3
6.9
18.8
0.07
Adjusting items:
Start-up costs new plants (1)
2.7
2.7
0.7
2.0
0.01
Restructuring and related charges (2)
0.9
0.9
0.2
0.7
0.00
Adjusted
50.6
28.9
7.8
21.5
0.08
Adjusted Margin
21.4
%
12.3
%
Three months ended March 31,
2023
EBITDA
Operating Profit
Income Taxes (3)
Net Profit
Diluted EPS
Reported
59.0
40.6
7.8
28.3
0.11
Adjusting items:
Start-up costs new plants (1)
2.9
2.9
0.8
2.1
0.01
Adjusted
61.9
43.6
8.5
30.4
0.11
Adjusted Margin
26.0
%
18.3
%
(1) During the three months ended March 31, 2024 and 2023, the
Group recorded EUR 2.7 million and EUR 2.9 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 commercial operation that are
associated with recruiting, hiring, training and travel of
personnel who are employed in the production of our products which
require specialized knowledge.
(2) During the three months ended March 31, 2024, the Group
recorded EUR 0.9 million of restructuring and related charges among
general and administrative expenses and research and development
expenses. These are mainly employee costs related to the
reorganization of some business functions.
(3) The income tax adjustment is calculated by multiplying the
applicable nominal tax rate to the adjusting items.
Capital Employed
(Amounts in €
millions)
As of March 31, 2024
As of December 31, 2023
- Goodwill and intangible assets
81.0
81.0
- Right of Use assets
18.0
18.2
- Property, plant and equipment
1,089.4
1,028.5
- Financial assets - investments FVTPL
0.7
0.7
- Other non-current financial assets
4.5
4.5
- Deferred tax assets
79.1
76.3
Non-current assets excluding FV of
derivative financial instruments
1,272.7
1,209.2
- Inventories
283.1
255.3
- Contract Assets
178.8
172.6
- Trade receivables
221.0
301.8
- Trade payables
(239.4
)
(277.8
)
- Advances from customers
(13.7
)
(22.9
)
- Non-current advances from customers
(41.1
)
(39.4
)
- Contract Liabilities
(25.8
)
(22.3
)
Trade working capital
362.9
367.2
- Tax receivables and Other
receivables
67.3
58.2
- Tax payables and Other liabilities
(112.0
)
(107.0
)
- Current provisions
(1.1
)
(1.1
)
Net working capital
317.1
317.4
- Deferred tax liabilities
(10.2
)
(9.6
)
- Employees benefits
(7.4
)
(7.4
)
- Non-current provisions
(3.9
)
(4.0
)
- Other non-current liabilities
(50.9
)
(48.5
)
Total non-current liabilities and
provisions
(72.4
)
(69.5
)
Capital employed
1,517.4
1,457.1
Net (debt) /cash
(186.9
)
(324.4
)
Total Equity
(1,330.4
)
(1,132.6
)
Total equity and net (debt)/
cash
(1,517.4
)
(1,457.1
)
Free Cash Flow
(Amounts in €
millions)
For the three months ended
March 31,
2024
2023
Net cash flow from operating
activities
71.6
37.1
Interest paid
0.7
0.9
Interest received
(0.2
)
(0.2
)
Purchase of property, plant and
equipment
(100.5
)
(127.7
)
Purchase of intangible assets
(2.2
)
(1.1
)
Free Cash Flow
(30.6
)
(91.0
)
(Net Debt) / Net Cash
(Amounts in €
millions)
As of March 31,
As of December 31,
2024
2023
Non-current financial liabilities
(280.5
)
(255.6
)
Current financial liabilities
(96.2
)
(143.3
)
Other non-current financial assets - Fair
value of derivatives financial instruments
0.2
0.6
Other current financial assets
3.3
4.4
Cash and cash equivalents
186.3
69.6
Net (Debt)/ Cash
(186.9
)
(324.4
)
CAPEX
(Amounts in €
millions)
For the three months ended
March 31,
Change
2024
2023
€
Addition to Property, plants and
equipment
69.7
112.1
(42.4
)
Addition to Intangible Assets
2.2
1.1
1.1
CAPEX
71.9
113.2
(41.3
)
Reconciliation of 2024
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
1,125.0-1,155.0
264.9-279.2
177.4-191.7
128.5-139.3
0.47-0.51
Adjusting items
—
13.0
13.0
9.8
0.04
Adjusted
1,125.0-1,155.0
277.9-292.2
190.4-204.7
138.3-149.2
0.51-0.55
*Amounts may not add due to rounding
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240509725369/en/
Media Stevanato Group media@stevanatogroup.com
Investor Relations Lisa Miles
lisa.miles@stevanatogroup.com
Stevanato (NYSE:STVN)
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