• Revenue Growth: 2% increase for fiscal year 2024, driven by 6% growth in Biopharmaceutical and Diagnostic Solutions segment.
• Fourth Quarter Revenue: EUR330.6 million, a 3% increase year-over-year.
• High-Value Solutions Revenue: 9% growth to EUR131 million in Q4, representing 40% of total revenue.
• Gross Profit Margin: Declined by 210 basis points to 29.7% in Q4 2024.
• Operating Profit Margin: Increased 20 basis points to 20.2% in Q4 2024.
• Net Profit: EUR48.3 million in Q4 2024.
• Adjusted EBITDA: Increased 5% to EUR90.9 million, with a margin increase of 50 basis points to 27.5% in Q4 2024.
• Cash and Cash Equivalents: EUR98.3 million at year-end 2024.
• Net Debt: EUR335 million at year-end 2024.
• Capital Expenditures: EUR286.6 million for full-year 2024, with 89% for growth projects.
• Free Cash Flow: Negative EUR148.5 million for fiscal 2024, improved from negative EUR333.9 million in 2023.
• 2025 Revenue Guidance: EUR1.160 billion to EUR1.190 billion.
• 2025 Adjusted EBITDA Guidance: EUR293 million to EUR306.3 million.
• 2025 Adjusted Diluted EPS Guidance: EUR0.51 to EUR0.55.

• Warning! GuruFocus has detected 2 Warning Sign with STVN.

Release Date: March 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Stevanato Group SpA (NYSE:STVN) reported a 2% revenue growth for 2024, driven by a 6% increase in the Biopharmaceutical and Diagnostic Solutions segment.
• High-value solutions, including syringes, saw a 15% increase, representing 38% of total company revenue for 2024.
• Revenue from injectable biologics increased by 24% year over year, indicating strong demand in this segment.
• The company achieved significant milestones with its Fishers, Indiana facility generating its first commercial revenue and the Latina project in Italy turning profitable.
• Stevanato Group SpA (NYSE:STVN) is strategically positioned to capitalize on the growing demand for biologic treatments and self-administrative medicines.

Negative Points

• The Engineering segment experienced a 7% decline in revenue, impacting overall company performance.
• There was a 34% decline in revenue related to bulk and EZ-fill vials due to industry-wide vial destocking.
• Gross profit margin for the fourth quarter of 2024 declined by 210 basis points to 29.7%, affected by vial destocking and underutilization of vial lines.
• The new manufacturing plants in Fishers and Latina are expected to be dilutive to gross profit margin in the near term.
• Free cash flow remained negative at EUR148.5 million for fiscal 2024, although it showed improvement from the previous year.

Q & A Highlights

Q: Can you provide additional color on when you expect the vial environment to fully recover? A: Franco Stevanato, Executive Chairman of the Board, stated that they are confident 2025 will be much better than 2024. They see signs of customers starting to normalize ordering patterns, indicating a gradual recovery throughout 2025.

Q: How do the Fishers and Latina facilities need to ramp up to go from being margin dilutive to margin accretive? A: Marco Dal Lago, Chief Financial Officer, explained that Latina is ahead of Fishers, having started generating positive gross profit in Q3 2024. Fishers is expected to turn positive in the second half of 2025. Both facilities will still be dilutive to gross profit margin in 2025.

Q: What should we expect for vial growth in 2025, and when do you anticipate a return to positive growth? A: Marco Dal Lago mentioned they are modeling mid- to high-single-digit growth for vials in 2025, with sequential improvements expected throughout the year.

Q: Can you discuss your investments in device manufacturing operations and expectations for scaling these programs? A: Marco Dal Lago highlighted their strategy to serve integrated solutions to biologic customers, including IP auto-injectors and pens. They are building capacity to serve Nexa and Alba syringes, aiming to be a holistic partner for glass and devices.

Q: How should we think about the progression of revenue and margins throughout 2025? A: Marco Dal Lago expects sequential growth quarter after quarter in 2025, with a stronger second half due to ramping up capacity, vial market recovery, and improvements in the Engineering segment.

Q: How does the administration change in the US impact your operations, particularly regarding tariffs and trial cancellations? A: Franco Stevanato noted that they have built a sophisticated supply chain to be domestic in major pharmaceutical areas, allowing them to adapt to changes. Marco Dal Lago added that vaccine-related risks are limited, with only 1% of revenue generated in the US.

Q: What are the utilization levels across different form factors like syringes, cartridges, and vials? A: Marco Dal Lago stated that there is strong demand for syringes and cartridges, with available capacity in vials due to a 34% revenue decline last year. They expect vial growth in 2025 but still have available capacity.

Q: What are your expectations for the Engineering segment's operating margins over the next few quarters? A: Marco Dal Lago mentioned they reached mid-15% operating margins in Q4 and aim to complete delay issues by mid-next year, with further optimization planned to improve profitability.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.