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spk12: Good afternoon. This is the Coruscant Conference Operator. Welcome and thank you for joining the Stevanato Group Third Quarter 2023 Financial Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Ms. Lisa Miles, Senior Vice President, Investor Relations. Please go ahead, Madam.
spk11: Good morning, and thank you for joining us. You can find a presentation to accompany today's results on the Investor Relations page of our website, which can be found under the Financial Results tab. As a reminder, some statements being made today will be forward-looking in nature and are only predictions. Actual events and results may differ materially as a result of risks we face, including those discussed in item 3D entitled Risk Factors in the company's most recent annual report on Form 20F filed with the SEC. Please take a moment to read our Safe Harbor Statement, including in the front of today's presentation. We encourage you to review the information contained in our most recent SEC filings, including our latest Form 20F filed on March 2, 2023. The company does not assume any obligation to revise or update these forward-looking statements to reflect subsequent events or circumstances except as required by law. Today's presentation may contain non-GAAP financial information. Management uses this information in its internal analyses of results and believes this information may be informative to investors in gauging the quality of our financial performance, identifying trends in our results, and providing meaningful period-to-period comparisons. For reconciliation of the non-GAAP measures, please see the company's most recent earnings press release. I will now hand the call over to Franco Stevanotto for opening remarks.
spk13: Thank you, Lisa. This morning, we reported our third quarter results with double-digit revenue growth and an adjusted EBITDA margin of 27.5%, in line with our near-term financial targets. While third quarter revenue in the engineering segment fell short of our expectations, largely due to timing of revenue, we remain confident that we can achieve our full year guidance. As we alighted at our capital markets day, the fundamentals of our business remain strong. For the last 50 years, our focus has been on delivering the highest quality products to pharmaceutical customers worldwide. Our unique value proposition of integrated end-to-end solutions has helped us become a living partner of choice. We support customers through the entire drug lifecycle, from early stage drug development through commercializations. Our differentiated products embed science and technology to meet the most stringent standards that customers demand. We are currently benefiting from macro trends such as edgy populations, the rise in biologics and biosimilar, and the shift towards self-administration of medicine. We operate in growing end markets, particularly biologics, where we have built a leadership position in treatment areas such as JP1, monoclonal antibodies, and mRNA applications. As previously disclosed, of 2022 FDA approvals, we are present in three out of four of the potential blockbusters, all of which are biologics. Biologics, which are mostly administered through injections, are delivering breakthrough results in patient care, but they tend to be costly and more challenging to manufacture due to their sensitive nature. These factors are driving demand for high-performing drug containment to ensure the integrity and stability of treatments delivered to patients. Moreover, the global pipeline of drugs in development is at record levels with more than 60% in injectable formats. In summary, we believe that these positive trends position us well to capitalize on the many favorable secular tailwinds. We are focused on executing against our strategic priorities to deliver sustainable organic growth and build shareholder value. Thank you. I will now hand the call over to Marco.
spk09: Thanks, Franco. Before I begin, I want to clarify that all comparisons refer to the third quarter of 2022, unless otherwise specified. Starting on page 7, for the third quarter of 2023, revenue increased 11% to $271.4 million and 13% on a cost and currency basis, driven by growth in both segments. While we achieved double-digit growth, this is below what we expected for the third quarter sales at the time of our capital market day. Since then, revenue tied to specific engineering contracts has shifted to the right and we expect to recognize the revenue in the fourth quarter. As a reminder, the engineering business is project-based with revenue recognized on a cost-to-cost percent of completion basis, and it can vary from quarter to quarter. The engineering business is comprised of large, complex projects that have long life cycles from start to finish, typically 12 to 24 months, depending on the nature of the project. In the third quarter, there were a couple of dynamics at play. First, we have been experiencing strong demand for manufacturing lines and this demand has outpaced our expectation from a year ago. This is certainly positive for us, but at the same time, it is increasing the pressure on operations for timely delivery. Secondly, the pandemic created volatility in supply chains and we are still working through a bottleneck of work in progress that resulted from the electronic component shortages last year. This combination of strong demand and supply chain volatility plays stress on our resources, resulting in certain projects experiencing delays and lower than expected marginality. We believe we are on the right path to better balance resources with demand. and Franco will discuss the initiatives we are taking under our efficiency plan. The BDS segment performed in line with the assumptions embedded in our guidance. We continue to gain traction with our customers with the adoption of high-value solutions. In the third quarter, high-value solutions represented 32% of revenue compared with 30% for the same period last year. In the third quarter, revenue from COVID-19 decreased 84% and accounted for approximately 2% of revenue. Excluding revenue from COVID-19, third quarter revenue increased approximately 25%. With our diversified portfolio, we have been successfully managing the roll-off and backfilling the revenue we knew and expanding projects. For the third quarter, gross profit margin was impacted by the lower marginality in the engineering segment, the ongoing startup of the new manufacturing plants, and higher depreciation. As a result, gross profit margin decreased 110 basis points to 30.5%. As we continue to execute our strategic priorities, We are also closely managing our SG&A expenses as we grow the business. In the third quarter of 2023, operating profit margin was 18.8% and adjusted operating profit margin was 20%. On the bottom line, for the third quarter of 2023, net profit increased 4% to 37.9 million. and we delivered diluted earnings per share of $0.14. Adjusted net profit increased 6% to $40.1 million, and adjusted diluted earnings per share were $0.15. Adjusted EBITDA increased 13% to $74.7 million, and adjusted EBITDA margin was up 70 basis points to 27.5%. Let's review new orders intake, which increased 4% to approximately $256 million in the third quarter of 2023. We ended the quarter with a backlog of committed orders of approximately $924 million. Moving to segment results on page 8. For the third quarter, revenue from the biopharmaceutical and diagnostic solutions segment increased 6% to $218.9 million and 8% on a cost and currency basis. Excluding revenue related to COVID-19, the BDS segment grew approximately 23%. Revenue from high-value solutions increased 16% to $86.2 million and revenue from other containment and delivery solutions was 132.8 million, consistent with the same period last year. As expected, in the third quarter of 2023, margins in the BDS segment were tempered by rising startup costs and higher depreciation. This was partially offset by a higher mix of high-value solutions. As a result, the segment delivered a gross profit margin of 32.7%, and operating profit margin of 21.2%. Revenue in the third quarter of 2023 from the engineering segment increased 37% to 52.5 million, driven by growth in all business lines. This was lower than expected due to the timing of revenue on certain engineering projects, and we expect to recognize the revenue in the fourth quarter. For the third quarter of 2023, gross profit margin was 18.5% and operating profit margin was 11.2%. The decrease in margins was mainly driven by lower marginality on specific projects in progress and, to a lesser extent, a lower mix of after-sales activity. On page 9, At the end of the third quarter, we had a net debt of $227.5 million and cash-in-cash equivalents of $64.8 million. As expected, capital expenditures were $107.2 million in the third quarter, and we remain on track with the capacity expansion in high-value solutions to meet customers' demand for ready-to-use drug containment. For the third quarter of 2023, cash flow from operating activities was 33.5 million, which reflects our current working capital needs to support organic growth. Cash used for the purchase of property, plants and equipment and intangible assets was 132.3 million, which resulted in negative free cash flow of 97.8 million. Lastly, on page 10, We are reiterating our full year 2023 guidance. We continue to expect revenue in the range of $1,085,000,000 to $1,115,000,000, 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. Thank you. I will hand the call to Franco.
spk14: Thanks, Marco. Since we provided a full business update at our recent Capital Markets Day, I thought it might be helpful to spend some time focusing on a couple of demand dynamics we currently see within the segments. Let's start with engineering. The engineering segment provides us with an important advantage and point of differentiation with our customers. As Marco noted, demand has picked up over the last year, particularly for visual inspection and assembly lines, mostly driven by the growth in biologics. To satisfy demand, we are adding resources, enhancing technical capabilities, capabilities to help drive digitalization and implementing continuous process improvements to increase efficiency and cost optimization. Nevertheless, we expect that it will take some time to work through the current bottlenecks. Turning to the BDS segment, which benefited from COVID-19 in 2021 and 2022. Coming into fiscal 2023, we faced a year-over-year revenue headwind of about €80 million. Despite this, the BDS segment is on track for double-digit growth in 2023. However, I would like to point out some differences within two of the business lines in our BDS segment. As COVID-19 revenue winds down, First, our core drug containment solutions, or DCS business, has more than overcome the COVID-19 headwind. Demand remains robust, driven by the need for high-performance drug containment and the adoption of ready-to-use solutions. In the third quarter, our core DCS business grew about 10% compared with the same period last year. Excluding COVID-19, our drug containment business grew more than 25% in Q3. The data underpins the clear secular tailwinds that we discussed at our capital markets today. Our investments in capacity expansion are designed to meet this demand. Second, And as expected, our in vitro diagnostic business has been much slower to recover coming out of COVID-19. We assumed this in our guidance at the beginning of the year. While we are starting to see some recovery with certain customers, we currently anticipate that the business will normalize over the next couple of quarters. Nevertheless, the in vitro diagnostic business is a strategic foothold that we are leveraging to diversify and extend our core competencies into drug delivery system activities. With our unique value proposition of integrated end-to-end solutions, we are bringing the full power of our capabilities to bear, and we are winning new business in the DDS space, both CDMO and proprietary. We currently expect that the revenue will begin to materialize from these new business opportunities sometime in the back half of 2025. We also see a strong pipeline of future projects complemented by opportunities on the engineering side for assembly lines. With the growth in biologics and the trends toward the self-administration of medicine, This is a natural stepping stone to supporting customers with integrated platforms, combining both drug containment and delivery solutions down the road. In closing, we are maintaining our full year 2023 guidance, and we currently see positive long-term trends. We are operating in an environment of favorable demand, growing end markets, and multi-year secular drivers. We are working with our customers every day to support their needs across the entire drug lifecycle. We remain focused on operational excellence and the successful execution of our near-term strategic and operational priorities as we aim to complete our capacity expansion projects in the U.S. and Italy. grow the mix of high-value solutions, invest in R&D to advance our premium primary packaging and drug delivery systems, and build a multi-year pipeline of new opportunities by supporting our customers through scientific innovation to meet their evolving needs. These priorities are specifically designed to capitalize on market trends to drive long-term sustainable organic growth and build shareholder value. And with that, let's open it up for questions.
spk12: This is the Coruscant Conference Operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. We will pause for a moment as callers join the queue. The first question is from Derek DeBruin of Bank of America. Please go ahead.
spk01: Hi, good morning, and thank you for taking my question. So I appreciate that the engineering segment was below your expectations, but basically it was a little bit ahead of what the consensus estimates are looking for while it was BDS that was below. Could you just talk a little bit about this in terms of just some of the seasonality that might have been going on and the ramp in BDFs from 3Q to 4Q, and also how much ES revenue got pushed into from 3Q to 4Q. Thank you, and I've got a follow-up.
spk14: I start a very nice question, Derek. I start saying something about the situation, then Marco may compliment about the figures. Obviously, we have some ordinary partner for customer that normally drives some overweight in business in the second part of the year, but there's also the new capacity coming into play that is delivering more in a high-value solution. And about your question on BDS, yes, we have some impact from the in vitro diagnostic that is lower in recovery after COVID, but it's something that we embedded in our guidance early in the beginning of the year. But also to reinforce the view about the DCS, where we are enjoying the very strong growth. If you look at the numbers, out of COVID, we are having 25% more in the DCS business. So in terms of seasonality, again, the result is repetitive, but it's not completely new.
spk09: Yes, and about the guidance, we are reiterating our guidance also by segment. We still expect a double-digit organic growth in both segments and the expansion of high-value solution with a percentage between 32% to 34% on total revenue. So for the year, we are in line with our expectations.
spk01: Got it. And expectation on what got pushed from 3Q to 4Q on the ES side?
spk09: Yes, as commented, it's mainly related to the engineering side where some revenue shifts from Q3 to Q4. You probably remember our long-term contracts from 12 to 24 months are treated with a percent of completion method for revenue recognition, and they are based on a cost-to-cost progress. So matter of fact, we have been able to progress less in Q3 due to lower costs than expected. And this is something that will be recovered in Q4 with the cost occurrence.
spk01: Got it. And then just one final follow up. What's on the backlog? What was the net new orders? The book to bill has been trending a little bit less than one, and just want to know how you're feeling about initial thoughts on, if any initial thoughts on how that will flow into 2024. Basically, you've got a, you know, there's a double-digit revenue growth expectation for the business for next year. Just want to know how the backlog is looking, net new orders, and sort of like any initial thoughts on how this will sort of like flow into revenues for 2024. Thank you.
spk09: What I can tell you about the backlog, and Franco will comment about 2024, is that we have confidence in our guidance for 2023 because we are covered for about 97% of the center point of our guidance. And all the remaining portion of our 924 million backlogs is associated to revenue that will be recognized in 2024. So this is the starting point, and I just reiterate the message that this is not the only KPI we have for visibility of the future growth. And about the future growth, we are reiterating also the message we delivered during our March capital market day where we see, on average, low double-digit growth toward 2027. Thank you.
spk12: The next question is from Paul Knight of KeyBank. Please go ahead.
spk16: Franco, could you talk about capacity expansions? I know Latina has opened status of Indianapolis, and then does the engineering segment need to expand capacity as well? Thank you.
spk14: Paolo Zanonni- Hi, Paul. Yes, I go through your questions, starting from saying that we are on track on our capital expansion, our capital execution. Moving from Latina, Latina is going to generate the first commercial revenues, in line with our expectation. I am glad to say that we positively received also first audit from certification bodies and customers, so we are very glad about the startup of Latina. We are in the same trajectory in Fisher, where we expect to have a commercial revenue generation meet of next year. But also in this case, we are supporting the startup both with local resources and also the staff moving from Italy to Fischer to help our new colleagues there. So we are very positive in the view about this big investment, and you are right, we are also supporting our growth and our customer needs in engineering, heading resources, not only to overcome the temporary challenges we are facing, as Marco noted in his comments, but also to prepare the stage for the next step of growth, because the success of our technology in the market is higher than expected at the IPO, and we are scaling up the rating as a supplier of high-end technology in visual inspection and assembly.
spk16: On the engineering segment, is this demand largely monoclonal antibody, or is there some GLP-1 demand out there?
spk14: It's biologics. Biologics is growing fast, and biologics is an area where autoinjector plants play a major role. It is a good driver for not only for assembly line in devices, but also because in each of these devices, there is a containment solution, high-value containment solution that needs a visual inspection after filling, and most importantly, ask more production of high-value solution in cartridges and syringes. So overall, it's a very interesting area of business, and biologically, it's the most important driver.
spk11: And, Paul, just as a reminder, during our capital markets day, we did outline that we are serving GLP-1s with engineering lines as well.
spk07: Okay, thanks.
spk11: Sabrina, next question, please.
spk12: The next question is from David Findlay of Jefferies. Please go ahead.
spk15: Hi, thanks. I wanted to come back to a couple of Derek's good questions, one on the engineering revenue pushout. if the straightforward question is, could you please quantify the revenue amount? You talked about cost to cost. But, you know, if you would please quantify the revenue amount that got pushed out.
spk09: You mean the shifting from Q3 to Q4?
spk15: Yes, please.
spk09: Yes, it's about 5 to 6 million euro.
spk15: Got it. Thank you. And then, Marco, you said in your prepared remarks You made a comment about managing SG&A costs closely. Both the sales and marketing and G&A lines were lower both in dollar and in ratio percentage than we were looking for. I wonder, on the point of managing those costs closely, do some of those costs need to come back? Was there some delay in spending given the lower revenue? Or are you managing to a more efficient level of operation where you can sustain the lower levels that we're seeing in the third quarter?
spk09: We are carefully managing, not postponing costs, obviously. So it's the second one. You can see we are well in line with our R&D expenditure. We are between 3.3% to 3.4% in the nine months, so in line with our expectation. We are tackling some costs in sales and marketing in China to manage efficiently our P&L.
spk15: Okay. And then last question for me. On the order book question, say closer to your IPO period, we were still in the pandemic. Lots of players were receiving orders that, you know, where clients were looking further out into the future, willing to do that. because of supply chain challenges, managing inventory, higher levels of demand, a lot of different reasons. And as a result of that, some of your backlog at that time would have lapped not only into the following year, but into the year after that. So if I bring that forward to current, that would be out into fiscal 25. Does your current committed order book include 25 orders, or has that kind of compressed from a forward visibility timeframe standpoint in customers' eyes? I hope that question makes sense.
spk09: You are right. The order partner, we experienced a change from the pandemic period to the now, and that is more similar to the pre-pandemic pattern. We have... only small piece of contract related to the engineering that is going beyond the end of 2024, but is related more to the nature of the contracts rather than the fact that the customer are ordering 18 months in advance as it happened during the pandemic.
spk14: Also to say that it doesn't mean that our visibility in the future demand is short and then in the past because at the meantime we are developing a forecast and a multi-year agreement with customers that maintain or enhance our visibility for the future is the pace to flow the committed order the forecast into the order book that is changing but the visibility is still big and also higher and deeper than in the past.
spk15: Understood. Thank you for those answers. Appreciate it.
spk12: Thanks, Dave. Sabrina, next question, please. The next question is from Patrick Donnelly of CDE. Please go ahead.
spk07: Hey, guys. Thank you for taking the questions. Franco, maybe one for you. As the quarter progressed, did you see any change in behavior from biopharma customers Just give a broad peer commentary around more cautious spend, maybe tighter inventory management from that customer base. Just curious what you saw and if things changed at all as the quarter went, September, October, whatever it may be, would be helpful just to kind of talk through the progression there.
spk14: I have to have a well-understood your question, and please correct me if I'm not giving the right answer. But in terms of the... behavioral customer about orders. In biologics, we see the tendency to secure the supply chain, not only for the short term, but also for the long run. So we are engaged with the customers, important customers, in planning our capacity according to their future needs. So the impact on biologics, because of the inventory built during the pandemic, is very minor, because you may recall that COVID-19 situation was overweighted in bias and biologics is mostly looking at the cartridges and syringes because also of the utilization of drug delivery devices. So the situation is Normally, in terms of the behavioral customer to commit to orders, but we see really high attention to secure the supply chain for the long run.
spk07: Okay. So you didn't really see a change as the quarter progressed with IO Pharma customers maybe being a little more cautious in this kind of status quo each month of the quarter?
spk14: No. I don't see big changes in this direction. The only message I can deliver is that the need to get ready to meet the customer demands in the coming years is a good reason to work together with customer and they are very keen to have agreement with us for not only the short term but also the much longer run.
spk07: Okay. And then, Marco, maybe just as we think about both the ramp-up of plants, that engineering revenue that you talked about, the push-out coming back in 4Q, maybe just how do we think about the margin profile in 4Q and the right jumping-off point for 24, just given the moving pieces here? Thank you.
spk09: Well, we are, let's say, confirming our margin for BDS segment. We see the robust shift into our high-value solution happening. And we expect to increase our gross profit margin compared to last year in the BDS segment on an adjusted basis, excluding the non-recurring costs associated to the startup. In engineering, we see a slight decline in the year compared to the previous one in gross profit margin. But as discussed with David, the other action we are putting in place is a cost management, especially in sales and marketing G&A, that is playing favorably for the end of the year. So that's the reason why we are reiterating our guidance for 2023. We expect also to adjust the bid and the bid for the year. Okay. Thank you.
spk12: The next question is from Larry Solo of CGS Securities. Please go ahead.
spk08: Great. Good morning or good afternoon. Thanks for taking the questions. Just first question. You guys mentioned a nice improvement or you've seen a good increase in demand in the vision inspection and assembly lines. And just talking through and coming out of the capital markets day, your ability to leverage this engineering segment, are a lot of these customers where you've seen that demand for the machinery, are they customers as well on the BBS segment? Can you kind of just talk about that dynamically?
spk14: Yes, you're right. There are many customers that use our visual inspection system or assembly line that are also our customer for containment solutions and mostly high-value containment solutions. So the share of customers that we serve more than with a single product line is increasing and is in line with our strategy to be a solution provider because we believe that the integrated offering leverage on engineering provide benefit to customer in time of a shorter time to market, more simple supply chain for them, better management of a project, and at the end, a reduction of their total cost of ownership. And the increased number of customer that use more than one single product on MySG is increasing.
spk08: Got it. And just to clarify, you guys, I know you don't guide to the quarter, and you certainly don't guide particularly to the quarter for the segment. So just in follow-up to a couple of questions asked earlier, I think by Derek, just on the BDS segment. So it sounds like those numbers were essentially in line with your expectations, that the $5 million or so was shortfall, at least relative to it. and your internally was all on the engineering piece, correct?
spk09: Yes, that's correct. We are on our side reiterating the double-digit organic growth in BDS segment. And this is how we can see the picture for the entire fiscal year with the strong growth in high-value solution that are expected to represent between 32% to 34% on total revenue. So we are reiterating these, and as you said, we generally don't provide quarter after quarter guidance, quarterly guidance. But our picture is still the same.
spk08: Gotcha. And that guidance obviously implies a pretty nice pickup in Q4. And I guess seasonally, the BDS segment normally does pick up significantly in Q4. And I assume that dynamic comes into play this year as well. But where does that supply chain, that supply and your rampant capacity, I guess that's helping that? Trends even more? Any thoughts on that?
spk14: No, but you already covered your question with the appropriate answer yourself. Because yes, it's a combination of new capacity coming online. specifically for high-value solution that is more effective in terms of revenues. At the same time, there is some repetitive pattern in terms of ordering by customer that is driving this distribution of revenues along the year. But the increasing capacity is the most important driver because we are having more capacity in high-value solutions.
spk08: Right. And just last question, just on price, any color there? I imagine you've been getting a little bit more price this year. You've probably, increasingly over the last couple of years, inflation has obviously gotten significantly more material. Your expectations as we go forward, do you continue to expect to get price more in line with, I guess, what the inflationary pressures are?
spk09: Our approach about pricing is basically depending on value with respect of the value solution. It's not just based on cost, first of all. About stationary pressure, you mentioned last year we discussed many times the sudden increase in cost of utilities and other specific items. But the approach, generally speaking, is the same. We are... frequently recalculating our cost basis, including inflation and price accordingly.
spk08: Great. Thank you. I appreciate the call. Thank you.
spk12: Thanks, Sabrina. Next question, please. The next question is from Jacob Johnson of Steffens. Please go ahead.
spk10: Good morning. This is Mac, on for Jacob. Just a couple quick ones for me. You highlighted at your investor day that you're tied to roughly 70% biopharma companies. With new capacity and new product launches, is there an opportunity for your win rate to be higher on new molecules coming to market? I know you mentioned the three out of four potential blockbusters, but just going forward, I'd like to get a potential mark there.
spk14: Yes, you're right in terms of what we deliver during market day. And, yes, we are – engage with important blockbusters coming to the market in the short term and to have a bigger volume in the future. There is no changes in this perspective. I want to just to stress the fact that we are talking about biologics in terms of kind of molecules coming to the market and the needs for biologics are perfectly matching our value proposition, high value solution and high value containment solution, but nothing different from what we deliver during the capital market day.
spk10: Thank you. And also, you talked a little bit about contracting your capital market today as well. Just quickly, what did you learn from contracting during COVID when it comes to large demand projects, and how does this impact GLP-1 contracts?
spk14: I cannot talk about any specific therapeutic area, but generally speaking, when we discuss with customers the opportunities in the long run, we have a complex agreement that may imply different engagement of the customer, including some support to CapEx sometime. So it's case-by-case negotiation, obviously, but the good starting point is the strong relationship we have and the fact that we can leverage on a long-lasting experience with this customer.
spk10: Great. Thank you for taking my questions.
spk11: Thank you. Sabrina, next question, please.
spk12: The next question is from Matt Leroux of William Blair. Please go ahead.
spk17: Hi.
spk05: Sam Argonon from Matt Leroux.
spk17: I'm with William Blair. Just a few questions. First and foremost, building off of some of the questions that people asked about contracts and the structure there, a peer or just another player in the farm packaging space sort of spoke about a delay in revenue as a result of sort of a misalignment between what customers wanted and their ability to improve lead time. So they went to them. They weren't able to kind of – the customers already had plans for 2024 sales and decided they would take it a quarter or two from now.
spk11: Sam? This is Lisa. I don't believe you've dialed in on the web phone this morning, so we are having difficulty hearing you. We cannot hear your question really at all. So I'm going to ask Sabrina to go to the next question. If you could dial in on the web phone, I will send you the link immediately.
spk12: The next question is from John Sorbrier of UBS. Please go ahead.
spk06: Hey, thank you for taking the question. I'm actually dialing in. I just want to make sure you can hear me fine here.
spk11: Yes, we can.
spk06: Great. Franco, you know, appreciate the color on some of the subsegment level on BDS. And just maybe on IBD, you know, would you be willing to quantify, you know, what the sizing of this is or what you're actually seeing on the non-COVID growth there within BDS?
spk14: John, we don't split the In these details, the revenue, I can reinforce the message that this, in terms of value in the total revenue, is represented as more part of revenues also in the segment. And the message about our interest in vitro diagnostics linked to the strategic view, because we can leverage on expertise, skills, and know-how that we apply for molecular diagnostics, also in the drug delivery device space. So it's this level of synergy that drives the strategic attention. In terms of revenues, it represents a minor part of the business.
spk06: And just to clarify, I guess, the comments on ordering patterns and backlog demand, but Are there any areas where you're seeing destocking or restocking within customers in BDS?
spk14: I can't repeat what we've delivered in the past about the situation in buyers and in consumables for diagnostic services. But it's something that represents one part of a highly differentiated portfolio in our revenue, so we are impacted in a very limited way, and as you know, we have been able to compensate with the expansion in other therapeutic areas or product lines, overweighting the space for high-value solutions for biologics.
spk06: I got it. So just to clarify on that, so I guess, you know, in drug containment solutions, you know, there's not areas where you're seeing any customers destocking
spk14: No, no, no. It's the opposite. We have to execute properly our capacity expansion plan to meet their strong demand. It's the opposite. There is no this kind of situation you are referring to in the high-value solution.
spk06: Got it. Thank you for taking the questions.
spk12: As a reminder, if you wish to register for a question, please press star and 1 on your telephone. Once again, if you wish to ask a question, please press star and 1 on your telephone. For any further questions, please press star and one on your telephone. Ms. Miles, gentlemen, there are no more questions registered at this time.
spk11: Thank you, everyone, for joining us today for the Stevanato Group third quarter 2023 earnings call. We look forward to speaking with you in the future. Thank you.
spk12: Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you. Thank you.
spk03: The way you laugh when your shoulders shook, the time you took to teach me all that you had taught me. Tell me, how am I supposed to move on? These days have become an everything that I hate. Wishing you'd be around, but now it's too late. My mind is a place that I can't escape your ghost. Sometimes I wish that I could wish it all away, babe. these days when i'm on the brink of the edge remember the words that you said remember the life you had you'd say i'll suck it all up don't get stuck in the mud thinking of things that you should have done i'll see you again my last one We'll be right back. I wish that I could see you one more day, but I need one more rainy day.
spk18: I'm walking out for love I'm walking out really down in a cool breeze I won't be late again, drive away from me please I'm running all in vain, trying to catch this train Time don't hold me no more I throw my watch to the floor. It's gone crazy. Time don't do it again. Now I'm stressed and strained. Anger and pain in the subway train. Now it's half past two. Long gone, the rendezvous. Now it's half past three. Time made a fool out of me. Now it's half past four. Oh baby, can't you see? No use in waiting no more. It's a time of tragedy. Think it's nine when the clock says ten. This girl won't wait for the out of time, out of time man. Time don't fool me no more. I told my watcher the flow has gone crazy. Time won't do it again. Now I'm stressed and strained. Anger and pain in the subway train. Now it's half past three. Long gone the wrong reason. Now it's half past three. Time made a fool out of me. Now it's half past four. Oh, baby, can't you see? The reason why you know me. It's a time of tragedy. Think it's nine when the clock says ten. This girl won't wait for the out of time. Out of time, ma'am. Now it's half past two. Long gone, the wrong they do. Now it's half past two. Time made a fool out of me. Now it's half past four. Oh, baby, can't you see? The reason why you know me. It's a time of tragedy. Now it's half past two. Long gone, the wrong wizard. Now it's half past two. Time made a fool out of me. Now it's half past four. Oh, baby, can't you see? Now it's half past four. Time and tragedy. Now it's half past two. Long gone, the wrong wizard. Now it's half past two. Time made a fool out of me. Now it's half past four. Oh, baby, can't you see? This girl won't wait for the out of time, out of time now.
spk02: I found a love for me Darling, just dive right in and follow my lead I found a girl, beautiful and sweet I never knew you were the someone waiting for me. We were just kids when we fell in love. Not knowing what it was. I will not give you up this time. Darling, just kiss me slow. Your heart is all I own. And in your eyes you're holding mine. Baby, I... Dancing in the dark, with you between my arms. Barefoot on the cross, listening to our favorite song. When you said you loved a man, I whispered underneath my breath. Darling, you look perfect tonight Well, I found a woman Stronger than anyone I know She shares my dreams I hope that someday I'll share her home I found a lover Carry more than just my secrets. Carry love, carry children of our own. We are still kids who are so in love, fighting against all odds. I know we'll be all right. Your man I see Baby, I'm dancing in the dark With you between my arms Barefoot on the grass Listening to our favorite song When I saw you in the trash Looking so beautiful I don't deserve it Darling, you were Thank you. I have faith in what I see Now I know I have met an angel in person And she looks perfect I don't deserve this a perfect nightmare
spk00: Oh, one of these nights and about twelve o'clock, it's over, it's going to be land rock. Saints will tremble and cry for pain, for the Lord's going to come in his heavenly airplane.
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