Stevanato Group S.p.A.

Good afternoon, this is the Coruscall conference operator. Welcome and thank you for joining the Stevanato Group fourth quarter and year end 2024 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.

Good morning, and thank you for joining us. With me today is Franco Stevanopto, Chairman and Chief Executive Officer, and Marco De Lago, Chief Financial Officer. You can find a presentation to accompany today's results on the Investor Relations page of our website, which can be located under the Financial Results tab. As a reminder, some statements being made today will be forward-looking in nature and only predictions. Actual events and results may differ materially as a result of the 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 read our Safe Harbor Statement including in the front of the presentation and in today's press release. 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 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 a reconciliation of these non-gap measures, please see the company's most recent earnings press release. And with that, I will now hand the call over to Franco Stevanotto.

Thank you, Lisa, and thanks for joining us. Today, we will review our 2024 performance, address current market dynamics, discuss our four-quarter results, and provide 2025 guidance. We finished fiscal year 2024 with a positive four-quarter that was in line with our expectations. In 2024, revenue grew 2% compared to last year, driven by 6% growth in the biopharmaceutical and diagnostic solution segment, which offset the expected 70% decline from the engineering segment. Growth in the BDS segment was driven primarily by robust market demand for high-value syringes. This helped drive a 15% increase in high-value solutions, which represented 38% of the total company revenue for fiscal 2024. We believe the success we are experiencing in high-value solutions also demonstrates that we are investing in the right markets at the right time as we ramp up syringes in Fisher and Latina to match customer demand. We expect that these investments will continue to drive near-term growth and allow us to capitalize on growing patient demand for biologic treatments such as GLP-1s, monoclonal antibodies, and biosimilar. The increasing availability of sensitive biologic treatments and patient adoption of self-administrated medicines are two key areas driving growth in integrated solutions and high-value solutions. In 2024, revenue from injectable biologics increased 24% year-over-year and represented 34% of the BDS revenue compared to 30% of BDS revenue last year. Additionally, in fiscal 2024, strong revenue growth in syringes coupled with growth in other product categories helped to offset a 34% decline in revenue related to bulk and easy-fill vial. As you know, this temporary soft vial demand stems from the industry-wide vial stocking. we saw modest improvements at the end of the year, with some customers slowly returning to more normalized ordering, while other customers are still managing inventories. As a result, our thoughts remain unchanged, and we still anticipate a gradual recovery in vial demand in 2025, which we built into our guidance. We still expect that the market will continue to stabilize throughout 2025 with a faster recovery in bulk vials. During 2024, we also made significant progress on our gross investments, and we achieved two important milestones. First, we generated our first commercial revenue in Fisher, Indiana. Second, our Latina project in Italy turned profitable at a gross profit margin level in the third quarter. Please, turn to page 6 for a review of our expansion projects. In Latina, our teams are focused on the ongoing ramp-up of syringes capacity as part of the Phase 1. Throughout 2025, we will continue installing, validating and launching additional manufacturing lines to help satisfy growing customer demand. We are still in the early phase of scaling up this important gross investment. As you may recall, the next phase of our expansion in Latina will be dedicated to expanding easy-fill cartridges capacity. This is a part of a larger program for an encore customer expanding into ready-to-use cartridges. The design and planning are completed. and the core infrastructure build-out is expected to continue through 2025. As part of this project, the engineering team will be delivering our next-generation easy-fill cartridges lines. We currently expect line installation to begin in early 2026. This is a market area where the demand environment has been more robust than we previously anticipated. We believe that our global leadership position and long history in both legacy and new GLP-1s position us as a partner of choice in this growing market. Turning to Fisher, we are making great progress and activities are advancing as planned. Our world-class facility is supporting U.S. customers across the full value chain, and our investment is strategically focused to meet the high market demand for biologics. Alongside the launch of commercial production last quarter, we are installing and validating new syringe lines throughout 2025 as we scale this multi-year gross investment. In parallel, construction is underway on the build-out of our device manufacturing operation in Fishers. This effort is supporting a large customer with multiple device programs across a range of biologic treatments. We will support this U.S. global customer with a fully integrated solution with both our Nexus ranges and our device manufacturing programs. Commercial activities related to this new contract manufacturing work are expected to begin sometime between late 2026 and early 2027. Please turn to the next slide for a status update on our optimization plan for the engineering segment. The team made major strides during the quarter. We are on track to complete the previously delayed projects in 2025, with the majority expected to be completed mid-year. Right now, we are squarely focused on the successful completion and installation of these manufacturing lines at our customers' sites. I am confident that we are moving in the right direction and our near-term efforts are yielding results. The next phase of our plan has a longer horizon. This includes optimizing our operational footprint, increasing efficiency by harmonizing our industrial processes, and streamlining activities into more defined structures. Our customers value our innovation in our top-tier products. we continue to see a favorable demand environment for our engineering segment underpinned by the rise in biologics. Our efforts are designed to drive efficiency and productivity gains to best position the segment for long-term success. In summary, while 2024 was challenging, it prompted us to take action to improve execution, drive operational improvements through footprint optimization, increase our efforts to streamline processes, and look for further areas to gain production efficiencies. These ongoing efforts will improve our setup for long-term growth. Looking ahead, we believe we are uniquely positioned with an integrated value proposition to better serve customers' wide-ranging needs. Our long history of embedding science and technology to drive continuous advancements has led to a differentiated product portfolio. We operate in attractive end markets and have an increasing presence in biologics which is the fastest-growing market segment. We have developed next-generation products, such as our ALBA portfolio, that are ideally suited to meet the scientific demands of highly sensitive drug products. We see a great opportunity driven by favorable macro tailwinds, such as aging population, the growth in biologics, and the rising patient adoption of self-administrated injectable drugs. We are positioning the company to take advantage of these opportunities to drive long-term sustainable growth. I will hand the call over to Marco for a review of our four-quarter results.