Stevanato Group's Q4 2024: Navigating Contradictions in Vial Recovery, Engineering Performance, and Customer Dynamics

These are the key contradictions discussed in Stevanato Group's latest 2024Q4 earnings call, specifically including: Vial Recovery Expectations, Engineering Segment Performance, and Customer Behavior Changes:



Revenue and Segment Performance:
- Stevanato Group reported a 2% revenue growth in fiscal year 2024 compared to the previous year.
- The growth was driven by a 6% increase in the Biopharmaceutical and Diagnostic Solutions segment, particularly through 15% growth in high value solutions, which represented 38% of total company revenue.
- The growth in high value solutions was due to strong market demand for high value syringes and other product categories.

Vial Market Recovery:
- Stevanato Group experienced a 14% revenue decline related to bulk and EZ-fill vials in the fourth quarter, compared to a 34% decline in the full year.
- Modest improvements were seen in vial demand in the latter half of the year, with some customers returning to more normalized ordering patterns.
- The company anticipates a gradual recovery in vial demand, particularly in bulk vials, during 2025.

Capacity Investments and Expansion:
- Stevanato made significant progress in its growth investments, achieving first commercial revenue in Fishers, Indiana.
- The Latina project turned profitable in the third quarter, and the company is installing, validating, and launching additional manufacturing lines to meet growing customer demand.
- These investments are focused on expanding capacity for high-value products like Nexa syringes and cartridges, driven by robust demand and strategic long-term positioning.

Gross Margin Dynamics and Guidance:
- The company's gross profit margin for the fourth quarter decreased by 210 basis points to 29.7%, impacted by vial destocking and underutilization of vial lines.
- Stevanato expects its gross profit margin to improve by 100 to 140 basis points in 2025, driven by improved capacity utilization and increased high value solutions.
- The company forecasts adjusted EBITDA in the range of €293 million to €306.3 million for 2025, with revenue expected to be stronger in the second half of the year.