Stevanato Group has announced an 11% revenue increase to EUR271.4 million in Q3 2023, propelled by growth across its segments. Despite the Engineering Segment's revenue falling short of expectations due to timing issues, the company remains optimistic about achieving its full-year guidance. The company's core Drug Containment Solutions (DCS) business grew by 10% in Q3 compared to the same period last year. The company also discussed its current order backlog and forward visibility, extending into fiscal year 2025.
Key takeaways from the call:
- The company's growth was driven by both segments, with a notable 10% increase in the core Drug Containment Solutions (DCS) business.
- The company reiterated its full-year 2023 guidance, expecting revenue in the range of EUR1,085 million to EUR1,115 million and adjusted EBITDA in the range of EUR291.8 million to EUR303.8 million.
- The company's investments in capacity expansion are aimed at meeting the demand for high-performance drug containment.
- The revenue from new business opportunities in the Drug Delivery System space is expected to materialize in the second half of 2025.
- The company's order backlog extends into fiscal year 2025, providing strong visibility for future demand.
- The company expects to increase its gross profit margin in the BDS segment compared to the previous year, while the engineering segment will see a slight decline.
Stevanato Group (EXCHANGE:STVN) operates in growing markets, particularly biologics, and has a strong presence in areas such as GLP1, monoclonal antibodies, and mRNA applications. The global pipeline of drugs in development is also at record levels, with a focus on injectable formats. The company is focused on executing strategic priorities to deliver sustainable organic growth and build shareholder value.
The company's in vitro diagnostics business has been slower to recover from the pandemic, but it expects normalization over the next few quarters. This business is seen as a strategic foothold to diversify into Drug Delivery System activities.
In the earnings call, the company also clarified that the change in order visibility is due to the nature of contracts rather than customers ordering far in advance. They also highlighted the increasing number of customers using multiple product lines and their focus on being a solution provider.
The company stated that they are not experiencing destocking in the Drug Containment Solutions segment and that they need to expand capacity to meet strong demand. The call concluded with no further questions.
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