Stevanato Group S.p.A. (NYSE:STVN) Q4 2022 Earnings Call Transcript

Patrick Donnelly: Okay. That’s helpful. And maybe one for Marco on the margin piece. Can you just talk about your expectations for 2023 how this will progress this year and then also as some of this capacity comes online how we should think about the margin profile of that revenue just kind of thinking longer term as these things came online with those nice margin opportunities. Maybe talk 2023 and then a little longer term as Fisher come online. Thank you guys.

Franco Stevanato: Thanks, Patrick. So, for 2023, our plan is to expand further the margin in both segments in engineering and BDS. Without BDS we’ll begin the main driver will be the shift into our high value solution. Now we are guiding between 32% to 44% of high value solutions on total revenues. On the other side, you are right, the margin expansion in BDS will be temporarily tampered by the startup cost in Fisher and in €“ because to secure the success of the project we need to put people and cost in place that will be for 2023 more than proportional compared to the grow of the revenue. What we expect for the future is obviously the investment in high value solution is to further expand it soon as the revenue generation will be normalized compared to the infrastructure and the costs.

Patrick Donnelly: Okay. Thank you guys.

Lisa Miles: Thanks, Patrick. The next question please.

Operator: The next question is from Derik De Bruin of Bank of America. Please go ahead.

Derik De Bruin : Hi, good morning. Thanks for taking the questions. Just expand a little bit on what Patrick just asked. Specifically on the gross margin, how should we think about that going from Q1 to Q4? Just is it that any sort of like color on just like €“ you expect to Q1 to be up from the prior year level in 2022 and then to grow up about, just some color on the pacing just kind of the moving parts?

Franco Moro: Yes we mentioned during the commentary remarks that we plan to grow the top-line quarter-after-quarter and we expect also to expand the margin going quarter-after-quarter because of the better leverage of our expansions and because of the greater in-store capacity in these high value solutions collecting the sample in the second half of the year.

Derik De Bruin : Okay. Great.

Franco Moro: And we actually we plan to expand our margin compared to 2022, so.

Derik De Bruin : Okay. Is that €80 million in COVID-19, is that a de-risk number for 2023? Basically it’s like what’s the conservatism in that. You came in a little bit stronger in the fourth quarter on COVID than we had thought. So wanting to know if that’s – that €80 million number, how to think about that?

Franco Moro: The 2% to 3% revenue generation from COVID is what we can see today. Obviously, it’s not easy to predict future revolution, but what we can see today is that level of revenues. Importantly, I think it’s excluding COVID growth that is expected to be north of 20%.

Derik De Bruin : Got it. And just one final one. You mentioned GLPs and mRNAs, can you give some color on what €“ how to sort of think about unit dynamics and incremental rvenue from that? I mean, basically if you are thinking about a GLP1, what would be a average sort of like revenue contribution from a typical components just selling into it. How should we think about this in terms of revenues stepping out of from a unit cost basis?