Italy Based Stevanato Reports Mixed Q1 Earnings, Revises Annual Guidance On Temporary Destocking

On Thursday, Stevanato Group S.p.A. STVN reported the first quarter of 236.0 million euros, down 1% Y/Y, compared to the consensus of 237.17 million euros.

Adjusted diluted earnings per share were 0.08 euros compared to the consensus of 0.11 euros. Adjusted EBITDA margin for the first quarter was 21.4%.

Sales fell due to lower revenue attributable to glass vials in the Biopharmaceutical and Diagnostic Solutions Segment resulting from the ongoing destocking of excess vial inventories that customers accumulated during the pandemic and lower revenue from the Engineering Segment. 

Revenue from high-value solutions increased to 37% of total revenue in the first quarter of 2024, compared with 32% for the same period last year, driven by demand for syringes and cartridges. 

Lower revenue from EZ-fill vials unfavorably impacted the mix within high-value solutions in the first quarter of 2024.

The gross profit margin for the first quarter of 2024 decreased to 26.4%, primarily due to the product mix resulting from lower revenue from EZ-fill vials. 

The operating profit margin decreased to 10.7%.

Biopharmaceutical and Diagnostic Solutions Segment revenue grew 2% to 198.9 million euros (2% on a constant currency basis).

Engineering Segment revenue decreased by 13% to 37.1 million euros. 

CEO Franco Moro stated, “Industry-wide vial destocking was more pronounced than expected in the first quarter, especially in our more accretive EZ-fill vials. While we believe this is a transitory situation, we now expect a more gradual recovery in vials, with orders beginning to pick up at the end of 2024 and into the early part of 2025, with bulk vials expected to recover first. This, coupled with the postponement of expected orders related to a large customer has caused us to take a more cautious approach to our 2024 guidance.”

Guidance: Stevanato is updating its fiscal year 2024 guidance, with revenue of 1.125 billion euros-1.155 billion euros, compared to a consensus of 1.186 billion euros and prior guidance of 1.18 billion-1.21 billion euros.

The company forecasts adjusted EBITDA of 277.9 million-292.2 million euros compared to prior guidance of 314.1 million-329.5 euros.

The company sees adjusted EPS of 0.51-0.55 euros compared to the consensus of 0.62 euros and prior guidance of 0.62-0.66 euros.

The company maintains its mid-term targets for fiscal years 2025 to 2027 of low double-digit revenue growth.

In 2027, the company expects a share of high-value solutions of 40%-45% of total revenue and an adjusted EBITDA margin of approximately 30%. 

CEO Franco Stevanato exclusively told Benzinga, “Stevanato Group has updated its guidance based on the temporary destocking and assumes a postponement of expected orders for high-value solutions for a large customer that were forecasted to be shipped in 2024. This was due to a change in the customer’s commercialization timeframes, but nevertheless, we have removed the forecasted orders from our guidance.”

“Despite these factors, we remain confident about our long-term prospects, and we remain on the right path to achieve our near-term targets in 2027,” the CEO added.

Price Action: STVN shares closed at $26.92 on Wednesday.