The habit of extraordinary numbers can make a slightly subdued first quarter a little more annoying than it should be for Stevanato Group. In reality this is a reduction in revenues of 1 percent (0.4% at constant currency) to 236 million euros, with a slightly more significant drop in margins. If it weren’t the Venetian group listed on Wall Street (and worth over 8 billion dollars on the NYSE), world leader in containers and drug administration systems, these numbers would probably be read as a sign of stability. It should also be said that on the basis of these first results the group has decided to revise its growth estimates for this year. The company has reduced its guidance for the financial year and expects revenues of between 1.12 and 1.15 billion euros (compared to the previous estimate of between 1.18 and 1.21 billion euros); and margins (adjusted EBITDA) between 277.9 and 292.2 million euros (on the previous estimate between 314.1 and 329.5 million euros).
The change, explains the note, is due to lower revenues attributable to glass bottles in the Biopharmaceutical and Diagnostic Solutions segment due to the currently ongoing reduction in stocks of excess bottles, accumulated by customers during the pandemic as well as lower revenues in the Engineering segment .
Stevanato had already communicated that the quarter would remain along this line, warns executive president Franco Stevanato, commenting on the results. «In recent years – he adds – the company has recorded strong growth in the sector of high added value products, which continues. In 2020, in addition to this growth, the COVID-19 pandemic generated significant demand for bottles, and to address this demand, we built a value chain that also anticipated growth in this sector. Pharmaceutical companies had strong demand for both vaccines and other drugs, but the decline in Covid-related demand was faster than expected, causing excess supplies of both vaccine bottles and other therapeutic areas.” . Thus, growth of around 9 percent was forecast, Stevanato further explains: «We had not estimated such a low demand for the bottles, which reduced the growth estimate to around 6%. In 2024 it will be a bit painful because around 50 million euros will be missing, but in our strategic areas, where we are making investments.” Capital expenditure for the first quarter amounted, in fact, to 71.9 million euros.
The objective after four consecutive years with the turbo (from 2019 to 2023 the group more than doubled revenues) “is now to increase the level of efficiency”, explains Stevanato again.
«Once customers have re-stabilized their inventory levels, this segment will resume growth. We are still managing the last phases of the adjustment of the warehouses” explains Stevanato again. For a return to normality in this segment, we expect the end of 2024 or the first months of 2025. «Our story is one of growth, supported by important programs with our customers. This trend will continue, bringing double-digit results” concludes Stevanato.
