Oh, yeah. And I've ended the week after a lot of, Oh, I see the countdown going, so we're live. Thank you, everybody, for joining us here at the UBS Healthcare Conference. I'm Dan Leonard, the Life Science Tools Services and Diagnostics Analyst at UBS. And we're happy to be joined by Stevanato Group for our next fireside chat. Franco Stevanato, the CEO; Riccardo Butta, President of Americas; and Lisa Miles with Investor Relations. Welcome, all of you. Thank you. Thank you, Dan. We're coming out of earnings season here, so I figure the best way to start off is maybe, Franco, Riccardo, whoever wants to take it, could just offer up the key highlights from Q3 results. Practically, in the Q3 result, there were some strong, positive elements in this quarter because we started from the greenfield plants that we are, is one of the most strategic investments that we are doing at Stevanato Group. We continue to progress in terms of validation with our customers and also to installing new high-speed line in all our plants, both in Europe and in Fishers. And also, the greenfield plants that we have in Latina turned profit in terms of gross margins this quarter. And for what is related to one of the major challenges that the industry was affected in 2024, related to the destocking, we are starting to see positive signals from the market, in particular for certain small customers that have reactivated more regular order in the second part of 2024. A big international customer that has started to share new forecasts for 2025, so all overall, this quarter is moving in the right direction. Dan, if I may, as a reminder, we were able to grow 2% on a consolidated basis despite a 38% drop in revenue from vials. So even though we are managing the destocking headwinds, we continue to see growth across the rest of the product categories, particularly in high-value syringes, IVD, and DDS as well. Correct. We are building capacity, in particular on Nexa syringes with our customer, Alba syringes with our customer, syringes with bypass, and cartridges ready- to- fill. Also, we are active in two big programs for the auto-injector space that will help us to deliver revenue in the next years from now. Okay, so an active quarter on the business development front? Correct. Franco, that comment that a large international customer has shared a forecast for 2025, you know, how meaningful is that? Is that standard course of business at this time, or is that something you're really looking at as a positive signal? Correct. Usually, we see the way that we work with our customer, that we have the multiple year contract, then we have the 12-month forecast and the one- or two-quarter confirmed order. When the customer is small, they have the tendency to confirm one quarter. When the customer is international, like I say, or more complex for our international customer, our customer that they are in the different therapeutic drugs, they have different plants spread in the different region all around the world, in particular in Europe and U.S. This customer, they are starting to reactivate. They are soft in demand still in 2024. But when we share the new forecast for 2025, in particular the quantity per quarter, we are starting to see positive signal. So what is the message that we would like to pass you? We are not back to normal, a pre-pandemic situation, but all our customers, they are starting to increase their forecast on a quarterly basis. Okay. Yeah. Then if I can add a bit of color here, of course, we talk to customers on a daily basis, right? And when you talk to these big global customers, besides the forecast and the projections, we clearly get some more reading and intelligence into what is going on with their inventory levels and so on. And we start to see them really going back to what is considered normal. In some cases, even they went a bit overshooting and going low with the inventory levels. And so I think the signals we are picking up, yes, small customers is easier, and they have much better visibility on their inventory levels, but also with the big ones, we start to see some good trends. Okay. And that actually dovetails well with my next question. I was curious from a destocking trend perspective, if the trends were any different between small customers, large customers, customers that were COVID-heavy versus those that weren't. Are there any meaningfully different trends amongst the different customer cohorts as you evaluate them? Small customers are already placing more regular orders in 2024. Bigger customers that also have the vaccine production in their product portfolio, they are more sharing if they are soft in demand in 2024. They are sharing the forecast in 2025. We see that quarter by quarter, positive signals they are going in the direction to be back to pre-pandemic situation. Just to give you some order of magnitude, the vial market has the size approximately of 13 billion units consumption per year. It is growing approximately 2% per year. Today, most of these customers, starting from end of 2020, 2021, they built a huge inventory. They built approximately one year of inventory for all the therapeutic drugs plus they built inventory for COVID treatment. We are using all the 2023, 2024 to today to go back to sort of normalized situations. Got it. I think the difference between the big ones and the small ones is the small ones, they have one, two sites. And so it's a much easier job to have the inventory under control. When you talk about big customers, global network, they have a lot of nodes, and not always they have an integral view of where the inventory sits. And that is what made their life a bit more difficult over the past quarters. Okay. Yeah. Franco, you talked about the greenfield plant in Fishers having generated its first revenue. How would you characterize the inbound customer interest you've seen in that facility in comparison to your initial expectations? Actually, very high. Meaning, when we started to build that site, we had a few customers in mind, actually a customer that came to us asking for a solution in the U.S., a domestic solution. But since we started to bring it up and to talk about it, we saw a much higher level of interest than we expected, both because of where the world is going in terms of the regional trends and wanting to be in the region for many reasons, on the supply chain, on the cost, sustainability, everything, but also because of this uptake in the biologics space. So clearly, there is a lot of demand in the market today. And people want to have a solution that is based on multiple nodes. So they. Correct. Way of having set up in U.S. serving the U.S. market is of great interest for customers. Okay. If I can add a little bit, more color. Please. When in 2020, many U.S. customers, they ask us to become domestic in the United States because they say, we used to validate our Italian plants for a high-value product, in particular for Nexa, Alba syringes, vials ready- to- fill. They say, "Okay, Stevanato, we want to become domestic because we, if the big growth, it will be there." So today, there are some positive effects. We have decided to list the company in New York and to reinvest most of the proceeds in the U.S. in order to become domestic in the United States. So this was very well appreciated by our customers. And the fact that we are building a campus in Fishers that is quite unique because in this campus, we can do bulk vial, ready-to-fill vial, EZ-fill product, auto-injector. It is really a campus that can offer the full integrated solution for our bio customer. So this has helped even more to give the perception that we are the right partner for the U.S. market based in U.S. Okay. Is it possible to track anything like, you know, a capture rate or better somehow quantify the implications and the impact that it's had on your discussions with customers in the U.S? Capture rate, I don't even know what the definition is, but what I can say. I only heard that term recently as comparing. All right. Maybe offline we speak. No, but what I can say is that when you look at the capacity that we are going to have installed in Fishers across all the products that Franco mentioned, already today, we see a very good coverage. Okay. Very good coverage, right? So that is giving us a lot of optimism for the future of the site. Yes. also here, the investment that we are doing in Fishers for high-value product, also the investment that we are doing in Europe for high-value product. Most of this capacity that we put in place is already covered by long-term contracts with our customers. And if you look also at our business model, our value proposition, we have in the U.S. one tech center in Boston where we approach our customer early stage, and we offer immediately our integrated solutions to both big bio customers and small new startups. And then when we go commercial, we show immediately our plants in Fishers. So this helps to immediately go to all our existing U.S. customers to deliver the program from now to next two to three years, but to be involved in their new program from now to the next 5 to 10 years. Today, we are deeply involved in new program for high-volume cartridges, high-volume syringes, sophisticated Alba technology, and also program auto-injector. So where we'll not be delivering revenue today, but we are doing the validation stability right now for the next years. Make an example of comparison. We were involved in GLP-1 by our big insulin customer eight years ago, and we are starting to build a huge capacity right now. The fact that we have our tech center based in Boston, and now we have this new hub based in Fishers, we are going really to continue to invest in the long term, also beyond the next two, three years. Okay. If I can say one thing, this setup we have in Boston, I think, is critical because it's a way to pull customers in early stages and somewhat be designed into their solution when they go commercial, but is also giving us a lot of visibility ahead of time so that we can plan our capacity ahead of time, right? It's not that we are at the last minute getting a PO or a contract for a customer, and we scramble, right, to bring it up. We have five, seven years of notice somewhat. Okay. I mean, is it fair to say in your business, you typically have a lot of visibility and a lot of long-term visibility? And the period we're coming out of now is the anomaly more than anything? Correct. This, the destocking isolated to vials was a surprise for all the industry. If when you deliver to pharma customer, primary packaging is the primary container that is in contact with the drugs. It's in the interest of the pharma company, even more in interest of the patient. Let's say assume that on vaccine, on insulin, on anti-cancer product, customers sometimes used to purchase several hundred or billion of primary packaging every year. And we had to produce from several plants of Stevanato Group and to deliver it to many plants of this pharma company. The priority number one for the pharma company is to secure the product because they cannot have any risk to don't do the injection to a patient. This is the reason why. Well, we can say that we are in one of the most safe industry where the forecast is the priority of the market. COVID was just again, like I say, a surprise for everybody because immediately we build huge stock build for COVID and non-COVID therapeutic drugs. And today, all the industry were facing a sort of destocking issue. But it's really something exceptional never happened before in the past. We never had such experience. Okay. So truly a one-off. And, another item that was talked about a lot on the third-quarter call is the restructuring in your engineering division. Can you give us an update there? Yes. If you allow me to go back on 2020, 2021, so this company engineering division is strong because it is a market leader on glass forming, is a market leader in inspection system, and also market leader in assembly technology. This division more than doubled in the last three years. In the middle also of the COVID, if I don't know if you remember, in 2022, 2023, there was a big supply chain shortage of electronic component. So practically, we increased revenue complexity. We launched also new high-speed line in the Denmark plant. What happened in 2023? In particular, in the plants located in Denmark, we faced a big increase of order of inspection machine and this assembly technology, even more the new generation of assembly technology for auto-injector. This have caused to us a congestion and some delay on delivering this line to our customer, in particular for sensor sophisticated product. So practically, what we have done today under the leadership of our new COO, we have done an optimization plan in order first to face the temporary challenges. Temporary challenge are delivering the line to our customers in order really to do the full acceptance test in time. The second action that we put in place, we wanted to review the size and our footprint. Today, most of the inspection technology sitting in Denmark, we are going to increase our capability also in Italy in order to have two locations that can both produce each product. So these are the two big action that we do. We perform so what we call a one-time investment in order to increase this size and further streamline our supply chain in order to reduce the cost of this line and to do much more revenue marginality. Okay. Today, we are on track. What was our target in Q3? We are on track. We deliver some handful number of line. Our goal is to use the next Q4, Q1, and Q2 next year to go back to the normal marginality. If I can add another also market perspective of this division, this engineering division have a high expectation of growth because the pharma market is strong, the demand in particular of assembly technology, because there is more and more increasing demand for auto-injector. And this type of technology that we serve to our major customer is perfectly fitting. And also in terms of inspection machine, the fact that we have this particular technology on inspection, there is more and more growing demand on inspection machine. I want to add one thing to this one. It's not only about the market growing, but when a pharma company decides to buy your technology, install that machine in one site, typically that becomes the standard for the company. They don't want to have different technologies, different suppliers, different machines within the same site or across site. They want to have one standard, and so what we are seeing, and we will continue to see, are repeat orders because they want the same technology deployed across the entire network, so that gives us a lot of confidence that once we have gone through this improvement plan on the execution side, the demand continues to be there and strong. Okay. I mean, has anything changed in your view on the strategic importance of coupling the engineering division with the rest of your business? No. Because we watched this engineering division through two angles. One is a business unit that is growing, performing, generating good marginality. And for each product we produce, we are always on number one and number two. So this is. We have strong leadership position. But even more, what is important is that the internal we call internal engine of Stevanato Group. What does it mean? For example, we win today a big contract for multi-hundred million cartridges ready- to- fill that we have to deliver to our big customers in the next years. All the new technology of high-speed washing, siliconization, new type of sterilization, and assembly is developed by our engineering division. So the fact that since decades we developed the technology for us is building a sort of competitive advantages in terms of productivity, quality, and also fast to market. At the end of the day, we can gain faster and more contracts. This is valid for the glass. It also is valid. We can also replicate this on our auto-injector because most of the time the technology that is developed by the internal engineering division. So we consider this like an internal competitive advantage. And then another item from the Q3 call, you showed that illustration of the time scale on when a new plant becomes break-even and profitable and then very profitable. I've gotten questions from investors around where does Fishers sit along that curve and how quickly is Fishers gonna ramp? I don't know if there's any kinda color you could offer on that, and if there's. That's a good question. Clearly, we are trailing compared to Latina. Latina, first of all, was a brownfield. So when you do a brownfield, you get to revenue faster. Fishers is a greenfield. We had to start building the site before being able to bring in clean rooms and lines and everything. And also when you look at the scale, it's two different scales. So Fishers is a much bigger setup than Latina. So it will take longer for us to fill it with lines and go from there to qualification and validation with customers. We started to ship commercial volumes already Q3, which is a great milestone to achieve. We will continue to deploy lines through the end of 2026, syringes first, and then vials and injectors with the idea to start really utilizing the site, in full, 2027, 2028. At that point, clearly, it will create a lot of value, but it's going to be a process for the next several quarters. Okay. So, the capacity will be fully established in 2026? By the end of 2026, it will be fully deployed. In terms of capacity, then you have to go through validation with customers, which takes time, and then you ramp. And so it's going to take. I think we will get into 2028 by the time we are completely utilized. Okay. Correct. Another question I often get is, what is the, you know, CapEx for Stevanato look like post-Fishers? Like, when does it get back to a normalized, capital spending level? We are facing this 2022, 2023 to 2024 big CapEx cycle. Also in 2025, we have a program of investment because we are driving the capacity. It is also true that the big building between the brownfield in Europe and the greenfield plant is already done. Our goal is to go to a sort of normalized situation in 2025 to 2027. The big comment there is, when you look at our network, there is more than Latina and Fishers in the network. Sure. There is capacity available in other locations. Capacity meaning space that we can go and utilize for bringing up additional manufacturing lines to say that we can continue to expand and grow volumes without going through heavy investment as we have done so far in those two sites because the buildings are already there. We just need to bring in the lines. Okay. A somewhat related question. How do you see margins developing over the next 12 to 18 months? Yeah. So I think as we, we've continued to highlight, we would anticipate that margins will continue to expand as we grow our high-value solutions. And so if you look particularly in the fourth quarter where you see a big step up in margin, that's predominantly driven by an increase in high-value solutions of committed orders that we already have in our backlog today and obviously volumes on that as well. But also keeping in mind that as Latina progresses and we benefit from economies of scale and as Fishers continues to improve, grow revenue, and also gain efficiencies, that should obviously help margins as we go into 2025, 2026. And as we think about 2027 with our target Adjusted EBITDA margin of 30%, we think of things such as, by the time we get to 2026, vial destocking should be in the rearview mirror. We should return the engineering segment to profitable growth. And obviously, the economies of scale that we will see generated out of Fishers and Latina. So as we think about that long-term trajectory, those are the three main components and obviously growth in high-value solutions that will drive that margin expansion. Okay. And just a point I wanna touch on there, Lisa. You mentioned destocking is in the rearview mirror in 2026. And, and so it is your view that destocking is still a theme as we roll into 2025? For sure. And we've already said that as you look into 2025 at the moment, the greatest swing factor to growth for us will be the pace and recovery in vials. And so I think, as Franco and both Riccardo have mentioned, we are all cautiously optimistic. Mm-hmm. And we are starting to see positive signals in the market. But at the current time, I think that a cautious stance is warranted. And then once you hit that 30% Adjusted EBITDA margin, what's the natural margin lift annually from the mix shift to high-value solutions over time? What type of tailwind is that in aggregate? So that's not something that we have shared. Okay. But we can take that away and look to see if that's a useful disclosure. I've got 75 basis points a year on my note card here. I'm not sure where that came from, but maybe it was a planted number. In terms of then the other drivers of, you know, your long-term growth outlook, I'd love to touch on them one by one, so first off, GLP-1s. Can you remind on the total exposure Stevanato has to GLP-1s and how important is that therapeutic category to your growth? Yes. We start to be involved by our insulin customers many years ago. In particular, it was through new requirement around syringes, Nexa, in particular, syringes with bypass, bulk cartridges, and cartridges ready- to- fill. This is what's related to our BDS segment. In parallel, we receive order, repetitive order for high-speed line for assembly from drug delivery system, where on GLP-1 we are involved today with the long-term contract with our customers. There is one point I want to make on GLP-1 because I think in the mind of people, there is this almost one-to-one linkage between GLP-1 and obesity. And so everyone is concerned what is going to happen if someone like a patient, which is almost like a consumer, right, is not continuing with the obesity therapy. In reality, more and more, GLP-1 is being planned for other therapeutic areas. You talk about cardiovascular, sleep apnea, bone density, osteoarthritis. And so that market is going to grow irrespective of what happens with obesity. And so for us, what is important is to be with the customers that have that technology in their portfolio. And whether obesity goes up or down, oral may be a factor or not, but we are going to continue to have substantial growth with that product. You know, another topic, the revision to Annex 1 in Europe was finalized a year ago. How would you frame the importance of that regulatory framework to Stevanato as a growth driver? We already are working together with our customer, and our EZ- fill configuration, particularly for vials and cartridges, is going exactly in this direction. Today, if you look at the main goal around the new requirement of Annex 1 is really to enhance the sterility of the drugs for the patient. So all the process of the pharma company, all the process of the partner, the supplier, the pharma company have really to put in place a process that can really reduce any type of risk of sterility. And EZ- fill technology is going perfectly in this direction. The fact that you can deliver to customer this vial in a glass-to-glass configuration where the customer is just going to open the nest and tub and to do the filling is the best way. Today, if you look at the traditional process of the pharma company, it's the nesting, handling, washing, siliconization, and tunnel for sterilization. There is a lot of metal contact with the glass. This is where the process has to face some improvement. So this is why EZ-fill is the right answer to this new requirement. In fact, it's where most of the pharma company, when they started to change their process, they go immediately with this, what we call flexible technology for filling. From an engineering side, like I mentioned before, we have this new inspection machine that have particular capability through particular algorithm to detect any type of cosmetic defect also in the drugs. This also can help to reduce any type of false rejection rate and any risk that in the glass there are some leaks, chips, and cracks that can allow the passage of oxygen and to lose the sterility. So, we are proactively working with our customers today. Okay. And maybe this is the time to ask about the importance of vaccines to your growth algorithm. It's a question I've been getting more and more over the past week specifically. Yeah. So if you look at revenue in fiscal 2023, revenue from vaccines was approximately 11% spread across the geographies, you know, especially in EMEA. And so as we think about the Trump administration coming in, I think it's early to speculate. We need to see what the appointments look like. However, on Wednesday of last week, after the election, the transition team did say that they're not really in the business of looking to, say, entirely limit vaccines. And if people wanna get vaccines, that's their prerogative. So I think we need to see how things play out. But I think from a U.S. perspective on vaccines, somewhat limited exposure. From my small side, I have four kids, four grandparents, so I already performed vaccination to all of the same day in order to do my small contribution to. Is that 11% a global number? It is. You mentioned. Yeah. Okay. Yeah. And we do report that number each year, and it will be in our 20-F again this year. Yeah. I'm sorry. It'll be under what? Our 20-F, our annual SEC filing. Got it. Okay. Well, maybe with five minutes left here, we'll go. I have a couple of more esoteric questions. You know, we cover West Pharma as well, and they have a relationship with Corning on aluminosilicate glass. And I think you have borosilicate glass. And not to get into all the technicalities of different glass types, but you know, just how should investors consider any evolving competitive dynamic among different glass suppliers over time? Any comments? So we have, by the way, collaboration in the industry is quite common. So sometimes we do partnership with Thermo Fisher, sometimes also we do, for example, we license our EZ-fill technology also to our competitor. Today, what we see, we have used to have also collaboration with Corning in the past when they launched the new Valor technologies. And also, we have a very active, intense collaboration with West because when we are in a new program, we supply the syringes, and they supply the container closure. Today, what I can tell you, based on our type of exchange with the market, we don't see that our product going in competition to this partnership. It's very rare. We never had any chance to see this partnership competing with us. Usually, on syringes, we'd compete with Becton Dickinson, and on vials and cartridges, our main competitor is Schott. Okay. You know, another niche here question I have here. There's been a lot of interest lately in, you know, bypass versus dual chamber syringes. So could you please remind me of Stevanato's competitive position? Yes. We start to develop this technology for our main customer both through the engineering division because we developed for us and also for our competitor the glass forming for dual chamber vials, dual chamber cartridges, and today dual chamber syringes. So we are active through our engineering division to deliver this line both to us and to our competitor. And we have a market leadership position since more than 20 years. Usually, customer is purchasing this type of primary packaging when he had to store liquid or powder or liquid and liquid separately, and they just mix before the injection. In the last years, we see that both on cartridges from 1 ml to 5 ml, also 10 ml, 10 ml sometimes, syringes from 1 ml up to 5 ml, more and more are requirement for bypass EZ-fill product. It's where today we are building up capacity both in the plants of Latina and the plants of Fishers, huge capacity today for syringes with bypass. Okay. But if I can add, our manufacturing lines are modular. So to do the bypass is about adding one more module to the line and pulling it out if you don't need bypass. So we are not introducing rigidity into our system. We are simply deploying one more module as long as it is needed. But there is a lot of flexibility in the setup. Okay. If I can maybe summarize a little bit also, Lisa should already share with you. 2024 was a challenge for Stevanato for the industry, and also we have some painful headwind that obliges also us a couple of times to review our guidance, but what is important to reassure that are some temporary headwind, like vial destocking. We are in the big heavy cycle of investment of these two greenfield plants. It was already planned and shared with all our investors. They said that it was one of the most intense years, and also in the engineering division, because of the increased order that we receive from our customer, we have to lose some revenue, also a little bit of marginality, but if you look also beyond 2024, 2025, beyond 2026, the vial destocking, it will be behind. We will gain a lot of benefit from this greenfield plant that we are building for our customer. The engineering segment at the middle of next year to be back on track. The market landscape where and the environment where Stevanato is working to work the next 10 years is amazing. Biologics is growing 15%. Pharma is growing high single digits. All our value proposition is well perceived by our customers. We are optimistic and enthusiastic for what we are doing. Also, we are going to confirm that in 2027, our 30% of EBITDA and our percentage of high-value solution, the range of 40%-45%, is going to be confirmed. Final question in the last minute here. Any change in dual sourcing from your customer's perspective as a result of the pandemic, wanting to diversify supplier risk or anything along those lines? Was already in their strategy to have all dual sourcing. Okay. Still today, they are doing what? Maybe they have further reinforced the requirement to have a partner with a geographical competence well spread, so Europe, they want to have all the full capability. U.S., they want the full capability, so on the top 12 double source, the partner must have a global footprint where it can really serve the same product from different location. Okay. Well, your expansion in Fishers then was very well timed. With that, we'll, we'll leave it. Thank you, Franco, Lisa, and, and Riccardo. Thank you all for coming. Good afternoon. Thank you for your time. Thank you, everyone. Thank you, Dan.