There we go. Hi, good morning. Dave Windley with Jefferies' Healthcare Equity Research. Appreciate your attendance and interest in our conference 2025. We are on kind of the home stretch here on Thursday. Our presenting company for this session is Stevanato Group. Here to present for them is the company's CEO, Franco Stevanato. He has just a few slides and is going to give some prepared remarks to kick off, and then we'll jump into Q&A. Thank you, Franco, for being here, and I'll turn it over to you. Thanks very much. Thank you, David, and thank you, Jefferies, to host the Stevanato Group at this event. We have prepared three slides at a high level in order to explain who is Stevanato, what do we do, where we are specialized, and even more, what were the track record that we have done in terms of number, and even more, the future of Stevanato. In this slide, we try to summarize our value proposition. Stevanato is a company that is present in the industry for more than 75 years. Even more, in the last 30 years, we have tried to focus our competence for only our pharma customer and biology customer. We try to put in place a particular, what we call integrated value proposition. At a high level, in Stevanato, there are two main divisions. One is the BDS segment that covers approximately 85% of the revenue of Stevanato Group, and the other division is the engineering division. What is important to underline is that if you are going to look at the BDS segment, we put in place a product portfolio that is fully focused, dedicated for everything that is injectable for the pharma company, like the vial, the cartridges, and the syringes. Also, more and more, we are developing particular IP through what is called the drug delivery system, like the pen, auto injector, and wearable devices. On the top of this product, in the last years, we have had a lot of research and development, and we have developed some particular IP that we are selling under the umbrella of all EZ-fill or high-value product in order to sell more value to our customers. For example, under the umbrella of the EZ-fill platform, we sell the same cartridge, vial, syringe with already washing, siliconization, sterilization in order to enhance the client to outsource to Stevanato what is not anymore core business for them. Also, in parallel, we are going to develop some IP around the auto injector, the wearable devices, and the pen in order to sell the full system where the client is going to purchase the cartridges, the syringes, and also the devices. If you're going more on the right side of the slide, you see also our competence of engineering. Stevanato, for our pharma client, is not only focused to serve the container or the device, but also to serve the inspection machine and the technology for assembly. Because there is more and more in the pharmaceutical industry, the requirement to upgrade everything that is around the inspection system, even more, there is an increase in demand thanks to what is related to biologics and is related to the self-administration for high-speed technology for assembly. In order to combine all these important ingredients and to be perceived like one integrated solution provided from the pharma customer, we have developed what we call tech center in Stevanato Group. We have one tech center in Europe and one tech center in Boston that is supporting the client at a very early stage in order to file and develop the tailor-made process, product, and service for them. This is very important for Stevanato because we are filing in our FDA the drugs. This is practically our value proposition. We are fully focused, laser focused in biologics, laser focused in injectable, and also for what is related to the future molecule of our client. Number, we have a good track record. If you look at this slide, in the last five years, we were able to more than double more of our financial KPI. The revenue doubled in the last years. Also, the EBITDA increased. Even more important KPI is the high-value product. They moved from 17% to 38%. Also, the EBITDA reinforced also in percentage. Also, in a period inside of these five years where there was a big up and down of the COVID. If you look at the CAGR, all overall, we are 15% CAGR on the company. That is perfectly consistent with the last 25 years of the company. This is giving us a good indication if you're going to cross the investment that we are putting in place in the next years compared to the trajectory of the contract that we have in the customer can be a good indicator to prove that we can stay in the double-digit growth also in the next years. The starting of 2025, starting in a positive way, we have a good momentum because we see that the demand from outside is robust, practically not our product category. The pharmaceutical industry is really active. We see more and more consolidation on the vial demand because we come from practically two years where the demand for vial was extremely soft due to the COVID because the client built more than one year of stock in the last year. We see consistent improvement and signal of improvement in terms of ordinary partners. What is important to underline and the reason why we have done the IPO in New York in 2021, the big investment that we are doing, that we are heavily investing capacity in Italy, but even more with a big investment that we are doing in Fishers because we are investing more than EUR 500,000,000 in order to become domestic for our U.S. client, we are on track. All the lines that we are installing are on track. We are performing a very robust program of audit and validation from our client. The plant of Fishers is already working in five-seven working days, 24 hours, is a visible contributor to the revenue growth in 2025 for Stevanato. It is starting to generate positive gross margin in the second part of last year. Fishers, that is a little bit behind because we started development practically three quarters behind compared to Fishers. Latina is on track. We have done approximately 12 positive audits in the first part of the year, and this is strictly connected with the ramping up with the capacity. This is fundamental investment that we are doing that if we succeed, we change the DNA of the company, are on track. Last point, I was looking to show you the footprint. Why is it important to show the footprint? One of the reasons why the client is looking to work with a company like Stevanato is because they want to have one quality in all the plants. They want to have the same technology, not compromise on the investment for the quality of their product. Even more, they want to have a very well-spread footprint in a different region of the world. It's exactly what we are doing. We start from Europe. Now we are starting to replicate all the capabilities of the States, even more now through the campus in Fishers in Indianapolis. We try to replicate to our client the full capability. From this campus in Fishers, we can serve not only syringes, Nexa, we can serve also vial, vial-to-fill, and now we are starting to introduce the competence from the device in order really to approach our client in the holistic way. We try to really to be one spot shot for all what we are looking for injectable. Exactly the approach that we are doing, we will do in the next years. Thank you. Great. Sorry about the noise there. Thank you, Franco. I wanted to start there on the capacity where you left off. You talked about and have talked about Latina crossing break-even in the second half of 2024, right? Can you give us a sense of how productive is the Latina site? How much revenue do you generate there? Or what is your relative level of utilization? How much growth room do you have in Latina to start? Today, Latina is a visible contributor to the growth of Stevanato in the first quarter. You will see during the year because we are starting to introduce this line. Practically, all the lines that we are installing, they are starting to work in 24 hours, seven working days, and it is also generating a lot of positive gross margin. David, it's not still accredited to the EBITDA of the company. We need maybe a few quarters, maybe the second part of next year because we need to add other lines in order to achieve a certain EBITDA target like what we have in Piombino Dese. It is on track, and we have further space to expand the syringes. On top of this, I would like to share with you that we have approved a further expansion in Latina for adding at the end of 2026, beginning of 2027, a high level of production for cartridges-to-fill. We win a big contract in order to install in the next years several hundred million for capacity for cartridges-to-fill for one big client. Also in parallel, we see more and more a lot of attention and requirement from our pharma customer for cartridges-to-fill is application between 3 ml, 5 ml, and 10 ml for what we call large volume on body devices. Today, Latina in 2025 is going to be a big contributor on revenue, but in the next year, it will be one of the important contributors for all the BDS segment thanks to the syringes and the cartridges production that we're putting in place. Okay. I want to make sure I got a few details there. So cartridges, that line capacity you said would come online at the end of 2026 or early 2027? We will install it in 2026. We will do revenue in 2027, beginning of 2027 with a sort of ramp-up phases. Okay. And that to serve cartridges and for a contract that you won that you will supply 700 million, is that? Several hundred. Several hundred million. Is that total or per year? It will be progressively because we will install several lines year by year. When it will be up and running, it will be per year. Okay. And so then zooming out on Latina, order of magnitude, how many lines, you said all the lines that have been installed are operating. I think you said 24/7. Yes. How many lines is that and how much more room do you have? How many more lines can you put in Latina? We have further capacity to expand other high-speed lines for syringes. We don't disclose, but there is some good space to further increase the capacity on syringes. Just to make you an example, Fishers, when it will be up and running at the end of 2028, we are talking about an estimation revenue of EUR 500 million. The combination in Latina between syringes and cartridges at the end of the game, at the end of 2028-2029, will be not so far in terms of size, a little bit smaller, but with this add-on for cartridges-to-fill, also Latina is going to be visible in terms of revenue. That's intriguing. The EUR 500 million, are you willing to size what Latina will be at full ramp? Smaller than EUR 500 million? Fisher, at the end of 2028, we target that it will be EUR 500 million investment that will represent EUR 500 million revenue. Latina is a smaller investment, but with the add-on of the cartridge, it will be not so far at the end of the cycle to Fisher. It will be smaller than Fisher, but much more relevant to our original expectation. Yeah. Okay. So let's transition to Fishers. I think you said Fishers is approximately three quarters behind in its ramp relative to Latina. For syringes. Taking consideration, Fishers is much wider spectrum because we are going to add also vial, and we are going to install device program. On syringes per se, we are talking about three quarters behind. Today, we have installed a certain number of high-speed lines. They are ramping up. Certain lines already started to be in, let's say, once they have done the validation, they're starting to run more on a regular basis. The others are still linked, connected to the validation and the ramp-up with the client. Okay. Because Fishers is so much bigger and you have these other product lines going in, can Fishers get to break even on syringes on these syringe lines that you've installed so far, or will it take more build out of more lines to get there? We would like to, at the end of the year, to start to be in positive terms of gross margin also in Fishers. This is the goal that we have more versus the end of the year. Okay. Just in terms of longer-term product strategy, I believe in Fishers, in your original plans, you had contemplated putting Alba syringe in Fishers. Is that still part of the plan or not anymore? Yes. We are going to have, we have already installed Nexa syringes technology. We will install syringes with double chamber bypass syringes, and we will install also Alba technology in Fishers because we have a big pipeline of U.S. clients that are going to adopt the Alba technology. We do not want to serve Alba only from Europe. We want to have also some high-speed line here in Fishers. Alba double chamber as well as just Alba single chamber? No. Alba single chamber and Nexa double chamber. Double chamber. Okay. Double chamber. Okay. Sorry about that. Let's think then about your growth drivers. Certainly, biologics broadly, injectable drugs, obviously, but biologics driving the high-value demand. How much of that is GLP-1 versus non-GLP-1? Talk about how important GLP-1 is to your future growth. We do not disclose the revenue related to GLP-1. We include the GLP-1 inside of biologics. For sure, GLP-1 will be inside of biologics, the star of biologics. It is one of the big pipelines that we have inside of biologics. We are growing a lot in biologics because inside of the BDS segment, biologics have represented in Q1 approximately 43% of our revenue in the BDS segment. GLP-1 is a big contributor factor. It will be a big contributor factor in the next years. It is also true, David, that today we are engaged with a lot of our, in particular, international U.S. clients that are validating our Nexa syringes, our Alba syringes, our cartridges-to-fill in all the pipeline of the product. Today, we see more and more requirement around U.S. 3 ml syringes where we propose either Nexa or Alba technology. We see more and more requirement when there is going to be certain sort of devices for cartridges 3 ml, 5 ml and ready-to-fill. The message is we try to maximize the success on GLP-1, but in parallel, we want to be validated in all the new programs that our U.S. clients have in phase II and phase III, and it is a very rich pipeline that our customers are sharing with us. While we're on this subject, so we're really talking about so far, I'm asking you about BDS drivers on biologics and GLP-1s. In your first slide, your integrated proposition slide, you talk about devices. You're adding devices capabilities into Fishers. Where are you in the maturation of your device strategy? Let me just stop there and keep it simple. Where are you in the maturation? In other words, are you still just doing contract manufacturing of devices, or have you landed some proprietary sales and devices? Our strategy on devices is we want to become in the next five, 10 years a visible player for our client because the market is growing. We are talking that if you are going to combine the forecast of our client in the next 10 years, we're talking about several hundred billion of additional capacity in devices. Stevanato, through our R&D department in Milano, have already developed a patent, the device on pen through our Alina devices, and we have already some active clients that we are building capacity for them in Germany. We already have a program around Aidaptus. It's a partnership that we have with Owen Mumford for our auto injector. We also have our IP on the Vertiva, is our on-body wearable devices. Our strategy is to own the patent and to propose to our client our patent for this type of drug delivery system. It's also true that in a very selective way, David, when one or existing via syringes or cartridges customers want to engage Stevanato to assign to us some program on auto injector or pen based on their IP, in a selective way, we are going to take some contract. For example, what we have done in Fishers, we started to serve Nexa syringes to this big U.S. client. Now we are starting also to build up capacity for them for two programs or auto injector, but they own the IP. Certain big clients, they own their IP, and they prefer to assign the construction in a CMO business model. In that particular area, in that device area, how much overlap, again, going back to the GLP-1 question, how much overlap do GLP-1s have and your client base have between BDS and your device activity? Is that a common driver between the two? In GLP-1s, we have only one client on auto injector. All the other clients that we have in between pen or auto injector, both through our IP or CMO, are outside of the GLP-1. Okay. So then thinking about the ramp, again, of device, I guess, in the GLP-1s, are you satisfied that your activity and devices has enough diversity to it that you're not overly beholden to one or two clients or one or two classes of drugs? Absolutely. The original goal, the original strategy for Stevanato on the device area is where there are syringes, there are cartridges, even more, the customer is going to do self-administration with the device, we must be the partner of choice. The goal of Stevanato, you can see in this slide, is to be the full integrated solution provider for the customer where it's not going to assign to Stevanato contract in the single component, but in the full system when there is the combination between glass and the devices. In a selective way, David, we took this big program on GLP-1, but the real strategy for Stevanato is to diversify the portfolio to many clients on the device area and with priorities through our IP. Got it. Let's focus a little bit on the current. Your first quarter outperformed revenue, particularly on BDS relative to our expectations. Can you talk about the drivers of that? Where are you seeing some uplift? Where does destocking stand? Things of that sort. Starting from the market, that is the positive news. The demand outside is robust in all the product category, and this is the right way. This is robust. I think it will be persistent also in the next years, not only 2025. The vial market, in particular, bulk market is starting to be versus a sort of normalization because we see more consistent order from all our clients, small, medium, big clients. We think that throughout 2025, we will go through a normalization. Normalization means that the annual consumption for vial is around 13 billion units per year, growing 1%-2%. EZ-fill technology for vial that is much more niche. We are in the range of a few hundred million. It's growing double digit. We are starting to see again this track record well spread to all our customers. This is another positive contributor. The fact that the greenfield plants that are starting to generate revenue and Latina also positive gross margin is helping to show more positive results in 2025 in order to go back to our trajectory, David, that we announced at the Market Capital Day in New York that the goal of Stevanato is to have the double-digit growth in the average next year and to target 30% of EBITDA in 2027 and to target 45% of revenue on high-value products. We are going to confirm this trajectory. Great. It sounds like the demand environment is improving. Given I do not want to go into tariffs too deeply on this question, but given the environment and potential tariffs, are you seeing customers alter order patterns to try to move inventory in advance of tariffs or around tariffs? No. What we have seen from our client, by the way, two months ago when we start to see this risk of tariff, we have proactively put in place a task force internally where we have people from procurement, from sales, from supply chain in order with the client to negotiate a surcharge or to negotiate a changement on the transport condition. By the way, again, we see a very fair professional approach to our client that they understand, like what happened two years ago with the increase of price of gas, that this is an external factor and we do not see issue to pass the surcharge. Also with our client, we start also when we can to replan production from one plant to another one in order to mitigate temporarily this product. Also because, let's say, in the next few years from now, the good news that the big plants in Fishers, it will fully mitigate practically all this risk of tariff. Now we are not going to speculate on these Fishers greenfield plants because the focus is to do the validation with a big client. When it will be up and running in a few years, pronounced, we can easily produce everything in the United States. Got it. You're not seeing, I don't know how easy it is to differentiate between these two, but as order patterns are improving, that is not being driven by pull forward of orders to avoid tariffs. No. Yeah. We do not see changement in the weekly ordering pattern. We do not see deviation. We see practically a sort of quarter-by-quarter normalization of the ordering. Got it. In terms of your task force on tariffs, your mitigation strategies, are those durable? You can mitigate in the near term. Do those same mitigations, can you continue to do that, presuming the tariff? Absolutely. Today, the procurement department is looking with all the suppliers to understand how to manage the situation, also because our supplier produces from several plants all around the world. With our supply chain, together with our client, we try to see how to put the production. For example, sometimes insulin we produce from four or five plants in Stevanato Group. Automatically, our sales department is talking about surcharge. I think it will be an activity that we continue to monitor through this task force also for the next few months since everything will be set. Got it. Let's move to engineering. Your engineering business has been working through some large, complicated projects. I believe your target to have those delivered is around the middle of this year, which is not too far away. How's your progress on that? We are on track. We have delivered many lines in Q1 and Q2, practically the most what we call critical line. Why I say critical? Critical because we're new technology for launch a new program for our client and we're at the first prototype line. It's the reason why we delay because instead to deliver maybe in 18 months, we deliver in 24 months. This has created some tension to our client and also erosion to margin to Stevanato. The goal in the first six months was to deliver all this line. We are on track. Now the goal in the second part of the year is also to recover marginality because once we start to produce the second line, we have all the learning curve for the first prototype where we want to really have the right marginality, the right efficiency. In parallel, we have done what we call right-sized optimization plan to our Italian and Denmark plants in order to put some internal center of excellence where each plant is going to be specialized in one product line, can be inspection, can be forming, EZ-fill technology, or assembly technology. Also, this is on track. A specialization by location of your engineering operations? Yes. Denmark had to be specialized for assembly technology, a certain customized sophisticated line for certain big client. Italy had to become center of excellence for inspection machine, and Bologna center of excellence for EZ-fill technology. All of these plants can apply like backup if there are in certain moments some extra demand from one client in order to always supply on time. You mentioned so the first prototype line, you'll have learnings that you can apply to the second. Is there a third and a fourth and a fifth? Correct. Usually there was a longer-term contract where there was a first line that moved with a high output, and there was a lot of customization is where we have delayed the delivery a few months. The second one is going to be a replication of the first one. There will be several lines in the next years to come, in particular for assembly technology for these devices. Okay. Assembly technology and more lines for the same client? Yes. Will you be able to resell this to more clients? Yes, for sure. Both for this customer. We can sell this technology to other customers. Okay. Maybe we've got a minute left. In terms of your capital position, how do you foresee your in terms of funding the business and the growth in the business? I guess there's really two things. One, you had delayed or paused a decision about a greenfield plant in China. I think kind of continuing to evaluate that. Where does that stand? Do you believe that you have adequate capital currently, adequate access to capital currently to fund the business, or will you need to go to the markets to raise capital? In 2025, most probably in 2026, we prefer to keep in standby the greenfield plants in China and in parallel serve the EZ-fill technology through the plants in Italy because we are going to, we have increased the investment in Latina through these cartridges. Also, we are fully focused to ramp up Fishers. We do not want to distract the organization. From a financial point of view, today our debt is 1.2x our EBITDA. We have space to increase the loan with the banks up to 2x our EBITDA. If it is necessary, together with the board, if you need to apply in the next years additional investment that we do not see in the horizon in the next 24 months, we will sell other share of the company in order to finance the growth of Stevanato like what we have done in the last years. We have two ways to finance Stevanato: through debt with the banks or to eventually do other offering. Excellent. That's great. That brings us to time. I did not mention at the top, Giacomo is with us today in the audience too, and I'll shout out to Lisa. We miss you. Hope you're well. Thanks to the audience for listening in. Hope you enjoy the rest of the conference and feel free to reach out to my team. Thank you.