Good afternoon. This is a course call conference operator. Welcome and thank you for joining the Stevanato Group second quarter 2025 results conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Ms. Lisa Miles, Head of Investor Relations. Please go ahead, madam. Good morning and thank you for joining us. With me today are Franco Stevanato, Chief Executive Officer, and Marco Dal Lago, Chief Financial Officer. A presentation to accompany today's results is available on the investor relations page of our website under the Financial Results tab. As a reminder, some statements being made today are forward-looking and based on current expectations. Actual results may differ materially due to risks outlined in item 3D risk factors of our most recent annual report on Form 20-F filed with the SEC. Please review the safe harbor statement included at the beginning of today's presentation and in our press release. The company undertakes no obligation to revise or update these forward-looking statements except as required by law. Today's presentation may include non-GAAP financial information. Management uses these measures internally to assess performance and believes they may be helpful for investors in evaluating the quality of our financial results, identifying trends in our performance, and providing meaningful period-to-period comparisons. For reconciliation of these non-GAAP measures, please refer to the company's most recent earnings press release. I'll hand the call over to Franco Stevanato. Thank you, Lisa, and thanks for joining us. Today, we will review our second quarter performance, share updates on our investment projects, and discuss the current market environment. We delivered another solid quarter marked by top-line growth, a higher mix of high-value solutions, and expanded margins. These results keep us on track to achieve our full year 2025 guidance and reflect the continued momentum of our strategic roadmap. In the second quarter of 2025, revenue grew 8%, led by strong performance in our Biopharmaceutical and Diagnostic Solutions segment, particularly in our core drug containment business. Notably, this growth offset a 2% revenue decline in the engineering segment as we continue to advance our business optimization plan. The solid performance in the BDS segment is underpinned by favorable secular tailwinds, especially the continued rise in biologics, which is fueling strong demand for our products. The spending capacity in Latina and Fishers is a direct response to market demand, and our new facilities are already contributing to near-term growth as we scale volumes and generate revenue from high-value products. In the second quarter, high-value solutions accounted for 42% of total revenue, driven primarily by growth in high-value syringes and, to a lesser extent, easy fill cartridges and easy fill vials. We are also seeing encouraging signs of ongoing stabilization in vial demand as the effects of the stocking continue to ease. Turning to the engineering segment, second quarter revenue was largely in line with our expectations, but margins were lower due to a higher mix of revenue from legacy projects and the timing of new order intake. Two factors contributed to this. First, our top priority remains execution, with dedicated resources focused on completing the remaining legacy projects. Second, several new orders that were forecast in the second quarter are now expected to be secured in the second half of 2025. However, we are making meaningful operational progress on the initiative outlined in our business optimization plan. During the quarter, we completed the majority of these legacy projects and remain on track to finalize the remaining ones by the end of this year. One of the key performance indicators underscoring our operational improvements is customer site assessment tests, or SATs. This is the final validation step when a customer assesses the manufacturing line. For the first half of 2025, our SATs significantly increased compared to last year. This is an important achievement for the team and confirms that our actions are delivering results. Over the last 12 months, we have streamlined processes and improved workflows across every phase, from order intake to assessment testing. We have also rebalanced internal resources to support the relocation of certain activities to Italy. Looking ahead, our Denmark operations will serve as an innovation hub, focused on more customized manufacturing lines for device assembly and packaging. In parallel, we are advancing our footprint optimization efforts. We are evaluating a second location in Bologna, Italy, where we already have operations and access to a strong pool of technical talent. Over the past year, we have been laser-focused on execution. Now, we have initiatives underway to enhance our commercial strategy and better position the segment to capitalize on long-term growth opportunities. Over the next five years, we see continued strong demand due to the favorable trends such as the increase in the self-administration of medicine and the continued rise in biologics. We also believe that we are well-positioned to benefit from the increase in capital investments and U.S. onshore initiatives that were recently announced by several pharma and biotech customers. Let's turn to an update on our capital investment projects in Fishers and Latina, where we are increasing our capacity for high-value syringes in the near term. In Fishers, line installation and customer validation are ongoing, and the site is expected to reach full productivity in late 2028. In June, we hosted participants from the Parenteral Drug Association, or PDA conference, for a tour of Stevanato Group's advanced manufacturing capabilities. The event showcased our premium drug containment solutions, integrated device manufacturing, and engineering after-sales services. It was a valuable opportunity to strengthen our relationships and demonstrate our commitment to innovation and quality. In Latina, the team remains focused on scaling the current phase of commercial production for high-value syringes. In parallel, we are installing additional syringe lines, including ones that produce dual-chamber products. Customer validations will continue into 2026 as planned. We are also preparing for the next phase of ready-to-use cartridge production. Our capital investments are helping us meet rising market demand for our core drug containment products amid the growth in biologics. In the first half of 2025, biologics represented 39% of BDS revenue, compared with 35% and 25% in the same periods in fiscal 2024 and 2023, respectively. While GLP-1s remain a strong long-term tailwind, the wider biologics segment is also a key growth driver for our broader high-value solutions portfolio. Let me share some examples. First, we are seeing high demand for our Alba technology, the highest-performing syringe platform in our portfolio. Customers in the U.S., Europe, and APAC are using our Alba platform for a range of MAPS-based products that require minimal particle release. These programs include ophthalmic applications, among others. Second, we have a robust pipeline of MAPS projects in the clinical phase for both novel applications and biosimilars, driving demand for our Nexa premium syringes. Lastly, we see an increasing number of requests for specially coated vials that are suited for highly potent drugs. This includes antibody drug conjugates, or ADCs, that require more complex production processes and advanced technologies. We believe that the strengths of our portfolio will put us in an optimal position to leverage the diverse set of opportunities ahead, particularly in biologics, to deliver long-term sustainable growth. With that, I'll turn the call over to Marco. Thanks, Franco. Before I begin, I'd like to clarify that all comparisons refer to the second quarter of 2024, unless otherwise specified. Let's start on page nine. In the second quarter of 2025, revenue increased by 8% to $280 million, driven by 10% growth in the BDS segment, which offset the 2% decline in the engineering segment. Foreign currency translation was a headwind, and on a cost and currency basis, revenue would have increased 10%. Revenue from high-value solutions grew 13% in the second quarter to $116.8 million, representing 42% of total revenue. This was primarily driven by continued strong demand for high-value syringes, as well as growth in both easy fill vials and cartridges. The strong performance in the BDS segment led to a 210 basis point increase in consolidated gross profit margin, reaching 28.1% in the second quarter of 2025. This was mainly due to the expected financial improvements at our Latina and Fishers facilities as we scale our multi-year investment plan. While both sites are currently margin dilutive, we will continue to gain operating leverage as volumes and revenue grow and a higher mix or more accretive high-value solutions. These favorable trends were partially offset by lower gross profit contribution from the engineering segment. In the second quarter of 2025, operating profit margin increased to 14.8%, and on an adjusted basis, operating profit margin rose to 15.5%. This improvement was driven by an increase in gross profit and continued benefits from the cost management initiatives launched last year. Net profit totaled $29.7 million, with diluted earnings per share of $0.11. On an adjusted basis, net profit was $31.3 million, and adjusted diluted EPS were also $0.11. Adjusted EBITDA increased to $65.1 million, resulting in a 240 basis point improvement in the adjusted EBITDA margin of 23.2% for the second quarter of 2025. Moving to segment results on page 10, in the second quarter of 2025, revenue from the BDS segment grew 10% to $243.5 million, led by growth in high-value solutions, as well as other containment and delivery solutions. On a cost and currency basis, segment revenue would have increased 12%. As Franco noted, we are seeing vial demand stabilize as the effects of the stocking continue to ease. High-value solutions grew 13% to $116.8 million, representing approximately 48% of segment revenue, fueled by growth in high-value syringes and, to a lesser extent, easy fill cartridges and easy fill vials. Revenue from other containment and delivery solutions increased 6% to $126.7 million, driven by bulk syringes, cartridges, and contract manufacturing activities. In the second quarter of 2025, gross profit margin increased 350 basis points to 31.2%. Margin expansion was driven by the financial improvements in Latina and Fishers, as well as a higher mix of more accretive high-value solutions. As a result, the operating profit margin for the BDS segment rose to 19.1%, up from 14.5% in the same period last year. In the second quarter of 2025, revenue from the engineering segment decreased 2% to $36.5 million. This was driven by lower revenue in our glass conversion business, partially offset by growth in the device assembly and packaging business. The segment's gross profit margin declined to 6.6%, resulting from a higher level of revenue from legacy projects and the timing of new work. This was due to a shift in new orders that were initially forecasted for the second quarter and are now expected to be secured in the second half of 2025. As a result, the operating profit margin was negative 0.8%. Please turn to the next slide for an overview of the balance sheet and cash flow. As of June 30, 2025, the company had cash and cash equivalents of $94.2 million and a net debt of $312.4 million. In July, we announced $200 million in financing from three of our banking partners. The funds will support the expansion of syringe production and future capacity for ready-to-use cartridges at our Latina facility, as well as syringe production and device contract manufacturing in Fishers. For the second quarter of 2025, capital expenditures totaled $69.1 million. Net cash from operating activities increased to $44.9 million. Cash used for the purchase of property, plant and equipment, and intangible assets totaled $60.3 million for the second quarter of 2025. The combination of increased operating cash flow and lower CapEx drove to a significant year-over-year improvement in free cash flow. This resulted in a negative free cash flow of $13 million for the second quarter of 2025, compared with negative $46.1 million in the same period last year. We believe we have adequate liquidity to fund our strategic priorities through a combination of cash on hand, cash generated from operations, available credit lines, and our ability to access additional debt or equity financing. Please turn to the next slide for guidance. We are reiterating our fiscal 2025 guidance and still expect revenue in the range of $1 billion,160 million to $1 billion,190 million, adjusted EBITDA between $288.5 million and $301.8 million, and adjusted diluted EPS between $0.50 and $0.54. We have updated certain inputs in our guidance, including the following: the BDS segment is now expected to grow high single digits, and the engineering segment is now expected to decrease by low double digits compared to fiscal 2024. An increase in the mix of high-value solutions to 40% to 42% of total revenue, up from 39% to 41% in our prior guide. For foreign currency, we now assume a headwind of approximately $12 million to $15 million on the top line. We assume a new dollar rate between 1.13 to 1.17 for the second half of 2025. The headwind is offset by growth and fully absorbed in the model. In addition, our hedging strategies have helped to limit our exposure. An updated tariff rate for imported goods from the European Union to the U.S. of 15% compared with our prior assumption of 10%. Our guidance fully absorbs the incremental impact from the new tariff rate. Our updated guidance also considers an operating profit margin expansion of approximately 150 basis points compared to fiscal 2024, driven by lower than expected depreciation as we refined our estimates at the end of June and an increase in high-value solutions. The better operating profit is offset on the bottom line by a higher tax rate of 25.8%. Thank you. I will hand the call back to Franco. Thank you, Marco. With the first half of the year behind us, we are seeing sustained momentum driven by healthy market demand, which puts us squarely on the path to achieve our full year guidance. As we advance our multi-year investment optimization plans, we remain focused on disciplined execution, industry-leading innovation, and continue to meet the evolving needs of our customers. Together, these priorities position us well for long-term profitable growth. We operate in dynamic, high-growth markets with capital investments strategically aligned to meet demand-driven needs. We have an established presence and a long track record with the major biotech and pharma players, including the top 25 global pharma customers. These customers have a rich pipeline of biologic injectables in development, and we remain a trusted partner to support their effort in bringing new groundbreaking treatments to patients. This dovetails with powerful secular trends, such as aging population, pharmaceutical innovation, and the shift towards self-administration therapies. These trends align closely with our core capabilities and position us well for long-term success. Looking ahead, we believe the need for high-performance drug containment, coupled with the value of a fully integrated platform, will support sustainable revenue growth and drive meaningful margin expansion. Backed by strong business fundamentals and a disciplined financial strategy, we have the flexibility to invest in growth while creating a long-term value for our shareholders. Operator, we are ready for questions. Thank you. Thank you, sir. This is the course call conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. We kindly ask you to limit to one question and follow up only and join the queue again for any further questions. We will pause momentarily for the first question. The first question comes from Matt Larew of William Blair. Hi, good morning, and thanks for taking my question. On engineering, it sounds like you're getting close to wrapping up some of the legacy projects that were hindering your ability to take on new work, but now you referenced some delays in new orders coming in. Just curious if those delays are in any way related to customer decision-making related to tariffs. Are they purely timing, or is this sort of an extended sales cycle issue? That's part one. The second part would be, I think the new guidance requires a high teens decline in the back half of the year for engineering. Franco, you obviously alluded to a number of strong tailwinds in the medium term vis-à-vis reshoring and investments in the U.S. To the extent we do have a high teens decline in engineering in the back half of the year, when does that reverse and how do we kind of bridge to the strong growth environment you alluded to? Thanks, Matt. That's Marco speaking. Starting from the second quarter, the difference is related to timing of new orders. That's basically from the second quarter to the second half of the year. We haven't lost important negotiations. It's just a matter of decision-making related to CapEx on our customer side. This is a project-based business, so it's not unusual for order flow and timing to fluctuate from quarter to quarter. About the guidance, reflecting this timing, let's say postponement, we review our guidance, guiding now to a low double-digit decline compared to last year that is reflecting the timing difference of new orders. Nevertheless, as mentioned, we more than offset the difference with a stronger market in the BDS segment that offset also the currency headwinds. Matt, Franco speaking. If I can add a little bit more color from what is related to the market, the biologics market is heavily investing in new technology thanks to the rich pipeline that they have at their launch into the market. I can confirm that demand outside is very strong. The focus in the last three quarters for Stevanato was just to deliver and to succeed with the SATs to our big clients, in particular for what are related to some legacy programs. Today, we were successfully able to deliver this line, and these are inside of bigger agreements with our customers that will be some additional repetitive orders. It's just a timing effect. Today, once we are going to deliver this line, there will be additional lines that we are going to assemble and deliver to our clients in the next 12 to 18 months. Okay. Thank you. Just as a follow-up, on the first quarter call, you referenced, I think, you know, an improvement in vials and talked about mid to high single-digit growth for vials for the year with sequential improvements throughout the year. It sounds like qualitatively your comments support that, but just wanted to confirm that you did continue to see quantitative improvement on the vial side and that that guidance is intact for the year. Yes. I start with the numbers, then Franco will provide more color about the market. We went up about 3% compared with the same period last year in vials, but the orders in stake are very, very strong. I mean, it's double-digit growth compared to the same period last year. We reiterate our confidence in mid to high single-digit growth in vials for 2025, you know, after a decline of 35% last year. Matt, if you remember, in the last two, three quarters, we showed that we are starting to see gradual recovery, gradual improvement in the vial market, in particular on bulk, but also in the easy fill. Today, we have some good indicators in Stevanato Group. Our order intake is starting to, order book is starting to improve quarter after quarter. We are starting to see also some positive big orders, in particular in the United States, in terms of easy fill vials. We are confident that our idea that without 2025, that we move without a sort of normalization is still on track. We are confident of this gradual recovery on the vial market. Great. Thank you. You're welcome. The next question is from Michael Ryskin of Bank of America. Hey, just about to go on for Mike. Thanks for taking my question. I just wanted to ask on BDS, the guide reads as encouraging, but wanted to see if you were seeing any pull forward from customers due to tariff. Franco speaking. What do we see overall? The forecast of our big clients, also biosimilar, are regular. We don't see big fluctuation quarter by quarter. We see that in particular for what is related to our easy fill product, syringes, cartridges, and vials, they are gradual and constant in forecasts. Yeah, about tariffs, we had positive conversations with our customers. Basically, we are reiterating our guidance. In May, we assume in our guidance about $4.5 million CIMPAT at the operating profit level. In spite of the increased tariffs from the European Union to the U.S., we have been able to offset these incremental tariffs thanks to conversations with our customers and the fact that we are leveraging more and more our global footprint. One other point that I might add is that we are not seeing the phenomenon of full pull forward as it relates to the tariff situation, as others may have seen. All right. Great. Thank you so much. If I may ask, a few weeks ago, you announced a $200 million bridge credit with your Fishers and Latina site. Are you able to give us a little bit more color on that agreement and what you're looking to use those funds for? Yes. First of all, we have a very good relationship with our banking partners. The purpose of the financing is to expand our capacity, predominantly in Latina with RTU cartridges and syringes, but also in Fishers with syringes, vials, and drug delivery systems. It's totally consistent with our strategy of expansion. Besides that, we are also planning to reimburse some financing in 2025 and 2026, some legacy financing. We are just securing in advance the needs for the future months and years. All right. Great. Thank you so much. The next question is from David Windley of Jefferies. Hi. Thanks. Thanks for taking my question. You mentioned in your prepared remarks, I made the point about the breadth of demand, highlighting GLP-1, but other biologics. I wondered if you could delve into that a little bit more, maybe tell us what% of your revenue or what growth contribution the GLP-1 class is making and what, you know, kind of where that is showing up in your product suite. I'm sure it's in cartridges and syringes, but also wondering about, you know, maybe some of your contract manufacturing activities as well. Thanks. Yes. David, Franco speaking. First of all, we don't provide a detailed breakdown around the GLP-1s. Usually, we don't provide a number around a single category. GLP-1s we put under the umbrella of biologics in our BDS segment that move from 2022 to 2025 from 19% of the revenue of the BDS segment up to more than 39% in the first semester of 2025. For sure, GLP-1s will be a solid long-term tailwind for Stevanato Group because we are deeply involved through our big clients, also biosimilar, through all practically our product portfolio from syringes, syringe bypass, cartridges, ready to fill, engineering line, and also from CMO in terms of DDS. Beside this, what I would like to underline is that the biologics industry in general, in particular our top 25 clients, have a rich pipeline today. Most of this pipeline, they are going to use injectable products, even more what we call self-administration. Today in Stevanato, we have many programs around Alba technology for what is related to certain high-potent drugs that from certain molecules that are very high attention on the particle release. We have many programs around cartridges, ready to fill from 3 to 5 to 10 mL when it's connected also to the injectors. We have many programs around vial ready to fill. Overall, we are able to continue to grow together with our big bio customers that involved Stevanato Group many years ago on standard vial. Today, they continue to evolve, and thanks to their self-administration requirement, they're going to engage Stevanato in the full portfolio. We are quite happy about this. That's helpful. Thank you. I'm wondering, as a follow-up, could you talk about maybe your mix within the high value and how that is evolving? I guess what I'm getting at is how much of the margin improvement that you're seeing is richer mix in terms of the product demand of your high-value solutions, and how much of it is simply recovering some utilization in some of the lines where activity has been depressed. How much of it is just absorption versus mix? Thanks. Thanks for the question, David. Marco speaking. First of all, we are happy about the first half of the year. In the second quarter, we reached 42% on total revenues in high-value solutions. The main driver in the first half of the year has been high-performance syringes, particularly Nexa. Nevertheless, we see improvements in EZ-fill® vials, as mentioned in the commentary, in EZ-fill® cartridges, and also we can see very good opportunities in Alba® syringes. It's both a growth of volumes, but also we are happy about the mix. Got it. Thank you. The next question is from Patrick Donnelly of Citi. Hey, guys. Thank you for taking the questions. Maybe one on the tariff side. It sounds like you guys are absorbing the new rates entirely in the guide. Can you just talk through the levers? Is that primarily pricing? Are you shifting more capacity to Fishers? On that point, where are we with Fishers in terms of the capacity and how you're feeling there? We have different factors helping us to absorb the incremental 5%. We had positive conversations with customers that most of the time help us in changing the income terms. It's not impacting our cost, and the customer is taking care of the custom duties. Sometimes we had the opportunity to increase the price after absorbing the cost. In this case, we are guiding a tailwind of about $2.5 million in our guidance that is a little bit dilutive, but is increasing our top line. Finally, probably most important, we are leveraging our global footprint, trying to optimize the logistics in agreement with our customers. Yes. Patrick, Franco speaking. On top of what Marco already shared with you, we are proactively mitigating the tariff through rescheduling through our 13 plants' production to our big clients and passing some surcharge to our customers. What I can add is that the Fishers plants in the short term are focused on doing audit and validation with the existing program that we have with our big U.S. clients. We cannot have a particular benefit in 2025 from the Fishers plants because they already have a big program to ramp up capacity with already existing agreements with our customers. It is also true that in the medium term, we count to benefit a lot with these greenfield plants, both for what is related to our easy fill product and also our device program. Even more, we are starting to see more and more interest from our international clients to further increase the opportunity in these plants. Okay. That's helpful. Marco, maybe one for you just in terms of the guidance. If you can just help us out on I was thinking about 3Q or 4Q, you know, whether it's revenue, EBITDA, earnings, it would be helpful just to talk through the second-half split there. Thank you, guys. Your voice was a little bit broken. Sorry, Patrick. I'm not sure we got the full question. Yeah, just asking about the second-half split between 3Q, 4Q on revenue and earnings. If you could help us out, thank you. Yeah, sure. Basically, we provide colors about segments. I think that is clear. We're expecting the third quarter a mid-single-digit growth compared with the same period last year, and similarly in Q4 a mid-single-digit growth. We've seen the second half a mid-single-digit to match our guidance both in Q3 and Q4. Is that clear compared with the same period last year, I mean? Yes, thank you. The next question is from Larry Solow of CJS Securities. Great. Good afternoon. Could you just follow up on the Fishers and Latina question? Can you just give us a little more color? I know you mentioned they're clearly still margin dilutive, but I know Latina is profitable now. Can you just kind of give us an update on progress there? Has Fishers, I assume, it is profitable today? I know it's margin dilutive, but still profitable. Is that correct? We start commercial production in Latina in Q4 2023 and three quarters after in Fishers. Today, Latina is positive in terms of gross profit. Fishers is not yet. Anyway, we can see sequential improvement quarter after quarter. Overall, the margin of the two sites is still dilutive compared with the average of the company. It means that for the future, we have further opportunity to scale up. Since we are producing and selling high-value products there, we expect the margin improvements in the coming quarters. Correct. In fact, if I can add a little bit more color from the market, in Latina, we are continuing to scale up commercial production, in particular for what is related to syringes, Nexa syringes, and also bypass syringes. We are preparing the plants in order to build capacity for easy fill cartridges, and the program is to launch at the end of 2026, beginning of 2027, this high-volume production for cartridges free to fill. All these elements will help to boost the revenue in Stevanato Group for high-value products from these plants. In parallel, from the plants in Fishers, we are continuing the installation and validation of syringes technologies. In parallel, we are building a big department that will be able to host production from drug delivery systems for one big U.S. client. These two greenfield plants will be an active contributor to revenue marginality in the next years. Gotcha. Great. If I could just switch gears to engineering real fast, it sounds like most of the stuff is just more growing pains and timing. As we look out, maybe not in early 2026, but as you look out maybe by 27, 28, would you expect margins to recover back and maybe be even higher than they were before you began these strategic initiatives in that segment? Thanks. We are very confident about that. We described the problem we face that we are now fixing with the delivery of the legacy projects, as Franco was mentioning. Generally speaking, we expect to go back to the profitability we had in 2022 and 2023. The customers are still appreciating our technology and our ability to deliver customized projects. Yes. In fact, if I can add a little bit more color, in the last three quarters, we focused our organization through some optimization plan program, in particular from the plants that we have in Denmark that specialize in the production for inspection machine assembly technology for sophisticated devices. Also, in Italy, we are starting to review our footprint in order to make some center of excellence able to produce some inspection lines. Our old products that are well absorbed by our biologics customers in the future. The combination of this increase of footprint productivity and the strong demand outside gives us good confidence that we can have a good growth on the engineering and also improving our margins. Great. I appreciate that color. Thank you. The next question is from Paul Knight of KeyBanc Capital Markets. Good morning. On the BDS segment, high-value solutions grew 13%. Other containment grew 6%. What would be a normal other containment growth rate, in your opinion? Should it be high single digits, or what should that 6% be after the stocking is over? Hi, Paul. Marco speaking. It's more the normalized, let's say, growth in other containment delivery solutions is more within the low to mid-single digit as per our Capital Markets Day. We expect after the recovery of the bulk vials growth in that range, we are, as you know, more focused with our investments in high-value solutions. This is where we are growing and see the growth for the coming years. In fact, Paul, again, I would like to give some color from a market point of view. We serve the top 25 global key customers. Also, in parallel, we serve several hundred clients worldwide. The goal in Stevanato Group in the medium-long term is to further focus Stevanato Group on high-value products. In fact, all the investments that we are doing are moving more and more in the high-value solutions. It's strategically important to keep a market on also bulk vials or other non-high-value products. The big goal in the medium term for us is to invest and to focalize Stevanato Group in this direction of high-value products. The question I have on engineering is you slightly lower sales from glass converting. Does your own internal need for equipment detract from engineering growth, and how quickly can you add capacity in engineering? In our comments, we focus on third-party revenue. As you know, Paul, engineering glass converting machines is an important piece of our integration, especially in Fishers and Latina, also in ready-to-use cartridges. When we comment revenue growth, it's only on third parties. Yes, sure. Where do you have you need to add capacity, is what you're saying? Exactly. We are going on in Latina and Fishers where our technology is needed both in bulk and in easy fill. Today, Paul, our engineering division, the glass forming third party is an important market, but it's more a niche. Where the engineering division is focused today is to serve our big pharma biologics customers, in particular for what is related to inspection machines and sophisticated technology of assembly from auto-injectors, is where the market is growing. Also, to remember that the power of the engineering division for Stevanato Group has two objectives. One is to serve the biologics market, but the second is to make the internal group, the BDS segment in particular, competitive. Today, our engineering division is squarely focused to develop the technology for cartridges free to fill, particular technology for bypass, and also the Alba® technologies, where we want really to build some competitive advantages. The BDS segment is where the engineering plays a critical role for the group internally. Okay, thank you. The next question is from Doug Schenkel of Wolfe Research. Hi. Thank you for taking my question. Let Let me start with tariffs. I'm just curious from a tariff mitigation standpoint, have you been able to pass along price? What other mitigation efforts are underway, and how are those reflected in guidance? Yes. As mentioned, we had positive conversations with our customers. We have been able to offset most of the impact through change of income terms or price increases in some cases. Most importantly, in agreement again with our customers, we have been able to leverage our global footprint in order to minimize the impact for them and also for us. Those are the two main tools we had the opportunity to play in this period of time. Is that something that might have even more benefit next year as we think about our models and margin trajectory? Again, in Fishers, we are installing capacity, and every quarter, every year, we are going to benefit from the Fishers plants. It's also true that today it is a little bit early to understand what it could be the evolution of this tariff. Okay. One more on margins, just from a guidance standpoint. I guess it depends on where you come out in terms of revenue, whether it's the high end or the low end of the range. I just want to make sure I'm doing the math correctly. At the midpoint of the range, from a revenue standpoint, if you go down to the operating margin line to get 150 basis points of operating margin expansion, your guidance, do you essentially keep operating spend about flat year over year, the second half of this year versus the second half of last year? Yes. The margin expansion is driven, as mentioned, by high-value products. We raise our guidance from 39% to 41% to 40% to 42%. We are more confident. We are very well covered in our backlog for high-value products. Moreover, we recalculated the depreciation after six months. You probably noticed we have a large amount of assets under construction. We played a little bit conservatively at the beginning of the year. Now we can estimate a lower level of depreciation. This is driving the increase in operating profit. Obviously, depreciation is not impacting our EBITDA and adjusted EBITDA, and we are reiterating our guidance for EBITDA for the year. Okay. Very last one, another modeling question. Tax rate. It does look like you bumped up second-half tax rate assumptions to around 27%. What drove that? Is that the new tax rate moving forward? This is not something that is impacting the cash of the company. It's more related to the fact that in executing our optimization plan, we are considering the risk of not fully recovering some deferred tax assets in Denmark, where we are moving part of the activities from Denmark to Italy. We are taking a cautious approach, waiting what is going to happen toward the end of the year with the deferred tax assets. Okay, thank you very much. The next question is from Matt Etosh of Jefferies. Hey, good morning. Just a few from me. You mentioned in your prepared remarks that you're well-positioned to benefit from some onshoring announcements that have been announced recently. I'm just curious to gauge where you all think you all can benefit the most and if you're seeing any incremental interest today in Fishers or within your engineering offerings. Yeah. I'm sorry, Matt, can you repeat that? You slightly broke up on our end. Apologies. Just the first part is the longest. Apologies. Can you hear me all right? Yes. Awesome. I was just curious. You mentioned in your prepared remarks that you're well-positioned to benefit from the onshoring announcements that have been announced recently. My question is, are you seeing any incremental interest today within Fishers or your engineering offerings? From your perspective, where do you think you're most well-positioned to benefit? Okay. Just to confirm, it's related to Franco's comments on the investments that we're seeing from customers related to those manufacturing investments in the U.S. and those U.S. onshoring initiatives and the demand that we anticipate from that. Yes, correct. We started from, let's say, end of March of this year, we are starting to see a changing on the strategy, in particular our big international clients, also some biosimilars, to review their installation of capacity in the United States. Thanks to this change of strategy, where Stevanato is looking to have some benefit. First, from an engineering point of view, this will give us the opportunity to sell more technology, in particular around inspection machines and also around assembly technology. Even more, through our greenfield plants in Fishers, automatically, we can better offer a sophisticated supply chain for the United States that, in terms of easy fill products, in particular, and devices, we can really build dedicated capacity for the U.S. utilization. In fact, we are happy for this. We are proactively working with our customers on this direction. Appreciate it. Killer. The next question is from Steven Moyles of BNP Paribas Exane. Hey, thank you. I think that was Curtis Moyles. Thanks for taking my questions. I just have a couple, please. First, on the engineering segment, I wanted to see if maybe you could give a little bit more color about how we can think about it in 2026, especially with some of these projects being pushed out, I guess. Are you expecting kind of a rebound in growth in margins pretty quickly in the year, or is it going to be maybe more back-end loaded? I don't know how much precision you can give there. Also on that, potentially expanding the footprint in Italy, do you have maybe a timeline in mind for that? Okay. Just to confirm your questions, engineering color on 2026, rebound on margins, and then question related to the activities we're moving to Italy. Regarding 2026, we will provide the guidance as usual in a couple of quarters. It's a little bit early to go through the segments and the evolution of each segment for 2026. Nevertheless, we mentioned before that the trajectory is positive, going out from the legacy projects and the problems we face related to the supply chain and the workload we mentioned during the pandemic. It's a little bit early to provide color about 2026. Regarding the footprint strategy, we already started in the second part of last year to optimize our footprint. In the last two or three years, in particular, the plants in Denmark increased a lot because we received many orders from inspection machines, standard assembly technology, but even more what we call this complex new prototype of high-speed technology for devices. Through what we call our optimization plan, we are building three different sites that are becoming centers of excellence. Denmark became a center of excellence for assembly technology and backup for inspections. Italy could be a center of excellence for glass forming and in inspection. We have the plants in Bologna that we are using in order to make what we call customized prototypes for new particular technology. In this way, we have three sites, each one specialized for one product line, and they can serve as a backup if in a certain quarter or period there will be some particular orders. This is the way that we are going to review our footprint strategy in our engineering divisions. Okay. That's helpful. Thank you. If I could just squeeze in one more too, I wanted to touch on vial order patterns that you're seeing recently. I mean, it sounds like it's improving there, but can you talk to maybe like lead times? Are they back to pre-COVID norms? Are you seeing kind of customer inventories at a normalized level? Finally, where is kind of utilization sitting for these vial manufacturing lines? Again, like I mentioned at the beginning, we gradually see improving practically in all our markets, in all the regions, in all the clients, the small, medium-sized clients. There are certain clients that are back on track with the original pre-pandemic situations. Other clients, in particular the big clients that serve many therapeutic drugs, many types of vial configurations, still have some inventory. Based on this assumption, we see that throughout 2025, the vial market will move versus a sort of normalization. Great. Thank you. The next question is from Yuko Oku of Morgan Stanley. Understanding that your offering and services address a critical aspect of drug manufacturing, given the uncertainty that the biopharma industry is facing today, are you seeing any pricing pressure broadly in the industry as pharma companies try to get best value for the cost? Today, what do we see? The big priority of our big clients is to secure the supply chain. Today, if you look in particular at the biologics market, they are starting with a large time in advance to secure the capacity, both in particular in Europe and the United States. To make an example, on syringes, they want to secure their capacity in order to be able to fulfill their demand for the existing commercial program, but also in particular for the pipeline that they are launching in phase two, phase three. The same is for the cartridges ready to fill. We are starting to see more and more that due to the Nexa requirement, many clients are moving with the new, what we call, flexible technology. Practically, they are moving from using bulk glass containers to easy fill. It is rare that for high-value products, we are under pressure about prices. It is more common that the market is looking for a well-established player with a global footprint, one superior quality. Let me do some, I'll say, sales marketing. Our Nexa technology in this moment is really the right answer to this superior quality requirement for this sophisticated biologics product. Thank you for the color. I just wanted to ask a question on margin. With good progress on the legacy projects from Denmark in the engineering segment, how should we think about the cadence of engineering margin improvements in 3Q? Should we anticipate a stepwise improvement for the engineering segment now that the majority of those projects are complete, or more gradual improvement over the remainder of the year? In our model, we expect sequential improvement in Q3 and Q4. Nevertheless, this is based on the assumption to win soon the contract shift from the second quarter to the second half of the year. Our model is a sequential improvement in Q3 and Q4. On one side, we are exiting from the legacy low-margin projects. We have very positive negotiations with our customers, and we are close to finalizing contracts. This is our model today of the sequential improvement. Thank you. The last question is from Dan Leonard of UBS. Thanks for the time. First off, I was hoping you could talk about the impact of GLP-1 compounding on the demand for vials and whether that's even a relevant demand driver. As you know, we are providing many different formats for GLP-1s, predominantly syringes and cartridges, syringes both in dual chamber and normal configuration, and also cartridges both in bulk and sterile configuration. Vials, we see vials as another option, but it's not the predominant format related to GLP-1s. Understood. A tariff-related follow-up: how much of your U.S. demand is supplied from the U.S. at this point, and where does that go over the near term? Up to now, the greenfield plants in Fishers are at the beginning. It's really a small portion of our revenue that we sell from our U.S. plants. Quarter after quarter, year after year, the goal is that these plants in Fishers need to be the plants that are going to serve the U.S. market. Thank you. Ladies and gentlemen, that was the final question. Thank you for joining. The conference is now over, and you may disconnect your telephone.