Stevanato Group at William Blair Conference: Strategic Growth Insights

On Wednesday, 04 June 2025, Stevanato Group (NYSE:STVN) presented at the 45th Annual William Blair Growth Stock Conference, sharing a strategic overview of its operations and future plans. CEO Franco Serrano emphasized the company’s leadership in pharmaceutical packaging, highlighting both its recent revenue growth and challenges such as market destocking. The presentation underscored a commitment to innovation and expansion, with a focus on high-value products and global market presence.

Key Takeaways

• Stevanato Group’s revenue reached $1.1 billion in 2024, doubling over the past five years.
• Investments are focused on high-value products like EZ-fill syringes and vials to drive margin expansion.
• The company aims to double its revenue in the coming years through organic growth and strategic contracts.
• Destocking issues from the COVID-19 pandemic are largely resolved, with market normalization expected.
• Global expansion includes new plants in Latina and Fisher, with significant revenue contributions anticipated by 2028.

Financial Results

• 2024 revenue was $1.1 billion, with a 15% annual growth rate over the last five years.
• High-value products now account for 39-41% of total revenue, up from 17% in 2019.
• Q1 2025 saw a 9% growth, and the company has invested 1.1-1.2 billion euros from 2021 to 2024.
• Target investment as a percentage of revenue is set at 9-11% from 2027 onwards.

Operational Updates

• The greenfield plant in Latina is operational, contributing to positive gross margins.
• High-speed syringe lines have been installed at the Fisher plant, enhancing production capacity.
• Expansion plans include a comprehensive global footprint with 16 sites across 9 countries.
• Tech centers in Italy and Boston support early-stage drug development with 80 engineers focusing on advanced technologies.

Future Outlook

• Revenue from the Fisher investment is expected to reach €500 million by 2028.
• Stevanato Group plans to maintain a disciplined capital allocation, prioritizing high-value product investments.
• The company is optimistic about its long-term growth, aiming to double revenue through strategic initiatives and contract execution.

Q&A Highlights

• Destocking from COVID-19 led to inventory normalization, particularly in bulk vials.
• New drug delivery systems, including auto injectors and wearable devices, are being developed.
• Oral pills may capture 15-30% of the market, but injectables are expected to continue growing.

For a detailed understanding of Stevanato Group’s strategic direction and financial performance, refer to the full transcript below.

Full transcript - 45th Annual William Blair Growth Stock Conference:

Matt Larue, Analyst, William Blair: Good morning, everyone. Afternoon now, actually. It was a slash. Good morning slash afternoon. So afternoon.

Thanks for joining us here for, the Stepanado management presentation. My name is Matt Larue. I cover tools, cover Stefano here at William Blair, and, very pleased to once again be joined by the company’s CEO, Franco Stefano, as well as Giacomo from investor relations. I wanna make two quick notes. The first is that the the breakout session is in the Richardson Room on the Second Floor.

And then second, I am required to inform you that for a complete list of research disclosures or potential conflicts of interest, please visit WilliamBlair.com. Again, very pleased to have Stefanato here today, and I will turn it over to Franco.

Franco Serrano, CEO, Stevanato Group: Thank you. Thank you. Thank you to William Blair to host Serrano Group on this very nice event. So good morning. I’m Franco Serrano.

I’m going to have the chance to present Serrano Group, and I will try to this slide to show a little bit the history, the track record, the value proposition that we put in place at Stefanato Group in order to mirror the future requirement of the biologic industry. So at a high level, Speranato Group is present in the industry more than seventy five years. The company was founded by my grandfather just after the second world war. At that time, in Europe, they were starting to have more and more increasing requirement for glass container for different application. We enter in the industry for beverage, food, cosmetic, and pharma, and he had the idea to automatize the technology of of glass.

And the journey started from that time. It’s also true that in the last the last year, we focused more and more in what was a pharmaceutical industry. After seventy five years of of effort, we can say that Stanto Group is a player recognized in the pharmaceutical industry. We have a good track record. We are also market leader in certain segment.

For example, we are market leader worldwide on pen cartridges in ready to fill vials. And also, we are the second player worldwide on syringes. We serve most of the bigger customers. We serve the top 23 global key customer worldwide, but also we serve 700 customer between general customer, regional customer and biosimilar worldwide. The group was able to grow in the last five years, fifteen percent per year.

We were able to double our revenue in the last five years. It’s consistent with a track record of the last twenty five years. In 2024, we delivered 1,100,000,000 of revenue, % focused on the pharmaceutical industry. Just to show you the value proposition that we have, we start with practically to produce the glass content. But in the last years, we put in place a sort of value proposition in order to be able to serve the pharmaceutical industry and everything that is injectable.

In Serenato Groupe, we have two main business unit. We have the the BDS segment that represent 80 per more than 80% of our revenue and the engineering segment. I’m going to explain you why we have these two divisions because these two divisions are two business unit, my fully complementarity complementarity in order to be the full to serve in the real intimacy of our pharma customer. Starting from the left, what we can see? We have a full portfolio of glass product like cartridges, vial, and syringes, which is our today core market and where we are heavily invested in Europe, United States, in particular, in the plants and fishers.

Also, this product we have converted in the last year together with our customer in what we call easy fill product, practically where we sell more value to our client. It also represent more marginality and more protection of our product compared to the competitor. On the right side, you can see our engineering segment that is lead market leader worldwide on glass forming because we developed the technology of glass forming for via cartridges syringes. Also in the last ten years, we specialize our division in order to develop sophisticated vision inspection machine for our pharma customer, a particular assembly technology for this new requirement of what we call auto injector space. Now what is the combination?

Now this competence, this capability connected with our tech center that we have in Italy and Boston, we try to have a holistic value proposition. So practically, we want to serve the client from preclinical in order to be filed in the FDA with our client at the very beginning, and then step by step develop the tailor made product, process and service based on the drug that they deliver. Today, you can see the pharmaceutical industry is heavily invested in product in Phase two, Phase three, and there are a lot there is a rich pipeline with most of our pharma customer worldwide. Sperato Group through these two tech center is present in most of these products in phase two and phase three. And then when the product go commercial, we are present with 13 site in nine different country, in particular in Europe, United States in order to find the the company pharma company is carrying up, we can serve the full material.

Let’s spend, if it’s possible, a little bit of time about the history because through the history, you it’s important to understand the strategy and the different milestone. The company have a long history of success. Like I mentioned to you, we’re in business at more than seventy five years. In particular, in the last fifty years, we focus our competence in just pharmaceutical industry. In 07/1971, we decide to develop the technology.

At the beginning, we decide to develop the technology internally in order really to have more productivity, to have a better process, and to to be more fast to market because all the machine that we use for the internal group are developed by the sister company engineering. It’s also true that in the second step, we decide to further enlarge our product portfolio and to develop this machine also for our pharma customer in order to increase the intimacy that the Stevanato is going to serve the primary packaging. Most is going to use the technology in in installing the pharmaceutical company in order to increase the productivity for our customer. So this is today one of our competitive advantages that we are trying to build our value proposition. In the last twenty five years, we tried to add other three driver of growth because our customer became global.

So what we have done? We have tried to more and more mirror the footprint of our customer worldwide. So our customers start to challenge Stefano to not be only present in Europe, but to be present also in America, in Asia, Latin America. Today, we have built a supply chain through our plants that we have the same quality standard. This is going really to serve our customer with the best efficiency.

This is one of the way that our big client is recognized, SevenAuto, like the true partner for their sophisticated product. Then what we have done? We reinforced more and more what we call the research and development. Originally, our R and D was more focused on process. Then step by step, we try to put value in the product we do.

How? We see more and more the tendency of the pharmaceutical industry to outsource what is not core competence for them. For example, washing, siliconization, sterilization preassembly. So the pharma company more and more is focalizing to filling and to develop the drug. So, this is reason why we have developed a patented particular EZField technology, you know, syringes on vial and cartridges in order to enhance more value for our client, also more marginality, more security to our value proposition for Sternhatto Group.

Then in the second step, what we have done, we have done so we have performed some particular m and a in order to introduce a standard group certain capability like high precision plastic injection molding. Today, what do we do? Today, we have competence through our plants in Germany, our plants in California. Today, what we are storing is exactly the same competence in in Fisher that we can provide to our client pen, auto injector, a wearable device. In order to do what?

To have always a value proposition that can really support everything that is injectable for our client. And this is the competence that we have introduced through this M and A. It’s also true that we have made some couple of acquisition on two sophisticated company in Denmark specialized for inspection system and assembly for this sophisticated drug delivery system. The last two important things that we have focused in the last years was the attention on people. More and more, we build we put in place, since the last ten years, a strong board of director with international leader coming from the industry pharma company and also the industry of primary packaging.

And also, more and more, we have a strong leadership team based between Europe, United States, and in in Asia, and we are all linked with the same company goal. In 2021, last big milestone, we decided to go public. So we listed the company in New York. Why? Because at that time, at the beginning of 02/2020, we were presented to the board the new industrial plan.

But they were we were facing very huge investment in order to increase capacity, in particular in Europe and United States. We’re talking about after the IPO, we invest more than €1,000,000,000 in order to massively build capacity in order to support the growth of our customer. This is exactly what what we have done. We listed the company. We raised money, and we’re in debt between Europe and United States.

Make an example, the greenfield plants that we’re building outside of Indianapolis is an investment of half a billion euro that we will generate at the end of twenty twenty eight, half a billion euro revenue. So this is the goal, extremely focused to customer, extremely focused to what is the growth in order to support the supply chain of our client. And here we can see as a little bit of the picture. We are present we have a global diversified manufacturing footprint. We are present through 16 site.

Today, we call more and more campus that in through this campus, can serve different capability to our client from nine different country. This is really not really to mirror and to give the perception that we have the more safe and high quality supply chain. One characteristic that we have in all our plants that we don’t compromise on technology, we don’t compromise on quality, we don’t compromise on the latest technology. We want really to give the offering to our client, and no matter if it’s China, Brazil, Mexico, United States, they have the same quality level for for the plan that we serve. Then on top of this, what we have done, we add two sophisticated tech center, one in Italy and the second one in Boston, in order to do what?

To try to serve the client at the very early stage. So most of the time, our client, when it’s in phase two or phase three, is looking to understand which is the better compatibility between glass, plastic, siliconization, technology of syringes, shape. So we really have between Italy and Boston, Eighty Engineer that are so specialized to do this type of service. Today, like I mentioned to you, we are so focused to build up these greenfield plants in Latina that today is up and running, have already delivered positive gross margin in Q3 of last year. And we are so focused to build up these greenfield plants in Fisher.

Exactly, we have already installed several high speed line for syringes. We’ve introduced those capacity for wire rate to feed. And also, we were going to install a big program for device in order really to serve the full capability from from our US plant. The market the addressable market that we serve is big, is continued to grow. So that we are based on our estimation, we’re talking about an addressable market of $13,000,000,000 per year is growing on high single digit to low double digit.

So starting from the left, we can see that the drug containment solution is where we are so focused. The market is growing 8%. What is related to biologics is also in double digit. Then we have the DDS market because most of our client that are launching new cartridges and new syringes in the market, most of the time there is also an auto injector or a pen or a usable pen. It’s where also there’s a big focus and also we are placing a big investment.

Today in the office in Milan, we have 70 engineer focusing continues to develop our IP between pen, auto inject, or wearable devices. In the plants in Germany and the plants in Fisher, we’re building up at high speed capacity for this type of technology. Lastly, the the engineering segment also is growing. We were talking about an addressable market of 1.5 billions that is growing rapidly, in particular, based on the latest investment our big customer have approved in the last three, four months. We are talking about a few hundred billions of dollar in new technology that our client are installing between Europe and United States.

And also through this division, we are working hard. So if you’re going to practically collect this, we are in a very nice environment. And Stellanato is is laser focused to execute and to really become part of the supply chain for the future molecule of our client. Here we are. I show you that addressable market is what we are doing.

So today, we are start really to strategically position our our focus in order really to expand our global footprint, in order to have some dedicated campus in each region of the world. We have really more and more developed our investment in order to address and build capacity for high value product. Today, nearly the totality of our the €1,000,000,000 that we have invested last year are focused in order to increase capacity for high value product. Product. And we continue to invest in research and development organically or when is the case, through partnership in order really to have the most fast and flexible business model for our client.

Lastly, to our tech center, what do we do? Today, it’s also true that client is growing with a lot of commercial product in mAbs, GLP-one monoclonal antibody. But it’s also true that there are several hundred molecule in Phase II and Phase III, and there are several hundred biosimilar client extremely energetic to launch this product. So we have a huge a big organization fully dedicated to find our product in the FDA from our with our client at the very early stage. Okay.

So just to give you some some information about our high value solution program, where we are really fully focused, where we are investing since a few years. So what are the benefit for our client? In order why the client is going to use this high value product, what is the benefit? So the first, they are going to reduce the total cost of ownership. The fact that they are outsourcing to Stefano, washing, synchronization, sterilization per assembly is giving us giving to them the the possibility to invest less in CapEx in people.

Also because just to understand, Stemanato is producing billions of glass container every year. The pharmaceutical industry, most of the time, the abortions, the recondition, sterilization, connected, for example, to their live process. Maybe they work one, two, three shifts per week. In Stemanato, we can really bring in full scale and to reduce scale and to reduce the cost and increase the quality. And this was really starting to build this type of standard on syringes years ago.

Now it’s moving into syringes, now even more is moving to cartridges. So the customer is outsourcing what is not anymore their core business. Also, this can help to increase the quality of the product that we’re going to sell. You know better than me that more and more there are higher regulatory requirement. For example, our next one where the pharmaceutical company have to put in place process that have to enhance any risk of sterility or any generation of gas particle.

Practically, the way that we are delivering today, the pro our glass containing a sort of no glass to glass configuration ready ready to fill can really help to increase the quality and to reduce any type of risk of market recall or even more risk for the patient. Then also, it’s going to make our supply chain even much more efficient because practically, we produce everything we ship and the client is going just to fill. It’s going to in this way, to mitigate the supply chain risk. What is the benefit for Stevanato? We can reinforce the contract.

We can really increase the barrier to entry because we can in this way, we can we increase the number of investment, regulatory registration, and to reinforce the contract, increase the marginality. The target of gross margin that we have in the high value product is between 40 to 70%. It’s where today all our organization is focused to select a contract in the future based on this type of characteristic. In fact, you see you see the track record. In 2019, ’17 percent of our revenue were on high value product.

Today, in we are on the range between 39 to 41%. He will continue to grow in the next years. So over the last years, biologicals have also an important growth driver. Most most of the time I hear from you, which is the presence of Sterenato Group in GLP one, which is the revenue that we will do in the next year in GLP one. So fortunately, one, it will represent a very nice tailwind for Sterenato Group because since many years, our historical big insulin client have validated Stefanato on the for their new GLP-one.

So close to ten years ago, our big client have filing our syringes, easy fill Nexa, our syringes with bypass cartridges with ready to fill via special machine and device. But beside the GLP-one, what we see that biologics is growing rapidly and strictly connected to our high value products. So the beauty is that the product portfolio that we developed in the last year on easy field on devices and also in engineering technology is perfectly fitting with this requirement biologics. It’s where today more and more we are heavily invested because we have a program with tens of hundred on new molecule where, for example, our ALBA technology, our Nexa technology when there is an auto injector, or our cartridges ready to fill when there is a pen or reusable pen is perfectly fitting. And today, more and more, we are focusing our organization from R and D, tech center and production, commercial to really become the true partner from our pharma customer.

And this also here, you can see the trend. For example, this year, 43% of our revenue in the BDS segment was just dedicated to the biologic product. It’s continued to grow in this way. So I want to underline certain point in order to explain that the origin, we start with the glass. We focus on pharmaceutical.

We build global footprint. We are the research and development. And today, we are building sort of product portfolio, a supply chain in order to mirror the future ten, twenty years growth of our pharma client. We want just to be focused on pharma, focused on biologic, and focused on injectable. Israel is where we want to be the number one in what we do.

Also, some number. We here, we can see we were able to more than double most of our KPI in the last year, five years. Before the IPO, we were half a billion euro revenue company. Last year, we were 1,100,000,000.0, also including the big spike of COVID and also the very painful destocking issue that we faced last year. But all overall, means that our investment are going in good direction because they’re perfectly consistent with the last twenty five years.

Just to make you a number, in ’98, the company revenue were €80,000,000. Now we are 1,100,000,000.0. So our goal in the next few years to do double just following the organic growth and the contract that we are executing with our customer. So this is where we want to do. And more and more, reinforce our contract with our client and to reinforce the marginality in order really to build a business model very safe for our customers, maybe more for our for our investor.

This is I would like to briefly summarize the q one. So we are facing a good momentum. Last year was not easy because we grow only a few point due in particular to for the issue of the stock. The Q1 is positive. We are plus 9%.

We start to reinforce the marginality. What is important to share with you that the most tough situation where we are facing, not only Stefano, the industry last year, like the stock is starting to be behind because we see more and more positive signal from the market that our client on Bayer is going to normalize the ordinary partner. So starting at the end of twenty twenty four, we start to see small and midsized customer reactivating normal order. In Q1 and Q2 this year, we see also the big organization placing more regular forecasts. So we are confident that throughout 2025, the buyer market will move versus a normalization.

Also, what we see in 2025, we see the important investment that we have done with the greenfield plants in Latina in fishery starting to generate revenue, and Latina also gross marginality. So this big effort of this multi hundred million euro investment that was just burn was looking to burn cash in the last two years, now it started really to deploy the execution. It’s on track. The validation with our client is on track, and now it started to be a real contributor on our revenue. And also, with there is other other, say, lateral positive KPI that is going to show that the trend of 2025 is will move in good direction.

In fact, independently for the external market volatility, we are fully focused to confirm our guidance and continue to drive growth. This was a is a little bit an explanation of our approach strategy around investment. In 2020, we we approved the industrial plan. Also in parallel, the board suggested the leadership team to to went public in order to find a safe way to raise money. We went public in 2021.

We raised money, and we invested practically between 1.1, 1 point 2 billion. So euro between building capacity for organic growth for our client, and force research and development, and also to do other other type of investment in order to do the right infrastructure to prepare the company for the next level, in fact, where we are. It’s also true that this important cycle, we we we shall we do that, we’ll have a peak. But in 2027, we want to go back to a normalization situation that will be high single digit, low double digit compared to our investment. So we want to run between nine to 11% of investment based on our revenue, and we are perfectly on track.

The beauty is that outside compared to 2021 when we decide to do IPO and when at the Capital Market Day in New York, we shared this number, there are more and more progression of positive opportunity for Sternato Group on the market. So this will enhance the Bernardo to more and more do the right priority of where we want to put our money in the future. And the idea is to always focus only on high value product where there is solid contract, solid pipeline with our client, and also good reputation of the molecule behind them. The type of investment that we are doing when we invest in high value product is duration is €1 CapEx have to represent €1 revenue. In fact, this big portion of investment that we are doing between Italy and Fischer, it will represent additional revenue next year.

Make an example, the investment that we are doing in Fischer, we we are talking about a €500,000,000 plus investment, nearly focused on high value product. At the end twenty twenty eight, we have to deliver the equivalent in time of revenue. So the goal is to generate after end of twenty twenty eight, ’5 hundred million euro revenue from the plants and features. This is our goal. And the goal is to continue to go in this this approach.

I would like just to summarize. So the company is not a startup. It’s more than 75 years old. The first profit we saw from my grandfather after because today, you’re right. You you are focusing to have the return on investment.

They put all the performance objective, all the leadership team, including myself, return on investment. My grandmother told me that the first money arrived after thirty to forty years in Familia Estebanata because it was only focused on the money where I always always in the company. Now we we changed the the project. Don’t worry. But the goal is the reason was really strong exercise, a lot of discipline, invest heavily, build a reputation with our client, and to build a sort of value proposition between global footprint, between value proposition in order to become the true partner of the supply chain for the future biologic drugs.

This is exactly where we are really working. We are happy. We are laser focused today in the company. Most of you in this today, they ask us which is your main priority, your main, let’s say, concern. So today, the external market is positive.

The demand is robust. The pipeline of our client is robust. Our products will perceive. Today, we have five big priorities in Stellanto Group. The priority, what doesn’t mean that are some cross functional project that are fundamental for the success of of our industrial plan, whether our involvement between all the functions, supply chain, operation, quality, HR, controlling, that we are going to monitor every week the status.

Priority number one is Fischer because it’s a big investment. Priority number two is the greenfield plants in Latina. Priority number three is we win a big program for cartridges, say, to feed. We are developing through our engineering division this high speed machine that do washing, sterilization, sterilization with a new patent technology of sterilization in order to build the multi hundred million capacity for cartridges to fit phase one airplanes of Latina. And there is organization laser focus to build this technology.

Priority number one, to resize and enlarge our competence of from engineering because we have one plants in Denmark, once in in in Italy, but we need to further increase this capacity of this engineering division or to prepare for the future growth of this company. And priority number five is digitalization. Today, the company is more complex. We want to more and more increase and make efficient tool for us and for our client in order to be efficient. So clear execution, clear priority in order to succeed from now to 2027 without having other distraction.

We want to more and more be recognized like the humble but hungry proactive partner for our customers. Thank you very much.

Matt Larue, Analyst, William Blair: Okay. I think we have time for my one question, I expect. So, Franco, you you referenced the 500,000,000 CapEx in Fisher’s, and that’s part of a billion of of CapEx since 2022 largely to support future growth and high value products. And some of that’s mostly driven by biologics, referenced from broad based demand. But from the outside looking in, you know, investors see that the last several quarters, you’ve seen significant destocking, which at least on the surface or gives the appearance of the opposite mismatch of supply demand.

And then obviously there’s quite a bit of focus on on GLPs, which some of your peers have characterized as high single digit percentage of revenue. And there’s obviously, whether it was the Lilly readout earlier this year or just generally speaking, a fear of that market moving to oral. So maybe speak to as you make these significant investments, what is underpinning that and what gives you confidence that it’s not just one drug or one drug class, but broad based demand to fill that capacity.

Franco Serrano, CEO, Stevanato Group: So the the stocking was related exclusively to the vial, particular bulk vial that is non high value product. And we serve during the COVID period this vial from the plants in Slovakia, Mexico, Brazil, China, a little bit from the plants in Italy for the easy feed. So what happened during the during the pandemic decline, usually, they keep three to six months of inventory. They build a layer of more than one year of stock in order to be ready to serve the the market with this COVID vaccine. And on top of this, many client bid additional inventory for the COVID vaccine.

A lot of CMO bid additional inventory to to be ready to win contract. When? Fortunately, but unfortunately for the industry, at the end of twenty twenty two, COVID disappear, the full market, we are talking about 13,000,000,000 size per year of of Viya, they they find that they have on the top more than one year. One year, they have half of stock. This took for all the industry practically two years to clean up.

Today, we are. This, like I mentioned to you, this COVID is starting to disappear. All of our client is moving to a sort of normalization. Many time I receive from you what is the future of Bayer. Bayer is one still one of the most flexible primary packaging for drugs.

You move it from two ml to thirty ml, can really store any type of therapeutic drug. So is there in Europe, United States is growing 1%, two %. Latin America and Asia and Russia is growing maybe 56%. Is there? It will continue to be remain there in the next decade.

It’s also true, and this is the reason why we are heavily investing in the Greenfield plants, that the the new molecule that the bio customer are launching in the market are most of the time entering what we call self administration. So the via, most of the time, you use in the hospital or you use in certain country where they’re spending a lot of attention or pharmaceutical spending too. The new drugs that most of the time are sophisticated, expensive drugs that some administration is through out injector or pen or wearable devices. It’s where Stavanaghto group is building capacity on syringes, is building capacity in cartridges, and building capacity in out injector. So there is not one thing that is going to the conflict.

COVID was an exceptional event that never happened because in the pharmaceutical industry, one thing is safe is the secure of the supply chain. But it’s happened and now fortunately is behind. There is the good news that there is several hundred new molecule that are well spread to many type of therapeutic area that the customer heavily invested and where we are putting our money. GLP-one is one of these, maybe is the star in this moment, probably is the star of the new growth on the market, but also is well compensated by many other product. You also ask the role of the oral pill.

Also, the pills, it will take a in the market. But remember, we’re talking about their building capacity for several billions of unit dose injection per year is normal. Also, there will be a role of the pills in the next year. There is estimation from the market it will be takes a role between 15% to 30%. In our model, we put the most safe approach that oral pill takes up to 30%, but in an environment that we grow also in injectable a lot.

Matt Larue, Analyst, William Blair: Alright. Great. Thank you. We’ll head up to Richardson for any more q and a. Thank you.

Thank

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