Stevanato Group S.p.A. Q3 FY2023 Earnings Call

Good afternoon. This is the Chorus Call conference operator. Welcome and thank you for joining the Stevanato Group Third Quarter 2023 Financial Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. At this time, I would like to turn the conference over to Ms. Lisa Miles, Senior Vice President, Investor Relations. Please go ahead, madam.

Good morning, and thank you for joining us. You can find a presentation to accompany today's results on the Investor Relations page of our website, which can be found under the Financial Results tab. As a reminder, some statements being made today will be forward-looking in nature and are only predictions. Actual events and results may differ materially as a result of risks we face, including those discussed in Item 3D entitled Risk Factors in the company's most recent Annual Report on Form 20-F filed with the SEC. Please take a moment to read our Safe Harbor statement included at the front of today's presentation. We encourage you to review the information contained in our most recent SEC filings, including our latest Form 20-F filed on March 2, 2023. The company does not assume any obligation to revise or update these forward-looking statements to reflect subsequent events or circumstances, except as required by law. Today's presentation may contain non-GAAP financial information. Management uses this information in its internal analyses of results and believes this information may be informative to investors in gauging the quality of our financial performance, identifying trends in our results, and providing meaningful period-to-period comparisons. For a reconciliation of the non-GAAP measures, please see the company's most recent earnings press release. I will now hand the call over to Franco Stevanato for opening remarks.

Thank you, Lisa. This morning we reported our third quarter results with double-digit revenue growth and an adjusted EBITDA margin of 27.5%, in line with our near-term financial targets. While third quarter revenue in the Engineering Segment fell short of our expectations, largely due to timing of revenue, we remain confident that we can achieve our full year guidance. As we highlighted at our Capital Markets Day, the fundamentals of our business remain strong. For the last 50 years, our focus has been on delivering the highest-quality products to pharmaceutical customers worldwide. Our unique value proposition of integrated end-to-end solutions has helped us become a leading partner of choice. We support customers through the entire drug life cycle from early-stage drug development through commercialization. Our differentiated products embed science and technology to meet the most stringent standards that customers demand. We're currently benefiting from macro trends such as aging populations, the rise in biologics and biosimilars, and the shift towards self-administration of medicine. We operate in growing end markets, particularly biologics, where we have built a leadership position in treatment areas such as GLP1, monoclonal antibodies, and mRNA applications. As previously disclosed, of the 2022 FDA approvals, we are present in three out of four of the potential blockbusters, all of which are biologics. Biologics, which are mostly administered through injections, are delivering breakthrough results in patient care, but they tend to be costly and more challenging to manufacture due to their sensitive nature. These factors are driving demand for high-performing drug containment to ensure the integrity and stability of treatments delivered to patients. Moreover, the global pipeline of drugs in development is at record levels with more than 60% in injectable formats. In summary, we believe that these positive trends position us well to capitalize on the many favorable secular tailwinds. We're focused on executing against our strategic priorities to deliver sustainable organic growth and build shareholder value. Thank you. I will now hand the call over to Marco.

Thanks, Franco. Before I begin, I want to clarify that all comparisons refer to the third quarter of 2022, unless otherwise specified. Starting on Page 7. For the third quarter of 2023, revenue increased 11% to EUR271.4 million, and 13% on a constant-currency basis, driven by growth in both segments. While we achieved double-digit growth, this is below what we expected for the third quarter sales at the time of our Capital Markets Day. Since then, revenue tied to specific engineering contracts has shifted to the right, and we expect to recognize the revenue in the fourth quarter. As a reminder, the Engineering business is project-based with revenue recognized on a cost-to-cost percent of completion basis and can vary from quarter-to-quarter. The Engineering business comprises large, complex projects that have long life cycles from start to finish, typically 12 months to 24 months, depending on the nature of the project. In the third quarter, there were a couple of dynamics at play. First, we've been experiencing strong demand for manufacturing lines, and this demand has outpaced our expectations from a year ago. This is certainly positive for us, but at the same time, it is increasing the pressure on operations for timely delivery. Secondly, the pandemic created volatility in supply chains, and we're still working through a bottleneck work in progress that resulted from the electronic component shortages last year. This combination of strong demand and supply-chain volatility places stress on our resources, resulting in certain projects experiencing delays and lower-than-expected marginality. We believe we are on the right path to better balance resources with demand, and Franco will discuss the initiatives we are taking under our efficiency plan. The BDS segment performed in line with the assumptions embedded in our guidance. We continue to gain traction with our customers with the adoption of high-value solutions. In the third quarter, high-value solutions represented 32% of revenue compared with 30% for the same period last year. In the third quarter, revenue from COVID-19 decreased 84% and accounted for approximately 2% of revenue. Excluding revenue from COVID-19, third quarter revenue increased approximately 25%. With our diversified portfolio, we've been successfully managing the roll-off and backfilling the revenue with new and expanding projects. For the third quarter, gross profit margin was impacted by the lower marginality in the Engineering segment, the ongoing startup of the new manufacturing plants, and higher depreciation. As a result, gross profit margin decreased 110 basis points to 30.5%. As we continue to execute our strategic priorities, we are also closely managing our SG&A expenses as we grow the business. In the third quarter of 2023, operating profit margin was 18.8% and adjusted operating profit margin was 20%. On the bottom line for the third quarter of 2023, net profit increased 4% to EUR37.9 million, and we delivered diluted earnings per share of EUR0.14. Adjusted net profit increased 6% to EUR40.1 million, and adjusted diluted earnings per share were EUR0.15. Adjusted EBITDA increased 13% to EUR74.7 million, and adjusted EBITDA margin was up 70 basis points to 27.5%. Let's review new order intake, which increased 4% to approximately EUR256 million in the third quarter of 2023. We ended the quarter with a backlog of committed orders of approximately EUR924 million. Moving to segment results on Page 8. For the third quarter, revenue from the Biopharmaceutical and Diagnostic Solutions segment increased 6% to EUR218.9 million, and 8% on a constant-currency basis. Excluding revenue related to COVID-19, the BDS segment grew approximately 23%. Revenue from high-value solutions increased 16% to EUR86.2 million, and revenue from other containment and delivery solutions was EUR132.8 million, consistent with the same period last year. As expected, margins in the BDS segment were tempered by a rise in start-up costs and higher depreciation. This was partially offset by a higher mix of high-value solutions. As a result, the segment delivered a gross profit margin of 32.7% and an operating profit margin of 21.2%. Revenue in the third quarter of 2023 from the Engineering segment increased 37% to EUR52.5 million, driven by growth in all business lines. This was lower than expected due to the timing of revenue on certain engineering projects, and we expect to recognize the revenue in the fourth quarter. For the third quarter of 2023, gross profit margin was 18.5%, and operating profit margin was 11.2%. The decrease in margins was mainly driven by lower marginality on specific projects in progress and, to a lesser extent, a lower mix of after-sales activity. On Page 9, at the end of the third quarter, we had net debt of EUR227.5 million, and cash and cash equivalents of EUR64.8 million. As expected, capital expenditures were EUR107.2 million in the third quarter, and we remain on track with the capacity expansion in high-value solutions to meet customer demand for ready-to-use drug containment. For the third quarter of 2023, cash flow from operating activities was EUR33.5 million, which reflects our current working capital needs to support organic growth. Cash used for the purchase of property, plant, and equipment, and intangible assets was EUR132.3 million, which resulted in negative free cash flow of EUR97.8 million. Lastly, on Page 10, we are reiterating our full year 2023 guidance. We continue to expect revenue in the range of EUR1,085 million to EUR1,115 million. Adjusted EBITDA in the range of EUR291.8 million to EUR303.8 million, and adjusted diluted EPS in the range of EUR0.58 to EUR0.62. Thank you. I will hand the call to Franco.

Thanks, Marco. Since we provided a full business update at our recent Capital Markets Day, I thought it might be helpful to spend some time focusing on a couple of demand dynamics we currently see within the segments. Let's start with Engineering. The Engineering segment provides us with an important advantage and point of differentiation with our customers. As Marco noted, demand has picked up over the last year, particularly for vision inspection and assembly lines, mostly driven by the growth in biologics. To satisfy demand, we are adding resources, enhancing technical capabilities to help drive digitalization, and implementing continuous process improvements to increase efficiency and cost optimization. Nevertheless, we expect that it will take some time to work through the current bottlenecks. Turning to the BDS segment, which benefited from COVID-19 in 2021 and 2022. Coming into fiscal 2023, we faced a year-over-year revenue headwind of about EUR80 million. Despite this, the BDS segment is on track for double-digit growth in 2023. However, I would like to point out some differences within two of the business lines in our BDS segment, as COVID-19 revenue winds down. First, our core Drug Containment Solutions or DCS business has more than overcome the COVID-19 headwind. Demand remains robust, driven by the need for high-performance drug containment and the adoption of ready-to-use solutions. In the third quarter, our core DCS business grew about 10% compared with the same period last year. Excluding COVID-19, our drug containment business grew more than 25% in Q3. The data underpins the clear secular tailwinds that we discussed at our Capital Markets Day. Our investments in capacity expansion are designed to meet this demand. Second, and as expected, our in vitro diagnostics business has been much slower to recover coming out of COVID-19. We assumed this in our guidance at the beginning of the year. While we are starting to see some recovery with certain customers, we currently anticipate that the business will normalize over the next couple of quarters. Nevertheless, the in vitro diagnostics business is a strategic foothold that we are leveraging to diversify and extend our core competencies into Drug Delivery System activities. With our unique value proposition of integrated end-to-end solutions, we are bringing the full power of our capabilities to bear, and we are winning new business in the DDS space, both CDMO and proprietary. We currently expect that the revenue will begin to materialize from these new business opportunities sometime in the back half of 2025. We also see a strong pipeline of future projects, complemented by opportunities on the engineering side for assembly lines. With the growth in biologics and the trends towards the self-administration of medicine, this is a natural stepping stone to supporting customers with integrated platforms combining both drug containment and delivery solutions down the road. In closing, we are maintaining our full year 2023 guidance, and we currently see positive long-term trends. We are operating in an environment of favorable demand, growing end markets, and multi-year secular drivers. We are working with our customers every day to support their needs across the entire drug life cycle. We remain focused on operational excellence and the successful execution of our near-term strategic and operational priorities as we aim to complete our capacity expansion projects in the US and Italy, grow the mix of high-value solutions, invest in R&D to advance our premium primary packaging and drug delivery systems, and build a multi-year pipeline of new opportunities by supporting our customers through scientific innovation to meet their evolving needs. These priorities are specifically designed to capitalize on market trends, to drive long-term sustainable organic growth and build shareholder value. And with that, let's open it up for questions.

This is the conference operator. We will now begin the question-and-answer session. The first question is from Derik de Bruin of Bank of America. Please go ahead.

Hi, good morning, and thank you for taking my question. So I appreciate that the Engineering segment was below your expectations. But it was a little bit ahead of what the consensus estimates are looking for while it was BDS that was below. Could you just talk a little bit about this in terms of just some of the seasonality that might be going on and the ramp in BDS from 3Q to 4Q? And also how much ES revenue got pushed into from 3Q to 4Q? Thank you. And I've got a follow-up.

I will begin by addressing the situation, and then Marco can add to the figures. We typically have certain partners or customers that contribute significantly to our business in the latter half of the year, and we are also seeing new capacities delivering more high-value solutions. Regarding your question on BDS, we are experiencing some impact from the in vitro diagnostics segment, which is recovering more slowly post-COVID, but we incorporated this into our guidance at the start of the year. Additionally, in terms of DCS, we are experiencing robust growth; the figures show a 25% increase in DCS business compared to pre-COVID levels. As for seasonality, while there are patterns that repeat, it is not entirely new.

Yes. And about the guidance, we are reiterating our guidance also by segment. We still expect double-digit organic growth in both segments and the expansion of high-value solutions with a percentage between 32% to 34% on total revenue. So for the year, we are in line with our expectations.

Got it. And expectation on what got pushed from 3Q to 4Q on the ES side?

Yes, as commented, it is mainly related to the engineering side where some revenue shifted from Q3 to Q4. You probably remember our long-term contracts from 12 months to 24 months are treated with a percent of completion method for revenue recognition, and they are based on a cost-to-cost progress. So, as a matter of fact, we have been able to progress less in Q3 due to lower costs than expected. And this is something that will be recovered in Q4 with the cost occurrence.

Got it. Just one final question. Regarding the backlog, what were the net new orders? The book to bill ratio has been trending slightly below one, and I'm interested in your initial thoughts on how that might affect 2024. Essentially, there is an expectation of double-digit revenue growth for the business next year. I would like to know how the backlog looks, what the net new orders are, and any initial thoughts on how this could translate into revenues for 2024. Thank you.

What I can tell you about the backlog and then Franco will comment about 2024 is that we have confidence in our guidance for 2023 because we are covered for about 97% of the center point of our guidance. And all the remaining portion of our EUR924 million backlog is associated with revenue that will be recognized in 2024. So this is the starting point, and I just reiterate the message that this is not the only KPI we have for visibility of the future growth. And about the future growth, we are reiterating also the message we delivered during our Capital Market Day where we see on average low double-digit growth toward 2027.

Thank you.

The next question is from Paul Knight of KeyBanc. Please go ahead.

Franco. Could you talk about capacity expansions? I know Latina has opened status of Indianapolis. And then, does the Engineering Segment need to expand capacity as well? Thank you.

Hi, Paul. Yes, I'll address your questions. To begin with, I want to confirm that we are progressing well with our capital expansion efforts. Latina is nearing the generation of its first commercial revenues, aligning with our expectations. I’m pleased to share that we have also received our initial audit from certification bodies and customers positively. We are very excited about the launch at Latina. Similarly, in Fishers, we anticipate generating commercial revenues by the middle of next year. In both locations, we are supporting the startup with local resources and staff relocation from Italy to assist our new team members. We have a positive outlook on this significant investment. Additionally, we are enhancing our engineering resources to meet growth and customer needs, not only to navigate the temporary challenges we are facing, as Marco mentioned, but also to prepare for the next phase of growth. The market response to our technology has exceeded our expectations from the IPO, and we are scaling up as a leading supplier of high-end technology in visual inspection and assembly.

On the Engineering Segment, is this demand largely monoclonal antibody, or is there some GLP1 demand out there?

Yes, Biologics is experiencing rapid growth, and it plays a significant role with auto-injectors. This not only drives our assembly lines for devices but also highlights the need for high-value containment solutions that require visual inspection after filling. Additionally, there is an increase in production for high-value solutions in cartridges and syringes. Overall, this is a very intriguing area of our business, with biologics being the key driver.

And Paul, just as a reminder, during our Capital Markets Day, we did outline that we are serving GLP1 with engineering lines as well.

The next question is from David Windley of Jefferies. Please go ahead.

Hi, thanks. I wanted to come back to a couple of Derik's good questions. One, on the engineering revenue push-out. If the straightforward question is, could you please quantify the revenue amount you talked about cost-to-cost, but if you would please quantify the revenue amount that got pushed out.

You mean the shifting from Q3 to Q4?

Yes, please.

Yes, it's about EUR5 million to EUR6 million.

Got it. Thank you. And then, Marco, you said in your prepared remarks you made a comment about managing SG&A costs closely. Both the sales and marketing and G&A lines were lower both in dollar and in ratio percentage than we were looking for. I wonder, on the point of managing those costs closely, do some of those costs need to come back? Was there some delay in spending given the lower revenue? Or are you managing to a more efficient level of operation where you can sustain the lower levels that we're seeing in the third quarter?

We are carefully managing, not postponing costs, obviously. So it's the second one. You can see we are well in line with our R&D expenditure. We are between 3.3% to 3.4% in the nine months. So in line with our expectation. We are taking some cost in sales and marketing and G&A to manage efficiently our P&L.

Okay. And then last question for me. On the order book question, you said it’s closer to your IPO period, we were still in the pandemic, lots of players were receiving orders where clients were looking further out into the future, willing to do that because of supply chain challenges, managing inventory, higher levels of demand, and a lot of different reasons. And as a result of that, some of your backlog at that time would have lapped not only into the following year but into the year after that. So if I bring that forward to current, that would be out into fiscal 2025. Does your current committed order book include 2025 orders, or has that kind of compressed from a forward visibility time frame standpoint in customers' eyes? Hope that question makes sense.

You are right, the order pattern, we experience a change from the pandemic period to now that is more similar to the pre-pandemic pattern. We have only a small piece of contract related to the engineering that is going beyond end of 2024. But it is related more to the nature of the contracts rather than the fact that customers are ordering 18 months in advance as it happened during the pandemic.

But David, also to say that it doesn't mean that our visibility in the future demand is shortened compared to the past. Because in the meantime, we are developing forecasts and multi-year agreements with customers that maintain or enhance our visibility for the future. The pace to flow a committed order, the forecast into the order book is changing, but the visibility is still significant and also higher and deeper than in the past.

Understood. Thank you for those answers. Appreciate it.

Thanks, Dave. Sabrina, next question please.

The next question is from Patrick Donnelly of Citi. Please go ahead.

Hey, guys. Thank you for taking the questions. Franco, maybe one for you. As the quarter progressed, did you see any change in behavior from biopharma customers? Just given broad peer commentary around more cautious spending, maybe tighter inventory management from that customer base. Just curious what you saw and if things changed at all as the quarter went, September, October, whatever it may be, it would be helpful just to kind of talk through the progression there.

I understand your question, and please let me know if I miss something. Regarding customer behavior towards orders in biologics, we notice a trend where they are securing the supply chain not just for the short term but also for the long term. We are collaborating with key customers to plan our capacity according to their future requirements. The pandemic's impact on biologics inventory is minimal. It's important to remember that the COVID-19 situation had a significant influence, and biologics mainly focus on cartridges and syringes due to their use in drug delivery devices. The normal behavior for customers in committing to orders is evident, but there is a strong emphasis on securing the supply chain for the future.

Okay. So you didn't really see a change as the quarter progressed with biopharma customers maybe being a little more cautious. It was kind of status quo each month of the quarter.

I don't see big changes in this direction. The only message I can deliver is that the need to get ready to meet customer demands in the coming year is a good reason to work together with customers, and they are very keen to have agreements with us for not only the short term but also for the much longer run.

Well, we are, let's say, confirming our margin for the BDS segment. We see the robust shift into high-value solutions happening, and we expect to increase our gross profit margin compared to last year in the BDS segment on an adjusted basis, excluding the non-recurring costs associated with the startup. In engineering, we see a slight decline in the year compared to the previous one in gross profit margin. But as discussed with David, the other actions we are putting in place are cost management, especially in sales and marketing and G&A that are playing favorably for the end of the year. So that's the reason why we are reiterating our guidance for 2023. We expect also adjusted EBITDA and EBITDA for the year.

Okay, thank you.

The next question is from Larry Solow of CJS Securities. Please go ahead.

Good morning or good afternoon. Thank you for your questions. To start, you mentioned an improvement in demand for vision inspection and assembly lines. Coming out of the Capital Markets Day, can you discuss how you intend to leverage this engineering segment? Are the customers you've seen this demand from also involved in the BDS segment? Please elaborate on that dynamic.

Yes, you're right. There are many customers that use our visual inspection system and our assembly line that are also our customers for containment solutions, and mostly high-value containment solutions. So the share of customers that we serve more than with a single product line is increasing and is in line with our strategy to be a solution provider because we believe that the integrated offering leverage on the engineering provides benefit to customers in terms of shorter time to market, simpler supply chains for them, better management of projects, and, at the end, a reduction of their total cost of ownership. And the increased number of customers that use more than one single product is increasing.

Got it. Just to clarify, I understand that you don't provide specific guidance for the quarter or for the segment. Following up on some earlier questions about the BDS segment, it appears that the numbers were generally in line with your expectations, and the EUR5 million shortfall compared to the street and your internal targets was primarily due to the engineering component, correct?

Yes, that’s correct. We are on our side reiterating the double-digit organic growth in BDS segment. And this is how we can see the picture for the entire fiscal year with strong growth in high-value solutions that are expected to represent between 32% to 34% of total revenue. So we are reiterating this. And as you said, we generally don't provide quarter-after-quarter guidance, quarterly guidance, and that is, our picture is still the same.

Got you. And that guidance obviously implies a pretty nice pickup in Q4. And I guess seasonally, the BDS segment normally does pick up significantly in Q4, and I assume that dynamic comes into play this year as well. But does that supply chain, that supply and you are ramping capacity, I guess that's helping that trend even more. Any thoughts there?

But you already covered your question with the appropriate answer yourself. Because yes, it's a combination of new capacity coming online, specifically for high-value solutions that is more effective in terms of revenues. At the same time, there is some repetitive pattern in terms of ordering by customers that is driving this distribution of revenues along the year. But the increasing capacity is the most important driver because we are having more capacity in high-value solutions.

Right. And then just last question, just on price, any color there? I imagine you've been getting a little bit more price this year, you probably increasingly over the last couple of years as inflation has obviously gotten significantly more material. Your expectation as we go forward, do you continue to expect to get price and more in line with, I guess, what the inflationary pressures are?

Our approach about pricing is basically depending on value, with respect to the high-value solutions is not just based on cost, first of all. About inflationary pressure you mentioned last year, we discussed many times the sudden increase in the cost of utilities and other specific items. But the approach generally speaking is the same; we are frequently recalculating our cost basis including inflation and pricing accordingly.

Great. Thank you. Appreciate the color.

Thank you.

Thanks, Sabrina. Next question, please.

The next question is from Jacob Johnson of Stephens. Please go ahead.

Good morning, this is Mac on for Jacob. Just a couple of quick ones from me. You highlighted at your Investor Day that you're tied to roughly 70% of biopharma companies with new capacity and new product launches. Is there an opportunity for your win rate to be higher on new molecules coming to market? I know you mentioned the three out of four potential blockbusters, but just going forward like to get a potential mark there?

Yes, you're right in terms of what we delivered during Market Day, and yes, we are engaged with important blockbusters coming to the market in the short term and have a bigger volume in the future. There are no changes in this perspective. I wanted to stress the fact that we are talking about biologics in terms of the kind of molecules that come into the market. And the needs for biologics are perfectly matching our value proposition in high-value solutions and high-value containment solutions. But nothing different from what we deliver during the Capital Market Day.

Thank you. You briefly mentioned contracting at your Capital Markets Day. What insights did you gain from contracting during COVID regarding large demand projects? How does this affect GLP1 contracts?

Obviously, I cannot talk about any specific therapeutic area. But generally speaking, when we discuss with customers, the opportunities in the long run we have a complex agreement that may imply different engagement of the customer, including some support to CapEx sometimes. So it's case-by-case negotiation obviously, but the good starting point is the stronger relationship we have and the fact that we can leverage on a long-lasting experience with these customers.

Great. Thank you for taking my questions.

Thank you. Sabrina, next question, please.

The next question is from Matt Larew of William Blair. Please go ahead.

Hi, Sam Martin is speaking on behalf of Matt Larew. I have a few questions. To start, building on what others have asked regarding contracts and structure, a competitor in the packaging industry mentioned experiencing delays in revenue due to a gap between customer expectations and their capacity to enhance lead times.

Sam, this is Lisa. It seems that we are having trouble hearing you this morning, so I will ask Sabrina to move on to the next question. If you could connect through the web phone, I will send you the link right away.

The next question is from John Sourbeer of UBS. Please go ahead.

Hey, thank you for taking the question. I'm actually dialed in. I just want to make sure you can hear me fine here.

Yes, we can.

Great. Franco, appreciate the color on some of the sub-segment level on BDS. And just maybe on IVD, would you be willing to quantify what the sizing of this is or what you're actually seeing on the non-COVID growth there within BDS?

John, we don't break down the revenue at this stage, but I want to emphasize that the total revenue and its value represent a small portion of the segment. Our interest in vitro diagnostics is linked to a strategic view, allowing us to leverage our expertise and know-how as we apply molecular diagnostics in the drug delivery device space. This level of synergy draws strategic attention, even though it accounts for a minor part of the business.

Got it. And just to clarify, I guess the comments on you know ordering patterns and backlog demand. But are there any areas where you're seeing destocking or restocking within customers in BDS?

I can repeat what we delivered in the past about the situation in buyers and in consumables for the diagnostic services. But it's something that represents one part of a highly differentiated portfolio in our revenue. So we are impacted in a very limited way. And as you know, we haven't been able to compensate with the expansion in other therapeutic areas or product lines, overweighting the space for high-value solutions for biologics.

I got it. So just to clarify on that, so I guess you know in Drug Containment Solutions you know there's not areas where you're seeing any customers destocking coming down?

No, no, it's the opposite. We have to execute properly our capacity expansion plans to meet their strong demand. It's the opposite. There is no this kind of situation you are referring to in the high-value solution.

Got it. Thank you for taking the questions.

Ms. Miles, gentlemen, there are no more questions registered at this time.

Thank you, everyone, for joining us today for the Stevanato Group third quarter 2023 earnings call. We look forward to speaking with you in the future. Thank you.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect the telephones. Thank you.