service@incommglobal.com Transcript www.incommglobal.com Stevanato Group Full-Year Results Tuesday, 08 March 2022 Lisa Miles: Good morning, and thanks for joining us. With me today is Franco Stevanato, Executive Chairman

Lisa Miles: Good morning, and thanks for joining us. With me today is Franco Stevanato, Executive

Chairman, Franco Moro, Chief Executive Officer and Marco Dal Lago, Chief Financial Officer. I d like to remind everyone that a number of statements being made today will be forward looking in nature. Please remember that such statements are

only predictions. Actual events and results may differ materially, as a result of risks we face, including those discussed in item 3-D, entitled risk factors in the company s annual report, on form 20-F for the fiscal year ended December 31, 2021, filed with the SEC.

We encourage you to review the information

contained in our earnings release today in conjunction with our associated SEC filings. 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-gap 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-gap measures presented in this

document, please see the company s most recent earnings press release. And with that, I ll hand the call over to Franco Stevanato for opening remarks.

Franco Stevanato: Thank you, Lisa. 2021 was a landmark year for Stevanato Group, under scored by the power of our integrated capabilities and value

proposition. For 2021, compared to the prior year, we delivered double digit revenue growth, excluding COVID, expanding margins and increasing mix of high value solution a rising customer demand was matched with a first-rate execution. With a

successful IPO behind us, we met or exceeded our full year 2021 financial performance metric despite the complexity of the current global supply chain environment. We finish 2021 with a solid backlog and new order intake, as well as a robust

pipeline of new opportunities. At year end, Stevanato had more than 400 million in cash, a flexible balance sheet and ample liquidity to fund future investment in growth platform.

The recently announced investment from BARDA illustrate our strong reputation and further confirm our strategic approach in the US, to invest and broaden our

offering in this strategic region. Our clear track record demonstrates consistent delivery in our financial and operational objective. Today, the fundamentals of our business continue to strengthening as we steadily advance our strategic priorities

to capitalize on strong customer demand. Amid the favorable macro trends, our integrated capability resonates with customers as we aim to drive double digit revenue growth, increase our mix of high value solution, expand margins and deliver long

term share of the value.

Franco Moro: Thank you, Franco. Our successful financial and operational performance in 2021 sets the foundation for

sustainable organic growth. For the full year of 2021 revenue grew 27.5% over the last year, driven by growth in both segments and an increasing mix of high value solutions. We closed the fourth quarter of 2021 with a new order intake of

approximately 278.3 million euros and a committed backlog of approximately 880 million euros. We view these key performance indicators as important measures for our future growth projects and represent ongoing favorable customer demand

trends as new treatments come to market to tackle chronic diseases and advance patient care. Turning to slide six, revenue from high value solution was strong in the fourth quarter, which helped to boost the full year mix to 25% of the 2021 revenue

compared to 22% last year. We expect this trend to continue as customers choose ready to use platforms because they reduce customers total cost of ownership, get treatments to market faster and increase quality and flexibility.

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In 2021, we experienced a rise in demand for syringes compared to last year. The increase was driven by our

high performance ready to use a syringes platform, where orders doubled in 2021 compared to the prior year. These proprietary platforms include our Alba and Nexa syringe products that are gaining traction. These platforms are ideally suited for biologics and high sensitive drugs like monoclonal antibodies, MRNA vaccines, and recombinant proteins because

of their advanced technology and the superior performance. We expect this trend will continue into 2022. The evolution in our high value solution extends beyond the primary packaging. We continue to expand our integrated capabilities in the drug

delivery space of pain injectors, health injectors, and wearable pods. In January 2022, we expanded our agreement with Haselmeier for our proprietary Alina pen injector, granting us

exclusivity to support a broader range of therapeutic areas beyond diabetes.

We design and developed the Alina variable dose and fixed dose pen injector platform, which is compatible with the established therapeutic regiments and innovative drug therapies related to diabetes. This expansion marks another

important step as we continue to expand our presence and diversify the opportunities within this product family. Let s go to slide seven of the presentation. We are excited to announce our first agreement with the US government Biomedical

Advanced Research and Development Authority or BARDA. Under the agreement, BARDA will invest up to approximately $95 million to support an increase in manufacturing capacity in Indiana for both standard and

EZ-Fill vials. This will help strengthen the US government domestic capabilities for national defense readiness and preparedness programs for current

and future public health emergencies.

We are very pleased to be selected for this important investment from BARDA, as we build and rapidly scale our

capacity in Indiana to help to fortify the US governments pharmaceutical supply chain. Turning to slide eight. The BARDA investment dovetails with our plan to expand our global industrial capacity to satisfy market demands. The build out of our

facility in Indiana remains on track. We still expect that construction will continue into 2023, followed by startup and validation, leading to revenue generation sometime between late 2023 and early 2024. In the meantime, the pace of demand has

increased over the last year, particularly for our high value solutions. In response, we are moving forward with an incremental investment in Italy to further shore up our capacity until the US and China facilities are expected to go live. We

believe that we have the necessary flexibility through our modular approach to incrementally add or modify capacity to match customers evolving needs.

Our capital investments are intended to yield sustainable organic growth as new treatments come to market that require high quality, high performance

solutions, further up the value chain. We believe that our integrated capabilities coupled with our high value solutions are important elements to create and drive shareholder value. Turn it to slide nine. While the pandemic continues to present

challenges to businesses around the world, we remain resolute in managing the complexities around inflation and the supply chains. We worked hard to effectively manage the impact to the business in 2021, and now we are keeping a sharp focus on

inventory management,

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manufacturing, and on time delivery to customers. We have been capturing cost increases and have raised the prices accordingly. We were not immune to the rapid rise of Omicron variant, and we

experienced a higher rate of absenteeism in January in some of our European facilities. And while production was temporarily slowed in January, we began a return to more normalized levels of staffing and productivity by mid to late February.

We are also following the situation in the Ukraine carefully and its potential business impacts. We are closely managing inflationary cost and supply chain

with a high degree of discipline and perseverance. We anticipate that these headwinds will persist throughout the year. And finally, we are executing against our strategic operational priorities to capitalize on rising demand trends and support

customers across the entire drug life cycle. In 2022, we remain focused on adding incremental capacity in Italy, in response to rising demand as customers move up the value chain. Advancing our expansion plans in the US and China, as we diversify

our industrial footprint and announce our proximity to customers. Continuing our investment in R&D to accelerate our market leading position and increase the pipeline of our solutions. Building a multiyear pipeline of opportunities heavily

weighted in the biologics market, where we expect to continue to see a growing demand for our high-performance products. I now hand the call over to Marco to cover the financial in more detail.

Marco Dal Lago: Thanks Franco. We are very pleased to deliver another solid quarter of financial results, which helped top off our full year estimates.

For the fourth quarter of 2021 revenue was better than expected, and grew 12.5% to 232.6 million over the prior year. This was driven by another strong quarter from our engineering segment due in part to the ongoing capital deployment by

customers to satisfy industry demand. For the fourth quarter COVID represented approximately 14.3% of revenue. As we mentioned on our last earnings call, the fourth quarter of 2020 included the benefit of approximately 15 million in our

BDS segment related to the timing of revenue, which concentrated revenue recognition of the fourth quarter, but had no impact on the full year 2020 revenue. For the full year revenue increased 27.5% to 843.9 million over last year, driven

by growth in both segments. As expected, COVID represented approximately 14.7% of revenue for fiscal year 2021. Excluding COVID, revenue grew approximately 15.2% over year 2020.

Please turn to slide 12. As expected, contributions from high value solutions increased approximately 62.9% to 66.4 million in the fourth quarter,

compared to last year, representing approximately 28.5% of consolidated revenue. For the full year, high value solutions grew approximately 42% over last year to reach 207.8 million bringing the full year mix to approximately 24.6% of

consolidated revenue. And while investors should anticipate quarterly fluctuations, our long-term trajectory remains unchanged with a target mix of mid 30% by 2026, contributing to the expansion of EBITDA margin over the long term. Moving to slide

13. The increases more accretive high value solutions and ongoing operating efficiency gained from our SG lean manufacturing initiatives, contributed to increased gross profit and operating profit margins. For the fourth quarter, gross profit margin

increased by 310 basis point to 31.4%, while operating profit margin was up 40 basis point to 18.7% compared to last year.

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Operating profit margins reflect increased investment in R&D mostly related to the advancement and innovation in premium products including EZ-fill platforms and DDS. This resulted in a net profit of 44.6 million or 17 cents of diluted earning per share. As expected, the number of shares outstanding in 2021 impacted the quarter and the

full year. Adjusted net profit was 33 million and adjusted diluted earning per share grew 18.2% to 0.13 euro. For the fourth quarter, adjusted EBITDA grew 10.3% over the prior year and adjusted EBITDA margin was 25.3%. For the full year

2021 gross profit margin increased 210 basis point to 31.4%, while operating profit margin was 19.2%. This resulted in a net profit of 134.3 million or 0.53 of diluted earnings per share. Adjusted net profit for fiscal year 2021 was

120.5 million and adjusted diluted EPS grew 54.8% to 0.48 cents, compared to last year. Adjusted EBITDA increased 36.3% to 218.3 million, resulting in adjusted EBITDA margin of 25.9% for fiscal year 2021.

Please turn to slide 14 for segment results. For the fourth quarter, BDS segment revenue increased 9.3% to 185.9 million compared to the same

period of last year. For fiscal year 21 BDS segment revenue increased 22.9% to 694 million. Period to period segment revenue increases for both the quarter and the full year were mainly driven by growth in our core products and more

importantly due to increasing mix of our high value solutions. As expected high value solutions accounted for approximately 35.7% of BDS revenue in the fourth quarter and 29.9% for the fiscal year 2021. The mixed shift led to expanded margin for the

segment. On a full year basis, gross profit margin increased 350 basis point to 33.1% and operating profit margin grew 330 basis points to 21.4% over the prior year.

The engineering segment delivered another solid quarter of financial results. Revenue derived from third parties increased 27.2% to 46.7 million in

the fourth quarter and grew 54.3% to 149.9 million for fiscal year 2021. This segment benefited from growth in all business lines in both periods. For the full year, gross profit margin was 19.3% and operating profit margin was 10.5%.

Let s move to slide 15. We have a healthy balance sheet, and as of December 31st, we are the positive net financial position,

189.8 million and cash and cash equivalents, totalled 411 million. For the full year, capital expenditures were 122.1 million, and used to support our ongoing expansion plans. For 2021, net cash generated from operating

activity was 133.3 million, which reflects increased working capital, as we continue to build sustainable growth; and free cash flow was 25.1 million. On slide 16 we ll drill down into the details of capital expenditures.

We finished 2021 with CapEx of approximately 122.1 million. This was lower than our initial expectation, mostly due to timing and the shifting of spend into 2022. We estimated that approximately 90 million of CapEx spend that

was previously expected to occur in 2021 is now included in our fiscal year 2022 CapEx budget. As Franco noted, we also anticipate some incremental expenditure as we add more capacity in Italy to meet the rising demand.

So together with the shift of approximately 90 million of capital expenditure into fiscal year 2022 and incremental CapEx for Italy, we are

estimating capital expenditure for 2022 will range between approximately 35% and 40% of revenue. Our capital investments are vital to growing revenue, increasing our mix of high value solutions and expanding margins all of which we believe will

create and drive long term shareholder value. Therefore, our overall capital allocation plans remain unchanged. First, our number one priority is investing in and executing against our ongoing capacity expansion plans, that are aimed to satisfy

market demand and drive organic growth. Second, R&D to maintain our competitive advantages and drive innovation. And third, we may consider opportunistic M&A to broaden our offering, technical know-how

and international footprint, but for now we are squarely focused on

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organic growth. In a nutshell, our balance sheet gives us the flexibility to invest in sustainable organic growth, by expanding our capacity to meet the long-term demand dynamics in our core

business. With a strong financial position, we believe we have ample capital to address future liquidity needs and execute our strategic and capital investment plans.

Moving to slide 17, guidance. The company is establishing 2022 guidance that is framed by the strength and visibility of our backlog. For the full year 2022

we now expect revenue in the range between 935 and 945 million, adjusted diluted EPS in the range of 0.49 cents to 0.51 cents, adjusted EBITDA in the range of 248 million to 253 million. Using the

midpoint of revenue guidance, we estimate that we have approximately 75% of our forecasted revenue in the form of committed backlog. Our guidance also assumes continued durability from COVID with expected revenue contribution in the mid-teens as a percentage of total revenue. Our guidance also considers the temporary headwinds related to inflation and supply chain. We currently expect the revenue will be higher in the second half of fiscal

year, 2022, compared to the first half of the year. This aligns to our industrial plans as we continue to bring more capacity online during the course of fiscal year 2022. Thank you. I will pass the call back to Franco Moro for closing comments.

Franco Moro: Thanks Marco. Our 2022 guidance reinforces our belief that we can continue to deliver on our long-term objectives. We have earned a

reputation as a leader in premium drug packaging and engineering, serving as a vital link to the safety and effective administration of our customers injectable treatments, diagnostic tests, and therapies. We have a relentless focus on driving

constant innovation R&D, delivering high quality products, offering scientific and technical support and meeting market demands. We serve some of the fastest growing market segments, and we are integrated into the drug production delivery supply

chain with favorable multiyear, secular tailwinds including pharmaceutical innovation, aging populations with chronic conditions, growth in biologics and biosimilars, acceleration and expansion of vaccination programs, self-administration of