Can you provide an update on the Annex 1 program and quantify its tailwind?

Annex 1 is considered a longer-term accelerator for ready-to-use (RTU) adoption, as it simplifies compliance for customers due to stricter contamination control standards. RTU configurations help ease the regulatory burden for pharma clients, but it's one of several factors driving the transition from bulk to RTU. “Annex 1 for Stevanato Group, we consider this as a much longer term accelerator to RTU adoption over time. Obviously, the ready-to-use configuration can simplify and reduce the regulatory burden for customers.”

Discuss the moving parts in BDS segment margins for Q1 and provide color on the full-year gross profit margin outlook.

Full-year BDS gross profit margin is expected to be in line or slightly better than 2025, driven by a better mix, but offset by anticipated higher depreciation and an estimated EUR 18 million currency headwind. Q1 margins were impacted by EUR 4 million higher depreciation, EUR 8 million FX headwind, temporary tariffs, and the non-recurrence of a strong pilot project from Q1 2025. “We reiterate our guidance where we see BDS gross profit margin in line or slightly better than last year with many moving pieces.”

What are you seeing in the Engineering segment regarding slow orders, and what initiatives are in place to turn things around?

Operational improvements are delivering margin expansion in Engineering. The primary focus is on winning new contracts, with the second half of the year expected to be stronger. There's strong demand in visual inspection and self-administration assembly/packaging machines. The speed from contract award to start is taking longer, but the company has good visibility to deliver its guidance. “We are winning contracts as we speak, so we are progressing with the orders intake. We are planning for the coming quarters. We expect the second part of the year stronger than the first part of the year.”

STVN

Stevanato Group (STVN) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Health Care· May 7, 2026

Source: earnings call transcript

Executive summary

Stevanato Group Q1 FY26 — Strong BDS Growth Driven by GLP-1s and Capacity Expansion

The company started FY26 with solid momentum, driven by robust demand for high-value solutions, particularly GLP-1s, within its BDS segment, supported by ongoing capacity ramp-ups in Latina and Fishers. While the Engineering segment showed margin improvement from optimization, new order intake remains slow, necessitating continued focus on sales and marketing. Management reiterated full-year guidance, confident in its market position and strategic investments.

Highlights

Revenue grew 10% at constant currency rates to EUR 273.6 million.
Biopharmaceutical and Diagnostic Solutions (BDS) segment revenue increased 16% at constant currency.
High-value solutions revenue increased 17% to EUR 128.6 million, accounting for 47% of total revenue.
Adjusted EBITDA increased 14% to EUR 65.5 million, with margin up 150 bps to 23.9%.
Engineering segment gross profit margin improved 460 bps to 15.3% due to optimization efforts.

Concerns

Engineering segment revenue decreased 31% due to low backlog and slow new order intake.
BDS gross profit margin decreased 300 bps to 28.3% due to higher depreciation, FX headwinds, and tariffs.
Tax rate increased to 28.6% from 24.5% due to the discontinuation of the IRES Premiale incentive.
Customer orders in Engineering are materializing slower than expected, despite sales and marketing efforts.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year 2026 Revenue	EUR 1.260 billion to EUR 1.290 billion high materiality	FY26	High
Full-year 2026 Adjusted EBITDA	EUR 331.8 million and EUR 346.9 million high materiality	FY26	High
Full-year 2026 Adjusted Diluted EPS	EUR 0.59 and EUR 0.63 high materiality	FY26	High
Full-year 2026 GLP-1 Revenue Growth	mid-teens medium materiality	FY26	High
Full-year 2026 High-Value Solutions Revenue Percentage	47% to 48% medium materiality	FY26	High
Full-year 2026 Engineering Segment Revenue	mid single digits to low double digits reduction medium materiality	FY26	Medium
Full-year 2026 BDS Gross Profit Margin	in line or slightly better than last year medium materiality	FY26	Medium
Q2 FY26 BDS Segment Revenue Growth	high single digit, low double digit low materiality	Q2 · FY26	Medium
Q2 FY26 Engineering Segment Revenue Decline	approximately 10% low materiality	Q2 · FY26	Medium
Second Half 2026 Revenue	stronger compared with the first half of the year low materiality	H2 FY26	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Biopharmaceutical and Diagnostic Solutions (BDS) Driven by strong growth in high-value syringes and other product categories. Gross profit margin decreased due to higher depreciation, FX headwinds, tariffs, and a strong pilot project in Q1 2025 not repeated. Constant currency growth: 16%High-value solutions revenue: EUR 128.6 millionHigh-value solutions % of segment revenue: 52%Other containment and delivery solutions revenue: EUR 120.3 millionOther containment and delivery solutions growth: 9%Operating profit margin: 17.7%	EUR 249 million	13%	—	28.3% Gross Profit Margin
Engineering Revenue decline due to lower sales from assembly and glass conversion. Margin improved due to optimization plan actions, right-sizing operations, and better labor cost structure in Denmark. Sales from assembly and glass conversion: declinedSales from pharmaceutical visual inspection: grewOperating profit margin: 6.6%	EUR 24.6 million	-31%	—	15.3% Gross Profit Margin

Product announcements

Product	Type	Timeline	Details
Large batch Not for Human Use fill and finish services	launch	—
Converted RTU cartridge line	launch	commercial production in the coming weeks

Risks & headwinds

Engineering Segment Backlog and Order Intake Ongoing

Revenue declined 31% in Q1; customer orders materializing slower than expected.

Mitigation:Focused sales and marketing efforts, strengthening commercial organization with new talent in U.S. and Europe, increasing business development activities.

Higher Depreciation Ongoing, particularly strong in Q1

Approximately EUR 4 million impact in Q1 compared to prior year.

Mitigation:Expected to be offset by growing revenues in coming quarters as capacity ramps up.

Foreign Currency Headwind Q1 FY26 and full year FY26

EUR 8 million impact on top line in Q1; anticipated EUR 18 million for the full year.

Mitigation:None explicitly stated beyond noting the impact.

Tariffs Q1 FY26, temporary

EUR 1.7 million impact in Q1.

Mitigation:Expected to be recovered in future periods by shifting from cost to revenue.

Increased Tax Rate Starting FY26

28.6% in Q1 FY26 compared to 24.5% in Q1 FY25.

Mitigation:None, due to discontinuation of Italian statutory corporate income tax incentive (IRES Premiale).

Inflationary Pressures Ongoing

Not quantified directly, but noted as impacting P&L (gas price, energy, logistics, supplier costs).

Mitigation:Immediately talking with customers to transfer pressure in price increases; monitoring and working with suppliers and customers.

What to watch in Q2 FY26

Engineering Segment Order Intake

next quarter

Current slow pace

Target improved order intake and backlog rebuild

Why it matters

Essential for sustainable financial performance and recovery of the Engineering segment.

However, we still have work to do to secure new orders and rebuild the backlog to drive sustainable improvements in the segment's financial performance.

Find out whether STVN delivers this. Inve re-checks your case every morning.

Q&A highlights

How do you view GLP-1 volume visibility and durability, and what is the risk from oral GLP-1s over time?

The GLP-1 market is expected to grow for several years with predictable volumes, largely covered by contractual commitments. 70% of the market opportunity remains in injectables, and orals are seen as market expansion rather than cannibalization, with early signs indicating new patient starts. Biosimilars are also gaining traction.

“We believe the GLP market will continue to grow over the next several years... Overall, for us, it's a growing trend with predictable volumes, and we expect it to stay for many years for Stevanato.”

asked by Alexa Chan · answered by Marco Dal Lago

2 min read 5 chapters

Detailed narrative

GLP-1 and Biologics Demand

GLP-1s accounted for 21-22% of total Q1 revenue, driving a 15% increase in biologics revenue. The company expects continued growth in GLP-1s, with 70% of the market opportunity remaining in injectables; orals are seen as market expansion rather than cannibalization. Stevanato has secured significant business in this area, primarily for cartridges, and anticipates it will remain a long-term tailwind.

Cartridge Capacity Expansion

Due to demand outpacing expectations, Stevanato converted an underutilized ready-to-use (RTU) vial line at Piombino Dese to an RTU cartridge line, expected to begin commercial production in the coming weeks. This conversion helps bridge the gap until new RTU 400 EZ-fill cartridge lines in Latina launch in early 2027, which are designed for significantly higher production output and operational efficiency.

The company is currently fully booked on cartridges for 2026.

Engineering Segment Optimization

The Engineering segment saw an initial improvement in gross profit margins, up 460 bps to 15.3%, attributed to operational efficiency improvements, right-sizing operations, and a better project mix, particularly in Denmark. However, revenue declined 31% due to low backlog and slow new order intake.

Management is prioritizing sales and marketing efforts, including strengthening the commercial organization, to rebuild the backlog and return the segment to historical performance levels.

Growth Projects Update (Fishers & Latina)

At the Fishers, U.S. facility, customer validations and audits are ongoing, with commercial production expected to begin at the end of 2026 or early 2027. The Latina, Italy facility is ramping up high-value syringe capacity and preparing for the next phase of EZ-fill cartridge expansion, with commercial production of RTU cartridges on new lines set for early 2027. These investments are disciplined and demand-driven.

Q1 Financial Highlights

Total revenue grew 10% at constant currency to EUR 273.6 million. Adjusted EBITDA increased 14% to EUR 65.5 million, with the adjusted EBITDA margin rising 150 bps to 23.9%. Adjusted diluted EPS grew 10% to EUR 0.11. Gross profit margin increased 30 bps to 27.5%, despite headwinds from higher depreciation (EUR 4 million), foreign currency (EUR 8 million impact on top line), and temporary tariffs (EUR 1.7 million), which were partially offset by improved Engineering margins and a favorable mix shift towards high-value solutions.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.