Good morning and thank you for joining us. With me today is Franco Stevanato, Executive Chairman; Franco Moro, Chief Executive Officer and Chief Operating 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 our registration statement on Form S-1, which was filed with the SEC on July 16th, 2021. We encourage you to review the information contained in our earnings release today in conjunction with our associated SEC filings and S-1. 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 analysis 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 presented in this document, please see the company's most recent quarterly earnings press release. And with that, I'll hand the call over to Franco Stevanato for opening remarks.

Thank you, Lisa. We are pleased with another successful quarter. Our strong financial results reinforce the solid fundamentals of our business, the long-term demand, and our leading position in growing markets. We remain focused on delivering our integrated end-to-end product portfolio, supported by our scientific analytical process and service; all of which are designed to meet the rise in need of our customers across the entire drug life cycle from preclinical to commercialization. We continue to make progress toward growing our industrial footprint to meet the demand for our high-value solution as a customer and move up the value chain, investing in research and development to maintain and accelerate our market-leading position to increase the pipeline of our proprietary solutions like Alba, Nexa, and our drug delivery system, expanding geographically in U.S. and China, and building a multiyear pipeline of opportunity heavily weighted in the growing biologic market. We are investing in the business to deliver sustainable organic growth that we believe will drive increased shareholder value. Before I hand the call over to Franco, I want to thank you, all of our employees, for their extraordinary efforts over the last 18 months. The remarkable work during a global pandemic help ensured business continuity, support our customers and grow our business. So, in the third quarter, we awarded a EUR 6.7 million discretionary bonus to employees as a thank you.

Thanks, Franco. Our third quarter featured over delivery on the top line, thanks to strong sales for both segments and better-than-expected results from the Engineering segment. This gives us confidence to raise our full-year revenue guidance for 2021 and the bottom end of the ranges for adjusted diluted EPS and adjusted EBITDA. For the third quarter, we had a strong order intake of EUR 310 million, and the backlog of committed orders totaling EUR 834 million. We believe that the strength of our results and robust backlog are indicative of favorable customer demand and the growing markets in which we operate. The positive momentum in new order intake and backlog set the stage for fiscal 2022 and beyond. An important pillar to our long-term strategic plan is responding to rising demand for our high-value solutions. In the third quarter, high-value solutions represented approximately 23% of total company revenue. Based on high visibility of our backlog, we expect an increase in revenue from high-value solutions in the fourth quarter. The trajectory for how high-value solution is unchanged from the 2021 forecast, we previously provided. We still expect that it will contribute approximately EUR 205 million to EUR 210 million for the full-year 2021. Let's turn our attention to strategic investments in capacity building. The expansion of our footprint in the United States marks an important step in boosting our presence in one of the fastest-growing markets. We broke ground in Indiana, and we are recruiting, hiring and training for key managerial positions. We expect that construction will last approximately 18 months, followed by start-up and validation in 2023, with revenue generation sometime between late 2023 and early 2024. The plant is designed to expand production for our EZ-Fill pre-fillable vials and syringes. This meets the stringent quality and performance requirements needed…

Thanks, Franco. We are pleased with delivering solid third quarter results and raising our revenue guidance for the year. For the third quarter, revenue increased 37% to EUR 214.5 million, driven by strong growth in both segments. As a leading player in vaccine, we are proud to support the fight against COVID. As expected, approximately 16% of consolidated revenue in the third quarter was linked to this ongoing tailwind. The solid fundamental of our business and the robust demand for our core products helped us deliver 25% year-over-year growth, excluding COVID. For the third quarter, revenue from high-value solutions grew 29% on an absolute basis and represented approximately 23% of consolidated revenue. This was lower by one percentage point compared to the prior year period due in part to total company revenue increasing more rapidly than anticipated. As Franco noted, we currently expect revenue to increase from high-value solution and then improve mix. While we may experience normal quarterly fluctuation in mix, we still believe that our long-term growth trajectory of double-digit organic growth. The shift to high-value solution and expanding EBITDA margin remains the same. Total company gross profit increased 34% to EUR 63.3 million despite higher sales from Engineering segment, which has a lower margin. As a result, gross profit margin was 29.5%. Employee recognition reward is an important part of the Stevanato culture, and we awarded a EUR 6.7 million discretionary out-of-cycle bonus to employees for their extraordinary effort. The bonus was already included in our full-year guidance that we provided last quarter. This was the primary reason for lower operating profit margin, diluted earnings per share and EBITDA margin in the quarter. This resulted in a net profit of EUR 18.6 million or EUR 0.07 diluted earnings per share on a GAAP basis. As noted in…

Thank you. [Operator instructions] Our first question today comes from Paul Knight of KeyBanc. Paul, your line is open. Please go ahead.

Hi, yes. Franco, could you talk about the Italy expansion? It seems like these line expansions come online relatively quickly. Is it due to this increased backlog, if you could talk about those expansions?

Yes. Nice to hear you again, Paul. Yes, we are [bridging] [Ph] the capacity expansion waiting for the availability of plants in U.S. and China, but this is something that we started with the program in the recent years. And now we are progressing according to our plan. We are meeting the demand of our customer, and this expansion will allow us to keep continuing meeting the demand. We are in line with our program.

And Marco, this out-of-cycle bonus, has this occurred in the prior years?

Well, we stated in our guidance last quarter that it is a discretionary out-of-cycle bonus to recognize the efforts done from the employees in the last 18 months.

So, it wouldn't necessarily be something to build into a model for future years?

No. We are treating it as any -- many other positive items as nonrecurring items that overall in the year are offsetting one another. And then neutrally impacting the EBITDA and adjusted EBITDA level, but in the quarter, of course, we are somehow hitting the reported P&L, but we are treating as a nonrecurring item. So, this is not hitting our adjusted EBITDA and adjusted operating profit.

Okay, thank you.

You are welcome.

Thank you, Paul. [Operator instructions] Our next question comes from Patrick Donnelly of Citi. Your line is open. Please go ahead.

Hey, guys. Thanks for taking the question. Maybe one on the COVID front, you know, obviously, last week, we had an approval that caused some noise in the space certainly in terms of the durability of the COVID tailwinds and some people's expectations. So, can you just talk through your visibility into, not only 4Q but into '22 on the COVID front? What your expectations are, and if last week changed anything?

Yes, sure. That is an important topic, Patrick. You know that we are linked to the majority of the players in the vaccine space. So, we have good visibility totally with them. We know very well that we are at the very beginning of booster's administration, and there is a lot of people around the world that are waiting for the first shot of vaccine. We see the trend to move from multi-dose vials to single-dose forms, but we are in a good position. We can deliver any form of delivery for the administration, but at the end, you can remember that the COVID is a tailwind for our business, but our business is independent from COVID. So, we are focused to serve the customer according to their needs, but it is our focus in expanding the high-value solution that will drive the growth of the company.

Okay, that's helpful. And then maybe just on the 4Q guide. I think it's implying more kind of mid-single-digit growth. Was there anything onetime in 4Q last year that makes the comp a bit off? It's probably more for Marco. I just want to talk through again that guidance, and what conservatism levels in it, and then again, if the comp had anything weird in there?

Yes. Last year, we had a nonrecurring item in this period for about EUR 2.3 million hitting the P&L and our G&A expenses, yes. It was related to an old acquisition we had done back in 2016. So, we recorded as not recurring last year. And we put some specific color in our press release about that.

Patrick, I just want to confirm that we've answered your question. I think there was a thing that we may have missed.

Yes, it's a little more on the revenue side in terms of -- did you guys see any -- I know engineering was strong in 4Q '20 last year, was there anything one-time in 4Q last year in terms of the revenue, anything that got pushed into 4Q last year that will make the comp a bit harder on the revenue side for this 4Q?

Not in the generic part of the business. We recognized last year in Q4, we had some important revenues related to in the injection molding project. So, we recognized big revenues in a project last year in Q4, but in BDS segment not in engineering. We consider it as ordinary cost of business.

Thank you, Patrick. Our next question comes from John Kreger of William Blair. John, please proceed.

Hey, guys Good morning, at least good morning in Chicago where I am. Question for you, I believe in your slides, you talked about orders in the third quarter of about EUR 310 million, can you just talk about how that compared to your expectations? And what that tells you about the mix of the business in the coming year or two, either kind of COVID versus non-COVID or high-value solutions versus other? Thanks.

Yes, A very interesting point. The driver for this increase in backlog is the strong demand that we see in the market. And this demand matches exactly with our value proposition and with high-value solution that we bring to the customer. In terms of details of our financial calendar, I'll pass over the answer to Marco.

Yes, you are right. We are keeping on increasing our backlog. We are at EUR 834 million at the end of the quarter. We have a very strong visibility on the fourth quarter. And as Franco was saying this assuming if we grow, we have a clear visibility on Q4 growing in high-value solutions. So, our trajectory in the medium term remains unchanged, and we are delivering according to our forecast. There could be some temporary mix effect in the quarter, but the trajectory in the medium term is definitely unchanged from our side.

Okay, thank you. And then a quick follow-up, in your prepared remarks, you mentioned supply chain pressures, can you just elaborate a bit on that? Where are you seeing pressure? Is it raw materials or labor? Is it something else? Thank you.

That's a very good topic. I like most companies we are managing through the current condition. Our supply chain is robust because it delivers to multiple supplier and different facilities around all the geographies. In the meantime, we consider the situation, we have taken precautions steps, increasing the raw material on hand and keeping some more inventory. They are not a specific topic that is under pressure, it's the overall situation that we are managing to continue to meet the customer demand.

You asked for higher effect in Q3. Beside the mix, we were hit by some logistic costs but not in a relevant way, especially it's not material with respect to Stevanato Group overall numbers, but we had about EUR 1 billion higher logistic costs than expected.

Okay, thank you.

Thank you, John. Our next question comes from David Windley of Jefferies. David, please proceed.

Hi. Thanks for taking my question. Good afternoon to you all. Following up on John's bookings backlog question, would you be able to break that down for us in terms of what coverage you have for the fourth quarter and then in '22? And how much of the backlog stretches into '23?

Thank you, David, for the question. Let's say, we are covered for the bottom part of the revenue range for the year with the orders we have in our backlog for 2021 and Q4. And we can tell you that as a matter of fact, we have more than EUR 600 million for 2022 and beyond. So, we are providing the guidance for 2022 in the next earnings call, but we start from a good position for 2022.

Got it. Thank you for that. I think you mentioned in the prepared remarks that you were, in fact, already supplying some -- I may have missed it, single-dose or low-dose format glass for COVID vaccines at this stage. Is that -- I understand your comments around readiness and flexibility to basically do what clients want you to do. I guess I'm just trying to get a feel for whether single-dose formats are being manufactured for commercial distribution? Or is that still kind of development and validation work? Can you help us with what stage of commercialization those volumes are going to?

Yes. Thank you, David, for this question. As you know that we are engaged with the majority of the players. So, there are different approaches, and each customer has a different strategy, but for sure, we are delivering both the kind of form, the vial and syringes. And we are in combination phase sometime, but we have already started the commercial production for them, both of them.

And if I could just tag on to that, are those high-value solutions where those clients are pulling those through for COVID vaccine? Is that high value, or is that also a mix of your product?

We already stated that the mix of product in COVID business is representing more or less the same distribution that in the standard business, let's say. So, we don't see any big significant difference.

Okay, thank you.

Welcome.

Thank you, David. Our next question comes from Derik De Bruin of Bank of America. Your line is open. Derik, please go ahead.

Hi. Good day. Thank you for taking my call. We've gotten a lot of questions from investors on, obviously, the Pfizer commentary. And just wanting some clarity, are the contracts that you have with customers, take-or-pay contract, means they're obligated and to buy minimum volumes? And I guess, is there any way for them to renegotiate those or change them should their sales projections change?

That's a very good question. You know that each commercial agreement is negotiated individually, but in general, we embedded in this agreement also reduction or cancellation fee or minimum quantity. That is a case-by-case situation. We don't have a general arrangement that is suitable for every customer.

Great. And then, just one follow-up, on the diagnostics products in the BDS segment, is there anything that's notable in terms of where you're involved in those products, meaning, are you involved in any specific COVID diagnostics? Is there anything on the molecular side that is growing outside? Just a little bit more color on what's involved in Diagnostics segment and how we should sort of think about that growth contribution in that business?

Yes, the COVID impact in the diagnostics space is controversial because we had some higher requests for specific diagnostics, but at the meantime, the standard treatment suffers from the slowdown of activity in the hospital. So, we don't see overall a net impact in a single direction in that area.

Thank you.

Thank you, Derik. [Operator instructions] The next question comes from John Sourbeer of UBS. John, please go ahead.

Hi. Thanks for taking my question. I was wondering just a little bit on the supply chain commentary, if you could talk a little bit on pricing and what is your ability to maybe pass through some of the increased costs on to customers?

Yes. That's also an important point, but as I mentioned before, the situation is negotiated individually, but in general, we embed in agreement that closes for escalation of prices in case of increased cost, for industrial costs like logistics, raw materials, utilities. We are monitoring carefully the evolution of cost trends and price accordingly.

Got it. And as a follow-up, maybe can you talk just a little bit about the 3Q performance across the different regions in EU, U.S., and APAC?

You know that we don't disclose the precise figures in different geographies, but you can have a flavor because you know that U.S. is a very strong market for us.

Yes. We can experience some fluctuation quarter over quarter, but the trend remains unchanged. So, we are growing very, very rapidly in Asia Pacific. We are growing the same in North America even during this quarter, we slowed down a little bit, but overall, those are the two markets where we expect to grow the most also based on the backlog we have in our hands. Overall, we are growing in every and each area: South America, North America, Europe, and especially in Asia-Pacific, as we were saying.

Thanks for taking the question.

You are welcome.

Thank you, John. We currently have no further questions registered. This concludes the Stevanato third quarter earnings call.