Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Stevanato Group Third Quarter 2024 Earnings Call. As a reminder, all participants are in a listen-only mode. After the presentation, there will be an opportunity to ask questions. [Operator Instructions] At this time, I would like to turn the conference over to Ms. Lisa Miles, Senior Vice President and Investor Relations. Please go ahead, madam.

Good morning, and thank you for joining us. With me today is Franco Stevanato, Chairman and Chief Executive Officer; and Marco Dal Lago, Chief Financial Officer. 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 the 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 on March 7, 2024. Please read our safe harbor statement included in the front of the presentation and in today's press release. 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 these non-GAAP measures, please see the company's most recent earnings press release. And with that, I will now hand the call over to Franco Stevanato.

Thank you, Lisa, and thanks, everyone, for joining us. Today, we will review our third quarter performance, provide an update on market dynamics, and discuss the ongoing initiatives to meet our objectives. For the third quarter, revenue was in line, but margins were below our expectations. As a result, we are lowering our full year 2024 guidance for adjusted EBITDA and adjusted diluted EPS. The main factors are higher costs in the Engineering Segment as we implement our optimization plan. And to a lesser extent, higher costs in the U.S. as we increase our validation activities. Let's start with Engineering. We are starting to see some initial benefits from the actions we have recently taken to improve execution and business performance. While it's still early days, we have successfully completed several complex projects in the third quarter for key customers that were previously delayed. As a reminder, we launched a business optimization plan designed to address the current challenges, improve the overall health of the business and position the segment to return to profitable growth. The main steps we are taking are focused on optimizing our engineering footprint in alignment with our product strategy, rightsizing the operational structure as we move some activities to Italy and harmonizing our industrial processes. Together, we believe this action will lead to an improved operational structure that can drive both cost savings and gains in productivity. Above all, we remain confident that this will position the Segment for long-term success. We believe that the demand landscape for the Engineering Segment remains favorable, underpinned by long-term tailwinds such as the rise in biologics and the adoption of drug delivery devices, higher regulatory standards like Annex One, and the trend towards ready to use systems. Let’s turn to vial destocking, which remains top of mind for…

Thanks Franco. Before I begin, I want to clarify that all comparisons refer to the third quarter of 2023, unless otherwise specified. Starting on page 9. For the third quarter of 2024, revenue grew 2% and 3% on a constant currency basis to €277.9 million, driven by 6% growth in the Biopharmaceutical and Diagnostic Solutions Segment, which offset the expected decline in the Engineering Segment. Revenue from high-value solutions grew 17% driven by high-value syringes, and to a lesser extent other product categories. High-value solutions represented approximately 36% of total revenue in the quarter, versus 32% last year. We are currently forecasting a strong fourth quarter for high value solutions. So, for the full year 2024, we now expect that high value solutions will represent approximately 37% to 39% of total revenue, versus our prior estimation of 36% to 39%. Gross profit margin decreased to 26.8% in the third quarter of 2024 due to, the ongoing temporary impact from vial de-stocking, including underutilization of vial lines, as well as lower revenue from more accretive EZ-fill® vials. Inefficiencies and higher costs tied to the ramp-up in Fishers, Indiana as we scale our validation activities, and higher costs in engineering. For the third quarter, lower gross profit led to a decline in operating profit margin to 14.8%. On an adjusted basis, operating profit margin was 16.3%. For the third quarter of 2024, net profit totaled €30 million, and diluted earnings per share were €0.11. On an adjusted basis, net profit was €33.1 million, and adjusted diluted EPS were €0.12. Adjusted EBITDA was €63.7 million, and adjusted EBITDA margin was 22.9%. Please turn to slide 10. Before we review segment results, we thought it would be useful to dive deeper into the temporary inefficiencies that we typically experience during the start-up phase of…

Thank you, Marco. In closing, while 2024 has presented many challenges, we are focused on execution and achieving our long-term objectives. We operate in growing end markets with favorable secular tailwinds, and we have several reasons to be confident in our strategic direction. First, we continue to deliver organic growth, driven by high-value solutions, the main pillar of our long-range construct. We are investing in the right areas to meet growing customer demand. Second, we expect to increasingly benefit from the new capacity in Italy and the U.S. as we advance our ramp-up activities and drive profitable growth. Third, the vial market continues to show positive signs. And we remain optimistic that as the demand continues to stabilize, we will see a return to historical market volumes and growth rates. Finally, in the near-term, we are implementing a clear and actionable plan to optimize the operations and improve execution in our Engineering Segment. These together, coupled with the strong fundamentals of our business and the high commitment of the team, set the stage for us to drive durable double-digit organic growth, expand margins, and drive long-term shareholder value. Operator, let’s open it up for questions.

Thank you. This is the chorus call conference operator. First of all, we apologize for the technical issues we had on the webcast from our side. We will now begin the question-and-answer session. [Operator Instructions] The first question is from Michael Ryskin, Bank of America. Please go ahead.

Hi. Thank you for the question. This is Avantika on for Mike. I understand that you will provide formal guidance for 2025, on the 4Q call, but the Street is modeling mid-to-high single-digit growth on the top line for 2025, and you reiterated your long-term construct of 11%. I understand that you've had headwinds in fiscal year 2024 from destocking in the Engineering segment, but is this a good starting point for 2025 as we stand today? Thank you.

Yes. Thanks for the question. Yeah, you are right. We will provide formal guidance next quarter. What we mentioned during the commentary is the summary of what we see today. I mean the uncertainty is related to the pace of recovery in EZ-fill vials and in bulk vials. This is the uncertainty. On the other side, we still continue to see favorable tailwinds, particularly in high-performance syringes, but also in other product categories like cartridges, in vitro diagnostic drug delivery system. We also anticipate improvement in the Engineering segment, alongside the implementation of our business optimization plan. Finally, we expect improved financial performances in Fishers and Latina, as we increase our capacity and increase our level of revenue, better leveraging the fixed expenses that are under pressure during the start-up phase. So in the end, we see a reasonable assumption.

Okay. Great. Thank you so much.

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

Hi. Thanks for the question. I just wanted to ask about, visibility to sort of destocking easing. I think last quarter you'd referenced maybe smaller customers in some countries getting back to ordering some positive conversations with larger customers. Just curious, if you had to bucket by customer group, what the conversations are like? And if sort of the number of each customer is making positive progress in each group has increased.

Thank you for your question. Based on our customer conversations, we would characterize the market as normalizing. While we see some positive signal, it's still a mixed bag. Customers are working through inventories at different rates. In terms of orders, we started to see gradual improvements in vial order in the second half of 2024, compared to the first half. But we're also seeing customer forecast that indicate increased demand for vial in 2025. That being said, the timing and pace to recovery remain uncertain, but the work we are doing with our customers, give us caution optimism in 2025.

Matt, just to clarify on your question, I think you were also asking about as it may relate to larger customers versus smaller customers, I think we can add some additional color on that, and I'll ask Franco to chime in here.

Okay.

Yes. We are starting to see order coming through in smaller markets like Latin America in particular. And in our larger market, things are going in the right direction. We are seeing update customers forecast that point to increasing buyer demand in 2025. So all overall, we are starting to see positive signal month-after-month.

Okay. Thank you. And then if the sort of destocking issue is maybe a market issue, the engineering issues perhaps, to some extent, more internal or under your control. Just curious on sort of the new guide and also the outlook, how much of your ability to hit your expectations is under your control, whether that's the optimization program or completing projects versus things that are perhaps out of your control like earlier when you were waiting for components or dealing with customer changes?

So if you want, I can start to give you an overview or picture of the situation, and Marco can maybe drive more through the numbers, if it's okay. So in Engineering, we are starting to see some initial benefits from the actions we have recently taken. We launched an optimization plan, designed to address the current short-term challenges, improve the footprint and position the segment to return to profitable growth. First, we have successfully completed complex projects in the third quarter for key customers. Second, we are focused on optimizing our Engineering footprint in alignment with our product strategies. Third, we are improving operational structure that can drive both cost savings and gain in productivity. We believe we can return to the segment to profitable growth by middle of next year, but some actions we are taking are expected to drive long-term results. The demand for the Engineering segment remains favorable today, boost in particular, by long-term tailwinds such as the rise in biologics, the adoption of drug delivery device and more and more the new regulatory like Annex 1 and the trend towards ready-to-use systems.

Yes. Okay. Thanks.

And the main driver of the change of our guidance is related to Engineering in 2024 and in Q3 and Q4. So as Franco was saying, we are taking action in order to regain the future profitability in a sustainable way, and this is the main driver of the change of our guidance this year. Besides that, we had also some changes related to the ramp-up cost for validation in Latina. But again, we are working hard to take future advantage with the action we are taking today.

And Matt, just a final closeout comment on that. You're correct. It is really largely within our control as it relates to the execution and Engineering. We really are no longer suffering from the supply chain challenges that we felt early on after the record wins that we had in that segment in late 2022. So as we advance our business optimization plan today, those actions are -- we would characterize them as largely within our control.

Okay. Thank you for all the color.

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

Great. Thanks and good morning, good afternoon. I guess first question, just on BDS, some of the moving parts. You mentioned vials were down 38%. Was that kind of in line with your expectations? Or was that still a little bit worse? And just within that, was it -- is it -- has bulk started to come back at all? It doesn't sound like the RTU has, but just curious a little bit more granularity on the vial piece.

Larry, Marco speaking, thanks for the question. So it's in line with our expectations. I mean, we changed our guidance after Q1. Basically, we expected and we can see also today steady level of revenue in Q2, Q3 and Q4. We are down 38%, and the decrease is more pronounced in EZ-fill buyers that is impacting our margin because they are very accretive for us. We can see some good signals in orders intake that what Franco was mentioning. So we can see improvement in overall situation, but it's more for revenue to be generated in 2025 rather than in Q4 2024. So we see still a steady situation in 2024.

Got it. And just -- I appreciate the illustrative chart on the Latina ramp. Just curious, obviously, a similar ramp in Fishers a couple of years out. Can you just give us just an update on Fishers, where we stand today? I imagine as we -- are we still losing money there? I assume so. When do you kind of think that Fishers can turn breakeven and actually start reaching a profit? Is that like a 2026, 2027 target? Any thoughts on that? Thanks.

I'll start with the margin question, then Franco for sure will complement on the operational and business point of view. So from the margin standpoint of view, as you can see the illustrative graph, we are now -- we have now started the revenues in commercial way. So we are obviously in the lower point of our profitability because of the activities we are putting together with validation, with customer testing and the ramp-up of the production, validating the lines immediately after the installation. So we expect improvement in the next quarter. Be in mind that Fisher is a larger plant compared with Latina, it is a greenfield. Nevertheless, we believe we have started the turning point, and we expect quarter-after-quarter improvement also in both sides, I would say. So that's why I mentioned before that in 2025, but also in Q4, the financial performances in Fishers and Latina are expected to be on the positive side.

Correct. I can further give some color about the capacity expansion that we are doing between Fisher and Latina. We continue to make progress in both the greenfield plants. So in both facilities, the ongoing installation of manufacturing line and the customer validation are on track today with a very high intense activity in a partnership together with them. In Fisher, in the third quarter, we start commercial production and we started generating our first commercial revenue. During the quarter, we also completed the installation of our second high-speed manufacturing line, and we start the validation activity with several key customers. In Latina, we are scaling production. And this quarter, the plant become profitable at a gross profit level. So in conclusion, we continue to see strong demand for high-value solutions driven by the strong momentum in biologics. And this reinforced our decision to strategically invest in particularly in Fishers and in Latina.

Great. Thank you, Franco. Appreciate it.

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

Hi, guys. Thank you for taking the questions. I have two, maybe I'll just ask them both at once. I mean, Marco, just on the margin side, can you just talk about what you're seeing there? Obviously, the engineering piece dragged a little bit. It would be helpful just to talk through the moving pieces there and expectations going forward. And then Franco, obviously, you talked a little bit about the destocking piece. Can you just talk about the confidence level that it's mostly in the rearview behind you guys? Any -- what would be the risks of that another leg there? Or are you guys feeling based on the order patterns, very confident that's over and we're in some level of stability to recovery? Thank you guys.

The destocking is -- was one of the most painful headwind that we had in 2024. And I would like to start also in order to clarify that the vial destocking is just a temporary dynamic. This is a temporary inventory normalization effect. That's not a question if the vial market will recover. It's a question when the market will recover. Vial are still the most adapted containment format globally. Every year, just to give you an idea, approximately more than 13 billion vials are used to deliver treatment to the patient. And this is through all the different pharmaceutical companies, or through the different therapeutic area at the different region around the world. So we have a strong confidence that the end markets are healthy and vial demand will return to its pre-pandemic volume. Just to give you another information, today, we are below 2019 vial demand level. And to us, this is clearly an inventory normalization effect. On the top of this, we continue to see positive signal from many of our customers, both small customers that are reactivating order in the second part of 2024, and bigger international customers that are sharing new forecast for 2025. So step-by-step, we have a cautious optimism that we are going to the right direction.

And about engineering, if I got correctly, Patrick, you asked about engineering also. So as mentioned, after basically doubling the size of the segment in terms of people and the revenue from 2019 to 2023, we are facing some challenges we explained last quarter with some specific highly customized complex projects. We are in the good direction to fix them. As Franco was mentioned, we have been able to complete some of them in the quarter. Nevertheless, we are taking action to optimize the segment, and we expect it will take other two to three quarters to fully normalize our profitability. This is embedded in our guidance, obviously. And this is an area where we are working hard and taking action in order to set the stage for the future growth.

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

Hey, thanks. Good morning. Maybe sticking on the margin front. Your guidance would seem to imply a decent step-up in EBITDA margins sequentially. Just curious how to think about that in terms of gross margin expansion sequentially versus operating leverage?

It is mainly driven by gross profit margin in Q4. We expect to leverage better volumes. The mix is expected to improve in Q4. As you can see, we increased a little bit the guidance for high-value products because of the -- we are largely covered by firm committed orders from customers there. So the confidence is both on volumes and mix. And finally, we expect slightly better performances in Latina and Fishers in Q4 compared to Q3. So mainly business and operational improvement rather than cost reduction.

Got it. Thanks for that Marco. And maybe just sticking on the cost side, you guys lowered the guide due to some incremental costs for engineering and Fishers. As we think about the kind of the return on those costs, just do those incremental costs maybe help accelerate the recovery in Engineering and the ramp at Fishers? Or just any way to think about where that money is going and the potential benefit from it?

Yes. Let's say, we are investing now to improve the situation and the profitability in the future. They are very different situation. I mean in Fishers, as you know, we are ramping up the production, validating the lines with customers. So this is driven by strong demand we see for the future and customers are willing to validate the production to leverage our capacity in the future. In Engineering, we commented is more to execute our business optimization plan and be more profitable in the future.

Yes, I confirm we have decided to apply this decision right now in order to build a new platform to set in the future more cost competitive in order to increase our productivity.

Got it. Thanks for taking the questions.

The next question is from Dave Windley, Jefferies. Please go ahead. Q – Dave Windley: Hi. Thanks for taking my questions. I was hoping to understand a little bit better how -- Larry kind of asked this question, but where we stand in Fishers related to the illustrative slide that you provided. Did I understand you to say that you're at kind of maximum operating loss there and with increased revenue, you would expect that to get better. Did I understand that correctly? And how should we think about incremental margin as that revenue improves in Fishers? Thank you.

We started commercial production in Q3. So our expectation is to increase the revenues quarter-after-quarter with more validation, more line installed, so on and so far. So we expect to better leverage the fixed expenses as soon as our production will steadily grow up. So this is our assumption. We believe we touched the lower point in this quarter with the higher cost associated with the validation and installation.

Correct. It's very similar journey we had with Latina. Now we have installed also the second line. And also in parallel, we are performing again validation, and we started to deliver commercial revenue also with the second line. In the next quarter, we will continue with this path with the same, similar to what we already happened in Latina today. In the long run, Fisher, it will have even more wide product portfolio because we are going also to produce some Alba technology and some auto-injector technology. So in the long run, a certain point, Fisher in the long period will be even wider and bigger than Athena.

Okay. So when you talk about gradual recovery in vials in 2025, can you help to define what that means? Should we pick a point in the second half of 2025 and kind of assume somewhat of a straight line from here to there of the de-stocking negative impact lessening from here to there? Or again, I'll just say it again, what does gradual recovery in 2025 translate to for us?

Dave, just let me just quickly start. I think as Marco commented earlier that the largest swing factor that we have for growth next year is really going to be tied to the timing and pace of recovery in vials. And so as you know that there is a sufficient amount of capacity on the market today, and so customers are not necessarily compelled to place orders as quickly as they may have historically. And so as we move into 2025, I think that it would be early to speculate kind of the timing and pace of that. And I just don't think we're in a position today. And Marco, Franco could additional color if they'd like.

Exactly. We have a constant exchange with our customer, in particular, at the end of the year. And we see that month by month, they are going to increase their way that they give more transparency on the forecast for 2025, not only the small customer and most big international organization. But still, we want to have a caution optimism that 2025 to be the year that we will recover. We want to be prudent to understand when it will be the right normalization.

Go ahead, Dave.

Okay. Since that one didn't hit the mark, let me move to a different one, which is around the additional costs for validation in Fishers and optimization in engineering. So those are -- you're adding costs. These are plans that were in place before and you're adding costs related to those. Can you talk about what has deviated from your previous expectation that requires those additional costs? For example, in Fishers, is validation proving to be more challenging than you previously expected? Are you validating for more customers than you previously expected? And similarly, in engineering, what is requiring the additional cost relative to the optimization plan that you set out before? Thank you.

The ramp-up activities are advancing as planned, and we are happy about the program. We have higher cost for Fishers are related to validation. And sometimes it's taking longer depending on customer approach, their process and not every customer is the same with respect to the validation activities. We are targeting here, as you know, high-value products. So the requirements are often very level. Anyway, we are very happy about the success we gained in validating the plant and the first line with the very important customers that are, by the way, already committed orders, so they are really willing to start with us.

For what is related to the Engineering segment, one of the main actions that we are taking in our optimization plan is review our footprint. For example, we have done some rightsizing our operational structure, and we have moved some activity to Italy. We have decided to move with this type of decision in order to build the floor for the next growing in order to increase our productivity and reduce our cost. We have decided to do this investment right now today in order to gain and to be back on more regular marginality for next -- in the middle of next -- in 2025.

Got it. Thank you. Appreciate your question. Thanks.

The next question is from Paul Knight at KeyBanc Capital Markets. Please go ahead.

Hi, Franco. Could you talk why Indianapolis is coming online faster? Was it customer request, customer payment? What were the dynamics from what we thought would be a later 2025 start-up?

No, we are in line with our expectation. I mean it was in our plan to start the commercial revenue about two, three quarters after Latino. So we are exactly in line with our plan. Obviously, now it's a matter of ramping up the revenue and the activities there and better leverage the fixed cost we have there. But all honesty, we are exactly in line with our plan in order to.

Remember, Paul, that Latina was a brownfield and fisher a greenfield plant. And the greenfield plant also from the moment that we decide during the IPO to do the greenfield plant, we received some additional orders like BARDA, also the other opportunity that we have enlarged the plant. So this is why we have this, let's say, a few quarters of difference between Europe and United States.

Okay. And then within the Engineering group, the turnaround there, is it done in terms of fixing operations in Northern Europe? Where are we from where you want to be with the efficiencies at engineering in Northern Europe, Denmark, I believe.

So today, our goal is to build a center of excellence by -- for each product. And already our original idea is to have -- for inspection system to have excellence in Denmark and also in Italy, in particular, in Bologna. So this action -- this plan is in place. We will require also a few quarters in front of us. Our expectation to be in the middle of next year to be back on certain marginality.

And the last question would be the start-up of hiring and training people in front of capacity starting like Indiana, like Latina, what do you think that's had a 100 basis point impact on gross EBITDA margin? Is it 200? Or is it kind of a range of 100 to 200? Can you kind of give a formula or a data range on personnel costs, training costs?

What I can tell you, Paul, is that we are having in this quarter, negative gross profit in the combination of Fisher and Latina. So the graph is illustrative, but we are not still at overall, the combination of the two in positive gross profit margin. And since we are targeting high-value products here, we expect the final gross profit margin will be above the average of the company. So you can see the magnitude of the delta we are suffering today with the ramp-up of the two facilities. But again, we are doing it for future profitability covered by customers' demand.

Okay. Thank you.

You're welcome.

The next question is from Dan Leonard, UBS. Please go ahead.

Thank you. I have a follow-up to Jacob's, question from earlier. I'm just trying to better understand the Q4 sequential margin expansion. I mean, I'm looking at a 500 basis point sequential gross margin improvement from Q3 levels into Q4. Is that number correct? And it does seem inconsistent with historical incremental margin. So I was wondering if you could help me better understand the buckets that would drive that.

Yes. Thanks for the question. So we are targeting at the center point more than $320 million of revenue in Q4. We are largely covered by committed orders. And the mix is expected to be pretty good. And that's the reason why we increased the guidance for high-value products in Q4. And again, we are covered by committed orders from customers largely. This -- the mix and the growing volumes is expected to help the better levels of fixed expenses and the mix. And on top of it, we are expecting better performances from the financial point of view, both in Fishers and Latina as soon as we step-up with revenue and the coverage of fixed expenses. So the combination of these events is giving us confidence in delivering the guidance for Q4.

Okay. I think I understand a bit better. And just a quick follow-up, Franco, I was wondering if you could better dimension that comment you made that vial demand is below 2019 levels, ,by how much? And I'm trying to better understand the magnitude of revenue lift possible if demand merely returned to 2019 levels.

Yes, Marcus speaking. As we disclosed clearly, we are down 48%, 40%, compared to last year in vials, and this is coming after a year when we declined the COVID business that was mainly biased by €80 million to €90 million in 2023. So it's the combination of two years of decline is putting us in a condition that we are below 2019 demand. What to expect for the future, I think we disclosed all the variables in place between large customers and smaller customers also by geographical area. Obviously, not easy today to put together the combination of all the probability and give you precise guidance about 2025, this is the main uncertainty we need to assess and to address for 2025.

Okay. Thank you.

You're welcome.

The next question is from Curtis Moiles, BNP Paribas Exane. Please go ahead.

Thank you for taking my questions. Just looking at the fiscal year guidance, the range that you have out there for the implications for Q4, it looks like it's kind of anywhere from a 1% decline to a 5% increase in Q4. So, I kind of wanted to get a better idea of what the moving parts are there. Are you expecting an improvement in BDS and engineering? Or is one going to do better than the other? Or any other color will be helpful.

For Q4, expectation is to improve mainly in BDS segment, where we are basically leveraging the high-value products, the higher volumes and the ramp-up of Fishers and Latina. So it's mainly about the BDS segment improvement.

Okay. That's helpful. And then also just going back to the destocking. You're calling out vial orders expected to improve or pick up by the end of the year. Should we expect any kind of impact on revenue in Q4? Or is that going to be delayed until 2025 at the earliest?

Again, as Franco was saying, we are gaining traction in orders. We see some improvement and not yet the normalization of the level of orders in vials. Orders are mainly for beginning of 2025 rather than Q4 '24.

And if I may also your sort of confidence about our long-term strategy and what eventually is behind 2024 in order to isolate the situation '24, so '24 was challenger for Stevanato Group, and we faced some temporary painful headwind this year. Bio destocking took the industry by surprise and will turn around. This is important that we need to be clear. We are also in a cycle of high investment in Fisher and in Latina, but we are doing this investment for the future. In engineering, this is within our control, and we feel confident that the action we are taking will deliver results. On the other side, we see sustained demand for high-value solutions, in particular, on syringes, [indiscernible]. At the end of the day, the fundamentals have not changed. The demand landscape is robust, and we have long secular tailwinds. In short, we are positioned for profitable growth. So, from our perspective, as we consider 2026, we would expect that while destocking will be behind us, we will gain leverage from scaling our new operation in Latina and Fisher and the Engineering segment should return to profitable growth. This, give us continued confidence in our ability to achieve an adjusted EBITDA margin of 30% and high-value solutions in the range of 40% to 45% in 2027. This is the -- we have that we have today with the leadership team.

All right. Thank you.

Operator, do we have any other questions?

[Operator Instructions] Ms. Miles, there are no more questions registered at this time.

Thank you very much. We want to thank everyone for joining us today, and have a wonderful day.