NVIDIA Q1 2024 Earnings Call Transcript

Quartr
Provided by Quartr
May 9, 2024

There are 12 speakers on the call.

Operator

Good morning, and thank you for joining us. With me today is Franco Stephanopto, Executive Chairman Franco Moro, CEO and Marco Di Lago, CFO. 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 3 d entitled Risk Factors in the company's most recent annual report on Form 20 F filed with the Securities and Exchange Commission on March 7, 2024.

Operator

Please take a moment to read our Safe Harbor statements included in the front of the presentation and also 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 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.

Operator

And with that, I will hand the call to Franco Stephanocto for opening remarks.

Speaker 1

Thank you, Lisa, and thanks for joining us. Today, we will review our Q1 performance, address our guidance change and provide an update on our markets and the dynamics we are seeing today. While Q1 results did not meet our expectations, the fundamentals of our business have not changed and the demand landscape remains robust. We are tackling 2 challenges today and our number one priority is execution. 1st, the impact from the industry wide temporary destocking was more pronounced than previously expected, especially in the more accretive Easy Field Vias.

Speaker 1

Customers are still working down excess inventories that were stockpiled during the pandemic. This has resulted in a temporary softening in demand for both bulk and ready to use vials, but we believe once the market rebounds that vials will return to normalized market growth rates. 2nd, in the engineering business, we enjoyed a period of record orders in the second half of twenty twenty two. This large volume of work and long lead times for components put stress in our organization last year, but while external factors played a role, our execution simply could have been better. We're taking many actions over the last year and we believe these steps will help us achieve a more optimized operational structure to maximize efficiencies to secure the success of projects going forward.

Speaker 1

I would like to take a moment to address our updated guidance. The temporary destocking is the main factor in our guidance change. Our updated guidance also assumes a recent postponement of expected orders for high value solutions for a large customer that were forecasted to be shipped in 2024. This was due to a change in the customer's commercialization time frames, but nevertheless, we have removed the forecasted orders from our guidance. Despite these factors, we remain confident about our long term prospects and we remain on the right path to achieve our near term targets in 2027.

Speaker 1

Our unique value proposition of integrated offerings ideally positions Tevenato Group to capitalize on favorable secular tailwinds such as aging populations with more complex health conditions pharma innovation particularly in the sensitive biologics and the trend towards the self administration of medicines. We operate in growing end markets and we are well positioned in the fastest growing biologics segment. We believe we have a leading presence in GLP-1s underpinned by a long term commercial contracts and we see many opportunities primarily in biologics over the next several years. Above all, our global footprint, differentiated product portfolio and integrated end to end solutions offer customers a unique value proposition. This provides us with sustainable competitive advantages.

Speaker 1

I will now hand the call over to Marco.

Speaker 2

Thanks, Franco. Before I begin, I want to clarify that all comparisons refer to the Q1 of 2023, unless otherwise specified. Starting on Page 7, for the Q1 of 2024, revenue decreased 1% and 40 basis points on a constant currency basis to €236,000,000 The biopharmaceutical and Diagnostic Solutions segment grew 2%, which partially offset expected decline in the engineering segment. The revenue decrease in the Q1 was mainly driven by lower revenue related to glass vials in the BDS segment due to the industry wide destocking, which we believe is transitory. Our product diversity help expand our mix of high value solutions, which represented 37% of total revenue in the Q1.

Speaker 2

However, the product mix within high value solutions was less accretive compared with the same period last year, mainly due to lower volumes from EasyFill Vials. For the Q1 of 2024, the lower revenue from easy fill vials was the largest factor in the gross profit margin decrease to 26.4%. In addition, the underutilization on Vial lines, lower gross profit from the engineering segment, temporary inefficiencies in our new manufacturing plants and higher depreciation also impacted gross profit margin, but to a much lesser extent. Lastly, the prior year period also benefited from government grants that help offset the spike in the utility costs that did not repeat in the Q1 of 2024. This led to an operating profit margin of 10.7% and on an adjusted basis, operating profit margin was 12.3%.

Speaker 2

For the Q1 of 2024, net profit totaled £18,800,000 and diluted earnings per share was 0 point 0 7 dollars On an adjusted basis, net profit was €21,500,000 and adjusted diluted earnings per share were €0.08 Adjusted EBITDA was €50,600,000 and adjusted EBITDA margin was 21.4%. Moving to segment results on Page 8. For the Q1 of 2020 4, revenue from the BDS segment increased 2% to 198,900,000. Euros Segment growth was impeded by the industry wide vial destocking and in the Q1 of 2024, revenue from Vias decreased 43%. This was offset by strong growth in syringes and other product categories.

Speaker 2

High value solutions grew 15% to €88,000,000 in the Q1, while revenue from other containment and delivery solutions decreased 7% to €111,000,000 For the Q1 of 2024, the change in product mix due to the lower revenue from Easyfield Vias had the most profound impact on gross profit margin of 27.1%. Gross profit margin was also tempered by the underutilization of wirelines and associated labor costs, the temporary inefficiencies from start up, higher depreciation and government grants that did not repeat in 2024. As a result, operating profit margin for the BDS segment decreased to 14.1%. For the Q1 of 2024, revenue from the engineering segment decreased 13% to €37,100,000 due to lower sales from pharmaceutical visual inspection and assembly and packaging lines. As previously discussed, our main priority in 2020 4 is executing the large volume of work in progress and shortening our lead times.

Speaker 2

We have hired additional labor resources to support these efforts along with other important long term projects in the pipeline. In the Q1 of 2024, gross profit margin from the engineering segment decreased to 17.3% due to lower marginality from certain projects in process. This led to an operating profit margin of 6.7% in the quarter. Please turn to the next slide for a review of balance sheet and cash flow items. In March, we closed our follow on offering and raised net proceeds of 170,500,000 The proceeds will be used for our capital investment projects, working capital needs and general corporate purposes to ensure an appropriate level of operating strategic flexibility.

Speaker 2

With the cash infusion from the offering, we ended the quarter with cash and cash equivalents of 186,300,000 and net debt of 186,900,000 We believe our cash on hand gives us adequate liquidity to fund our strategic priorities. As expected, capital expenditures for the Q1 of 2024 totaled €71,900,000 with approximately 88% tied to grow investment to advance our ongoing capacity expansion for high value solutions. We continue to carefully manage trade working capital to support the growth of our business. In the Q1, we benefited from strong collections of receivables, which drove cash generation. But as expected, our inventory levels increased in the first quarter mainly due to the establishment of baseline inventories in our new plants, which includes products that are expected to be delivered to customers in the future quarters.

Speaker 2

In the Q1 of 2024, net cash from operating activities totaled €71,600,000 Cash used in the purchase of property, plant and equipment and intangible assets was €102,700,000 This drove negative free cash flow of €30,600,000 in the Q1. Lastly, we are updating our full year 2024 guidance on page 10. As Franco mentioned, the combination of temporary soft vial demand and the postponement of a large customer order are the main reasons for taking a more cautious approach to our 2024 guidance. Our guidance now assumes a more gradual recovery in vials. We currently expect that vials orders will increase at the end of 2024 and into early 2025, with bulk bias expected to recover 1st.

Speaker 2

While our recent public offering had limited impact on dilution in the Q1, our updated guidance includes the increase in weighted average shares outstanding. For fiscal 2024, we now expect revenue in the range of $1,125,000,000 to 1,155,000,000 Adjusted EBITDA in the range of 277,900,000 to 292,200,000 and adjusted diluted EPS in the range of $0.51 to 0 $0.55 Thank you. I will hand the call to Franco Moro.

Speaker 3

Thank you, Marco. Starting on Slide 12. Over the last several weeks, we have spent a lot of time with our customers as they continue to manage excess of oil inventories. As Marco noted, we now anticipate a slower recovery in vias, particularly easy fill vias, which will unfavorably impact our mix of high value solutions in 2024. It's important to remember that ready to use wires are currently a small portion of the market and the vast majority of wires are in bulk configurations.

Speaker 3

We are the market leader in ready to use wires in the temporary imbalance of supply and demand is having a pronounced impact for us given our significant position in the market coupled with the low volumes in the market today. In the near term, we are carefully managing costs and we have taken many actions on the labor side, including redeploying via production staff and improving efficiencies on maintenance activities while some via lines are idle. At the same time, we expect to retain most of the staff who work on our wire production lines despite a temporary underutilization. We believe this approach best positions us to be prepared for the recovery, especially considering the time it takes to recruit, hire and train new staff to achieve full productivity. We believe it's the right thing to do for our business and we do not want to take short term actions that might compromise our future growth.

Speaker 3

Turning to the Engineering segment, the actions that we initiated last year are just starting to yield operational improvements in the business. The combination of additional resources, ongoing optimization of our industrial footprint and streamlining internal processes are helping to improve the overall health of the business. These actions are ongoing, but improvements will take time. We expect that in the long run, they will drive operational efficiencies and short term lead times, which in turn will benefit the segment's margins. Longer term, we believe the demand landscape in engineering remains favorable.

Speaker 3

For example, the self administration medicine is a growing trend, especially given the popularity of GLP-1s as patients become more comfortable with drug delivery devices like pen injectors and auto injectors. This trend is generating customer demand for our assembly and packaging lines and we are supporting many customers as they rapidly expand their device programs. Let's turn to Page 13 for a brief update of our expansion projects. In features, we remain on track to begin commercial production in the second half of twenty twenty four. Customer related validation activities are in full swing and will continue into 2026 as planned.

Speaker 3

In the meantime, we expect to deliver and install several more manufacturing lines in the coming months following the completion of our performance qualifications, customer validation will begin on these new lines. In addition, we are set to begin the build out of our contact manufacturing capabilities in features related to a dry delivery platform for multiple biologic indications for a larger customer. Commercial activities related to this new CMO work are expected to begin in 2026. In Latina, ramp up activities are ongoing as we continue installing and validating new lines into 2026. Commercial production launched last year and revenue is expected to grow over the next several years.

Speaker 3

I'll hand the call back to Franco Stefonato for closing remarks.

Speaker 1

Thank you, Franco. In closing, Stevonato Group has cemented its leadership position as a mission critical partner in the pharmaceutical supply chain. We have experienced significant growth and we have been building the organization to support our long term objectives. Our number one priority in 2024 is execution. We are laser focused on ramping up our new capacity to meet rising customer demand for high value solutions such as our Nexa syringes and EasyFill Cartridges.

Speaker 1

We are also strengthening our processes and driving efficiencies across our global operations to best manage our future growth. These are exciting times. We offer a unique value proposition of integrated solutions and differentiated products that resonate with customers. We operate in attractive end markets with long secular tailwinds. These factors favorably position us to drive durable organic growth, expand margins and deliver long term shareholder value.

Speaker 1

Operator, let's open it up for questions.

Speaker 4

Thank you. This is the conference operator. We will now begin the question and answer The first question is from Michael Pritchard with Bank of America. Please go ahead.

Speaker 5

Great. Thanks for taking the question. I want to dig in first on the inventory comments, obviously. I mean, it's something that's been going on in the industry for a number of months now. I wouldn't say exactly a surprise, but can you give us a little bit more color on what changed as you went through the quarter?

Speaker 5

I mean, if you look back to where you were in March versus where you are now in early March when you reported 4Q and initially guided for the year, you provided some color on destocking. But clearly you underestimated the problem. So is this something that changed during the quarter? Is this something where you got better visibility in customers? And I'll tack on the follow on immediately after that is the new outlook that you're giving, what gives you confidence that destocking will fade as you go through the year?

Speaker 5

Is there any level of conversations you can say with customers or anything like that to point to the improved timelines? Thanks.

Operator

Thanks, Mike. Just to make sure we've captured all of your questions. First on what's changed since our last earnings call on destocking? And secondly, the confidence in the fact that destocking will continue to fade and we'll see that recovery later in the year on the new outlook. So I'm going to hand that over to Franco Stefano to begin.

Speaker 1

Yes. Thank you. So the pandemic presented extraordinary challenge across our industry. We are still on the path to normalization, but the market is still choppy today. First, the impact from destocking was simply more pronounced than previously expected.

Speaker 1

Frankly, the pandemic created a fast acceleration of higher demand as a customer stock pile inventory. We previously anticipated a slower path to normalization, but instead we experienced a more rapid decline in buyer demand due to excess inventory. In this context, customers and us by consequence face challenges in anticipating and predicting the right timing and the intensity of fed out. This quote are partially off guard. This is at the end of the game is a temporary dynamic that is impacting 2024.

Speaker 1

Once completely over, we anticipate that we will return to pre pandemic market growth rate. This include low single digit for Bayer Bulk and double digit for Area2Bio.

Operator

Mike's follow-up is the confidence that we see in the fading of the destocking throughout the year.

Speaker 2

Yes. During this year, as I said by Franco, we see more difficult condition than previously anticipated. We don't see during this year an increase in the following quarters with respect of vials and dizzy fill vials. As mentioned during the commentary, we now expect order starting increasing toward the end of the year with Vias bulk starting first and immediately after the basic fill vias. We mentioned also the fact that we went down 43% year over year in vias.

Speaker 2

And as you said, this headwind is stronger than what we anticipated. We expected a lower reduction in Vias, but matter of fact, this is what we can see today and this is the main difference compared to 2 months ago.

Speaker 1

Correct. If you can further implement, Michael, we have a very close and intense relationship with our customer in particular for the supply chain, what is related to research and development and engineering department. From one hand, in 2024, we see the customer is looking really to bring the inventory back to the regional scenario towards pre pandemic. In parallel, we are starting to see more and more our big customer still talking to renew our long term contract for Bayer starting from 2025. This is the reason why we are going to see that this temporary destocking that was more pronounced than previously expected is going to be closer at the end of 2024.

Speaker 5

Okay. Thanks.

Speaker 4

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

Speaker 6

Hi. Thank you for your time. First question is, I would expect that Nomo or Catalent site in Anogne to expand quite a bit. Will would you be involved in that because you're so nearby in Latina in terms of have you historically been a provider for that site in that region?

Speaker 3

Yes, Paul. Thanks for the question. Obviously, we can repeat that our CapEx decision and plans are not related to single customer that we are addressing mostly biologics space where there is a good growth for because of the success of some treatments. We cannot comment obviously in term of any relationship we have with the single customers. But we can confirm also that the view about the utilization of our new investment is very clear.

Speaker 3

And our capacity is almost taken for very precise ideas. In terms of the investment, we'll give us the possibility to have more high value solution both in syringes and even important the growth in the EasyFuel Cartridges that is much more than expected at the time of our IPO to be candid.

Speaker 6

Yes. And then the single customer delay, is it a delay in clinical trial success? Is it a delay in their other CapEx they're adding? Could you give a little color on what's behind this one customer delay?

Speaker 3

As for our understanding, is a change in their planning for the commercialization of some drugs in the biological space that we are involved in with our high value solutions. We are not talking about any cancellation of committed orders. We are just talking about the change in our forecast mostly in timing. So we expect to have some news in the near future with the customer. We continue to monitor with them the situation.

Speaker 3

In the meantime, obviously, we will have time to backfill the capacity to expand our business following other opportunities.

Speaker 6

And I squeeze in the last one. What's your capacity utilization rate right now, Franco?

Speaker 3

That is strongly dependent on product line by product line. Obviously, it's clear that is not the best in buyers, but we are under pressure to continue to serve our customer with the syringes with all the most innovative solution we are bringing to the market. So the rate of utilization is in the good or beyond the good standards that we expect.

Speaker 6

Thanks.

Speaker 4

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

Speaker 7

Hey, guys. Thanks for taking the question. Maybe just a follow-up on that large customer postponement. Can you talk about, I guess, the visibility into this order? Is there any chance that materializes this year?

Speaker 7

It doesn't sound like it. And if not, does that show up next year? Could that actually lead 25 growth above trend? Just how do you think about that order and when it shows up and what it means to numbers?

Speaker 3

As we put and embed in our guidance, we don't expect a recovery significant recovery for the same volume this year. We are talking about high value solutions mostly syringes. So we expect to follow the trend of growth in this space and not only because of this single opportunity, but for many others. The time to react in this specific case is also impacted by the longer lead time to start a different production because of we have to order the proper components, the proper tubing and then to plan the production, execute production including the final stabilization. So it's a matter of time more than of the visibility opportunity.

Speaker 3

Timing execution cannot allow us to react in a very, very short time.

Speaker 7

Okay. That's helpful. And then Marco, maybe just in terms of the cadence of the year, can you help us think about 2Q, what that looks like? And just trying to figure out that 2H ramp and how to get comfortable with it. So again, if there's any way you can kind of frame up the 2Q numbers, that would be certainly helpful.

Speaker 2

Yes. We expect that revenue will increase incrementally quarter by quarter throughout the year. We still anticipate the second half of twenty twenty four will be stronger than the first half because the challenges that we mentioned today, we expect will persist in the second quarter. We still anticipate the 2nd quarter will be largely in line with the prior year, so growing compared to Q1, but still not growing compared to the prior year, largely in line. And for the year, we expect for the BDS segment, we expect the mid single digit to high single digit growth driven by syringes that are still very strong.

Speaker 2

In Q1, we have been able to offset the 43% drop in vials with syringes that are growing in line with our expectations. And our model now assume a mid single digit decline in engineering business for the year. So this is the kind of color we can provide today that is based on the visibility we have and is based also on the fact that we are installing more capacity in syringes throughout the year.

Speaker 7

That's helpful. I appreciate it.

Speaker 4

The next question is from Matt Laro with William Blair. Please go ahead.

Speaker 8

Hi. Sam Martin on for William Blair on behalf of Matt LaRue. So when I think about the large customer delaying an order, is there any way you can somewhat kind of quantify the impact that had on the reduction to the guide? And then when we think about destocking, accelerating or really even spreading to easy fill vials, can you speak about when you first noticed that? You held your Q1 call, I think, in early March.

Speaker 8

And then can or earlier mid March and then can you speak to really when you notice the it's spreading to EZ fill bills, EZ fill dials are accelerating past our expectations?

Speaker 2

Yes. Our guidance is assuming now a gap compared to prior guidance of approximately €55,000,000 About the GAAP, about 65% of the gap is related to Vias with more pronounced gap on easy fill Vias in this period of time. The remaining 25% is associated to the large order we were mentioning and 10% is related to engineering. So this is the breakdown of the delta we assume today based on, again, the visibility we have and the review guidance for those three reasons.

Operator

And Sam, I apologize. Can you please repeat your second the second part of your question? We missed that.

Speaker 8

No, no. You oh, sorry. Just really when I think about kind of when you first notice destocking and vials accelerating to easy easy fill, when did you really notice that? Was it late March? Was it over the course of April?

Speaker 8

Just kind of when did it first start to become apparent that destocking was going to be worse or more pronounced than you thought?

Speaker 2

Basically, 2 months ago, we were assuming a situation similar to Q4 and beginning of the year. In reality, in Q1, revenues and order went down more than our expectation. And we don't have today clear signal of a different situation in the following quarters throughout the year. So we have taken an approach with Vias in line with the new situation, new compared to Q4 and compared to the beginning of the year. To give you even more color, we went down quite significantly in 2023 in buyers.

Speaker 2

We did not expect such a strong headwind to further decline the level of 2024. That is what we are now putting our guidance for the rest of the year.

Speaker 8

Thank you. That's helpful.

Speaker 4

The next question is from Ramesh Tuukkar with Jefferies. Please go ahead.

Speaker 9

Can you guys hear me all right?

Operator

Hi, Tucker. Yes, we can hear you.

Speaker 9

All right, great. Thank you for taking my question. The first kind of question I had was on the margin impacts. Can you kind of divide between the mix of lower absorption or should I divide between mix and lower percent growth in EPS. That seems like it would be a benefit to mix, but we didn't really see that.

Speaker 9

So can you kind of break down just the mix and absorption pieces in the margin?

Speaker 2

Yes, of course. I'll start with the mix. First of all, it's good that we are shifting syringes more and more to our high value products. This is the main driver for increasing the share of high value products. Within high value products, on the other side, we are, as you know, market leader in sterile vials, and this is a very attractive product for us.

Speaker 2

And the sharp decline in ZFEL vials is what impacted the most the margin. So a mix effect within the mix of high value products. 2nd reason is, as mentioned, the underutilization we have in bulk via slime mainly because this is where we have more quantity and fixed cost compared with the other lines. And so the impact has been significant also there. In Q1, we had higher depreciation.

Speaker 2

As you can see from the number in the range of 150 basis points more. So the combination of this factor will more than offset the mix shift to our high value products in general.

Speaker 9

Got you. Thank you. And if I can get one more in. So what were the temporary inefficiencies in Italy in particular, but kind of in both Fishers and Italy?

Speaker 2

Yes, it's more in Italy, of course, because today the most important factory for EasyFuel is still in Italy. Obviously, Fishers, we are in a ramp pickup phase. But yes, the short answer is yes.

Speaker 4

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

Speaker 10

Hey, this is Will on for Larry Solow. I understand today's revision is related to a temporary slowdown in market and widespread inventory destocking. But can you update us on the competitive environment in ready to use products?

Speaker 3

Yes. In terms of I'll start answering from Vias. We maintain our leadership position in ready to use Vias. Our view about expansion of capacity in ready to wire in the mid to long run is unchanged. Obviously, it takes time because we are talking about the conversion of a market from a buy configuration to ready to use configuration.

Speaker 3

So it's much more important for us to look at the mid to long run than to a single quarter or a single year volume. But the outlook on the adoption of the ready to use configuration not only via but also in cartridges as I mentioned before is more important, very important for us.

Speaker 10

All right, great. And then just one more. There's a lot of talk of tightening regulations on drug packaging quality and adoption of high value solutions and services not only new drugs, but conversion on older legacy pharmaceuticals? Have you seen increased customer interest on this front?

Speaker 3

Yes, sure, sure. There is some regulation that are becoming stricter and stricter. I can mention the Annex 1 that are pushing customers to adopt more stricter rules about particle contamination. And ready to use vials and cartridges are the right answer to these needs in the current configuration and even more when we will have the commercial volume for the new generation of the same products. So it's one of the most important driver for the adoption for sure that is on top of the other benefits we deliver to customers and of total cost of ownership reduction and flexibility that is something that is very important for our customer.

Operator

And just to add one comment on that. As we discussed at our Capital Markets Day, we are seeing this adoption and we can see it in the infrastructure in the industry, particularly as it relates to fill and finish lines capable of processing ready to use containers. So we see that as an important leading indicator as well as Annex 1 that will further enable that adoption as we move forward.

Speaker 10

All right. Thank you.

Speaker 4

The next question is from Curtis Miles with BNP Paribas. Please go ahead.

Speaker 11

Hi, thank you for taking my questions. So you in the BDS segment had commented that you're seeing strong demand for syringes. I just wanted to check, can you give a little bit color around the demand that you're seeing for the cartridges as well?

Speaker 3

You know that we are a market leader in cartridges since many years because the cartridges are the containment solution for pen injectors. So the growth of generally speaking the South administration and even more the expected growth in pen injectors is driving volume for the future. In this space, the adoption of a higher quality standards and the protection of a quality that is more pronounced when they use ready to use configuration is accelerating the demand of such containment containment solution in the market. So our CapEx are really in line with these trends and we expect to take opportunities mostly in biologics because of the quality of our containment solution and because our ability to serve them in ready to use configuration. That is also linked to the positive impact in the business we have from the same trends in engineering for our assembly lines and visual inspection systems.

Speaker 11

Super. And if I could just add another one on the Engineering segment. You had previously mentioned that there were long lead times for electronic components. I'm just curious, have you seen any improvement there? Or do you have a time line of when that will be kind of normalized?

Speaker 11

Thank you.

Speaker 3

The comments of Franco before was mostly related to what happened in 2022. Now the situation is much more normalized in time of reliability of the supply. There are still lead times that are longer than 5 years ago. What is now needed to be order 2 months in advance, a few years ago was out of the shelf supply. But now we adjusted our planning to the new situation.

Speaker 3

And so we are dealing with the tale of what happened 1 year ago or more.

Speaker 11

Super. Thank you.

Speaker 4

Ladies and gentlemen, there are no more questions registered at this time. Floor is back to management for any closing remarks.

Operator

Thank you. Franco Stephanado will add some closing remarks.

Speaker 1

Thank you, Lisa. So despite this near term headwind that we are facing in 2024 for Bayer that is more pronounced than what was expected, What is for me is extremely important to reassure all of you that our strategy is extremely solid. We are confident in our future. We are so proud and honored to invest in these new greenfield plants because we are behind bigger customer program, in particular for syringes, snacks, high Z Flip cartridges, and we are today laser focused to execute. Nothing changed on our strategy to deliver to our customers a high value solution program for them.

Speaker 1

So today, the organization in a humble approach is going to more and more reinforce attention on execution and efficiency in order to deliver what we presented during the Capital Markets in New York. Thank you.

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