Everyone. Welcome to the 2023 Jefferies Global Healthcare Conference. I'm Nausica from the investment team, and it's my pleasure to introduce you to Franco, CEO of Stevanato, and Giacomo, Investor Relations. I'll hand it over to Franco for a presentation.
Thanks.
Okay. Very glad to be here with you today, and to say something about our company, about the life cycle of our company at this specific moment. Obviously, to my presentation, safe harbor statement apply. I know that you're familiar with the such stuff more than me, so we can start. We can start talking about the business that have, in our idea, very strong fundamental. We are a company that is working since more than 75, 70 years now. Really, next year, we, we'll celebrate the 75-year of history, and in the last 20 years, we focused completely on pharma. We have a unique value proposition, and we believe it is a distinctive advantage in the market that is supported by secular tailwinds that set the stage for very promising opportunity in the future.
We are in a cycle of big investment dedicated to expand our capacity, the capacity much needed by the demand of our customers. We believe that we can continue in a good trajectory after having delivered in the next last year's double-digit growth, with expansion of a high-value solution and associated higher profitability. We are in a very good position to continue to perform like this also in the future. Back to our history, I don't want to drive you through each of these steps, but it's very important for us to underline some of the milestone and the pillar we based our growth in the past and even more in the future.
Years ago, focusing on pharma, we took some decision, very important decision, to focus on having a stronger leadership and stronger management team to support the growth. We decided to focus on global expansion, becoming a global player, global partner for pharma companies. We acquired some different business, and we integrated the different business to expand and make broader range of capabilities to become more and more end-to-end solution provider for pharma. We are continuing to invest a lot in R&D and innovation to boost further the growth of a high-value solution in our portfolio. Now, we are a global leader in different regions of the world. We are covering the three main areas, in our view: EMEA region, the Americas, and Asia Pacific.
This situation, being a global partner, deliver big advantage for our customer because we are able to deliver to them everywhere the full set of our products, and, more importantly, the same quality standard. Having different facility in different parts of the world, we have also the possibility to give more robustness to the supply chain because we have, backup sites after the main site serving the customer. Sorry for the advancing of the slide. Okay. Which is our role in the pharma landscape? We play a mission-critical role because the containment solution that represent the core business of us are mission-critical to preserve the integrity of drug. This is the reason why our products are embedded in the filling of customer, and this build a strong relationship between our products and the success of the drug and the treatment on the market.
Being so critical, we can start working with the customer since the early stage of the project, and to follow their needs down to commercial scale with the different capabilities that are in our integrated offering. We deliver also analytical and development services that support each of these steps in the life cycle of a drug. I want to drive you also in a closer look in how we look at our business in Stevanato Group. We look at our business in two segments that we reported separately for accounting reason, but the strength of these two segments is the high level of integration. We are strong believer in the power of this integration. It's not because it's a faith, but it's because it's based on the evidence of the result we deliver year after year in our history.
Starting on the left, our core business is for containment solution. We have multiple formats, different formats: vial, syringes, cartridges. We provide this kind of container solution on the market, both in bulk configuration, not sterile. Bulk in our jargon means not sterile, and sterile configuration, where syringes are almost all converted to the sterile configuration. On the other side, cartridges and vials are starting to ramp in the same direction. Then we have drug delivery devices. We started the activities as a CDMO, but we have also very promising prospect for our own platform of proprietary devices, and it will become a very important part of our business in the year to come.
We serve also the diagnostic space, where we see big, very interesting opportunities to leverage on our value proposition of integrated capabilities, even more in the new trend about the molecular diagnostic. In the engineering segment, we include the production of machinery that are historically based on the glass converting, machinery for the specific market. But for pharma market, we integrated along the years the production of a visual inspection system, high speed, but also small-scale, systems for serving the clinical phases. And looking at the space of drug delivery devices, it's very important for us, the sector delivering assembly line for pen injector, auto-injector, that are very high volume in the future. So we—you can see that we have, at the same time, the mastering of, products and the mastering of processes. The processes means the machinery to execute the production.
We have a strong leadership position in some areas. We are by far the most important player in pen cartridges. We have established position as a leader in sterile vials, where we patented the technology back in 2008, and we are the first player in glass converting equipment. We reached the second position worldwide in visual inspection system last year. I wanted to keep your attention about the power of integration of these different capabilities together. Just a very practical example, we had the opportunity to name also the customer. In this case, it's Merck Serono, and they involved us years ago in one of their important project for a biologic drug, where they have the need to have the right containment solution, but also the view about the administration route by pen injector.
They decide to involve us at the very beginning to select the most suitable containment solution, and we developed analytical testing and testing methods that at the end, demonstrated that our Nexa cartridges were the most suitable solution in term of containment, and we have been able to deliver at commercial scale, cartridges. At the same time, as I told you, we were talking about a pen injector. This pen injector was supposed to be delivered to patient in certain number of different configurations. So the customer needed to have a very flexible, highly flexible assembly line to adjust the production to the variability of volume, depending on the different therapeutic regimen. So we designed for them this assembly line, highly flexible, and overall, we provide them from the lab activities test, testing method to the production of the device, all they needed to serve the patient.
I believe that is one of the good example of how we can streamline the supply chain of our customer and to give them advantages in term of time to market and reliability of the supply chain. Okay. Now, I want to move your attention to our strategy. We have clear strategic priorities. First, we wanted to continue to expand at our global presence in the market, expanding our capabilities around the world, mostly for high-value solution. And in fact, the second priority is to expand the share of high-value solution in our portfolio, and I will comment later on, more in the details. We continue our effort in R&D and innovation to increase and make even more robust our value proposition in high-value solutions.
At the same time, working in our tech center in Italy and Boston, we are building a multi-year pipeline of new opportunities, overweight in the biologics, working in close intimacy with our customers. The first priority was the global expansion. We are in the execution phase of big investment in different area. At our headquarters in north of Italy, close to Venice, we are in completion phase of a capacity expansion for high-value solution manufacturing, including our premium brand, Nexa, Alba. But we had also decided to start a new initiative close to Rome, very close to our existing site for vials in bulk production. And now we are at the end of the first step of this investment, we have already started very recently commercial revenue in line with our initial plan.
And obviously, we will go ahead with our modular approach to expand the capacity in Latina and to increase revenue. We started an initiative, big initiative, also in the U.S., in Fishers, Indiana, where we are approaching the first validation of the first installed lines, and we expect to have revenue generation starting mid of next year, and obviously ramping up along the years, because of this modular approach, until 2026, with the full commercial exploitation of the new facilities, scheduled on 2028.
In the meantime, because of the acceleration of the demand, we are looking at, in the Western world, we decide to pause a little our investment in China, not because we are changing our strategic view about Asia Pacific, but because we wanted to have a real, total focus on the good execution of the big investment, in Europe and, in the U.S. I want now to give you a glance into why we are so confident that our effort in investment will deliver good result. Our investment are demand-driven. We are not putting our bet in something that we don't know. We have huge visibility in the future demand of our customer because of different factors, different indicators. I want also to clarify, which is the backlog in our view. In terms of definition, backlog for us is only committed orders.
Committed orders that have all the commercial details, but are just the final step coming from binding forecast or multi-year agreement with the customer. So backlog is an indicator that is in normal situation, our view today, but is not the most important one. Most important one for us is the visibility we have in customer demand because of a long-term agreement that may range three to five years, and the consistent flow of forecast, binding forecast in the order book. On top of that, we have two other ways to look to have an insight in the future demand. One is coming from the engineering segment, because serving the customer in their expansion of capacity in fill and finish activities, we can anticipate their future needs in terms of containment solution.
Working with the same customer in our tech center, talking about the new drug in preclinical or clinical phase, we can have also a really anticipated view in the prospect after a few years. So the visibility we have, according to all these indicators, is supporting all our CapEx decision, and our CapEx decision seems to be good because we are enjoying in Italy an internal rate of return north of 20%, and we expect to continue to invest our money in the best interest of our shareholders also in the future. Why we are so focused in capacity expansion for high-value solution? What are high-value solution? I don't want to enter too many details, but in high-value solution, we put something that delivers specific, specific value to our customers because of the superior quality or superior performances.
We increased the share, the share of high-value solution in our portfolio consistently in the last years, moving from 70% in 2019, and landing last year at 30%, and this year, we expect to stay in the range in between 32% and 34%. And this is the main driver for the profitability of the company. Why we can have this benefit in terms of profitability? Because we are delivering to customer real value, real values in different way. We help them to reduce their total cost of ownership, we help them to have a shortened time to market, we provide superior quality products, and overall, we are able to help customer to de-risk the supply chain, and risk mitigation, you know, is so important for the originator, specifically when we are talking about new and costly treatment.
High-value solution provide a superior performances, and we have some specific brands in this space associated with our brand, like Nexa and Alba. We serve the biologic market mostly with this high-value solution, and the takeaway from this slide is that with our high-value solution, we are supporting the best and most and fastest growing area of the business that is associated to biologics. Why biologics needs this kind of specific solution? Because of the sensitiveness of the molecules that we are talking about, protein that may have some bad impact in case of bad interaction with the containment solution. And very often, the containment solution is designed to be part of a pen injector cartridge or an autoinjector.
In this case, also, the mechanical properties of the containment solution are at stake because the forces implied in autoinjector or pen injector deserve this kind of superior mechanical resistance. If you go more in detail in the biologic space, you see that the growth rate of biologic is higher than in different area. We enjoyed good growth also in vaccine. We are one of the most important player in primary packaging for vaccine, but also in vaccine, we are below 10%. Biologics are growing at a pace of 15%, and we have a very well-balanced portfolio of opportunity and commercial revenue in different areas. mRNA technology, that took a boost during the pandemic, GLP-1s, and monoclonal antibodies. So when we talk about the biologics, we are talking about these three main areas of application.
Overall, the market that we consider addressable from our value proposition is a very huge market. We are talking about an environment of $15 billion spread around close to $4 billion in containment solution, more than $2 billion in drug delivery devices, $8 billion, roughly, in diagnostic, $1.6 billion in visual inspection system, assembly line, and glass converting lines for our engineering segment. So huge market, where we have huge opportunities also linked to the conversion of sterile ready-to-use configuration of vials and cartridges.
The fundamental of the growth of this big market, with different pace, but, still healthy growth in initial area, is linked to some mega trends, secular trends, and I don't want to do comment each one of them, but, it's evident that biologics are addressing the need of patient because of the increased number of population in the world, but also the aging population. So the growth of chronic disease, the need of specific, treatment that are overweight in the biologics space. We have also the opportunity to follow the trend for self-administration, because these aging population with chronic disease want to have a better life under sick condition. So self-administration by autoinjector, pen injector, and also wearable device is something that is, very well, deserved by patient around the world. Now is the time to say something about, the financial result.
We delivered a Q3 this year, that in our view, was a very positive quarter. We enjoyed a stronger growth in the drug containment solution. If you consider the growth, excluding COVID, year over year, we delivered more than 25% growth in drug delivery solution. If we want to include also COVID, the growth is still 10%. During 2023, we have been able, according to our initial expectation, by the way, to replace more than EUR 80 million of COVID business with different business opportunities. Now, we expect to have COVID representing something between 1%-2% of total revenue for this year. At the end, we are talking about a business that landed in the regular business of vaccine. On the opposite, we are stronger enough in our therapeutic, other therapeutic area.
I'm short in time, so I want just to say something about the reiteration of our guideline that we delivered in during our capital market day some weeks ago. We improved also our outlook on the next years. We forecast to have a low double digit, no, no longer only high single digit, low double digit growth, but to have a low double digit growth, to increase further the share of a high-value solution in our portfolio, ranging between 40% and 45% by 2027, and with a beneficial impact on EBITDA margin. In closing, we are in good, a fantastic environment in terms of business. We have a strong strategy, we are executing according to our strategy, and we believe that all the action taken and all our plan will support sustainable organic growth in the next year.
Thanks so much.