Hello and welcome to today's Stevanato full year results. My name is Elliot, and I'll be coordinating your call today. If you would like to register a question during the presentation, you may do so by pressing star followed by one on your telephone keypad. I would now like to hand over to our host, Lisa Miles, Head of Investor Relations. Please go ahead.
Good morning, and thanks for joining us. With me today is Franco Stevanato, Executive Chairman, Franco Moro, Chief Executive 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 Item 3.D, entitled Risk Factors in the company's annual report on Form 20-F for the fiscal year ended December 31, 2021, filed with the SEC. We encourage you to review the information contained in our earnings release today in conjunction with our associated SEC filings. 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 presented in this document, please see the company's most recent earnings press release. With that, I'll hand the call over to Franco Stevanato for opening remarks.
Thank you, Lisa. 2021 was a landmark year for Stevanato Group, underscored by the power of our integrated capability and value proposition. For 2021 compared to the prior year, we delivered double-digit revenue growth excluding COVID, expanding margin, and increased the mix of high-value solution as rising customer demand was matched with a first-rate execution. With a successful IPO behind us, we met or exceed our full year 2021 financial performance metric, despite the complexity of the current global supply chain environment. We finish 2021 with a solid backlog and new order intake, as well as a robust pipeline of new opportunities. At year-end, Stevanato had more than EUR 400 million in cash, a flexible balance sheet, and ample liquidity to fund future investment in growth platform.
The recently announced investment from BARDA illustrates our strong reputation and further confirms our strategic approach in the U.S. to invest and broaden our offering in this strategic region. Our strong track record demonstrates consistent delivery in our financial and operational objectives. Today, the fundamentals of our business continues to strengthen as we steadily advance our strategic priority to capitalize on strong customer demand. Amid favorable macro trends, our integrated capabilities resonate with customers as we aim to drive double-digit revenue growth, increase our mix of high-value solutions, expand margins, and deliver long-term shareholder value.
Thank you, Franco. Our successful financial and operational performance in 2021 sets the foundation for sustainable organic growth. For the full year 2021, revenue grew 27.5% over the last year, driven by growth in both segments and an increasing mix of high-value solutions. We closed the fourth quarter of 2021 with a new order intake of approximately EUR 278.3 million and a committed backlog of approximately EUR 880 million. We view these key performance indicators as important measure for our future growth prospects and represent ongoing favorable customer demand trends as new treatments come to market to tackle chronic diseases and advance patient care. Turning to slide six. Revenue from high-value solution was strong in the fourth quarter, which helped boost the full year mix to 25% of the 2021 revenue compared to 22% last year.
We expect this trend to continue as customers choose a ready-to-use platform because they reduce customers' total cost of ownership, get treatment to market faster, and increase quality and flexibility. In 2021, we experienced a rise in demand for syringes compared to last year. The increase was driven by our high performance, ready-to-use syringes platform, where orders doubled in 2021 compared to the prior year. These proprietary platforms include our Alba and Nexa syringe products that are gaining traction. This platform is ideally suited for biologics and highly sensitive drugs like monoclonal antibodies, mRNA vaccines, and recombinant proteins because of their advanced technology and superior performance. We expect this trend will continue into 2022. The evolution in our high-value solution extends beyond the primary packaging. We continue to expand our integrated capabilities in the drug delivery space of pen injectors, auto-injectors, and wearable pods.
In January 2022, we expanded our agreement with Haselmeier for our proprietary Alina pen injector, granting us exclusivity to support a broader range of therapeutic areas beyond the diabetes. We designed and developed the Alina variable dose and fixed dose pen injector platform, which is compatible with the established therapeutic regimens and innovative drug therapies related to diabetes. This expansion marks another important step as we continue to expand our presence and diversify the opportunities within this product family. Let's turn to slide seven of the presentation. We are excited to announce our first agreement with the U.S. Government Biomedical Advanced Research and Development Authority, or BARDA. Under the agreement, BARDA will invest up to approximately $95 million to support an increase in manufacturing capacity in Indiana for both standard and EZ-fill® vials.
This will help strengthen the U.S. government's domestic capabilities for national defense readiness and preparedness programs for current and future public health emergencies. We are very pleased to be selected for this important investment from BARDA as we build and rapidly scale our capacity in Indiana to help fortify the U.S. government's pharmaceutical supply chain. Turning to slide eight. The BARDA investment dovetails with our plans to expand our global industrial capacity to satisfy the market demands. The build-out of our facility in Indiana remains on track. We still expect that construction will continue into 2023, followed by startup and validation, leading to revenue generation sometime between late 2023 and early 2024. In the meantime, the pace of demand has increased over the last year, particularly for our high-value solutions.
In response, we are moving forward with incremental investment in Italy to further shore up our capacity until the U.S. and China facilities are expected to go live. We believe that we have the necessary flexibility through our modular approach to incrementally add or modify capacity to match customer evolving needs. Our capital investments are intended to yield sustainable organic growth as new treatments come to market that require high quality, high performance solutions further up the value chain. We believe that our integrated capabilities, coupled with our high-value solution, are important elements to create and drive shareholder value. Turning to slide nine. While the pandemic continues to present challenges to businesses around the world, we remain resolute in managing the complexity around inflation and the supply chains.
We worked hard to effectively manage the impact to the business in 2021, and now we are keeping a sharp focus on inventory management, manufacturing, and on-time delivery to customers. We have been capturing cost increases and have raised prices accordingly. We were not immune to the rapid rise of the Omicron variant, and we experienced higher-rate absenteeism in January in some of our European facilities. While production was temporarily slowed in January, we began returning to more normalized levels of staffing and productivity by mid to late February. We are also following the situation in Ukraine carefully and its potential business impacts. We are closely managing inflationary cost and supply chains with a high degree of discipline and perseverance. We anticipate that these headwinds will persist throughout the year.
Finally, we are executing against our strategic operational priorities to capitalize on rising demand trends and support customers across the entire drug life cycle. In 2022, we remain focused on adding incremental capacity in Italy in response to rising demand as customers move up the value chain. Advancing our expansion plans in the U.S. and China as we diversify our industrial footprint and enhance our proximity to customers. Continuing our investment in R&D to accelerate our market-leading position and increase the pipeline of our solutions. Building a multi-year pipeline of opportunities evenly weighted in the biologics market, where we expect to continue to see a growing demand for our high-performance products. I now hand the call over to Marco to cover the financials in more detail.
Thanks, Franco. We are very pleased to deliver another solid quarter of financial results, which helped top our full year estimates. For the fourth quarter of 2021, revenue was better than expected and grew 12.5% to EUR 232.6 million over the prior year. This was driven by another strong quarter from our engineering segment, due in part to the ongoing capital deployment by customers to satisfy industry demand. For the fourth quarter, COVID represented approximately 14.3% of revenue. As we mentioned on our last earnings call, the fourth quarter of 2020 included the benefit of approximately EUR 15 million in our BDS segment related to the timing of revenue, which concentrated revenue recognition in the fourth quarter, but had no impact in full year 2020 revenue.
For the full year, revenue increased 27.5% to EUR 843.9 million over last year, driven by growth in both segments. As expected, COVID represented approximately 14.7% of revenue for fiscal year 2021. Excluding COVID, revenue grew approximately 15.2% over year 2020. Please turn to slide 12. As expected, contribution from high-value solutions increased approximately 62.9% to EUR 66.4 million in the fourth quarter compared to last year, representing approximately 28.5% of consolidated revenue. For the full year, high-value solutions grew approximately 42% over last year to reach EUR 207.8 million, bringing the full year mix to approximately 24.6% of consolidated revenue.
While investors should anticipate quarterly fluctuations, our long-term trajectory remains unchanged with a target mix of mid-30% by 2026, contributing to the expansion of EBITDA margin over the long term. Moving to slide 13, the increase in more accretive high-value solutions and ongoing operating efficiency gained from our lean manufacturing initiatives contributed to increased gross profit and operating profit margins. For the fourth quarter, gross profit margin increased by 310 basis points to 31.4%, while operating profit margin was up 40 basis points to 18.7% compared to last year. Operating profit margins reflect increased investment in R&D, mostly related to the advancement in innovation in premium products, including EZ-fill® platforms and BDS. This resulted in a net profit of EUR 44.6 million, or EUR 0.17 of diluted earnings per share.
As expected, the higher number of shares outstanding in 2021 impacted the quarter and the full year. Adjusted net profit was EUR 33 million, and adjusted diluted earnings per share grew 18.2% to 0.13 EUR. For the fourth quarter, adjusted EBITDA grew 10.3% over the prior year, and adjusted EBITDA margin was 25.3%. For the full year 2021, gross profit margin increased 210 basis points to 31.4%, while operating profit margin was 19.2%. This resulted in a net profit of EUR 144.3 million or 0.53 EUR diluted earnings per share. Adjusted net profit for fiscal year 2021 was EUR 120.5 million, and adjusted diluted EPS grew 54.8% to 0.48 EUR compared to last year.
Adjusted EBITDA increased 36.3% to EUR 218.3 million, resulting in adjusted EBITDA margin of 25.9% for fiscal year 2021. Please turn to slide 14 for segment results. For the fourth quarter, BDS segment revenue increased 9.3% to EUR 185.9 million compared to the same period last year. For fiscal year 2021, BDS segment revenue increased 22.9% to EUR 694 million. Period to period, segment revenue increases for both the quarter and the full year were mainly driven by growth in our core products and more importantly, due to an increase in mix of accretive high-value solutions. As expected, high-value solutions accounted for approximately 35.7% of BDS revenue in the fourth quarter, and 29.9% for the fiscal year 2021.
The mix shift led to expanded margin for the segment. On a full-year basis, gross profit margin increased 350 basis points to 33.1%, and operating profit margin grew 330 basis points to 21.4% over the prior year. The engineering segment delivered another solid quarter of financial results. Revenue derived from third parties increased 27.2% to EUR 46.7 million in the fourth quarter and grew 54.3% to EUR 149.9 million for fiscal year 2021. The segment benefited from growth in all business lines in both periods. For the full year, gross profit margin was 19.3% and operating profit margin was 10.5%. Let's move to slide 15.
We have a healthy balance sheet, and as of December 31st, we had a positive net financial position of EUR 189.8 million, and cash and cash equivalents totaled EUR 411 million. For the full year, capital expenditure were EUR 122.1 million and used to support our ongoing expansion plans. For 2021, net cash generated from operating activity was EUR 133.3 million, which reflects the increased working capital as we continue to build sustainable growth, and free cash flow was EUR 25.1 million. On slide 16, we'll drill down into the details of capital expenditures. We finished 2021 with CapEx of approximately EUR 122.1 million. This was lower than our initial expectation, mostly due to timing and the shifting of spend into 2022.
We estimate that approximately EUR 90 million of CapEx spend that was previously expected to occur in 2021 is now included in our fiscal year 2022 CapEx budget. As Franco noted, we also anticipate some incremental expenditure as we add more capacity in Italy to meet the rising demand. Together with the shift of approximately EUR 90 million of capital expenditure into fiscal year 2022 and incremental CapEx for Italy, we are estimating capital expenditure for 2022 will range between approximately 35%-40% of revenue. Our capital investment are vital to growing revenue, increasing our mix of high-value solutions and expanding margins, all of which we believe will create and drive long-term shareholder value. Therefore, our overall capital allocation plans remain unchanged.
First, our number one priority is investing in and executing against our ongoing capacity expansion plans that are aimed to satisfy market demand and drive organic growth. Second, research and development to maintain our competitive advantages and drive innovation. Third, we may consider opportunistic M&A to broaden our offering, technical know-how, and international footprint. For now, we are squarely focused on organic growth. In a nutshell, our balance sheet gives us the flexibility to invest in sustainable organic growth by expanding our capacity to meet the long-term demand dynamics in our core business. With a strong financial position, we believe we have ample capital to address future liquidity needs and execute our strategic and capital investment plans. Moving to slide 17, guidance. The company is establishing 2022 guidance that is framed by the strength and visibility of our backlog.
For the full year 2022, we now expect revenue in the range of EUR 935 million-EUR 945 million. Adjusted diluted EPS in the range of EUR 0.49-EUR 0.51. Adjusted EBITDA in the range of EUR 248 million-EUR 253 million. Using the midpoint of revenue guidance, we estimate that we have approximately 75% of our forecasted revenue in the form of committed backlog. Our guidance also assumes continued durability from COVID, with expected revenue contribution in the mid-teens as a percentage of total revenue. Our guidance also considers the temporary headwind related to inflation and supply chain. We currently expect that revenue will be higher in the second half of fiscal year 2022 compared to the first half of the year.
This aligns to our industrial plans as we continue to bring more capacity online during the course of fiscal year 2022. Thank you. I will pass the call back to Franco Moro for closing comments.
Thanks, Marco. Our 2022 guidance reinforces our belief that we can continue to deliver on our long-term objectives. We have earned a reputation as a leader in premium drug packaging and engineering, serving as a vital link to the safety and effective administration of our customers' injectable treatments, diagnostic tests, and therapies. We have a relentless focus on driving constant innovation in R&D, delivering high quality products, offering scientific and technical support, and meeting market demands. We serve some of the fastest growing market segments, and we are integrated into the drug production and delivery supply chain with favorable multiyear secular tailwinds, including pharmaceutical innovation, aging population with chronic conditions, growth in biologics and biosimilars, acceleration and expansion of vaccination programs, self-administration medicine, and increasing quality standards and regulation.
Above all, we believe that our strong reputation, coupled with these favorable macro trends and our high-quality suite of products, position us well to benefit from continued demand and, in turn, deliver double-digit revenue growth, margin expansion, and long-term shareholder value. Operator, let's open up the line for questions.
Thank you. For our Q&A, if you would like to ask a question, please press star followed by one on your telephone keypad now. If you change your mind, please press star followed by two. For those who have joined online, please press the flag icon. When preparing to ask your question, please ensure your phone is unmuted locally. Our first question today comes from David Windley from Jefferies. Your line is open.
Hi. Good morning or good afternoon. Thanks for taking my questions. I wanna start with just a couple of kind of housekeeping type questions. Marco, I was hoping you could tell us what the dollar value or the percentage of revenue from your EZ-fill products that you're not including in high-value solutions.
Yeah. We are going up rapidly in EZ-fill® . So our practice, we provide data about segments and high-value solution. Anyhow, I can tell you that high-value solution went up 42% in the year, and EZ-fill® sales went up more or less in the same range year-over-year.
Okay. Secondly, do you have, you mentioned the inflation factors and the pricing that you're taking, watching supply chain, things of that sort. Can you quantify any kind of unexpected negative impact that the fourth quarter P&L absorbed? Maybe talk about the timing of the pricing. Is there any lag between, you know, the pickup on pricing versus the cost that you're incurring?
Yes. As anybody else in the industry, we are facing inflation pressure like any other industry. We have experienced, we mentioned in Q3 some logistical cost increase. We are putting our model some other cost increase in our total manufacturing cost. As Franco was saying, we are recalculating pricing frequently and rising price accordingly. Overall, we expect also taking out the inflation from our model an organic double-digit growth for 2022 compared to 2021.
Okay. Then I guess the last question I have is around your capacity. You mentioned the shift in some of your CapEx spend. I guess, first of all, I want to just confirm that that's not impacting the timing of capacity that you're bringing on. Then kind of maybe flipping the coin and asking the question the opposite way, does the BARDA investment give you any ability to accelerate the pace of build-out and validation of your Indiana greenfield? Thanks.
Starting from the first part of your question about the capacity. Since we have our regional plan for capacity expansion, the demand grew more than expected. We took the decision to boost the capacity in Italy. That is the way we can bridge waiting for the availability of a new capacity in U.S., in China. Our modular approach to investment makes has the possibility to be reactive and responsive to match the upside in demand. Back to the second part of your question about BARDA. BARDA agreement involved a multi-year plan to expand the capacity. For sure is a sort of acceleration of part of our initial plan, but is not for the short time.
Okay. Thank you.
Thanks, David. Operator, can we please have the next question?
Our next question comes from Paul Knight from KeyBanc. Your line is open.
Hi. Thanks for the question. Could you update us on the planning on the China expansion as well?
Yes. Our plan are not changed at all. We are proceeding. As we mentioned, we spend some time to improve and to optimize the capital allocation, also to work on having the right appropriate financial incentives. We are in line both with starting designing and starting construction and hiring people, training people to get ready for the date. We already mentioned that is having the first activities and the first revenues in first half and second half of 2024.
It looks like COVID and non-COVID grew a little better than expected. Is the industry moving to lower doses per vial with COVID at this point, do you think?
There is the continuation of this trend to move from multi-dose to single dose that impact the volume needed for the market, both in syringe and vial. We see opportunities in both areas because you are well aware that we produce both syringe and vial. Our syringes proved to be the right solution also in terms of suitability with the cold chain distribution. We monitor these trends, and there is no impact in our planning about the capacity expansion.
Thank you.
Our next question comes from Derik De Bruin, from Bank of America. Please go ahead.
Hi, good afternoon. Thank you for taking my question. One housekeeping question. What's embedded in your guidance for FX in the top line?
Derik, let me just clarify. You're wondering what the currency translation rates are that are embedded in our guidance?
What should we model for currency headwinds? It's the question about what's the organic revenue growth guide for the total business.
Thank you for the question, Derik. We don't expect material changes compared to 2021 in our model.
Great. Thank you. You know, when you look at your business, I mean, the COVID expectations you had, you're guiding to are basically in line with where we are. I guess the question I have is like, if you weren't doing COVID work, is there, would your core business be your non-COVID core business even higher? That is, are you turning away business or delaying business due to COVID, due to having to do COVID work? It's basically trying to get to sort of like what's the underlying core demand.
As we several times mentioned, our business is not COVID dependent. The visibility we have because of the backlog interaction with customers make us in good position to look at the order intake. We have good visibility in COVID revenue that we think and we believe we remain consistent also in the near term. It's hard to speculate about the future of the COVID, but we feel reasonably confident that we can match any possible free capacity with fresh order because the demand is very strong in different therapeutic areas.
Just to complement, we mentioned the fact that the visibility into our revenue in the form of backlog for 75% of 2022 midpoint guidance. We have clear visibility also about COVID for 2022. As Franco was saying, it's obviously more difficult to speculate for 2023 and beyond.
Great. Just one final question. High-value solutions at 25% exiting kind of fiscal 2021, the mid-30s by 2026. How should we think about that number for 2022? You know, another increment. Basically, I know it's not gonna be linear, but should we think about another 2-3 percentage point increase on average per year?
Thank you for the question. As you noted, we were in 17% range in 2019, 2020, and we are close to 25% in 2021. We see the trajectory going on. We have a robust backlog and visibility, and we see high 20% range for 2022, consistent with our trajectory and expectation to meet mid-30% by 2026.
Great. Thank you very much.
Our next question comes from Lizzie Speyer from Citi. Please go ahead.
Hi, thanks for taking my question. I'm on for Patrick. I think backlog, as you touched on earlier, ramped to EUR 880 million this year. Can you just talk more about, you know, how that 75% for 2022 that's covered compares to prior years?
Yeah, the backlog is much stronger this year compared to 12 months ago, where we had approximately EUR 600 million backlog. We have much more visibility this year compared to 12 months ago. We see robust backlog in both segments. The percentage is more or less the same in the two segments. We have clear visibility and ability to plan in advance.
Great. Thanks. That's helpful. Then I guess just broadly, can you talk about, you know, how you guys performed in the three regions between Europe, U.S. and APAC, and what your outlook is for these regions in going into 2022? Thanks.
Yeah, about the regions, we have grown in Asia Pacific, particularly as you have seen in 2021. We expect robust growth both in Asia Pacific and North America regions for 2022. Europe is still a very important market for us, but we see growing more those regions than Europe.
Thank you.
Our next question comes from Tim Daly from Wells Fargo. Please go ahead.
Hi, thanks for the time. My first question is, you know, digging a bit more into the booking trends and the backlog, you know, how should we be thinking about this, I guess, the lead times and the percent of revenues that are captured in backlog heading into the year as we go forward? You know, are you expecting some sort of normalization in lead times? Any sort of detail you could provide around, what happens when, I guess, things start normalizing a bit more? How should we think about the trajectory of backlog and book-to-bills and everything throughout 2022?
Yeah, great question. I mean, we experienced, as mentioned a couple of times, our customers are booking in advance capacity to secure their supply chain. This is one of the reasons why we have been able to grow the backlog so significantly besides the growing of Stevanato Group business. It's not easy to speculate what's going to happen in the future, but we see, as Franco was saying, very robust demand in the market, so we are not worried about filling our capacity for the future.
Okay. And in a similar vein there, just I know you noted that 75% of the sales for 2022 are captured in backlog. For the around EUR 140 million or so euros of COVID work expected, per your guidance here, how much of that is captured in the backlog, or are there any assumptions baked into that EUR 140 million number?
Yeah, more or less the same percentage. I mean, the 75% of COVID.
Okay. No, that's helpful. Then my final one is on margins. Obviously lots of noise going on on the macro front, especially in Europe around energy prices. What are the assumptions, you know, baked into the EBITDA guidance for, I guess, energy prices? How much of your expenses this year were spent on energy? And, you know, do you have any hedging mechanisms in place to account for, you know, the macro volatility going around right now?
Yeah, those are the costs we are talking about when we say we are frequently recalculating our total manufacturing cost. Again, this is a situation everybody are facing in any industry. Our customers understand it. Obviously, we try to minimize the cost increase, but we are increasing our price accordingly.
Tim, just to follow up on that, as Marco mentioned previously, if you exclude the cost increases, year to year, we still anticipate double digit organic growth.
All right. Are there any hedging mechanisms in place for energy costs?
There is no mechanism. It's not the clauses that are embedded in, generally in our agreement with the customer, but the relationship with the customer allows also to share the situation. We think they can really understand what is going on in the market.
Yeah. You probably know an important part of our production is in Italy, where we have some protection due to the long-term agreement we have with the utilities here in Italy.
All right, great. Thank you. Appreciate the time.
Thanks. Thanks, Tim. Operator, next question, please.
Our next question comes from Drew Ranieri from Morgan Stanley. Your line is open.
Hi. Thanks for taking the questions. Just on guidance for a moment. You grew 15% ex-COVID in 2021. 2022 looks like it's taking a little step down. Is this just modeling conservatism into your guidance? Or just as you're kind of looking at the business, can you talk about maybe areas of the business where you are starting to see any type of slower growth rate relative to 2021? Just on your commentary about phasing between the back half and first half of the year, can you give us a little bit more detail there on how the businesses should ramp over the year? Thank you.
Thank you for the question. For 2022, as mentioned, we expect stronger sales in second half of the year compared to the first part of the year because of the capital deployment we are doing, increasing capacity mainly in EZ-fill® high-value solutions. We can tell you also that we expect double-digit growth in our BDS segment boosted by high-value solutions. In engineering, we are initially modeling a high single-digit growth compared to 2021 when we went up almost 55%.
Okay, thank you. Then just on the inflationary environment, you touched on this a little bit, but should we think gross margins will be able to actually expand in 2022, or should we kind of think about it more consistent with your 2021 levels? Or will high-value solutions really drive the mix shift and you'll see some pricing benefit? Just trying to get a better sense of gross margin expansion here.
Well, I think that it's worth to go back to the driver of our growth that is the market. The market demand is growing very fast, and the demand for our high-value solution is very strong, particularly in syringes with our Alba® and Nexa® products. EZ-fill® vials also enjoy very robust demand. This is the main driver, and we are growing because we are putting our investment in that direction, deploying the capital step by step to increase the share of high-value solution in our portfolio. The marginality as an average is the result of this effort coming from the demand on the market.
Got it. And then just lastly, on COVID-related revenue, I mean, is there any way to put out a 2023 number or kind of what you're thinking about for potential COVID contribution?
There are many variables playing in the forecast for 2023. We mentioned the shifting from multi-dose to single-dose that can happen that could be from neutral to favorable from the economic point of view. We cannot speculate on the presence of new variants, and there are many, many factors to be understood before providing any numbers on 2023.
Understood. Thanks for taking the questions.
Our next question comes from John Sourbeer from UBS. Please go ahead.
Hi. Thanks for taking my question. I guess any update around new customers in the quarter with HVS growing pretty solid 63% roughly year-over-year? I guess, you know, specifically what percentage of that HVS growth was from new customers?
No, we will not disclose these figures. What I can say is that there is a very huge demand for high-value solution linked to new therapeutic and new drugs, specifically in biotech space. This is one of the main driver of our emerging business in that space.
John, just as a reminder, many of our contracts with our customers are under non-disclosure agreements. Therefore, that would be the type of information that we won't be able to provide on a regular basis.
Got it. Thanks for the color there. I guess just as a follow-up, the comment in 1Q with the increased absenteeism in January in Europe due to the Omicron spike, any way to quantify the impact there or just how we should see on the cadence on 1Q for the guidance?
Yeah. When Omicron variant hit Europe also, we had to face an increased rate of absenteeism in our facility in Europe, and we took countermeasures in terms of having more shifts from people that were healthy, and with the incentive to have people at work. We are not going to quantify the impact. What I can say is that mid to late February, we came back to the normalized condition in terms of staffing, in terms of productivity, and we expect to continue this direction.
Got it.
By the way.
Thank you for taking my question.
Our guidance includes this, headwind.
Our final question comes from John Kreger from William Blair. Please go ahead.
Hey, thanks very much. Maybe just one more to try to clarify on the first quarter outlook. Do you expect revenue growth to be positive in the first quarter compared to last year? Should we assume down a bit given the Omicron surge?
I will expect significant growth compared to previous year in the range of double-digit growth.
Marco, is just that in the first quarter or is that for the full year?
First quarter, we expect lower revenues than in Q4 in both segments. Nevertheless, we expect an organic growth double-digit year-over-year.
Great. Thank you. Another question. It sounds like you've had strong orders. Are you capacity constrained at all? In other words, how does your time to complete orders now compare to where it was, let's say, a year ago?
First of all, the demand for our high-value solution had remained very, very strong. Our plan to expand the capacity at scale is obviously something that is vital. We recognize that the execution is a vital factor to match the customer expectation, and we will continue to put our best effort to match their needs in the shortest time possible.
Okay, thanks. One last one. You noted CapEx is supposed to be much higher in 2022. I understand part of that is a push from 2021. Can you remind us what you think your longer term CapEx spending ratio should be relative to revenues?
Yeah. 2022 is expected to be the peak year for CapEx because of the initiative we launched. We expect also high CapEx in 2023 as we complete the buildings and the machinery for U.S., Europe and China. As normalized CapEx, we see for the future something in the range of 9% of revenue to keep on growing double digit. We can expect some year where we are installing more capacity, followed by years when we leverage the existing capacity and just concentrate on revenue execution. This is what we have in mind in the medium term as normalized level of CapEx.
Okay, thank you.
Thanks, John.
We've come to the end of our Q&A. I wanna hand back to the Stevanato management team for closing remarks.
We wanna thank everyone for joining us today for the Stevanato Group fourth quarter and full year 2021 earnings call. We appreciate your time, and have a good day. Bye.
This concludes today's call. We thank you for joining. You may now disconnect your lines.