Thanks to that, we work with customers, usually for decades, starting from the early stage of the drug development to the commercial phase where we stay for many years. Our products are included in the regulatory filings. Our products are in the Drug Master File. This is helping us to keep an eye customer retention, because very often the cost to switch is very high. Okay, moving to the second slide. We have a long track record of double-digit organic growth. We have more than 70 years of history, and we are well-positioned to be a global leader in the industry. We saw in the previous slide our unique value propositions. That is a key competitive advantage for us to serve the industry with high flexibility and different type of formats and solutions. We can leverage on secular tailwinds.
We see the growth of biologics, where our high value solution are particularly suitable for due to low silicone content, high mechanical resistance. We see the growth of GLP-1s, where we won a good share of the market in glass container solutions. Thanks to the capacity and the flexibility we can provide to our customers, switching from different formats, from Nexa syringes to sterile cartridges to dual chamber syringes. We want a fair share wallet. Other secular tailwind we can see is the self-administration of the drug. I mentioned before the drug delivery system development we did in recent years. What we can see beside biologics, GLP-1s and self-administration, we see the trend in pharma industry to focus more and more on the core business, on drug development rather than in production.
This is positioning us as an ideal partner to serve the overall pharmaceutical industry. Following our IPO, we decide to deploy our capital predominantly in increasing our capacity in high value solutions. We invested significantly to gain customer proximity, both in Europe and North America, with our plants in Fishers, Indiana and Latina, close to Rome, where we are installing more and more capacity, validating new lines with customers, and we are increasing rapidly in those two new plants. We entered in 2026 with a strong momentum. We have been able to grow double-digit on a constant currency rate also in Q1 2026 compared with the same period last year, mainly driven by the main segment, the BDS segment.
We grew 16% on a constant currency rate in BDS segment, mainly driven by our high value solutions that grew 17% compared with last year. They are representing today approximately 47% of our overall revenue. We see strong momentum, strong growth in high value solutions driven by biologics and GLP-1s. The main driver of growth has been predominantly in our Nexa syringes that are very suitable for self-administration due to mechanical resistance. GLP-1s is an important tailwind for us. We see it as a durable trend and tailwind. Today, the revenues in GLP-1s are representing between 21% and 22% of our overall revenue. We are serving the market predominantly with the high value solutions. I mentioned Nexa syringes, but we can see starting traction also in sterile cartridges.
Twenty-one to 22% compared to last year same period, we grew more than 20% in GLP-1s. GLP-1s, we went up more than 20%. The big driver in term of product has been again, Nexa syringes. We are happy about the visibility we can see in the overall high value products, like Alba® syringes. Sterile cartridges are exceeding our capital market expectations. The conversion from bulk to sterile is gaining traction. This is the main reason why we decided approximately 10 months ago to convert one EZ-fill vials line into EZ-fill cartridges to accommodate a high demand. Good visibility and good growth. Engineering went down 31%. It was expected from our side due to the current moment in the visibility we have about the current backlog we had at the end of Q4.
It's largely anticipated. We see margin expansion there following the difficult period we had in 2023 and particular in 2024 and particular in 2025 with respect of margin. We are exiting from the legacy, not profitable projects in Denmark for highly complex machining, assembly, and packaging. We are managing the situation as anticipated.
Okay. Okay. That's great. There's a lot of that I wanna follow up on.
Yeah.
Maybe first on the biologics and GLP-1 demand specifically. You know, you called out more than 20% growth. It's in the low, you know, 21%, 22% of revenues now. That's obviously been a big driver for you the last couple years. Have you noticed any change in customer demand in the last three or six months as oral GLPs hit the market? You know, I imagine that you're in very close relationships with the major GLP-.
Yeah.
1 vendors. You know as much about their demand patterns as anybody will outside of themselves. What's been the latest communication and messaging from them and, you know, how does that play out over the next couple years in your roadmap?
Our strategy, first of all, is to cover the market. We are clearly working now predominantly with the big originators. Nevertheless, we are covering the market and monitoring the evolving growing situation, both in biosimilars and also other biotech that are in phase II, phase III, ready to issue new assets in the market. We are working with most of them, and we want to play a key role in the GLP-1s space as we are currently doing. This is driven by our ability to provide flexible solutions to our customers so we can accommodate the pen injector route of administration through our cartridges. We can do the same with the Nexa syringes for auto-injectors. We have proprietary device like Alina Pen for biosimilars that are gaining tractions.
We have multiple solutions to serve the market. We see a growing market for the coming years. We are, let's say, secure by long-term contracts with our key customers, the originators. We have very good visibility for the next three, four years. In the meantime, we are covering the market. To your question, based on discussions we have with customers, the expert reports, and all the data points we have, the fact that, for example, Lilly is investing heavily in injectables. We see the injectable will still playing a key role in the future. The bigger part, share of market we expect to be injectable. We expect, as anybody else, that the market is keeping on growing in the coming years.
We know we are talking about approximately 10% of the overall population affected by obesity, diabetes or overweight. It's an important market, is a phenomenal drug, and we want to play an important role in that for the years to come. Our focus is not only GLP-1s. We are growing significantly in biologics. We see the way coming, driven basically by the big pipeline in the biologic space. Our high value products are, let's say, perfectly suitable for managing the complexity of the drug and biologics due to the low silicone content, the interaction between our containers and the biologic stocks.
Okay. And, within GLP-1s, what about some of the changes in formulation? You talk about syringes versus cartridges versus vials. Are you seeing any of that transition? Can you talk about how you're exposed across the portfolio?
We have good visibility, a multi-year contract with the syringes on one side, but also the right cartridges. On the other side, we are installing capacity in our plant in Latina for the first high speed, ready-to-use line that will start generating revenue beginning of 2027. And we have a plan to store more lines in cartridges. We have very good visibility for syringes, but we see cartridges gaining traction. There can be some different route of administration depending on also on the geographical area. Europe are more used to use multi-dose pen injectors. We see a lot of traction U.S. in pen injectors, but in auto-injectors, sorry. Pen injectors are starting gaining traction. About formulation, for example, we have flexibility also here. We are providing dual chamber syringes.
We can switch easily from producing dual chamber to Nexa syringes due to our engineering flexibility. We have many solutions to offer to the market. Again, we see our pen injector gaining traction with the biosimilars.
Something you called out on the quarter was that you did take that one, that one line where you switched from ready-to-use vials, ready-to-use cartridge, where you converted an existing line that was underutilized capacity. Could you talk about that a little bit more detail, sort of the build up to that? Have you done moves like that in the past and sort of the opportunity to do that to flex the manufacturing base and your existing CapEx to meet evolving customer needs?
Yeah. Again, the peak of suppliers has been during the pandemic. In 2022, 2023, we saw the destocking. In 2024, we have a sufficient installed capacity to serve the market today. The market in buyers we see it growing in single-digit on average with more traction in sterile configuration than in bulk configuration. Looking at the demand, we saw approximately one year ago, the demand growing in cartridges and having us not enough capacity to serve the market, waiting for the installation where 400 is producing commercial revenue in 2027. We decided with our engineering department to switch the technology from vials to sterile cartridges.
This is another tool of flexibility we have to adapt the demand without installing no new machines, but leveraging our ability to have flexibility, speed to market and lower CapEx with that.
How long did that process take to convert that?
Well, from the decision to the start of the commercial production, approximately nine to 10 months.
Okay. Great. all right. I mean, let's talk about other capacity. You're talking about, Fishers, Latina, you called that out on some of your prepared remarks. You've been talking about those facilities for a number of years. A lot of CapEx is dedicated to that.
Yeah.
You're sort of right on the cusp of sort of, you know, reaping the gains from those facilities. Can you talk about the roadmap from here, over the next couple of years as they come online, what we should expect, from both of those sites?
Yeah. The good news is that most of the CapEx has been already deployed. We spent the money to create the infrastructure, to develop and buy the machines. Most of the money went already out. We expect now to grow significantly our revenue driven by the capacity we install. The good news is that the capacity is matching market demand. We have very good visibility. We installed so far most of our capacity for Nexa syringes or high-value syringes. We have almost completed the phase related to syringes in Latina, where we are growing significantly in terms of installation, validation and commercial revenue. In Q1 2026, Latina plant is not anymore dilutive compared with the average of the segment. We are very happy also about the financial performances.
We still see room of increase in Latina because there is a high concentration of high-value products there. About Fishers, it's a bigger plant. It's a greenfield. We are in line with our plan. It is to reach the full capacity, the full ramp up by second half of 2028. We are sort of in the middle of the journey. We see improvements every quarter. So far, we installed and validated and generated commercial production for Nexa syringes too, also in Fishers. We will be starting the production of drug delivery system in the second half of this year. For 2027, we plan the installation of Alba® syringes. We have already installed also a sterile vials line that will be validated in the coming quarters.
Okay. When you talk about, you know, full capacity by the second half 2028-
Yeah.
That's when you'll see sort of full margins as well?
In the meantime, you know, it's a continuous improvement. Same way we saw in Latina quarter after quarter is getting better. Same in Fishers. It's important to underline the fact that the two sites represented in 2024 and 2025 a pain for the PNL, obviously, because you need to set up the organization, train the people, validate the lines, and in the meantime, you are not generating revenue in each single line you are validating. Now the situation is much better. Also in Fishers, we validated almost all the lines with very important customers in U.S. We are now ready to take advantage of the growth, the revenue, and higher profitability. I didn't mention probably enough the plan we have for expanding Latina for glass cartridges.
We have an important anchor customer here with many years of visibility about the production of sterile cartridges. It's very important for us because being the market leader in bulk cartridges, we believe it's very important for us that the, that the market is switching to sterile solutions. Today is a very low penetrated market with low, lower than 5% penetration in sterile. We see more and more traction, not only from the big customers, but also from the overall market in biosimilar and biotech.
Okay. Just real quick, in terms of the sort of key contribution we can expect from Fishers and Latina, you know, the old paradigm of EUR 1 or EUR 1 of CapEx is EUR 1 of revenues. Does that hold? Is that, you know, the right ballpark of what we should be thinking about, you know, in 2028, 2029, and sort of like the incremental contribution from these? You're seeing some of it already.
Yeah, it's, the rule of thumb is when we talk about high-value solutions, we can estimate 1 EUR CapEx, 1 EUR revenue when fully ramped up. This is the case for the high-value solutions. That is giving us confidence to have, as I was saying before, a big room for expansion in the coming years in revenue and profitability. Important, we are matching customers' demand. It's not only the CapEx, it's the fact that, in investing in syringes, for example, we match the needs of our customers. We are doing the same for cartridges with multi-year visibility. In high-value solution, we believe, yes, we did a very big CapEx in the past, but we believe it has been the best way to deploy our capitals after IPO.
Yeah. Let's turn to engineering and talk through that. You've been facing headwinds in that segment for a number of quarters now. You're working through it, sort of it's a lot of blocking and tackling and identifying the issues and working through them. Can you give us an update on sort of the roadmap from here? You know, you mentioned 31% decline in 1Q as expected. How does that progress through the year? When does engineering sort of get back on track and there's no longer a headwind?
The visibility we have today is similar to the one we had last year to deliver our guidance. We are confident about our guidance. Our guidance today stays between EUR 130 million-EUR 140 million of third-party revenue, driven by the backlog we have and the opportunities we are discussing with our key customers. The good news is that our key customers are still there. They appreciate a lot our technology. Medium term, we see strong demand both for visual inspection machines and assembly and packaging lines, mainly related to the self-administration. The technology is there, customers, good customers are there, and the market demand is we can see it positively for the medium term.
We are in this situation where we saw some slowdown in the decision-making of CapEx projects, probably driven by also by tariffs and some geopolitical tension. Talking with the peers is a quite common situation this period of time. We did a good job in making the segment more efficient with a more efficient footprint, with more technology concentrated in Italy for visual inspection, glass forming, and the second step of the process of the ready-to-use. In Denmark, we are keeping the assembly and packaging lines for drug delivery system and devices in general. We have been able to reduce cost, improve our processes, and we can see the first signal in our profitability expansions. Very important also, we have been able to deliver all the complex machines that were in delay in the past.
We regain credibility with customers, and we are well positioned to restart our journey of growth.
Okay. You talked about sort of rebuilding some of that funnel, some of the order and commercial execution.
Yeah.
I imagine you have very long lead time in this business. Are you starting to get visibility on 2027 trends you're gonna talk about this year? Kind of thinking through of when will engineering go back to historical trends or sort of LRP. Is it too early to project that, or you think you're on your way there?
It's a little bit early to project 2027 because, you know, it's a project business, so we have backlog for 2027, but we still have to fulfill the backlog. It's important to underline, we are recognizing our revenue on the percentage-of-completion basis. Part of the orders we are winning will be converting to saving 2026 and part in 2027. We are starting gaining more visibility on 2027, but it's a little bit early to talk about numbers. What I can tell you is that we see strong interest and good pipeline in visual inspection machines and assembly and packaging lines.
Just in the last couple minutes we have left, you know, you touched on margin expansion and sort of the roadmap there a number of times, you know, both from BDS and HBS underlying demand and volumes, mix shift and, you know, Latina Fishers coming online and then also getting past the engineering headwinds. Can you talk about margin trajectory this year and then longer term, what that algorithm, what that formula looks like?
No, our journey, we explained during Capital Markets Day it remains intact. We've been able to increase adjusted EBITDA margin by 160 basis points last year, and our guidance for this year is a further expansion of 150 basis points. This is the trajectory. I mean, when you put together the fact that biologics are gaining traction, GLP-1 is a durable tailwind. This is driving the increase of the share of our high-value products. I mentioned before, Fishers and Latina were dragging. They are still dilutive in the combination of the two. On the opposite, we plan that when fully ramped up will be significantly accretive for the mix of the segment.
If you put this together with the fact that we need to slightly improve our engineering business, we are confident to do that. Our trajectory of growing margin expansion remain intact. Our goal is to reach 30% of adjusted EBITDA at some point in 2027. The trajectory is there. There can be some quarterly anticipation or delay in getting there, but we are very committed and confident to get there.
Okay. Any questions from the audience? All right, I'll throw in one last one. We're almost out of time. You know, you talked about CapEx and free cash flow and the requirement, especially with Latina.
Yeah.
The heavy lifting has been done, yeah. This typically is still a very CapEx-intensive industry and market. What are your plans for cash use going forward and sort of some of those balance?
Following the IPO, the peak was in 2023 with more than EUR 430 million of CapEx. We went down in 2024 and 2025. We see 2026 between EUR 240 million-EUR 260 million of CapEx. This is related to the execution in Fishers and Latina. Level of CapEx is going down in 2027, and our goal is to go back to our 10% CapEx on revenue to keep on growing high- single- digit, low- double- digit. The cash flow is coming. 2026, we are still between neutral to EUR 20 million + after EUR 18 million + free cash flow in 2025. We see significant improvement in cash flow by 2027 and beyond.
All right. Well, thank you so much. That's it. We're out of time. Thanks, everyone. Thank you, Marco.
Thank you very much.
Thanks.