18. Property, plant and equipment

At December 31, 2024, the overall increases in land and buildings, considering both the yearly additions and the reclassification from assets under construction, amounted to EUR 189,764 thousand and was mainly related to (i) the Group’s EZ-Fill® facilities in Latina, Italy, and Fishers, U.S., and (ii) the acquisition of land in Mexico.

In the first half of 2024, the Group sold its facility in Brabrand, Denmark. All activities in Brabrand were transitioned and consolidated to the Group's location in Silkeborg, Denmark, to gain operational efficiencies, harmonize the industrial footprint and allocate all resources and competencies at the same location to optimize the Group's Danish operations. As a result of such sale, the net decrease in land and buildings amounted to a total of EUR 2,361 thousand.

At December 31, 2024 the overall increases in plant and machinery, considering both the yearly additions and the reclassification from assets under construction, amounted to EUR 145,051 thousand and mainly referred to the acquisition of new production lines and equipment for the production of EZ-Fill® and bulk syringes, microvials and cartridges and molding machines for container in vitro diagnostic solutions as the Group continues its global capacity expansion initiatives.

In the second quarter of 2024, the Group reassessed the expected useful life of certain machinery installed in the Italian facilities considering the low impact of extraordinary maintenance performed over time on these assets, their first installation and their continuing functioning. Based on a technical appraisal, the expected useful lives for the machinery pertaining to our bulk production and to our EZ-Fill® production were extended from 6.7 years to 15 years and 12 years, respectively. The change in the expected useful lives of the machinery was treated as a change in estimate starting from April 1, 2024. The reduction in depreciation expense in the second, third and fourth quarter of 2024 related to the machines for which expected useful lives were reassessed approximated total EUR 14.5 million.

Disposal of plant and machinery included the carrying amount of a production machine, previously used for manufacturing purposes, which sale is expected to occur in 2025. Accordingly, at December 31, 2024 the Group classified it as non-current asset held for sale for EUR 222 thousand.

Assets under construction, includes investments in production lines and machines for primary drug containers production, molds and injection machines which have not yet been completed but are expected to enter into use in the coming years. This category also includes the advancement of construction of the new Group's facility in the U.S., the construction works for the further expansion of the EZ-Fill® facility in Latina as well as the related production lines.

For the year ended December 31, 2024, the Group recorded an impairment loss of EUR 2,616 thousand resulting from the write-down of a facility in Zhangjiagang, China, that was acquired in 2021 and still included in assets under construction, to its estimated recoverable amount. The write-down of the Zhangjiagang facility resulted from the further postponement of the EZ-Fill® capacity expansion investment due to the diversion of a customer's EZ-Fill® project to the Group's facility in Latina, Italy, and to the increasing focus on the capacity expansion projects in the U.S. and Italy. This write down was recognized in the consolidated income statement as cost of sales. The recoverable amount at December 31, 2024 approximates EUR 11 million and is based on the fair value of the building resulting from a technical asset appraisal.

At December 31, 2024 committed supplier orders related to the ongoing investments equaled approximately EUR 94 million (EUR 136.5 million at December 31, 2023), net of the expected contribution from the U.S. government’s Biomedical Advanced Research and Development Authority (BARDA). As part of the investment for the construction of the new U.S. facility in Fishers, Indiana., in February 2022, Stevanato Group entered into an agreement with BARDA, which is part of the U.S. Department of Health and Human Services, through its partnership with the U.S. Department of Defense. Under the agreement, BARDA will make a multi-year contribution for up to approximately USD 95 million (or approximately EUR 90 million) for manufacturing capacity for standard and EZ-Fill® vials in support of U.S. national defense readiness and preparedness programs for current and future public health emergencies.

At December 31, 2024, EUR 6,432 thousand borrowing costs were capitalized under IAS 23 (EUR 2,290 thousand in 2023). The average capitalization rate used to determine the amount of capitalized borrowing costs was 4.35% (4.60% in 2023).

At December 31, 2024, approximately EUR 19.2 million of investments in property, plant and equipment were unpaid and recorded among trade payables (approximately EUR 50.6 million at December 31, 2023).