NEWS DETAIL

Lonza Reports Strong 2020 Performance, Driven by Sales Growth in Pharma and Biotech Business

Basel, Switzerland, 27 January 2021 – Lonza (with the Specialty Ingredients segment – LSI – reported as discontinued operations) today reported strong sales of CHF 4.5 billion, sales growth of 12.0%5, and CHF 1.4 billion CORE EBITDA, resulting in a margin of 31.2%. The results mainly reflect the Pharma Biotech & Nutrition segment (LPBN), which delivered 12.2%5 sales growth and a CORE EBITDA margin of 32.1%. The LSI segment6, reported as a discontinued operation, delivered a strong performance with 3.4%5 sales growth alongside an improved 20.3%7CORE EBITDA margin.

Throughout 2020, Lonza maintained business continuity during the COVID-19 pandemic with minimal impacts to operations and supply. Lonza’s sustained contribution to controlling the pandemic saw agreements signed with many customers to manufacture vaccine candidates, treatments and therapies related to COVID-19. Production of the drug substance for Moderna’s COVID-19 Vaccine is underway at both Lonza Portsmouth (USA) and Lonza Visp (CH) sites.

Progress has been made in the divestment of the LSI segment. Following initial expressions of interest from potential buyers in 2020, a shortlist of bidders has been selected and a deal is expected to be signed in Q1 2021. The sale will allow Lonza to focus on its core healthcare business while delivering value to shareholders.

A new organizational design came into effect on 1 January 2021, in which Lonza’s businesses are organized into four main divisions and five functions. Financial reporting will be updated to include divisional performance in the future. Alongside this, effective 1 April 2021, three new members (Claude Dartiguelongue, Gordon Bates and Jean-Christophe Hyvert) have been appointed to Lonza’s Executive Committee to reflect the new structure of the business and ensure divisional representation.

Lonza’s Guidance for Full-Year 2021 is low double-digit CER sales growth and improved CORE EBITDA margin, both in line with the 2023 Mid-Term Guidance trajectory. While the businesses have shown strong levels of resilience during the pandemic, all forecasts should continue to be treated with some caution at this time of global uncertainty arising from the COVID-19 pandemic.

Lonza Pharma Biotech & Nutrition (LPBN) Segment Overview

The LPBN segment demonstrated resilience to the impacts of COVID-19. Facilities remained open and supply chains were managed to ensure business continuity. The business worked diligently to expand service offerings to customers while investing in production capacity in response to continued demand.

  • Small Molecules delivered high single-digit growth and improved margin, while winning new projects and launching new service offerings. Investment to increase capacity and support customers in early phase development is planned.   
  • Biologics saw mid-teens sales growth driven by new customers and programs and lower operating margin for 2020, reflecting the impact of operational expenses behind the ramp up of growth projects. Further capacity expansion is planned across drug substance and drug product services.   
  • Cell & Gene Therapy expanded its service offerings, while working to grow its vein-to-vein supply network for cell and gene therapy customers. The business reported strong sales growth, well ahead of the market. 
  • Bioscience is focused on improving its customer experience and operational efficiency. In 2020 it achieved high single-digit sales growth and strong margin improvement, driven by efficiency gains. 
  • Capsules & Health Ingredients grew high single-digit, benefitting from increased demand for nutritional supplements caused by the pandemic. It has approved new capacity investments to meet sustained and high levels of customer demand in the future.

For more detail on performance and financials, please refer to the Full-Year 2020 Report

Group Financial Summary Continuing Business

CHF million

FYR 2020

YoY change

FYR 2019 8

Sales

4,508

7.2% 9

4,207

EBITDA

1,378

9.0%

1,264

Margin in %

30.6

60bps

30.0

CORE EBITDA

1,406

5.4%

1,334

Margin in %

31.2

(50bps)

31.7

EBIT

901

9.2%

825

Margin in %

20.0

40bps

19.6

CORE EBIT

1,094

4.8%

1,044

Margin in %

24.3

(50bps) 

24.8

Dividend Announced

Lonza’s Board of Directors is proposing a dividend increase for shareholders of CHF 0.25 per share to CHF 3.00 per share. The proposal represents a pay-out of 25.8% of 2020 reported net profit. Subject to approval at the upcoming Annual General Meeting (AGM) on 6 May 2021, 50% of the dividend of CHF 3.00 per share will be paid out of the capital contribution reserve and will therefore be free from Swiss withholding tax.

  1. 2020 Guidance relates to Lonza Group results without LSI reported as discontinued operations
  2. All sales growth figures, expressed in percentage (%), are at a constant exchange rate (CER)
  3. Specialty Ingredients Business (excluding Corporate/carve-out and divestiture costs directly attributable to LSI)
  4. CORE EBITDA margin at a constant exchange rate (CER)
  5. All sales growth figures, expressed in percentage (%), are at a constant exchange rate (CER)
  6. Specialty Ingredients Business (excluding Corporate/carve-out and divestiture costs directly attributable to LSI)
  7. CORE EBITDA margin at a constant exchange rate (CER)
  8. Restated to reflect the classification of Specialty Ingredients as discontinued operations
  9. Actual exchange rate (AER); in constant exchange rate (CER): 12.0%
About Lonza 

Lonza is the preferred global partner to the pharmaceutical, biotech and nutrition markets. We work to prevent illness and enable a healthier world by supporting our customers to deliver new and innovative medicines that help treat a wide range of diseases. We achieve this by combining technological insight with world-class manufacturing, scientific expertise and process excellence. These enable our customers to commercialize their discoveries and innovations in the healthcare sector. 

Founded in 1897 in the Swiss Alps, today Lonza operates across three continents. With approximately 14,000 full-time employees, we are built from high-performing teams and of individual talent who make a meaningful difference to our own business, as well as to the communities in which we operate. The company generated sales of CHF 4.5 billion in 2020 with a CORE EBITDA of CHF 1.4 billion. Find out more at www.lonza.com 

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Lonza Contact Details 

Dirk Oehlers 
Investor Relations 
Lonza Group Ltd 
Tel 41 61 851 4927 

Dr. Sanna Fowler 
Head of External Communications 
Lonza Group Ltd 
Tel 41 61 316 8929 

Victoria Morgan 
Head of Corporate Communications 
Lonza Group Ltd 
Tel 41 79 599 6260 

Additional Information and Disclaimer 

Lonza Group Ltd has its headquarters in Basel, Switzerland, and is listed on the SIX Swiss Exchange. It has a secondary listing on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Lonza Group Ltd is not subject to the SGX-ST’s continuing listing requirements but remains subject to Rules 217 and 751 of the SGX-ST Listing Manual. 

Certain matters discussed in this news release may constitute forward-looking statements. These statements are based on current expectations and estimates of Lonza Group Ltd, although Lonza Group Ltd can give no assurance that these expectations and estimates will be achieved. Investors are cautioned that all forward-looking statements involve risks and uncertainty and are qualified in their entirety. The actual results may differ materially in the future from the forward-looking statements included in this news release due to various factors. Furthermore, except as otherwise required by law, Lonza Group Ltd disclaims any intention or obligation to update the statements contained in this news release.