Financial Data and Key Metrics - Sales growth in H1 2024 was 1.8% YoY, reaching CHF 3.1 billion, with a core EBITDA margin of 29.2% [48] - Free cash flow for H1 2024 was CHF 296 million, driven by favorable customer funding and normalized inventory levels [11] - The company expects lower free cash flow in H2 2024 due to accelerated CapEx investments [11] - Core EBITDA margin decreased by 0.8 percentage points YoY, mainly due to lower COVID-related mRNA sales and weaker margins in the CHI division [52] Business Line Performance - Biologics division saw 7.3% sales growth YoY, with strong commercial demand and early-stage recovery signs [54][55] - Small Molecules division experienced lower-than-expected sales growth due to timing of customer campaigns, but maintained a solid core EBITDA margin of 33.6% [57][58] - Cell & Gene division declined 6.6% YoY, but underlying growth was 10% excluding the Kodiak termination impact [26] - Capsules & Health Ingredients (CHI) division faced headwinds from destocking in pharmaceutical hard empty capsules, with recovery expected in 2025 [60][62] Market Performance - The company signed significant new contracts in the CDMO business, including a key commercial supply agreement in the Cell & Gene division [49] - Strong interest in the Vacaville site acquisition, with the first letter of intent signed with a key customer [50] - The hard empty capsules market is expected to return to historical growth patterns by 2025, with a projected annual growth rate of 2% [30] Strategy and Industry Competition - The company is focused on expanding large-scale mammalian capacity, with the Vacaville acquisition set to double capacity [44] - Investments in ADC (antibody-drug conjugate) technology and Synaffix integration are driving early-stage interest and commercial demand [17][24] - The company is committed to ESG goals, aiming for 100% renewable electricity in US operations by 2026 [18] Management Commentary on Operating Environment and Future Outlook - Management expects flat sales growth in constant exchange rates and a core EBITDA margin in the high 20s for 2024 [16] - The company anticipates higher CDMO sales in H2 2024, driven by new HPAPI facility operations and recovery in early-stage funding [25][31] - Management remains confident in the long-term growth trajectory of the hard empty capsules market, despite short-term volatility [30] Other Important Information - The company was recognized by Ethisphere as one of the world's most ethical companies for the third time [9] - Board governance updates include the election of a new Chairman and the establishment of new committees focused on talent and leadership [32][65] Q&A Session Summary Question: Margin phasing in Biologics and Small Molecules divisions [71] - Margins in Biologics are expected to be lower in H2 due to less favorable product mix, despite higher sales [76] - Small Molecules margins will be impacted by ramp-up costs for the new Visp facility [72] Question: Long-term mammalian capacity and CapEx outlook [73] - The company believes current capacity is sufficient to meet demand, with no immediate plans for additional large-scale investments beyond Vacaville [44][100] Question: Impact of biotech funding on RFPs and contract signings [78] - Increased biotech funding has led to more early-stage RFPs, but it takes 6-9 months for funding impacts to reflect in financials [80] Question: Interest in Vacaville from new and existing customers [81] - The Vacaville site has attracted interest from both new and existing customers, with the first letter of intent already signed [50][82] Question: Pricing and volume trends in CHI division [84] - Pricing was a significant negative factor in H1, with roughly half of the decline attributed to volume and half to price [85] Question: Impact of BIOSECURE on customer conversations [88] - BIOSECURE has prompted strategic discussions about supply chains, but immediate impacts on business are not yet visible [89][111] Question: Yield improvements in Biologics division [93] - Yield improvements are gradual and tied to customer-specific processes, with no significant impact on H1 financials [94][117] Question: Outlook for ADC and conjugation offerings [139] - The ADC market is constrained, with strong demand for both early-stage and commercial capacities [151] - Synaffix technology is a key entry point for early-stage ADC customers, though its contribution to revenue is not yet significant [150][166] Question: CapEx investment priorities [162] - The company remains focused on commercial capacities, including conjugation and fill-finish, as outlined in previous strategic plans [163][175]

Business Use Only Half-Year Results 2024 Wolfgang Wienand, CEO Philippe Deecke, CFO 25 July 2024 Wolfgang Wienand Joins Lonza as CEO − Previously CEO of the Swiss CDMO Siegfried, SIX: SFZN (since 2019, from 2010 first Chief Scientific Officer, then Chief Strategy Officer), before at Evonik Industries − Working closely with the Executive Committee and the Board of Directors with a focus on priorities on execution and foundations for long-term success Lonza Half-Year Results 2024 Half-Year 2024 Group Overview ...

Financial Data and Key Metrics Changes - The company reported a softer Q1 group performance, with expectations for H1 to normalize and align with the full year trajectory, confirming a flat CER sales growth compared to the prior year and a CORE EBITDA margin in the high 20s, between 27% to 29% [5][14] Business Line Data and Key Metrics Changes - The Biologics division experienced good momentum despite a slower start in Q1, impacted by high delivery in Q4 of the prior year and campaign shifts [7] - The Drug Product Services business continued to grow but at a slower pace compared to previous years, with a key milestone reached in Q1 for the first commercial fill and finish program [8] - The Microbial business developed strongly, supported by new assets and solid demand [9] - The Small Molecules division saw strong commercial demand but was affected by biotech funding challenges, with expectations for a stronger H2 [10] - The Cell & Gene division delivered improvements in commercial and operational performance, with strong sales and customer interest [11] - The Capsules & Health Ingredients division faced softer sales and margin performance, particularly in the U.S. due to post-pandemic destocking [12] Market Data and Key Metrics Changes - The funding environment for biotech improved significantly, with around USD 23 billion in funding in Q1 2024, although customers remain cautious about spending [60] Company Strategy and Development Direction - The company is focused on growing its commercial offering while managing costs and driving operational excellence, with ongoing progress in growth projects such as the large-scale commercial drug product facility in Switzerland [6][14] - The integration of Synaffix into the licensing business is proceeding smoothly, with positive market feedback on the expanded offering [9] Management Comments on Operating Environment and Future Outlook - Management noted that the softness in Q1 was due to phasing of commercial batches and weaker demand in early discovery activities, but emphasized the strength in other business units [25][69] - The company remains cautious about the market recovery in the Capsules & Health Ingredients division and has made price concessions to maintain business with key customers [32] - Management expressed confidence in the visibility of contract deliveries, supporting the outlook for H1 and H2 [53] Other Important Information - The company is progressing with a share buyback program of up to CHF 2 billion, having repurchased CHF 1.3 billion of shares as of March 31 [13] - The appointment of Wolfgang Wienand as the new CEO was confirmed, set to commence in the summer [13] Q&A Session Summary Question: Phasing and growth trends - Management explained that Q1 softness was due to the phasing of commercial CDMO batches and a weaker start in Bioscience, with expectations for improvement in Q2 and H2 [19] Question: Market developments and fill and finish expansion - Management refrained from speculating on the acquisition of Catalent but acknowledged potential pressure on fill and finish capacity [27] Question: Vacaville acquisition status - The transaction is expected to close in the second half of 2024, with no contribution from Vacaville included in the 2024 guidance [30] Question: Capsules & Health Ingredients recovery - Management noted weakness in demand in pharma and cautious expectations for market recovery during 2024 [32] Question: Core definitions impact on segment EBITDA - Management indicated that the reporting change would not distort figures going forward, providing a new base for divisional EBITDA [34] Question: Small molecules campaign impact - Management stated that the impact of campaign timing would be marginal but positive in H2, with new HP API plant ramping up in Q4 [38] Question: Cell & Gene demand drivers - Demand is driven by both strong market interest and the number of programs progressing into later stages [40] Question: BIOSECURE Act impact - Management expressed uncertainty regarding the BIOSECURE Act's implementation and its potential impact on business [44][49] Question: Capacity normalization in the industry - Management did not observe a trend of capacity elimination in the industry, stating that closures were due to inefficiencies in specific plants [57] Question: Biotech funding recovery pace - Management noted that while funding has improved, there is a 6 to 9-month delay before any impact on revenues is expected [60] Question: Biologics EBITDA margin guidance - Management maintained that the Vacaville acquisition would be neutral to the overall margin guidance for 2028 [62] Question: New business contracts and backlog - Management reported signing CHF 10 billion in biologics and CHF 1 billion in small molecules contracts last year, with ongoing contracting but no specific backlog metrics shared [66]

JHVEPhoto Introduction The Lonza Group (OTCPK:LZAGF) is a chemical and biotech company providing high quality ingredients to the pharmaceutical industry, where it has been building and maintaining long-term relationships with its customer base. It recently started an aggressive expansion program in the CDMO space, where it acts as a third party manufacturer of drugs or components for drugs. Lonza continues to invest in growth and has outlined an ambitious plan to increase its revenue by a double-digit n ...

Financial Data and Key Metrics Changes - In 2023, the company reported sales of CHF6.7 billion, reflecting a sales growth of 10.9% at constant exchange rates [2][99] - Core EBITDA remained flat year-over-year at CHF2 billion, resulting in a margin of 29.8% [8][99] - Reported profits decreased by 46% to CHF655 million, primarily due to high base effects from divestment gains in 2022 and impairment losses in 2023 [8][99] Business Line Data and Key Metrics Changes - The Small Molecules division achieved sales of over CHF900 million in 2023, growing by 11% due to strong demand for high-value CDMO services [9][43] - The Biologics division experienced a sales growth of 17.6%, with underlying growth reaching 25% when excluding the Moderna business [60][75] - The Cell & Gene division reported a sales growth of 6.6%, but faced margin declines due to early-stage funding weaknesses and operational challenges [64][101] - The Capsules & Health Ingredients division saw a decline in sales and margins, impacted by post-pandemic inventory destocking and higher raw material costs [22][31] Market Data and Key Metrics Changes - The company signed approximately 130 new CDMO customers and around 350 new clinical and commercial programs in 2023, indicating strong market demand [4][27] - The company’s top 10 customers represent about half of total sales, providing a stable foundation for growth [28] - The company operates in a market where 80% of sales are focused in Europe and the Americas, with a balanced customer base between small, mid, and large pharma [96] Company Strategy and Development Direction - The company continues to invest in growth, deploying CHF1.7 billion in CapEx in 2023, which is 25% of sales, focusing on large growth projects [12][104] - The strategic review led to the decision to decommission two sites in Guangzhou, China, and Hayward, U.S., to reduce fixed costs without impacting mid-term growth [41][103] - The company aims for high single-digit underlying sales growth in 2024, driven by strong commercial CDMO performance and a rebound in Capsules & Health Ingredients [23][47] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term potential of the CDMO industry, driven by outsourcing trends and a robust pipeline of Phase I drug candidates [27][95] - The company anticipates a similar adverse impact on 2024 sales due to the loss of COVID business from Moderna, but expects margins to remain stable due to natural hedging [15][39] - Management noted that the early-stage funding environment remains challenging, with no significant rebound expected in 2024 [77][88] Other Important Information - The company achieved a strong free cash flow of CHF329 million in 2023, supported by net working capital improvements [36][99] - A 14% increase in the dividend to CHF4 per share is proposed, reflecting a payout ratio in line with the company's capital allocation strategy [94][106] - The company has made significant progress in sustainability, reducing emissions intensity by 43% and energy intensity by 35% [29] Q&A Session Summary Question: Clarification on margin range - Management clarified that the core EBITDA margin for 2024 is expected to be between 27% to 29% [50][51] Question: Performance trends in early-stage demand - Management indicated that early-stage demand remains weak, with no significant rebound expected in 2024 [77][88] Question: Guidance for growth adjusted for Moderna - Management explained that the guidance for high single-digit growth in 2024 reflects a lower base due to the previous year's performance and ongoing challenges in early-stage funding [58][88] Question: Impact of site closures on early-stage capacity - Management stated that there is sufficient small-scale capacity in the market for early-stage biologics despite the site closures [145] Question: Update on CEO search process - The board is in the process of interviewing candidates and expects to announce a new CEO by early Q2 [117][145]

Financial Data and Key Metrics Changes - The company reported sales of CHF3.1 billion for H1 2023, representing a 5.6% growth at constant exchange rates compared to H1 2022, with underlying performance showing about 10% growth [6][19] - CORE EBITDA reached CHF922 million, resulting in a margin of 30%, which is 3 percentage points lower than the previous year due to the loss of COVID-related sales and lower asset utilization [7][20] - The updated outlook for sales growth is mid- to high single-digit at constant exchange rates, with CORE EBITDA margin revised to 28% to 29% [7][40] Business Line Data and Key Metrics Changes - **Biologics Division**: Reported sales growth of 2%, with double-digit growth when adjusted for mRNA sales loss. The division saw strong performance in Bioconjugates, Mammalian, and Microbial businesses [23][32] - **Small Molecule Division**: Achieved a strong performance with sales growth of 37.5%, driven by high asset utilization and a favorable product mix, with margins at 35% [24][32] - **Cell & Gene Division**: Experienced softer growth at 11%, with BioScience performing well but Cell & Gene Technologies facing weak demand due to the biotech funding environment [25][35] - **Capsules Division**: Reported flat sales, impacted by weak demand in the nutraceutical market, while pharmaceutical hard capsules showed growth [28][32] Market Data and Key Metrics Changes - The company noted a decrease in early-stage service inquiries, leading to underutilization of assets, particularly in the Cell & Gene division [56][60] - The nutraceutical market is experiencing destocking by U.S. customers, contributing to lower demand [10][28] Company Strategy and Development Direction - The company is focused on ramping up new commercial assets to support growth in Biologics and optimizing early-stage opportunities [16][45] - An acquisition of Synaffix was completed to enhance capabilities in developing Antibody-Drug Conjugates (ADCs), positioning the company uniquely in the industry [12][13] - The company remains committed to its ESG initiatives, including significant progress in emission reduction programs [14][15] Management Comments on Operating Environment and Future Outlook - Management acknowledged current market headwinds affecting early-stage services and nutraceutical capsules, with expectations of a prolonged recovery period [60][61] - The company maintains confidence in its long-term growth potential, particularly in the Cell & Gene sector, despite short-term challenges [76][117] Other Important Information - The company invested CHF765 million in CapEx, focusing 80% on growth projects, primarily in the Biologics division [29] - Free cash flow was negative CHF62 million, attributed to ongoing organic growth investments [30] Q&A Session Summary Question: Margin bridge between H1 last year and H2 this year - Management explained that the margin decline is primarily due to the drop in COVID-related sales, one-off effects, and lower asset utilization [49][51] Question: Project funding infrastructure changes - Management noted a decrease in early-stage service inquiries, impacting utilization rates [56] Question: Guidance for early-stage services recovery - Management indicated that visibility for early-stage services is limited to three to six months, with expectations of a slow recovery [60][61] Question: Visibility for 2023 and 2024 guidance - Management confirmed strong visibility for commercial manufacturing, while early-stage services have less visibility [81][82] Question: Pricing and capacity concerns in the industry - Management expressed confidence in high utilization rates for large-scale assets, emphasizing the importance of execution and quality over pricing [85][87] Question: Capital expenditure plans - Management confirmed no changes to capital expenditure plans, focusing on growth projects in Biologics [96][98] Question: Outlook for Cell & Gene therapy - Management noted stabilization in the Cell & Gene market, with potential for recovery [100]

Enabling a Healthier World Lonza Half-Year Results 2023 Pierre-Alain Ruffieux, CEO Philippe Deecke, CFO 21 July 2023 Lonza Contents Half-Year 2023 Group Overview Half-Year 2023 Financial Summary Half-Year 2023 Divisional Overview Concluding Remarks Q&A 2 Half-Year 2023 Group Overview Executive Summary1 – CHF 3.1 billion sales and 5.6% CER sales growth, corresponding to around 10% CER underlying sales growth² – CHF 922 million CORE EBITDA resulted in a margin of 30% – Good momentum in commercial CDMO busines ...

Lonza Group AG (OTCPK:LZAGY) Q1 2023 Earnings Conference Call May 9, 2023 9:00 AM ET Company Participants Pierre-Alain Ruffieux - CEO Philippe Deecke - CFO Conference Call Participants Matthew Weston - Credit Suisse Vineet Agrawal - Citi James Quigley - Morgan Stanley Richard Vosser - JPMorgan Patrick Rafaisz - UBS Max Smock - William Blair Paul Knight - KeyBanc Capital Markets Peter Welford - Jefferies Operator Ladies and gentlemen, welcome to the Q1 Qualitative Update Conference Call and Live Webcast. I ...

Financial Performance - The company reported a sales growth of 15.1% at constant exchange rates, reaching CHF6.2 billion, with a core EBITDA of CHF2 billion and a margin of 32.1% [5][21] - Core EBITDA grew by 19.8%, leading to a year-on-year margin improvement of 1.3 percentage points [23] - Free cash flow before gross CapEx was CHF1.1 billion, implying an 18% cash conversion, while the return on invested capital (ROIC) remained strong at 11.4% [36] Business Line Performance - The Biologics division achieved a sales growth of 21.7%, driven by high customer demand and a strong pipeline of commercial agreements [42] - The Small Molecules division saw a sales growth of 5.9%, supported by new manufacturing capacity for ADC payloads and improved margins [45] - The Cell & Gene division reported a sales growth of 13.6%, with strong performance in BioScience, but faced challenges in the Cell & Gene technologies unit due to product delays and funding slowdowns [46][100] Market Performance - 90% of sales are concentrated in the EMEA and Americas regions, with a customer base split of 60% small to mid-sized pharma and 40% large pharma [11][12] - The company signed approximately 115 new CDMO customers and around 375 new clinical and commercial programs in 2022 [11] Company Strategy and Industry Competition - The company plans to maintain a CapEx of 30% of sales to secure long-term growth and consolidate its leading position in the CDMO industry [6][52] - Following the divestment of the Specialty Ingredients business, the company is focused on organic investment and attractive bolt-on M&A opportunities [8][39] - The CDMO industry is expected to continue showing double-digit growth driven by the biopharma market and increased demand for outsourcing [17] Management Commentary on Operating Environment and Future Outlook - The management anticipates high single-digit sales growth at constant currency for 2023, with a core EBITDA margin of 30% to 31% [7][51] - The company is confident in its midterm guidance of low-teen sales growth and core EBITDA margins within the 33% to 35% range [53] - Management noted that inflation impacts are being managed through price adjustments and procurement initiatives [26][93] Other Important Information - The company has committed to returning excess capital to shareholders via a share buyback program of up to CHF2 billion and proposed a dividend increase to CHF3.50 per share [8][38] - The company reduced greenhouse gas emission intensity by 13%, energy intensity by 6%, and water intensity by 10% compared to 2021, reflecting its commitment to sustainability [16] Q&A Session Summary Question: Contribution of various headwinds to margin contraction - Management indicated that residual inflation and delays in growth projects are key drivers for 2023, but they remain confident about 2024 margin improvements due to strong visibility on growth assets [59][63] Question: Slowdown in ramp-up of biologic projects - Management confirmed that some delays impacted 2022 and early 2023, but they expect to catch up by the end of the year [66][67] Question: CapEx expectations and growth opportunities - Management stated that the high CapEx in 2023 corresponds to projects initiated in previous years, and they anticipate a decrease to high teens by 2025, contingent on investment opportunities [71][73] Question: Local market pressures in China - Management noted that competition and post-lockdown challenges have affected their operations in China, but they remain optimistic about future opportunities as restrictions ease [76][78] Question: mRNA impact on future margins - Management clarified that while mRNA sales peaked in 2022, residual sales are expected to be marginal, with no significant impact anticipated for 2024 [80][81] Question: Cell & Gene product headwinds - Management acknowledged challenges in the Cell & Gene division due to clinical trial delays and funding slowdowns, but they do not foresee long-term disruptions [100][102] Question: Cash flow generation expectations - Management expects improved cash flow in 2023 as inventory levels normalize following supply chain recovery [120]

Lonza Group AG (OTCPK:LZAGY) Q2 2022 Earnings Conference Call July 22, 2022 8:00 AM ET Company Participants | --- | --- | |----------------------------|---------------------------------------| | | | | Philippe Deecke - CFO | Pierre-Alain Ruffieux - CEO | | | Conference Call Participants | | Daniel Buchta - ZKB | | | | Matthew Weston - Credit Suisse | | Vineet Agrawal - Citi | Charles Weston - RBC Europe | | | James Quigley - Morgan Stanley | | | Keyur Parekh - Goldman Sachs | | Peter Welford - Jefferies | | ...