Lonza Group AG Reports Q1 2024 Results and Updates Full-Year Outlook

Lonza Group AG provided a qualitative update on its Q1 2024 performance, describing it as softer, with expectations to normalize in the first half of the year. The company reaffirmed its full-year 2024 forecast, projecting flat sales growth in CER and a Core EBITDA margin in the high twenties. According to the update, H2 2024 is anticipated to demonstrate solid sales, attributed to the timing of batch releases.

The performance across Lonza's divisions varied, with the Biologics division showing good momentum due to sustained commercial demand. However, clinical demand was weaker, despite early signs of recovery in biotech funding. The Small Molecules division experienced robust commercial demand and progressed on strategic investments. In contrast, the Capsules & Health Ingredients division faced softer performance due to declining demand for pharmaceutical hard capsules and lower margins in nutraceuticals, although demand there showed improvement.

Significant operational milestones are set for late 2024, including the commencement of operations at key facilities in Visp and Stein, Switzerland. Additionally, the company disclosed the strategic acquisition of a Genentech manufacturing facility in Vacaville, USA, for USD 1.2 billion, which is expected to be upgraded with an investment of around CHF 500 million.

New CEO Wolfgang Wienand is set to join Lonza in summer 2024, underscoring a leadership transition during a pivotal period of strategic expansions and acquisitions. The company also revised definitions of its Alternative Performance Measures, which will be integrated starting H1 2024 to improve transparency and efficiency in reporting.