Q1 2024 Qualitative Report: Performance Aligns with Full-Year 2024 Projections

In its quarterly qualitative update, Lonza reported a softer Q1, with performance across H1 expected to align with the full-year 2024 trajectory.

Lonza confirms its 2024 outlook, projecting flat sales growth in constant exchange rates (CER) and a Core EBITDA margin in the high 20s. H2 2024 sales are expected to be solid, reflecting the timing of batch releases.

In Biologics, there was strong momentum with sustained commercial demand, while clinical demand remained softer despite early signs of biotech funding recovery. The Small Molecules division also experienced robust commercial demand and continued progress on strategic investments. The Cell & Gene division delivered improved commercial and operational performance in Cell & Gene Technology, though market headwinds impacted Bioscience, particularly in its media business. The Capsules & Health Ingredients division underperformed expectations due to weaker demand for pharmaceutical hard capsules in western markets and lower margins in its nutraceutical business despite improved demand.

Lonza’s key growth projects are progressing as planned. Operations at the large-scale Mammalian drug substance and highly potent API facilities in Visp (CH) are expected to commence in Q4 2024. Construction of the large-scale commercial drug product facility in Stein (CH) is on track.

In Q1 2024, Lonza announced an agreement to acquire the Genentech manufacturing facility in Vacaville (US) from Roche for USD 1.2 billion in cash. Lonza plans to invest around CHF 500 million to upgrade the facility and enhance its capabilities to accommodate next-generation mammalian biologics therapies. In this context, the mid-term guidance for 2024–2028 sales growth was updated from a range of 11–13% CAGR in CER to 12–15%. All other mid-term guidance metrics remain unchanged.

On April 2, 2024, the Board of Directors appointed Wolfgang Wienand as the new Chief Executive Officer of Lonza. He will join the company during the summer of 2024.

Albert M. Baehny, CEO ad interim of Lonza, commented: “We made good progress in Q1 2024 with the strategic acquisition of the large-scale biologics site in Vacaville and the appointment of Lonza’s new CEO, Wolfgang Wienand. Looking at our industry fundamentals, we remain well-positioned to capture value by maintaining our focus on growing our commercial offering, managing our costs, and maintaining our focus on operational excellence.”

Lonza has revised the definition of three Alternative Performance Measures, including CORE EPS, Free Cash Flow, and Divisional CORE EBITDA. The new definitions will be reflected in the H1 2024 reporting process. These changes are designed to enhance transparency and efficiency and will not change IFRS reporting. Additional information, including restated Full-Year 2023, Half-Year 2023, and Full-Year 2022 results, can be found here.

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