Lonza Group (LONN) investor relations material

Strategic direction and value creation

• Clear strategy for value creation, focusing on capital allocation and leveraging the proprietary Lonza Engine to outgrow attractive underlying markets.

• Leading global CDMO network supports customer regionalization and supply chain needs, with balanced revenue streams from both small/mid-size and large pharma clients.

• Ongoing investments across technologies and geographies to drive customer and company growth, with a strong track record of market outperformance (12% CAGR).

• Exit from CHI business is well underway, with legal and IT separation completed and the process progressing as planned.

• High-performing teams and a new target operating model introduced, with strong leadership engagement and role clarity.

Financial model and growth drivers

• Financial model is based on a compounding defensive growth approach, emphasizing strong top-line growth, margin expansion, and cash generation.

• CDMO market addressable by Lonza is estimated at $100 billion, growing 8-10% annually, with Lonza targeting 10-13% growth through market selection and the Lonza Engine.

• Revenue growth is driven by innovative pharma pipelines, continued outsourcing trends, and active market selection.

• CapEx and M&A are key growth drivers, with a focus on organic growth and disciplined capital allocation.

• Upgraded 2025 guidance: 20-21% constant exchange rate sales growth, including CHF 500 million from Vacaville, and a core EBITDA margin of 30-31%.

Investment highlights and project pipeline

• Managing a portfolio of 23 growth projects globally, including new facilities in Visp and Stein, and the major acquisition of Vacaville.

• Vacaville acquisition created the largest U.S. CDMO mammalian network, with integration on track and high customer interest (four contracts signed, more in progress).

• CHF 10 billion invested globally over the past five years, with CHF 3 billion in the U.S.; future investments expected to exceed CHF 7 billion by 2028, mostly for growth.

• Vacaville expected to generate CHF 500 million in annual revenue until 2028, with upgrades planned to enhance flexibility and efficiency, leading to higher revenues post-2028.

• High customer retention rate (99%+) through all clinical phases, with a diversified customer base and strong pull-through from early to commercial stages.