Lonza Group (LONN) investor relations material

Strategy and portfolio

• Transformation toward a focused pure-play CDMO through divestments, including the agreed sale of 60% of Capsules & Health Ingredients to Lone Star Funds; 40% retained, with closing expected before year-end 2026.

• Three platforms represented 60% Integrated Biologics, 25% Advanced Synthesis and 15% Specialized Modalities of FY25 sales; 25 growth projects span eight modalities and technologies.

• Strategy centers on innovation-to-launch offerings across modalities and lifecycles, customer value and differentiation over a capacity race; the Lonza Engine combines scientific and digital capabilities, partnerships and execution.

• Global network spans 13 large sites on three continents, balancing regional supply resilience with cost competitiveness.

Market outlook and growth model

• Pharma market growth is forecast at 6%-7% CAGR through 2030; market selection and outsourcing add 1%-2% each, supporting 8%-10% addressable CDMO market growth.

• Differentiation is expected to add 2%-3% above addressable-market growth; the Organic Growth Model targets 10%-13% CER sales growth on average over time for the continuing CDMO business.

• Pipeline is growing at 8% CAGR, with current technologies covering 90% of pipeline molecules; mammalian commercial drug-substance demand is forecast to rise 40%, from ~340 to ~470 tonnes.

• Capacity is expected to shift further toward CDMOs through 2035; mammalian manufacturing remains undersupplied with high utilization.

• Multimodality network retention is 99% from development through launch, normalized for clinical failure; work spans more than 1,000 molecules, with 90% of contracts signed before Phase III.

Financial ambitions and capital allocation

• Mid-term ambitions: low-teens organic CER sales growth, CORE EBITDA growth ahead of sales, high-30s CORE EBITDA margin and ROIC of 2-3x 2026 WACC.

• FY2026 outlook reiterated at 11%-12% CER sales growth and 33%-34% CORE EBITDA margin; FX is expected to reduce sales growth by 2%-3%.

• 25 major growth projects represent CHF 8bn cumulative investment, with 90% commercial or mixed assets and 30%-40% peak ROIC on a CapEx-weighted average basis.

• More than CHF 7bn of investment is planned through 2030; organic CapEx targets mid- to high-teens % of sales, including 10%-13% for growth projects.

• Partial Capsules & Health Ingredients exit expected to generate CHF 1.7bn, including a promised CHF 500m buyback after closing; progressive dividends and a BBB+ credit rating remain part of the capital framework.