Lonza Group (LONN) CMD 2026 summary

Strategy and portfolio

• Pure-play CDMO transformation completed in less than two years through four divestments; agreed to sell 60% of Capsules & Health Ingredients to Lone Star Funds, retain 40%, and close by year-end 2026.

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

• Integrated offerings rose to 70% of molecules signed YTD 2026, from 45% in 2025; customer NPS doubled for big pharma and rose 50% for biotech since 2024.

• Global network spans three continents and 13 large sites, emphasizing regional supply resilience while balancing cost competitiveness.

• Attrition fell 3 percentage points; more than 80% of the top 200 leaders recorded engagement above 80%.

Market and growth model

• Pharma market growth is forecast at 6%-7% CAGR; active market selection and outsourcing add 1%-2% each, while differentiation adds 2%-3%, supporting 10%-13% organic CER growth on average over time.

• Pharma pipeline is growing at 8% CAGR; current technologies cover 90% of pipeline molecules, with more than 1,000 molecules in the pipeline and 99% batch success rate.

• 2025 CDMO capacity share was likely above 50%, with further shift toward CDMOs expected through 2035; mammalian capacity remains structurally undersupplied.

• Mammalian commercial drug-substance demand is forecast to rise 40%, from ~340 to ~470 tonnes, while mammalian pharma sales are expected to grow ~8% annually to 2030.

• Biologics manufacturing volume is projected to rise from more than 60 tons to more than 100 tons; blockbuster drugs are projected to increase from 80 to 110 over five years.

Financial ambitions and outlook

• Mid-term ambitions for the continuing CDMO business: low-teens organic CER sales growth, CORE EBITDA margin in the high 30s, and ROIC of 2-3x WACC.

• CORE EBITDA growth is targeted to exceed sales growth; improving FCF conversion and progressive dividends, maintained or increased per share annually, are part of the model.

• FY 2026 outlook reaffirmed at 11%-12% CER sales growth and 33%-34% CORE EBITDA margin; expected FX impact on sales growth is -2% to -3%.

• Since 2024, sales CAGR rose to 16%-17% including Vacaville; CORE EBITDA margin increased 3-4 percentage points and ROIC 2-3 points, with FY 2026 FCF conversion expected at twice the 2024 rate.

• From 2019 to 2024, sales and CORE EBITDA grew at low-teens CAGRs, adding CHF 2.5bn revenue through varied market conditions.