Lonza Group (LONN) H1 2024 earnings summary

Executive summary

• H1 2024 sales reached CHF 3.1 billion, up 1.8% at constant exchange rates, with core EBITDA of CHF 893 million and a margin of 29.2%.

• Strong CDMO performance offset by headwinds in Capsules & Health Ingredients and Bioscience divisions.

• Free cash flow was CHF 296 million, supporting growth investments and normalized inventory levels.

• Full-year 2024 outlook and upgraded mid-term guidance confirmed.

• Major strategic moves included the acquisition of the Vacaville site from Roche, expected to double global mammalian capacity and strengthen the U.S. presence.

Financial highlights

• Sales grew 1.8% year-over-year at constant exchange rates to CHF 3,057 million; excluding COVID-related mRNA business, growth was around 6%.

• Core EBITDA margin was 29.2%, down 0.6–0.8 percentage points year-over-year due to lower CHI margins and prior year COVID-related sales.

• Profit for the period was CHF 330 million, down 19.7% year-over-year; basic EPS was CHF 4.61, down 16.8%.

• CapEx exceeded CHF 600 million (20% of sales), with 65% allocated to growth projects, mainly in Biologics.

• Free cash flow was CHF 296 million, expected to decrease in H2 as CapEx accelerates.

Outlook and guidance

• Full-year 2024 guidance reaffirmed: flat sales growth at constant exchange rates and core EBITDA margin in the high twenties (27–29%).

• Sales growth expected to accelerate in H2 2024 due to batch releases and new facility ramp-ups.

• Biologics to benefit from ramp-up of growth assets; Small Molecules to see higher sales from new HPAPI facility.

• Capsules & Health Ingredients recovery anticipated in 2025 as destocking completes.

• Mid-term (2024–2028): 12–15% sales CAGR in CER, 32–34% core EBITDA margin, double-digit ROIC, net debt/CORE EBITDA 1.5–2.0x.