Lonza Group (LONN) Investor update (Q&A) summary

Strategic transformation and divestments

• Divestment of 60% of Capsules & Health Ingredients (CHI) business to Lone Star Funds, with CHF 1.7 billion upfront and a 40% retained stake, marks the final major step in the transformation to a pure-play CDMO, completing four divestments in under two years.

• CHI divestment valued at CHF 2.3 billion enterprise value, with total expected proceeds at or above CHF 3 billion at full exit.

• Additional divestments include Personalized Medicines (Cocoon® Platform), MODA® software, and the Monteggio micronization site, streamlining the portfolio.

• Transaction structured to provide significant immediate liquidity and future value creation potential, with preferential participation rights in value creation from the retained stake.

• Estimated CHF 1.3 billion non-cash impairment to be booked in FY2025, with no impact on CDMO financials.

Financial impact and capital allocation

• CHF 500 million share buyback planned post-closing, with remaining proceeds allocated to organic growth, bolt-on M&A, and maintaining a BBB+ credit rating.

• Upfront proceeds to fund organic growth and acquisitions aligned with the One Lonza Strategy.

• Commitment to progressive dividend policy and maintaining investment grade credit profile.

• Leverage expected to be materially below target levels due to proceeds and moderated capex.

• Retained CHI interest will be accounted for as an investment in an associated company.

Growth strategy and market positioning

• Focused on high-value organic growth and targeted acquisitions, with CHF 7 billion planned investment in organic growth by 2030.

• Strategic priorities include expanding integrated biologics, advanced synthesis, and specialized modalities.

• U.S. remains a priority for future investments, with recent successful integration of a major biologics site in California.

• Now operates solely in fast-growing pharmaceutical market segments, with a focus on CDMO services and three integrated CDMO business platforms powered by the Lonza Engine®.

• Addressable CDMO market estimated at ~USD 100 billion, growing at 8-10% CAGR through 2030.