Lonza Group AG (LZAGF.PK), a key player in the pharmaceutical, healthcare, and life-science sectors, revealed a dip in EBITDA (a crucial earnings measure) in its fiscal year 2023, although it saw increased sales.
In addition, Lonza's Board of Directors proposed a 14 percent rise in dividends to 4 francs per share.
Projecting ahead to fiscal 2024, Lonza anticipates a stable CER sales growth and a CORE EBITDA margin in the high twenties. This forecast reflects a robust underlying CDMO business performance, counterbalanced by a growth slowdown due to around 500 million francs in Moderna sales and related termination impacts in 2023.
Lonza reaffirmed its Mid-Term Guidance for 2024 - 2028, which consists of 11-13 percent sales CAGR in CER, and a 32-34 percent CORE EBITDA margin.
The company confirmed plans to streamline its global Biologics network by phasing out its small-scale manufacturing facilities in Guangzhou, China, and Hayward, US. These progressive closures are slated to commence in the first quarter of the current year and conclude in the first quarter of 2025. The Biologics division will maintain its commercial sales organization in China.
Furthermore, Lonza declared the appointment of Jean-Marc Huet as successor to Albert Baehny in the role of Chairman.
Jean-Marc Huet currently chairs Heineken N.V, and has served as the CEO of Unilever, Bristol-Myers Squibb, and Royal Numico N.V, a specialized nutrition company.
After being a Board member for seven years and Chairman for six, Baehny will not vie for re-election at the forthcoming Annual General Meeting in May 2024.
Baehny will continue to serve as the interim CEO of Lonza until the new CEO takes over. Having joined the Board of Lonza in 2017, Baehny assumed the position of Chairman the following year.
In fiscal 2023, EBITDA decreased by 9.3 percent to 1.94 billion Swiss francs, down from the previous year's 2.14 billion francs. The EBITDA margin shrunk to 28.9 percent from the 34.4 percent seen a year ago.
The CORE EBITDA was set at 2 billion francs, up by 0.2 percent from last year, which resulted in a margin of 29.8 percent, a reduction from 32.1 percent the previous year.
Sales rose by 8 percent to 6.72 billion francs, up from the previous year's 6.22 billion francs. In terms of constant currency rates, the sales growth was 10.9 percent.
The commendable financial results were due to the performance of the Biologics and Small Molecules divisions, while the Cell & Gene and Capsules & Health Ingredients divisions lagged.
