Lonza: the end of the tunnel?

5th February 2024
-IAM, News

Daniel Pfund, Senior Financial Analyst

The world’s leading pharmaceutical outsourcing company, Lonza, published its results last week. For fiscal year 2023, the company reported sales up +10.9% at constant exchange rates. In Swiss francs, sales were up +7.9% to CHF 6.7 billion. Adjusted EBITDA profit amounted to CHF 2 billion, with a margin of 29.8%. These results are in line with the guidance given by the company in October (which was significantly lower than analysts’ expectations at the time).

The company also confirmed its guidance for 2024: stable sales and an EBITDA margin in the upper 20% range (without being more precise). We can therefore expect no growth in 2024, which is understandable given the loss of the lucrative Moderna contract (estimated at CHF 500 million a year). Despite this, the company is proposing a dividend increase of +14% to CHF 4 per share and the continuation of its share buyback program (of CHF 2 billion).

Finally, the Chairman will be stepping down. He was also acting CEO, which was problematic. The new Chairman has already been appointed, and is the current Chairman of Heineken, Jean-Marc Huët. He will have his say on the new CEO, who should be announced in the second quarter at the latest.

Investors reacted well to this news, with the share price finishing up 14.4% on Friday.