Lonza Q1 2023 Update: Steady Performance Supports Full-Year Trajectory
Biotech funding constraints impact early-stage demand, while growth projects progress according to plan
Key highlights:
- Strong commercial demand persists, while early-stage demand softens due to biotech funding limitations.
- Growth project portfolio progresses according to plan.
- 2023 Outlook reaffirmed, featuring high single-digit CER sales growth and a CORE EBITDA margin between 30 and 31%.
In its quarterly qualitative update, Lonza reported Q1 performance consistent with the 2023 trajectory.
In the Biologics division, good momentum was observed across the board, with continued customer demand for commercial supply and a softer demand for early-stage services. The Small Molecules division demonstrated a solid performance. Meanwhile, in the Cell & Gene division, biotech funding constraints affected the demand for pre-clinical and Phase 1 services. Lastly, the Capsules & Health Ingredients division's performance was influenced by the weaker demand for consumer health products in the US.
Lonza's growth projects are advancing as planned. Operations have commenced in two new facilities for drug product and bioconjugates in Visp (CH), while construction began at the large-scale commercial drug product facility in Stein (CH).
Lonza reiterated its 2023 Outlook, reaffirming its trajectory for a stronger Second Half, compensating for a softer First Half, as anticipated at Full-Year 2022.
Pierre-Alain Ruffieux, CEO of Lonza, commented: "Our Q1 performance aligns with the projected trajectory towards our Group Outlook 2023. Owing to our strong base business and industry fundamentals, we are well-positioned to continue capturing value with our clear focus on quality, a wide range of offerings, and our technical expertise."
As announced at Full-Year 2022, Lonza has initiated the return of excess capital to shareholders through a share buyback of up to CHF 2 billion. The programme began in early April 2023 as planned and is scheduled for completion in H1 2025. The programme is being executed via a second trading line at the SIX Swiss Exchange.