Lonza has reported sales of CHF 5.4 billion, growing 20% AER (20% CER) and CHF 1.7 billion CORE EBITDA, resulting in a margin of 30.8%. This strong momentum at Group level was driven by sales growth ahead of market across all divisions. The margin improvement was achieved through productivity improvements which were partially offset by the dilutive effect of ramping up growth projects and a negative mix. Reported EBITDA was impacted by the provision of CHF 285 million for the environmental remediation of the old Gamsenried landfill, with no impact on CORE EBITDA and cash flow.

Through 2021, Lonza continued to execute its ongoing organic growth projects, as well as confirming new investments. For the Full Year, the total CAPEX reached CHF 1.3 billion or 24% of sales, and it is expected to increase to around 30% in 2022. These investments are focused on delivering the company’s long-term investment strategy to capture growth opportunities at attractive margins while minimizing risk. This level of investment was supported by free cash flow, alongside the proceeds from the divestment of Lonza’s former Specialty Ingredients business. The company’s internal growth investments were accompanied by a selective approach to bolt-on acquisitions. Lonza’s new exosomes sites in Lexington (US) and Siena (IT) have expanded its offering in this important emerging area, reflecting its focus on differentiating through innovation.

As well as investing for the future, Lonza also continued to successfully navigate global supply disruptions arising from the COVID-19 pandemic with manageable impact for its customers and growth projects. Although disruptions look set to continue into 2022, no material impact is anticipated as long as the conditions remain comparable with the previous two years.

Through the year, the business has continued to strengthen its balanced portfolio of customer collaborations with approximately 170 new CDMO customers² signed in 2021, alongside more than 400 new clinical and commercial programs.

Looking to the year ahead, Lonza’s Outlook for Full-Year 2022 remains strong, with low to mid-teens CER sales growth anticipated. Business momentum across divisions and ramp-up of growth projects will drive expansion at above-market levels. A continuing focus on operational excellence is expected to deliver an improved CORE EBITDA margin in line with the 2024 Mid-Term Guidance trajectory. Lonza also reconfirms its 2024 Mid-Term Guidance.

Pierre-Alain Ruffieux, CEO, Lonza commented: “In 2021, we remained resilient to the challenges of the pandemic. We achieved a strong business performance across our four divisions, thanks to the commitment of our dedicated employee community. We continue to meet our customers’ most pressing needs by accelerating growth in areas of sustained high margin and market demand.

Looking to 2022, we will continue to maintain momentum in our organic investments to expand our global capacities and service offering while focusing on operational excellence. We are also continuing to drive forward our sustainability agenda. All of this will allow us to deliver sustained growth across our divisions. In this context, we are confident the building blocks are in place to deliver on our 2022 Outlook and our 2024 Mid-Term Guidance.”

Divisional Overview

• Biologics benefited from continued strong customer demand. The division was able to meet these high demand levels by bringing online and approving new significant expansions across modalities. Compared to Full-Year 2020, the business achieved 24.7%³ sales growth, with a lower CORE EBITDA margin of 36.3%, reflecting a combination of project mix, one-time effects and the impact of growth projects.
• Small Molecules saw a significant number of new programs signed and the successful ramp-up of large assets in 2021. The division delivered 11.6%³ sales growth versus Full-Year 2020, alongside a slight margin improvement to 28.0%.
• Cell & Gene performance was driven by strong customer demand and improved synergies between the Bioscience business unit and Lonza’s CDMO services. As anticipated, the Cell & Gene Technologies business achieved a positive margin in Q4. The wider division saw 26.6%³ sales growth and a margin improvement to 17.6%, compared to Full-Year 2020.
• Capsules & Health Ingredients saw solid demand across portfolios and regions. Compared to Full-Year 2020, the division delivered 5.6%³ sales growth, with attractive and improved margins of 34.4%.

All financial information for financial year 2021 is unaudited. The audit report on the 2021 consolidated financial statements of Lonza Group will be issued in March 2022 together with the publication of Lonza’s 2021 Annual Report. For more detail on performance and financials, please refer to the Full-Year 2021 Presentation, Full-Year 2021 Report and Alternative Performance Measures (APM) 2021 Report.

Dividend Announced
Lonza’s Board of Directors is proposing an unchanged dividend for shareholders of CHF 3.00 per share for 2021. The proposal represents a pay-out of 7.5%⁸ of 2021 reported net profit of Lonza Group. Subject to approval at the upcoming Annual General Meeting (AGM) on 5 May 2022, 50% of the dividend of CHF 3.00 per share will be paid out of the capital contribution reserve and will therefore be free from Swiss withholding tax.

Changes in Board of Directors
Two changes in Lonza’s Board of Directors were announced. Dorothée Deuring and Werner J. Bauer have decided not to stand for re-election at the upcoming Annual General Meeting (AGM) on 5 May 2022. Werner J. Bauer has been a member of the Board since 2013 and most recently held the role of chair of the Innovation and Technology Committee. Dorothée Deuring has been a member of the Board since 2020 and chaired the Audit and Compliance Committee. The Board would like to thank them both for their contributions during their years of service to Lonza.

The Board of Directors is proposing to Lonza’s AGM the election of two new Board members, Dr Marion Helmes and Prof Roger M. Nitsch.

Dr Marion Helmes is an experienced CFO and Board member with international exposure. She brings experience from multiple industries including retail, energy and heavy manufacturing. She has served on the Boards of Siemens Healthineers, Heineken, ProSiebenSat.1 Media, British American Tobacco, and others.

Prof Roger M. Nitsch is the CEO and President of Neurimmune and Chairman of Neurimmune Holding AG. He holds an MD from the University of Heidelberg and earned his post-doctoral qualification at the Massachusetts Institute of Technology and Harvard Medical School. Roger is Ordinary Professor at the University of Zurich where he holds a part-time position as a lecturer in Bio-Entrepreneurship.

The Board is further proposing to the AGM the re-election of all other Board members.

[1] Constant exchange rate

[2] Based on distinct companies

[3] All sales growth figures, expressed in percentage (%), are at a constant exchange rate (CER)

[4] All financial information referring to continuing operations are exclusive of the Specialty Ingredients business, that was sold on 1 July 2021 and therefore reported as discontinued operations

[5] Actual exchange rate (AER); in constant exchange rate (CER): +20.0%

[6] Includes Gamsenried environmental remediation expense of CHF285 million

[7] CORE results for the Full-year 2020 were restated to reflect the changes from the revised Alternative Performance Measures policy that was introduced on 1 January 2021

[8] Pay-out ratio of 7.5% based on the profit for the period of Lonza Group consolidated (incl. discontinued operations). The pay-out ratio based on the profit for the period of continuing operations would amount to 32.9%