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• Revenue: CHF6.6 billion for the full year 2024, in line with prior year.

• EBITDA Margin: 29%, yielding CHF1.9 billion.

• CapEx: 22% of revenues, focused on organic growth investments.

• Cash Flow: Strong cash flow of CHF470 million.

• Biologics Growth: 13% growth excluding mRNA business impact.

• Small Molecules Growth: 9% growth year-on-year.

• Cell & Gene Growth: 10% growth adjusted for Kodiak termination.

• Capsules & Health Ingredients Decline: 6.6% decline in constant currency.

• Free Cash Flow: CHF500 million, representing 21% of sales before gross CapEx.

• Dividend Proposal: CHF4 per share, representing a 44% payout.

• 2025 CDMO Outlook: Revenue growth approaching 20%, core EBITDA margin approaching 30%.

• 2025 CHI Outlook: Low to mid single-digit sales growth, EBITDA margin in the mid 20s.

• Warning! GuruFocus has detected 7 Warning Signs with LZAGF.

Release Date: January 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Lonza Group Ltd (LZAGF) reported strong revenue growth in its CDMO business, with growth in the low 10s, adjusted for the extraordinary high base in 2023.

• The company achieved an EBITDA margin of 29%, yielding CHF1.9 billion, with significant margin expansion in the core CDMO business.

• Lonza Group Ltd (LZAGF) executed an ambitious organic growth investment program, with CapEx around 22% of revenues, supporting future growth.

• Strong cash flow of CHF470 million was reported, essential for the company's growth trajectory.

• The company expects a stronger year in 2025, with CDMO business revenues approaching 20% growth and core EBITDA margin approaching 30%.

Negative Points

• The CHI business experienced a decline, with revenues and EBITDA margin expected to grow only in low to mid single digits.

• The capsules and health ingredients business faced market headwinds, resulting in a 6.6% decline in constant currency.

• The company faced a high base effect from 2023 due to COVID-related revenues, impacting overall growth figures.

• There was a slight decline in overall margins due to the high base in 2023 and market headwinds in the CHI business.

• The corporate segment experienced increased core EBITDA loss due to various factors, including lower hedging gains and pension adjustments.

Q & A Highlights

Q: How do you view the operational performance and margin for small molecules in 2025, considering capacity additions? A: Wolfgang Wienand, CEO, stated that the small molecules business performed strongly in 2024 and is expected to continue this trend in 2025. It will contribute to both top-line growth and margin expansion, although specific divisional details won't be shared.