Lonza confirms yearly outlook, growth strategy on strong third quarter

11 hours ago

(AWP Alliance News) - Lonza Group Ltd on Wednesday confirmed its upgraded annual guidance after it said third-quarter performance across all its divisions was in line with expectations.

At a capital markets day that Lonza is holding at its Vacaville facility in California, Chief Executive Wolfgang Wienand said that completing Lonza's transformation into a pure-play contract development and manufacturing organisation for the pharmaceutical, biotechnology and nutrition sectors had "created a stronger, more integrated global organisation".

"The improvements we are bringing to the business further strengthen our confidence in our organic growth model and our ability to improve margin faster over time," Wienand said.

The Basel, Switzerland-based company confirmed its annual outlook, which it had upgraded in July to 11% to 12% sales growth at constant currency rates and core earnings before interest, tax, depreciation and amortisation margin of 33% to 34%.

Its organic growth model targets a mid-term return on invested capital of two to three times the current weighted average cost of capital, with free cash flow conversion improving over time. Capital expenditure expectations are unchanged, forecast to fluctuate around the mid-to-high teens as a percentage of sales.

Lonza expects a foreign exchange drag of about 2.0% to 3.0% on 2026 sales growth.

The Capsules & Health Ingredients division's performance was in line with expectations, the company said. In March, Lonza agreed to sell the business for CHF2.30 billion, or USD2.96 billion, to Lone Star Global Acquisitions Ltd. On Wednesday, Lonza said it still expects mid-single-digit constant exchange rate sales growth and further core Ebitda margin expansion for Capsules & Health Ingredients in 2026.

Lonza said it remains committed to a progressive dividend.

Lonza shares were up 1.9% to CHF577.20 in Zurich on Wednesday.

By Camilla Borri, Alliance News reporter

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