Lonza delivers strong 20% sales growth in 2021

Swiss contract development and manufacturing organization (CDMO) Lonza (SIX: LONN) has reported full-year 2021 sales of 5.4 billion francs ($5.9 billion), growing 20% AER (20% CER) and 1.7 billion francs core earnings before interest, taxes, depreciation and amortization (EBITDA), resulting in a margin of 30.8%. The results were helped by demand for the substances it supplies for new mRNA COVID-19 vaccines.

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 285 million francs 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 1.3 billion francs 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.