Enabling a Healthier World
Full-Year Report
2022
Full-Year Report 2022
Contents
CEO Update | 4 |
Financial Highlights | 5 |
Biologics | 6 |
Small Molecules | 7 |
Cell & Gene | 8 |
Capsules & Health Ingredients | 9 |
Corporate | 10 |
Outlook 2023 and Mid-Term Guidance 2024 | 11 |
Dividend Proposed | 11 |
Share Buyback Announced | 11 |
Notes | |
Condensed Financial Statements | 12 |
Selected Explanatory Notes | 16 |
Forward-Looking Statements | 20 |
Disclaimer | 20 |
2
Full-Year Report 2022
Lonza delivers strong Full-Year performance, with CHF 6.2 billion sales and 15.1% CER1 sales growth
CHF 2.0 billion CORE EBITDA resulting in a margin of 32.1%
Growth investment continues with 2022 CAPEX reaching 30% of sales
Outlook 2023: high single-digit CER sales growth and CORE EBITDA margin of 30-31%
Mid-Term Guidance 2024 confirmed
Proposed dividend increase of 17% to
CHF 3.50 per share
Share buyback program of up to CHF 2 billion
announced, starting in 2023
1 Sales growth figures, expressed as a percentage (%), are at Constant Exchange Rate (CER)
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Full-Year Report 2022
CEO Update
Dear Stakeholders,
2022 was another year of strong performance for Lonza, as the business delivered on its Outlook despite a challenging macroeconomic environment. Our resilient performance was supported by sustained market demand and a broad and diversified customer base. The business also accelerated its CAPEX investment program to support long-term growth and success.
Full-Year sales reached CHF 6.2 billion, with sales growth of 15.1% CER and CHF 2.0 billion CORE EBITDA, resulting in a margin of 32.1%. These results were driven by strong underlying business performance, and supported by a COVID-related sales peak in 2022.
In line with Outlook, CAPEX reached 30% of sales. Our investment program remains focused on sustainable growth supported by attractive margins and low levels of risk. It will enable us to capture market demand by supporting our customers' complex needs.
In 2022, there have been investments across modalities in all four divisions. A landmark growth project was announced in July, with a ~CHF 500 million investment in a new large-scale commercial drug product facility in Stein (CH). Once operational, the facility will complete our Biologics value chain to support an integrated end-to-end offering to our customers.
Our Board of Directors will propose a dividend increase to CHF 3.50 per share, representing a year-on-year increase of 17% or CHF 0.50. Furthermore, our strong balance sheet and positive outlook enable us to initiate a share buyback program of up to CHF 2 billion. This will enable us to return excess capital to shareholders at a time when our stock valuation is attractive for purchase. We remain committed to maintaining our strong investment grade rating. The share buyback does not impact our capability to invest in organic growth and bolt-on M&A.
Alongside our financial performance, we also remain focused on our environmental and social responsibilities. We believe that how we work is just as important as what we achieve. 2022 was the first year in which ESG targets were incorporated into our executive and employee remuneration policies, to support a collective commitment to responsible business across our global network. We have continued to make progress in reducing our energy, water and GHG emission intensity. We were also proud to be recognized by the Ethisphere Institute as one of the world's most ethical companies for the second year.
Looking towards 2023, we provide an Outlook of high single-digit sales growth, reflecting our strong underlying business performance, balanced by a headwind from the COVID-related sales peak in 2022. We provide a CORE EBITDA margin Outlook of 30 to 31%. We will also continue to invest for the future, with CAPEX remaining at 30% of sales.
We are pleased to confirm our 2024 Mid-Term Guidance. More widely, we will continue to build on our position as a leading CDMO player to capture value in the healthcare market.
Finally, 2022 marked an important milestone for Lonza, as we celebrated the 125th anniversary of our foundation. Over 125 years, Lonza's success has been driven by our capacity to adapt to a changing world and serve our customers' most pressing needs. These characteristics continue to define our success as much in 2023 as they did at our foundation in 1897.
As I close, I would like to take this opportunity to thank our customers for their loyalty, our business partners for their collaboration and our investors for their trust. I would also like to thank our global colleague community, which is responsible for delivering our performance and ensuring we continue to fulfil our purpose of enabling a healthier world.
Sincerely,
Pierre-Alain Ruffieux
Chief Executive Officer
4
Full-Year Report 2022
Financial Highlights (Unaudited) for the Twelve Months Ended 31 December1
IFRS Results
Million CHF | 2022 | Change | 2021 |
in % |
Sales | 6'223 | 15.0 | 5'409 | |
EBIT | 1'541 | 81.1 | 851 | |
Margin in % | 24.8 | 15.7 | ||
EBITDA | 2'139 | 56.7 | 1'365 | |
Margin in % | 34.4 | 25.2 | ||
Profit for the period | 1'218 | 79.9 | 677 | |
EPS basic | (CHF) | 16.37 | 80.3 | 9.08 |
EPS diluted | (CHF) | 16.34 | 80.6 | 9.05 |
CORE Earnings2
Million CHF | 2022 | Change | 2021 |
in % |
CORE EBITDA | 1'995 | 19.8 | 1'665 | |
Margin in % | 32.1 | 30.8 | ||
CORE Profit for the period | 1'097 | 16.2 | 944 | |
CORE EPS basic | (CHF) | 14.74 | 16.3 | 12.67 |
CORE EPS diluted | (CHF) | 14.71 | 16.5 | 12.63 |
ROIC in % | 11.4 | 6.5 | 10.7 | |
Other Performance Measures
Million CHF | 2022 | Change | 2021 |
in % | |||
Operational free cash flow (before acquisitions and divestitures) | (465) | (216.5) | 399 |
Operational free cash flow | (237) | (150.3) | 471 |
Capital expenditures (CAPEX) | 1'872 | 44.1 | 1'299 |
Net debt / (net cash) | (186) | (80.6) | (958) |
Debt - equity ratio | (0.0) | (88.9) | (0.1) |
Net Debt / CORE EBITDA ratio | (0.1) | (83.8) | (0.6) |
Number of employees (Full-Time Equivalent) | 17'494 | 7.9 | 16'218 |
- All financial information for financial year 2022 is unaudited. All financial information for financial year 2021 is based on "continuing operations", i.e. exclusive of the Specialty Ingredients business (that was sold on 1 July 2021 and therefore reported as discontinued operations in 2021)
- For Lonza's definition of CORE results, also refer to the Alternative Performance Measures Brochure published in conjunction with this Full-Year Report
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Lonza Group Ltd. published this content on 25 January 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 January 2023 06:06:02 UTC.