Lonza Shares Fall After Lowering 2023 Targets

By David Sachs

Lonza, the Swiss pharmaceutical and biotech company, experienced a drop in its shares on Friday following the revision of its 2023 sales and earnings targets. This move was prompted by the release of mixed first-half results.

At 0711 GMT, Lonza shares fell 7.4% to CHF511.40.

First-Half Results

During the first half of the year, Lonza reported core earnings before interest, taxes, depreciation, and amortization (EBITDA) of 922 million Swiss francs ($1.06 billion), a decline of 6.6% compared to the same period last year. Furthermore, its core EBITDA margin dropped from 33.1% to 30%. Despite these figures, sales showed a modest increase of 3.2% to CHF3.08 billion.

Revised Targets

In light of the first-half performance, Lonza has decided to revise its 2023 sales targets. The company now projects mid-to-high single-digit growth at constant exchange rates, down from its previous target of high single-digit sales growth. Additionally, the core EBITDA margin for 2023 is now expected to be between 28% and 29%, compared to the earlier target of between 30% and 31%.

Mid-Term Outlook

Lonza confirmed its mid-term sales guidance; however, it did revise its margin outlook. The new projected range for the mid-term EBITDA margin is between 31% and 33%, a decrease from the previous range of 33% to 35%.

Reason for Downgrade

The company attributes the revision to current market dynamics that have negatively affected demand for early-stage services and nutraceutical capsules.