Lonza Group Ag · SIX:LONN
Lonza — H1 2023 Earnings Presentation
31 slides from Lonza's earnings presentation, Jul 21, 2023
Slide 1: Half-Year Results 2023
Enabling a Healthier World LO nZza Half-Year Results 2023 Pierre-Alain Ruffieux, CEO Philippe Deecke, CFO 21 July 2023
Slide 2: Contents
Contents Half-Year 2023 Group Overview Half-Year 2023 Financial Summary Half-Year 2023 Divisional Overview Concluding Remarks Q&A
Slide 3: Half-Year 2023 Group Overview
Half-Year 2023 Group Overview
Slide 4: H1 2023 Group Highlights
− − − − − 1 CORE results and Constant Exchange Rates (CER) are non-IFRS measures. For Lonza's definition of CORE results, also refer to the Alternative Performance Measures Brochure published in conjunction with the Lonza Half-Year Report. 2 H1 2023 sales growth against an elevated H1 2022 base set
Slide 5: H1 2023 - Update on Key Events
H1 2023 - Update on Key Events — Solid underlying growth in Biologics, driven by Bioconjugates, Mammalian and Microbial — Strong performance in Small Molecules driven by high asset utilization, favorable mix and a focus on more complex and high value offerings — Healthy increase in value of Biologic
Slide 6: New investments and assets coming online to drive growth
New investments and assets coming online to drive growth LONZa -Bend, US rood Portsmouth, US : Small Molecules "Cell & Gene | — Solid Form Services ‘ — Dedicated facility in H facility expansion ' collaboration with Vertex - Significant additional ! : ‘ eae capacity for Bioconjugates in oe ° Visp (C
Slide 7: Synaffix acquisition creates a best-in-class ADC customer offering
Synaffix acquisition creates a best-in-class ADC customer offering — Acquisition of leading clinical-stage Synaffix technology platform for the development of antibody-drug conjugates (ADCs) — Strong Synaffix IP and talent enables Lonza to deliver a comprehensive service to rapidly discover, develop
Slide 8: Commitment to >40% emission reduction by end of 2030
Commitment to >40% emission reduction by end of 2030 Commitment to reduce greenhouse gas (GHG) emissions — Letter of commitment to Science Based Targets initiative (SBTi), a leading carbon footprint reduction initiative Lonza plans to reduce absolute Scope 1 and 2! GHG emissions by more than 40% by
Slide 9: Priorities for H2 2023
Priorities for H2 2023 — Ramp-up of new commercial assets to support accelerated growth in Biologics — Secure early-stage opportunities to optimize capacity utilization — Continuous improvement initiatives across the network
Slide 10: Half-Year 2023 Financial Summary
LONZG Half-Year 2023 Financial Summary
Slide 11: Robust performance despite market headwinds
Robust performance despite market headwinds LONZa Financial Performance Summary in m CHF — Around 10% underlying sales growth supported by strong commercial Sales 3,078 5.6% 3.2% demand offsetting lower COVID sales — Market headwinds in early-stage and CORE EBITDA 922 (4.71% (6.6)% nutraceutical cap
Slide 12: Margin in line with expectations
Margin in line with expectations LONZa CORE EBITDA Margin Drivers CORE EBITDA Margin H1 2023 vs H1 2022 in% 33.1 30.0 — H12022 with higher COVID sales and positive one-time items — Underutilization in early-stage and capsules assets — Productivity and operating leverage mitigate negative division mi
Slide 13: Strong commercial CDMO, market softness impacts CHI and CGT
Strong commercial CDMO, market softness impacts CHI and CGT Divisional Performance LONZa Financial Results by Division H1 2023 Sales growth CER' Biologics 1.9% Small Molecules 37.5% Cell & Gene 10.8% sel 03% Lonza 5.6% ‘Constant Exchange Rate. Comparison vs. H1 2022 2 Actual Exchange Rate. Compariso
Slide 14: Continued progress on growth investments
Continued progress on growth investments CAPEX LONZa CAPEX Breakdown by Division in m CHF 765 H1 2023 BE Biologics 1) Capsules & Health Ingredients (CHI) ©) small Molecules [Mill Shared Infrastructure Mi cell & Gene @ % Sales ‘Total project CAPEX >50m 2 Total project CAPEX <50m H1 2023 Project Portf
Slide 15: Robust cash generation to support growth investments
Robust cash generation to support growth investments LONZa CAPEX Operational Free Cash Flow “ ES EBITDA 899 (35) 934 Change of net working capital (436) 56 (492) — Strong Free Cash Flow (RG) before growth CAPEX CAPEX (765) 76 (841) — CAPEX below prior year Other 240 172 68 due to timing of project i
Slide 16: Half-Year 2023 Divisional Overview
Half-Year 2023 Divisional Overview
Slide 17: Biologics
Biologics LONZa 1,605. Sales (CHF) +1.9%! 506.. CORE EBITDA (CHF) -16.5% 31.5% CORE EBITDA Margin Boarded figures are a comparison vs. Half-Year 2022 1$ales growth, expressed as a percentage (%), are at constant exchange rate (CER) -5.8ppts Divisional sales momentum fully offset H1 2022 higher mRNA
Slide 18: Small Molecules
Small Molecules LONZa 593» Sales (CHF) +37.5%! 137m CORE EBITDA (CHF) +59.3% 34.9: CORE EBITDA Margin Boarded figures are a comparison vs. Half-Year 2022 ‘Sales growth, expressed as a percentage (%), are at constant exchange rate (CER) 2 Small Molecules Mid Term-Guidance 2024: high single-digit sale
Slide 19: Cell & Gene
Cell & Gene LONZa 563» Sales (CHF) +10.8%! 710 CORE EBITDA (CHF) -7.8% 19.6. CORE EBITDA Margin Boarded figures are a comparison vs. Half-Year 2022 ‘Sales growth, expressed as a percentage (%), are at constant exchange rate (CER) 2 Further information on Codiak BioSciences termination -2.8ppts H1 20
Slide 20: Capsules & Health Ingredients (CHI)
Capsules & Health Ingredients (CHI) LONZGa 595... +0.3%'! Sales ° (CHF) — Flat sales resulting from price increases offsetting lower volumes 1 90 — Lower nutraceutical sales due to lower customer demand and m destocking -13.6% CORE EBITDA — Sales growth in pharma hard capsules (CHF) — CORE EBITDA ma
Slide 21: Concluding Remarks
Concluding Remarks
Slide 22: Updated Outlook 2023 and Mid-Term Guidance
Updated Outlook 2023 and Mid-Term Guidance LONZa Sales Outlook ‘23 H2 2023 Performance Drivers — Sales growth acceleration driven by Mid-to-high single-digit CER sales growth new Biologics assets coming online — Margin impacted by increasing under- : absorption of early-stage and Margin Outlook ‘23
Slide 23: Lonza is set up for success in CDMO industry
Lonza is set up for success in CDMO industry LONZQG Strong and stable business model 10-15% Phase | — Long-term customer contracts — Diversified business CDMO — Large asset base in a highly Business regulated market, supported by world-class talent ~70% Commercial Investment in future growth Acceler
Slide 24: Concluding Remarks
Concluding Remarks — Lonza delivered 5.6% CER sales growth and a CORE EBITDA margin of 30% — Robust momentum in commercial CDMO business, with current market dynamics impacting demand for early-stage services and nutraceutical capsules — 2023 Outlook at mid-to-high single-digit sales growth and 28 t
Slide 25: Q&A
Q&A
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Slide 27: Impact of Termination of Relationship with Codiak BioSciences on Lonza
Impact of Termination of Relationship with Codiak BioSciences on LONZa Lonza Performance Codiak BioSciences Chapter 11 filing in March 2023 led to termination of exosomes partnership with Lonza Termination of engagement resulted in release of obligation to provide manufacturing services by Lonza Cod
Slide 28: Half-Year 2023 Financial Highlights (1/2)
Half-Year 2023 Financial Highlights (1/2) LONZQG CHF milion HY 2023 HY 2022! YoY (in %) Sales 3,078 2,982 3.2 CORE EBITDA 922 987 (6.6) Margin in % 30.0% 33.1% EBITDA 899 934 (3.7) Margin in % 29.2% 31.3% EBIT 540 645 (16.3) Margin in % 17.5% 21.6% ROIC in % 8.7% 1.7% Net Financial Result (42) (52)
Slide 29: Half-Year 2023 Financial Highlights (2/2)
Half-Year 2023 Financial Highlights (2/2) LONZQG CHF million HY 2023 HY 2022! YoY (in %) CORE EPS basic (CHF) 6.12 7.29 (16) EPS Basic (CHF) 5.54 6.68 (17.1) CORE EPS Diluted (CHF) 6.12 7.28 (15.9) EPS Diluted (CHF) 5.54 6.67 (16.9) Change of Net Working Capital (436) (492) Capital Expenditures 765
Slide 30: Event Calendar and Contacts
Event Calendar and Contacts LONZa ming R how: 25 August 2023 Credit Suisse, Zurich 28 August 2023 JP Morgan, New York 29 August 2023 JP Morgan, Boston 4-5 September 2023 UBS, London Upcoming Announcements 17 October 2023 Capital Markets Day (incl. Qualitative Update) 26 January 2024 Full-Year Result
Slide 31: Additional Information and Disclaimer
Additional Information and Disclaimer LONZa Lonza Group Ltd has its headquarters in Basel, Switzerland, and is listed on the SIX Swiss Exchange. It has a secondary listing on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Lonza Group Ltd is not subject to the SGX-ST’s continuing listi