Lonza Group Ag · SIX:LONN
Lonza — Investor Day (October 2020)
112 slides from Lonza's investor day presentation, Oct 15, 2020
Slide 1: Investor Update: Lonza's Blueprint for the Future
Investor Update Lonza’s Blueprint for the Future 15 October 2020 Aerial view of Hong Kong Downtown 1
Slide 2: Introduction
Introduction Organizational Design Our Divisions • Capsules and Health Ingredients • Small Molecules • Biologics • Cell & Gene Therapy, and Bioscience External Reporting Company Culture Concluding Comments Q&A Urban crowd from above 2
Slide 3: Organizational Design
Organizational Design Aerial View of a Crossing in Mexico City 3
Slide 4: The Case for Change
The Case for Change Decision to carve out LSI in 2019 Decision to exit LSI via a sales Different dynamics between LSI and LPBN process Attractive growth opportunities across all LPBN modalities Refocus the Lonza business Increased competition and complexity of Biopharma industry offering around the
Slide 5: Design Principles
Design Principles A clear focus on the market and customer Cohesion A manageable matrix Simplicity Standardized and efficient processes and structures Global Selected functions and teams defining global frameworks and Perspective standards, and guiding innovation Workforce Shared accountability and
Slide 6: Organizational Design
Organizational Design Business Divisions Four Divisions, each with their own Business Units Each holds responsibility for its own value chain and P&L Global Functions Five Functions supporting the Divisions and Business Units Responsible for Group standards, policies, principles and governance Windi
Slide 7: Divisions and Functions Overview
Divisions and Functions Overview CEO Mammalian Office of the CEO Corporate Functions1 Divisions Functions Capsules and Cell & Gene Small Commercial / Human Health Biologics Therapy, and Operations Quality Finance Molecules Marketing Resources Ingredients Bioscience P&L accountability Global standard
Slide 8: Divisions Overview
Divisions Overview A market-led structure to meet evolving customer needs Capsules and Small Cell & Gene Biologics Therapy, Health Ingredients Molecules and Bioscience Capsules Active Mammalian Bioscience Pharmaceutical Ingredients Health Microbial Ingredients Cell and Gene Therapy Drug Product Form
Slide 9: Functions Overview
Functions Overview Deep functional expertise across Business Functions Commercial / Finance Human Operations Quality Marketing Resources Procurement Compliance Customer and Tax Recruitment Market Intelligence Manufacturing Talent Quality Control Treasury Standards Management Digital Marketing Supply
Slide 10: CEO Office of the CEO Corporate Functions
CEO Office of the CEO Corporate Functions Divisions Functions Capsules and Cell & Gene Commercial / Human Small Operations Quality Finance Health Biologics Therapy, and Marketing Resources Molecules Ingredients Bioscience Capsules Active Mammalian Bioscience Procurement Compliance Customer and Tax R
Slide 11: Management Team
Management Team Aerial view of overpass at night 11
Slide 12: Lonza Group Leadership
Lonza Group Leadership Pierre-Alain Ruffieux Rodolfo Savitzky Caroline Barth Stefan Stoffel Chief Executive Officer Chief Financial Officer Chief Human Resources Chief Operating Officer Officer Tenure Commences with Lonza 6 years 6 months 30 years 1 November 2020 Professional experience snapshot PhD
Slide 13: Lonza Group Leadership
Lonza Group Leadership Claude Dartiguelongue Gordon Bates Jean-Christophe Hyvert Capsules and Health Small Molecules Biologics / Cell & Gene Ingredients Therapy, and Bioscience Tenure with Lonza 9 months 17 years 3 years Professional experience snapshot MSc Medical Education and Management (ESCP MBA
Slide 14: Our Divisions
LONZa Our Divisions
Slide 15: 2019 Sales Distribution – Divisions
2019 Sales Distribution – Divisions Cell & Gene Therapy, and Bioscience 10% Small Molecules 16% Divisions Biologics 47% Sales 27% Capsules and Health Ingredients * Sales figures, expressed in % are approximate and based on full-year 2019 results at actual exchange rate (AER). The split reflects the
Slide 16: Sales Distribution of Divisions and Business Units
Sales Distribution of Divisions and Business Units Business Unit sales listed in descending order for each Division 27% of 16% of 47% of 10% of Group Group Group Group sales sales sales sales Capsules and Health Cell & Gene Therapy, Small Molecules Biologics Ingredients and Bioscience Mammalian Acti
Slide 17: Capsules and Health Ingredients (CHI)
Capsules and Health Ingredients (CHI) 17
Slide 18: CHI Portfolio
CHI Portfolio Capsules* Health Ingredients Filled Capsules Empty Capsules (Dosage Form Solutions) Distinctive offerings for consumer health Pharma Pharma UCII® Carnipure® Healthy aging Sports (joint health) nutrition Nutrition Nutrition ResistAid™ Digestive and Others immune * The size of the boxes
Slide 19: CHI Offering & Capabilities
CHI Offering & Capabilities Capsules Health Ingredients Pharma Capsules Nutrition Capsules Addresses major consumer Filled Capsules health concerns and needs Empty Capsules Empty Capsules (Dosage Form Solutions) • Sports nutrition • Joint health Innovation and quality Multipurpose and functional Uni
Slide 20: Network and Assets
Network and Assets Bornem / Komec Helsen, Belgium Colmar, France Cohasset, Cohasset, USA USA Sagamihara, Japan Greenwood, USA Suzhou, China Benicia, USA* 230 Nansha, China Billion capsules produced annually Fort Smith, USA* For 5,000 Jakarta, Indonesia global customers Delhi, India Puebla, Mexico Ca
Slide 21: Market Overview
Market Overview Drivers for Demand in Pharma Capsules Drivers for Food Supplements’ Demand Overall growth in Pharmaceutical demand Many new molecules are heat sensitive, eliminating Demographic Trends tableting as an option Growth of older/ageing demographic groups End-patient preference drives and
Slide 22: Key Priorities
Key Priorities Accelerate profitable growth Drive differentiation with capsules • Focus on innovative capsules • Quality leadership • Cutting edge capsule dosage forms and services Increase capsules capacity Focus on high-growth, high-margin Joint Health and Nutrition markets Continuous implementati
Slide 23: CHI Growth Rates
CHI Growth Rates Market1 Lonza2 Capsules Capsules Estimated Growth 2 – 3% Estimated Growth 3 – 4% CAGR 2020 – 2023 CAGR 2020 – 2023 Health Ingredients Health Ingredients Estimated Growth 5 – 6% Estimated Growth 6 – 8% CAGR 2020 – 2023 CAGR 2020 – 2023 1 Based on volume 2 Revenue growth 23
Slide 24: Pharma & Biotech
Pharma & Biotech 24
Slide 25: Our Contribution to the Value Chain
Our Contribution to the Value Chain Discovery Development Manufacturing Market Basic Drug Pre-clinical Clinical Commercial Commercial Pharma/Biotech Research Discovery Testing Testing Production Sales Lifecycle Clinical Development Selected Modalities Mammalian Microbial Cell & Gene Therapy Lonza Sm
Slide 26: Small Molecules
Small Molecules
Slide 27: Small Molecules Offering
Small Molecules Offering Drug Substance Drug Product API/HPAPI Formulation Oral Dosage Form Full range of APIs Supply finished dosage Tablets form services to the pharma industry Market leader on HPAPIs Encapsulation Particle engineering: Increasing early phase Filled into sachets granulation, micro
Slide 28: End-to-End Services and Know-How
End-to-End Services and Know-How Particle Drug Product (DP) Drug Substance (DS) Engineering Drug Early Commercial Particle Formulation Clinical Trial Sales and Phase DS Engineering Development Packaging Development Discovery Marketing Late Enhanced Commercial Phase Formulation DP Lonza Selected comp
Slide 29: Network and Assets
Network and Assets Edinburgh, UK Bend, USA • Liquid filled hard capsules Ploermel, France • Spray drying • Soft gel and liquid filled hard capsules Quarkertown, USA Visp, Switzerland • Micronization • API and HPAPI Monteggio, Switzerland Tampa, USA • Micronization • Tablets • Powder Filled Nansha, C
Slide 30: Industry Overview and Lonza Key Priorities
Industry Overview and Lonza Key Priorities Industry Lonza Adapt business model for smaller companies to secure new early-phase clinical programmes Accounts for ~70% of global pharmaceutical Retain leadership position in particle sales engineering technology Balance of asset scales and location 6,000
Slide 31: The Rise of Highly Potent API Molecules
The Rise of Highly Potent API Molecules Growing demand for more complex and highly potent APIs (HPAPIs) New way to use small molecules to deliver innovative patient therapies Interest in HPAPI drugs is largely driven by oncology research New medicines with lower dose requirements and fewer side effe
Slide 32: Small Molecules Growth Rates
Small Molecules Growth Rates Market1 Lonza2 Estimated Growth 4 – 5% Estimated Growth 9 – 10% CAGR 2020 – 2023 CAGR 2020 – 2023 1 Based on volume 2 Revenue growth 32
Slide 33: Biologics: Mammalian
Biologics: Mammalian
Slide 34: Mammalian Offering
Mammalian Offering Late stage discovery, early stage development Applied Protein Gene sequence analysis Services Vector development and manufacturing Cell Line Development and Selection and manufacturing of host cells Manufacturing Clinical Full service drug substance and drug product development an
Slide 35: Network and Assets
Network and Assets Clinical Clinical Commercial Pre-clinical Development Manufacturing3 Manufacturing4 Visp, Switzerland1 Basel/Stein, Switzerland Portsmouth, USA Hayward, USA Cambridge, UK Slough, UK Porriño, Spain Tuas, Singapore Guangzhou, China2 1 Ibex® Solution – under construction, operational
Slide 36: Mammalian Network Capacity by end of 2020
Mammalian Network Capacity – 330 Kiloliter (KL) by end of 2020 Slough, UK • 6 x 1 KL Visp, Switzerland • 2 x 20 KL / 3 x 1KL / 3 x Portsmouth, USA 2KL • 3 x 5 KL / 5 x 20 KL / 4 x 6 KL Porriño, Spain • 4 x 10 KL Hayward, USA Guangzhou, China1 • 2 x 1 KL / 1 x 2 KL • 2 x 1 KL / 2 x 2 KL Tuas, Singapo
Slide 37: Ibex Complex in Visp, CH
Ibex® Complex in Visp, CH Ibex proposal has been validated and wins significant new contracts Ibex® Facility Sanofi JV Facility Ibex® Design & Develop Ibex® Dedicate Examples Examples Plant ramp-up expected from Q4 2020 Strong small-scale pipeline Large microbial contract Most capacity is contracted
Slide 38: Ibex Complex in Visp, CH
Ibex® Complex in Visp, CH Sanofi JV Facility Ibex® Design & Develop Ibex® Dedicate 38
Slide 39: Key Priorities
Key Priorities Increase early phase sales, strengthen Applied Pre-clinical and Protein Services Phase 1 Increase end-to-end offering for small and large Pharma and Biotech 8% Leverage Ibex® Solutions 2019 sales 14% 22% Add incremental capacity distribution 70% Clinical – Phase 2 + 3 Geographic expan
Slide 40: Lonza Mammalian Fermentation Capacity in Kiloliter
Lonza Mammalian Fermentation Capacity in Kiloliter (KL) Anticipated / To Validate 330 290 30 70 Now End of 2020 2023 – 2024 Additions by December 2020 Additions by 2023 – 2024 Small/Mid-scale (<10 KL) • 4 x 6 KL in Portsmouth, USA • Small and mid-size Large-scale (>10 KL) • 3 x 1 KL + 3 x 2 KL in Vi
Slide 41: Mammalian Growth Drivers and Estimated Production Capacity
Mammalian Growth Drivers and Estimated Production Capacity Growth Drivers Capacity Expansion in kiloliter (KL) Solid base line demand in therapeutics +33% Biosimilars – geographic adoption of new therapeutics Venture capital funding expected to continue N 7,7001 Improvements to platform processes N
Slide 42: Market Overview
Market Overview Market Selected Key Manufacturers Pharma companies CDMO companies More than 2/3 of the pipeline comes from small and mid-sized Biotechs • Roche • Lonza • J&J Sustained need for large-scale manufacturing • Samsung Biologics capacity • Novartis • Wuxi Biologics • Boehringer Ingelheim T
Slide 43: Mammalian Growth Rates
Mammalian Growth Rates Market1 Lonza2 Estimated Growth 7 – 8% Estimated Growth 10 – 14% CAGR 2020 – 2023 CAGR 2020 – 2023 1 Based on volume 2 Revenue growth 43
Slide 44: Biologics: Microbial
Biologics: Microbial
Slide 45: Microbial Offering
Microbial Offering Offering Offering Network and Assets More than 30 years of experience Clinical development and manufacturing Commercial manufacturing From clinical to commercial supply Ibex® Dedicate for tailored ownership and risk Regulatory expertise to support IND Visp, sharing models and BLA
Slide 46: Key Priorities
Key Priorities Pre-clinical and Phase 1 Leverage Lonza’s proprietary expression systems 10% Expand development capacity to grow pre-clinical and early phase customers 2019 sales 25% distribution Expand manufacturing capacity for full scope 65% Clinical – (small, mid and large scale) Phase 2 + 3 Leve
Slide 47: Industry Overview
Industry Overview Represents ~30% of total Biopharma Installed Capacities 2020 E 690,000 liters More than 2/3 of microbial derived biotherapeutics are Total from small/mid-sized Biotechs 370,000 liters 320,000 liters Increasing number of complex molecules produced in CDMO Pharma microbial systems Se
Slide 48: Microbial Growth Rates
Microbial Growth Rates Market1 Lonza2 Estimated Growth 7 – 8% Estimated Growth 9 – 10% CAGR 2020 – 2023 CAGR 2020 – 2023 1 Based on volume 2 Revenue growth 48
Slide 49: Biologics: Licensing
Biologics: Licensing
Slide 50: The Concept Starts with Lonza's Expression System
The Concept Starts with Lonza’s Expression System Gene for Protein of Host cell from Nucleus Culture media interest from our customer Lonza from Lonza Lonza or customer Vector (e.g. Plasmid or virus) from Lonza Gene for a desired protein is combined The recombinant DNA sequence The host cell is grow
Slide 51: The Licensing Business
The Licensing Business More than 200 customers for around 600 molecules 80% of revenues from royalties with balance from annual fees, milestones and other payments Sales and marketing focused on early stage innovators – first contact with Lonza Our Mammalian Gene Expression Systems (GS) account for
Slide 52: Biologics: Bioconjugates
Biologics: Bioconjugates
Slide 53: Bioconjugates Overview
Bioconjugates Overview Biopharmaceuticals developed by attaching two molecules together, of which one is a biomolecule Powerful anti-cancer therapeutics exploiting the high specificity of a monoclonal antibody (selection of the cell tumor) with enhanced tumor cell-killing capacity by attaching a hig
Slide 54: Bioconjugates Offering
Bioconjugates Offering Offering Offering Network and Assets Proven track record Bioconjugation • Clinical development and manufacturing • Commercial manufacturing Supports the majority of commercially approved ADCs Highly Potent API • API development and manufacturing Competency around complex molec
Slide 55: Bioconjugates Growth Rates
Bioconjugates Growth Rates Market1 Lonza2 Estimated Growth 6 – 8% Estimated Growth 10 – 12% CAGR 2020 – 2023 CAGR 2020 – 2023 1 Based on volume 2 Revenue growth 55
Slide 56: Biologics: Drug Product Solutions (DPS)
Biologics: Drug Product Solutions (DPS)
Slide 57: DPS Offering
DPS Offering Drug Product Solutions (DPS) Drug Product Services Expertise in formulation of API with excipients Analytical capabilities Stability and usability of final therapeutics Final Medical Drug Drug Product Substance Fill & Finish Acquisition of Novartis Stein (CH) facility Drug product clini
Slide 58: Analytical Expertise Overview
Analytical Expertise Overview Analytical methods for formulation development Particle characterization Visible particles Turbidity UV Light obscuration pH Flow imaging microscopy Osmolality Electrical zone sensing Residual moisture Resonant mass measurement Methionine oxidation Nano tracking analysi
Slide 59: Industry Overview
Industry Overview Industry Competitive Landscape Fragmented and disparate competitor community Large and growing pipeline with all biologics being Selected value chain competitors parenteral • Wuxi • Catalent • Patheon New molecular formats require more specialized DP formulation know-how Selected s
Slide 60: End-to-End Offering Extension
End-to-End Offering Extension Built a leading offering over four years >200 FTEs Started in November 2016 >80 Customers Created leadership in science and regulatory know-how >100 Molecules Large number of customers are integrated with the Business Unit to provide end-to-end offering November 2016 20
Slide 61: DPS Growth Rates
DPS Growth Rates Market1 Lonza2 Estimated Growth 7% Estimated Growth 20% CAGR 2020 – 2023 CAGR 2020 – 2023 1 Based on volume 2 Revenue growth 61
Slide 62: Biologics: mRNA
Biologics: mRNA
Slide 63: Strategic Collaboration with Moderna on mRNA platform
Strategic Collaboration with Moderna on mRNA platform Ten year strategic collaboration agreement on mRNA and lipid nano-particles Moderna is the leading developer of mRNA-based new therapeutics and vaccines Lonza will gain access to all mRNA-based projects from Moderna’s innovation pipeline Current
Slide 64: COVID–19 Vaccine Candidate mRNA 1273 – Lonza's Role
COVID–19 Vaccine Candidate mRNA 1273 – Lonza’s Role One Drug Substance production line Portsmouth Annual capacity 100 mio doses USA CAPEX funded by Moderna: ~CHF 70 mio First Drug Substance batch targeted for end October 2020 Three Drug Substance production lines Annual capacity 300 mio doses CAPEX
Slide 65: Moderna with Most Advanced mRNA Platform
Moderna with Most Advanced mRNA Platform 23 development candidates Pre-clinical Phase 1 Phase 2 Phase 3 Commercial 9 9 4 Launch mRNA 1273 preparation Moderna has the most advanced mRNA platform Moderna is not only a COVID–19 vaccine company Moderna has one of the most advanced COVID–19 Moderna has 2
Slide 66: Cell & Gene Therapy, and Bioscience Division
Cell & Gene Therapy, and Bioscience Division
Slide 67: Bioscience
Bioscience
Slide 68: Bioscience Offering
Bioscience Offering Support customers in disease research, drug discovery and development, including cell and gene therapy Bioscience Primary human cells and stem cells from various tissues Discovery Optimized cell culture media Nucleofector® transfection device Bioscience Cell Culture Media support
Slide 69: Network and Assets
Network and Assets Rockland, USA • Electrophoresis Copenhagen, Denmark • Chromatography, Agarose Wayne, USA • MODA, Software Verviers, Belgium Walkersville, USA • Cell Culture Media • Cell Culture Media • Endotoxin Assays Cologne, Germany Durham, USA • Transfection • Primary Cells – isolation of hum
Slide 70: Market Overview
Market Overview Global addressable Research Products market estimated at around CHF 950 mio1 • ~ CHF 300 mio in standard cell culture media for research use • ~ CHF 300 mio in primary cells and cell specific media • ~ CHF 150 mio in transfection • ~ CHF 200 mio – others Lonza serving academic, gover
Slide 71: Bioscience Growth Rates
Bioscience Growth Rates Market1 Lonza2 Estimated Growth 6 – 8% Estimated Growth 10 – 12% CAGR 2020 – 2023 CAGR 2020 – 2023 1 Based on volume 2 Revenue growth 71
Slide 72: Cell & Gene Therapy (CGT)
Cell & Gene Therapy (CGT)
Slide 73: CGT Overview and Lonza Participation
CGT Overview and Lonza Participation Autologous Cell Therapy Allogeneic Cell Therapy Viral Vector Gene Therapy 1 batch = 1 patient 1 batch = multiple patients Viruses are used as “vehicles” to deliver genes into patients to restore functional cells Product examples “Off-the-shelf” model (bulk) “Off-
Slide 74: Unmatched CGT Experience
Unmatched CGT Experience 20+ years of GMP experience; acquisition of Cambrex in 2007 Experience 2 commercial products Process > 120 projects Development Viral Vector 250 and 2,000 L suspension production Production Market Access > 160 CGT customers globally 74
Slide 75: Network and Assets
Network and Assets Geleen/Maastricht, NL Portsmouth, USA • Cell therapy • Cell therapy Tokyo, Japan1 Houston, USA • Cell therapy • Cell therapy • Viral vector • Process development • Largest dedicated Tuas, Singapore cell & gene facility in the world • Cell therapy 1 The facility is owned and operat
Slide 76: Industry Overview
Industry Overview CGT is a laboratory-based science that is growing into an industry 2019 2021 2025 Transformational efficacy of CGT is established Accelerated approval pathways Manufacturing is challenging: manual, unscalable and slow processes 5 products approved; 20+ to be approved; 70 – 90 appro
Slide 77: Key Priorities
Key Priorities Secure long-term sustainable growth Align capacity expansion with growth ambition Improve operational execution and reduce costs Maintain technology leadership Invest in top talents: identify, build and retain 77
Slide 78: CGT Growth Rates
CGT Growth Rates Market1 Lonza2 Estimated Growth >20% Estimated Growth 20 – 25% CAGR 2020 – 2023 CAGR 2020 – 2023 1 Based on volume 2 Revenue growth 78
Slide 79: Personalized Medicine
Personalized Medicine
Slide 80: Challenges in Autologous Cell Therapy
Challenges in Autologous Cell Therapy Manual and complex manufacturing process Develop a system to answer the needs for manufacturing automation, A challenge to scale the manufacturing process scale-up, process control and COGs Variation in starting patient material Need to bring manufacturing close
Slide 81: Meeting the Challenges in Autologous Cell Therapy
Meeting the Challenges in Autologous Cell Therapy Cocoon® system answers the needs for manufacturing scale-out, costs, quality and process control Costs • Space efficiency • Automation • Ability to scale-out Quality • Process control and analytics • Few manual steps Opportunity • Strong pipeline wit
Slide 82: Commercial Potential of Cocoon Platform
Commercial Potential of Cocoon® Platform Model Opportunity Partners / Customers Revenue Sources Cocoon Sales Cocoon and Cassette supply Industry and academic clinical Sales of Cocoons, Cassettes etc. centers CDMO Services CDMO services Industry customers Payment for CDMO services Product royalties D
Slide 83: First Cancer Patient Treated Using Cocoon Platform
First Cancer Patient Treated Using Cocoon® Platform 83
Slide 84: End-to-End Offerings
End-to-End Offerings Agricultural area and thoroughfare 84
Slide 85: End-to-End Offerings
End-to-End Offerings IND Discovery Pre-clinical Clinical Supply Commercial Licensing Bioscience: Media Bioscience: Cells Lonza clinical development and commercial solutions Biologics Small Molecules Cell & Gene Therapy 85
Slide 86: From Gene to IND to Drug Substance and Drug Product
From Gene to IND to Drug Substance and Drug Product Example integration of Cambridge, Slough and Basel / Stein Site receives genes from customers Genes are analyzed Cambridge Recommendations are made from in silico and in vitro analysis, which predicts the UK behavior of the genes. This ensures that
Slide 87: Drug Product Development
Drug Product Development Example integration of Cambridge, Slough and Basel / Stein Manufacturability assessment Vector construction Transfection and Cloning (Rapid Scope) Material supply for formulation Formulation study USP evaluation DSP evaluation ELISA transfer ELISA qualification cGMP Cell Ban
Slide 88: Strong Pipeline Building
Strong Pipeline Building Aerial view of a traffic roundabout. 88
Slide 89: Strong Pipeline Building
Strong Pipeline Building Contracted business in Biologics and Small Molecules is up high double-digit versus 2019, driven by new assets coming on line and strong market demand New customer acquisition across Biologics, Small Molecules and Cell & Gene Therapy continues with >30% increase over 2019 Ne
Slide 90: Investment Projects 2020 – 2023
Investment Projects 2020 – 2023 Car, taxi, and bus traffic on road intersection at night in Hong Kong downtown district,
Slide 91: Selected CAPEX Projects 2020 – 2023 (1/2)
Selected CAPEX Projects 2020 – 2023 (1/2) Site Project / Technology Ibex® Design – pre-clinical to clinical Phase 1 Ibex® Develop – clinical phase 2 to commercial Ibex® Dedicate – fully customizable. 50:50 JV Sanofi-Lonza for large-scale biologics commercial manufacturing Visp, Capacity expansion of
Slide 92: Selected CAPEX Projects 2020 – 2023 (2/2)
Selected CAPEX Projects 2020 – 2023 (2/2) Site Project / Technology Houston, Capacity expansion of Cell Therapy manufacturing USA Hayward, Single-use technologies for clinical and commercial manufacturing of mAb USA Guangzhou, Small-scale clinical and early commercial Mammalian offerings China Nansh
Slide 93: External Reporting
External Reporting Vineyards by the lake - Lavaux, Switzerland 93
Slide 94: Increased Reporting Granularity
Increased Reporting Granularity Principles for external reporting Increase granularity by modality for investors Ensure external reporting fully reflects new divisional structure from 1 January 2021 Focus on key financial metrics by reducing number of Alternative Performance Metrics (APMs) Tighten C
Slide 95: Divisional Performance Indicators
Divisional Performance Indicators Considerations on segment reporting Division Group Sales AER / CER Performance by modality group for Sales, CORE EBITDA/ CORE EBITDA margin and Capex margin Capex Key focus on growth, profitability, liquidity Cash flow – and capital return at Group level ROIC – Elim
Slide 96: Convergence of CORE and Reported Financials
Convergence of CORE and Reported Financials Impact of CORE adjustments on EBITDA Impact of CORE EBITDA adjustments on Lonza profitability1 20182 2019 H1 2020 New CORE Definition Moderate impact of CORE adjustments on financial results in the past – to be EBITDA margin 25.8% 25.8% 28.8% further reduc
Slide 97: Different Financial Profile for Lonza after Divestment of LSI
Different Financial Profile for Lonza after Divestment of LSI Bridge to new reporting structure FY 2019 financial performance overview (Indicative figures) LSI Discontinued Future Lonza vs. current Lonza1 Future Lonza CHF mio Operations2 Lonza Group Sales 5,920 1,693 4,227 Sales growth and margin ac
Slide 98: Behind a Strong Balance Sheet
Behind a Strong Balance Sheet Cash generation and capital allocation priorities Cash Generation Capital Allocation Accelerated CORE EBITDA increase behind strong Organic growth projects sales growth and high operating leverage Selected acquisitions Capex investments required to support long-term gro
Slide 99: New Reporting Structure to be Reflected in H1 2021 Financial Results
New Reporting Structure to be Reflected in H1 2021 Financial Results New reporting structure timeline Reporting timeline FY 2020 results reported in current organizational structure, LSI as January 2021 May / June 2021 July 2021 discontinued operations Update of FY 2020 and H1 2020 Sales, CORE EBITD
Slide 100: Complementary Financial Models by Business
Complementary Financial Models by Business Divisional financial models CDMO Commercial CDMO Clinical Product Business Long-term contracts Revenue profile <2y ~1y (5-10y in Biologics, 5-7y in SM) Main revenue recognition Rendering of services/ Batch release Shipment consideration1 batch release Opera
Slide 101: Portfolio of Attractive Businesses
Portfolio of Attractive Businesses LPBN baseline Capsules & Health Small Molecules Biologics1 Cell & Gene, and Ingredients Bioscience Sales Split ~25% ~15% ~45% ~10% H1 20202 Approx. CORE EBITDA ~35% ~25% ~35% Break-even H1 2020 1 Excluding Licensing 2 Licensing attributable to ~5% of total sales 10
Slide 102: Attractive Financial Trajectory for all Divisions
Attractive Financial Trajectory for all Divisions 3-year projections Capsules & Health Small Molecules Biologics1 Cell & Gene, and Ingredients Bioscience Sales CAGR High-single-digit Low-to-mid single- 2020 - 2023 to Low double-digit Double-digit digit (CER) Low-double-digit CORE EBITDA margin 2023
Slide 103: 2023 Financial Guidance
2023 Financial Guidance Balance short term margin vs. long-term growth ~ 33% – 35% Double-digit CORE EBITDA Double-digit sales growth driven by Biologics, Small Sales Growth Margin Molecules and Cell & Gene Therapy businesses Improved CORE EBITDA margin despite investments in growth projects Capex t
Slide 104: Company Culture
Company Culture Aerial view of Independence monument in Mexico City 104
Slide 105: What Culture Means at Lonza
What Culture Means at Lonza A CORE set of shared values, A force field to unite and galvanize beliefs, habits and behaviors the whole employee community The Company Spirit A touchpoint to guide the behavior Must be earned and built and mindset of individual employees 105
Slide 106: The Values that Define our Culture
The Values that Define our Culture Collaborative based on mutual trust Collaboration Collective contribution to the whole A focus on performance and results Accountability Highly aligned, committed and accountable teams and individuals Pragmatic, motivated and conscientious Focus Market and customer
Slide 107: Building our Culture through Leadership Behaviors
Building our Culture through Leadership Behaviors Champion company values Calm, resilient and consensual approach Predictable, but responsive to change Encourage and embrace new ideas and perspectives Encourage creative and constructive dissidence Grounded and down-to-earth Nurture, develop and grow
Slide 108: Conclusion
Conclusion Julier pass road in Switzerland 108
Slide 109: Our Business Today
Our Business Today Resilience Growth Robust pipeline across our modalities All Divisions show attractive growth levels Large Pharma is increasingly less likely to Contribution to the value chain – following invest in production facilities the molecule from late stage discovery to final drug product
Slide 110: The Lonza Business Blueprint
The Lonza Business Blueprint A fully aligned structure and culture Structure Culture Full divisional P&A Accountability accountability Functional collaboration to Collaboration create one Lonza business End-to-end customer delivery Customer focus Global standards processes Integrity and best practic
Slide 111: Immediate Priorities
Immediate Priorities Single Dedicated Smooth and industry focus focus on seamless and single transformation leadership business and delivery transition identity 111
Slide 112: Q&A
Q&A People crowd motion through the pedestrian crosswalk