Lonza Group Ag · SIX:LONN
Lonza — Investor Day (October 2021)
85 slides from Lonza's investor day presentation, Oct 12, 2021
Slide 1: Enabling a Healthier World
Enabling a Healthier World Lonza Capital Markets Day 2021 12 October 2021, Zurich, Switzerland Ree ass Td en
Slide 2: Reflection on the Business in 2021
Reflection on the Business in 2021
Slide 3: Reflections on the Business in 2021
Reflections on the Business in 2021 CEO perspectives e Specialty Ingredients divestment completed, allowing Lonza to focus as a pure-play CDMO player e Deliver strong sales growth and profitability during a pandemic e Contribution to controlling the pandemic through COVID-19 vaccine drug substance m
Slide 4: Agenda
Agenda Group Overview Our Company Today Strategic Priorities Financial Update Break Highlights and Priorities by Division Biologics Small Molecules Cell & Gene Capsules & Health Ingredients Q&A
Slide 5: > © Oo O kK > c © or E O O i O
> © Oo O kK > c © or E O O i 5 O
Slide 6: Strengthening our Position as a Leading CDMO Player
Strengthening our Position as a Leading CDMO Player Our company in numbers >1,065 250., 355 Molecules in development Capsules produced annually in 2020 in 2020 4.5.. 50.6: Development and manufacturing sites ~20.. Sales (CHF) CORE EBITDA margin Full-Year 2020 Full-Year 2020 CAPEX as % sales Full-Yea
Slide 7: Our Journey Within the Healthcare Industry
Our Journey Within the Healthcare Industry LONZa Transformation into a pure-play CDMO 1980s 1992 1996 2007 Small Biotechnological Mammalian cell ADCs molecules production of cultures and Cell Therapy and APIs fine chemicals monoclonal antibodies Specialty Viral vector ® Water Care Ingredients gene C
Slide 8: Delivering on our Vision to Bring any Therapy to Life
Delivering on our Vision to Bring any Therapy to Life Leading CDMO with breadth, experience and scale Customer relationships Focus on Capabilities quality across modalities LONZa Leading CDMO Regulatory Dedicated ti : expertise Global offerings network LONZG Biologics LONZG Small Molecules LONZG Cel
Slide 9: Established, Well Balanced and Diversified Customer Portfolio
Established, Well Balanced and Diversified Customer Portfolio Global customer base LONZQG Lonza Sales by Customer Location APAC AMER EMEA “Gl ‘Top 30 largest pharma companies by revenue are attributed to large pharma Mid-to-Small Pharma Lonza Sales by Customer Type! 39% Large Pharma Lonza Sales by C
Slide 10: Proximity to Customers Through Broad and Regionalized Network
Proximity to Customers Through Broad and Regionalized Network Global development and manufacturing capabilities LONZa Americas EMEA APAC * Network of 35 sites across all key regions and modalities a bd e + Ability to offer ( } customers access to r ) regional supply e + Expanding presence in Asia to
Slide 11: Strategic Priorities
Strategic Priorities
Slide 12: Focus on Sustainable Value Creation
Focus on Sustainable Value Creation ==“ LONZG@_ Key priorities Growth Investments Operational Excellence Innovation Sustainability Culture and People
Slide 13: Favourable Market Dynamics and Investment Opportunities
1) Favourable Market Dynamics and Investment Opportunities LONZa Divisional market growth outlook 15%+ 11-13% Market J 7-9% growth 4-5% 2-3% Biologics" Small Molecules Cell & Gene Bioscience Capsules & Health Technologies! Ingredients? % share ( in Lonza Cell & Gene \ ivision’: | } Sales? Division’:
Slide 14: Addressing Market Momentum Through Growth Investments
@ Addressing Market Momentum Through Growth Investments Overview of growth projects LONZQG Investments across modalities - 2021 CAPEX anticipated at c.25% of Sales Attractive return profile: IRR 15-20%, ROIC >30% after ramp-up Investments de-risked through anchor customer commitments Jin CHF mio fit
Slide 15: Delivering on Investment Projects
1) Delivering on Investment Projects LONZGa Case study Ibex® Solutions 2017 - 2018 2020 - 2021 2021+ Start of construction Start of operation Investment in a new large-scale mammalian manufacturing facility Manufacturing complex 2 Bons pallets: see ~ * = larna Multiple undisclosed biotech — > SERVIE
Slide 16: Generating Value for our Customers and our Business
(2) Generating Value for our Customers and our Business Operational excellence LONZQG Customer Increasing market demand Focus on continuity of supply through pandemic Need for speed to capitalize on opportunities Continuing to meet customer needs through a focus on: Speed ml Company Increased produc
Slide 17: Focus on Delivering Differentiated Solutions for our Customers
6 Focus on Delivering Differentiated Solutions for our Customers Innovation Highlights LONZQG Biologics Small Molecules Cell & Gene Capsules & Health Ingredients ADC payload manufacturing in Visp (CH) mRNA suite in Visp (CH) Manufacturing capabilities of complex cytotoxins for Antibody Drug Conjugat
Slide 18: Promoting a Responsible Approach
(4) Promoting a Responsible Approach LONZa Sustainability e Resolving legacy issues post Specialty Ingredients divestment e Updating ESG KPIs in line with UN framework to reflect new focus as a CDMO business e ESG targets will be incorporated in people reward and recognition from 2022 Recent Actions
Slide 19: Growing Employee Community Supporting Business Growth
5 WN Growing Employee Community Supporting Business Growth LONZGa People Lonza workforce evolution’ >100 ne = iy +1.7 nationalities Ne y 15 5 14,4 >60 iuages >30% 4 female leaders 11% 5 | 12,7 employees with PhD degree >90% retention rate2 oO 4 2019 H12021 1nd of period FTE H1 2021 for continuing op
Slide 20: Attracting and Retaining Top Talent with Right Environment and Culture
Q Attracting and Retaining Top Talent with Right Environment and Culture _LONZG Culture United by a common vision to e Clear company identity, supported by a vision, Bring Any Therapy To Life purpose and values Four pillars of Lonza culture e Strong employee motivation to develop and deliver life-sa
Slide 21: Group Mid-term Guidance 2024
Group Mid-term Guidance 2024 Strategic priorities supporting our financial forecasts e Current performance is influenced by: e Continuing focus on operational excellence e Talent attraction and retention e Ramp-up and operationalization of new assets and facilities e Long-term success is influenced
Slide 22: Financial Update
Financial Update
Slide 23: Strong Financial Pillars Underpinning Strategy
Strong Financial Pillars Underpinning Strategy Financial perspective Value Creation Model Capital Allocation Capital Structure Mid-Term Guidance
Slide 24: Value Creation Fuelled by Growth Investments and Operational Excellence
Value Creation Fuelled by Growth Investments and Operational Excellence LONZQd Value creation model Base Business e Growth is driven by investments in assets and people Throughput Operational e Investment projects have excellence attractive risk / return profile Operating leverage e Base operations
Slide 25: Accelerating Sales and ROIC Growth
Accelerating Sales and ROIC Growth... LONZa Investment projects Indicative Sales Trajectory Indicative ROIC Trajectory WN Growth projects 2021+ 1) Growth projects 2017-2020 Ml Base + ROIC Base business Growth 2021 2022 2023 2024 2025+ projects Time aie > e Mid-term growth from past CAPEX investments
Slide 26: ..and Accelerating Productivity
..and Accelerating Productivity Disciplined execution LONZQG Base business Production Costs Growth projects Sales & Marketing Overheads R&D Admin Increased yield ++ Right first time Reduced cycle times Short-term - Optimised investments Mid-term + Efficient scale up + Increased contract pipeline Imp
Slide 27: Many Investment Opportunities to Maximize Value
Many Investment Opportunities to Maximize Value Capital allocation framework LONZQG EBITDA and Specialty Ingredients proceeds e Broad portfolio of investment opportunities e Intrinsic component of Lonza business model e Proven track record of delivering high returns with low risk profile e Strong ex
Slide 28: Investments to Capitalize on Increased Demand
Investments to Capitalize on Increased Demand CAPEX LONZQG Lonza CAPEX as % of sales and in CHF Return to high-teens c.25% ~, 19,7% 16.5% ' 2019 2020 2021 2022 “Infrastructure investments, mainly in Visp that are shared across multiple Divisions (as part of Corporate segment) 2Cell & Gene Division i
Slide 29: Projects Backed by Commitments and Pipeline
Projects Backed by Commitments and Pipeline Managing investment risks Investment Risk Mitigation Illustrative Project CAPEX and Sales Levers Profile! e Long contract duration e High level of backlog and pipeline e Anchor customers e Diversified project portfolio e Stepwise, milestone-based investmen
Slide 30: Focused and Disciplined M&A Approach
Focused and Disciplined M&A Approach LONZa M&A priorities and guardrails M&A Priorities M&A Guardrails e Clear strategic fit Tee ep) & Additional short-term capacity Business e Increased regional presence e Buy benchmarked against build edie ie | @ Parenteral commercial fill and finish e Strong valu
Slide 31: Balance Sheet Supports Growth Investments
Balance Sheet Supports Growth Investments LONZa Leverage profile Net Debt / CORE EBITDA' inx 1,7x 1,6x (0,7x) FY 2020 H12021 H1 2021 PF LSI Mid-term ‘Based on Lonza Group figures for FY 2020, H12021; based on Lonza Continuing figurespro forma CHF 4bn Specialty Ingredientsproceeds for H12021 PF LSI;a
Slide 32: Group Mid-term Guidance 2024
Group Mid-term Guidance 2024 LONZG Sales guidance update driven by strong momentum Low Teens CER Cone ceiae across businesses Sales Growth Margin Sustained CORE EBITDA margin improvement Accelerated CAPEX investment reflecting increased demand ROIC accretion reflecting positive sales growth and Doub
Slide 33: Divisional Mid-term Guidance 2024
Divisional Mid-term Guidance 2024 LONZQa Biologics Small Molecules Cell & Gene Capsules & Health Ingredients Sales CAGR High Low to mid ree Mid-teens singe-digit Mid-teens single-digit CORE EBITDA margin 35%+ 30%+ 15%+ ~35% 2024 CORE definition: See appendix 33
Slide 34: Introducing Philippe Deecke
Introducing Philippe Deecke
Slide 35: Coffee Break
Coffee Break
Slide 36: Highlights and Priorities by Division
Highlights and Priorities by Division
Slide 37: Biologics
Biologics
Slide 38: Broad Offering Across Modalities and Development Phases
Broad Offering Across Modalities and Development Phases Business overview LONZQG Bioconjugates Drug Product Services Licensing @ Market: 11- 13% Lonza: a * Broad service offering for biotechs and large pharma Market: 7 - 9% Lonza: aA + Leading capabilities and end-to-end offering across all conjugat
Slide 39: Strong Growth Outlook Supported by Market Trends
Strong Growth Outlook Supported by Market Trends LONZa Market perspectives Key Market Trends Market Growth Outlo: 2020-2025 CAGR e Strong pipeline growth for all modalities 11-13% e Increased outsourcing e Increasing complexity of therapies and vaccines e Biotechs continuing their programs to late p
Slide 40: Expanding Value Chain and Flexible Delivery Model
Expanding Value Chain and Flexible Delivery Model LONZa Strategic priorities Commer- Strengthen end-to-end cu ) ¢ cial DP . Pre- ;ommercial offering ce ci ie ql DP Increase presence across Clinical 2025 modalities and regions 2021 Leverage global capabilities to offer agile delivery model e e e@ -@
Slide 41: Providing Services Across the Product Lifecycle
@Providing Services Across the Product Lifecycle Developing end-to-end offering LONZQG Drug Substance mRNA DPS Regulatory consulting to support IND and BLA @ @ @ @ Oo <) @ e mAb, Linker, payload mAb, Linker, payload 0 O @ @ formulation oO Capabilities build-up a
Slide 42: Offering Across Development Stages, Scales and Technologies
@ Offering Across Development Stages, Scales and Technologies Mammalian highlights LONZQG Our Proposition e Proven track record through 20 years of experience e Integrated offering from preclinical to commercial, including drug substance and drug product e Capability to develop and manufacture compl
Slide 43: Global Network Providing Flexibility for Customers
OGlobal Network Providing Flexibility for Customers LONZa Mammalian highlights Portsmouth, US Slough, UK es a qkL 6x 8x 4x 5x Visp, CH | *. ¢ eo e Hayward, US / e 3x 3x 6x 2x is 20 cece! Porrifio, ES Tuas, SG i i Guangzhou, CN 2x 2x 8 2x 2x Legend: 4x 2x 4x 8 Existing capacity 8 ‘Announced additions
Slide 44: Industry Leading Experience and Complete Offer
Olndustry Leading Experience and Complete Offer Bioconjugates highlights LONZQG Our Proposition e Pioneer with more than 15 years of experience e Supporting the majority of commercially approved ADCs e Integrated offering with capabilities across all ADC elements e Opportunity to extend partnerships
Slide 45: Early Mover in High-growth mRNA CDMO Market
OeEarly Mover in High-growth mRNA CDMO Market MRNA highlights LONZQG e Demonstrated capabilities to deliver quickly, evidenced by production of Spikevax for Moderna and facilitated by Ibex® e Significant market opportunity: 200 mRNA drugs in development! e Lonza well positioned to capitalize on mark
Slide 46: Ibex Solutions video
Slide 47: Strengthening Drug Product Services Capabilities
OStrengthening Drug Product Services Capabilities LONZa Drug product highlights Our Proposition Overview of Facilities e Leading CDMO for sterile drug product development with >300 FTEs, >100 customers and expertise in complex projects 4 ~ abt e Integrated DS and DP offering across all key modalitie
Slide 48: Strengthen Biologics Presence Across Modalities and Regions
@sStrengthen Biologics Presence Across Modalities and Regions LONZa Biologics investment projects Visp, CH Stein, CH Geleen / Maastricht, NL ul Fi gs Aetert HRee . * Large-scale mammalian DS * Additional clinical filling line * Commercial mRNA . ial . Commercial mRNA expansion Basel, CH Hayward, US
Slide 49: Leverage Global Capabilities to Offer Agile Delivery Model
O_Leverage Global Capabilities to Offer Agile Delivery Model LONZa Ability to offer solutions for specific client needs Differentiated CDMO offering... ...enhanced by customized solutions Established global manufacturing network Fully customizable, technology agnostic solution Broad range of modalit
Slide 50: Enhancing Technological Edge Through Innovation
@eEnhancing Technological Edge Through Innovation LONZa R&D priorities aac oe nie Continuous Manufacturing Next-generation Modalities Next gen expression systems for Approach to intensifying Building early-stage, small-scale In-process analytics for real-time scalable and reliable production of proc
Slide 51: Small Molecules
Small Molecules
Slide 52: Differentiated Solutions for Complex Small Molecules Products
Differentiated Solutions for Complex Small Molecules Products LONZa Business overview onzaPoston] crow) [Offering * Development and manufacturing of API and intermediates for a wide range of customers from [ # | Top tier in highly | Market: 4-5% . . Drug Substance | \ fragmented o virtual companies
Slide 53: Increased Growth Expected in Highly Potent API Segment
Increased Growth Expected in Highly Potent API Segment Market perspectives LONZQG Key Market Drivers e Small molecule therapies remain the largest pharmaceuticals market segment (70%) e Fast growth in Highly Potent API segment driven by oncology @ Clinical pipeline increasingly owned by small and em
Slide 54: Strengthening Differentiated Offering Focused on High Value-add Segment
Strengthening Differentiated Offering Focused on High Value-add Segment LONZG Strategic priorities (1) Strengthen early-phase offering (2) Expand capabilities in complex highly-potent products (3) Deploy agile manufacturing solutions @rFocus on innovation - Commercial Clinical DS DS ® - brug substan
Slide 55: Solutions to Accelerate Clinical Development
@ Solutions to Accelerate Clinical Development LONZa Early-phase offering Market Trend Lonza Solution e eomme Propri . . ae S | F prietary solutions for rapid supply of First in I m p I I Human drug substance and drug product >3 months reduction in Phase 1 timeline Reduced complexity of new drug app
Slide 56: Recognized Industry Leader in HPAPI Manufacturing
@Recognized Industry Leader in HPAP! Manufacturing LONZa Capabilities in complex highly potent APIs Lonza Proposition Recent Highlights Large Pharma Complexity e Complex ADC payload manufacturing e Highly potent cytotoxic molecule e Breadth of expertise to respond to almost any chemical synthesis e
Slide 57: Tailor Made Solutions to Address Demand Unpredictability
© Tailor Made Solutions to Address Demand Unpredictability LONZa Agile manufacturing solutions Facility Description e New 2,000m? manufacturing complex in Visp (CH) e CHF 200m investment supported by capital contribution from a long-term customer e Dedicated manufacturing line for ADC payload molecu
Slide 58: Enhancing our Proposition Through Focused Innovation
@ Enhancing our Proposition Through Focused Innovation R&D priorities LONZQG Reduction of Time to Clinic 1 Ag In silico route selection / automation for rapid clinical supply for drug substance Innovative technology to allow spray drying for ‘brick dust’ molecules Predictive formulation models for d
Slide 59: Cell & Gene
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Slide 60: Portfolio of Complementary Strong Businesses
Portfolio of Complementary Strong Businesses LONZa Cell & Gene overview [Growth | —_Profitabiity | Offering Cell & Gene End-market!: 15%+ Break-even * CDMO services across cell and gene Technologies Lonza: aA by Q4 2021 therapy modalities GMP suite End-market!: 7-9% . * Critical raw materials and Bi
Slide 61: Established Partner to Innovators in Cell & Gene Space
Established Partner to Innovators in Cell & Gene Space LONZGa Cell & Gene Technologies value proposition wi, Offering across all a’ cell and gene modalities Strong Viral Vector Offering Market leader in Autologous and Allogeneic cell therapies Integrated Process & assays Regulatory Clinical & commer
Slide 62: Getting Ready to Address Maturing Therapies Pipeline
Getting Ready to Address Maturing Therapies Pipeline LONZGa Capabilities for late-stage and commercial cell & gene therapies Regulatory approval in Feb 2021! Le Houston - now a certified CGT commercial site Capacity expansion * Readily available manufacturing space ¢ Additional shell space for rapid
Slide 63: Continued Strong Market Momentum
Continued Strong Market Momentum LONZGa Market perspectives Market Trends e Strong growth driven by transformational clinical efficacy Mid-twenties e Products moving towards late-stage and commercialization Mid-teens e Complex, un-scalable and costly manufacturing processes e Accelerated approval pa
Slide 64: Strengthening Solutions Offering for Cell & Gene Market
Strengthening Solutions Offering for Cell & Gene Market LONZa Strategic priorities Bioscience Drive profitable growth in =) . & info New modalities: Cell & Gene Technologies IPSCs, exosomes Solutions & a 6 Strengthen Bioscience cocoon Develop offering for Cell & Gene Commercial son ll cee ° ‘ 2025 @
Slide 65: Drive Profitable Growth in Cell & Gene Technologies
@ Drive Profitable Growth in Cell & Gene Technologies LONZa Path to improved profitability Lonza’s Focus on Operational Excellence Maturing Portfolio of Therapies in the Market + Enhance excellence across quality, delivery, * Longer contracts cost * Smaller number of changeovers * Drive process auto
Slide 66: Providing Critical Raw Materials and Instrumentation from Gene to Patient
@ Providing Critical Raw Materials and Instrumentation from Gene to Patient LONZGA Bioscience offering Discovery Solutions Biomanufacturing Solutions =: @-O0-—0—0-0-0 |: gene patient Priority growth area Offering Customers Target Markets Basic Disease Drug Drug Clinical Production research discovery
Slide 67: Addressing Urgent Need for Automation of Autologous Cell Therapy
@ Addressing Urgent Need for Automation of Autologous Cell Therapy LONZQa Cocoon® Platform - Business Opportunity Challenges in Autologous Cell Therapy e Manual and complex manufacturing e Challenge to scale up e Long manufacturing time and logistical complexities e High cost Benefits of Cocoon® Pla
Slide 68: Step-wise Advance Towards Commercialization Ambition
@ Step-wise Advance Towards Commercialization Ambition Cocoon® Platform - highlights of our journey LONZQG Recent Collaborations Q SHEBA © Collaboration to deliver CAR-T cell ND) er ers immunotherapy targeting B-cell malignancies e Three successful clinical outcomes March 2019 e Manufacture TAC-T ce
Slide 69: Cocoon Platform
Cocoon® Platform youtube.com
Slide 70: Synergy Case Across Commercial Activities, Operations and Know-how
@ Synergy Case Across Commercial Activities, Operations and Know-how Cell & Gene synergies LONZQG New Cocoon® Capabilities Leverage internal technologies to drive new capabilities in Cocoon®: Nucleofector® for transfection, media, etc. Q Bioscience End-to-end solutions for Cell & Gene market Cell &
Slide 71: Capsules & Health Ingredients
Capsules & Health Ingredients
Slide 72: Strong Portfolio to Help Customers Deliver Differentiated Products
Strong Portfolio to Help Customers Deliver Differentiated Products LONZa Business overview y », (O) * Comprehensive range of high quality capsules configurable to meet 1 @ customer requirements Capsules * Global manufacturing footprint Market: 2-3% + End-to-end support and integrated value chain Lon
Slide 73: Driving Profitable Growth Through Differentiated Offering and Innovation
Driving Profitable Growth Through Differentiated Offering and Innovation LONZa Strategic priorities value capsules MAS Specialty . . ; bia Specialty Capsules @ Drive value shift towards high @ Capsules Standard Standard Capsules Capsules 6 Expand co-development DFS partnerships to accelerate 2025 cu
Slide 74: Drive Value Shift Towards High Value Capsules
@ Drive Value Shift Towards High Value Capsules LONZa Lonza proposition in innovative capsules + Increasing importance of encapsulation profile + End-consumer trend to healthy living and clean for new drugs in development label products + Demand for high quality and security of supply * Nutrition pr
Slide 75: Expand DFS Partnerships to Accelerate Customer Innovation
© Expand DFS Partnerships to Accelerate Customer Innovation LONZa Facilitating disruptive product launches through Lonza innovation Market Trend! of new nutritional liquid >55% supplements pipeline utilize customized delivery technology Our Proposition e Early engagement with customers at product de
Slide 76: Focus on Innovation
© Focus on Innovation R&D priorities LONZa Hard Capsules Oral Dosage Form Solutions Next Generation Enterics Proprietary capsule with protection against stomach acid Opportunity for novel delivery of complex compounds: therapeutic proteins, antibodies, vaccines, etc. LiCaps® and Lipid multi-particul
Slide 77: Conclusion
Conclusion
Slide 78: Concluding Remarks
Concluding Remarks e New chapter for Lonza as a leading pure-play CDMO focused on delivering best-in-class solutions for the global healthcare industry e Portfolio of divisions with high value offerings and clear strategies to drive above-market growth e Commitment to innovation to deliver different
Slide 79: Coffee Break
Coffee Break
Slide 80: Q&A
Q&A
Slide 81: Appendix
Slide 82: “ “
“ “
Slide 83: Glossary
Slide 84: Glossary
Slide 85: Additional Information and Disclaimer