Lonza posts 2024 results under new structure, led by biologics growth

Lonza Group has released updated 2024 financial results reflecting its new "One Lonza" operating model, reporting total net sales of CHF 6.57 billion and core EBITDA of CHF 1.91 billion, with a group margin of 29.0%. Integrated Biologics led platform performance with CHF 2.88 billion in sales and a 36.2% EBITDA margin, while Capsules & Health Ingredients generated CHF 1.05 billion in sales. These figures will serve as a baseline for the half-year 2025 report due July 23.

Analysis

Lonza Group has provided updated comparative financial results for 2024, reflecting its new “One Lonza” operating model set to be effective from April 1, 2025. This restructuring establishes three core Contract Development and Manufacturing Organization (CDMO) platforms: Integrated Biologics, Advanced Synthesis, and Specialized Modalities, while the Capsules & Health Ingredients unit remains unchanged. Under this new framework, Lonza reported total 2024 net sales of CHF 6.57 billion, achieving a core EBITDA of CHF 1.91 billion and a group margin of 29.0%. The Integrated Biologics platform emerged as the primary driver of performance, contributing CHF 2.88 billion in sales with a notable EBITDA margin of 36.2%. Advanced Synthesis recorded CHF 1.37 billion in revenue, and Specialized Modalities CHF 1.10 billion. Capital expenditures for 2024 amounted to CHF 1.42 billion, with Integrated Biologics receiving the largest portion at CHF 607 million, indicating strategic investment in this high-performing segment. The Capsules & Health Ingredients unit generated CHF 1.05 billion in sales and CHF 256 million in core EBITDA. For the first half of 2024, Lonza's restated net sales were CHF 3.06 billion with core EBITDA of CHF 893 million, yielding a margin of 29.2%; Integrated Biologics again led with CHF 1.34 billion in sales and a 35.5% margin. These figures establish a new baseline for evaluating Lonza's performance, particularly ahead of its half-year 2025 report scheduled for July 23. An external AI-driven analysis by InvestingPro suggests that LONN may not be among the most undervalued stocks, introducing a point of consideration regarding its current market valuation.

Key Decisions for Investors

• Investors should closely monitor the future performance contributions from the newly defined Integrated Biologics segment, given its current strong margins and significant capital allocation, as this will be key to Lonza's growth under the "One Lonza" model.
• Utilize the restated 2024 financials, particularly the CHF 6.57 billion net sales and 29.0% group EBITDA margin, as the primary benchmark for assessing the upcoming H1 2025 results and the efficacy of the new operating structure.
• Consider the InvestingPro AI assessment, which suggests Lonza may not be significantly undervalued, as a factor in their valuation analysis, warranting careful due diligence before initiating or expanding positions.