Lonza ((LZAGY)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Lonza painted a picture of strong financial performance and growth, particularly in the Contract Development and Manufacturing Organization (CDMO) segment. The company reported impressive results, leading to an upgraded guidance for the fiscal year. Despite facing challenges in the Specialized Modalities segment and currency fluctuations, the overall sentiment was robust and positive.
Strong Overall Performance
Lonza delivered CHF 3.6 billion in sales, marking a 19% constant exchange rate (CER) sales growth compared to 2024. This achievement resulted in a core EBITDA of CHF 1.1 billion and a margin growth to 29.6%, underscoring the company’s strong overall performance.
CDMO Business Growth
Excluding Capsules and Health Ingredients (CHI), the CDMO business experienced a remarkable 23.1% sales growth. This growth led to a core EBITDA margin slightly above 30%, highlighting the segment’s significant contribution to Lonza’s financial success.
Upgraded CDMO Outlook
In light of the strong performance, Lonza has raised its guidance for the CDMO business, projecting a 20% to 21% CER sales growth and a core EBITDA margin of 30% to 31% for the full year 2025. This optimistic outlook reflects the company’s confidence in sustaining its growth momentum.
Integrated Biologics Success
The Integrated Biologics segment reported a robust CER sales growth of almost 40%, driven by the Vacaville acquisition and high demand for assets. This success underscores the strategic importance of biologics in Lonza’s portfolio.
Advanced Synthesis Improvement
The Advanced Synthesis segment achieved a strong CER sales growth of above 18%, with a core EBITDA margin of 40.3%, representing a significant increase of 6.9 percentage points compared to the first half of 2024.
Capsules and Health Ingredients Recovery
While the Capsules and Health Ingredients segment experienced flat sales growth versus the first half of 2024, it saw a core EBITDA margin increase to 26.2%, indicating a recovery in profitability.
Specialized Modalities Decline
The Specialized Modalities segment faced challenges, with CER sales declining by 9.2% and a core EBITDA margin decrease to 17.3%, a drop of 6.1 percentage points compared to the first half of 2024.
Currency Headwinds
Currency fluctuations posed a challenge, with group sales affected by a negative 2% currency headwind due to the appreciation of the Swiss franc against the U.S. dollar.
High CapEx Intensity
Lonza reported a high capital expenditure (CapEx) intensity, with CHF 672 million spent in the first half of the year, representing 19% of sales. This reflects the company’s ongoing investments in growth and infrastructure.
Forward-Looking Guidance
During the Half Year Results 2025 Investor and Analyst Conference Call, CEO Wolfgang Wienand announced that Lonza has achieved a robust performance in the first half of 2025. The company reported CHF 3.6 billion in sales, translating into a 19% CER sales growth compared to 2024. With a positive outlook for the second half of the year, Lonza has raised its guidance for the full year 2025, projecting a 20% to 21% CER sales growth and a core EBITDA margin of 30% to 31% for the CDMO business.
In summary, Lonza’s earnings call highlighted a strong financial performance, particularly in the CDMO segment, leading to an optimistic outlook for the remainder of the year. Despite challenges in certain areas, the overall sentiment was positive, with significant achievements and strategic advancements positioning the company for continued success.