The following is a summary of the Lonza Group AG (LZAGY) Q4 2023 Earnings Call Transcript:

Financial Performance:

• Lonza reported group sales of CHF 6.7 billion in 2023, showing a growth of 10.9%.

• Profits stood at CHF 655 million in 2023, declining by 46% year-on-year, primarily due to divestment gains and impairment losses.

• The core EBITDA remained steady at CHF 2 billion, resulting in a margin of 29.8%.

• The free cash flow for 2023 was CHF 329 million, backed by net working capital improvements and CapEx prioritization.

• Net debt rose to CHF 1.1 billion due to investments in organic growth and the share buyback program.

• A proposed dividend increase of 14% to CHF 4 per share is planned for 2023.

Business Progress:

• The company observed strong performance in Biologics and Small Molecules divisions, which generated over 70% of the revenue with a margin exceeding 30% each.

• About 130 new CDMO customers and 350 new clinical and commercial programs were signed in 2023, indicating significant market operations progress.

• The company foresees high capacity utilization over the next five years, led by sustained manufacturing services demand and successful Phase I drug candidates.

• Sustainability efforts are being bolstered, with reductions in emission, energy, and water intensity accomplished.

• For 2024, the company expects high single-digit underlying sales growth and a core EBITDA margin in the high 20s (27% - 29%), driven by sturdy commercial CDMO business performance and anticipated recovery in Capsules & Health Ingredients.

• There are expansion plans for growth investments in Europe and Americas, and an improved core EBITDA margin within the 32% - 33% range by 2028 is projected.

• Jean-Marc Hyvert is proposed to be the new Chairman of Lonza, as decided at the forthcoming AGM in May.

More detailed: LONZA GROUP AG UNSP ADR EACH REP 0.1 ORD IR

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