Lonza’s Strategic Pivot Fuels Robust Growth and Shareholder Returns

Lonza US54338V1017

The Swiss pharmaceutical supplier Lonza has reported a strong performance for the 2025 fiscal year, setting ambitious new benchmarks for the period ahead. In a sector where many peers face volatile demand, the company's strategic acquisitions and solid order book have provided significant momentum. However, maintaining this pace through 2026 may present challenges, particularly from adverse currency movements.

Key Financial Highlights:

• 2025 Revenue: CHF 6.5 billion (representing 21.7% growth on a constant currency basis)
• Core EBITDA: CHF 2.1 billion (Margin: 31.6%)
• Dividend: CHF 5.00 per share (a 25% increase year-over-year)
• 2026 Forecast: Revenue growth of 11–12% anticipated, with margins expected to exceed 32%

Lonza's transformation into a pure-play Contract Development and Manufacturing Organization (CDMO) is yielding clear financial benefits. The company's strategic shift is underscored by the ongoing sale of its Capsules & Health Ingredients division, which is now reported as a discontinued operation. Internally, the launch of the "One Lonza" operating model in April 2025 aims to enhance productivity by consolidating activities around three core platforms.

A major contributor to the year's impressive revenue leap was the faster-than-expected integration of the newly acquired biologics manufacturing site in Vacaville. This facility has already secured its fifth major commercial contract. Complementing this, Lonza allocated approximately CHF 1.3 billion last year to expand its capabilities in cell and gene therapies as well as bioconjugates.

This focused investment strategy has directly improved profitability, with the Core EBITDA margin of 31.6% surpassing the company's own targets. Shareholders are set to benefit from this success through a proposed 25% hike in the dividend to CHF 5.00 per share.

Confident Guidance Tempered by Currency Headwinds

Looking forward to 2026, management has expressed confidence, projecting constant-currency revenue growth in the range of 11% to 12%. The operational margin is targeted to break through the 32% level. A significant factor weighing on these results will be foreign exchange, with the weak U.S. dollar forecast to negatively impact both reported sales and operating profit by approximately 2%.

The company anticipates stronger business momentum in the first half of the year, with growth potentially moderating in the second six-month period. The operational execution of the planned division sale and the ability to sustain high margins in the face of currency losses will be critical for share price performance in the current year. Management's forecast for particularly high dynamism in the first half of 2026 now sets a standard the company must deliver against.