Pharmaceuticals Lonza divests its capsules and nutritional supplements business

The pharmaceutical supplier Lonza has announced new medium-term targets ahead of an investor day. The capsules and nutritional supplements business (Capsules & Health) is to be discontinued.

Lonza is concentrating on its core business as a contract manufacturer (CDMO), the contender announced on Thursday. The food capsules and supplements business, on the other hand, will be discontinued in due course and in the best interests of shareholders and stakeholders. The company will determine the next steps next year.

There had been speculation in the market for some time about a possible sale of the Capsules & Health Ingredients (CHI) business because it would dilute Lonza's growth profile. However, it was repeatedly emphasized by the company's management as a solid cash flow generator.

Outlook for 2024 confirmed

Meanwhile, the outlook for the full year 2024 was confirmed: A flat sales performance in local currencies and an operating profit margin (core EBITDA) in the "high 20 percent range". In other words, in the region of 27 to 29 percent, as Lonza specified.

Excluding CHI, Lonza expects sales growth of almost 20 percent in 2025, including a sales contribution of around half a billion Swiss francs from the acquisition of the Vacaville site in California. The margin will approach the 30 percent mark.

For the period after 2025, Lonza expects organic growth in the low teens on average in the remaining CDMO business and margin growth above sales growth.

The forecasts are consistent with the previous medium-term financial targets for 2028, the company said.

At the investor event, which will take place this afternoon in Basel, CEO Wolfgang Wienand will provide a deeper insight into his vision and strategic priorities. Wienand had just joined Lonza in the summer.