Final hours! Save up to 55% OFF InvestingProCLAIM SALE

Lonza to buy back $2.17 billion worth of shares, backs mid-term growth

Published 01/25/2023, 01:36 AM
Updated 01/25/2023, 02:51 AM
© Reuters. FILE PHOTO: The logo of Swiss contract drug maker Lonza is seen at its headquarters in Basel, Switzerland October 1, 2020. REUTERS/Arnd Wiegmann/File Photo
MRNA
-

By Ludwig Burger and Tristan Chabba

(Reuters) -Lonza on Wednesday said it will buy back shares worth 2 billion Swiss francs ($2.17 billion), despite an expected drop in annual margins, as the Swiss drug contract manufacturer backed its growth prospects for the near future.

Lonza expects its 2023 core earnings before interest, depreciation and amortization, or EBITDA margin, to slip between 30% and 31%, down from 32.1% in 2022, as last year's boost from COVID-19 vaccine manufacturing services waned.

The Basel-based company, however, reiterated a target of 33%-35% for 2024 marginsand announced a 17% rise in its annual dividend.

"We are also pleased to confirm our Mid-Term Guidance 2024, supported by new capacity coming online and robust industry fundamentals," chief executive Pierre-Alain Ruffieux said in a statement.

The firm, which is in a multi-year investment push to assist drug developers as they bet on new therapeutic proteins, as well as cell and gene therapies, also reported an almost 20% jump in core 2022 EBITDA of 2.0 billion Swiss francs, slightly ahead of market expectations.

With a net cash position of 186 million francs, its financial buffer was large enough for building new plants, seeking bolt-on takeover opportunities and the distribution of cash among shareholders, Lonza said.

Some analysts have expressed concerns over the negative impact of higher energy prices, costly domestic production from a recent surge in the value of the Swiss franc, and a decline in income from producing COVID-19 vaccines for Moderna (NASDAQ:MRNA).

© Reuters. FILE PHOTO: A logo is pictured on the Ibex building of Lonza, where the Moderna mRNA coronavirus disease (COVID-19) vaccine will be produced, in Visp, Switzerland, September 29, 2020. REUTERS/Denis Balibouse/File Photo

The Swiss group forecast sales growth in the "high single-digit" adjusted for currency swings, a slow-down from the 15.1% rise it saw last year.

($1 = 0.9223 Swiss francs)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.