Lonza, the Swiss pharmaceutical and biotech company, has revised its 2023 guidance due to lower earnings, despite reporting higher sales in the first half of this year.
In the first half of the year, Lonza witnessed a 3.2% increase in sales, reaching 3.08 billion Swiss francs ($3.55 billion). However, earnings before interest, taxes, depreciation, and amortization (EBITDA) experienced a decline of 3.7%, totaling CHF899 million. The EBITDA margin stood at 29.2%. Lonza’s core EBITDA also dropped by 6.6% to CHF922 million, with a core EBITDA margin of 30%, compared to 33.1% the previous year.
Due to current market dynamics negatively impacting demand for early-stage services and nutraceutical capsules, Lonza has revised its 2023 sales targets. The company now anticipates mid-to-high single-digit growth at constant exchange rates, compared to the previous target of high single-digit sales growth. Additionally, Lonza’s revised core EBITDA margin outlook for 2023 is between 28% and 29%, in contrast to the previous target of between 30% and 31%.
Lonza reaffirmed its mid-term sales guidance; however, it adjusted its mid-term margin outlook. The company now expects the mid-term margin to range between 31% and 33%, whereas the previous range was 33% to 35%.
Lonza’s decision to downgrade its 2023 guidance reflects the challenges posed by market dynamics, emphasizing the need for adaptive strategies in response to changing industry demands.