Lonza : Full-Year 2022 Results Report

Enabling a Healthier World

Full-Year Report

2022

Full-Year Report 2022

Contents

CEO Update	4
Financial Highlights	5
Biologics	6
Small Molecules	7
Cell & Gene	8
Capsules & Health Ingredients	9
Corporate	10
Outlook 2023 and Mid-Term Guidance 2024	11
Dividend Proposed	11
Share Buyback Announced	11
Notes
Condensed Financial Statements	12
Selected Explanatory Notes	16
Forward-Looking Statements	20
Disclaimer	20

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Full-Year Report 2022

Lonza delivers strong Full-Year performance, with CHF 6.2 billion sales and 15.1% CER1 sales growth

CHF 2.0 billion CORE EBITDA resulting in a margin of 32.1%

Growth investment continues with 2022 CAPEX reaching 30% of sales

Outlook 2023: high single-digit CER sales growth and CORE EBITDA margin of 30-31%

Mid-Term Guidance 2024 confirmed

Proposed dividend increase of 17% to

CHF 3.50 per share

Share buyback program of up to CHF 2 billion

announced, starting in 2023

1 Sales growth figures, expressed as a percentage (%), are at Constant Exchange Rate (CER)

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Full-Year Report 2022

CEO Update

Dear Stakeholders,

2022 was another year of strong performance for Lonza, as the business delivered on its Outlook despite a challenging macroeconomic environment. Our resilient performance was supported by sustained market demand and a broad and diversified customer base. The business also accelerated its CAPEX investment program to support long-term growth and success.

Full-Year sales reached CHF 6.2 billion, with sales growth of 15.1% CER and CHF 2.0 billion CORE EBITDA, resulting in a margin of 32.1%. These results were driven by strong underlying business performance, and supported by a COVID-related sales peak in 2022.

In line with Outlook, CAPEX reached 30% of sales. Our investment program remains focused on sustainable growth supported by attractive margins and low levels of risk. It will enable us to capture market demand by supporting our customers' complex needs.

In 2022, there have been investments across modalities in all four divisions. A landmark growth project was announced in July, with a ~CHF 500 million investment in a new large-scale commercial drug product facility in Stein (CH). Once operational, the facility will complete our Biologics value chain to support an integrated end-to-end offering to our customers.

Our Board of Directors will propose a dividend increase to CHF 3.50 per share, representing a year-on-year increase of 17% or CHF 0.50. Furthermore, our strong balance sheet and positive outlook enable us to initiate a share buyback program of up to CHF 2 billion. This will enable us to return excess capital to shareholders at a time when our stock valuation is attractive for purchase. We remain committed to maintaining our strong investment grade rating. The share buyback does not impact our capability to invest in organic growth and bolt-on M&A.

Alongside our financial performance, we also remain focused on our environmental and social responsibilities. We believe that how we work is just as important as what we achieve. 2022 was the first year in which ESG targets were incorporated into our executive and employee remuneration policies, to support a collective commitment to responsible business across our global network. We have continued to make progress in reducing our energy, water and GHG emission intensity. We were also proud to be recognized by the Ethisphere Institute as one of the world's most ethical companies for the second year.

Looking towards 2023, we provide an Outlook of high single-digit sales growth, reflecting our strong underlying business performance, balanced by a headwind from the COVID-related sales peak in 2022. We provide a CORE EBITDA margin Outlook of 30 to 31%. We will also continue to invest for the future, with CAPEX remaining at 30% of sales.

We are pleased to confirm our 2024 Mid-Term Guidance. More widely, we will continue to build on our position as a leading CDMO player to capture value in the healthcare market.

Finally, 2022 marked an important milestone for Lonza, as we celebrated the 125th anniversary of our foundation. Over 125 years, Lonza's success has been driven by our capacity to adapt to a changing world and serve our customers' most pressing needs. These characteristics continue to define our success as much in 2023 as they did at our foundation in 1897.

As I close, I would like to take this opportunity to thank our customers for their loyalty, our business partners for their collaboration and our investors for their trust. I would also like to thank our global colleague community, which is responsible for delivering our performance and ensuring we continue to fulfil our purpose of enabling a healthier world.

Sincerely,

Pierre-Alain Ruffieux

Chief Executive Officer

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Full-Year Report 2022

Financial Highlights (Unaudited) for the Twelve Months Ended 31 December1

IFRS Results

Million CHF	2022	Change	2021
		in %

Sales		6'223	15.0	5'409
EBIT		1'541	81.1	851
Margin in %		24.8		15.7
EBITDA		2'139	56.7	1'365
Margin in %		34.4		25.2
Profit for the period		1'218	79.9	677
EPS basic	(CHF)	16.37	80.3	9.08
EPS diluted	(CHF)	16.34	80.6	9.05

CORE Earnings2

Million CHF	2022	Change	2021
		in %

CORE EBITDA		1'995	19.8	1'665
Margin in %		32.1		30.8
CORE Profit for the period		1'097	16.2	944
CORE EPS basic	(CHF)	14.74	16.3	12.67
CORE EPS diluted	(CHF)	14.71	16.5	12.63
ROIC in %		11.4	6.5	10.7

Other Performance Measures

Million CHF	2022	Change	2021
		in %
Operational free cash flow (before acquisitions and divestitures)	(465)	(216.5)	399
Operational free cash flow	(237)	(150.3)	471
Capital expenditures (CAPEX)	1'872	44.1	1'299
Net debt / (net cash)	(186)	(80.6)	(958)
Debt - equity ratio	(0.0)	(88.9)	(0.1)
Net Debt / CORE EBITDA ratio	(0.1)	(83.8)	(0.6)
Number of employees (Full-Time Equivalent)	17'494	7.9	16'218

1. All financial information for financial year 2022 is unaudited. All financial information for financial year 2021 is based on "continuing operations", i.e. exclusive of the Specialty Ingredients business (that was sold on 1 July 2021 and therefore reported as discontinued operations in 2021)
2. For Lonza's definition of CORE results, also refer to the Alternative Performance Measures Brochure published in conjunction with this Full-Year Report

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