The following is a summary of the Lonza Group AG (LZAGY) Q1 2024 Earnings Call Transcript:

Financial Performance:

• Lonza Group reported softer Q1 performance but expects alignment with the year's trajectory in H1.

• The company confirms its 2024 outlook with a CORE EBITDA margin in the high 20s (27% to 29%).

• Lonza has bought back CHF 1.3 billion of shares out of a CHF 2 billion program, intending to finalize the program in H1 2025.

• Large contracts were signed last year, significantly ahead of previous averages, however, Q1 2024 specifics were not provided.

• Despite the Vacaville acquisition, commitment to a BBB+ rating is maintained, reflecting a strong financial position.

Business Progress:

• Growth project advancements noted with construction at the Stein site and upcoming operational start of Mammalian drug substance plants.

• First batches from API Small Molecules facility are set to be produced in Q4 2024.

• The Biologics division shows strength with strong demand and rising biotech funding.

• The Drug Product Services business is growing at a slower pace.

• Sales are strong in the Cell & Gene technology business, sustaining customer interest.

• A cost management program is in place in the Capsules & Health Ingredients division.

• New CEO, Wolfgang Wienand, will commence duties in summer 2024.

• Despite a delay between funding and its impact on business and revenues, a positive impact from the improving funding environment is expected from Q4 2024.

• The Vacaville acquisition's effect on the group margin guidance for 2028 is neutral with more specifics to be provided later.

• Contracting continues to track well with updates on the backlog due by the end of the year.

More details: LONZA GROUP AG UNSP ADR EACH REP 0.1 ORD IR

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