Free Trial

Lonza (NR, BBB+) uses $1.8b cash on facility

  • Lonza {LONN SW Equity} (NR, BBB+) will acquire a manufacturing facility in the US from Roche {ROG SW Equity} (AA, Aa2, AA) for $1.2b cash.
  • Its guiding to another CHF500m (~$560m) in capex to upgrade the facility, and sees it accretive - its boosted mid-term guidance ('24-'28) from (constant currency) 11-13% CAGR to 12-15%.
  • Other medium-term guidance is left unch; core EBITDA margin of 32-34% in 2028, double digit ROIC in '28, capex (25% of sales) & net leverage of 1.5-2* with commitment to IG ratings.
  • It was guiding to flat constant currency sales growth for FY24 at FY23 results in late Jan, & increased dividend pay-out to 44% (~CFH 298m) - not alarming given it has headroom on leverage (0.5* leverage/CHF922m net debt on 2b of EBITDA vs. a 1.5*-2* target). It has a ongoing CHF 2b buyback program, 1b used last year.
  • Cash lines for both are unch this morning, credit neg on size of cash use here for Lonza, equities taking it well on guidance lift.
There will be a investor session with Q&A today at 1pm London/9am ET;

To read the full story



MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.