- Sales and profits above expectations in the first half of the year
- The company raises its sales forecasts for the entire year
- Plans to increase investments during H2 to increase production
ZURICH, July 23 (Reuters) – Swiss contract drug maker Lonza (LONN.S) on Friday raised its outlook for 2021 after booming COVID-19 vaccine ingredient manufacturing activities and strong growth elsewhere helped him exceed analysts’ expectations in the first half of the year.
The company, which has stepped up deals with vaccine producer Moderna (MRNA.O), said sales to the U.S. company exceeded expectations, although it was also seeing widespread improvement in sales of non-coronavirus products. .
âThe previous year we provided an estimate of what we expected from Moderna’s sales for 2021â¦ the number is much higher considering our ability to increase production from our existing facilities,â the director told reporters. financier Rodolfo Savitzky.
After a 13.3% increase in sales in the first half of 2021, the Basel-based company said it now expects sales to increase at constant exchange rates towards the mid-teens percentage level. This year.
His previous forecast had been sales growth in the low double-digit range.
Savitsky said that while increased sales of COVID-19-related products played a role in the upgrade, their impact should not be overstated.
âCovid (the products) still represent a relatively small share of our overall sales,â he said. “It is having an impact, but we are seeing strong momentum across the portfolio.”
For the first half of the year, Lonza achieved sales of 2.54 billion Swiss francs ($ 2.76 billion), beating analysts’ forecasts of 2.47 billion francs.
Basic earnings before interest, taxes, depreciation and amortization (EBITDA) rose 13% to 847 million francs, also exceeding the 787 million francs forecast in an analyst survey conducted by the company.
“Overall a good set of numbers,” said Bank Vontobel analyst Sibylle Bischofberger.
Lonza stock, which topped the blue-chip Swiss market index by rising 19.4% in 2021, gained 2.1% at the start of the session.
The company is responding to growing demand by increasing its investments to CHF 474 million in the first half of the year.
More spending was expected to arrive in the second half of the year, bringing the 2021 investment level to 25% of sales, from a usual level of around 20%.
Among the investments is the addition of three additional production lines at the company’s plant in Visp, Switzerland, while another line has been added at its site in Geleen, The Netherlands.
Lonza also hired 1,000 more workers in the first half of the year and planned to hire 2,000 more in the second half to deal with production bottlenecks.
“We have solid growth,” said Managing Director Pierre-Alain Ruffieux. “We need to be able to meet our manufacturing obligations.”
($ 1 = 0.9200 Swiss francs)
Reporting by John Revill; Editing by Shailesh Kuber, Keith Weir and Kim Coghill
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