Lonza : Half-Year Results Report

Enabling a Healthier World

Half-Year Report

2022

Half-Year Report 2022

Contents

CEO Update	4
Financial Highlights	5
Biologics	6
Small Molecules	7
Cell & Gene	8
Capsules & Health Ingredients	9
Discontinued Operations	10
Corporate	10
2022 Outlook and 2024 Mid-Term Guidance	11
Notes
Condensed Financial Statements	12
Selected Explanatory Notes	15
Forward-Looking Statements	22
Disclaimer	22

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Half-Year Report 2022

Lonza delivers solid H1 performance, with CHF 3 billion sales and 16.8% CER1 growth

CHF 987 million CORE EBITDA resulting in a margin of 33.1%

Landmark ~CHF 500 million investment in Fill & Finish to complete the value chain in Biologics (part of planned CAPEX)

Group Outlook 2022 confirmed at

low to mid-teens CER sales growth and

CORE EBITDA margin improvement

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

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Half-Year Report 2022

CEO Update

Dear Stakeholders,

In the First Half of 2022, we have redoubled our focus on operational excellence, while continuing to navigate the challenges of an uncertain macroeconomic context.

With the dedication and hard work of our global employee community, we have continued to manage our supply chain and rising inflation levels to deliver a solid financial performance for the First Half. Assuming no unexpected adverse events, we reconfirm our Outlook 2022 at low to mid-teens CER sales growth, and CORE EBITDA margin improvement in line with Mid-Term Guidance 2024.

While there are some signs of economic uncertainty, the healthcare industry provides essential goods and services, meaning it is less sensitive to major impacts from macroeconomic fluctuations. In this context, we see continuing demand for CDMO services with specific interest in flexible business models and end-to-end offerings.

To capture this industry demand, we have recently announced a ~CHF 500 million investment in a new large-scale commercial drug product fill and finish facility in Stein (CH). This strategic investment will allow us to complete our Biologics value chain, enabling our customers to benefit from an integrated end-to-end offering.

More widely, we have continued to invest across divisions to expand capacity. Our Biologics business has brought online additional commercial mRNA capacity in Visp (CH), and our Capsules and Health Ingredients (CHI) division has added new capsule production lines as we make progress towards delivering an annualized capsule capacity of 260 billion by the end of 2022. We have also successfully executed capacity expansions for our Small Molecules business in Nansha (CN), Bend (US) and Tampa (US).

Our approach to long-term value creation is supported by our ESG targets, which have been incorporated into our global employee and executive renumeration policies. This ensures that our ESG commitments are a shared responsibility for all our people across our global network. More than 100 ESG projects are under way at individual sites. Specifically, at our site in Visp (CH), we have completed an investment to recycle water for steam production which will enable us to achieve a 20% annualized reduction in water usage across our Visp operations.

At the beginning of the year, I shared our key priorities for 2022. These remain as relevant to the Second Half as to the First. We will continue to focus on delivering our financial targets and execute on our planned growth investments. We will also maintain our focus on innovation and differentiation while advancing our ESG agenda to drive sustainable value. In view of the current macroeconomic context, we will also continue to proactively manage challenges including inflation and potential supply chain disruptions.

I would like to take this chance to thank Claude Dartigue- longue and Stefan Stoffel who have confirmed that they will retire from Lonza's Executive Committee (EC) this year. I would also like to welcome our two new EC members, Christian Seufert who joins as President, Capsules and Health Ingredients and Maria Soler Nunez who will come on board as our new Head, Group Operations.

Finally, I would like to thank our global employee communi- ty. With their ongoing support, commitment and collabora- tion, we continue to fulfill our purpose of enabling a healthier world.

Sincerely,

Pierre-Alain Ruffieux

Chief Executive Officer

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Half-Year Report 2022

Financial Highlights for the Six Months Ended 30 June

IFRS Results (Continuing Operations1)

Million CHF	2022	Change	2021
		in %

Sales		2'982	17.3	2'542
EBIT		645	103.5	317
Margin in %		21.6		12.5
EBITDA		934	67.4	558
Margin in %		31.3		22.0
Profit for the period		498	89.4	263
EPS basic	(CHF)	6.68	90.3	3.51
EPS diluted	(CHF)	6.67	90.6	3.50

CORE Earnings2 (Continuing Operations1)

Million CHF		2022	Change	2021
			in %
CORE EBITDA		987	16.5	847
Margin in %		33.1		33.3
CORE EPS basic	(CHF)	7.29	4.3	6.99
CORE EPS diluted	(CHF)	7.28	4.4	6.97
ROIC in %		11.7	1.7	11.5

Other Performance Measures (Continuing Operations1)

Million CHF	2022	Change	2021
		in %
Operational free cash flow (before acquisitions and divestitures)	(331)	N/A	243
Operational free cash flow	(335)	N/A	363
Capital expenditures (CAPEX)	841	77.4	474
Number of employees (Full-Time Equivalent)	17'154	16.9	14'678

Other Performance Measures (Lonza Group incl. Discontinued Operations)

Million CHF	2022	Change	2021
		in %
Operational free cash flow (before acquisitions and divestitures)	(337)	N/A	256
Operational free cash flow	(341)	N/A	376
				3
Net debt / (net cash)	(221)	N/A	(958)
				3
Debt - equity ratio	(0.02)	N/A	(0.09)
				3,4
Net Debt / CORE EBITDA ratio	(0.12)	N/A	(0.58)

1. All financial information referring to "continuing operations" are exclusive of the Specialty Ingredients business, that was sold on 1 July 2021 and therefore reported as discontinued operations
2. The definition of CORE results are described in the Alternative Performance Measures Brochure published in conjunc- tion with this Half-Year Report 2022
3. Net debt and related ratios are based on reported financial results for total Group as of 31 December 2021
4. Net debt/CORE EBITDA is calculated based on the CORE EBITDA of the last twelve months. For 2021, this ratio is presented on continuing operations basis. This ratio calculated on Total Lonza Group would result in a ratio of (0.53)

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