Lonza Reports Record Profit Growth of 39%

The performance is on track due to the strengthened portfolio of businesses Bioscience and the extension of the custom manufacturing model to the joint development of product pipelines forge a deeper integration with customers The Board of Directors is proposing a cash dividend of CHF 1.75 per share.

27/01/09 Lonza has reported record EBIT of CHF 441 million (+8%; +12% on a comparable basis). Net income growth of 39% was reported, further strengthening the investment-grade balance sheet and supporting the ability to generate further sustainable growth. The performance is on track due to the strengthened portfolio of businesses Bioscience and the extension of the custom manufacturing model to the joint development of product pipelines forge a deeper integration with customers The Board of Directors is proposing a cash dividend of CHF 1.75 per share.

Lonza’s mix of life-science products and services contributed to a balanced performance across its businesses. Sales for the full year grew by 2.3% to CHF 2 937 million (+10.4% in local currencies, based on continuing operations). Cost and efficiency improvements achieved through operational excellence programs counteracted most of the effects of the significant negative currency, raw material and customer financing headwinds. EBIT margins increased by 0.8 percentage points to 15.0% of sales. Along with a low underlying tax rate, the book gain recorded on the sale of the remaining stake in Polynt S.p.A. led to an increase in net income of 39.2% to CHF 419 million. Gearing remained stable at 76% by year-end, despite the acquisition of amaxa and high capital expenditure. The strong balance sheet and conservative financing further improve flexibility and the ability to generate sustainable growth, while minimizing the effects of the ongoing financial crisis.

All strategic projects are on track. With sound execution of its long-term plan, Lonza continues to drive growth initiatives in the form of strategic investments and organic growth projects. The recently signed agreement to develop a selected number of biosimilars represents a new strategic initiative for the development of the group. Based on visibility of contracts, projects and economic conditions, Lonza expects:

• EBIT growth in the mid to high teens on average until 2013.

• Project pipeline fully aligned to support growth expectations – 80% of capacity expansion committed.