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Lonza FY22 Profit Up, Lifts Dividend; Sees Higher FY23 Sales, Weak Margin; Plans CHF 2 Bln Buyback

Lonza Group AG (LZAGF.PK), a supplier to the pharmaceutical, healthcare and life-science industries, reported Wednesday that its fiscal 2022 profit climbed 80 percent to 1.22 billion Swiss francs from last year's 677 million francs.

Earnings per share grew 80.6 percent to 16.34 francs from 9.05 francs last year.

Core profit was 1.10 billion francs or 14.71 francs per share, compared to 944 million francs or 12.63 francs per share a year earlier.

Sales grew 15 percent to 6.22 billion francs from 5.50 billion francs last year.

CORE EBITDA was 2 billion francs, up 19.8 percent from last year, and CORE EBITDA margin improved to 32.1 percent from 30.8 percent a year ago.

Looking ahead for fiscal 2023, Lonza expects high single-digit CER sales growth, which reflects strong underlying business performance.

The company also projects CORE EBITDA margin of 30 percent to 31 percent, supported by strong productivity and pricing.

In 2023, Lonza plans to maintain CAPEX at 30 percent of sales. Lonza also confirmed its Mid-Term Guidance 2024.

Further, Lonza's Board of Directors is proposing a dividend of 3.50 francs per share, representing a year-on-year increase of 17 percent. Subject to approval at the upcoming Annual General Meeting, 50 percent of the dividend will be paid out of the capital contribution reserve and will therefore be free from Swiss withholding tax.

Lonza also said it intends to initiate the return of excess capital to shareholders through a share buyback of up to 2 billion francs, based on its strong balance sheet and positive outlook. The buyback is expected to commence in H1 2023 and be completed in H1 2025.

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