By Tristan Veyet and Chiara Holzhaeuser
(Reuters) -Lonza said on Friday Chairman Albert Baehny will step down in May after six years in the job, in a second senior management reshuffle in recent months as the Swiss contract drug manufacturer grapples with the loss of COVID-related business.
The company also reported better-than-expected sales and margins last year and confirmed its 2024 and mid-term margin targets.
Its stock, which lost 23% last year hurt by guidance cuts and concerns over medium-term targets, was up 12%, topping the pan-european STOXX 600 in early trade as it is on track for its best day ever.
Lonza said it had proposed Jean-Marc Huet, current chairman of the supervisory board of Dutch brewer Heineken, as a new chairman.
Before Heineken, Jean-Marc Huet was the former chief financial officer of consumer goods giant Unilever, drug maker Bristol-Myers Squibb and the specialized nutrition company Royal Numico N.V.
Baehny, who has also served as interim CEO since Pierre-Alain Ruffieux quit in September, will continue in that role until a new CEO commences tenure, Lonza said.
The Basel-based company confirmed its core earnings margin target of “high 20s” for this year, roughly in line with expectations, though JP Morgan analysts said there were some concerns Lonza might be forced to walk back on that goal.
Sales at constant exchange rates jumped 10.9% last year to 6.7 billion Swiss francs ($7.72 billion), driven by its Biologics and Small Molecules divisions, beating the 8.2% growth expected by analysts.
This year, however, it expects flat sales due to lost revenue from vaccine maker Moderna, which canceled an mRNA COVID-19 vaccine manufacturing contract on lack of demand.
It furthermore confirmed its mid-term guidance that includes a 32–34% core EBITDA margin target.
Its core earnings before interest, taxes, depreciation and amortisation (EBITDA) margin came in at 29.8% last year, just above the 29.2% expected by analysts in a Vara Research consensus.
Lonza is to propose at the annual general meeting a dividend of 4.00 Swiss francs per share, below 4.15 Swiss francs forecast in a Vara poll.
“As a growth company, Lonza will have a difficult 2024, as it will not grow. Good is, that a new Chairman can drive Lonza into calmer waters,” Vontobel writes in a note.
($1 = 0.8674 Swiss francs)
(Reporting by Tristan Veyet and Chiara Holzhaeuser; editing by Jacqueline Wong, Jason Neely and Tomasz Janowski)
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