SWX:LONN

Stock Analysis Report

Executive Summary

Lonza Group Ltd supplies products and services to the pharmaceutical, biotech, and specialty ingredients markets worldwide.


Snowflake Analysis

Adequate balance sheet with moderate growth potential.


Similar Companies

Share Price & News

How has Lonza Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LONN has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

8.2%

LONN

4.1%

CH Life Sciences

0.3%

CH Market


1 Year Return

39.8%

LONN

41.8%

CH Life Sciences

19.6%

CH Market

Return vs Industry: LONN underperformed the Swiss Life Sciences industry which returned 44% over the past year.

Return vs Market: LONN exceeded the Swiss Market which returned 18.9% over the past year.


Shareholder returns

LONNIndustryMarket
7 Day8.2%4.1%0.3%
30 Day11.1%6.8%1.6%
90 Day13.3%16.4%6.9%
1 Year41.0%39.8%43.2%41.8%25.3%19.6%
3 Year140.4%115.5%96.9%86.8%41.0%24.0%
5 Year317.9%261.8%257.9%231.3%54.0%29.5%

Price Volatility Vs. Market

How volatile is Lonza Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Lonza Group undervalued compared to its fair value and its price relative to the market?

44.58x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: LONN (CHF397.8) is trading above our estimate of fair value (CHF338.42)

Significantly Below Fair Value: LONN is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: LONN is good value based on its PE Ratio (40.4x) compared to the Life Sciences industry average (57.4x).

PE vs Market: LONN is poor value based on its PE Ratio (40.4x) compared to the Swiss market (20.4x).


Price to Earnings Growth Ratio

PEG Ratio: LONN is poor value based on its PEG Ratio (2.6x)


Price to Book Ratio

PB vs Industry: LONN is overvalued based on its PB Ratio (4.3x) compared to the XE Life Sciences industry average (4.1x).


Next Steps

Future Growth

How is Lonza Group forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

16.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LONN's forecast earnings growth (15.7% per year) is above the savings rate (-0.6%).

Earnings vs Market: LONN's earnings (15.7% per year) are forecast to grow faster than the Swiss market (10.4% per year).

High Growth Earnings: LONN's earnings are forecast to grow, but not significantly.

Revenue vs Market: LONN's revenue (7% per year) is forecast to grow faster than the Swiss market (3.6% per year).

High Growth Revenue: LONN's revenue (7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LONN's Return on Equity is forecast to be low in 3 years time (14.2%).


Next Steps

Past Performance

How has Lonza Group performed over the past 5 years?

29.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LONN has high quality earnings.

Growing Profit Margin: LONN's current net profit margins (11.5%) are lower than last year (16.4%).


Past Earnings Growth Analysis

Earnings Trend: LONN's earnings have grown significantly by 29.2% per year over the past 5 years.

Accelerating Growth: LONN's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: LONN had negative earnings growth (-20.3%) over the past year, making it difficult to compare to the Life Sciences industry average (8.8%).


Return on Equity

High ROE: LONN's Return on Equity (10.6%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Lonza Group's financial position?


Financial Position Analysis

Short Term Liabilities: LONN's short term assets (CHF2.9B) exceed its short term liabilities (CHF2.3B).

Long Term Liabilities: LONN's short term assets (CHF2.9B) do not cover its long term liabilities (CHF5.0B).


Debt to Equity History and Analysis

Debt Level: LONN's debt to equity ratio (60.4%) is considered high.

Reducing Debt: LONN's debt to equity ratio has reduced from 118.1% to 60.4% over the past 5 years.

Debt Coverage: LONN's debt is well covered by operating cash flow (21.8%).

Interest Coverage: LONN's interest payments on its debt are well covered by EBIT (7.1x coverage).


Balance Sheet

Inventory Level: LONN has a high level of physical assets or inventory.

Debt Coverage by Assets: LONN's debt is not covered by short term assets (assets are 0.8x debt).


Next Steps

Dividend

What is Lonza Group's current dividend yield, its reliability and sustainability?

0.70%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Lonza Group before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company0.7%marketbottom25%1.7%markettop25%3.4%industryaverage0.7%forecastin3Years0.9%

Current dividend yield vs market & industry

Notable Dividend: LONN's dividend (0.77%) isn’t notable compared to the bottom 25% of dividend payers in the Swiss market (1.73%).

High Dividend: LONN's dividend (0.77%) is low compared to the top 25% of dividend payers in the Swiss market (3.42%).


Stability and Growth of Payments

Stable Dividend: LONN is not paying a notable dividend for the Swiss market, therefore no need to check if payments are stable.

Growing Dividend: LONN is not paying a notable dividend for the Swiss market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: LONN is not paying a notable dividend for the Swiss market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of LONN's dividend in 3 years as they are not forecast to pay a notable one for the Swiss market.


Next Steps

Management

What is the CEO of Lonza Group's salary, the management and board of directors tenure and is there insider trading?

3.3yrs

Average management tenure


CEO

Albert Baehny (67yo)

0.2yrs

Tenure

CHF548,318

Compensation

Mr. Albert M. Baehny has been a Vice Chairman of Investis Holding SA. Mr. Baehny has been an Interim Chief Executive Officer of Lonza Group Ltd. since November 12, 2019. He serves as the Chief Executive Of ...


Management Age and Tenure

3.3yrs

Average Tenure

57yo

Average Age

Experienced Management: LONN's management team is considered experienced (2.5 years average tenure).


Board Age and Tenure

5.8yrs

Average Tenure

61yo

Average Age

Experienced Board: LONN's board of directors are considered experienced (5.8 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Albert Baehny (67yo)

    Chairman & Interim CEO

    • Tenure: 0.2yrs
    • Compensation: CHF548.32k
  • Dominik Werner

    Head of Corporate Communications & VP

    • Tenure: 9.3yrs
  • Joseph Colleluori

    Senior Vice President of Corporate Development

    • Tenure: 14yrs
  • Dirk Oehlers

    Head of Investor Relations

    • Constance Ward

      Head of External Communications

      • Sven Abend (51yo)

        Chief Operating Officer of Specialty Ingredients Segment

        • Tenure: 5.5yrs
      • Rodolfo Savitzky (57yo)

        Chief Financial Officer

        • Tenure: 3.3yrs
      • Jennifer Clancy

        Senior Director of Global Marketing

        • Tenure: 1.8yrs
      • Stefan Stoffel

        Chief Operating Officer of Lonza Pharma Biotech & Nutrition

        • Tenure: 0.8yrs
      • Sanna Fowler

        Head of External Communications


        Board Members

        • Patrick Aebischer (65yo)

          Independent Vice Chairman of the Board

          • Tenure: 5.8yrs
          • Compensation: CHF292.60k
        • Barbara Richmond (59yo)

          Independent Non-Executive Director

          • Tenure: 5.8yrs
          • Compensation: CHF271.07k
        • Christoph Mäder (60yo)

          Lead Independent Director

          • Tenure: 0.2yrs
          • Compensation: CHF282.17k
        • Werner Bauer (69yo)

          Independent Director

          • Tenure: 6.8yrs
          • Compensation: CHF249.99k
        • Albert Baehny (67yo)

          Chairman & Interim CEO

          • Tenure: 0.2yrs
          • Compensation: CHF548.32k
        • Jürgen Steinemann (61yo)

          Independent Director

          • Tenure: 5.8yrs
          • Compensation: CHF239.56k
        • Margot Scheltema (65yo)

          Independent Director

          • Tenure: 7.8yrs
          • Compensation: CHF279.43k
        • Angelic Kohlmann (59yo)

          Independent Director

          • Tenure: 1.7yrs
          • Compensation: CHF188.22k
        • Olivier Verscheure (47yo)

          Independent Director

          • Tenure: 1.7yrs
          • Compensation: CHF188.22k

        Company Information

        Lonza Group Ltd's company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: Lonza Group Ltd
        • Ticker: LONN
        • Exchange: SWX
        • Founded: 1897
        • Industry: Life Sciences Tools and Services
        • Sector: Pharmaceuticals & Biotech
        • Market Cap: CHF29.335b
        • Shares outstanding: 74.25m
        • Website: https://www.lonza.com

        Number of Employees


        Location

        • Lonza Group Ltd
        • Muenchensteinerstrasse 38
        • Basel
        • Basel-Stadt
        • 4002
        • Switzerland

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        LZAG.FOTCPK (Pink Sheets LLC)YesRegistered SharesUSUSDNov 1999
        LONNSWX (SIX Swiss Exchange)YesRegistered SharesCHCHFNov 1999
        LO3DB (Deutsche Boerse AG)YesRegistered SharesDEEURNov 1999
        0QNOLSE (London Stock Exchange)YesRegistered SharesGBCHFNov 1999
        LZAG.YOTCPK (Pink Sheets LLC)UNSPONSORED ADRUSUSDOct 2008

        Biography

        Lonza Group Ltd supplies products and services to the pharmaceutical, biotech, and specialty ingredients markets worldwide. The company operates through two segments, Pharma&Biotech and Specialty Ingredients. Its products and services cover bio research solutions, such as stem cells primary cells and media, cell culture, transfection, exosomes, and assay solutions; electrophoresis of nucleic acids and proteins; primary and stem cell protocols; Hepatocytes/ADMETox solutions for microsomes and primary cell culture applications; and CytoSMART system, a live cell imaging and monitoring system. The company’s products and services also cover pharma and biotech solutions, such as bioprocess systems, drug discovery, endotoxin detection, informatics, bioassay services, and encapsulation technologies; consumer health solutions comprising hygiene, nutrition, personal care, preservation, and capsules and food supplements; and agro ingredients, such as intermediates, molluscicides, specialties, formulation ingredients, crop protection, and animal care solutions. In addition, its products and services include coatings and composites, performance intermediates, composite materials, and functional chemicals; and materials protection, oil and gas, marine antifouling, hydrazine, and wood protection solutions. The company serves pharmaceutical, biotech, consumer health, nutrition, and specialty chemicals and industrial markets. Lonza Group Ltd has a strategic collaboration agreement with Prevail Therapeutics Inc. to develop and manufacture Prevail’s AAV9 gene therapy programs for patients with neurodegenerative diseases. Lonza Group Ltd was founded in 1897 and is headquartered in Basel, Switzerland. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/25 20:59
        End of Day Share Price2020/01/24 00:00
        Earnings2019/06/30
        Annual Earnings2018/12/31


        Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.