Lonza Group AG

And thanks to all of you for joining our call today. Before we start the presentation, let me share with you our disclaimer regarding forward-looking statements made by us. This is also available in the online version of our presentation for you to download and read in your own time, I guess. Before we move to the details of our half-year results, let's briefly look at the agenda that we prepared for you today. I will start with an overview of our H1 performance and some of the key highlights from across our business. I will then hand over to Philippe, our CFO, who will take you through the financial results in detail. After that I will return to provide an update on the performance of the individual business platforms and conclude with our outlook for the rest of the year. Following the presentation, we will take a short two-minute break and return with a live video stream for our Q&A session. Let me start with a top-line overview of our H1 performance. We delivered a strong performance across all three of our business platforms. All of this essentially spot on or even better than our expectations at the beginning of the year. This strong performance reflects the sustainable, robust demand for our offering, the depth of our customer relationships and the disciplined operational execution by our global OneLonsa team. Together with some favorable phasing, these strengths taken together enabled us to deliver sales of 3.4 billion Swiss Francs and a CER sales growth of 16% compared to H1 2025. The core EBITDA reached 1.2 billion CHF, which represents a high margin of 34.8%, an increase of 4.4 percentage points versus H1 2025. Alongside the strong sales growth and further margin expansion, in H1 2026 we improved our free cash flow by 300 million CHF compared to H1 2025. Based on this performance and our current H2 forecast, we are upgrading our full year core EBITDA margin outlook to 33-34% and reconfirm our expectation of 11-12% CER sales growth. As in previous years, our guidance remains rooted in a disciplined assessment of our business. Our track record of consistently delivering on and at times exceeding the promises we make to you gives us confidence in the upgraded outlook we are providing today. My takeaway as the CEO of Lonsa? We have a tight control and very good visibility of our business at hand and how it will evolve over time. And we have a global team which efficiently translates over and over again market opportunities and our customers' trust in Lonsa into an attractive and very profitable business. Earlier in H1, we also marked an important strategic milestone for our company with the agreement to divest the capsules and health ingredients business to Lone Star. With this large divestment, alongside the other recent divestments, we further executed the One Lonza strategy and have now completed our transformation into a pure play CDMO at high pace. All this within less than 15 months after announcing our new strategy in late 2024. While H1 numbers as such are obviously an important proof point and in our case a strong one, let me put them into perspective to how we see the full year performance evolving and how it relates to what you can expect from us in the years to come. Based on our upgraded 2026 outlook, we are convinced to eventually look at another strong year and another important step on our overall trajectory of strong profitable growth and significant value creation at Lonsa year over year. All of this fully in line with our ambitious organic growth model of low teens annual CR top-line growth on average over time at continuously expanding profitability and cash generation. My takeaway? We continue to deliver on our promises and intend to continue to do so in the future. Now, let's dive into our Group's business and the overall operational performance in H1. In the first half of 2026, we saw broad-based momentum across our businesses, with all three business platforms delivering double-digit constant exchange rates, sales growth at high profitability. This also meant a return to positive sales growth for specialized modalities, as expected and communicated to you earlier, which reported 22.6% sales growth compared to H1 2025. In integrated biologics, we have seen healthy momentum in our mammalian and drug product technology platforms. While delivering fully in line with our expectations, the business platform is lining up, among others, the large-scale commercial assets in FISP and Vacaville as important drivers of future growth in the years to come. In advanced synthesis, exceptional growth has been driven by a combination of small molecules and bioconjugates. and in specialized modalities we have seen exceptional growth in microbial from a low prior year base alongside sustained healthy growth in bioscience and a strengthened operational performance in cell and gene. With our new operating model that we have introduced in April last year, We have further increased focus on quality, operational execution, productivity and cost discipline across our global network and across all three business platforms. The organization-wide effort to drive both top line and margins and improve cash generation is becoming increasingly embedded across OneLonsa. And I am encouraged to see the first tangible results of these efforts already reflected in our H1 performance. This is another proof point for me that we are on track with our measures to deliver both elements of our longer term organic growth model which is not only attractive top line growth but equally margin expansion which will then more and more translate into attractive cash generation. Customer demand remained robust across technologies during H1. This was reflected, as an example, in the extension of our strategic long-term collaboration with the leading US biopharma company for a broad range of innovative clinical and commercial biologics. The agreement underlines continued high demand for our global biologics development and manufacturing services as well as our capability to deliver highly tailored and flexible solutions to meet specific customer needs. The ability to combine multiple sites, including all of our commercial-scale US sites and development services from across our global network within a single partnership highlights the strength of our unique OneLonsa business model, which strongly differentiates us within the CDMO industry. and specialized modalities, we have seen the approval of the sixth commercial cell and gene therapy in the Lonsa network, further consolidating our position as the world leading commercial manufacturer in this space. We continue to support sustained demand by investing in our growth and this is reflected in our announcement of today of two new ADC related projects. One to expand our payload linker manufacturing capacities in FISP and another to further strengthen our commercial scale ADC fill finish offering in Stein, both in Switzerland. More about these in a moment. These investments also support the continued expansion of our integrated offering across technologies, which sees growing interest as customers are looking for a single strategic partner that can support their programs from early stage clinical development through to large-scale commercial supply and from drug substance to drug product. This end-to-end capability is further evolving as another key differentiator for Lonza and positions us strongly to support antibodies, bispecifics and ADCs and other bioconjugates throughout their life cycle. With our increasingly diversified offering, our deep long-term customer partnerships and our broad and well-diversified geographical footprint, our business model is uniquely positioned to remain resilient and deliver profitable growth as the external environment evolves. Let me now provide an update on some of our key growth projects in some more detail. Across our network we continue to make good progress in executing the investments that will support the next phase of growth for Lonza. And we are adding new ones to support future growth mid to long term. In Wackerville, the upgrade measures towards CDMO readiness continue to progress well. As communicated previously, already the five contracts signed by the time of our full year 2025 reporting in January this year are expected to offset the gradual reduction of Roche volumes through 2028. Perceived attractiveness of the capacities and customer demand remain high, reinforcing our confidence in Wackerville, starting to drive growth after 2028 and fully exploiting the site's capabilities and capacities in the early 2030s to maximize value creation for Lonza. Let me also briefly touch on our large-scale aseptic fill finish facility in Stein. As customer needs continue to evolve, we have decided to further enhance the strategic scope of the facility by adding capabilities for high-value small molecule drug products alongside its original focus on biologics only. This will broaden the addressable market for us and will further strengthen the long-term attractiveness of the site. The additional capital requirements will be small, while the enhanced scope is expected to extend the timeline to start operations in 2028. Turning to our newly announced investments on the right side of the slide, both in support of our integrated ADC offering. This area continues to attract strong customer interest, given its high therapeutic and commercial potential. In FISP, we are building a set of multi-purpose, highly potent payload linker suites, which are scheduled to commence ramp up in 2029. We continue to see strong customer demand in this area, supporting our confidence in the long-term opportunity for this investment. In Stein, we are building a second commercial aseptic ADC filling line, which is due to commence ramp up from 2030 onwards and already benefits from a major pharmaceutical company as an anchor customer and strategic partner. Both projects will reach peak sales by the mid 2030s at the latest. Alongside investing into growth in line with our new One Lonsa strategy, in the first half of 2026 we also took the final step on our transformation journey to a pure play CDMO. We signed an agreement to divest the CHI business to Lone Star for an enterprise value of 2.3 billion Swiss Francs. The transaction is expected to close before year-end 2026. Within less than two years, we have systematically transformed our portfolio around the technologies and capabilities where we see the greatest opportunities for superior long-term value creation. As you can see on this slide, this transformation included four divestments of non-CDMO and non-core CDMO activities, sharpening our focus on our three business platforms, integrated biologics, advanced synthesis and specialized modalities. At the same time, we continued to embed our new OneLonsa operating model across the company to ensure our organizational scalability and readiness for the significant growth in the years to come. Today, Lonsa has a clear strategic direction and a portfolio fully aligned with our ambition as the global leader in the CDMO industry and the most trusted partner for the biopharmaceutical industry. While implementing our one-launcher strategy, we follow a highly disciplined approach to how we deploy our funds. Every growth investment, organic or inorganic, is assessed against our defined capital allocation framework. We have presented this before. However, let me briefly recap it here, considering its importance for our strategic decision-making process. As you will see, our first priority is to invest in maintenance, infrastructure and systems, ensuring that our base business remains robust, efficient and well positioned to reliably deliver value over time. Second, we are committed to a progressive dividend policy. This brings us to the discretionary cash that we have available for growth investments, both organic and inorganic. We remain highly disciplined when allocating capital to organic capex or bolt-on M&A, guided by strict financial thresholds and our commitment to sustainable value creation. For such investments, we need a clear view on how our distinct CDMO business model can deliver value for our customers and that we can differentiate against competition through the Lancer engine as our unique set of strengths. In the absence of appropriate strategically and financially attractive growth opportunities, surplus capital would be returned to our shareholders. Until 2030, based on our organic growth model, we intend to invest more than 7 billion Swiss francs in organic capex, with the majority of it dedicated to future growth. As said, these investments follow clear financial return criteria, namely an IRR of at least 15% and a ROIC at peak of at least 30%. For acquisitions, we will remain disciplined and committed to attractive financial returns to ensure shareholder value creation from a strong strategic fit and the potential to generate synergies. Now, let's take a brief look at some analytics underpinning our confidence in Lonza's growth potential going forward. Across our technologies we continue to see sustained demand for outsourcing. For example, demand for mammalian capacity continues to outpace supply. With recent geopolitical developments, pharma and biotech customer demand for U.S. capacity has remained particularly high. And this is reflected in the sustained level of contracting for bioelectrics capacity at all our U.S. sites, namely Portsmouth and Buckerville. Looking ahead, we anticipate an increased regionalization of supply and demand, a trend that aligns well with Lonsa's broad and well-diversified global network and our ability to support customers across key pharmaceutical markets. The sustained trend towards outsourcing across the biopharma industry is reflected in the modest and, based on our historic and forward-looking analysis, unchanged capex to sales ratios of the largest pharmaceutical companies, which balance out at around the 5% between 2015 and 2030. While the ratio has remained largely flat and looks set to continue at the same level, there is greater interest in US investments in the current geopolitical context, likely at the expense of investments in other regions. As a result, we continue to see healthy momentum in strategic outsourcing across both large pharma and biotech customers and attractive opportunities across technologies and geographies. In this context, Lonza's continued focus on growth investments has remained attractive to both large pharma and small and medium biotechs. This has helped us to maintain a largely balanced customer portfolio among the two. In my regular exchanges with a number of key pharma customers, I have not seen any evidence of a fundamental shift in how they view their strategic partnerships with Lonsa or outsourcing more generally. This reinforces our confidence in the resilience of the demand environment and our ability to deliver on our ambitious growth trajectory. Within our customer portfolio, I should also mention that we have a high weighting of long-standing strategic partnerships that in multiple cases span decades. At the same time, we continue to maintain a strong presence in early stage development which supports future demand for our technologies and capacity. Overall, The fundamental drivers of outsourcing remain firmly in place and we see Lonza very well positioned to continue to significantly benefit from these sustainable long-term industry trends. With this, I hand over to Philippe for him to take you through the details of our strong financials in H1 2026.

Thank you very much, Wolfgang. Good afternoon and good morning to those of you joining from North America. Before we dive into the details of our half-year 2026 financial performance, let me remind you that all figures relate to Lonza's continuing CDMO business unless explicitly stated otherwise. This means they exclude the capsules and health ingredients business, which is reported as discontinued operations. The half-year 2025 financials have been restated accordingly and were published on June 23rd, 2026 to allow you to put today's result in perspective. Also, unless otherwise stated, sales growth figures are reported in constant exchange rates. Starting with an overview of our financial performance in H1-2026 where Lonza delivered a strong performance with sales of 3.4 billion Swiss francs and an H1-weighted CER sales growth of 16%. Importantly, this growth was entirely organic. whereas the strong growth reported in H1 2025 included the contribution from the Vacaville acquisition. In actual exchange rates, sales grew by 11.2%, reflecting an FX headwind of almost 5 percentage points versus H1 2025, mainly from the weaker US dollar. This FX impact is expected to moderate significantly in H2 2026, as the US dollar weakened primarily during the first half of 25, while it's transcended again more recently. For the year, we therefore expect an FX impact on growth of minus two to minus three percentage points. Core EBITDA increased to 1.2 billion Swiss francs, representing a growth of 27.4% versus H1 2025. This translated into a core EBITDA margin of 34.8%, up 4.4 percentage points versus last year. Our margin expansion was supported by operational execution, maturing growth projects and operating leverage. A favorable product mix and phasing further contributed to the margin uptick. This is also reflected in the continued improvement in our return on invested capital ROIC, which increased by almost 3 percentage points to 13.2% in H1 2026 versus H1 2025 on an annualized basis. This demonstrates that our stronger earnings performance is also increasingly translating into higher returns. This strong H1 performance provides the foundation for our upgraded 2026 core EBITDA margin outlook of 33 to 34%, from our previous outlook of a core EBITDA margin above 32%. As Wolfgang already mentioned, this was a particularly strong first half supported by a lower prior year base and favorable business phasing. Momentum remains positive and absolute sales growth will continue in H2. We expect a lower percentage growth in the second half of 2026 based on the prior year high comparable, especially in advanced synthesis. As a result, H1 and H2 for the Group should be viewed together, with a stronger first-half performance and a more normalized second-half growth, combining to deliver growth in line with our full-year 2026 outlook. Looking at sales growth by business platform, all three business platforms delivered double-digit CR growth in H1-26. Integrated biologics grew by 10%, advanced synthesis by 28%, and specialized modalities by 23%. This demonstrates the broad base nature of the first half performance and shows that all our businesses are contributing to Lonza's growth. Integrated biologics delivered healthy momentum, driven by maturing growth projects and robust growth in the base business. Vacaville, as communicated earlier, showed an H1 weighted sales phasing due to a planned shutdown in the second half to implement the CDMO readiness changes and for the full year we expect the Vacaville site and sales to be roughly in line with full year 2025 at around 0.6 billion Swiss francs. As expected, Advanced Synthesis delivered another half year of exceptional growth, supported by strong performance in small molecules and especially in bioconjugates versus a lower 2025 base. H2 sales for the platform are expected to be higher than H1 in absolute terms, with growth versus the prior year normalizing against a much stronger prior year base and favorable phasing. Adjusting for these factors, underlying growth in H1 was in the low teens, demonstrating the continued strength of the business. Following a somewhat weaker year 2025, impacted by plant asset adaptation in microbial and operational challenges in cell and gene, our specialized modalities business platform returned to strong CER sales growth, mainly driven by microbial and bioscience. Celengene returned to normal operations towards the end of H1, which is expected to support growth in the second half. Overall, sales for the Group grew by almost half a billion Swiss francs in constant currencies in H1 2025. This reflects our continued effort to bring new capacities online and increase throughput within our existing base assets. Turning to Cori Bida and margin development, the strong top line growth translated into significant margin leverage. The Group Cori Bida margin expanded by 4.4 percentage points to 34.8% in H1 2026. This uplift was mainly driven by three factors. First, growth projects across platforms continue to mature, meaning are more utilized and operate more efficiently, and so contributed positively to margins. Second, sales growth outpaced functional expense growth, creating operating leverage. And third, our organizational focus on operational execution, productivity measures and cost discipline began to show tangible results. A favorable product mix and H1 weighted sales facing further supported margin accretion. The strongest margin improvement came in Advanced Synthesis, where core EBITDA margins increased by 6.8 percentage points to around 48%. Also, H2 margins are unlikely to reach the exceptionally high levels seen in H1. We continue to see a strong margin trajectory for the business overall. Specialized modalities also delivered a material margin improvement, with the core EBITDA margin increasing 10.7 percentage points to 28% from strong margin improvement in our microbial business. This was driven by the return to growth of the platform, favorable portfolio mix, and disciplined cost management. With that margin uplift for microbial and the continued attractive margins in bioscience, specialized modalities is now getting closer to the overall group level margins. In integrated biologics, the core EBITDA margin remains stable at a solid 36%. Margin accretion in the growth business from project ramp-ups was offset by less favorable profit mix in the base business. Moving to free cash flow, we made further progress in H1 2026. Free cash flow improved to 426 million Swiss francs compared with 116 million in H1 2025. This represents a clear step up in cash generation and reflects the stronger earnings level as well as somewhat lower capex spend. It also illustrates that our organizational focus on cash generation is beginning to show first results. CAPEX amount to 530 million CHF in H1, equivalent to 15.7% of sales compared with 21.2% of sales in H1 last year. In H1 2026, trade working capital as a potential of sales increased to 37.9%, reflecting the strongest sales growth in H1, which resulted in a higher level of accounts receivable at the end of the first half. We expect this to be a temporary factor and we continue to see additional opportunities to improve trade working capital. Now let's take a look at our CAPEX spend and project portfolio in more detail. In H1 2026, around 60% of CAPEX was invested into growth projects across our business platforms. While we expect some normal CAPEX phasing from 2026 to 2027, investment intensity is expected to remain within our CDMO organic growth model range. Our key investment area in H1 remain mammalian, drug products, bioconjugates and cell and gene. We continue to make progress on our major growth projects, including the upgrade measures at Vacaville, which will lead to the aforementioned site shutdown in H2 2026. Also, we advance larger CAPEX projects in drug product and bioconjugates. This investment portfolio is central to our CDM organic growth model. The assets currently in ramp-up are increasingly contributing to growth and profitability in the short to medium term as utilization continues to build. At the same time, the projects under construction provide the additional capabilities and capacities needed to support Lonza's long-term growth ambitions and meet future customer demand. Across both categories, we remain focused on discipline return criteria and investment areas where the Lonza engine creates a clear competitive advantage. Our CAPEX investment plans and how our disciplined capital allocation translates into sustainable long-term growth, cash generation, value creation is a topic we will have the opportunity to discuss in more depth at our upcoming Capital Markets Day in Wackenville in October. I very much look forward to see you all there. With that, thank you for your attention. Now let me hand back to Wolfgang for the business platform updates and the 2026 outlook.

Yeah, thank you, Philippe. And indeed, now let's look more closely at the H1 performance of each of our three business platforms, starting with integrated biologics. In this platform, our largest business platform, we delivered sales of 1.87 billion Swiss francs and a CER sales growth of 10% as compared to H1 2025. With a core EBITDA of 674 million Swiss francs, we delivered a flat margin of 36% versus H1 2025. Sales and margin were both driven by healthy momentum from growth projects ramping up across our Malian and drug product technology platforms. Sales growth was further supported by the base business, although the margin was offset by a weaker product mix in H1 and the growth project ramp up in FISP. Looking at specific sites, we saw H1 weighted sales at Wackerville. However, we anticipate that this will be offset in H2 due to the extended shutdown to progress with the site's capex measures, with full year 2026 sales expected to be broadly flat versus full year 2025 at around 0.6 billion Swiss francs. Overall, We are very pleased in how the site is now fully integrated in our global network, continues to fully deliver on our expectations and to attract high customer interest. Wackerville is also part of the, I believe, unique and successful offer that we could make to a leading US biopharma company as one of our strategic partners. Turning to our large-scale mammalian asset in FISP, we have commenced the multi-year ramp-up in line with our planned timeline. While during ramp-up this asset doesn't contribute to growth yet and is dilutive on margin, it will become an important source of future growth of our biologics business. In addition, the already ongoing drug product investments in Stein that I mentioned earlier belong to integrated biologics and will also support the platform's long-term growth trajectory. Now let's take a moment to look at the performance and key highlights in our advanced Synthetis platform. Here, we delivered exceptional CR sales growth of 27.7% versus H1 2025, resulting in sales of 834 million Swiss francs. We also reported a core EBITDA margin of 48.1%, an increase of 6.8 percentage points versus H1 2025 for a core EBITDA of 401 million Swiss francs. Sales growth in this platform was driven by a combination of factors. We saw a strong performance in our small molecules technology platform and especially in bioconjugates. This was further supported by increased asset utilization alongside a favorable product mix, a lower base in H1 2025 and phasing. The accompanying high core EBITDA margin was supported by a favorable mix, good operational execution and strong operating leverage. While we are pleased with the exceptionally strong performance in this business platform in H1 2026 and anticipate higher absolute sales in H2, we envisage that CR sales growth will moderate in H2 as planned due to a combination of less favorable phasing and portfolio mix alongside a higher base in H2 2025. Similarly, margins will normalize in the second half of the year as expected. To support the attractive long-term growth outlook of Advanced Synthesis, our recently announced highly potent payload linker expansion in FISP that I talked about earlier will provide much needed additional capacity in response to strong customer demand. Finally, let me take a moment to review the performance of our specialized modalities business platform. Here, we delivered sales of 553 million Swiss Francs and a strong CER sales growth of 22.6% as compared to H1 2025. We also reported a core EBITDA margin uplift to 28%, an improvement of more than 10 percentage points versus H1 2025, resulting in a core EBITDA of 155 million Swiss francs. We are particularly encouraged by this continued progress with margins in specialized modalities now approaching Group Average. This highlights the balance across Lonza and demonstrates the profitable growth is being delivered across all business platforms. The return to positive sales growth was driven by exceptional growth in our microbial technology platform compared to a low base in H1 2025 with the asset successfully adapted and now contributing to growth. Performance also benefited from favorable phasing in H1 2026. Bioscience sustained double-digit sales growth as well, benefiting from favorable sales phasing, while Cell & Gene showed a strengthened operational performance towards the end of H1 2026, and we therefore expect the business to make a meaningful contribution to growth in H2. Double-digit core EBITDA margin accretion was driven by a combination of strong sales growth and favorable portfolio mix alongside our ongoing focus on good cost discipline across our operations. Now let's turn to our outlook for the full year 2026. The strong performance we delivered in H1 reinforces our confidence in our one Lonsa strategy and its centerpiece, the Lonsa engine. Together, they drive attractive growth above the underlying market, while our disciplined investments continue to create the foundation for future growth. These investments will remain in the mid to high teens of capex as percentage of sales and will proceed in line with the capital allocation framework that I shared with you before. Based on our strong H1 performance, we are upgrading our full year 2026 core EBITDA margin outlook to 33-34%, while reconfirming our expectation of 11-12% CER sales growth. In summary, for 2026 you can expect from us the delivery of another full year of strong profitable growth. which will then form the basis for us to continue on our overall trajectory of strong profitable growth and value creation year over year in line with our organic growth model. As we come towards the end of our presentation, let me take a moment to summarize the four key takeaways of our half-year results. Firstly, We delivered a strong H1 performance with 16% sales growth at constant exchange rates and a high core EBITDA margin of 34.8% while also materially improving free cash flow. Based on this, we are well set up to deliver a strong full year in line with our upgraded outlook. Secondly, these results show benefits of our sharper focus on quality, operational execution, productivity, cost discipline and cash generation. While this is an ongoing journey that will never stop, the first signs are encouraging and reinforce our confidence that we will continue to unlock value across all levers. Thirdly, looking to the external environment, we see that customer demand for Lonza's capabilities and capacities remains strong. This reflects the deep trust of our customers in us and supports the resilience of Lonza's unique business model. Across our global network we continue to see customers choosing Lonsa for our scientific expertise, our strong commitment to quality, our manufacturing excellence and our ability to support complex programs across the molecule lifecycle and across the world. In H1, lastly, we have successfully completed our transformation into a pure play CDMO, which will enable us to continue to unlock significant value from our CDMO business. This gives us a clear strategic focus and ensures disciplined capital execution, with an impartial view on organic investment and bolt-on acquisitions. With all of our investments, we are guided by the same objective, creating sustainable long-term value for our shareholders, our customers and the patients they serve. Before we conclude, let me remind you about our Capital Markets Day, which we will host in Wackerville this October. This is your opportunity to engage with our chairman and myself, with Philippe as our CFO and other members of our leadership team. You will gain deeper insights into our strategy and value creation framework and visit one of the most important sites in our global network, widely recognized as a global beacon of biologic manufacturing across the biopharmaceutical industry since more than 25 years. We will share how we are executing the One Launcher strategy, discuss our growth ambitions and provide a deeper look at the opportunities ahead in our integrated biologics business platform. We look forward to welcoming many of you to Wackerville and we encourage you to register your interest soon if you wish to join us.

For questions over the phone, please press are followed by one. We take the first question from Charles Weston from RBC Capital Markets. Please go ahead.

Hello. Thank you for taking my question. It relates to CapEx programs. And I just wanted to understand how you manage the CapEx growth projects in order to keep growing smoothly within the medium term guidance range. And when there is a change, like there has been twice now for commercial fill finish in Stein, where different assets ramp quite differently and change the business mix. How should we think about the impact in terms of where you will fall within your range in any given year and margins? That was a long question. In summary, when CapEx programs change, what's the impact and how should we think about that?

Thank you, Charles, and first of all, great to have you. And before we actually answer the question, just for your information, I mean, if need be, Philippe and myself will be happy to actually add another five to ten minutes to our session and we'll be happy to answer your questions. Before, maybe to your point, first of all, CAPEX is in itself a process which is lumpy. And how it actually occurs over time is not easy to plan, which is why we are kind of more looking at the overall corridor in line with our organic growth model, so mid to high growth. This is how we would like you to look at the capex figure as we described it for the first half and how we see it evolve for the full year, shifting somewhat into 2027. Second part of the answer is, and we have a very clear view, I mean, not only for the next five years, but further out, because lead times of large projects actually is much longer. And we actually know precisely when we actually need to take which investment decision in order to have the capacity ready to then further out and provide the capacity that we need to deliver the revenues. When it comes to Stein and the, let's say, more strategic decision that we have taken there, to broaden the scope of the facility towards high-value small molecules. This in the end was a view of creating additional potential and an attractive offering for our clients and kind of came with consequences like a small additional capex amount, insignificant, but a certain extension of the timeline. When it comes to our growth trajectory, I mean midterm and longer term, actually we continue to commit to our CDMO organic growth model of low teens sales growth and constant exchange rates on average over time. So in this regard, I believe there is no reason to be concerned because this is how we foresee our company to grow over the next years. I don't know, anything to add from you, Philippe? So thank you, Charles. James, great to have you. Thank you.

The next question comes from James Quigley from Goldman Sachs. Please, go ahead.

Excellent. Thank you for taking my question. I've got one on the revenue outlook and the guidance. So you didn't upgrade the guidance for revenues with a set of results, but how would you characterize the visibility that you have on revenue growth for the second half of the year? There is a bit of a concern amongst some investors on the exit rate being lower in half two and then moving into 2027. But could you talk to the dynamics that give you confidence in the outlook? To be clear, not looking for any guidance for 2027, but what are the factors that give you confidence in being able to continue to grow in the mid-term range despite the 68% implied growth for the second half?

Thank you. Thank you, James. Maybe me taking at least the first part, maybe the full answer. First of all, visibility for the rest of the year is very good. and in a way, if you look at our top line guidance and also the upgraded margin guidance, actually pretty narrow corridors which you can take as our confidence and our tight grip that we have on our business. When it comes to, I mean, what does it tell us for the future of Lonza? I mean, you will have your view or anyone will have his or her view but in our view, 2026 will be another year of strong profitable growth and you should rather see it as a starting point for our organic growth model to continue to be applied. So while there has been phasing between H1 and H2, you might rather see that as a reflection of the fact that actually Lonsa is not a cookies factory, right? It's a pretty complex, high-tech, Thank you very much. in line with our CDMO organic growth model, which is for us the North Star in terms of how we think about our future ourselves and how we actually explain and communicate to you about what you can expect going forward.

Great, thank you.

Yeah.

The next question comes from Thibaut Botterin from Morgan Stanley. Please go ahead.

Thank you very much. Just in terms of when you think about midterm outlook between the different divisions, I think, you know, there was at least a consensus that view that biologics would be the fastest growing midterm and we're seeing this very, very strong growth in advanced synthesis. So just if you could, without giving guidance, if you could just give us an idea of your view on which, you know, Modality has the strongest potential on short to mid-term, so we have a better idea of what to expect.

Again, I would start with my answer to that. First of all, I would rather take this as a sign of strength because what is actually happening and what you are seeing at work is risk diversification across technologies and across business platforms. and this enables us to actually commit to our organic growth model to actually deliver low TNCR sales growth on average over time in the future with margin expansion step expanding step by step. So this idea of kind of diversifying a certain lumpiness within our different businesses is not an outcome but it's actually an incoming hypothesis and one of the design principles of our company and our overall portfolio. If you ask me what our growth expectations for all those businesses are, they are all high. and Biologics is a growth engine of the company and will continue to be a growth engine and in my presentation I shared, I thought I said the business platform is right now lining up the next commercial scale, large scale assets in FISP and also in Vacaville, which will drive significant growth in biologics over the next years to come. However, those assets today don't really contribute to growth yet because Vacaville is Vacaville and it's an acquisition from Roche. and FISP, the large scale biologics asset, is an asset in ramp up right now. ADS is a highly attractive market segment where we are actually leading as a company and we enjoy significant growth and are happy to continue to invest and double down on this technology. Specialized modalities, as we talked about, benefited very much from this diversification logic that I just described before last year. But we also told you at that time that this business platform will also start to contribute not only to growth but over time also to margin. That is what we are starting to see right now. So also cell and gene we consider to be an attractive modality in which we would like and will be present going forward. Anything to add, Philippe? No. I take that as a good sign.

The next question comes from Justin Smith from Bernstein. Please go ahead.

Thank you very much for my question. A quick one. Given where the ROICs are now, just wondered if you wanted to make any potential comments about where each ROIC might be as a multiple of WACC?

Yes, thank you, Justin, for the question. So again, 13% now, which again benefited, of course, from also putting our capsules business into discontinued operation. And now you're seeing the increased margin dropping all the way down, of course, to profits and to ROIC ultimately. So in terms of WACC, we are probably now close to two times WACC or so, and we probably see further potential. But we are not guiding on ROIC, but given our margin expectations as you have them in the organic growth model, ROIC will follow suit.

Thank you.

The next question comes from Odysseus Maneziotis from BNP Paribas. Please go ahead.

Hi, thanks for taking my questions. Firstly, would it be fair to assume your bioprocessing raw materials and finished goods inventory is at levels similar to or below usual? And would small scheduling changes in this be a reason for volatility we're seeing in the bioprocessing side and the supplier side? and secondly, Philippe, should we take your comments on CGT production coming fully back to normal in late H1 as the Portsmouth 483 on CGT product has been fully resolved? And sorry to say at this point that all the 483s in key facilities have been resolved as well.

Sorry, Odysseus, I could not understand the very last part of your question. So CGT has returned to normal and then you said something else.

Yes, and that essentially means that the 483 in Portsmouth has been resolved, but also that all the other 483s in the key facilities have been resolved as well.

You want me to start? Yes. So I think on our inventory levels, I think again we are continuously working on our inventory levels, not just around raw materials, but all across the chain from raw materials all the way through to finished goods. So I think right now I wouldn't say that there's a significant change between where we were at the end of last year and the first six months. But this is a continuous part. But if you're trying to read across some of the bioprocessing companies, I would not do that just based on kind of our inventories. On CGT, indeed, we've resolved the manufacturing challenges that we had last year, which were actually unrelated to the 483. So I would not want you to make a link between the 483 observations and our operational challenges in the sites. But the production has resumed, and this will contribute to the second half performance of Cell and Gene. So this is, I think, good news. In terms of the 483s across the other sites, as we communicated before, 483s is almost nowadays normal course of business. You always get some observations from the FDA when they come and visit the site, either for a product launch or to look at the site in general, and we are working very closely to remediate the observations, but none of the 483s have had an impact on our operations or revenue generation.

Very clear, thank you.

The next question comes from Charles Pittman King from Barclays. Please go ahead.

Hi guys, thanks so much for taking my questions. I just have a question on the kind of customer behavior and market and any comments you can provide by customer. So just wondering if you've seen any push out or delay for demand related to macro uncertainty, or if there's been any change in the broader European contracting environment, given your reshoring comments, if there's any difference between your larger and smaller customers. Thank you.

Yeah, thank you for the question, Charles. And we kind of starting in a more general level and kind of circling back to what I said during the presentation. And of course, we kind of carefully listened and carefully did our own analytical work. So in the summary from that is actually the strategic outsourcing trend. We actually don't see any change. I mean, no one in the industry told me that they are now changing their individual model which is different from company to company and the amount of outsourcing is also different but that no one is actually really changing its outsourcing model with outsourcing anyway being a big pharma and many others. Actually, no, we don't see that. However, there will likely be a shift in where this money is spent. Less so in the rest of the world, probably more so in the US. When we earlier kind of shared impressions about certain decisions on the customer end taking longer, Our explanation is that of course those companies kind of had to find their way through all this volatility which took them some time to eventually come to conclusions, some of them earlier, others later. So this is I guess our take here but kind of taking it down to what really matters is the sustained demand that we continue to see and customers continuing to enter into or extending their strategic outsourcing partnership with Lonza. So overall, and not so much by surprise if you think about it, the CDMO model, especially with a leading company or the leading company like Lonza, which is, I mean, a broad technology, broad regional offering, remains very attractive and in very high demand. Variation between small and large customers, this is not really a change to before because small, mid-sized customers kind of by default had to go to companies like Lonsa. They continue to do so, us having 45% of our revenues with this kind or this archetype of customers. and large customers with own capacities take a different perspective which again is different from company to company as well but we continue to have very attractive conversations and continue to be able to win business with them as before I would say. Thank you.

The next question comes from Ibrahim Zain from JP Morgan. Please go ahead.

Hello, Zainab Rahim, Jason Morgan. Thanks for taking the question. My question is just on the H1, H2 phasing, just to make sure we fully understand. So I think the advanced index of commentary is really clear, but just on specialised modalities, that also saw very strong growth. You highlighted in the first half, like 23% revenue growth. Just how should we think about the trajectory for the second half and even on the margin for specialised modalities, as you said, approaching group margin, how should we think about that going forward in the second half and the years to come?

Yes, Zain, thank you for the question. So again, maybe I can take you through the three platforms, making it easy. I think probably on SPM and Biologics, I think the two halves are comparable for different reasons. I think on SPM, of course, we had little contribution from cell and gene in the first half. As just answered in the question before, we see more contribution from cell and gene in the second half. in terms of growth and probably some moderation on the rest of the technologies within SPM. I think the biologics divisions, integrated biologics, probably also, as you can imagine, with a shutdown in Vacaville, we will have less sales in Vacaville, which is a little bit of a drag. On the other hand, as Wolfgang mentioned, our six-time 20K in FISP is starting operations in the second half, so this will help. So that's a little bit the ups and downs for biologics. And then ADS is probably where we will see the biggest change given also the very different size of the halves we had in the previous year. I think the second half last year in ADS was a very strong half where we had several new capacities coming online and starting to ramp up. So this I think is probably where you'll see the biggest difference in terms of percentage growth. But again, bear in mind, our second half will still be growing in absolute, so it's still kind of a growth versus where we are today. And so all three platforms will be very competitive. On the years to come, I won't comment besides, you know, you have the organic growth model, you have our algorithm, and we are abiding to this. Right.

And kind of adding to that and circling back to what Charles asked at the very beginning in the first question in terms of, I mean, how... To make sense of 2026, the half year and the second half and how to use it to kind of think about the future of Lonza, our view on that is that you actually should look at the full year. which will be a strong and strongly profitable year within our organic growth model. And it actually is playing out as expected. So for us, and we kind of communicated that to you before, I mean this profile of H1, H2 is not a surprise. It's going according to plan. and when we think about our future we will look at a full year 2026 which again according to our upgraded guidance will be another a year of strong profitable growth and then we will actually continue our business planning in line with our organic growth model which has low teens sales growth year over year on average over time with profitability margins expanding over time as well. So that is probably the view that we would recommend you to take when thinking about the future. And H1 is just, I believe, a strong proof point of the market leadership of Lonza, of the appreciation of our offering and of our ability to actually not only strongly grow, but also turn this growth into significantly increasing profits and eventually also cash. Very good. Thank you, Sein. One more question we will be happy to take and then would have to close the call. So I don't know, Sandra, if there is anything that we could actually tag on.

Yes, sir. We take the last question from James Wayne Tempest from Jefferies.

Super. Hi, James.

Hi. Hi. Thanks very much for taking the question. Just a clarification if I can from the prior question. At least coming back to this sort of phasing argument, I understand in terms of the margins there were no one-offs or termination payments in terms of seeing that sort of increase in the first half. But when I look at last year, both advanced synthesis and specialized modalities, you know, the margins were kind of relatively stable. So when we think about the normalization in the second half of the year, is that the right framework we should be thinking about for those two segments? Or was there perhaps kind of any sort of pull forward from the second half so maybe, you know, the second half margins would be lower? I know you're not going to guide specifically on what the margin would be like in the second half, but some of the puts and takes of that to understand what that floor looks like in the second half would be very helpful. Thank you.

Thanks, James. Well, the floor we gave you is 33 to 34, so the floor would be 33 for the year. So I think we can do the math of what it means for the second half. But taking probably your question more seriously, I think on ADS, clearly, as I said in my presentation, the margins will not stay at the H1 level. There will be a lower margin in the second half because, yes, H1 grew very strongly. You had a strong operating leverage. You had a slight phasing, which was some help from 2025 into 2026. This will not repeat. So this will become more for normal second half in terms of margins. And we said that for advanced synthesis, we are happy with margins around 40. Starting with the 48, of course, this is a good start in the year. But there will be margin normalization for ADS very clearly. On the other platforms, I think we feel comfortable to be in the range of historical, not for SPM, historical performance.

That's important. What you said about margins applies to ADS. Correct.

So sorry, when you say they're in specialized modalities, you know, comfortable with approaching, you know, sort of the group CW margins, you know, is that sort of like a step change to the first half, which you think about in the second half in terms of how we're looking at things versus last year? Or is that also expected to normalize?

Yeah, I think on SPM, what I think happened is we put together microbial together with cell and gene and bioscience. And so microbial is actually a very strong business, has always been a strong margin business as well. except for 2025 where we had this asset change and therefore almost kind of you're not used to see SPM with a microbial and bioscience performing. And so now you're seeing SPM with two of the three components performing and therefore this is probably margins that are to be expected.

Great. Thanks for the clarification. Appreciate it.

So that was the last question. Over to you, Sandra.

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