The favorable market dynamics across Lonza's businesses create attractive investment opportunities, reflected in the company's growth plans. Lonza is accelerating its de-risked long-term investment program to ensure it can capture increasing market demand and capitalize on future opportunities.
In 2020, Lonza had sales of 4,500 million CHF, with a core Ebitda of 30.6% and a capex of 20% of sales. In the first half of 2021, Lonza reported sales of CHF 2.5 billion, sales growth of 14.7% 1 and CHF 847 million CORE EBITDA, resulting in a margin of 33.3%.
In H1, Lonza has invested a total of CHF 474 million CAPEX. Investments supporting growth contributed to around 80% of the total amount. Lonza anticipates that the current levels of CAPEX spending on internal growth initiatives will continue to increase over the course of H2.
At its Capital Markets Day, Lonza provided more details of the company's strategic priorities at a Group and divisional level. The favorable market dynamics across Lonza's businesses create attractive investment opportunities, reflected in the company's growth plans. Lonza is accelerating its de-risked long-term investment program to ensure it can capture increasing market demand and capitalize on future opportunities. These investments will allow Lonza to drive strong growth in the mid-to-long term. The company anticipates 2021 Full-Year CAPEX to reach around 25% of sales and remain elevated at current levels for the next few years, returning to high-teens by 2025.
The Biologics division remains the primary driver for growth with an increased focus on innovations across all businesses. Innovation priorities include next-generation modalities, manufacturing optimization and automation.
"2021 has been a significant year for Lonza. We have strengthened our strategic focus, refined our business model and demonstrated our resilience and agility. We have entered a new chapter as a pure-play partner to the healthcare industry while redoubling our focus on long-term growth." Said Pierre-Alain Ruffieux, CEO, Lonza
Biologics benefited from strong customer demand and new contracts across technologies and scales. The business was able to meet these high levels of demand by actively managing the supply impacts arising from the pandemic. Compared to H1 2020, Biologics saw strong sales growth of 16.7%2, accompanied by a CORE EBITDA margin decrease to 38.2%.
Cell & Gene delivered 24.7%2 sales growth and an improved margin of 16.1% compared to H1 2020. Cell & Gene Technologies saw performance driven by the further growth of its customer pipeline and a focus on continuous operational improvement. The business aims to approach a break-even margin by Q4 2021.
Capsules & Health Ingredients delivered a strong performance with particularly high demand for capsules. Compared to H1 2020, the business saw a CORE EBITDA margin decrease to 35.4%. This has been accompanied by 5.8%2 sales growth.
In August, Lonza, announced it will invest to establish drug product manufacturing capabilities at its site in Guangzhou, China. The new investment will fund the installation of an aseptic drug product fill and finish production line at the 17,000 m2 state-of-the-art cGMP mammalian facility. The Guangzhou (CN) facility began operations in Q2 2021 and expects to deliver its first cGMP batch later this year.
The sterile, multi-product fill and finish line will support the filling of liquid and lyophilized products. The installation is expected to be completed in 2022 and will create more than 150 new positions at the Guangzhou (CN) site.
In September, Lonza, announced it will invest in additional drug product manufacturing capabilities in Switzerland. This investment will fund an additional aseptic flexible filling line for clinical supply of drug product in Stein (CH). The new line will support liquid and lyophilized vial filling and processing, cartridges and pre-filled syringes. The new filling line will allow Lonza to process various modalities, including monoclonal antibodies, bioconjugates, viral vectors, and other gene therapy products, for its customers. The filling line will utilize state-of-the-art robotic technology and implement innovative freeze-drying technology with a sustainable air-cooling system. The installation is expected to be completed in 2023 and will create more than 70 new positions at the Stein (CH) site.
In October 2021, Lonza, announced it will invest to expand mammalian development services in Singapore. The expansion will establish additional capacity for cell culture, purification, and analytical services for mammalian biologics.