For Lonza, 2021 was a year characterized by transformation and growth. We have divested our former Specialty Ingredients business and refocused our energy and attention as a dedicated healthcare partner. As part of our transformation program, the Board has worked assiduously to set the company strategy and laid the foundation for future success with significant growth investments. It has also driven progress in corporate responsibility while ensuring we maintain a rigorous and robust approach to company governance.
Business Transformation
Completing the divestment of our former Specialty Ingredients business has provided an opportunity for us to consolidate our focus and identity. The divestment to the Bain Capital and Cinven consortium was completed on 1 July 2021, for an enterprise value of CHF 4.2 billion. I would like to thank the members of the Lonza divestment team for their tireless work in completing this complex divestment in an expedited timeframe. I would also like to wish our former colleagues every success for their future in the new company, recently named Arxada.
With the divestment completed, we are able to refine our focus on the healthcare industry. As part of this consolidation, we undertook a structural redesign in 2020, enabling Lonza to operate as four clear divisions since the beginning of 2021. Our divisions include: Biologics, Small Molecules, Cell & Gene, and Capsules & Health Ingredients.
Long-Term Growth
With the generated cash flow from operations as well as the proceeds from the divestment, we announced a series of strategic growth investments including a CHF 200 million investment in a new Small Molecules facility in Visp (CH) and an investment of CHF 850 million to expand mammalian capacity in Biologics. We also made investments in our Cell & Gene and Capsules businesses. These will ensure that we can continue to expand our capacity and offerings in these critical areas of our business.
When considering new growth investments, the Board works closely with management to identify opportunities that will generate attractive return on capital in areas of high market growth and sustained customer demand. This combination of factors will ensure that improved margins can be delivered by the Group in the long term.
We are committed to ensuring that Lonza Group is able to capture market opportunities and drive competitive advantage. By maintaining our ambitious approach to new growth investments, we will ensure that we are able to anticipate customer needs and capture future demand. Given our current focus on growth investments, we are proposing an unchanged dividend for shareholders of CHF 3.00 per share, in line with last year.
Corporate Responsibility
As a global healthcare partner, it is critical that our business demonstrates a world class approach to corporate responsibility. We have worked diligently in 2021 to ensure that responsibility is integrated and embedded across our global network. Commencing in 2022, environmental, social and governance (ESG) metrics will be incorporated into our compensation policy for both management and employees. This is a significant commitment that is designed to ensure that our whole employee community understands the importance of responsible business and works actively to support our ambitious ESG agenda.
We have also worked to create a clear, comprehensive and systematic framework around our ESG activities. Using the UN Sustainable Development Goals, we have defined seven key ESG priorities. These include: good health and well-being; quality education; gender equality; clean water and sanitation; industry, innovation and infrastructure; responsible consumption and production; and climate action. Each of these goals provides a long-term objective that resonates with our own vision for sustainability, based on the role we fulfil for our customers and the industry in which we operate.
While ensuring that we maintain good corporate citizenship, we also remain aware of our responsibility to support a robust and representative approach to governance within the business. There is a high proportion of female representation on the Board and we are committed to ensuring that this continues in the future.
More on our 2021 sustainability activities can be found in our Sustainability Report, which forms a companion document to this 2021 Annual Report.
The World in 2022
Looking to 2022, we continue to observe the pandemic with humility and do not speculate on future events. As a Board, our role is to set the company strategy, while ensuring we remain resilient to challenges and ready to capture opportunities. Within this framework we have built a strong foundation, enabling the company to pursue its role as a dedicated partner to the healthcare industry. As such, we are strongly placed to deliver on our purpose to enable a healthier world, and pursue our vision to bring any therapy to life.
I would like to close by recognizing our management and employee community for their work over the course of 2021. Our business relies on the talent and dedication of its people, and our success is a testament to their tireless efforts. On behalf of the Board of Directors, I thank you for your work in 2021, and I look forward to working with you all in 2022.
Albert M. Baehny
Chairman of the Board of Directors
