Lonza Cuts Full-Year Target

Basel, 29 October 2009 – Lonza Group Ltd today announces that the third quarter was characterized by an accumulation of unexpected events since the end of September 2009 which will reduce operational EBIT towards a level of CHF 360-380 million for the full year 2009 (excluding any one time re-engineering costs):

• Cancellations and postponements in large-scale biopharmaceutical custom manufacturing
• 18 month delay of a lead customer project in cell therapy due to clinical disappointments
• Continued low order level in Exclusive Synthesis due to key customers reducing net working capital
• Continued reduced demand for Nutrition Ingredients combined with significantly lower pricing for the fourth quarter
• On-going margin pressure in Microbial Control and Performance Intermediates

• Reduce fixed costs by CHF 60-80 million over the next two years through consolidation of business units and divisions in order to simplify business processes and reduce overhead
• Reduce number of Management Committee members from seven to six with Lonza Custom Manufacturing being solely led by Stephan Kutzer; furthermore, Uwe Boehlke will lead the new consolidated division that includes Corporate Services and Human Resources.

• Adapt biopharmaceutical large-scale capacities in order to be able to competitively fill large-scale plants with smaller volume products (clinical phase II/III)
• Continue to expand the project pipeline in Custom Manufacturing as started in 2009 and increase longer-term customer collaborations
• Further increase resources in sales and business development and align the organization to customer projects
• Reduce Capex from the originally targeted CHF 500 million in 2010 to below CHF 400 million and to a similar amount in 2011

• Net working capital will be reduced again to reach our target of 20-25% of sales by the end of 2010