Lonza ahead of plan

1 Nov 2016

Lonza has reported what it describes as another strong quarter in terms of sales and earnings. It now expects to reach CHF1 billion in CORE EBITDA and CORE RONOA above 20% by the end of 2017, both one year ahead of time.

Lonza ahead of plan

Lonza has reported what it describes as another strong quarter in terms of sales and earnings. The overall company results were, it says, a consequence of continued good performance in both the Specialty Ingredients and the Pharma&Biotech segments.

“We have experienced a continuous growth pattern, which is further proof that our strict market focus is paying off. Although we are satisfied with progress, we still have a long way to go. That’s why we’ll keep emphasizing improvement projects, organic growth, portfolio management and operational excellence going forward,” said Richard Ridinger, CEO of Lonza. “Our focus remains on strengthening our position as a leading supplier to the pharmaceutical, biotech and our different specialty ingredients markets.”

Lonza says its Specialty Ingredients segment continues to focus on portfolio management and higher-value activities. It delivered robust results throughout all markets with the exception of Agro Ingredients, which was negatively impacted by the overall industry downturn and pricing pressures for animal nutrition in China.

Consumer Care growth was driven by ongoing demand in all businesses. Hygiene continued to add new contracts for various technologies. The Nutrition business is expected to accelerate growth with the acquisition of InterHealth in September 2016, which will allow Lonza to harness the team’s proven management and branding capabilities and leverage them to a global level.

Lonza said that the continued strong momentum in Q3 gives it the confidence to specify that CORE EBIT is on track to cross the 15% growth line for full-year 2016. CAPEX in 2016 is expected to be above the 2015 level due to the strong demand particularly in Pharma&Biotech and the larger number of growth projects. The good performance is expected to lead to strong cash generation and an improved balance sheet.

The company is adjusting its CORE EBITDA and CORE RONOA target. It expects to reach CHF1 billion in CORE EBITDA and CORE RONOA above 20% by the end of 2017, both one year ahead of time.