Lonza report "strong" full-year results

Lonza has delivered what it describes as strong full-year 2019 group results, with 11% pharma segment growth.

Lonza reported CHF 5.9 billion in sales, CHF 1.6 billion in CORE EBITDA and CHF 1.2 billion in CORE EBIT for the full-year 2019. These strong results, it said, reflect the continued positive momentum of the pharma-related businesses.

Albert M. Baehny, Chairman and CEO ad interim, Lonza Group, said: “Our people and business have delivered a strong Full-Year 2019 result. The biopharma business achieved double-digit sales growth and a stable CORE EBITDA margin, even though we are investing in significant growth initiatives. Our specialty chemicals businesses showed soft full-year performance after headwinds, but margins began to show improvement.”

2019 was a year of change as we accelerated the portfolio review and significantly progressed with the carve-out of our Specialty Ingredients business. Our leadership changes have had no impact on our employees' collective commitment to deliver for our customers and shareholders.”

I am confident about our current momentum, and our ability to deliver on our targets in 2020. We look forward to the successful start of operations for major investment projects by the end of the year, completing the carve-out on schedule, announcing a new Group CEO and continuing to work on the delivery of our Mid-Term Guidance 2022”.

Lonza Group delivered on its guidance with 6.8% sales growth, resulting in a CORE EBITDA margin of 27.4% in an important investment year.

Full-year performance was driven by Lonza's Pharma Biotech & Nutrition (LPBN) segment achieving 11.0% sales growth above guidance, despite a contraction in the nutritional hard capsules business. LPBN reported a CORE EBITDA margin of 32.9%, even after an elevated level of operational expenditure (OPEX) behind growth initiatives.

The Specialty Ingredients (LSI) segment reported weaker sales than anticipated in H2 2019. Segment performance was, Lonza says, in line with industry peers and overall softness in global end-markets. However, productivity gains, cost control measures and price increases resulted in a CORE EBITDA margin of 17.8%.

Lonza Pharma Biotech & Nutrition (LPBN) achieved continued double-digit sales growth above guidance for the Full-Year 2019. The newly expanded segment now includes the nutritional hard capsules business (acquired with Capsugel), as well as a small portfolio of nutritional ingredients and formulation services. LPBN delivered CHF 4.2 billion sales in FY 2019 and a CORE EBITDA of CHF 1.4 billion while investing in strategic growth projects, a number of which are expected to commence operations from the end of 2020.