Lonza reports 9% organic sales growth

4 Feb 2019

Having completed the first full year with Capsugel as a combined company, Lonza has reported a 9% organic (like-for-like) sales, 12% organic core EBITDA and 14% organic core EBIT growth.

Lonza reports 9% organic sales growth

Lonza has reported a 9% organic (like-for-like) sales, 12% organic core EBITDA and 14% organic core EBIT growth. Having completed the first full year with Capsugel as a combined company, sales amounted to CHF 5.5 billion for 2018; and margins for Lonza further improved, resulting in a core EBITDA margin of 27.3% and a CORE EBIT margin of 21.0%.

On a segment level, Lonza Pharma & Biotech contributed significantly to Lonza’s 2018 performance with 14% organic sales growth and a 32.8% CORE EBITDA margin, especially driven by Clinical Development and Manufacturing and by Commercial Manufacturing in its biological business.

Lonza's Specialty Ingredients segment achieved 3.4% organic sales growth and a 22.1% CORE EBITDA margin, despite headwinds due to raw-material price increases, supply-chain challenges and negative cyclical impacts throughout 2018 as already communicated.

The Consumer Health division performed strongly with continued momentum, particularly in Consumer Health and Nutrition, benefiting from synergies across nutritional ingredients, formulation capabilities and dosage form offerings. The specialty portfolios in Consumer & Resources Protection also performed robustly. Cyclical and commoditized parts especially in the agricultural ingredients and wood protection businesses were negatively impacted by market developments in 2018; countermeasures have been initiated for operational and commercial improvements.

"With these record full-year results, Lonza achieved another successful milestone toward our 2022 goals. The Healthcare Continuum®, which we first introduced in 2016 and have continued to shape since then, has been proven to be the right strategy for profitable growth and strong market leadership," said Richard Ridinger, CEO of Lonza.

"The transformative acquisition of Capsugel added value from the first day, and we can be proud of our achievement in bringing two high-performing companies together successfully,” he added. “We have set Lonza up for continued growth along the Healthcare Continuum® and have created value for all stakeholders, including our shareholders."

Specialty Ingredients delivered 3.4% organic sales growth and a 22.1% core EBITDA margin despite a challenging environment for cyclicals and some raw-material pricing and supply-chain related headwinds in parts of the portfolio. The segment reported CHF 2.4 billion sales for 2018, and CORE EBITDA amounted to CHF 528 million (pro-forma -5.4% versus prior year). CORE EBIT was CHF 421 million (pro-forma -6% versus prior year) and resulted in a CORE EBIT margin of 17.6%.

In 2019 Lonza says it will focus on the thorough execution of its growth projects in what is expected to be a year of significant investments. Its outlook for full-year 2019 sees mid-to-high-single digit sales growth with a sustained high core EBITDA margin level.