Lonza results in line with expectations

29 Apr 2015

During the first quarter of 2015, Lonza says that its business performance was fully in line with its expectations. In both the Specialty Ingredients and Pharma&Biotech segments, it realised its growth targets and achieved good results. The impact of the foreign exchange changes earlier in the year is under control, the company said, and being […]

Lonza results in line with expectations

swiss-flag-closeup-4229112During the first quarter of 2015, Lonza says that its business performance was fully in line with its expectations. In both the Specialty Ingredients and Pharma&Biotech segments, it realised its growth targets and achieved good results. The impact of the foreign exchange changes earlier in the year is under control, the company said, and being managed through counter-measures across the company.

Recent investments, such as in the niacinamide plant in Nansha (CN) and the Agro Ingredients plant in Visp (CH), are said to be ramping up production and are providing projected volume growth. Adaptations of the large-scale microbial plant in Visp to accommodate different customers are also successfully underway. In addition, Lonza said it is making good progress on preparing to build out assets for emerging technologies, such as cell and viral therapy in the United States.

Lonxa also confirmed that its global balance of currencies is continuing to provide stability to its business. Strong business results from regions outside Switzerland and the Eurozone have largely balanced the impact of the strong Swiss currency. Operational improvements, portfolio optimisations and quality initiatives remain high on the agenda, the company said.

“Our first-quarter results demonstrate that we are well positioned to deliver on our 2015 targets,” said Richard Ridinger, CEO of Lonza. “We’re expecting positive performance and further growth throughout the rest of the year and in the foreseeable future. Our solid business plans in our well-defined markets and associated clear strategic direction allow us also to provide a positive mid-term outlook until 2018.”

Lonza said that its financial situation remains solid and that, based on constant exchange rates, it is  on track to deliver sales growth in 2015. Despite foreign exchange rate and raw material volatility, the company said it is planning for CORE EBIT growth of at least 5% as a result of portfolio optimisations and further operational productivity improvements. Ongoing enhancements of the worldwide production network are expected to lead to a further improved CORE RONOA of >15%.

Mid-term priorities for Specialty Ingredients will be to expand global reach, become more operationally efficient and transfer technology know-how out of the Pharma&Biotech toolbox across the businesses and segments in order to capitalise on synergies.

Lonza expects that its CORE EBITDA will approach CHF 1 billion in 2018. This assumption is based on efforts to further optimise its portfolio, strengthen customer orientation, implement cross-business synergies, improve productivity and focus on new and emerging technologies.

The company is also targeting CORE RONOA of 20% in 2018 (14.3% in 2014) and sales growth of low to mid-single digits on average per year until 2018. That growth will come from new technologies, further productivity improvements and expanded global reach, as well as more service-business offerings and additional innovative products, Lonza said.