CORE Results as Defined by Lonza

Lonza believes that disclosing CORE results of the Group’s performance enhances the financial markets’ understanding of our company because the CORE results enable better comparison across years. Therefore, the CORE results exclude exceptional items such as restructuring charges, impairments and amortization of acquisition-related intangible assets, which can differ significantly from year to year. For this same reason, Lonza uses these CORE results in addition to IFRS as important factors in internally assessing the Group’s performance.

 

Lonza’s Investment Grade Rating Maintained Post  FY 2015 Results

Following Lonza’s full-year 2015 results presentation on 27 January 2016 a number of the leading Swiss  banks have re-evaluated Lonza’s investment rating. Following their analysis, the banks came to the conclusion that Lonza’s investment grade rating should be maintained. At the end of 2015 the Company’s net debt amounted to CHF 1660 million, giving  a debt-equity ratio of 0.78 and a net debt/EBITDA ratio of 2.09x, as a result of the acquisition of Arch Chemicals in October 2011 which was entirely debt financed. This focus on reducing net debt is expected to continue for the next several years. 

Dividends

The policy is to pay between 25% and 40% of net profit to shareholders in the form of dividends.
At the 2015 Annual General Meeting of the Shareholders, held on Wednesday, 8 April 2015, the shareholders followed the proposal of the Board of Directors and voted for a payment of a dividend (out of reserves from capital contribution) of CHF 2.50 per share for the fiscal year 2014.

Dividend Proposed

The Board of Directors is proposing a stable cash dividend of CHF 2.50 per share for 2015. Subject to approval at the Annual General Meeting, this dividend will be paid out of the reserve capital contribution and will be free from Swiss withholding tax.

Currency Exposure

Lonza has an extremely good natural hedge. The currency exposure reflects as follows:

                Sales         Cost        
USD  50% 45%
CHF ~20% 25%
EUR ~15% 15%
GBP  5%  5%
CNY 4%  4%
Other 9%  6%

Hedging policy / foreign exchange management policy and process:

  • Focus on natural hedge
  • Contract hedging
  • Central hedging
  • Partial, forward hedging of net exposure

 

 Pension Benefits

The group operates defined-benefit pension plans in various countries, with the major plans in Switzerland, Great Britain and the United States (these plans are described in the financial section of the Annual Report 2015 on pages 43-45). For pension accounting purposes, these plans are considered as defined benefit plans.

The significant actuarial assumptions at the reporting date (expressed as weighted averages) were as follows:

 in %  2015  2014
             
                                                    CH        US        UK          CH       US       UK      
             
Discount rate  0.80
4.27
3.58 1.00
3.89
3.58
Future salary increases 1.00 0.00 3.29 1.00 0.00 3.18
Future pension increases n/a 0.00 2.33 n/a 0.00 2.20

Additional information on Employee Benefit Liabilities e.g:

  • Movements of the defined benefit liability
  • Mortality assumptions
  • Sensitivity analysis
  • Detail of plan assets
  • Defined benefit obligations and plan assets by country

are disclosed in financial section of the Annual Report 2015 on pages 46-48.

How Much Does Lonza Spend on Research and Development (R&D)?

Research & Development (R&D) costs include all primary costs directly related to this function, as well as internal services and imputed depreciation.These costs are incurred for:

  • Development of new products and services
  • Improvement of existing products and services
  • Development of new production processes
  • Improvement of existing production processes
  • Cost for patents
  • Purchase price for product and process know-how to the extent not capitalized

The research and development costs amounted to CHF 185 million (2014: CHF 195 million) and represent the full range of R&D activity. However, the consolidated income statement discloses research and development costs of only CHF 103 million (2014: CHF 101 million), as the remainder of such costs are absorbed in “Cost of goods sold” for R&D products and services sold.        

 
Where are Lonza Shares Traded?

Lonza shares are traded at the SIX Stock Exchange in Zurich the home market for the Swiss Leader Index (SLI) and at the Main Board of the Singapore Exchange Securities Trading Limited (“SGX-ST”). Lonza has secondary listing at SGX Singapore Exchange.

 

What is the Stock Symbol?

The stock symbol for Lonza shares at the SIX is LONN VX and O6Z at the SGX-ST.

 

How Many Shares Does Lonza Have Issued?

Registered shares
 2015 2014
Number of shares issued
52,920,140 52,920,140
Number of shares ranking for dividend
52,282,635
52,014,512
Par value per share CHF 1 1
Net income (equity holders of the parent) million CHF 277
237
Diluted net income million CHF 277
237
Ratios per security
2015 2014
Weighted average number of shares
52,268,315
51,988,177
Diluted weighted average number of shares
52,693,239
52,189,051
Basic earnings per share CHF 5.30
4.56
Diluted earnings per share CHF 5.26
4.54

 

What is Lonza Doing to Protect the Environment?

Lonza is committed to generating sustainable added value. This is only possible if ecological, social as well as economic objectives are met. Our highest priorities are personal safety and environmentally sound processes and products. For more information, please visit our Environment, Safety & Health section.

 

What is Lonza Position on Corporate Governance?

Lonza has implemented modern corporate governance structures to ensure accountability, responsibility and transparency throughout the Group and for its shareholders. Corporate governance reporting is in compliance with the guidelines of SWX Swiss Exchange. For more information, please refer to the section relating to Corporate Governance.

 

Where can I Obtain More Information?

Don’t hesitate to contact the Investor Relations team.