to Make Measurable Progress in Its Transformation
Lonza delivered expected CORE EBIT
growth of 11% in constant exchange rates (+9% in reported currency), supported
by both the Specialty Ingredients and Pharma&Biotech segments
- Revenues grew by 3% in constant exchange rates (+1.6% in reported
currency) to CHF 3.64 billion in reported currency
- Lonza’s 2014 CORE EBITDA margin of 20.4% exceeded original guidance
given in 2012 for 2015, one year ahead of schedule
- CORE RONOA increased from 12.3% to 14.3% in 2014
- Operational free cash flow remained high at CHF 476 million
- Profit for the period increased by 172% to CHF 237 million
- The full impact of the recent decision of the Swiss National Bank is
still to be determined as volatility continues in the financial markets
- Lonza’s Board of Directors is proposing an increased dividend to CHF
2.50 per share for 2014
Basel, Switzerland, 21 January
2015 – In 2014 Lonza delivered expected CORE EBIT growth of 11% in constant
exchange rates (CER) (+9% in reported currency), compared with 2013. Lonza’s overall
results confirm the updated guidance communicated during the third-quarter
update. Both of Lonza’s
segments – Specialty Ingredients and Pharma&Biotech – delivered a solid performance
despite currency headwinds and the performance of the Water Treatment business.
Most of the individual businesses performed
according to expectations. Unfavorable weather conditions in the Water
Treatment business had a negative impact on revenues for the second consecutive
year, as well as time-consuming, complex tech transfers and
validations/qualifications in Pharma&Biotech businesses and portfolio
optimizations, e.g. the impact of Hopkinton, MA (USA) shutdown.
“For the third consecutive year, our full-year
results demonstrate that we’re making good progress in transforming Lonza.
Thanks to the efforts of our employees and managers, we will continue our
journey from a product-focused organization into a market-driven one,” said
Richard Ridinger, CEO of Lonza. “Our focus on quality and operational
improvements produced positive results in 2014. We are also proud that during
our ongoing transformation, we have achieved the best safety results in our
Specialty Ingredients Segment
In 2014 Lonza’s Specialty Ingredients segment
delivered a solid financial performance with substantially improved
profitability, more active portfolio management and marketing efforts, and more
innovation. Innovative approaches resulted in a noteworthy number of new
product launches driven by market demand and customers’ desire for
technologically led, environmentally friendly and affordable solutions.
CORE EBIT for
Specialty Ingredients grew by 13.0% in CER (+7.1% in reported currency). All
businesses met financial expectations except Water Treatment, which was
substantially affected by unfavorable weather conditions. Consumer Care
delivered solid results based on growing market demand and innovation.
Excellent performance of the Agro Ingredients business was based on rising
demand, new product launches and innovation. Industrial Solutions performed
better than planned based on solid demand for new products introduced in 2014. Wood
Protection delivered strong results coming from improved residential and
Lonza’s Pharma&Biotech segment
experienced strong CORE EBIT growth of 15.2% in CER (+18.4% in reported
currency) as efforts continued to refocus portfolios on higher-margin products
Custom Manufacturing, mainly the biopharma
activities, benefited from solid outsourcing and dual-sourcing trends in the marketplace.
Market interest and demand in new technologies – particularly for antibody drug
conjugates (ADCs), cell therapy and viral therapy – continued in 2014. Lonza
was able to accommodate manufacturing demand across technologies. These factors
resulted in additional contracts for commercial and clinical-stage products. In
addition, our Bioscience Solutions business developed well with product
offerings to the pharma, biotech and research industries.
All 34 regulatory
audits and 169 customer inspections were successfully completed; the
significantly increased numbers over last year reflect the current
substantially larger product pipeline and the more stringent regulatory environment
in the pharmaceutical industry.
CORE EBIT grew by 11%
in CER (+9% in reported currency)
- Lonza’s 2014 CORE EBITDA
margin of 20.4% exceeded original guidance given in 2012 for 2015, one year
ahead of schedule
- CORE RONOA increased
to 14.3% compared with 12.3% in 2013
- Sales increased by 3%
in CER (1.6% in reported currency) to CHF 3.64 billion
- Profit for the period
increased by 172% to CHF 237 million
- CORE EPS increased to
CHF 6.79, an increase of 36%
- Capital expenditure was
CHF 180 million compared with CHF 210 million in 2013
- Operational free cash
flow remained high with CHF 476 million
- Net debt reduction to
CHF 2.0 billion resulted in a net debt/EBITDA ratio of 2.7x and a debt/equity
ratio of 0.94x
The transformation of Lonza will continue in 2015
as planned and previously announced. In 2015 Lonza will continue to focus on
improving operational efficiency with a stronger focus on embedding quality and
balancing the portfolio with a more favorable product mix of higher-margin
products and services. Lonza is well positioned for further measurable positive
development in 2015.
Underlying business performance leads us to be
confident we will grow sales and profits in 2015. However, due to the recent
and unexpected volatility in financial and currency markets, Lonza has decided
to re-evaluate its outlook and to provide guidance for 2015 at a later stage. Lonza
continues to have a positive outlook for the future as it is well positioned in
its markets. Also Lonza has achieved a substantially better natural hedge with
the Euro and U.S. dollar since the acquisition of Arch and a more balanced
spread of investments globally.
guidance until the end of 2018 will be provided during the first quarter 2015 qualitative
update on 28 April 2015.
of continued strong cash flow development and further improvement of our balance
sheet, the Board of Directors is proposing to increase the dividend after four
consecutive years of stable dividend payments to CHF 2.50 per share.
Further details about the Full-Year Report 2014 can
be found on http://www.lonza.com/about-lonza/investor-relations/investor-information.aspx.
Lonza is one of the world’s leading and most-trusted suppliers to the
pharmaceutical, biotech and specialty ingredients markets. We harness science
and technology to create products that support safer and healthier living and
that enhance the overall quality of life.
Not only are we a custom manufacturer and developer, Lonza also offers
services and products ranging from active pharmaceutical ingredients and
stem-cell therapies to drinking water sanitizers, from the vitamin B compounds
and organic personal care ingredients to agricultural products, and from
industrial preservatives to microbial control solutions that combat dangerous
viruses, bacteria and other pathogens.
Founded in 1897 in the Swiss Alps, Lonza today is a well-respected
global company with more than 40 major manufacturing and R&D facilities and
approximately 9,800 full-time employees worldwide. The company generated sales
of CHF 3.64 billion in 2014 and is organized into two market-focused segments:
Pharma&Biotech and Specialty Ingredients. Further information can be found
Additional Information and Disclaimer
Lonza Group Ltd is
headquartered in Basel, Switzerland, and is listed on the SIX Swiss Exchange
and secondary listed on the Singapore Exchange Securities Trading Limited
(“SGX-ST”). Lonza Group Ltd is not subject to the SGX-ST’s continuing listing
requirements. Lonza Group Ltd is subject to the listing rules of the SIX Swiss
Exchange, which does not have specific requirements equivalent to the listing
rules of the SGX-ST for interested person transactions, acquisition and
realizations and delisting.
discussed in this news release may constitute forward-looking statements. These
statements are based on current expectations and estimates of Lonza Group Ltd,
although Lonza Group Ltd can give no assurance that these expectations and
estimates will be achieved. Investors are cautioned that all forward-looking
statements involve risks and uncertainty and are qualified in their entirety.
The actual results may differ materially in the future from the forward-looking
statements included in this presentation due to various factors. Furthermore,
except as otherwise required by law, Lonza Group Ltd disclaims any intention or
obligation to update the statements contained in this presentation.