Full-Year 2019 Results

Lon­za report­ed con­tin­ued pos­i­tive momen­tum in its core health­care busi­ness­es in the first six months of 2019. This has dri­ven 6.4% sales and 7.7% CORE EBITDA growth for the group, result­ing in a CORE EBITDA mar­gin of 27.8%. Based on H1 2019 results, Lon­za con­firms the Full-Year 2019 out­look of mid-to-high sin­gle-dig­it sales growth and a sus­tained CORE EBITDA margin.

Half-year per­for­mance was dri­ven by Lon­za­’s Phar­ma Biotech & Nutri­tion seg­ment achiev­ing 10.8% sales growth and a 33.2% CORE EBITDA mar­gin in an impor­tant invest­ment year.

The Spe­cial­ty Ingre­di­ents seg­ment report­ed a 3.8% decline in sales in H1 2019. How­ev­er, the CORE EBITDA mar­gin increased by 20bps to 19%, despite head­winds caused by raw mate­r­i­al price increas­es, sup­ply chain chal­lenges and neg­a­tive cycli­cal impacts.

All fig­ures relate to Lonza’s con­tin­u­ing oper­a­tions (exclud­ing the Water Care busi­ness unit) in report­ed cur­ren­cy and are com­pared with the same peri­od in 2018 on a like-for-like basis (restat­ed Lon­za Half-Year 2018 finan­cial results) to reflect adop­tion of IFRS 15 on rev­enue from con­tracts with cus­tomers and realign­ment of seg­ments). Pos­i­tive devel­op­ment of CORE EBITDA was also sup­port­ed by the IFRS 16 account­ing adjust­ment on leas­es, result­ing in 40bps incre­men­tal mar­gin for Lon­za Group.

Pharma Biotech & Nutrition Segment

Lon­za Phar­ma Biotech & Nutri­tion achieved dou­ble-dig­it sales growth. The new­ly formed seg­ment, now includ­ing the Con­sumer Health & Nutri­tion busi­ness (for­mer­ly part of Spe­cial­ty Ingre­di­ents), deliv­ered CHF 2.1 bil­lion sales in H1 2019 and a CORE EBITDA of CHF 693 mil­lion while invest­ing in strate­gic growth projects.

Lon­za con­firmed the expan­sion of its bio­con­ju­ga­tion facil­i­ties in Visp (CH), togeth­er with the suc­cess­ful com­mer­cial approval of a third anti­body-drug con­ju­gate (ADC) pro­duced at this site. With eleven inves­ti­ga­tion­al new drugs (INDs) com­plet­ed, and now three out of five com­mer­cial­ly avail­able ADCs sup­port­ed by its bio­con­ju­ga­tion facil­i­ty, Lon­za sees the need to fur­ther expand based on com­mit­ments from cus­tomers signed. Many bio­con­ju­gates are on expe­dit­ed pro­grams and the exist­ing exper­tise at the facil­i­ty, com­bined with prox­im­i­ty to clin­i­cal and com­mer­cial man­u­fac­tur­ing of anti­body, link­ers and pay­load, will reduce risk and increase speed on the path to mar­ket for Lon­za customers.