Lonza’s Overall Business Performance Year-to-Date on Track

In the third quarter of 2014, Lonza’s business performance in both the specialty ingredients and pharma & biotech segments remained on track. The company’s underlying financials also continued to be strong although the translational currency impact of the strong Swiss franc was felt throughout the business.
 

“Overall results at the end of third quarter are on track, and Lonza’s financial situation remains solid,” said Richard Ridinger, CEO of Lonza. “Transformational initiatives in both segments continue to gain traction across the organization and contribute positively to RONOA.”
 

Pharma & Biotech Segment

The pharma & biotech segment performance grew year-on-year as contracted products moved toward manufacturing phases following a large number of successful inspections. Improvements in technology and product transfers during the third quarter helped to improve the segment’s results.
 

As a follow-up to the Board of Directors’ decision in July 2013 to end the joint venture with Teva, the decision was made to write-off entirely the value of Lonza’s interest in the Teva joint venture, which led to an expected write-off of CHF 83 million.
 

Outlook

Based on constant exchange rates, the company sees the following developments by year end:

•  CORE EBIT growth of ~10%, despite the weaker-than-expected Water Treatment results, bringing revenue growth to under 5%
•  CAPEX will remain below CHF 250 million in 2014
•  Solid free-cash flow generation enables debt reduction as planned
•  Further guidance for 2015 will be given in January 2015
•  Mid-term guidance until 2018 will be given with the first quarter 2015 results in April 2015.