Lonza Reports Strong Sales and Profit Growth in 2015

27 Jan 2016

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27 Jan 2016 --- Lonza have reported that 2015 was a successful year, on a financial and an operational level, with both segments – Specialty Ingredients and Pharma&Biotech – contributing to the strong results. Strong sales growth over 2014 in reported currency of 4.5% (a growth of 5.7% in constant exchange rates, CER) resulted in sales of CHF 3.80 billion.Each segment had double-digit CORE EBIT growth in CER, which led to an overall growth of 10.3% in reported currency (+12.0% in CER) to CHF 524 million.

These improved 2015 financial results in nearly all disciplines were the consequence of Lonza’s measurable progress in the company’s ongoing transformation, which has led to a continued path of stabilization. Healthy market demand, combined with better operational performance, bolstered the strong results.

In addition, Lonza continued to de-risk the portfolio, deleverage the company, increase return on capital and reduce volatility even further in 2015. Macro-economic uncertainties, geo-political unrest and variable raw material prices were balanced in 2015. In addition, foreign-exchange effects were minimized through targeted counter-measures and through Lonza’s natural hedge.

“For the fourth year in a row, we have delivered on our promise to move the company to the next level,” said Richard Ridinger, CEO of Lonza. “Our significantly improved full-year results demonstrate that we’re making sustained progress in operational and financial execution. Thanks to the efforts of our employees and other stakeholders, we are continuing our transformation into a fully customer-oriented organization.”

Specialty Ingredients Segment – Enhanced portfolio management counterbalances currency effects

The Specialty Ingredients segment overall had a solid performance throughout the year, with sales growth of 2.5% in CER, driven by good market demand. The sales figures were also impacted by low oil prices. CORE EBIT had a solid increase, based on better product mix in the portfolio and value-chain improvements. The firm demand resulted in high capacity utilization in most technologies. Innovative solutions provided to customers were highly appreciated, and new product launches gained traction.

The Agro Ingredients and Wood Protection businesses had the strongest profit growth compared with the previous year. Consumer Care performed as budgeted based on solid demand. Benefiting from the good development of the specialty portfolio was the Industrial Solutions business, which delivered strong results. Effective 1 January 2016, Industrial Solutions was renamed Coatings and Composites and was expanded to include Wood Protection. Water Treatment grew on the top and the bottom line.

Since the lifting of the EUR/CHF ceiling by the Swiss National Bank (SNB) in mid-January 2015, the foreign-exchange development has influenced the majority of the businesses, especially the Swiss-based Agro Ingredients and industrial products businesses. However, additional sales, price increases and productivity improvements compensated for this impact in 2015.