Profits up at Lonza Despite Slowdown in Agro Ingredients

26 Jan 2017 --- Lonza has reported its full-year sales were up 8.7 percent to 4.13bn Swiss francs ($4.14bn) but the Swiss speciality ingredients supplier and pharmaceutical company was hit by a slowdown in its Agro Ingredients business. Lonza, which shelled out $5.5bn just months ago to buy the US provider of capsules for the food and healthcare industries Capsugel, said its increase in profits was courtesy of the improved running of divisions with its Consumers Care, Wood Protection and Water Treatment business performing particularly well.

Over the year, core EBITDA (earnings before interest, tax depreciation and amortisation) came in at 918 Swiss francs ($920m), which was up 16 percent up on the year previous.

Across its Agro Ingredients unit, which supplies a range of products including technologies and sanitization products for the food and farming industries, its financial performance was hit by softer demand since April in the agro and feed markets.

Results were also impaired by reduced investment by the agrochemical industry and the farming industry.

But Lonza said there was a growing interest in its portfolio of products, such as its adjuvants, formulation ingredients, preservatives for crop protection and crop hygiene products, its molluscicide for slug control MetaTM experienced “solid growth” helped by the expansion into new markets.

In the Nutrition part of its Consumer Care division, there was a strong performance from L-Carnitine, vitamin B3 and food emulsifiers.

Lonza will be able to boost its offering across its Nutrition business once its acquisition of California-based InterHealth Nutraceuticals, a developer and manufacturer of nutritional ingredients used in dietary supplements, is bedded in. 

Lonza paid out around $300m to buy a company whose range of range of products like UC-11 promotes healthy joints would complement its own in sports nutrition, weight management, immune and pet health.

“Lonza has made another leap forward by successfully delivering on all major key performance indicators for the fifth year in a row,” said Richard Ridinger, CEO of Lonza. 

“We as an organization are proud of these record-breaking full-year results as we see that the hard work of our employees is paying off. The regained strength of Lonza makes us confident that we are well prepared for the next cycle of accelerated organic and inorganic growth.”

He added, “With the successful acquisitions of Triangle Research Labs and InterHealth Nutraceuticals in 2016, as well as the anticipated closing of the Capsugel acquisition in 2017, we clearly have the momentum to propel us toward our strategic goal of being the leading player along the healthcare continuum.”