Lonza Continues to Make Measurable Progress in Its Transformation

23-Jan-2015 - Switzerland

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 company’s history.”

Financial Summary

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 rati

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