On track: Lonza's Capsugel integration going smoothly, reports strong Q3

26 Oct 2017 --- Lonza has reported that business and functional integration with Capsugel, acquired on July 5, is on track, with key managers from both Lonza and Capsugel leading the integration activities. The news comes as Lonza shares its continued strong performance in the third quarter of 2017 and therefore confirms its full-year 2017 guidance on a standalone basis, which was already upgraded with Q1 2017 Qualitative Business Update in April 2017.

Capsugel integration continues
Following the closing of the Capsugel acquisition, Lonza says it “further strengthened its position as one of the world’s leading and most-trusted suppliers to the pharmaceutical, biotech and specialty ingredients markets.”

After the successful closing on July 5, Lonza reports that the post-deal integration began immediately. Business and functional integration is on track with key managers from both Lonza and Capsugel taking leading roles in the integration activities. Lonza is putting a strong focus on business continuity while the integration successfully proceeds as planned.

“Our focus now is on the successful integration of Capsugel in order to realize the expected synergies and further boost our ambition to become the leading integrated service provider for the pharma and healthcare industries,” says Richard Ridinger, CEO of Lonza. “The first three months of the integration have been promising. We have confirmed the close cultural fit while we've been bringing the first combined business opportunities to life.”

Lonza and Capsugel employees are said to be committed to the common path of offering high-quality products and services along the healthcare continuum – from ingredient sourcing to finished dosage form. First commercial synergies have already been identified with joint product offerings in consumer health and sports nutrition. Initial customer response to the combined Lonza-Capsugel value proposition is positive.

In Q3 2017, Capsugel performed in line with expectations with particularly strong results in Consumer Health and Nutrition. Lonza confirms its positive outlook for Capsugel to deliver the expected synergies and growth targets. Combined financial figures will be reported with the full-year results 2017 in January 2018.

Full guidance
The full-year 2017 guidance (Lonza standalone) is as follows:

• Sales growth of high-single digits.
• CORE EBITDA above CHF 1 billion (US$1.01 billion).
• Double-digit CORE EBIT growth significantly above sales growth.
• CORE RONOA above the 21.5 percent achieved in 2016.

Both Lonza segments – Pharma & Biotech and Specialty Ingredients – contributed to the strong third quarter with offerings along the healthcare continuum adding to the other growth drivers.

“Lonza sustained strong performance and growth of the company in the first nine months of the year, which proves the rationale behind our strategic direction,” says Ridinger.

Specialty Ingredients segment “as expected”
Specialty Ingredients experienced a solid Q3 2017 and performed as expected, contributing to the full-year guidance on a Lonza standalone basis. Growth drivers are reported to have included the Hygiene and Preservation and Consumer Health and Nutrition businesses, benefiting from high market demand and new, innovative product offerings in the fast-growing consumer products markets.

The other Specialty Ingredients businesses performed in line with expectations, Lonza reports.

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