Lonza Business Performance on Track

25 Apr 2013 --- In the first quarter 2013, Lonza’s business performance was solid and in line with expectations. While the Specialty Ingredients market segment showed a good performance, the Pharma&Biotech market segment had a slow start as anticipated.

Growth in project pipelines demonstrates Lonza’s leading market positions. Strong cost controls and process improvements continue across the organization. Also, performance for 2013 will be geared towards a stronger second half-year 2013. Lonza reiterates its 2013 EBIT guidance growth of approximately 10%.

Richard Ridinger, CEO Lonza, said “Earlier this year, we announced significant changes to our organization; aligning ourselves directly with markets we serve. I am pleased to report the newly focused organization is taking hold while delivering on our first quarter results. At the same time, we are working broadly to assess the performance and efficiencies across of our operations as well as administrative functions and we are making good progress; I am pleased with the results so far. Our first quarter results are in line with the expectations we have set out.”

The Pharma&Biotech market segment saw a good pipeline development across all technologies. As expected the segment had a lower capacity utilization in the first quarter of the year due to higher product changeover because of new project introductions as well as project delays at customers. Based on contracts and negotiations there will be a continuous ramping-up of the entire network in the quarters ahead.
 
Various long-term supply agreements for small molecule products were signed during the first quarter 2013 and the expansion of antibody drug conjugate plant in Visp is on track. Biological Manufacturing saw good pipeline development. The resolving of the Hopkinton, MA (USA) manufacturing issues remains a key priority and we are working diligently to address the manufacturing and process issues. The pipeline for cell and viral was strong with high number of new product candidates and for new clients. Lonza‘s Singapore cell therapy facility is on-line and the first GMP lots of cell therapy products were produced.
 
Custom Development services saw good overall demand in the first quarter. Lonza’s XS Microbial Technologies was a catalyst for new projects in the first quarter. There was high demand for development and scale-up services using proprietary micro-reactor / continuous flow technology (MRT).
 
The Media business had good sales and Cell Biology continued to perform strongly, supported by introduction of new products. The long-term collaboration with Sartorius is on track. Sequestration in the U.S. impacts academic and governmental sales and in Europe, Research and Testing businesses suffer from deteriorated economic situation. Testing Solutions is on target with strong growth in Asia-Pacific.
 
The Specialty Ingredients market segment had a good start into 2013 with decent overall market demand in most areas. All growth projects are on track.
 
The Personal Care market experienced good overall market demand. Preservative and Specialty Ingredients sales are tracking slightly ahead of target. We introduced new and innovative products for anti-aging, anti-acne active and a natural preservative providing a broad spectrum antimicrobial effect in cosmetic products along with fragrance enhancement.
 
In Hygiene, there was solid performance in primary markets (Europe and USA) and sales were in line with budget and with improved margins. In response to the Influenza virus Type A, Lonza is able to offer a wide range of disinfectant grade products effective against these types of viruses. There is increasing interest for the company’s disinfecting wipes against hospital acquired infections. Nutrition Ingredients experienced good overall market demand. Niacin had market demand as expected with pricing remaining at a low level.