Lonza reports solid performance for Q1 2020, deflects major COVID-19 operational disruptions

17 Apr 2020 --- Lonza Group reported Q1 net sales of CHF1.6 billion (US$1.65 billion), which represents an increase of 7.4 percent compared to the previous year at a constant exchange rate (CER). Segment growth in both the Lonza Pharma Biotech & Nutrition (LPBN) and the Lonza Specialty Ingredients (LSI) segments helped bolster overall Group performance, the company highlights. In this first quarter, Lonza further states its facilities continue to “largely remain operational” in light of the COVID-19 outbreak, and its business will continue “as planned” with key strategic growth projects.

“We have maintained a positive performance in Q1 2020, despite the challenging economic environment and operating conditions. We have been fortunate not to suffer from any major disruptions to business continuity caused by challenges to supply. Moreover, our business is supported by a strong level of liquidity. This means that we are currently able to continue as planned with our key strategic projects and long-term investments, all of which contribute to support our future success,” says Albert Baehny, Chairman and CEO ad interim, Lonza Group.

Segment performance
LPBN net sales increased by 8.3 percent quarter-on-quarter CER, reaching CHF1.2 billion (US$1.24 billion) while LSI net sales increased by 3.8 percent quarter-on-quarter CER, amounting to CHF409 million (US$421 million).

“Our LPBN segment continues to deliver medical treatments so that our customers can support their vulnerable patients at a time when their need has never been greater. Meanwhile, our LSI segment continues to develop disinfection solutions, many of which have proved to be effective in controlling the coronavirus,” Baehny continues.

Meanwhile, there was mixed performance within the Capsules business with the pharma business behind the previous year. This was partially offset by an improved level of performance in the Nutrition business, which benefited from strong demand in the US and in Europe.

Under the LPBN umbrella, Lonza reports that the Small Molecules alongside Mammalian and Microbial sites achieved “strong momentum” and experienced “only minimal impacts from COVID-19, with no delays or cancellations to existing clinical programs.” Continuous demand for the company’s Cell and Gene Therapy site also facilitated strong sales growth, especially in the viral vector, Lonza affirms.

However, strong sales in Microbial Control Solutions gave LSI an advantageous head start to 2020, boasting “solid performance and positive sales growth” from the Professional Hygiene Home and Personal Care categories. However, Performance Chemicals and Intermediates were impacted by lower prices, which was only partially offset by solid Vitamin B3 demand, says Lonza.

Business impacted by COVID-19
According to the company, the LPBN segment has currently received an abundance of clinical and commercial opportunities to participate in projects relating to COVID-19 and has decided to focus on a small number of key development projects relating to both vaccines and therapeutic treatments in a bid to help to contain the spread of the pandemic.

“Our work to control the spread of COVID-19 is not only a commercial imperative. It is also an ethical and moral duty for our business and industry. We remain fully committed to doing everything possible to maintain the supply of our current solutions, as well as supporting and accelerating the development of any medical treatments to contain the infection,” Baehny concludes.

NutritionInsight previously spoke with Lonza’s Head of Consumer Health Ingredients on how the company is narrowing its focus on increasing its competitive advantage. It aims to surge ahead with its investments in growth projects, including capacity expansions and new technologies supporting the full life cycle of molecules. To stay on top of more COVID-19 related news, visit NutritionInsight’s daily updates here.

Edited by Anni Schleicher

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