Basel, Switzerland–Lonza announced in a press release that it has experienced continued positive momentum in its core healthcare businesses in the first six months of 2019, which has driven 6.4% sales and 7.7% CORE EBITDA growth for the group, resulting in a CORE EBITDA margin of 27.8%. Driving half-year performance: the Pharma Biotech & Nutrition segment, which achieved 10.8% sales growth and a 33.2% CORE EBITDA margin in what Lonza noted was an important investment year.
Based on H1 2019 results, Lonza confirmed the Full-Year 2019 outlook of mid-to-high single-digit sales growth and a sustained CORE EBITDA margin. Lonza Group CEO Marc Funk said, “Our Half-Year results leave us confident that Lonza is on track to deliver on our Full-Year 2019 outlook. The strong momentum in our Contract Development and Manufacturing Organization (CDMO) businesses continues to drive our financial performance. Challenges in other parts of the business are being addressed. We are already working to deliver a recovery in the performance of the Specialty Ingredients segment. Our focus is supported by the carve-out program, which has already provided some improved transparency on cost and profitability.”
Funk continued, “Our segment realignment earlier in the year has given Specialty Ingredients greater autonomy to push towards a leadership position in microbial control. Concurrently, Pharma Biotech & Nutrition maintains positive momentum as a major player in Life Sciences. Our targeted, high-return growth projects are progressing as planned and the strength of our current market position is validated by the number of confirmed strategic contracts.”
- The Specialty Ingredients segment reported a 3.8% decline in sales in H1 2019.
- The Pharma Biotech & Nutrition segment achieved double-digit sales growth. The newly formed segment, now including the Consumer Health & Nutrition business (formerly part of Specialty Ingredients), delivered CHF 2.1 billion sales in H1 2019 and a CORE EBITDA of CHF 693 million while investing in strategic growth projects.
- Consumer Health & Nutrition performed below expectations against a strong year-on-year comparable base, Lonza reported. Ingredient sales were marginally softer, driven by customer inventory pre-build in 2018 and subsequent Lonza supply challenges. The report noted that additional capacity is coming on stream within the existing footprint in 2019, with significant expansion starting mid-2020 from its Greenwood, SC facility in the U.S. Lonza’s UC-II ingredient for joint health entered new markets, regions, and applications, Lonza said, and Carnipure L-Carnitine ingredient for sports nutrition performed strongly. Positive market momentum was noted for for specialty polymer capsules, and several product launches for clean-label and natural capsules were introduced to the market in Q2 2019 including Vcaps Plus White Opal.