- Lonza Group said Wednesday it’s on track to deliver full-year sales growth in the mid-to-high single digits and a sustained earnings margin for its core business.
- Sales in the first half rose about 6% to 2.98 billion Swiss francs ($3 billion), while profit dropped by roughly 25% — to 300 million francs from the 405 million recorded during the same period in 2018 — amid losses associated with the February sale of its water care unit.
- For the core continuing business, earnings before interest, taxes, depreciation and amortization rose about 8% to 828 million francs in the first half, resulting in a margin of 28%, the Swiss company said in a Wednesday statement.
Lonza CEO Marc Funk says the results show the steps the company is taking to reorganize are paying off. Lonza's focus is on growing businesses such as biologics manufacturing while shedding more traditional divisions, including water care.
The company is also separating out its struggling specialty ingredients business. That’s already provided better transparency on cost and profitability, Funk said.
"The strong momentum in our Contract Development and Manufacturing Organization (CDMO) businesses continues to drive our financial performance," Funk said in a statement. "Challenges in other parts of the business are being addressed."
Sales in the pharma, biotech and nutrition unit jumped 10.8% to 2.1 billion francs in the period, Lonza said. The company highlighted that business as a bright spot in its first-quarter report.
Also yesterday, the company announced plans to expand its bioconjugation facility in Visp, Switzerland, to meet increased demand and said it recently received approval for commercial manufacturing of a third antibody-drug conjugate.
The expansion will take two years, and contracts are already in place for the extra capacity, according to Lonza. The facility "will provide current and future customers with launch and commercial manufacturing and will serve the rapidly expanding early clinical phase market for bioconjugates," the company said.