Lonza Business Performance Remains on Track

In the third quarter 2013, Lonza’s business performance remained on track as anticipated. The Specialty Ingredients market segment delivered a good performance despite a continued weak recreational water market. The Pharma&Biotech market segment delivered as expected. Strong cost controls and process improvements continue across the organization. The overall headcount at the end of September was 10,045, reflecting a reduction of 744 positions since the beginning of the year. Lonza reiterates its 2013 CORE-EBIT guidance growth of approximately 10%.

Richard Ridinger, CEO Lonza, said: “In our half year update, we have announced a number of important decisions regarding our footprint and portfolio. Our organisation is working intensively on the implementation of these numerous transformational activities, which will help to increase our productivity, reduce our complexity and transform our business portfolio. 2013 is for Lonza a true transformational year and I’m happy to see the new organisation taking shape.”

Pharma&Biotech Market Segment

Driven by the state-of-the-art technology toolbox, the Pharma&Biotech market segment continues to generate customer interest. In Custom Manufacturing, the pipeline development for long-term assets commitment is on track and the business also secured new contracts for small molecule products. The build-out of additional commercial scale Antibody Drug Conjugate (ADC) capacity in Visp is on track in response to continuous high demand for a full service integrated ADC offering, from mAb manufacture to conjugation. In the first 3 quarters of 2013, Lonza underwent 16 regulatory inspections and follow-up discussions with regulatory agencies for both products and sites. The phasedown of our Hopkinton, MA (USA) site is on track.

Custom Development services saw good overall demand. Lonza’s GS Xceed Gene Expression System is expanding worldwide with Asia now representing 25% of GS Xceed Research Evaluation Agreements.

The Media business is on track, supported by the long-term Sartorius Collaboration which is progressing.  Research Products is facing a challenging market environment and fierce competition in Europe. Testing Solutions is on target in the US, with strong growth in Asia-Pacific.

Transformational Activities

Our global initiatives are well under way. The Global Manufacturing and Business Service Excellence projects are working to improve the competitiveness of our physical value chain and our business support structures. The Go-To-Market-Excellence initiative is dealing with the improvement of the commercial and customer facing side of our businesses including innovation, marketing and sales activities with the goal of increasing revenues and profit growth over the coming years. VispChallenge, our project to improve the competitiveness of our Visp, Switzerland, site, is progressing as planned.

In summary, overall results, as well as Lonza’s reorganisation and improvement project,s are on track. Based on our remaining order book visibility Lonza reiterates its 2013 CORE EBIT guidance growth of approximately 10%. The revenues will remain on previous year’s level. CAPEX for 2013 will remain below CHF 250 million.