Restructuring at Lonza continues to improve results

Sales and EBIT both rise in the first half of 2015

Lonza’s Pharma&Biotech and Speciality Ingredients divisions delivered a 'strong and improved performance' in the first half of 2015 and are expected to deliver their growth targets for the full year.

Total sales grew by 6.1% to CHF1.9bn (€1.8bn) in constant exchange rates and CORE EBIT increased by 8.3% to CHF261m, as a result of improved operational performance and the implementation of 'market-driven activities'.

Lonza's Chief Executive Richard Ridinger said this steady improvement 'gives us the stability to look at further optimisation of our portfolio and our asset footprint, including consolidation of our expertise into specific sites'.

The company said its performance in Visp, Switzerland had been affected by the Swiss National Bank’s lifting of the ceiling of the Swiss franc to the Euro in the first half of 2015 and the company continued the 'Visp Challenge' programme started in 2012. This meant the addition of further automation, making slight adaptations to its capacity offering in lower-margin assets, and also making some changes to its portfolio.

The company also instigated a recruitment freeze in certain areas which allowed it to reduce the workforce through natural wastage. Over time these actions will lead to cutting about 90 jobs, and further efficiency and productivity measures will continue to be implemented, the company said.

Pharma&Biotech substantially increased sales in commercial biologics, which over-compensated for the impact of restructuring activities in other areas. Bioscience Solutions also delivered a strong performance during the first half of 2015.

Lonza said it experienced 'firm market demand' for commercial and clinical products, as well as for make-to-stock products.

In addition to offering services to customers in its multi-purpose plants, the company said it now offers suites with dedicated manufacturing capacity to give customers greater flexibility in determining production quantities and timings.

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