Lonza Organic Growth of 8% Sales and 11% CORE EBITDA in H1 2018

Outperformance in Pharma & Biotech in H1 2018 in sales, with margins up 270 bps, was combined with strong positive momentum in the newly formed Consumer Health division

• Legacy Capsugel businesses, now well integrated into Lonza, exceeded expectations for performance and synergistic potential in H1 2018

• Growth drivers in Consumer & Resources Protection added to favorable momentum, but H1 2018 was negatively impacted by more mature, cyclical parts of the portfolio

• Water business gained momentum in May and June with positive outlook from H2 2018 onward

• Full-Year 2018 sales outlook was upgraded, and double-digit ROIC Mid-Term Guidance 2022 target was announced

Lonza today reported a strong 8.2% organic (like-for-like) sales growth, double-digit organic CORE EBITDA and CORE EBIT growth and continued CORE EBITDA margin improvement during the first half of 2018. One year after the successful closing of the Capsugel acquisition, sales amounted to CHF 3.1 billion for the Half-Year 2018; and margins for Lonza further improved, resulting in a CORE EBITDA margin of 26% and a CORE EBIT margin of 20.3%. All figures are in reported currency and compared with the same period in 2017 (restated to reflect adoption of IFRS 15).

On a segment level, Lonza Pharma & Biotech contributed significantly to Lonza’s strong H1 2018 performance with 14.7% organic sales growth and a 33.1% CORE EBITDA margin. Pharma & Biotech’s Clinical Development & Manufacturing and Commercial Manufacturing services across all technologies and assets continued to build on buoyant demand for Lonza’s offerings along the entire value chain. Within Lonza’s Specialty Ingredients segment, the newly formed Consumer Health division performed extremely well, driven by robust momentum for nutritional ingredients and supplement delivery forms.

“The strong organic sales growth and margin improvements – particularly in our businesses along the healthcare continuum – helped us achieve a positive Half-Year 2018 result, which is why we are updating our outlook for the full year,” said Richard Ridinger, CEO of Lonza. “We look back at a successful first year after acquiring Capsugel and see that integration is progressing better than planned, operational and commercial synergies are starting to materialize and healthcare continuum offerings are becoming even stronger.”

He added, “An important part of the successful integration into the Lonza family has been the valuable contribution of Guido Driesen, Capsugel’s former CEO, who helped bring together a strong organization. With integration progressing so well, he is winding down his activities. We are thankful that Guido is prepared to support us even further with his expertise in other projects globally as needed.”

Based on the strong Half-Year 2018 results, Lonza today upgraded its sales outlook for Full-Year 2018 to mid- to high-single-digit growth on a comparable basis. CORE EBITDA margin for Full-Year 2018 is expected to be comparable to the CORE EBITDA margin of 26% for Half-Year 2018.

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