Edited from: “business update, October 2008” and company website
Lonza will focus on the implementation of its growth strategy. This is based on a plan that was created over two years ago and has been regularly updated and improved. The key points of this strategy include key areas such as operational, technical and leadership, innovation, and commercial performance. 
“We implement our strategy by focusing on vigorous internal organic growth and permanently adjusting our portfolio of chemical and biotechnology businesses. By delivering on the targets of our well-defined plan, we estimate that we will be able to achieve sales growth of 8-12% and profits in the mid to high teens each year. The visibility of existing contracts and projects, together with prevailing economic conditions, are the basis for projecting continuous growth until 2012”, says chief executive officer, Stefan Borgas.
Realignment and growth in defined life-science markets are the primary objectives of the Lonza strategy. The company says that the acquisitions, investments and divestures undertaken recently by Lonza emphasises this shift towards the life sciences.
With biopharmaceuticals seen as being a key area of growth for Lonza, the company plans to expand capacity at its plants in Singapore and Portsmouth, New Hampshire to meet rising global customer demand for drug ingredients.
Its strategy includes focusing on the manufacture of active pharmaceutical ingredients and vitamins and building up its research and development capability as costs are significantly lower than in developed countries.
“There are two main pillars to the Lonza strategy. One is the strong and highly focused investment programme in our own capacity within our core areas. The second pillar is the change in emphasis of the portfolio towards the life science markets: healthcare, hygiene, preservation, nutrition, agrochemicals and personal care”, says Borgas.
The company states that its strategic growth execution plan includes:
Capital expenditure projects on or ahead of schedule and budget.
Contracts for new plants developing according to plan.
Additional and significant new mid-term opportunities identified, for example, biosimilars, customer cooperation and continued investment in innovation and R&D projects.
Outlook
Lonza believes that its performance is largely on track despite macroeconomic challenges.
Its biopharma services and bioscience are below expectations.
Similar challenges expected to continue in 2009.
Extension of custom manufacturing model to the joint development of product pipelines with customers ongoing.
New significant strategic opportunities identified.
Earnings before interest and tax (EBIT) growth mid to high teens until 2013 on average.
Project pipeline fully aligned to support growth expectations with around 80% of capacity expansions.
Strong earnings per share (EPS) growth in 2008 due to the sale of minority stake in Polynt.
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Financial highlights: Lonza, year ended 31 December
|
|
2008 |
2007 |
2006 |
2005 |
|
Sales (SFr m) |
2.937 |
2,870 |
2,914 |
2,521 |
|
Operating Profit (SFr m) |
441 |
408 |
344 |
297 |
|
Net Profit (SFr m) |
419 |
301 |
222 |
188 |
|
Total Assets (SFr m) |
5,626 |
4,932 |
3,912 |
4,331 |
|
Diluted earnings per share (SFr) |
8.15 |
5.88 |
4.30 |
3.87 |
|
Number of Employees |
8,462 |
7,711 |
6,146 |
5,984 |
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Lonza
Company Structure
Lonza is a life sciences driven chemical company. Lonza was formed when the chemical activities were demerged from parent company Algroup, in October 1999. In the past century, Lonza has developed from a carbide and fertiliser plant into a specialised, globally operating chemical and biotechnology company.
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