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Lonza unveils new business structure; expects to post above-market growth to 2023

October 16/2020

MOSCOW (MRC) -- Lonza (Basel, Switzerland) says it has developed a new structure for its pharma, biotech, and nutrition (LBPN) segment to increase “divisional end-to-end performance accountability” and to strengthen governance and process excellence from global functions, as the company proceeds with the previously announced divestment of its specialty ingredients (LSI) segment, said Chemweek.

The company expects double-digit sales growth, core EBITDA margin of around 33–35%, and double-digit return on invested capital (ROIC) for 2023, it says. “We have considered areas for review, now that Lonza has a dedicated focus on the pharma and biotech industry. Lonza’s structural and cultural blueprint will help us to achieve a harmonized ‘one business’ identity and provide a greater level of transparency on company performance to our investor and analyst community,” says Albert M. Baehny, chairman and CEO ad interim at Lonza.

The new structure of the LPBN segment comprises four business divisions: biologics, which represents 47% of the group’s sales; capsules and health ingredients, 27% of group sales; small molecules, 16% of sales; and cell, gene therapy, and bioscience, 10% of sales, according to Lonza. This structure will become operational from 1 January as the business is currently in a period of transformation, it says.

The company estimates that all of its business units will have a compound annual growth rate (CAGR) higher than that of their respective markets in the 2020–23 period. Lonza anticipates double-digit sales growth in this period, driven by biologics; small molecules; and cell, gene therapy, and bioscience businesses, it says. The CAGR for capsules and health ingredients for 2020–23 is expected to be in the low- to mid-single-digit range; for biologics in the low-double-digit range; for small molecules in the high-single- to low-double-digit range; and for cell, gene therapy, and bioscience in the double-digit range, it notes.  

The estimated double-digit ROIC is driven by growth and margin expansion, Lonza says, adding that it is confident on delivering an improved core EBITDA margin, although it is committed to investing in future growth projects. Capital expenditures in 2021 and 2022 are likely to remain at 2019 levels, it adds.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
Author:Anna Larionova
Tags:petroleum products, crude oil, PP, PE, LLDPE, PP random copolymer, copolymer, neftegaz, petrochemistry, Interim, Polymer, polyethylene (PE).
Category:General News
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