* FY EBIT 335 mln Sfr vs 329 mln market forecast
* FY sales rise 45.8 pct to 3.925 bln Sfr
* Reaffirms 2015 targets
* Dividend unchanged at 2.15 francs a share
* Share price down 4.8 pct
(Adds market reaction, analyst's comment)
By Caroline Copley
ZURICH, Jan 24 Swiss specialty chemicals and
life sciences group Lonza reported a better than
expected rise in profits on Thursday but dampened expectations
of another big jump this year, taking the edge off a two-month
rally in the share price.
The Basel-based firm, which also produces pharmaceutical
ingredients for drugmakers such as GlaxoSmithKline, is
now aiming for 10 percent growth in earnings before interest and
tax (EBIT) in 2013, Chief Executive Richard Ridinger told
reporters on a conference call.
This is far weaker than the average forecast given by
analysts in a Reuters poll of EBIT growth of 21 percent for 2013
and the 28 percent jump in EBIT to 335 million Swiss francs
($361 million) achieved last year.
Sales last year jumped 46 percent, boosted by its $1.2
billion acquisition of biocides producer Arch Chemicals in 2011.
The shares, which had gained 25 percent since mid-November
following the launch of a major cost-cutting and plant
rationalisation plan, were trading down 4.8 percent by 1013 GMT
at 52.65 francs, off an earlier session low of 51.65 francs.
"We will slightly revise our estimates and expect that
consensus estimates for 2013 will have to be revised down by at
least 10 percent," said Carla Baenziger, an analyst at Vontobel.
"2013 will be a transition year with a reducing of the
number of production facilities globally."
Lonza, which also makes the active ingredient used in
anti-dandruff shampoos, believes it is well placed to benefit
from pharmaceutical companies' efforts to make their
manufacturing processes more efficient as they face patent
However, it has also been hit by volatility in that sector,
and sought to shield its margins by buying Arch in July,
2011, its biggest ever acquisition.
Excluding Arch EBIT rose 14.7 percent last year, at the top
end of its 2012 target to grow profits by between 10 and 15
Ridinger who took over the helm last May after the ousting
of his predecessor Stefan Borgas has led a review of the firm's
structure and strategy.
Faced with low-cost competition, a strong Swiss franc and
higher raw material prices, Lonza said last October it would cut
500 jobs, including 400 at its main plant in Switzerland.
On Thursday Ridinger had said the firm planned to slim down
its manufacturing, make existing sites more competitive and
carry out further structural changes in 2013, but declined to
give any specific details when asked about possible divestments.
The group expects areas like the manufacturing of anti-body
drug conjugates, which are increasingly being used as targeted
therapies for cancer, and active ingredients for agrochemicals
to drive growth this year.
Lonza reaffirmed its 2015 targets for mid single-digit
percentage growth in annual sales and an EBIT margin of at least
20 percent, but held its dividend payment for 2012 unchanged at
2.15 francs per share.
($1 = 0.9287 Swiss francs)
(Editing by Greg Mahlich)