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Healthcare

UPDATE 2-Lonza Group CEO to leave in March, shares slump

* 2018 core operating profit up 14.1 pct

* CEO Richard Ridinger to retire in March

* Confirms medium-term guidance

* Says to accelerate review of business portfolio (Adds market reaction)

ZURICH, Jan 30 (Reuters) - Lonza Group Chief Executive Richard Ridinger will retire at the start of March, the Swiss drug ingredients maker said on Wednesday, combining with disappointing 2019 guidance to send its shares sharply lower.

The stock was off more than 7 percent in early trading after news Ridinger, who has been CEO since 2012 and overseen brisk growth, would be replaced by pharma and biotech chief operating officer Marc Funk.

Ridinger, who is aged 60, will remain with the company until the end of April to help with the handover and will be available to Lonza in an advisor until the end of the year.

Lonza said it would focus on executing growth projects in 2019, which it called “a year of significant investments”.

“Lonza is also factoring into its outlook the continued macro-economic uncertainty and some potential ongoing headwinds in the cyclical parts of Lonza’s Specialty Ingredients businesses,” it added.

It guided for mid-to-high-single digit sales growth and a sustained core EBITDA margin level this year.

JP Morgan said the guidance implied cuts in consensus estimates while Ridinger’s departure was “likely to disappoint”.

Lonza’s 2018 core operating profit rose 14.1 percent, buoyed by strong results in its business supplying the drug and biotech industries.

Core earnings before interest and taxes were 1.17 billion Swiss francs ($1.18 billion), compared with the 1.16 billion franc average in a poll of analysts by Reuters.

Sales rose 9 percent to 5.54 billion francs, compared with the poll average of 5.56 billion.

Lonza confirmed its medium-term guidance, said it would accelerate a review of its business portfolio, and proposed an unchanged dividend of 2.75 francs per share. ($1 = 0.9946 Swiss francs) (Reporting by John Miller Editing by Maria Sheahan/Keith Weir)

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