Basel, Switzerland, 9 July 2018 – As a pre-information for the reporting of the Half-Year Results 2018 on 25 July, Lonza today is providing clarification on certain items.
Impact from IFRS 15 Restatement on 2017 Comparable Information
On 1 January 2018, the new comprehensive revenue recognition standard, IFRS 15 "Revenue from Contracts with Customers," took effect. Lonza is applying the full retrospective methodology to adopt IFRS 15 and enhance comparability.
As a result, Lonza will publish restated financial results for Half-Year Results 2017 as part of the Half-Year Results 2018 (Table 1) in accordance with IFRS 15. The IFRS 15 restatement only has an impact on Lonza's Pharma & Biotech segment.
Further information has already been provided in the online Lonza Annual Report 2017.
Table 1: Impact from IFRS 15 Restatement on 2017 Comparable Information
External Reporting for Half-Year 2018 | |||
IFRS 15 –Impact from Restatement of 2017 Comparable Information | |||
Restatement of Half-Year 2017 Reported Results | |||
million CHF | 2017 (reported) | IFRS 15 restatement | 2017 (restated) |
Sales | 2'323 | (13) | 2'310 |
Core EBIT | 447 | (7) | 440 |
Core EBIT margin in % | 19.2 | 19.0 | |
Core EBITDA | 577 | (7) | 570 |
Core EBITDA margin in % | 24.8 | 24.7 | |
Lonza Comparable Reporting for Half-Year 2017 and Half-Year 2018
To provide enhanced transparency and comparability to the capital markets, Lonza will provide pro-forma Half-Year 2017 results (reported Lonza Half-Year 2017 financial results including Capsugel Half-Year 2017 financial results) for Lonza's key performance indicators (KPI) of sales, CORE EBITDA and CORE EBIT. These pro-forma KPIs take into account that on 5 July 2017, Lonza successfully closed the acquisition of Capsugel, now a Lonza company. Capsugel has been fully consolidated since the closing of the acquisition.
Lonza Specialty Ingredients Divisional Reporting
As of 1 January 2018, the Specialty Ingredients segment began operating in three distinct units: a Consumer Health division, a Consumer & Resources Protection division and a Water Care business unit.
With the publication of the Half-Year Results 2018, Lonza will provide sales and CORE EBITDA financial KPIs for its new reporting structure in Specialty Ingredients. Historical data for the first half of 2017 will be disclosed, too, in order to enable comparison. Historical data also includes pro-forma Half-Year 2017 financial results for the Consumer Health division (reported Lonza Half-Year 2017 financial results, including Capsugel Half-Year 2017 financial results).
Introduction of ROIC as New Key Metric
As previously communicated on 4 May 2018 with the publication of Half-Year Results 2018, CORE RONOA (return on net operating assets) will be complemented by ROIC (return on invested capital) as a KPI; and the new mid-term ROIC target will be announced. Lonza will provide a comparable ROIC metric for Full-Year 2017 and the actual ROIC metric for Half-Year 2018.