Lonza Cuts Sales Forecast and Abandons Wood Protection Unit Sale
Oct. 31 (Bloomberg) — Swiss chemicals maker Lonza Group AG cut a sales forecast and abandoned plans to divest a unit that makes wood treatment products after offers weren’t good enough.
Full-year sales growth will be less than a previous forecast of 5 percent, the Basel-based company said in a statement. Sales of swimming-pool cleaning chemicals fell well below expectations because of a cool summer in the U.S. and Europe, Lonza said today.
Lonza will focus more intensely on boosting orders for industrial water treatment, which is less affected by weather changes, Chief Executive Officer Richard Ridinger said on a conference call.
“Sales forecasts aren’t easy to predict because of this weather-dependent business model,” Ridinger said. “We want to get into a situation where it impacts us less and less.”
Ridinger has been streamlining Lonza’s manufacturing operations after the company’s $1.3 billion acquisition of Arch Chemicals in 2011 added cosmetic ingredients and made the Swiss company the largest supplier of disinfectants for pools and spas. Today Lonza said it will abandon attempts to sell the wood treatment unit, which has annual sales of about 300 million francs ($313 million).
Offers weren’t satisfactory and the unit, which makes products including the Wolmanized heavy duty wood protector, is providing cash flow to the group, Lonza said.
The company maintained its full-year profit target and said it will provide new mid-term targets in April 2015. Lonza is aiming for about 10 percent growth in adjusted earnings before interest and taxes.
To contact the reporter on this story: Patrick Winters in Zurich at pwinters3@bloomberg.net To contact the editors responsible for this story: Simon Thiel at sthiel1@bloomberg.net Thomas Mulier, David Risser
