Note 2 – Information on Balance Sheet and Income Statement Items

2.1 Investments

Lonza Group Ltd holds the following direct subsidiaries as of 31 December 2018. For indirect principal subsidiaries, please see the list in note 33.

 

 

 

 

Capital in CHF 1,000

 

Share in capital and
voting rights in %

 

 

 

 

31 12 2018

 

31 12 2017

 

31 12 2018

 

31 12 2017

 

 

 

 

 

 

 

 

 

 

 

Arch Quimica, S.A. de C.V.

 

Mexico, MX

 

MXN 109

 

MXN 109

 

28%

 

28%

Capsugel Holdings S.à.r.l

 

Luxembourg, LU

 

EUR 78,025

 

EUR 0

 

100%

 

0%

Lonza AG

 

Visp, CH

 

CHF 60,000

 

CHF 60,000

 

100%

 

100%

Lonza America Inc.

 

Allendale, US

 

USD 8

 

USD 8

 

100%

 

100%

Lonza Bioproducts AG

 

Basel, CH

 

CHF 100

 

CHF 100

 

100%

 

100%

Lonza do Brasil Especialidades Quimicas Ltda.

 

Sao Paulo, BR

 

BRL 18,387

 

BRL 18 387

 

99.9%

 

99.9%

Lonza (China) Investments Co. Ltd

 

Guangzhou, CN

 

USD 75,500

 

USD 75,500

 

100%

 

100%

Lonza Europe BV

 

Breda, NL

 

EUR 0

 

EUR 21

 

0%

 

68%

Lonza Holding Singapore Pte Ltd

 

Singapore, SG

 

USD 100,000

 

USD 100,000

 

100%

 

100%

Lonza Japan Ltd

 

Tokyo, JP

 

JPY 200,000

 

JPY 200,000

 

100%

 

100%

Lonza Licences AG

 

Basel, CH

 

CHF 100

 

CHF 100

 

100%

 

100%

Lonza Sales AG

 

Basel, CH

 

CHF 2,000

 

CHF 2,000

 

100%

 

100%

Lonza Swiss Finanz AG

 

Basel, CH

 

CHF 100

 

CHF 100

 

100%

 

100%

Lonza Swiss Licences AG

 

Basel, CH

 

CHF 100

 

CHF 100

 

100%

 

100%

Aravis Venture 1, L.P.

 

Grand Cayman, Cayman Islands

 

USD 58,824

 

USD 58,824

 

31%

 

31%

International School of Basel AG

 

Reinach, CH

 

CHF 20,525

 

CHF 20,525

 

1.6%

 

1.6%

Seed Fund Cycle-C3E (A), L.P.

 

Montreal, CA

 

CAD 42,000

 

CAD 42,000

 

2.4%

 

2.4%

In 2018, Lonza Europe BV was sold to the indirect subsidiary Capsugel Belgium NV. The purchase price was EUR 406,068,293. The transaction gain of CHF 298,166,268 was recorded to other financial income.

2.2 Long-Term Financial Assets

Lonza Group Ltd issued subordination agreements of CHF 95 million (2017: CHF 190 million) on loans to subsidiaries and associates.

2.3 Trade Accounts Payables

Trade accounts payables include liabilities to personnel welfare institutions of CHF 755,518 at 31 December 2018 (2017: CHF 250,909).

2.4 Short-Term Interest-Bearing Liabilities

CHF

 

31 12 2018

 

31 12 2017

 

 

 

 

 

Bank loans

 

90,164,000

 

95,042,412

2.5 Long-Term Interest-Bearing Liabilities

Term Loans Lonza Group Ltd issued in 2017 term loans of EUR 450 million and USD 489 million tranches carrying floating interest rates and repayable in 2020 and 2022 (EUR 225 million and USD 245 million at the first maturity date), respectively.

German Private Placement issued in 2017:

  • Dual-currency German private placement (Schuldscheindarlehen) of EUR 700 million and USD 200 million tranches carry fixed and floating interest rates (LIBOR/EURIBOR + margin) respectively, and are repayable in 2021 (EUR 325 million), 2022 (USD 150 million), 2023 (EUR 375 million) and 2024 (USD 50 million).
  • Single-tranche German private placement (Schuldscheindarlehen) of USD 100 million carrying floating interest rates (LIBOR + margin) and repayable in 2024.

Syndicated Loan In 2017 Lonza signed a syndicated loan with a consortium of banks on the following terms: Credit facility of CHF 700 million, of which CHF 259 million was used as of 31 December 2018 (2017: CHF 230 million), due 2023, at floating interest rates (based on LIBOR). The syndicated loan agreement contains a financial covenant that is based on Lonza’s net debt/EBITDA ratio. The Group was released in 2018 from this covenant as the net debt/EBITDA ratio fell below a defined threshold.

CHF

 

31 12 2018

 

31 12 2017

 

 

 

 

 

Long-term interest-bearing liabilities

 

2,331,849,070

 

2,343,228,100

2.6 Share Capital and Authorized Capital

The share capital on 31 December 2018 comprised 74,468,752 registered shares (2017: 74,468,752) with a par value of CHF 1 each, amounting to CHF 74,468,752 (2017: CHF 74,468,752).

Contingent Capital The share capital of Lonza Group Ltd may be increased through the issuance of a maximum of 7,500,000 fully paid-in registered shares with a par value of CHF 1 each up to a maximum aggregate amount of CHF 7,500,000.

Authorized Capital The Board of Directors shall be authorized to increase, at any time until 25 April 2019, the share capital of Lonza Group Ltd through the issuance of a maximum of 7,500,000 fully paid-in registered shares with a par value of CHF 1 each up to a maximum aggregate amount of CHF 7,500,000. The capital increases in the form of contingent capital and authorized capital may increase the share capital of Lonza Group Ltd by a maximum aggregate amount of CHF 7,500,000. The details and conditions are set out in Articles 4bis to 4quater of the Company’s Articles of Association.

At 31 December 2018, Lonza Group Ltd had a fully paid-in registered capital of CHF 74,468,752 and a contingent capital of CHF 7,500,000.

Reserves in the amount of CHF 37,234,376 (2017: CHF 26,460,070) included in the financial statements of the parent company cannot be distributed.

2.7 Reserves from Capital Contributions

Reserves from Capital Contributions

CHF

 

 

 

 

 

Reserves from Capital Contributions at 1 1 2017

 

243,393,025

 

 

 

Agio capital injection of 5,000,000 shares in February 2017

 

844,665,610

Dividend payout May 2017

 

(159,280,385)

Agio capital injection of 16,548,612 shares in May 2017

 

2,158,055,143

Reserves from Capital Contributions at 31 12 2017

 

3,086,833,393

 

 

 

Dividend payout May 2018

 

(204,781,924)

 

 

 

Reserves from Capital Contributions at 31 12 2018

 

2,882,051,469

2.8 Treasury Shares

 

 

Total
shares

 

Average rate in CHF

 

Number of
transaction

 

 

 

 

 

 

 

Treasury shares at 1 1 2017, weighted average price

 

128,891

 

79.26

 

 

 

 

 

 

 

 

 

Acquisitions 2017

 

288,789

 

247.06

 

7

Distribution to board members

 

(6,828)

 

201.47

 

4

Distribution to E-STIP share plans

 

(16,979)

 

184.31

 

3

Distribution to LTIP share plans

 

(108,682)

 

183.42

 

2

Distribution to ESPP share plans

 

(39,700)

 

206.63

 

2

Distribution to other share plans

 

(1,263)

 

205.40

 

1

Sale treasury shares

 

(18,308)

 

180.28

 

1

Treasury shares at 31 12 2017, weighted average price

 

225,920

 

261.99

 

 

 

 

 

 

 

 

 

Treasury shares at 1 1 2018, weighted average price

 

225,920

 

261.99

 

 

 

 

 

 

 

 

 

Acquisitions 2018

 

246,039

 

311.38

 

10

Distribution to board members

 

(5,321)

 

266.63

 

4

Distribution to E-STIP share plans

 

(17,103)

 

226.40

 

1

Distribution to LTIP share plans

 

(223,357)

 

270.29

 

2

Distribution to other share plans

 

(3,583)

 

264.00

 

1

Treasury shares at 31 12 2018, weighted average price

 

222,595

 

319.73

 

 

2.9 Dividend Income/Impairment Losses on Investments

Dividend income in 2018 includes a dividend distribution from Capsugel Holdings S.à.r.l. of EUR 1,265,000,000 (CHF 1,479,597,560) considered as a capital repayment and at the same time an impairment loss on Capsugel Holdings S.à.r.l. of CHF 1,479,597,560.

2.10 Other Financial Income

Other financial income in 2018 includes interest income from loans to subsidiaries and associates of CHF 118,562,375 (2017: CHF 121,627,865) and the realized gain on sale of Lonza Europe BV of CHF 298,166,268 to Lonza Group Ltd’s indirect subsidiary Capsugel Belgium NV.

2.11 Other Financial Expenses

CHF

 

2018

 

2017

 

 

 

 

 

1

Represents the reclassification from personnel expenses to other financial expenses of the loss on treasury shares to consistently state the 2017 comparative period with 2018 presentation

Bank interest and fees

 

46,525,631

 

31,328,344

Interest on deposits subsidiaries

 

9,884,381

 

1,951,438

Amortization of discounts and issue costs

 

4,948,909

 

41,381,248

Premium paid on finance instruments

 

0

 

18,651,430

Loss on treasury shares

 

28,237,309

 

18,656,646

Net exchange rate loss

 

0

 

132,083,109

Total financial expenses

 

89,596,230

 

234,052,215

2.12 Other Operating Expenses

CHF

 

2018

 

2017

 

 

 

 

 

Consulting expenses

 

17,107,848

 

13,691,678

Administrative expenses

 

5,244,963

 

5,404,116

Other operating expenses

 

38,490,720

 

24,822,255

Total other operating expenses

 

60,843,531

 

43,918,049

Other operating expenses include transaction-related costs incurred for integration of Capsugel and disinvestment.