Return on Invested Capital

Lonza’s return on invested capital (ROIC) is defined as net operating profit after taxes (NOPAT) divided by the average invested capital of Lonza Group.

In 2018 and 2017, the development of ROIC by component was as follows:

Components of net operating profit after taxes for the year ended 31 December:

million CHF

 

2018

 

2017
1restated

 

 

 

 

 

1

Restated to reflect adoption of IFRS 15 (see note 1) and classification of Water Care business as discontinued operations (see note 5.2)

2

Group tax rate of 18.3% for 2018 and 6.6% for 2017 (restated for IFRS 15 adoption and excluding the favorable impacts from the estimated US and Belgian tax reforms)

3

Pro-forma reflects Capsugel Capsugel full-year 2017 financial results

CORE result from operating activities (CORE EBIT)

 

1,165

 

904

Amortization of acquisition-related intangibles assets

 

(164)

 

(100)

Share of result of associates / joint ventures and interest on operating leases

 

(1)

 

1

Debt impact of operating leases (ROIC)

 

4

 

3

Net operating profit before taxes

 

1,004

 

808

Taxes2

 

(184)

 

(53)

Net operating profit after taxes (NOPAT)

 

820

 

755

 

 

 

 

 

Net operating profit after taxes (NOPAT), pro-forma3

 

820

 

824

 

 

 

 

 

Average invested capital

 

10,254

 

9,849

 

 

 

 

 

ROIC (in %)

 

8.0

 

8.4

The invested capital represent the average of the monthly balances of the following components:

Components of average invested capital for the year ended 31 December:

million CHF

 

2018

 

2017

 

 

 

 

 

1

Investments in associates / joint ventures, operating cash, present value of operating leases

CORE net operating assets

 

3,713

 

3,448

Goodwill

 

3,786

 

3,756

Acquisition-related intangible assets

 

3,244

 

3,356

Other assets1

 

320

 

265

Net current and deferred tax liabilities

 

(809)

 

(976)

Average invested capital

 

10,254

 

9,849