Roche reports strong results in a challenging market environment: Group sales up significantly, increasing by 10% in local currencies excluding Tamiflu pandemic sales.

Strong organic growth of key products more than outweighs lower Tamiflu pandemic sales. Including Tamiflu pandemic sales, Group sales in local currency rise 6%.

Operating profit exceeds last year’s record by 4% in local currencies, reaching 13.9 billion Swiss francs despite increased level of R&D investment.

Net income down by 5% in Swiss francs to 10.8 billion Swiss francs, primarily due to the strong Swiss franc, but also to lower net financial income.

Core Earnings per share at constant exchange rates 2% above previous year’s record level.


Pharmaceuticals sales advance 10% — twice the global market growth rate. This is the sixth double-digit increase in as many years.

Oncology product sales grow by 15% to 19.7 billion Swiss francs. For the first time, three cancer products achieve sales of over 5 billion Swiss francs.

Operating profit margin increases by 0.7 percentage points to 36.2% despite significantly lower Tamiflu pandemic sales and increased investments in the development pipeline.

Avastin receives accelerated approval for breast cancer in US; applications for approval in brain cancer filed in US and EU.

Actemra/RoActemra approved for rheumatoid arthritis in Japan, EU and Switzerland; additional data will be submitted to US FDA in 2009.

Twelve major phase III programmes initiated.

Acquisitions of Piramed, Mirus and ARIUS significantly strengthen R&D pipeline with new compounds and technology platforms.


Above-market sales growth in both divisions.

Mid-single-digit sales growth for both divisions and Group.

Core Earnings per share target to remain at the high level of 2008 in spite of increased investments in research and development and expected lower net financial result.

Severin Schwan, chief executive officer of Roche, on the Group’s 2008 results: “Roche continued the positive trend of recent years. Once more sales by both the Pharmaceuticals and Diagnostics Divisions grew considerably faster than the market. Core Earnings per share in local currencies also rose again.” Speaking of Roche’s future strategic direction, Schwan said: “In these times of economic upheaval it is more important than ever that we adhere rigorously to our strategy. We will continue to focus on our core pharmaceuticals and diagnostics businesses. Our aim remains to offer patients ever better treatments that are tailored to their condition.”

In 2008, the Group continued its strong sales performance. Total sales grew by 6% in local currencies (-1% in Swiss francs; 10% in US dollars) to 45.6 billion Swiss francs, with the Pharmaceuticals Division representing 79% of Group sales and the Diagnostics Division contributing 21%. The sales increase in the underlying business more than compensated for the anticipated decline in Tamiflu pandemic sales of 1.6 billion Swiss francs. Local currency sales growth excluding Tamiflu pandemic sales was 10%. Both the Pharmaceuticals and Diagnostics Divisions grew well ahead of their respective markets.

Demand for the Group’s oncology drugs Avastin, MabThera/Rituxan, Herceptin, Tarceva and Xeloda continued to be strong. Additional growth drivers in the Pharmaceuticals Division were Bonviva/Boniva in metabolism/bone and CellCept in transplantation. In the Diagnostics Division the main growth areas were Professional Diagnostics and Applied Science, with both business areas growing well ahead of their respective markets. Following the acquisition of Ventana at the beginning of February 2008, sales in the Tissue Diagnostics business grew significantly faster than the market, contributing 4 percentage points to local currency sales growth of the Diagnostics Division.

Significant increase in operating free cash flow

The group’s operating profit increased by 4% in local currencies to 13.9 billion Swiss francs. The operating profit margin declined slightly by 0.9 percentage points to 30.5% due to a margin reduction in the Diagnostics Division of 5.3 percentage points. The main reason being the impact of recent acquisitions, strong competition in the US diabetes care market and portfolio mix effects. The Pharmaceuticals margin improved by 0.7 percentage points to 36.2% despite significantly lower Tamiflu pandemic sales and increased investments in the strong development pipeline. Operating free cash flow increased by 16% to 12.4 billion Swiss francs despite significant currency translation effects.

Strong balance sheet

The financial crisis had only a minimal adverse effect on net financial income due to the conservative investment approach with limited exposure to equity securities. In 2008, net financial income reached 0.2 billion Swiss francs. The reduction of 0.6 billion Swiss francs compared with 2007 is primarily due to lower interest income resulting from lower liquid funds and reductions in interest rates. Due to the strong Swiss franc and the lower net financial income, group net income decreased by 5% to 10.8 billion Swiss francs. Core EPS increased by 2% in local currencies to 11.04 Swiss francs. The Group continues to have a strong balance sheet, also when compared internationally, with equity (including non-controlling interests) representing 71% of total assets and 84% of total assets financed long-term.


Barring unforeseen events, the Roche Group expects to continue to perform strongly in 2009. Full-year sales in both the Pharmaceuticals and the Diagnostics Division are expected to grow ahead of the market, with increases in the mid-single-digit range in local currencies. Roche will continue to invest in the large-scale confirmatory clinical trials that are vital to the Group’s long-term success. Despite the higher research and development costs involved and the expected lower net financial result, the Group is aiming for Core Earnings per share (Core EPS) at constant exchange rates to remain at the same high level as in 2008. Following the proposed purchase of the outstanding Genentech shares, Roche expects that the transaction will have a positive impact on Core EPS within the first year after closing. Roche will update its targets once the transaction has been closed.

22nd dividend increase in a row

In view of Roche’s latest excellent results, the Board of Directors will propose that the dividend for 2008 be increased by 9% to 5.00 Swiss francs per share and non-voting equity security (up from 4.60 Swiss francs for 2007). Subject to approval at the next annual general meeting of shareholders, this will be Roche’s 22nd consecutive annual dividend increase.