Roche posts solid results in 2010

Basel, Switzerland – The Roche Group posted solid overall results in 2010. Group sales were stable in local currencies at 47.5 billion Swiss francs. The good underlying growth of both Pharmaceuticals and Diagnostics divisions compensated for the expected decline in Tamiflu sales and the impacts of healthcare reforms and austerity measures. Excluding Tamiflu, sales increased by five percent in local currencies. The Pharmaceuticals Division represented 78 percent of Group sales and the Diagnostics Division contributed 22 percent.

Sales in the Pharmaceuticals Division declined by two percent in local currencies to 37.1 billion Swiss francs. Excluding Tamiflu, local growth was five percent, above market growth. Demand for the oncology drugs Avastin, MabThera/Rituxan, Herceptin, Xeloda and Tarceva continued to grow strongly. Additional major growth drivers were Actemra/RoActemra in rheumatoid arthritis, Mircera in anemia and Lucentis in ophthalmology. Actemra, which is now launched in some 50 countries including the United States, the EU and Japan, reached sales of 397 million Swiss francs in 2010. These positive factors compensated for most of the expected strong decline in Tamiflu sales, the reduction in CellCept sales due to US patent expiry in May 2009 and the impacts of the US healthcare reforms, European austerity measures and price cuts in Japan.

The Diagnostics Division increased sales to 10.4 billion Swiss francs in 2010, growing eight percent in local currencies, thereby strengthening its leading market position. Major drivers were Professional Diagnostics with 11-percent sales growth and Diabetes Care with four-percent sales growth.

The Group’s core operating profit increased by seven percent in local currencies (two percent in Swiss francs). The Pharmaceuticals Division increased its core operating profit by four percent in local currencies, driven primarily by cost synergies from the Genentech integration and productivity improvements. Core operating profit growth in the Diagnostics Division was 30 percent in local currencies, mainly resulting from sales growth due to new product launches and the ongoing operational efficiency programmes. The Group’s core operating profit margin increased by 1.7 percentage points to 34.9 percent, with the Pharmaceuticals Division improving by 1.9 percentage points to 39.9 percent and the Diagnostics Division by 3.8 percentage points to 21.1 percent.

In 2010 the Group’s net income increased by four percent to 8.9 billion Swiss francs compared to 2009. Net income attributable to Roche shareholders rose 11 percent to 8.7 billion Swiss francs.

The Group’s operating free cash flow remained strong at 14.1 billion Swiss francs.