Roche (ROG) H1 2024 earnings summary

Executive summary

• Group sales grew 5% at constant exchange rates (CER) to CHF 29.8 billion for H1 2024, with base business up 8% and both Pharma (+8%) and Diagnostics (+9%) divisions showing strong momentum; Q2 sales growth accelerated to 9% as COVID-19 impact faded.

• Core operating profit increased 11% at CER, core EPS up 9%, and operating free cash flow up 9%; IFRS net income declined 4% at CER due to higher impairments.

• Young portfolio and recent launches (Vabysmo, Phesgo, Polivy, Ocrevus, Evrysdi, Hemlibra) are driving growth, with significant regulatory and clinical milestones achieved.

• Strategic focus on R&D excellence, digital health, and portfolio prioritization, with accelerated asset development and operational efficiency.

• COVID-19 and loss of exclusivity (LOE) impacts are diminishing, supporting continued momentum into 2025.

Financial highlights

• Group sales reached CHF 29.8 billion for H1 2024, up 5% at CER; core operating profit CHF 11.3 billion (+11% CER); core net income CHF 8.65 billion (+8% CER); core EPS CHF 10.23 (+9% CER).

• IFRS net income declined 4% at CER to CHF 6.7 billion, mainly due to impairments and higher taxes.

• Operating free cash flow CHF 8.05 billion (+9% CER); free cash flow CHF 5.6 billion (+1% CER).

• Gross margin and core operating margin improved, with group core operating margin up to 37.8%.

• Currency headwinds reduced reported growth by 5 percentage points in H1 2024.

Outlook and guidance

• 2024 guidance raised: group sales expected to grow mid-single digit at CER, with high single-digit core EPS growth (excluding 2023 tax dispute resolution); further dividend increase planned.

• COVID-19 and LOE impacts are expected to diminish further, supporting continued momentum.