Roche (ROG) H1 2024 earnings summary

Executive summary

• H1 group sales rose 5% at CER, or 8% excluding COVID-19 impacts; Q2 growth accelerated to 9%.

• Core operating profit increased 11% at CER and core EPS rose 9%; IFRS net income fell 4% at CER, mainly due to higher intangible-asset impairments.

• Pharmaceuticals and Diagnostics each grew 5% at CER, with base-business growth of 8% and 9%, respectively.

Financial highlights

• Sales were CHF 29.848bn, flat in CHF and up 5% at CER; COVID-19 sales fell CHF 0.8bn and LOE reduced sales CHF 0.6bn at CER.

• Core operating profit was CHF 11.293bn (+11% CER); core net income was CHF 8.651bn (+8% CER).

• IFRS operating profit was CHF 9.071bn (-7% in CHF); IFRS net income was CHF 6.697bn (-11% in CHF, -4% at CER).

• Core EPS was CHF 10.23 (+9% CER); diluted IFRS EPS was CHF 7.80 (-4% CER).

• Operating free cash flow was CHF 8.053bn (+9% CER); free cash flow was CHF 5.591bn (+1% CER).

Outlook and guidance

• FY 2024 group sales growth guidance remained mid-single-digit at CER; core EPS growth guidance was raised to high-single-digit, excluding resolution of 2023 tax disputes.

• COVID-19 sales are expected to decline by ~CHF 1.1bn and LOE impact is expected at ~CHF 1.4bn for 2024.

• Further dividend growth in Swiss francs is expected; Diagnostics is expected to deliver mid- to high-single-digit growth in coming years.