Roche (ROG) H2 2021 earnings summary

Executive summary

• Sales reached CHF 62.8bn in 2021, up 9% at CER despite biosimilar erosion and COVID-19 uncertainty; Pharma and Diagnostics both grew.

• New Pharma products and Diagnostics growth supported 6% CER core EPS growth and CHF 19.4bn operating free cash flow, up 34% at CER.

Financial highlights

• Sales were CHF 62.801bn, up 8% reported and 9% at CER; core operating profit was CHF 21.897bn, up 2% reported and 4% at CER.

• Core EPS was CHF 19.81, up 3% reported and 6% at CER; IFRS net income was CHF 14.935bn, down 1% reported and up 2% at CER.

• Core operating margin was 34.9% vs. 36.9% in 2020; IFRS net income margin was 23.8% vs. 25.8%.

• Operating free cash flow was CHF 19.411bn, up 31% reported and 34% at CER; free cash flow was CHF 15.691bn, up 43% reported and 46% at CER.

Outlook and guidance

• 2022 sales growth guidance: stable to low-single digit at CER; core EPS growth: low- to mid-single digit, including 4.4 percentage points of share-repurchase accretion.

• Pharma new products and Diagnostics base business expected to grow; AHR biosimilars forecast to erode sales by ~CHF 2.5bn vs. CHF 4.5bn in 2021.

• 2022 COVID-19 sales forecast at ~CHF 5bn vs. CHF 7bn in 2021; excluding COVID-19 sales and AHR, sales growth expected at high-single digit. Dividend expected to increase in Swiss francs.

• 2022 currency impact, based on 31 Dec 2021 rates, expected at -2% to -4% points on sales, core operating profit and core EPS.