Roche (ROG) H2 2024 earnings summary

Executive summary

• Group sales grew 7% at constant exchange rates in 2024, with base business up 9%; Pharma grew 9% and Diagnostics 8%.

• Core operating profit increased 14%, and core EPS rose 12% excluding tax effects; IFRS net income declined 19% due to CHF 3.2–3.9 billion in impairments.

• Dividend increased for the 38th consecutive year to CHF 9.70 per share, with plans for further increases.

• COVID-19 sales impact was CHF 1.1 billion, and loss of exclusivity impact was CHF 1 billion, both offset by strong base business growth.

• Key regulatory and clinical milestones achieved, with significant pipeline newsflow and product launches expected in 2025.

Financial highlights

• Group sales reached CHF 60.5 billion (+7% CER); Pharma CHF 46.2 billion (+9% CER), Diagnostics CHF 14.3 billion (+8% CER base business).

• Core operating profit: CHF 20.8 billion (+14% CER); core OP margin up 2.1 percentage points to 34.4%.

• Operating free cash flow rose to CHF 21.2 billion (+34% CER); free cash flow: CHF 15.3 billion (+43% CER).

• Gross debt increased to CHF 34.7 billion; net debt improved by CHF 1.4 billion to CHF 17.3 billion.

• Currency headwinds reduced sales growth by 4 percentage points and core EPS by 6 percentage points.

Outlook and guidance

• 2025 guidance: mid single-digit group sales growth, high single-digit core EPS growth, further dividend increase, and LOE impact of CHF 1.2 billion.

• Diagnostics division expects low to mid single-digit growth in 2025 due to China headwinds, with higher growth in later years.

• Effective tax rate expected to rise to 19.5% in 2025.