Roche (ROG) Q1 2020 earnings summary

Executive summary

• Q1 sales reached CHF 15.143bn, up 7% at CER and 2% in CHF; both divisions contributed to CER growth.

• New pharmaceutical products and COVID-19 testing demand supported growth, while biosimilar erosion and pandemic-related disruption weighed on parts of the portfolio.

Financial highlights

• Pharmaceuticals sales were CHF 12.262bn, up 7% at CER and 3% in CHF; Diagnostics sales were CHF 2.881bn, up 5% at CER and down 1% in CHF.

• Strongest regional sales growth was in Pharma International (+16% CER) and Europe (+14%); consolidated growth was +12% in Europe and +10% in International.

• Currency translation reduced sales growth: CER growth was 6.9% versus CHF growth of 2.1%; USD, EUR and JPY were negative contributors.

Outlook and guidance

• FY 2020 outlook confirmed: Group sales growth at low- to mid-single digits and Core EPS growth broadly in line with sales growth, both at CER.

• Further increase in the dividend in Swiss francs expected.

• At 31 March 2020 exchange rates held through year-end, expected FY currency impacts were sales -5%, Core operating profit -6% and Core EPS -7%.

• Major 2020 launches and pivotal readouts were largely on track; risdiplam, satralizumab, Perjeta/Herceptin FDC-SC, Tecentriq plus Avastin in 1L HCC, and Venclexta plus azacitidine were highlighted.