Roche (ROG) Q3 2020 earnings summary

Executive summary

• YTD Sep sales reached CHF 44.0bn, up 1% at CER as Diagnostics growth and new Pharma products offset biosimilar erosion and COVID-19 effects.

• Activity recovered gradually from Q2; Q3 sales returned to growth, with Pharma recovery and COVID-19 testing supporting Diagnostics.

Financial highlights

• YTD Sep sales were CHF 44.0bn versus CHF 46.1bn; CER growth was 1%, while reported CHF sales declined 5%.

• Pharma sales were CHF 34.3bn, down 1% CER; Diagnostics sales were CHF 9.7bn, up 9% CER.

• New Pharma products grew 32% in Q3 and represented over 43% of Pharma sales; growth offset severe biosimilar erosion.

Outlook and guidance

• FY 2020 guidance was confirmed: sales growth in the low- to mid-single digits and Core EPS growth broadly in line with sales, at CER and based on current COVID-19 assumptions.

• Further increase in the Swiss-franc dividend expected.

• Diagnostics launches and increased SARS-CoV-2 test manufacturing capacity expected to support growth in Q4 2020 and 2021.