Currency pressures are easing slightly at Roche
Keystone-SDA
At Roche, the headwinds from currency fluctuations have eased somewhat after nine months. The third quarter, in particular, brought some relief thanks to a weaker Swiss franc. On Thursday, the pharmaceutical group confirmed its previous targets for the full year.
Roche generated sales of CHF46.5 billion ($56.5 billion) between January and September. In the reporting currency, the Swiss franc, this represented an increase of 1%, as Roche announced on Thursday. At constant exchange rates, the increase was 6%. The Group has therefore met its own target, which is based on constant exchange rates.
While Roche had still suffered to some extent from the strong Swiss franc in the first and second quarters, its depreciation in the third quarter provided some tailwind, which was broadly in line with analysts’ expectations. As Roche itself reports, currency effects were slightly positive in the third quarter at +1%, having previously been a clear drag at -11% in the first quarter and -4% in the second.
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Of the two business divisions, the larger pharmaceuticals division generated sales of CHF36.2 billion in the first three quarters, an increase of 2%. The five key growth drivers – Xolair, Hemlibra, Ocrevus, Phesgo and Vabysmo – together generated sales of CHF16.8 billion (+12%). Sales of off-patent products (Avastin, Herceptin, MabThera/Rituxan, Lucentis and Actemra/RoActemra) fell by a total of CHF600 million.
In the diagnostics business, Roche generated CHF10.3 billion, which was in line with the previous year’s figure. This indicates that the negative impact of the price reform in China has noticeably eased. Roche had repeatedly emphasised that the impact was expected to diminish as the year progressed. By way of comparison: in the first quarter, revenue had fallen by 7%, and by 3% in the first half of the year.
Roche does not traditionally report profit figures for odd-numbered quarters.
Outlook confirmed
With the figures reported, Roche has largely exceeded analysts’ estimates.
Management, led by CEO Thomas Schinecker, has confirmed its previous guidance for the rest of the financial year. At constant exchange rates, sales are expected to rise by a mid-single-digit percentage. Core earnings per share are expected to grow in the high single-digit percentage range. Furthermore, the Group remains committed to increasing the dividend in Swiss francs.
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Translated from German, reviewed by an English Department journalist.
