Roche holds out prospect of slight growth after subdued 2023
Published: Thursday, Feb 1st 2024, 07:50
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Various factors slowed growth at the pharmaceutical company Roche in the 2023 financial year. In addition to the loss of Covid-19 income, the erosion of sales due to biosimilars and the stronger Swiss franc had a particularly negative impact on profit development. Shareholders will nevertheless receive an increased dividend of CHF 9.60.
At Group level, Roche posted sales of 58.7 billion Swiss francs last year, a decline of 7 percent, as the Group announced on Thursday. At constant exchange rates, however, sales rose by 1 percent. Growth was therefore better than expected by management, which had predicted a low single-digit percentage decline in sales at constant exchange rates.
Roche was able to more than compensate for the erosion of sales due to the decline in Covid-19 sales of 4.3 billion and the loss of sales from generic products of 1.1 billion, at least at constant currencies.
At 44.6 billion in 2023, the Pharma division generated 2 percent less revenue. Revenue in the diagnostics business fell by 20 percent to 14.1 billion Swiss francs. The division has been suffering from lower sales of Covid tests since the end of the coronavirus pandemic. However, as Roche emphasizes in the press release, the basic business has recovered to such an extent that it is now showing growth comparable to the period before the coronavirus pandemic.
Meanwhile, the significant appreciation of the Swiss franc against most currencies had a particularly negative impact on the results reported in Swiss francs. Roche reported net income of 12.4 billion Swiss francs, compared with 13.5 billion in the previous year. Core operating profit, which analysts use as a benchmark, fell by 13 percent.
The reported turnover figures are roughly in line with analysts' estimates. At core profit level, however, they are slightly lower.
Roche is not venturing too far out of the window when it comes to the outlook for the 2024 financial year, which has already begun. CEO Thomas Schinecker and his management team anticipate a mid-single-digit percentage increase in sales at constant exchange rates. Core earnings per share should also increase by a mid-single-digit percentage. In addition, the Group is continuing its efforts to increase the dividend in Swiss francs.
There will be a departure from the Board of Directors. Bernard Poussot, member of the Roche Board of Directors since 2015, will not stand for re-election at the 2024 Annual General Meeting.
©Keystone/SDA
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