Group sales were stable in local currencies at 47.5 billion Swiss francs (-3% in Swiss francs; 1% in US dollars). The good underlying growth of both divisions compensated for the expected decline in Tamiflu sales and the impacts of healthcare reforms and austerity measures. Excluding Tamiflu, sales increased by 5% in local currencies. The Pharmaceuticals Division represented 78% of Group sales and the Diagnostics Division contributed 22%.
Sales in the Pharmaceuticals Division declined by 2% in local currencies to 37.1 billion Swiss francs. Excluding Tamiflu, local growth was 5%, above market growth. Demand for the oncology drugs Avastin, MabThera/Rituxan, Herceptin, Xeloda and Tarceva continued to grow strongly. Additional major growth drivers were Actemra/RoActemra in rheumatoid arthritis, Mircera in anemia and Lucentis in ophthalmology. Actemra, which is now launched in some 50 countries including the United States, the EU and Japan, reached sales of 397 million Swiss francs in 2010. These positive factors compensated for most of the expected strong decline in Tamiflu sales, the reduction in CellCept sales due to US patent expiry in May 2009 and the impacts of the US healthcare reforms, European austerity measures and price cuts in Japan.
The Diagnostics Division increased sales to 10.4 billion Swiss francs in 2010, growing 8% in local currencies (4% in Swiss francs; 8% in US dollars), thereby strengthening its leading market position. Major drivers were Professional Diagnostics with 11% sales growth and Diabetes Care with 4% sales growth.
The Group's core operating profit increased by 7% in local currencies (2% in Swiss francs). The Pharmaceuticals Division increased its core operating profit by 4% in local currencies, driven primarily by cost synergies from the Genentech integration and productivity improvements. Core operating profit growth in the Diagnostics Division was 30% in local currencies, mainly resulting from sales growth due to new product launches and the ongoing operational efficiency programmes. The Group's core operating profit margin increased by 1.7 percentage points to 34.9%, with the Pharmaceuticals Division improving by 1.9 percentage points to 39.9% and the Diagnostics Division by 3.8 percentage points to 21.1%.
In 2010 the Group's net income increased by 4% to 8.9 billion Swiss francs compared to 2009. Net income attributable to Roche shareholders rose 11% to 8.7 billion Swiss francs.
The Group's operating free cash flow remained strong at 14.1 billion Swiss francs. A free cash flow of 4.7 billion Swiss francs was achieved in 2010 despite higher interest, tax and dividend payments.
Of the debt raised in early 2009 to finance the Genentech transaction, 33% had already been repaid by 31 December 2010. In addition, the Group exercised its option to call for redemption a portion of the US dollar notes due 1 March 2014. Of the total principal amount of 2.75 billion US dollars, 1.0 billion US dollars will be redeemed in March 2011. The net debt position of the Group is 19.2 billion Swiss francs, a decrease of 4.7 billion Swiss francs from 31 December 2009.
About Roche
Headquartered in Basel, Switzerland, Roche is a leader in research-focused healthcare with combined strengths in pharmaceuticals and diagnostics. Roche is the world's largest biotech company with truly differentiated medicines in oncology, virology, inflammation, metabolism and CNS. Roche is also the world leader in in-vitro diagnostics, tissue-based cancer diagnostics and a pioneer in diabetes management. Roche's personalised healthcare strategy aims at providing medicines and diagnostic tools that enable tangible improvements in the health, quality of life and survival of patients. In 2010, Roche had over 80,000 employees worldwide and invested over 9 billion Swiss francs in R&D. The Group posted sales of 47.5 billion Swiss francs. Genentech, United States, is a wholly owned member of the Roche Group. Roche has a majority stake in Chugai Pharmaceutical, Japan.