Roche results. January 30, 2013

Transcription

1 1

2 Roche 2012 results January 30,

3 This presentation contains certain forward-looking statements. These forward-looking statements may be identified by words such as believes, expects, anticipates, projects, intends, should, seeks, estimates, future or similar expressions or by discussion of, among other things, strategy, goals, plans or intentions. Various factors may cause actual results to differ materially in the future from those reflected in forward-looking statements contained in this presentation, among others: 1 pricing and product initiatives of competitors; 2 legislative and regulatory developments and economic conditions; 3 delay or inability in obtaining regulatory approvals or bringing products to market; 4 fluctuations in currency exchange rates and general financial market conditions; 5 uncertainties in the discovery, development or marketing of new products or new uses of existing products, including without limitation negative results of clinical trials or research projects, unexpected side-effects of pipeline or marketed products; 6 increased government pricing pressures; 7 interruptions in production; 8 loss of or inability to obtain adequate protection for intellectual property rights; 9 litigation; 10 loss of key executives or other employees; and 11 adverse publicity and news coverage. Any statements regarding earnings per share growth is not a profit forecast and should not be interpreted to mean that Roche s earnings or earnings per share for this year or any subsequent period will necessarily match or exceed the historical published earnings or earnings per share of Roche. For marketed products discussed in this presentation, please see full prescribing information on our website All mentioned trademarks are legally protected 3

4 Group Severin Schwan Chief Executive Officer 4

5 Solid results 2012 Outlook 5

6 2012: Financial targets fully achieved Targets for 2012 FY 2012 Pharma Low to mid single-digit 1 +5% Diagnostics Above market 1 +4% Group Low to mid single-digit 1 +4% Core EPS High single-digit 1 +10% Dividend Continue attractive dividend policy CHF % 1 At CER=Constant Exchange Rates 2012 dividend as proposed by the Board of Directors 6

7 2012 Highlights Innovation 11 out of 14 trials successful HER2 franchise strengthened through Perjeta and T-DM1 Emerging pipeline to secure MabThera/Rituxan franchise US launch of next-generation Accu-Chek portfolio Efficiency Implementation of annual savings from Operational Excellence (2.4 bn CHF) Refocus of pred following closure of Nutley site (Group R&D stable) Adjustment of cost structure of Applied Science and Diabetes Care 7

8 2012: Sales growth above market change in % CHF bn CHF bn CHF CER Pharmaceuticals Division Diagnostics Division Roche Group CER=Constant Exchange Rates 8

9 2012: Sales growth accelerating 1 8% 6% 4% 2% 0% 0% 0% 1% 4% 2% 2012: +4% 6% 4% 6% -2% -4% -3% -5% -6% Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 At CER=Constant Exchange Rates 9

10 2012: US and Emerging markets driving growth Pharma Growth vs. market Diagnostics Growth vs. market Asia 15% Asia- Pacific 15% Latin America 11% Latin America 15% CEMAI 8% US 7% North America 3% Japan 2% Japan 7% WE-2% EMEA -1% All growth rates at CER=Constant Exchange Rates; CEMAI=Central and Eastern Europe, Middle East, Africa, Central Asia, Indian Subcontinent; EMEA=Europe, Middle East and Africa. Source: IMS, company and independent estimates 10

11 2012: Operating profit and margin further increased Group core operating profit and margin 33.0% 33.2% 34.9% 35.6% +11% % % of sales CHF bn 1 At CER=Constant Exchange Rates

12 2012: Cash flow and margin further increased Group operating free cash flow and margin 27.1% 32.1% 29.8% 32.3% +10% % % of sales CHF bn 1 At CER=Constant Exchange Rates

13 2012: Dividend further increased Average yearly dividend growth ( ): 18% payout ratio of 54% CHF Pay-out compound ratio calculated annual growth as dividend rate per share divided by core earnings per share (diluted); 2012 as proposed by the Board of Directors 13

14 Solid results 2012 Outlook 14

15 2012: Strong progression of pipeline 11 successful late-stage clinical trials Avastin TML dalcetrapib dal-outcomes aleglitazar AleNEPHRO Actemra CHERISH MabThera SC SABRINA Actemra BREVACTA Actemra FUNCTION 2012 Actemra ADACTA T-DM1 EMILIA Actemra SUMMACTA Herceptin HERA 2 yrs Avastin AVAGLIO Avastin AURELIA Avastin BEATRICE Positive trials 15

16 2013: A rich year for late-stage enabling studies Major up-coming decision points aleglitazar metabolic diseases lebrikizumab asthma mglur2 antagonist treatment-resistant depression gantenerumab* Alzheimer s mglur5 antagonist treatment-resistant depression ocrelizumab MS crenezumab Alzheimer's bitopertin schizophrenia Anti-PD-L1 solid tumours HCV combo HepC MEKi melanoma onartuzumab (MetMAb) NSCLC obinutuzumab (GA101) CLL T-DM1 HER2+ BC Anti-EGFL7 solid tumours EGFR ADCC MAb (GA201) solid tumours PI3 kinase solid tumours dual PI3 kinase/mtor solid tumours etrolizumab ulcerative colitis Anti-factor D geographic atrophy Anti-PCSK9 metabolic diseases inclacumab (P selectin MAb) ACS/CVD Oncology Neuroscience Virology Immunology Ophthalmology Metabolism Ph III NMEs Late stage enabling data expected in 2013 *Phase II/III label enabling 2013 R&D to remain stable 16

17 2013 Outlook Group sales growth 1 In line with sales growth recorded in 2012 Core EPS growth 1 Ahead of sales growth Dividend outlook Further increase dividend 1 At constant exchange rates 17

18 Pharmaceuticals Division Daniel O Day COO Roche Pharmaceuticals 18

19 2012 results Growth drivers Outlook

20 2012: Pharma sales US and International major growth contributors change in % CHF m CHF m CHF CER Pharmaceuticals Division 35,232 32, United States 13,856 12, Western Europe 7,926 8, Japan 4,108 3, International 9,342 8, CER=Constant Exchange Rates 20

21 2012: Pharma Division Profit margin improvement driven by higher sales 2012 CHF m % sales Sales 35, vs CER growth 5% Royalties & other op inc 1, Cost of sales -7, M & D -5, R & D -7, G & A -1, % -3% 2% 2% 18% Core operating profit 15, % +16% in CHF CER=Constant Exchange Rates 21

22 Major clinical and regulatory news flow Timeline Compound Indication Milestone Avastin mcrc Ph III TML Perjeta 1 st line HER2+ mbc US approval EU approval Erivedge advanced BCC US approval EU approval (2012/13) Zelboraf metastatic melanoma EU approval Lucentis DME US approval T-DM1 2 nd line HER2+ mbc Ph III EMILIA Herceptin subcutaneous early HER2+ BC Ph III HANNAH (data presentation) Herceptin adjuvant HER2+ BC Ph III HERA 2 years vs. 1 year MabThera subcutaneous front-line follicular NHL Ph III Actemra RA DMARD IR Ph III ADACTA H2H vs. Humira Actemra subcutaneous RA, moderate to severe Ph III SUMMACTA BREVACTA Avastin newly diagnosed glioblastoma Ph III AVAglio dalcetrapib Atherosclerosis CV risk red. 2 nd interim analysis in H GA101 Front line CLL Ph III vs. chemotherapy bitopertin (GlyT-1) Schizophrenia Ph III Data expected in 2014 Oncology and CV outcome studies are event driven, timelines may change 22

23 2012 results Growth drivers Outlook

24 2012: Pharma sales Oncology, Actemra and Pegasys main growth drivers Herceptin MabThera/Rituxan +11% +9% Avastin +6% Actemra/RoActemra Zelboraf Pegasys +33% NM +12% CellCept -11% Lucentis NeoRecormon/Epogin Boniva/Bonviva -54% -26% -8% International US Japan Western Europe Absolute amounts in CHF m at Constant Exchange Rates (CER) average 2011; all growth rates at CER 24

25 2012: Oncology franchise Strong growth of established products CER growth MabThera/ Rituxan Herceptin Avastin +9% +11% +6% EU, US: Continued uptake in 1 st L maintenance in FL Emerging markets: increased share and treatment duration in DLBCL US, Emerging markets main growth contributor; Increased HER2 testing and further uptake in HER2+ gastric cancer; SC Herceptin approval delayed at least one quarter, CHMP opinion now expected in Q EU: Launch in ovarian cancer, increased share in LC and BC Japan: strong uptake in CRC, NSCLC and mbc Xeloda +9% Growth driven mainly by US, China and other Int l regions; US supply of IV 5FU normalised Tarceva +2% WE: Uptake in 1 st L mut+ segment not yet compensating for pressure in 2 nd L wt. US: 1 st L mut+ filed end Growth driven mostly by US, China and Japan CHF bn CER=Constant Exchange Rates Oncology 2012 sales: CHF 21.3 bn 25

26 Avastin Turnaround driven by ovarian and colorectal cancer Colorectal TML launch underway, offsetting competitive pressure Market share gains in EU and Japan Lung Avastin remains the standard of care Market share gains in Japan Ovarian Best ever Avastin launch in EU. ~35% EU4 NPS in front line Brain AVAglio met PFS co-primary endpoint. EU filing Q1 13 Current US glioblastoma sales ~USD 170 m Breast Further adoption in triple-negative segment in EU NPS=New Patient Share 26

27 2012: Oncology franchise New products Good launch in US Positive CHMP opinion in Dec 12 US: Market fully penetrated at ~85% 1 st line NPS WE: More than half of global sales, main growth region in 2013 Ph III in combination with MEKi started US: Broad prescriber base, need for education on disease definition and eligibility EU: Approval expected in 2013 US PDUFA 26 February 2013, EU H MARIANNE study data expected H (based on current event rate) NPS=New Patient Share 27

28 Perjeta: Encouraging launch in the US US Perjeta weekly volume Q4 in-market demand grew by 53% over Q3 ~75% physicians prescribing the drug Further increasing patient share Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 28

29 Lucentis Competitive pressure in wamd 500 Lucentis quarterly sales (USD m) AMD 0.5 mg PRN dosing approval expected February Eylea wamd Further pressure on AMD sales expected in 2013, partially offset by DME RVO 300 Lucentis DME Lucentis share stable DME Approved in August 2012 (0.3 mg) 200 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Strong increase in patient share AMD=wet age-related macular degeneration; RVO=retinal vein occlusion; DME=diabetic macular edema; NPS=New Patient Share 29

30 Pegasys Growth contribution to shift from US to Emerging markets US Pegasys weekly volume DAA launch Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 US High base-line in H Patient warehousing ahead of all-oral therapy Western Europe Slower adoption of new combination therapies Early warehousing observed Japan Overall HCV market shrinking International region Main growth driver in 2013, including HBV 30

31 Actemra: Superiority in monotherapy (ADACTA) drives market share growth Biologic therapy today (patient shares) 1 Actemra market share in monotherapy segment 2 30% 25% 30% 20% 70% 10% Biologic monotherapy Biologic combination 0% Q1 '09 Q3 '09 Q1 '10 Q3 '10 Q1 '11 Q3 '11 Q1 '12 Q3 '12 1 st line biologic use approved in US October 2012 Subcutaneous formulation filed in US and EU December Data from biologics registries and US claims database; 2 Market share for DE, FR, IT, ESP, UK, predefined target groups 31

32 2012: Emerging markets remain strong growth driver Russia +14% Brazil +11% China +27% 2012 International region: +9% Tailor-made access programs to continue supporting growth All growth at CER=Constant Exchange Rates 32

33 2012 results Growth drivers Outlook

34 2013: Major clinical and regulatory news flow Compound Indication Milestone Avastin mcrc (TML) US EU approval Avastin Newly diagnosed glioblastoma EU filing Erivedge Advanced BCC EU approval Regulatory Herceptin subcutaneous HER2-positive BC EU approval Lucentis AMD PRN US approval Perjeta 1 st line HER2-positive mbc EU approval Tarceva EGFR mut+ 1 st line NSCLC US approval T-DM1 2 nd line HER2-positive mbc US, EU approval Phase III obinutuzumab (GA101) Front line CLL Ph III Tarceva Adjuvant NSCLC Ph III RADIANT Xolair Chronic idiopathic urticaria Ph III Outcome studies are event driven, timelines may change 34

35 2013: Major late-stage enabling studies Phase II Compound crenezumab Anti-EGFL7 EGFR ADCC (GA201) etrolizumab Anti-factor D HCV combo inclacumab (P selectin Mab) mglur2 antagonist mglur5 antagonist Anti-PCSK9 Anti-PD-L1 PI3 kinase Dual PI3 kinase/mtor Indication Alzheimer s disease Solid tumours Solid tumours Ulcerative colitis Geographic atrophy Hepatitis C ACS/CVD Treatment-resistant depression Treatment-resistant depression Metabolic diseases Solid tumours Solid tumours Solid tumours Outcome studies are event driven, timelines may change 35

36 Outlook Sustained sales growth with significant newsflow Sales drivers Avastin growth driven by Emerging markets and Europe (OC, TML) Herceptin, MabThera/Rituxan continuing growth Newly launched products (Perjeta, Zelboraf, Erivedge, T-DM1) Actemra further increasing market share in monotherapy Emerging markets Newsflow GA101 vs. MabThera/Rituxan in CLL, Ph III T-DM1 approval in US and EU Perjeta launch in EU Significant number of late-stage enabling Ph II studies 36

37 Diagnostics Division Roland Diggelmann COO Roche Diagnostics Picture 37

38 2012: Professional Diagnostics main growth driver Refining Diabetes Care and Applied Science Companion Diagnostics 38

39 2012: Diagnostics Division sales Sustained growth above the market * CHF in % CHF m CHF m growth CER Diagnostics Division 9,737 10,267 5% 4% Professional Diagnostics 4,709 5,165 10% 8% Diabetes Care 2,652 2,566-3% -4% Molecular Diagnostics 1,094 1,168 7% 4% Applied Science % -3% Tissue Diagnostics % 12% *IVD market growth estimated at 3% as of end Oct 2012 by independent IVD consultancy; CER=Constant Exchange Rates 39

40 2012: Profitability impact from pricing pressures in Diabetes Care 2012 CHF m % sales Sales 10, vs CER growth 4% Royalties & other op income Cost of sales (CoS) -4, M & D -2, R & D G & A % 4% 6% 14% 21% Core operating profit 2, % 0% in CHF CER=Constant Exchange Rates 40

41 Key launches 2012 Area Product Market BA 1 Instruments / Devices Labs Point of Care Diabetes Care cobas t Coagulation analyzer BenchMark Special Stains - Tissue stainer VENTANA iscan HT - Digital tissue scanner cobas b HbA1c and lipid monitoring system cobas b 123 POC - Blood gas analyzer Accu-Chek Nano SmartView -Small, no-code bgm 2 system Accu-Chek Combo Insulin pump & bg meter combined Accu-Chek Mobile Next generation strip free bgm system SOLO Micropump Insulin pump and bg meter combined EU WW EU, US EU US US US EU EU RPD RTD RTD RPD RPD RDC RDC RDC RDC Tests / Assays Oncology Infectious Diseases HE4 - Ovarian cancer ER Breast cancer CINtec p16 Histology- Cervical cancer GS GType Sequencing Primer Sets- Leukemia CMV Cytomegalovirus infections CT/NG - Chlamydia and gonorrhoea infections US US WW WW US US RPD RTD RTD RAS RMD RMD Metabolism Vitamin D - Vitamin D2 & D3 US RPD Achieve sales growth above the market 1 Business Areas. RPD: Roche Professional Diagnostics; RDC: Roche Diabetes Care; RMD: Roche Molecular Diagnostics; RAS: Roche Applied Science; RTD: Roche Tissue Diagnostics; 2 blood glucose monitoring 41

42 2012: Diagnostics Division sales Market leader in all regions North America +3% 26% of divisional sales EMEA 1-1% 46% of divisional sales Japan +7% 6% of divisional sales Latin America +15% 8% of divisional sales Asia Pacific +15% 14% of divisional sales 17 % growth in E7 countries 2 1 Europe, Middle East and Africa; 2 Brazil, China, India, Mexico, Russia, South Korea, Turkey All growth at CER=Constant Exchange Rates) 42

43 2012: Growth driven by Professional Diagnostics CHF bn 2012 vs CER growth Q4 Highlights Professional Dia +8% FDA approval for HE4 test for ovarian cancer diagnosis; Launch of cobas b 101 HbA1c and lipid monitoring system Diabetes Care -4% US launch of Accu-Chek Combo system, an insulin pump & bg meter combination Molecular Dia +4% Cobas HPV Test: Registration of primary screening indication in CE Mark; Gaining traction in US market Applied Science -3% Launch of LightCycler 96 qpcr system; Partnership with PSS for automation of sequencing workflow Tissue Dia +12% EMEA North America RoW Companion Diagnostics (CDx): Launch of ALK test in EMEA as CDx with crizotinib in non-small cell lung cancer EMEA=Europe, Middle East and Africa; CER=Constant Exchange Rates 43

44 Professional Diagnostics: Industry leader growing twice as fast as the market Reagent pull-through model RPD 2 sales vs. market growth (%) FY 2012: 8% Instrument placements in SWA 1 :+13% Expanded immunoassay menu with >100 tests 2 0 Q1 Q2 Q Q4 Q1 Q2 Q Market RPD Q4 1 Serum Work Area: Immunoassays and Clinical Chemistry; 2 RPD=Roche Professional Diagnostics; Market estimates from independent IVD consultancy, Q forward estimate; 44

45 Professional Diagnostics: Immunoassays Investing in high growth areas Over a decade of consecutive double-digit growth Expanding capacity CHF bn % New production facility in Penzberg Invest over CHF 240 m Capacity expansion of immunoassay production facilities Roche and Hitachi - 35 years of partnership Securing increasing supply of cobas instruments All growth at CER=Constant Exchange Rates 45

46 RPD: Strengthening presence in Point of Care Strong business with new launches in 2012 Hospital PoC testing site Hospital wards Operating room New PoC product launches Accu-Chek Inform II system Next generation wireless hospital blood glucose monitoring system cobas b 123 POC system Blood gas testing (lung function, kidney or metabolism disorders) Physician office cobas b 101 system Targeting diabetes and dyslipidemia (metabolic syndrome) Home Market-leading PoC product line CoaguChek systems Coagulation monitoring continuing strong business with sales growth +8% (CER) RPD=Roche Professional Diagnostics 46

47 2012: Professional Diagnostics main growth driver Refining Diabetes Care and Applied Science Companion Diagnostics 47

48 Diabetes Care Strong presence with a comprehensive portfolio Single strip bgm products with selected examples Integrated systems Premium Accu-Chek Aviva Expert Precise insulin dosing with bolus advisor Built-in software for diabetes management solutions Next-generation Accu-Chek Mobile Strip-free and built in lancing device Best fit for frequent testers Base Next-generation Accu-Chek Active Ease of use Maltose independent strips No existing market segment 48

49 Applied Science: Focus and invest in select areas with high growth potential LightCycler 96 qpcr Launch of LightCycler 96 System Completes Roche s real time PCR portfolio Innovative features combined with ease of use Very successful market launch GS FLX+ platform Sequencing solutions Software upgrade for GS FLX+ platform Partnership with PSS for improvement of sequencing workflow Launch of Sequence Capture Neurology and Oncology panels 49

50 2012: Professional Diagnostics main growth driver Refining Diabetes Care and Applied Science Companion Diagnostics 50

51 Tissue Diagnostics: SPHERE Project in China CDx collaboration for HER 2 testing & Herceptin PATHWAY (4B5) IHC INFORM Dual ISH Integrated HER 2 testing expands patient access to Herceptin Patients starting therapy 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Instrument placements and sales growth for all advanced tissue staining tests % % % BenchMark automated slide staining platform AS placements AS assays sales CER growth 51

52 Key launches 2013 Area Product Market BA 1 Labs cobas 8100 Next generation modular pre-analytics EU RPD Instruments / Devices Life Sciences Diabetes Care GS FLX+ long amplicons- Software for long read targeted sequencing Accu-Chek Insight- Next generation insulin pump & bgm 2 system Accu-Chek Active LCM- Next-generation bgm 2 meter with maltose independent test strips WW EU EU RAS RDC RDC Tests/ Assays Oncology Infectious Diseases Transplant Sequencing Calcitonin Medullary thyroid cancer progrp- Small cell lung cancer CINtec PLUS Cytology- Cervical pre-cancer ER- Breast cancer EGFR- Lung cancer MPX 2.0 Next generation blood screening multiplex test for HIV, HCV & HBV CAP/CTM HCV 2.0 Next generation HCV viral load test Cyclosporin, Tacrolimus immunosuppressive drug monitoring SeqCap EZ Reagent Kits - Targeted next gen. sequencing 1 Business Areas. RPD: Roche Professional Diagnostics; RDC: Roche Diabetes Care; RMD: Roche Molecular Diagnostics; RAS: Roche Applied Science; RTD: Roche Tissue Diagnostics; 2 blood glucose monitoring EU EU EU US US US US EU WW RPD RPD RTD RTD RMD RMD RMD RPD RAS 52

53 Outlook Sustained sales growth driven by leading IVD business Drivers Further growth of installed base Expansion of test menu Emerging markets Stabilise Diabetes Care Increasing CDx collaborations 53

54 Group Alan Hippe Chief Financial Officer 54

55 2012: Continued strong profit growth Deleveraging Focus on cash Outlook 55

56 2012: Highlights Core EPS +10% 1 Sales translating into profit Productivity improvements on track Cash flow and Balance sheet Net debt / Total assets: 16% Operating FCF: 10% CER growth (+12% in CHF) FCF: +15% CER growth (+19% in CHF) Dividend Increased for the 26 th consecutive year: from CHF 6.80 to CHF 7.35 (+8%) 1 CER = Constant Exchange Rates 56

57 2012: Group performance Core EPS growth +10% 1 CHF m % Change CHF CER Sales 42,531 45, Core operating profit 15,149 17, as % of sales Core net income 10,685 11, as % of sales Attributable to Roche shareholders 10,470 11, Core EPS (CHF) Operating free cash flow 13,733 15, % of sales p Free cash flow 3,904 4, % of sales p 1 At CER=Constant Exchange Rates 57

58 2012: Sales growth as main operating profit contributor % 16,809 15,149 +1,704 Productivity improvements 1 Core Operating Profit Pricing pressure Diabetes Care Japan price cuts EU austerity Sales growth Core Operating Profit 2012 CHF FY11 Fx FY11 Fx rates 1 Includes CHF ~170 m higher royalty, out-licensing income & other (net) 58

59 2012: Group operating performance Sales main profit growth driver Sales 2012 vs CER growth 4% Major drivers Driven by growth in Oncology and IVD business Strong US and Emerging markets Royalties & other op. inc 17% Higher royalty and product disposal income Cost of sales 0% Lower manufacturing costs M & D 3% Better utilisation of existing infrastructure R & D 2% Stable R&D G & A Admin:+2% 6% IT systems Core operating profit 11% +13% in CHF CER=Constant Exchange Rates 59

60 2012: Core operating profit and margin Strong margin increase led by Pharma CHF m 34.9% 35.6% 37.7% 39.9% 40.9% 44.0% 16,591 15,14917, %p 1 (+2.1 %p) +11 % 1 (+13 %) +3.4 %p 1 (+3.1 %p) +13 % 1 (+16 %) 14,776 13,40615, % 22.4% 21.3% -1.4 %p 1 (-1.1 %p) % of sales ,202 2,178-2 % 1 (0 %) 2,187 1 At CER=Constant Exchange Rates CER Roche Group Pharma Division Diagnostics Division 60

61 Restructuring in 2012 CHF m Restructuring costs ~1,440 Net Savings Reinvestments and P&L impact 1, ~810 Offsetting price pressures in RDC and investment in RAS ~580* ~ Reinvestment in pipeline ~150 FY 2012 FY One-time costs Thereof cash out Net Savings R&D & Diagnostics reinvestment P&L savings Pharma IT Diagnostics * 2013 CHF 500 m, CHF +80 m 61

62 2012: Core net financial result Lower interest expenses, higher losses from fx & bond redemptions CHF m '000-1'200-1'400-1'600-1'800-2'000-1,581-1, Increase -1,690 of -1,777 14% in CHF -1,816 / 9% at -1,797 CER -1,797-1, Fx result, Bond Net interest Equity Interest All other, 2011 net redemption & debt gains expense net 2012 security income 62 CER=Constant Exchange Rates

63 2012: Group Core Tax Rate Higher core profit contribution from the US in % ,21.3, Higher core profit contribution Other 2012 from US 63

64 Implications of IAS 19 Employee Benefit accounting change - effective 2013 Balance sheet Actuarial gains/losses Booked against equity already No impact on P&L or balance sheet Impact No impact Net financial income P&L return on plan assets Expected return on plan assets Net financing charge Discount rate applied to net funding position CHF161m additional expense pre-tax (2012) Impact on Core EPS expected to be <1% Restated figures for 2012 will be provided ahead of HY 2013 results 64

65 2012: Continued strong profit growth Deleveraging Focus on cash Outlook 65

66 31 December 2012: Balance sheet Equity ratio up due to strong net income CHF bn Cash and marketable securities Other current assets % % % 27% % change in CER % change in CER vs 31/12/11 vs 31/12/11 +8 % +8 % +28 % +6 % Current liabilities Non-current liabilities % 31% % 43% +27 % -7 % Non-current assets % CER=Constant Exchange Rates Assets 51% +3 % Equity (Net assets) % 26% 31/12/11 31/12/12 31/12/11 31/12/12 Equity & liabilities +19 % 66

67 Total equity increasing since Genentech transaction 71% % 19% 24% 26% Equity ratio Genentech transaction Total equity (CHF bn)

68 Aiming for net debt leverage of 0-15% Still highly leveraged 42% 45% Net debt / Total assets 32% 31% 32% 25% 29% % Total assets CHF bn Net debt CHF bn HY HY HY HY

69 FY 2012: Debt maturity profile 52% of Genentech related debt repaid CHF bn Tender of EUR 193m Tender of EUR 782m Call of USD 1.75bn Tender of EUR 650m Early repayment in 2013 Repayments in 2012 Refinancing in Q1/ USD EUR CHF GBP Of the CHF 48.2bn bonds and notes issued to finance the Genentech transaction, cumulative 24.8bn have been repaid as of December 31, 2012 * Nominal actual FX rates; *Original net proceeds in CHF 69

70 2012: Continued strong profit growth Deleveraging Focus on cash Outlook 70

71 Strong Operating Free Cash Flow & Free Cash Flow 32.3% 33.8% OFCF margin (% of sales) 29.8% +10% Operating FCF +15% 1 FCF CHF bn CER=Constant Exchange Rates 71

72 Operating Free Cash Flow Strong cash generation in both divisions CHF m 39.4% 39.9% % of sales 29.8% 32.3% 33.8% 34.9% +1.7 %p 1 (+1.5 %p) +0.8 %p 1 (+0.5 %p) +10 % 1 (+12 %) 14,149 13,733 15,389 12,933 12, % 1 (+9 %) 14, % 12.9% 17.8% +4.9 %p 1 (+4.9 %p) 1,634 1, At CER=Constant Exchange Rates CER +43 % 1 (+45 %) 1,826 Roche Group Pharma Division Diagnostics Division 72

73 Accounts receivable in Southern Europe Significantly reduced B- Greece Dec 2012 Dec 2011 BB Portugal BBB+ Italy BBB- Spain % Southern European Countries 1'521 2'021 Sovereign country ratings from Standard & Poor s, as of 11January '000 1'200 1'400 1'600 1'800 2'000 2'200 EUR m 73

74 2012: Continued strong profit growth Deleveraging Focus on cash Outlook 74

75 Moderate currency impact in 2013 expected CHF / USD average YTD % +7% +6% Monthly avg fx rates 2012 J F M A M J J A S O N D CHF / EUR -2% % % 1.24 average YTD % -2% Assuming the 31 Dec 2012 exchange rates remain stable until end of 2013, 2013 impact is expected to be (%p): Q1 HY Sep FY YTD Sales Core operating -2-3 profit Core EPS J F M A M J J A S O N D 75

76 2013 Outlook Group sales growth 1 In line with sales growth recorded in 2012 Core EPS growth 1 Ahead of sales growth Dividend outlook Further increase dividend 1 At constant exchange rates 76

77 77

78 Roche Group development pipeline Marketed products development programmes Roche Pharma global development programmes Roche Pharma research and early development Genentech research and early development Roche Group 2012 results Diagnostics Foreign exchange rate information 78

79 Roche Group development pipeline Oncology RG7112 MDM2 ant solid & hem tumors RG7116 HER3 MAb solid tumors RG7155 CSF-1R MAb solid tumors RG7167 CIF/MEK inh solid tumors RG7204 Zelboraf + ipilimumab met. melanoma RG7212 Tweak MAb oncology RG7221 Ang2-VEGF MAb oncology RG7304 Raf & MEK dual inh solid tumors RG7356 CD44 MAb solid tumors RG7388 MDM2 ant solid & hem tumors RG7420 MEK inh solid tumors RG7440 AKT inhibitor solid tumors RG7446 PD-L1 MAb solid tumors RG7450 Steap 1 ADC prostate ca. RG7458 ADC ovarian ca. ADC RG7598 ADC multiple myeloma ADC RG7599 ADC oncology ADC RG7600 ADC oncology RG7601 Bcl-2 inh CLL and NHL RG7602 ChK1 inh solid tum & lymphoma RG7604 PI3K inh solid tumors RG7636 ADC metastatic melanoma RG7666 PI3k inh glioblastoma 2L RG7741 ChK1 inh(2) solid tumors RG7853 ALK inhibitor NSCLC CHU PI3K inh solid tumors CHU WT-1 peptide cancer vaccine Phase I (36 NMEs+2 AIs) RG7624 CHU CHU RG7795 RG7697 RG1662 RG7314 RG7129 RG7203 RG3645 CHU Other disease areas IL-17 MAb autoimmune diseases IL-6 MAb RA CIM331 atopic dermatitis TLR7 agonist HBV GIP/GLP-1 dual ago type 2 diabetes GABRA5 NAM cogn. disorders V1 receptor antag autism BACE1 inh Alzheimer s PDE10A inh schizophrenia Lucentis sust. deliv. AMD/RVO/DME ACE910 hemophilia A New Molecular Entity (NME) Additional Indication (AI) Oncology Immunology Virology CardioMetabolism Neuroscience Ophthalmology Others RG-No Roche Genentech managed CHU Chugai managed Status as of December 31,

80 Roche Group development pipeline Phase II (23 NMEs + 14 Als) Phase III (9 NMEs + 23 Als) RG1273 Perjeta HER2+ mbc 2 nd line RG435 Avastin HER2+ BC adj RG1273 Perjeta HER2+ gastric cancer RG435 Avastin HER2-neg. BC adj RG3502 T-DM1 HER2+ early BC RG435 Avastin NSCLC adj RG3502 T-DM1 HER2+ gastric cancer RG435 Avastin high risk carcinoid RG3616 Erivedge operable BCC RG435 Avastin glioblastoma 1 st line RG3638 onartuzumab triple-neg mbc, 1 st /2 nd line RG435 1 Avastin ovarian cancer 1 st line RG3638 onartuzumab mcrc 1 st line RG435 1 Avastin ovarian cancer platinum resist. RG3638 onartuzumab NSCLC non squamous 1 st l RG1273 Perjeta HER2+ early BC RG3638 onartuzumab NSCLC squamous 1 st line RG1415 Tarceva NSCLC adj RG3638 onartuzumab glioblastoma 2 nd line RG3502 T-DM1 HER2+ mbc 3 rd line RG7160 EGFR MAb solid tumors RG3502 T-DM1 HER2+ mbc 1 st line RG7204 Zelboraf papillary thyroid cancer RG3638 onartuzumab NSCLC 2 nd /3 rd line RG7321 PI3K inh solid tumors RG3638 onartuzumab gastric cancer RG7422 PI3K/mTOR inh solid & hem tumors RG7159 obinutuzumab CLL RG7414 EGFL7 MAb solid tumors RG7159 obinutuzumab inhl relapsed RG7593 CD22 ADC hem tumors RG7159 obinutuzumab DLBCL RG7596 CD79b ADC hem tumors RG7159 obinutuzumab inhl front-line RG7597 HER3/EGFR m. epithelial tumors RG7204 Zelboraf m. melanoma adj RG7686 glypican-3 MAb liver cancer RG7421 MEK inh combo Zelboraf m. melanoma RG1569 Actemra systemic sclerosis RG1569 Actemra early RA RG7413 etrolizumab ulcerative colitis RG3637 lebrikizumab severe asthma RG7415 rontalizumab systemic lupus erythem RG3648 Xolair chronic idiopathic urticaria RG7449 quilizumab (M1 prime MAb) asthma CHU Suvenyl enthesopathy RG7128 mericitabine HCV RG1439 aleglitazar CV risk red post ACS in T2D RG7227 danoprevir HCV RG1439 aleglitazar CV risk red CVD in T2D/ pre-t2d RG CMV RG1439 aleglitazar type 2 diabetes RG7790 setrobuvir HCV CHU tofogliflozin (SGLT2) type 2 diabetes RG1512 inclacumab (P selectin MAb) ACS/CVD RG1594 ocrelizumab RMS RG7652 PCSK9 MAb metabolic diseases RG1594 ocrelizumab PPMS RG1450 gantenerumab Alzheimer s RG1678 bitopertin schiz neg symptoms RG1577 MAO-B inh Alzheimer s RG1678 bitopertin schiz subopt control RG1578 mglur2 antag depression SST* arbaclofen fragile X syndrome RG1678 bitopertin obsessive compulsive disorder RG7090 mglur5 antag tx resistant depression RG7412 crenezumab Alzheimers SST* arbaclofen autism (ASD) RG7417 anti-factor D Fab geographic atrophy Status as of December 31, 2012 RG105 2 RG597 2 RG RG RG3502 RG RG105 3 RG1569 RG1569 RG Registration (3 NMEs + 7 Als) MabThera NHL sc formulation Herceptin HER2+ BC sc form Perjeta HER2+ mbc 1 st line Tarceva NSCLC EGFR mut 1 st line T-DM1 HER2+ pretreated mbc Erivedge advanced BCC MabThera ANCA assoc vascul Actemra RA sc formulation Actemra polyarticular JIA Lucentis AMD 0.5 mg PRN 1 US only: ongoing evaluation for FDA submission 2 Submitted in EU 3 Approved in US, submitted in EU 4 Approved in EU, submitted in US 5 Submitted in US * Opt-in opportunity from SeaSide Therapeutics New Molecular Entity (NME) Additional Indication (AI) Oncology Immunology Virology CardioMetabolism Neuroscience Ophthalmology RG-No Roche Genentech managed CHU Chugai managed SST Seaside Therapeutics (opt-in) RG105 MabThera is branded as Rituxan in US and Japan RG1569 Actemra is branded as RoActemra in EU 80

81 Changes to the development pipeline Q update New to Phase I New to Phase II New to Phase III New to Registration 2 NMEs transitioned from Ph0 RG7221 ANG2-VEGF humab oncology RG7203 PDE10A inh schizophrenia 1 NME changed from Chugai managed to Roche managed RG7853 ALK inhibitor NSCLC 1 NME transitioned from Ph1 RG7667 in cytomegalovirus infection (CMV) New AI RG1678 bitopertin obsessive compulsive disorder 1 NME transitioned from Ph1 RG7421 MEK inhibitor in combination with Zelboraf solid tumors 1 AI transitioned from Ph2 RG3638 onartuzumab gastric cancer 2 new AIs RG1439 aleglitazar type 2 diabetes RG1439 aleglitazar CV risk red CVD patients with type 2 diabetes/pre-type 2 diabetes 1AI following US submission RG1415 Tarceva NSCLC EGFR mutation-positive 1st line 1AI following EU submission RG105 MabThera NHL sc formulation 1AI following NDA submissions in EU and US RG1569 Actemra RA sc formulation Removed from Phase I Removed from Phase II Removed from Phase III Removed from Registration 2 NMEs discontinued RG7418 oxldl MAb metabolic diseases RG7416 pateclizumab (LT alpha MAb) RA 1 AI following US approval RG105 Rituxan NHL fast infusion 2 AIs following EU approval RG1569 Actemra RA DMARD IR H2H RG435 Avastin relapsed ovarian cancer 1 AI following EU and US approval RG435 Avastin mcrc TML 81

82 NME submissions and their additional indications Projects currently in phase 2 and 3 T-DM1 (RG3502) HER2-pos. gastric cancer obinutuzumab (GA101) inhl relapsed aleglitazar type-2 diabetes (US/China) T-DM1 (RG3502) HER2-pos. early BC obinutuzumab (RG7159) DLBCL and Frontline NHL PI3 kin inh (RG7321) solid tumors EGFR MAb (RG7160,GA201) solid tumors PI3K/mTOR inh (RG7422) solid & hem tumors EGFL7 MAb (RG7414) solid tumors CD22 ADC (RG7593) CD79b ADC (RG7596) heme tumors HER3/EGFR (RG7597) m. epithelial tumors glypican-3 MAb (RG7686) liver cancer RG7667 CMV mericitabine (RG7128) HCV onartuzumab (MetMAb) gastric cancer & other AIs bitopertin (RG1678) obsessive compulsive dis. gantenerumab (RG1450) Alzheimer s MAO-B inh (RG1577) Alzheimer s mglur2 antag (RG1578) depression mglur5 (RG7090) depression crenezumab (RG7412) Alzheimer s PCSK9 MAb (RG7652) metabolic diseases inclacumab (RG1512) ACS/CVD aleglitazar CV risk red CVD in T2D/pre-T2D T-DM1 (RG3502) HER2-pos. mbc 1st line aleglitazar CV risk red post ACS in T2D danoprevir (RG7227) HCV 2016 and beyond etrolizumab (RG7413) ulcerative colitis T-DM1 (RG3502) HER2-pos. pretreated mbc obinutuzumab (GA101) CLL MEK inhibitor (RG7421) combo Zelboraf met melanoma onartuzumab (MetMAb) mnsclc, 2 nd /3 rd line bitopertin schizophrenia# ocrelizumab PPMS and RMS setrobuvir (RG7790 ) HCV anti-factor D Fab (RG7417) geographic atrophy quilizumab (RG7449) asthma lebrikizumab (RG3637) asthma and beyond Unless stated otherwise, submissions are planned to occur in US and EU. indicates a submission which has occurred with regulatory action pending # negative symptoms and sub-optimal control Status as of December 31, 2012 Oncology Immunology Virology CardioMetabolism Neuroscience Ophthalmology NME 82

83 Submissions of additional indications for existing products Projects currently in phase 2 and 3 Avastin mcrc TML Herceptin sc formulation (EU) Avastin ovarian cancer platin. resist. Zelboraf met melanoma adj. MabThera NHL sc formulation (EU) Tarceva (US) NSCLC EGFR mut. 1 st line Avastin relapsed ovarian cancer (US) Avastin ovarian cancer 1 st line (US) Zelboraf papillary thyroid cancer Perjeta HER2-pos. EBC Actemra polyarticular JIA Avastin HER2-pos. BC adj Perjeta HER2-pos. mbc 2 nd line Actemra RA DMARD IR H2H (EU) Actemra sc formulation Avastin glioblastoma 1 st line Tarceva NSCLC adj (EU) Perjeta HER2-pos. gastric cancer Avastin HER2-neg BC adj MabThera ANCA assoc vasculitis (EU) Xolair (US) chronic idiopathic urticaria Avastin NSCLC adj Lucentis AMD 0.5 mg PRN (US) Actemra early RA Tarceva NSCLC adj (US) Actemra systemic sclerosis and beyond indicates submission to Health Authorities has occurred. Unless stated otherwise, submissions are planned to occur in US and EU. Oncology Immunology Virology CardioMetabolism Neuroscience Ophthalmology 83 Status as of December 31, 2012

84 Major granted and pending approvals 2012 Approved Pending approvals 1 Avastin mcrc TML Rituxan NHL faster infusion US Erivedge adv. basal cell carcinoma Perjeta HER2-pos. mbc 1 st line Actemra RA DMARD IR Lucentis diabetic macular edema Tarceva NSCLC EGFR mut. 1st line Filed Nov 2012 T-DM1 (RG3502) HER2-pos pretreated mbc Filed Aug 2012 Actemra polyarticular JIA Filed June 2012 Lucentis AMD 0.5 mg PRN Filed Apr 2012 EU Actemra RA DMARD IR H2H Erivedge adv. basal cell ca Filed Nov 2011 Actemra polyarticularjia Filed June 2012 Zelboraf met. melanoma 2 Perjeta (RG1273) HER2-pos. mbc 1 st line Filed Dec 2011 Actemra sc formulation Filed Dec 2012 Avastin relapsed ovarian cancer T-DM1 (RG3502) HER2+ advanced mbc Filed Aug 2012 MabThera ANCA associated vasculitis Filed Apr 2012 Avastin mcrc TML MabThera NHL sc formulation Filed Dec 2012 Oncology Immunology Virology CardioMetabolism Status as of December 31, 2012 Neuroscience Ophthalmology NME 1 FDA approval Jan Positive CHMP opinion Dec 2012 Herceptin Her2+ BC sc formulation Filed Mar

85 Major Chugai granted and pending approvals 2012 Approved Pending approvals Pulmozyme Improvement pulmonary function in cystic fibrosis Bactramin Treatment and prevention of Pneumocystis pneumonia Actemra sc formulation Filed March 2012 Avastin recurrent glioblastoma Filed September 2012 Avastin ovarian cancer Filed October 2012 Perjeta HER2-pos. mbc Filed May 2012 Tarceva NSCLC EGFR mut 1 st line Filed June 2012 Boniva/Bonviva osteoporosis Filed July 2012 Status as of December 31, 2012 Oncology Immunology Virology CardioMetabolism Neuroscience Ophthalmology NME 85

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