Annual Report 2002 - Roche

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to substantial volume gains, posted a modest sales increase in local currencies. Following the announcement last spring of our intention to divest the Vitamins and Fine Chemicals Division, and after a careful review of the options, we sold the division to the Netherlands-based DSM group at the beginning of 2003. As an industry buyer, DSM offers complete familiarity with the division’s businesses. To facilitate comparisons with 2001, this year’s Annual Report once again presents the Group’s results on both a consolidated and an adjusted basis. The principles employed in compiling the adjusted figures, which exclude one-time special items and represent only continuing operations, have remained unchanged since 1999. A detailed explanation of these principles will be found on page 69. By demerging the Vitamins and Fine Chemicals Division and acquiring a majority stake in Chugai, Roche has further strengthened its focus on its innovative pharmaceuticals and diagnostics businesses, and as a result is ideally positioned to pursue opportunities in tomorrow’s healthcare market. Excluding special items, net income totalled 3.8 billion Swiss francs, a decline of 17% from the previous year. A marked drop in net financial income and a higher tax charge, which reflects the fact that operating income now accounts for a higher proportion of total income than it has in the past, were the two main factors for the decline. The appreciable fall in financial income, to 736 million Swiss francs, was due primarily to lower gains from equity investments as a result of negative developments on world financial markets. Against this background, the favourable terms on which Roche sold its final tranche of LabCorp shares deserves special mention. Early this year Novartis announced that it had increased its holding in Roche to nearly one-third of the voting shares. The Roche Board of Directors and Executive Committee are convinced that continuing our company’s independent course provides a solid basis for sustainable, long-term value growth. Maintaining Roche’s clear strategic direction and developing businesses that continue to create value for all stakeholders – patients, employees and shareholders – remains our top priority. By demerging the Vitamins and Fine Chemicals Division and acquiring a majority stake in Chugai, Roche has further strengthened its focus on pharmaceuticals and diagnostics and the synergies they can generate. The combination of these two innovative, high-tech businesses means that we are ideally positioned to pursue opportunities in tomorrow’s healthcare market. We expect to see further positive growth in 2003, with both Diagnostics and Pharmaceuticals contributing double-digit increases in sales and operating profit in local currencies, and we expect the operating profit margin for the Group as a whole to 8 Letter from the Chairman
emain stable. Given the volatility of financial and stock markets, it is impossible at present to predict the level of financial income in 2003. The measures Roche has initiated will give the Group greater financial flexibility. Our improved operating results, consolidated global leadership in oncology and in-vitro diagnostics and stronger R&D pipeline are confirmation that we are following the right strategy. Our improved operating results, consolidated global leadership in oncology and in-vitro diagnostics and stronger R&D pipeline are confirmation that we are following the right strategy. Over the past few years we have steadily strengthened the Group and, by combining organic growth with complementary strategic moves, forged a strong position for ourselves in the healthcare sector. We intend to maintain this independent course. Thanks to the profitability of its operating activities and its solid financial position and substantial liquid reserves, Roche has the strategic flexibility it needs to continue growing its businesses. Franz B. Humer Letter from the Chairman 9
Page 1 and 2: Annual Report 2002 Roche Group Annu
Page 3 and 4: Group Performance at a Glance Sales
Page 5 and 6: Roche Group Annual Report and Group
Page 7 and 8: The sale of the Vitamins and Fine C
Page 9 and 10: While continuing with the successfu
Page 11: in biotechnology. At the beginning
Page 15 and 16: Board of Directors as of 1 January
Page 17 and 18: Executive Committee from 1 January
Page 19 and 20: persons closely associated with the
Page 21 and 22: usinesses through targeted acquisit
Page 23 and 24: Pharmaceuticals Division in brief c
Page 25 and 26: also posted double-digit gains. Alt
Page 27 and 28: Western Europe. In November this no
Page 29 and 30: Transplantation - strong growth for
Page 31 and 32: ing positive decisions on both fili
Page 33 and 34: Research and development - substant
Page 35 and 36: Substantially expanded pipeline Ind
Page 37 and 38: oncology portfolio, the roll-out of
Page 39 and 40: Diagnostics Division in brief chang
Page 41 and 42: Helping to shape the future. Roche
Page 43 and 44: thing from glucose self-monitoring
Page 45 and 46: Centralized Diagnostics. Sales by o
Page 47 and 48: The global roll-out of Cobas TaqMan
Page 49 and 50: Vitamins and Fine Chemicals Divisio
Page 51 and 52: division outperformed expectations
Page 53 and 54: People and the Environment Human re
Page 55 and 56: worldwide the opportunity to purcha
Page 57 and 58: Safety and Environmental Protection
Page 59 and 60: Social Involvement The many faces o
Page 61 and 62: ‘We do not intend to make a profi
Page 63 and 64:
Financial Review Figures reported F
Page 65 and 66:
Treasury and Financing During 2002
Page 67 and 68:
Operating profit: Double-digit incr
Page 69 and 70:
Pharmaceuticals: Operating profit a
Page 71 and 72:
Net income in millions of CHF On a
Page 73 and 74:
Foreign currency translation effect
Page 75 and 76:
The adjusted basis The concept of t
Page 77 and 78:
in millions of CHF Reconciliation o
Page 79 and 80:
Consolidated balance sheet in milli
Page 81 and 82:
Consolidated cash flow statement in
Page 83 and 84:
Foreign currency translation Most G
Page 85 and 86:
Deferred income tax is provided, us
Page 87 and 88:
Provisions Provisions are recognise
Page 89 and 90:
Changes effective 1 January 2001 Se
Page 91 and 92:
Liquidity risk Group companies need
Page 93 and 94:
Total Core Vitamines and Pharmaceut
Page 95 and 96:
of which the Group’s majority int
Page 97 and 98:
6. Chugai On 10 December 2001, Roch
Page 99 and 100:
The fair value adjustments to inven
Page 101 and 102:
Vitamin case Following the settleme
Page 103 and 104:
10. Employee benefits in millions o
Page 105 and 106:
The Group operates defined benefit
Page 107 and 108:
12. Financial income (expense), net
Page 109 and 110:
Income tax assets and liabilities A
Page 111 and 112:
Patents, licences, trademarks 2002
Page 113 and 114:
18. Other long-term assets in milli
Page 115 and 116:
25. Equity Share capital At the Ann
Page 117 and 118:
28. Minority interests in millions
Page 119 and 120:
The carrying value of the Group’s
Page 121 and 122:
2002 2001 Foreign currency derivati
Page 123 and 124:
33. Cash flow statement in millions
Page 125 and 126:
Report of the Group Auditors To the
Page 127 and 128:
1995 1996 1997 c) 1998 1999 2000 20
Page 129 and 130:
Additions to property, plant and eq
Page 131 and 132:
Number of shares and non-voting equ
Page 133 and 134:
Outstanding issues Summarised issue
Page 135 and 136:
Balance sheet at 31 December in mil
Page 137 and 138:
Participations The major participat
Page 139 and 140:
Report of the Statutory Auditors To
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120° 30° 150° 90° 60° 30° 0°
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Garden City, 70.000 GBP | Roche Reg
Page 145 and 146:
Diagnostics 27% Sales by division 1
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Annual Report 2002 - Roche

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