Annual Report 2002 - Roche

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average. This translated into 2% in Swiss franc terms, owing to the strength of the franc against the Group’s key trading currencies. On an adjusted basis, operating profit totalled 4,082 million Swiss francs, while the division’s operating profit margin was 21.1%, an increase of 1.6 percentage points over the year-earlier figure. This improvement was due mainly to increased sales of Roche prescription medicines and the continued positive impact of restructuring measures initiated in 2001. Divisional EBITDA totalled 5,982 million Swiss francs, or 31% of sales, compared with a margin of 29.7% in 2001. One of our major goals is to be a leader in the key medical areas we choose to serve. In 2002 we further extended our numberone positions in oncology and transplantation, and in virology the milestones we reached in 2002 have brought us a major step closer to achieving this ambition. William M. Burns, Head of the Pharmaceuticals Division Pharmaceuticals – global market growth surpassed. Sales by the Pharmaceuticals Division in 2002 amounted to 19,306 million Swiss francs. At 9% in local currencies, sales growth was ahead of the global market Prescription medicines post doubledigit growth. In 2002 worldwide sales of Roche prescription medicines (divisional sales excluding OTC) totalled 17,754 million Swiss francs. Growth was 10% in local currencies, well ahead of the global market average (7%), and 3% in Swiss francs. On an adjusted basis, operating profit amounted to 3,838 million Swiss francs. The operating profit margin rose further, to 21.6%, after a 19.7% margin the previous year. EBITDA totalled 5,694 million Swiss francs, or 32.1% of sales, compared with 30.6% in 2001. Prescription sales growth was driven mainly by our oncology products 1) , sales of which rose 33% 2) to over 5 billion Swiss francs, and by the integration of Chugai. Other key products such as CellCept and NeoRecormon 1) Oncology portfolio: MabThera/Rituxan, Herceptin, Xeloda, Bondronat, Kytril, Furtulon, Neupogen, NeoRecormon (25%), Roferon-A (60%), Neutrogin, Picibanil. 2) All growth rates in local currencies. 20 Pharmaceuticals
also posted double-digit gains. Although Rocephin, the leading hospital antibiotic, is now off patent in all major markets except the United States and Italy, sales of the product declined only slightly. Sales erosion following loss of patent protection for Roaccutane/Accutane was less than expected, as generic competitors did not reach the US market until November. North American sales of prescription products continued to grow at a double-digit rate, fuelled by Roche’s strong oncology franchise. The sharp upturn of over 80% in sales in Japan was due mainly to the consolidation of Chugai since 1 October 2002. This new alliance has catapulted Roche to number five in the world’s second-largest pharmaceutical market. Sales growth in Europe was in the mid-single-digit range. Latin American sales were affected by the region’s macroeconomic difficulties but declined slightly less than the market as a whole. Sales in all other regions showed high single-digit growth. Chugai – a new member of the Roche Group. The merger of Nippon Roche and Chugai has created the fifth-largest pharmaceuticals company and the fourth-largest sales force in Japan. This provides powerful leverage for existing and future Roche products in this key market. Moreover, Chugai now has one of the biggest development organisations in Japan, a factor that will help us to develop and launch products faster in the coming years. Shortly after the Roche-Chugai alliance was announced, the two partners signed a research agreement covering the development of common technology platforms to facilitate and advance research projects. Scientists at Roche and Chugai will share information through Roche’s leading-edge data management system, which links the Group’s research centres worldwide. This will enable both companies to broaden their respective capabilities and expertise in the complex field of small molecule development. Pharmaceuticals sales 1998–2002 21,000 18,000 15,000 12,000 9,000 6,000 3,000 0 14,376 | 98 | 99 16,487 in millions of CHF 17,686 Chugai’s new research and development network includes the Fuji Gotemba Research Laboratories. Integration of the former Nippon Roche research centre in Kamakura will add to the Japanese company’s existing strengths in oncology. Expanding capabilities in genomics, proteomics and life science technology will be another priority. This will give Chugai a solid base on which it can grow into a leading Japanese pharmaceuticals company with strong international drug discovery capabilities in Japan and other Asian countries, Europe and the United States. 18,861 | 00 | 01 1) | 02 1) 1) Sales figures are adjusted to include reclassification of sales to the Vitamins and Fine Chemicals Division. 19,306 Pharmaceuticals 21
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 and 12: in biotechnology. At the beginning
Page 13 and 14: emain stable. Given the volatility
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: Pharmaceuticals Division in brief c
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
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The adjusted basis The concept of t
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in millions of CHF Reconciliation o
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Consolidated balance sheet in milli
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Consolidated cash flow statement in
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Foreign currency translation Most G
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Deferred income tax is provided, us
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Provisions Provisions are recognise
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Changes effective 1 January 2001 Se
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Liquidity risk Group companies need
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Total Core Vitamines and Pharmaceut
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of which the Group’s majority int
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6. Chugai On 10 December 2001, Roch
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The fair value adjustments to inven
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Vitamin case Following the settleme
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10. Employee benefits in millions o
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The Group operates defined benefit
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12. Financial income (expense), net
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Income tax assets and liabilities A
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Patents, licences, trademarks 2002
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18. Other long-term assets in milli
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25. Equity Share capital At the Ann
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28. Minority interests in millions
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The carrying value of the Group’s
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2002 2001 Foreign currency derivati
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33. Cash flow statement in millions
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Report of the Group Auditors To the
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1995 1996 1997 c) 1998 1999 2000 20
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Additions to property, plant and eq
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Number of shares and non-voting equ
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Outstanding issues Summarised issue
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Balance sheet at 31 December in mil
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Participations The major participat
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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
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Diagnostics 27% Sales by division 1
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