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Research Tree provides access to ongoing research coverage, media content and regulatory news on ROCHE HOLDING AG-GENUSSCHEIN. We currently have 6 research reports from 1 professional analysts.
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ROCHE HOLDING AG-GENUSSCHEIN
ROCHE HOLDING AG-GENUSSCHEIN
Nothing wrong but sentiment in a dull stretch
25 Oct 16
Roche’s Q3 sales were marginally shy of the estimates at CHF12.48bn (vs our estimate of CHF12.56bn and the consensus estimate of CHF12.64bn), primarily due to the uninspiring performance of the mature drugs in the US. Nine months’ revenue came in at CHF37.5bn. These numbers represented (at CER) growth of 3% for the quarter and 4% for 9m. Forex had a positive impact of 150bp in Q3. The Pharma segment was up by 2% (vs 5% in Q2) to CHF9.7bn while the diagnostics business continued its robust performance at 8% growth (vs 8% in Q2) to CHF2.8bn. Of the main drugs in Pharma, while Herceptin (+4%), Lucentis (-1%), and Perjeta (+24%) came in ahead, Avastin (-3%), Tarceva (-18%), Xolair (+13%), Kadcyla (+5%) and Tamiflu (-23%) fell short of our expectations. The US market (+1% vs 5% in Q2, 3% in Q1) was hamstrung by MabThera (-3% vs 6% in Q2 and flat growth in Q1), Herceptin (flat vs +6% in Q2 and +4% in Q1), and Avastin (-9% vs flat in Q2 and -2% in Q1). While Europe (+5%) remained stable (vs 6% in Q2 and 5% in Q1), Japan languished in the second consecutive quarter (-3% vs 1% in Q2 and 4% in Q1), primarily due to price cuts in Avastin (although the 10.9% price-cut was narrowed to a decline of 6% at the sales level due to support from the volumes). The Diagnostics business saw a healthy Asia Pacific (+17% growth in 9m was marked by 24% growth in China) drive the 9% growth in the professional diagnostics sub-segment (~58% of diagnostics sales). The new high-volume testing immunoassay solution, Cobas E 801 (launched in June 2016) was reported to be ramping up fast on the back of the productivity and efficiency gains it offers. The second biggest sub-segment, diabetes care (18% of diagnostics sales), continued to reel under pricing pressure and the continued run-off of the lower Medicare prices to private plans. Management expects the turnaround by 2017. The remaining two segments – molecular diagnostics (16% of diagnostics sales) and tissue diagnostics (8% of diagnostics sales) – grew by 6% and 15%, respectively during the quarter. Sales guidance for the year was maintained at low-to-mid single-digit at CER, while the core EPS growth is guided to remain ahead of sales growth. The dividend is likely to increase from the 2015 level of CHF8.1 per share (we expect it to increase to CHF8.3 per share).
Investment-heavy H1 while top-line remains strong
26 Jul 16
After two consecutive quarters of 4% yoy growth, Roche reported 6% growth in Q2 16 to CHF12.6bn, coming in ahead of our as well as consensus estimates. NB All sales numbers at CER, unless mentioned otherwise. The quarter was driven by 5% growth in Pharma (to CHF9.7bn, +7% in CHF) and 8% growth in Diagnostics (to CHF2.9bn, +8.2% in CHF). The weak Swiss franc against the Japanese yen, Brazilian real and the euro boosted reported sales by another percentage point during the quarter. The 6% pharma growth in the US during the quarter resulted from a strong performance by MabThera (+6%), Xolair (+17%), Herceptin (+6%), Perjeta (+16%), Esbriet (+32%) and Actemra (+23%), though partially offset by a flat Avastin (market saturation), and lower sales from Lucentis (-10%) and Tarceva (-17%). Europe’s 6% growth was on the back of an impressive performance by Perjeta (+56%), followed by Actemra (+21%), and MabThera (+5%). China (+8% for H1) swung back to strong growth, leading the 5% growth in International pharma business. The Diagnostics business grew by 8% to CHF2.9bn, fuelled primarily by Asia Pacific (+18% in CHF), although growth was seen across the regions. By service line, strong growth in professional diagnostics (+11% in CHF, driven by immune-diagnostics and clinical chemistry), molecular diagnostics (+6% in CHF) and tissue diagnostics (+13% in CHF) was offset to some extent by anaemic diabetes care (+0.9% in CHF). Profitability details are disclosed on a half-yearly basis. The underlying operating profit growth for H1 was slower than the sales growth of 5%. It grew by 2% (in CHF) to CHF8.1bn (reflecting a margin decline of 140bp, predominantly in the diagnostics business), in line with our expectations. The company reported an earnings benefit from a one-time cash gain of CHF426m (pertaining to pensions) but we remove this item because of its one-off nature. The company maintained the guidance of low-to-mid single-digit growth at CER and a higher growth in core EPS. Management has acknowledged getting hit by the biosimilars from 2017-18. Several candidates for the Herceptin biosimilar, including from Amgen and Allergan, Mylan and Biocon, have already shown comparable efficacy and safety profile (in fact already launched in some markets, including India), indicating that generic erosion can come in ahead of the official US patent loss in 2019. In terms of M&A, the company maintained its strategy to stick to small/early-stage bolt-ons rather than mega mergers.
Strong Q1 with favourable forex impact
24 Apr 16
Roche begins the year with solid sales growth in Q1, coming in marginally ahead of our expectation. Total sales grew by 4% (same as Q4 15 growth rate) at CER (+5% in CHF, thanks to a stronger dollar and Japanese yen benefit, offset to some extent by devaluations in Argentina as well as in Venezuela) to CHF12.4bn (vs our expectation of CHF12.2bn). NB All growth numbers at CER unless specified otherwise. The Pharmaceuticals division grew by 4% (to CHF9.8bn, +5% in CHF), while the Diagnostics increased by 5% (to CHF2.6bn, +4% in CHF). Europe grew faster at 5%, driven by Perjeta (+65%), MabThera (+5%) and RoActemra (+17%). US growth of 3% was driven by Herceptin (+4%), Perjeta (+15%), Esbriet (+127%) and Xolair (+22%), offset to some extent by lower Avastin (-2%), Tamiflu (-15%), Lucentis (-13%) and Tarceva (-15%). The Diagnostics business grew on the back of a strong performance in Asia-Pacific (+16%; particularly China which grew at 24%) and LatAm (+21%) in immuno-diagnostic, molecular and tissue diagnostics businesses. The company does not give details on profitability in the quarterly results but maintained the annual guidance of core EPS growing faster than low-to-mid single-digit growth in sales.
Robust top-line pulled down by substantial one-offs and investments
17 Feb 16
Roche’s Q4 sales increased by 4% at CER (-1% in CHF) to CHF12.6bn, driven by 3% growth at Pharma (CHF9.6bn, -1% in CHF) and 7% at Diagnostics (CHF3bn, flat growth in CHF). For the full year, sales increased by 5% (+1% in CHF) to CHF48.1bn – Pharma +5% (+2% in CHF) and Diagnostics +6% (flat in CHF). The growth was fuelled by the oncology and immunology portfolios, and by the immuno-diagnostics business within professional diagnostics (+8%). These numbers were slightly ahead of our expectations; we had estimated sales of CHF47.9bn (vs CHF48.1bn in actuals). Geographically, the US did a better job than our expectations with 6% growth (+11% in CHF) in pharma and 3% growth (+7% in CHF) in diagnostics (where it is reported as North America), while Europe (+4% CER and -7% CHF growth in pharma) languished. The adjusted gross margin decline was steeper than our expectation at 370bp, due to higher manufacturing and sourcing costs, amortisation of Esbriet-related intangibles (acquired as part of the InterMune acquisition) and inventory write-offs (worth CHF539m for Esbriet) in the pharma business. Operating profit in the diagnostics business was also impacted by higher research expenses in professional diagnostics and on-going investments in the sequencing business along with price erosion in the diabetes care business. Net income came in far behind our expectation, further run down by higher-than-expected restructuring costs (CHF1.1bn vs our expectation of CHF300m) and an unforeseen forex loss of CHF470m booked within net financial income. The company ended the year with a net profit of CHF8.9bn (vs our estimate of c.CHF11bn). The company's reported core net profit came in at CHF11.6bn (core EPS 13.49). As a reminder, the company defines core numbers by excluding restructuring charges, amortisation, impairments, legal charges, business combinations and pension plan settlement, etc., from the reported numbers. This is a general practice followed by Big Pharma; however, we exclude only the restructuring charges to arrive at adjusted numbers, which explains a substantial difference between our core/adjusted numbers and the company's reported core numbers. The restructuring cost exceeded our expectations, following the decision in November 2015 to reorganise the manufacturing network for small molecules. Of the targeted CHF1.1bn, CHF301m pertained to the Diagnostics business and remainder to the Pharmaceutical division. The programme involves upgrading the manufacturing capability towards producing specialised medicines in lower volumes to keep pace with the future technological requirements; in effect four manufacturing sites – Ireland, Spain, Italy and the US – are being closed. Management's guidance for 2016 stands at growth of low to mid single-digit for revenue and a slightly better core EPS (taking without forex - devaluations in Argentina as well as in Venezuela - the EPS number as the base). The dividend of CHF8.1 per share represents an increase of 1.3% yoy, lagging behind our estimate of CHF8.6.
Strong performance along with key R&D successes
27 Oct 15
Q3 was another resilient quarter, slightly ahead of our expectations, with strong organic growth softening the impact of negative currency. For both 3m and 9m, sales increased 6% organically to CHF11.9bn and CHF35.5bn, respectively, while negative currency brought down the reported growth to 1% and 2%, respectively. The earnings numbers are not disclosed in quarterly releases. The sales outlook has been upgraded from low-to-mid single-digit to mid single-digit range, while the guidance for core EPS growth stays ahead of sales growth. The positive impact of the dollar strength will continue to be offset by weaker other currencies such as the EUR and JPY, with the net negative forex impact of 4ppts on sales, 6ppts on core operating profit and 9ppts on core EPS for the year.
Resilient performance despite currency headwinds and capacity expansion investments
28 Jul 15
Roche reported a strong Q2 as revenue grew by 6% at CER to CHF23.6bn, while both core operating profit and core EPS (excluding a one-off divestment income in 2014) increased by 7%. Revenue growth was driven by 5% CER growth in Pharma and 7% CER growth in the Diagnostics businesses, partially offset by a 3% negative impact of unfavourable currencies. Guidance for the full year was maintained at low to mid single-digit revenue growth at CER and core EPS ahead of this.
08 Dec 16
Elderstreet stake acquired 02 GENERAL NEWS Globalworth premium In this issue Venture capital firm Draper Esprit has taken a 30.8% stake in venture capital trust manager Elderstreet. Both investment managers focus on the technology sector and they will be able to co-invest. Elderstreet has investments in a number of AIM-quoted companies through its VCTs. The purchase was funded by an issue of Draper Esprit shares worth just over £250,000. Simon Cook, the chief executive of Draper Esprit, is a former partner at Elderstreet so he knows the business and the people who run it, although he did leave more than 14 years ago. Cook has previously acquired portfolios from 3i and Cazenove, two other firms where he has worked. Draper Esprit has an option to acquire the remaining shares in Elderstreet, which has more than £25m under management. Adding Elderstreet to the group enables Draper Esprit to offer investors a range of EIS funds, VCTs and an ISA qualifying listed evergreen patient capital fund. The enlarged group has venture capital assets under management of more than £350m. At the end of September 2016, Draper Esprit had a net asset value of 352p a share, which is similar to the current share price. The June 2016 flotation price was 300p a share. Draper Esprit is quoted on Ireland’s Enterprise Securities Market as well as AIM.
N+1 Singer - Morning Song 05-12-2016
05 Dec 16
RTHM is acquiring a profitable Canadian listed mobile specialist for equivalent of US$42.5m consideration in shares (88.235m). This helps adds to two growth vectors RTHM is targeting; (i) adds unique exclusive audience (10m unique) and (ii) Exclusive demand Yahoo and Facebook. The business has 15 premium and owned and operated apps which provide users with rewards for activity. The business is expected to deliver c$9m of EBITDA in FY18 including $2m of cost synergies. This equates to just 4.7x EV/EBITDA. This marks what we see the first step in RTHM activity to scale the business and deliver on margin potential (see our initiation notes). Our initial estimates for EPS revisions are very significant - for FY18 are 2.3 cents (currently 0.6) and for FY19 4.3 (currently 2.5). There is a call at 830 for investors and we will revise post this.
Exponential growth now in sight
07 Dec 16
The best things in life are worth waiting for, or at least that seems to be the case with Kromek, a pioneering radiation detection expert. Since listing on AIM at 51p back in October 2013, the company has not only been busily refining and field testing its next generation CZT (cadmium zinc telluride) technology, but importantly also securing a raft of new orders.
N+1 Singer - Morning Song 09-12-2016
09 Dec 16
This morning’s AGM Statement confirms that trading in the first four months of the year to 31st October was in line with expectations. Revenue was slightly above the prior year period and cash collection has remained strong. The Group has reiterated its commitment to maintaining a progressive dividend policy. The statement is encouraging and we therefore leave our forecasts unchanged. We note the attractions of a 5% dividend yield and consider the shares inexpensive at 4.5x FY’17 EV/EBITDA.
Small Cap Breakfast
07 Dec 16
Creo Medical group—Schedule 1 update.. £20m raise. Expected market cap £61.2m, admission expected 9 December. ECSC—Schedule 1 from provider of cyber security services. Raising £5m. Vendor sale £0.8m. Target date 14 Dec. Expected market cap £15m. RM Secured Direct Lending - The secured direct lending fund intends to float on the Main Market on 15 December raising up to £100m
N+1 Singer - Morning Song 06-12-2016
06 Dec 16
With FY16 volume and revenue already disclosed in the pre-close, the focus in today’s prelims is on PBT (£100.3m versus our £101m) and EPS (96.8p versus our 95.4p). No special dividend triggered this year (none forecast) and DPS is held at 46.8p (N1SE: 48.0p). On end markets, recent commentary is reiterated – the core business is growing, whilst consumer electronics will be subdued in the current year (competitive capacity from Solvay). On currency, there will be a material benefit in the current year (a little more than the £14m to £15m previously indicated), and a further tailwind next year if current rates are maintained (quantum TBC). There is also an investment of £10m today in a minority interest in Magma Global, Victrex’ oil and gas mega programme partner. Although the share price is now close to our TP of 1730p, we feel that there is enough in today’s announcement to retain a positive stance on medium term opportunities with strong cashflow and a special dividend potentially to look forward to in the current year.