Chairman’s letter to shareholders

Dear Shareholders

At Roche, the year 2023 was marked by significant management changes. I am very pleased that my successor as CEO, Thomas Schinecker, and his leadership team have already embarked on a series of important initiatives. Roche is characterised by its ability to combine continuity and change. We remain committed to our values and our strategy, and at the same time, we evolve as an organisation, and initiate necessary changes accordingly.

We are convinced that our strategy, which is focused on innovation in pharmaceuticals and diagnostics, ensures we remain in a strong position. Our consistent ability to successfully bring new products to patients is a hallmark of our company – particularly last year when we were able to offset the expected significant decline in the COVID-19 business with new products.

Our ability to innovate will remain the key success factor for Roche in the future. For this, we need the courage to take risks. In our industry, only a handful of molecules make the leap from development to approved medicine. And Roche is no exception: we have also had to overcome some setbacks in recent times, such as with a new compound against Alzheimer’s. The patients are at the heart of all our endeavours. And that is exactly what motivates us to keep creating a better framework in order to maintain, foster and strengthen the creativity and innovative spirit at Roche. This starts with the company’s culture and the incredibly talented people who work here. Yet, at the same time, we must keep looking for opportunities to make our work even more efficient along the entire value chain. This includes, for instance, testing and developing new methods in research and development.

One great example of this is the foundation of the Institute of Human Biology (IHB) in Basel last year. The institute is focused on, among other things, research on organoids – miniature models of organs or tissues that are grown in the laboratory and used for researching diseases without having to rely on real organs. This also means we can reduce animal testing even further while accelerating and improving the development of much needed innovative treatments.

As important as our own innovative strength is, a large proportion of innovation takes place outside our company. For that reason, securing even more long-term partnerships with academic institutions, hospitals and other companies remains an essential part of our strategy. For example, the recent acquisition of Telavant provides the opportunity for us to combat various autoimmune diseases with a promising new mechanism of action. And with the acquisition of Carmot, we are able to tap into potential new medicines in obesity and other metabolic diseases.

After all, innovation is only sustainable if it reaches the patients who need it most. One of our key priorities therefore remains to facilitate and improve worldwide access to our medicines and diagnostic tests.

From a results perspective, 2023 was again a good year for Roche. In spite of the expected decline in sales from our COVID-19 products of CHF 4.3 billion, total sales rose by 1% at constant exchange rates, and IFRS net income came to CHF 12.4 billion.

The Board of Directors therefore proposes to the Annual General Meeting an increase in the dividend of +1% to CHF 9.60 per share. If approved, this will be the 37th consecutive increase.

Lastly, the past year was also marked by geopolitical uncertainties, major conflicts, war, terror and the dreadful impact these events had on those affected. In such situations, it becomes even more important to ensure that patients continue to receive our medicines and diagnostic tests. Our employees devote themselves to achieving this goal with great passion and dedication every single day. I would like to thank them for their tireless efforts.

And thank you, dear shareholders, for placing your trust in us.

Chairman

Unless otherwise stated, all growth rates and comparisons to the previous year are at constant exchange rates (CER; average rates 2022) and all total figures quoted are reported in CHF.