Dear Shareholders,

Some 15 years after the decoding of the human genome and the adoption of the United Nations Millennium Health Goals, the opportunities and challenges in global healthcare are greater than ever. I am confident that Roche, with its strengths in Pharmaceuticals and Diagnostics, is well placed to actively help shape and advance the healthcare of tomorrow.

This is primarily due to our strong core business: In what is still a volatile environment impacted by austerity measures, we succeeded in increasing sales by 4%* to 50.6 billion Swiss francs in 2016. Net income came to 9.7 billion francs (+7%*). I am particularly proud of our many product launches, which make new treatments available for various types of cancer, and further improve and automate in vitro diagnostics.

The challenges facing global health remain immense—for instance the increase in chronic diseases, the emergence of new epidemics and the spread of antibiotic resistance. The only way to achieve enduring solutions is to adopt an integrated perspective and engage in international and multi-stakeholder collaboration. Roche is ready to do its part. We are committed to the United Nations Sustainable Development Goals on health and beyond. We are spurred on by the fact that Roche has been ranked the most sustainable healthcare company in the Dow Jones Sustainability Index for the eighth year running. Developing novel products that address difficult-to-treat diseases is and remains our greatest contribution to society, as well as our way to create value. Consequently, we invest approximately one fifth of our sales in research and development. In 2016, that translated into 9.9 billion Swiss francs.

New medical technologies and digitisation create huge opportunities for us. Enormous scientific and technological advances are being made in the world’s major life science and technology centres. This pioneering spirit and the wealth of ideas are truly compelling.

Roche is part of this, on site, together with its many partners. In November, for instance, we set up imCORE, a network of 21 academic institutions working with Roche to advance research into cancer immunotherapies. Here, diagnostics also plays a crucial role in the search for treatments tailored to patients’ individual immunobiology.

Our aim is to integrate diagnosis and treatment with digital technologies and applications to an even greater extent. As clinical pictures and treatment options become ever more numerous and diverse, we see this as a way to provide doctors and patients with more comprehensive information to aid the decision-making process. While the partnerships entered into in 2015 with Foundation Medicine and Flatiron Health give us access to data and promising analysis tools in the field of cancer, we at Roche are ourselves developing pioneering IT solutions to integrate and interpret diagnostic data from a wide variety of sources.

Technological possibilities and the global pressure on healthcare systems nevertheless call for far more than the development of novel products for the future. It is just as vital that our treatments and tests are available to the patients who need them today. Regrettably, for a variety of reasons, this access is not yet guaranteed everywhere.

The major task of establishing and maintaining a functioning healthcare system is, of course, the responsibility of each individual state. In a great many countries, the latest medicines and diagnostic products are available to everyone, yet elsewhere even the most rudimentary healthcare resources are lacking. In autumn 2016, I travelled through three sub-Saharan countries—Kenya, Nigeria and Côte d’Ivoire. Despite a frequent absence of basic necessities in many places, including clean water, infrastructure and know-how about chronic illnesses, our Roche teams in the field are working passionately with local partners to provide treatments for more and more patients.

I am certain that we can achieve a great deal in collaboration with governments, patient groups and aid organisations. This is shown, for instance, by the progress made in Kenya, where new oncology centres are being set up, and where, under an agreement with the government, we are training healthcare specialists, enabling modern diagnostic tests, and co-funding free breast cancer treatment for patients in public institutions. In other regions and countries too, we are endeavouring to promote access to healthcare by means of tailored local solutions.

The imCORE network, the partnerships with Foundation Medicine and Flatiron Health, and our projects in Kenya are just three examples—albeit pivotal ones—of our wide-ranging activities with external partners. They demonstrate the way we approach opportunities and challenges—with openness, team spirit and tenacity.

I look forward to welcoming you at the 99th Annual General Meeting of Roche Holding Ltd on 14 March 2017. In light of the company’s good full-year results, the Board of Directors is proposing a dividend increase to 8.20 Swiss francs per share and non-voting equity security. Subject to your approval, this will be the 30th consecutive dividend increase.

I would also like to draw your attention to changes to the Roche Board of Directors. Professor Pius Baschera has decided not to stand for re-election at the 2017 Annual General Meeting following ten years of tenure. On behalf of the Board of Directors, I would like to extend our sincerest thanks to him for his valuable contributions to Roche’s success. I am delighted to be able to propose Anita Hauser, a successful Swiss business leader, as the new member of the Board of Directors. As Vice-Chairwoman of the Board of Directors of a globally operating family business, Bucher Industries AG, Anita Hauser has a strong entrepreneurial background.

For us, shaping the future means continuing to develop our product offerings and markets globally with an entrepreneurial spirit and sound strategic instinct. My thanks go out to our Group’s more than 94,000 employees for their dedication and to our external partners for their willingness to work with Roche towards a shared goal: patients’ wellbeing.

And I would like to thank you, our shareholders, for your confidence in us.

Dr Christoph Franz
Chairman of the Board