The Swiss franc surged as the Swiss National Bank unexpectedly removed the cap of 1.20 francs per euro, concluding that it was no longer justified. That ended a three-year-old policy designed to shield the economy from the euro area's sovereign debt crisis.

“We are an export-oriented business,” said Andrew Weiss, a spokesman for Allschwil, Switzerland-based Actelion Ltd., Switzerland's third-biggest drugmaker. “We have a certain amount of revenues that come from the U.S. Together with the European revenues that will be under pressure.”

While Actelion slumped 13 percent in Swiss trading, the country's biggest drugmakers, Novartis AG and Roche Holding AG, both dropped 12 percent. Parity between the franc and euro will cut about 1 billion francs or 6 percent from Roche's core earnings, analysts led by Michael Leuchten at Barclays Plc wrote in a note today.

“Clearly Roche, Novartis profits suffer,” Leuchten wrote.

Novartis, based in Basel, declined to comment. Roche said that while the company generates significant revenues in the euro zone, it also incurs an important part of its costs in euros, including expenses for research and development, production and personnel.

Market Turmoil

“This helps mitigate the currency impact on Roche's cash flow,” Nicholas Dunant, a spokesman for the Basel-based company, said in an e-mail.

Thomas Cueni, secretary-general of Interpharma, Switzerland's pharmaceutical group, said the SNB's decision had caught the industry by surprise, but it was better positioned to weather the impact than some other parts of the economy because of its geographical diversification.

“There's a bit of regret because over the last few years, the minimum brought predictability and stability to the industry in Switzerland,” Cueni said by phone from Basel. “As you can see from the market reaction, now we have turmoil and volatility.”

Nestle SA, the world's largest food company, which gets about 98 percent of its revenue from outside Switzerland, declined as much as 11 percent, the biggest intraday drop since October 1997.

Luxury goods makers are also vulnerable after the advance in the franc.

The Swiss watch industry was already reeling from what probably will rank as the second-worst annual performance since 2009. Full-year data isn't out yet, but exports of Swiss watches rose 2.3 percent in the first 11 months of 2014, decelerating from a growth rate that peaked at 22 percent in 2010.

“Exports from Switzerland to the rest of the world suffer from the negative currency effect,” Sylvia Kaelin, spokeswoman for Kilchberg-based Lindt & Spruengli AG, the world's biggest premium chocolate maker, said by e-mail. “We're trying to counteract these challenges through efficiency and volume growth.”

The alarm over the central bank's decision wasn't confined to exporters as the franc jumped to a record against the euro and rose to its highest in more than three years against the dollar.

Jobs Threatened

“The SNB is playing with fire,” the Social Democratic party said in an e-mailed statement. Switzerland is at risk of “catastrophic consequences for the economy and jobs.”

Pressure on the cap increased in recent months as speculation the European Central Bank was preparing a program of bond buying, or quantitative easing, weakened the euro. The SNB also cut its interest rate to minus 0.75 percent.

The challenges faced by Swiss exporters will be compounded because most won't have hedged against a stronger franc, said Ralf Zimmermann, an equity strategist at Bankhaus Lampe KG in Dusseldorf, Germany.

“No one in Switzerland has hedged their forex exposure,” he said in a phone interview. “All companies trusted the SNB to keep its peg against the euro. Now the rally in the Swiss franc against the euro will lead to a hit in the P&L of Swiss companies.”

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