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Novartis Annual Results 2015

Basel - Novartis delivered strong sales growth and core margin expansion (cc[1]) in 2015; announces plans to accelerate growth at Alcon, streamline Group operations

  • Strong growth (cc) in full year sales, core operating income and core EPS[2]
    • Net sales up 5% (cc) and core operating income up 10% (cc)
    • Core operating income margin up 1.3 percentage points (cc)
    • Operating income (-2% cc) down mainly due to amortization of the new oncology assets
    • Net income (-18% cc) impacted by exceptional gains in 2014 (from the sale of shares in Idenix and LTS) and exceptional charges in 2015 (related to Venezuela subsidiaries)
    • Core EPS up 10% (cc) to USD 5.01
    • Currency negatively impacted sales by -10% and core operating income by -15%
    • Free cash flow of USD 9.3 billion, down 15% (USD) due to currency
  • Solid Q4 with net sales up 4% (cc) and core operating income up 9% (cc)
    • Strong Pharmaceuticals performance offset weak Alcon
  • Innovation momentum continued with key approvals and filings in Q4
    • Entresto approved for chronic heart failure in EU
    • Cosentyx approved for AS and PsA in EU and, in January 2016, in US
    • Sandoz submitted biosimilar etanercept in EU and pegfilgrastim in US
  • Focusing Alcon Division on core Surgical and Vision Care business, with growth plan underway
    • Alcon ophthalmic pharmaceuticals business to move to Pharmaceuticals Division, combining Alcon's strong brand with Pharmaceuticals strengths in development and marketing
  • Leveraging Group scale to drive even greater efficiency and innovation
    • Centralizing manufacturing operations across Group to optimize capacity planning and lower costs
    • Integrating some drug development functions across divisions to improve resource allocation, technology and standards to increase innovation even further
    • Changes expected to generate over USD 1 billion in annual cost savings by 2020, ramp-up starting in 2016; one-time restructuring costs of approximately USD 1.4 billion spread over 5 years
  • Novartis leadership changes effective February 1, 2016
    • Mike Ball appointed Division Head and CEO Alcon, succeeding Jeff George
    • Vas Narasimhan appointed Global Head Drug Development and Chief Medical Officer
    • Andre Wyss appointed President Novartis Operations
  • Dividend of CHF 2.70 per share, up 4%, proposed for 2015
  • 2016 Outlook[2]
    • Net sales and core operating income expected to be broadly in line with prior year (cc)


 

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References

[1] Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 53 of the Condensed Financial Report. Unless otherwise noted, all growth rates in this Release refer to same period in prior year.
[2] Refers to continuing operations, defined on page 43 of the Condensed Financial Report.