Pharmaceuticals and Alcon performed strongly in the first quarter; overall Group results impacted by expected challenges
(Thomson Reuters ONE) -
Novartis International AG /
Pharmaceuticals and Alcon performed strongly in the first quarter; overall Group
results impacted by expected challenges
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The issuer is solely responsible for the content of this announcement.
* Group net sales of USD 13.7 billion (-1% cc)
* Strong net sales performance at Pharmaceuticals and Alcon
* Sandoz faced a strong year-ago base with enoxaparin exclusivity and
Consumer Health impacted by the suspension of production at the Lincoln,
Nebraska manufacturing site
* Core operating income of USD 3.7 billion (-6% cc) driven by Sandoz and
Consumer Health businesses; Pharmaceuticals and Alcon delivered operating
leverage, improving core operating margins
* Core EPS of USD 1.27 (-8% cc)
* Free cash flow improved 27% to USD 2.1 billion
* Novartis continued to execute on strategic priorities
* FDA and EMA safety review for Gilenya confirmed positive benefit-risk
profile
* Four QVA149 Phase III studies met their primary endpoints, including
head-to-head study against Seretide®, demonstrating its strong potential
to address the unmet needs of patients with chronic obstructive
pulmonary disease
* Group delivered strong volume growth of 5 percentage points, driven by
the continued strong performance of recently launched products, now
comprising 28% of Group net sales
* Progress made in the quarter to address FDA concerns at Consumer Health
Lincoln site and the three Sandoz sites
Key figures
Q1 2012 Q1 2011 % change
USD m USD m USD cc
------------------------------------------------------
Net sales 13 735 14 027 -2 -1
Operating income 2 815 3 408 -17 -15
As % of net sales 20.5 24.3
Net income 2 327 2 821 -18 -15
EPS (USD) 0.95 1.21 -21 -19
Free cash flow 2 056 1 622 27
Core[1]
Operating income 3 686 4 012 -8 -6
As % of net sales 26.8 28.6
Net income 3 093 3 376 -8 -6
EPS (USD) 1.27 1.41 -10 -8
------------------------------------------------------
[1] Core results and Free Cash Flow are non-IFRS measures. An explanation of
these non-IFRS measures and reconciliation tables can be found beginning on page
32 of the Interim Financial Report, together with the additional data listed in
the index below. These are available on our website at
http://www.novartis.com/investors/financial-results/quarterly-results-q1-
2012.shtml.
Basel, April 24, 2012 - Commenting on the results, Joseph Jimenez, CEO of
Novartis, said:
"Novartis Pharmaceuticals and Alcon Divisions delivered strong growth and
operating leverage in the first quarter. Group net sales performance was
impacted by Sandoz, which was up against a strong year-ago base with enoxaparin
exclusivity, and by Consumer Health, which was impacted by the suspension of
production at the Lincoln, Nebraska manufacturing site. We are making progress
remediating the quality issues at the Lincoln site, as well as the three Sandoz
production sites. Importantly, we had excellent pipeline news, including strong
Phase III results on QVA149 in COPD. We are pleased with the outcome of the
safety review on Gilenya and expect to see continued strong sales growth."
GROUP REVIEW
First quarter
Strong sales performance in Pharmaceuticals and Alcon
Group net sales declined by 2% (-1% cc) to USD 13.7 billion. Currency negatively
impacted sales by 1% due to the strengthening of the dollar against many
currencies.
Products launched since 2007 drove the Group to strong volume growth of 5
percentage points versus the previous year. These recently launched products now
represent 28% of Group sales (up from 24% a year ago) and grew 16% in the first
quarter, offsetting the negative impact of generic competition mainly to Diovan
and Femara (-3 percentage points), lower production volume in Consumer Health (-
2 percentage points) and price (-1 percentage point, including enoxaparin).
Pharmaceuticals saw net sales growth of 2% (+3% cc) to USD 7.8 billion, as very
strong volume growth of 9 percentage points more than offset the effect of
generic entries of 6 percentage points. Pharmaceuticals products launched since
2007 generated USD 2.6 billion of net sales, growing 33% (+35% cc) over the same
period last year. These products - which address medical needs across a range of
therapeutic areas and include Lucentis, Tasigna, Afinitor and Gilenya - now
represent 33% of division sales, compared to 26% in the same period last year.
Alcon net sales of USD 2.5 billion rose 5% (+6% cc), led by strong growth in
Surgical of 9% (+10% cc). Ophthalmic Pharmaceuticals sales grew 5% (+6% cc)
while Vision Care grew 1% (+2% cc). Growth versus the prior year was dampened
slightly by the inclusion in 2011 of certain lens care products divested at the
end of the first quarter last year.
Sandoz net sales declined 10% (-8% cc) to USD 2.1 billion, against a very strong
first quarter last year. Price erosion was 8 percentage points, mainly due to
increased competition for enoxaparin, while volume growth was flat as declines
in the US and Germany were offset by double-digit growth in Western Europe, Asia
and biosimilars.
Vaccines and Diagnostics net sales were down 19% (-18% cc) to USD 299 million,
mainly due to an exceptionally strong first quarter in 2011, which benefited
from the release of bulk pediatric shipments.
Consumer Health - which comprises OTC and Animal Health - declined 20% (-18% cc)
in the first quarter of 2012 to USD 932 million, impacted by the suspension of
production at the Lincoln site.
Pharmaceuticals and Alcon delivered operating leverage
Core operating income, which excludes exceptional items and amortization of
intangible assets, decreased 8% (-6% cc) to USD 3.7 billion. Core operating
income margin in constant currencies decreased by 1.6 percentage points.
Pharmaceuticals (contributing +0.3 percentage points) and Alcon (contributing
+0.2 percentage points) both improved core operating income margin in cc, but
this was insufficient to offset the combined effect of lower margins in Sandoz,
Consumer Health and Vaccines and Diagnostics (accounting for 2.1 percentage
points of the overall decline in Group core operating income margin). Currency
had a negative impact of 0.2 percentage points, resulting in a reduction in core
operating income margin of 1.8 percentage points to 26.8% of net sales.
Operating income was down 17% (-15% cc) to USD 2.8 billion as a result of the
lower core operating income and higher net core adjustments which in the first
quarter amounted to a net expense of USD 871 million compared to USD 604 million
in the prior-year period. Currency reduced growth by 2 percentage points, as the
dollar strengthened against most currencies.
Core adjustments to arrive at core operating income in the first quarter of
2012 of USD 871 million (2011 USD 604 million) included US restructuring charges
of USD 147 million and intangible asset amortization amounting to USD 714
million (2011 USD 781 million). These were offset by a gain from the sale of
financial assets of USD 51 million and provision releases of USD 88 million. The
previous year benefitted from exceptional income of USD 376 million offset by
USD 199 million of exceptional expenses.
Pharmaceuticals core operating income increased by 2% (+4% cc) to USD 2.6
billion following strong sales growth and good cost management, resulting in an
improvement in core operating income margin in constant currencies of 0.4
percentage points.
Alcon increased core operating income by 7% (+8% cc) to USD 902 million.
Constant currency core operating margin increased by 0.6 percentage points from
strong operating leverage through productivity gains and the realization of
post-integration synergies while continuing to invest in emerging markets and
R&D.
Sandoz core operating income declined by 28% (-28% cc) to USD 382 million
following the sales decline in the US and Germany, together with the impact of
increased quality-related investments and adverse production variances, as well
as continued investment in our biosimilars and respiratory pipeline.
Vaccines and Diagnostics core operating loss increased to USD 118 million (2011
USD 24 million loss) mainly due to the release of bulk pediatric shipments in
the first quarter of 2011.
Consumer Health core operating income declined by 83% (-77% cc) to USD 41
million due to the impact of suspended production at the Lincoln site and
investments to upgrade quality.
Group net income declined 18% (-15% cc) to USD 2.3 billion following the decline
in operating income. The effect on net income of increased net financial
expenses was offset by higher income from associated companies and lower income
taxes. EPS declined 21% (-19% cc) to USD 0.95 at a slightly higher rate than net
income as a result of the Alcon-related higher number of average outstanding
shares, partially offset by a lower impact from non-controlling interests.
Core net income decreased 8% (-6% cc) largely in line with the decline in core
operating income. Core EPS declined 10% (-8% cc).
Free cash flow improved 27% to USD 2.1 billion due to an improvement in working
capital and a net benefit from lower taxes and exceptional payments, offset by
lower operating cash flows and higher net investments in intangible assets.
Executing on innovation, growth and productivity
Our long-term strategy is based on driving innovation, that is science-based,
across high-growth segments of the healthcare industry. This requires a
consistent focus on our core priorities of innovation, growth and productivity.
We strive to run our businesses as efficiently and effectively as possible so we
can maintain our commitment to bringing high-quality, innovative medicines to
patients in need and providing long-term value for our investors.
Innovation: Gilenya safety review concluded, significant progress in respiratory
portfolio
FDA and CHMP concluded safety review of Gilenya and reaffirmed positive benefit-
risk profile
Novartis received a decision from the FDA and a recommendation from the EMA's
CHMP regarding an updated label for Gilenya, the first oral treatment for
multiple sclerosis (MS). Both agencies have confirmed that the overall benefit-
risk profile of Gilenya remains positive for MS patients when used in accordance
with the updated label, which includes the recommendation that all MS patients
initiating Gilenya should receive an electrocardiogram (ECG) prior to the first
dose and six hours after the first dose. In addition, all patients should have
blood pressure and heart rate measurements every hour during the six-hour post
first dose observation period. In the US and EU, enhanced first dose monitoring
should be performed in patients at risk for or who develop symptoms of
bradycardia during the first dose. Gilenya should not be used in a subset of
these patients with higher risk. The CHMP has also recommended continuous
monitoring with ECG for minimum of six hours following the first dose.
In the US, Gilenya remains approved as a first-line therapy for relapsing forms
of MS. In the EU, Gilenya is approved for people with highly active relapsing-
remitting MS despite treatment with beta interferon, or in patients with rapidly
evolving severe relapsing-remitting MS. Novartis believes that Gilenya provides
a benefit for patients with relapsing-remitting MS and remains committed to
engaging with the MS community with the goal of ensuring that appropriate
patients will have access to Gilenya.
Tekturna/Rasilez label updated in EU and US
Following the Novartis decision in December 2011 to halt the ALTITUDE study (due
to an interim analysis showing limited benefit from treatment and higher adverse
events), the EMA's Committee for Medicinal Products for Human Use (CHMP) and the
FDA confirmed the benefit of Tekturna/Rasilez (aliskiren) in a narrowed patient
population and have requested updates to the Tekturna/Rasilez product
information. Furthermore, and in consultation with the FDA, Novartis has decided
to voluntarily cease marketing in the US of Valturna, a single pill combination
of aliskiren and the ARB valsartan.
Positive results from IGNITE Phase III clinical trial program for QVA149
The first four Novartis QVA149 Phase III studies in the treatment of chronic
obstructive pulmonary disease (COPD) all met their primary endpoints. The
results of the SHINE, BRIGHT, ENLIGHTEN and ILLUMINATE studies, which are key
components of the IGNITE program, demonstrate the potential of QVA149 in the
treatment of COPD, a progressive disease that affects approximately 210 million
people worldwide and is predicted to be the third leading cause of death by
2020.
The ILLUMINATE study demonstrated in more than 500 patients superior lung
function of once-daily QVA149 compared to twice-daily Seretide(®) in patients
with moderate to severe COPD. SHINE, which involved more than 2,100 patients,
demonstrated the superiority of QVA149 - an inhaled, once-daily, fixed dose
combination of indacaterol and NVA237 - compared to indacaterol or NVA237 alone
in patients with moderate to severe COPD. The study also showed QVA149's
superiority compared to placebo and open-label tiotropium. BRIGHT demonstrated
that patients taking QVA149 experienced significantly better exercise endurance
than those taking placebo, while ENLIGHTEN showed that QVA149 was well
tolerated, with a safety and tolerability profile similar to placebo. Taken
together, these studies demonstrate our commitment to addressing the unmet
medical needs of COPD patients and improving their quality of life by providing
innovative medicines and devices.
In addition, after discussions with FDA, we agreed on the Phase III trial design
for QVA149 as well as NVA237. We expect filing for NVA237 beginning of 2014 and
for QVA149 end of 2014 in the US.
Jakavi received positive opinion from CHMP in myelofibrosis
In April, Jakavi (ruxolitinib) received a positive CHMP opinion for the
treatment of patients with myelofibrosis. The opinion was based on data from the
previously reported Phase III studies COMFORT-I and COMFORT-II, published in The
New England Journal of Medicine. Both studies met their primary endpoints when
treatment with Jakavi significantly reduced spleen size by at least 35% from
baseline at 24 weeks in COMFORT-I and at 48 weeks in COMFORT-II. Additionally,
patients treated with Jakavi demonstrated a marked and durable improvement in
overall quality of life measures, functioning and symptoms, including appetite
loss, dyspnea (shortness of breath), fatigue, insomnia and pain. If approved,
Jakavi would be the first Janus kinase (JAK) inhibitor developed to treat
patients with myelofibrosis in the EU.
US and EU approval of expanded label for Glivec in GIST
The FDA and EMA approved a new label for Glivec (imatinib), extending adjuvant
treatment to three years for certain patients with KIT+ gastrointestinal stromal
tumors. The approvals followed a Phase III study, published in the Journal of
the American Medical Association, showing that more patients taking Glivec for
three years after surgery remained free of cancer recurrence (66% compared to
48%) and alive (92% compared to 82%) than those who received only one year of
treatment after surgery.
Pivotal Phase III study and CHMP recommendation for Signifor in Cushing's
disease
The EMA's CHMP adopted a positive opinion for our investigational drug Signifor
(SOM230, pasireotide) for the treatment of Cushing's disease, a debilitating
endocrine disorder, based on a Phase III study published in The New England
Journal of Medicine. The study, which represents the largest randomized trial to
evaluate a medical therapy in patients with Cushing's disease, found that
Signifor helped patients achieve biochemical control of their disease while
reducing associated symptoms like weight gain and depression. If approved,
Signifor will be the first medication in the EU targeting Cushing's disease. An
EMA decision is expected soon. Regulatory submissions in Cushing's are underway
worldwide, and pasireotide is also being studied in a large-scale, global Phase
III clinical trial program in patients with acromegaly, a chronic disease caused
by excess growth hormone secretion.
Sandoz leadership in biosimilars reinforced with two new Phase III study starts
Sandoz started two milestone Phase III clinical trials in breast cancer patients
in the first quarter - one for biosimilar filgrastim (generic Neupogen(®)) in
the US market and the other for its global pegfilgrastim development program
(generic Neulasta(®)). Sandoz is the clear global leader in biosimilars overall
and in each of our three marketed products (Omnitrope, Binocrit and Zarzio),
with approximately 50% total segment share in North America, Europe, Japan and
Australia. These latest milestones further reinforce our commitment to continued
global biosimilar leadership, with a total of three ongoing Phase III trials and
8-10 molecules at various stages of development.
Complete Response Letter for Menveo in the US, positive CHMP recommendation in
the EU
Novartis received a Complete Response letter from the FDA on its supplemental
Biologics License Application for the expanded use of Menveo in infants and
toddlers from 2 months of age. Menveo, a quadrivalent meningococcal conjugate
vaccine, is already approved for use in individuals 2 to 55 years of age in the
US. Meningococcal disease infects more than 500,000 people each year, leading to
more than 50,000 deaths globally. The Complete Response letter requested
additional information prior to proceeding with further review. Novartis is
currently working with the agency on next steps.
In Europe, the EMA's CHMP adopted a positive opinion for Menveo in young
children from 2 years of age, representing an important step towards approval
and in providing parents and physicians access to a broad coverage vaccine to
help protect children against meningococcal disease and its potentially deadly
complications.
Growth: Strong underlying performance with volume growth of 5 percentage points
Recently launched products fueled growth
Our consistent focus on innovation has strengthened our pipeline and allowed us
to bring new targeted therapies to patients in need. As we continue to execute
on strategic launch activities and go-to-market initiatives, our products
launched since 2007 continue to drive growth across the portfolio. In the first
quarter, these products grew 16% and contributed USD 3.8 billion or 28% of Group
net sales.
Afinitor (everolimus), an oral inhibitor of the mTOR pathway used across
multiple diseases, made a strong contribution to Pharmaceuticals growth in the
first quarter with sales of USD 143 million (+60% cc). Everolimus was submitted
to regulatory agencies around the world in the fourth quarter of 2011 as a
potential treatment for postmenopausal women with advanced breast cancer that
recurred or progressed despite treatment with hormonal therapies. If approved,
this indication would represent the first major breakthrough in the treatment of
advanced breast cancer in 15 years.
Tasigna (USD 209 million, +39% cc), approved in more than 90 countries as a
next-generation therapy for chronic myeloid leukemia (CML), continued its strong
growth trajectory. Tasigna now represents approximately 21% of our total CML
franchise.
Lucentis (USD 567 million, +30% cc), a medicine that significantly improves
vision in patients with wet age-related macular degeneration, diabetic macular
edema and macular edema secondary to retinal vein occlusion, continued to
deliver robust growth in the first quarter.
Gilenya (USD 247 million), the first oral treatment for multiple sclerosis,
continued to gain global acceptance and capture market share, achieving approval
for wide use from the UK's National Institute for Health and Clinical
Excellence.
Additionally, Galvus (USD 201 million, +57% cc), an oral treatment for patients
with type 2 diabetes, showed continued strong growth, benefitting from an
additional approval in the EU for expanded use as a second line monotherapy for
diabetes patients who cannot take metformin.
Strengthened commitment to addressing eye disease and retinal disorders
Alcon gained exclusive rights to commercialize ocriplasmin, a treatment for
symptomatic vitreomacular adhesion (VMA), outside the US. This progressive,
debilitating eye disease may lead to visual distortion, loss in visual acuity
and central blindness, and there are more than 300,000 patients in Europe alone
who could potentially benefit from this new therapy. Ocriplasmin is currently
under review with the EMA as the first pharmacological treatment for symptomatic
VMA.
Accelerated growth in China, broader definition of emerging growth markets
Our long-term growth is supported by our established presence in emerging
markets. Historically, we have concentrated on our top six emerging markets -
Brazil, China, India, Russia, South Korea and Turkey - in financial reporting.
However, in the first quarter, we decided to move to a broader definition of
"emerging growth markets" to capture our performance in other fast-growing
markets in addition to the six listed above.
Taken together, our emerging growth markets - comprising all markets except the
US, Canada, Western Europe, Australia, New Zealand and Japan - grew 5% (cc) in
the quarter, resulting in USD 3.3 billion or 24% of Group net sales. China is
currently our fastest-growing market, with very strong growth of 30% cc and new
approvals for Lucentis and Galvus.
Productivity: Contributed 3.7 percentage points to core operating income margin
Our continued focus on productivity contributed an equivalent of 3.7 percentage
points to the Group core operating income margin in the first quarter. Overall,
core operating income margin declined 1.6 percentage points in constant
currencies as the impact of higher cost of goods sold (due to quality
remediation expenses and adverse production variances in Sandoz and Consumer
Health), continued investment in R&D (including biosimilars and respiratory in
Sandoz), and Marketing & Sales support to recently launched products exceeded
the benefits generated from productivity. Currency impacted 0.2 percentage
points, reducing core operating income margin by 1.8 percentage points to 26.8%
of net sales.
We continued to optimize our manufacturing footprint in the first quarter and
successfully concluded the divestment of a site. This brings the total number of
production sites that have been restructured or divested to 14, which has
enabled us to reduce excess capacity and shift strategic production to
technology competence centers. We recorded charges related to exits, impairment
charges and inventory write-offs of USD 15 million in the first quarter,
bringing the total charges to USD 347 million since the program began in the
fourth quarter of 2010.
The restructuring of our US business announced in January 2012 resulted in a
charge of USD 147 million in the first quarter, encompassing the reduction of
1,960 positions (of which 1,630 were in the field force). When completed in the
second quarter, we expect this action will generate full-year savings of USD
450 million.
Group quality: Committed to full regulatory compliance across all sites
Quality is a global priority for Novartis. We are committed to strengthening
full regulatory compliance across all of our divisions and are investing the
necessary resources to deliver on our commitment. To that end, we are constantly
monitoring the quality of our production around the world to ensure that all
Group company sites and operational units achieve this standard.
Patients are at the center of everything we do and at the heart of our
commitment to quality. It is our obligation as a company to consistently deliver
the quality patients deserve and expect, and to ensure the integrity of the
products on which they depend.
The vast majority of our facilities already operate to the high standard of
quality that we have set for ourselves. However, in instances where regulatory
checks or internal audits have identified areas for improvement, we have
launched comprehensive remediation programs.
In December 2011, Novartis suspended production at the US Consumer Health
manufacturing facility in Lincoln, Nebraska to enable the complete remediation
of quality issues. Consumer Health plans to restart production on a line-by-
line, product-by-product basis to ensure control and adherence to our high
standard of quality, and expects to begin shipments mid-year 2012 of the first
products restarted. Due to the product-by-product start-up, we expect a limited
portfolio of products to ship in the second half of the year. Therefore,
Consumer Health has engaged third-party manufacturers to bolster supply of
select products, which will help meet demands of patients and customers, as well
as enable us to regain lost market share.
Since mid-2010, Sandoz has been implementing a comprehensive global program to
strengthen quality assurance across its network of manufacturing sites.
Following the November 2011 FDA Warning Letter regarding Sandoz's three North
American sites, we have intensified these efforts. As part of the these
programs, Sandoz has made substantial investments both in strengthening
organizational capabilities and talent as well as in upgrading facilities,
processes and systems. Production continues at all three sites, albeit at a
lower level than last year, and the continuity of supply of essential medicines
to patients remains a top priority.
We are applying our lessons from Sandoz and Consumer Health to all of our sites
with the aim of strengthening full regulatory compliance across our divisions.
In addition to investing globally to upgrade and modernize facilities as
necessary, we are also implementing improved, standardized training to enhance
compliance and reinforce a culture of commitment and accountability to this high
quality standard across our organization.
Free cash flow
The sustainability of our strategy lies with the generation of cash flow that
provides the resources for reinvestment and returns to shareholders. Cash flow
is driven by a continued focus on the cash conversion cycle and operational cash
flow improvements.
Free cash flow improved 27% to USD 2.1 billion. The principal components of the
increase in free cash flow of USD 0.4 billion include the following elements: an
improvement in working capital of USD 0.4 billion; a net benefit from lower
taxes and exceptional payments of USD 0.8 billion, offset by lower operating
cash flows of USD 0.4 billion and higher net investments in intangible assets
(USD 0.2 billion).
Capital structure and net debt
Strong cash flows and a sound capital structure have allowed Novartis to invest
in the future of its business through R&D and acquisitions even in turbulent
times while keeping its double-A rating as a reflection of financial strength.
Retaining a good balance between attractive shareholder returns, investment in
the business and a sound capital structure will remain a priority in the future.
As of March 31, 2012, net debt stood at USD 19.2 billion, compared to USD 15.2
billion at the end of 2011. The net increase of USD 4.0 billion was mainly
driven by a temporary increase in short-term debt to fund the dividend payment
of USD 6.0 billion at the end of the first quarter of 2012.
The long-term credit rating for the company continues to be double-A (Moody's
Aa2; Standard & Poor's AA-; Fitch AA).
2012 Group outlook
Barring unforeseen events
Our outlook for 2012 remains unchanged:
Group constant currency net sales are expected to be in line with 2011; Group
core operating income margin in constant currencies is expected to be slightly
below 2011 core operating income margin.
During the first quarter, the dollar strengthened against most currencies. As a
result, if month of March exchange rates prevail for the remainder of the year,
there would be a negative impact of approximately 2-3% on sales and
approximately 2-3% on operating income for the full year.
Divisional Performance
Pharmaceuticals
Q1 2012 Q1 2011 % change
USD m USD m USD cc
-------------------------------------------------------
Net sales 7 839 7 698 2 3
Operating income 2 402 2 461 -2 0
As % of net sales 30.6 32.0
Core operating income 2 589 2 542 2 4
As % of net sales 33.0 33.0
-------------------------------------------------------
Alcon
Q1 2012 Q1 2011 % change
USD m USD m USD cc
--------------------------------------------------------
Net sales 2 541 2 416 5 6
Operating income 363 524 -31 -30
As % of net sales 14.3 21.7
Core operating income 902 840 7 8
As % of net sales 35.5 34.8
--------------------------------------------------------
Sandoz
Q1 2012 Q1 2011 % change
USD m USD m USD cc
--------------------------------------------------------
Net sales 2 124 2 373 -10 -8
Operating income 298 412 -28 -28
As % of net sales 14.0 17.4
Core operating income 382 534 -28 -28
As % of net sales 18.0 22.5
--------------------------------------------------------
Vaccines and Diagnostics
Q1 2012 Q1 2011 % change
USD m USD m USD cc
------------------------------------------------------
Net sales 299 371 -19 -18
Operating loss -173 -101 -71 -76
As % of net sales -57.9 -27.2
Core operating loss -118 -24 nm nm
As % of net sales -39.5 -6.5
------------------------------------------------------
nm - Not meaningful
Consumer Health
Q1 2012 Q1 2011 % change
USD m USD m USD cc
---------------------------------------------------------
Net sales 932 1 169 -20 -18
Operating income 12 265 -95 -90
As % of net sales 1.3 22.7
Core operating income 41 240 -83 -77
As % of net sales 4.4 20.5
---------------------------------------------------------
A full financial report with the information listed in the index below can be
found on our website at http://www.novartis.com/investors/financial-
results/quarterly-results-q1-2012.shtml.
Novartis Q1 2012 Interim Financial Report - Supplementary Data
INDEX Page
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GROUP AND DIVISIONAL OPERATING PERFORMANCE
Group 2
Pharmaceuticals 5
Alcon 10
Sandoz 12
Vaccines and Diagnostics 13
Consumer Health 14
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GROUP BALANCE SHEET AND CASH FLOW 15
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INNOVATION REVIEW 16
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CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Consolidated income statements 23
Consolidated statements of comprehensive income 24
Condensed consolidated balance sheets 25
Condensed consolidated changes in equity 26
Condensed consolidated cash flow statements 27
Notes to condensed interim Consolidated Financial Statements, 28
including update on legal proceedings
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SUPPLEMENTARY INFORMATION 32
CORE RESULTS
Reconciliation from IFRS to core results 33
Group 34
Pharmaceuticals 35
Alcon 36
Sandoz 37
Vaccines and Diagnostics 38
Consumer Health 39
Corporate 40
ADDITIONAL INFORMATION
Condensed consolidated changes in net debt 41
Free cash flow / Share information / Summary of equity movements 42
Net sales of top 20 Pharmaceuticals products 43
Pharmaceuticals Division by therapeutic area 44
Net sales by region 45
Income from associated companies 46
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DISCLAIMER 47
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Disclaimer
This press release contains forward-looking statements that can be identified by
terminology such as "on track," "expectations," "potential," "guidance,"
"expects," "pipeline," "expect," "strategy," "commitment," "will,"
"recommendations," "recommendation," "recommended," "committed," "goal,"
"expected," "potentially," "strategic," "would," "committed," "expects,"
"should," "outlook," "pending," "under review," "planned," "launched,"
"ongoing," "priority review," or similar expressions, or by express or implied
discussions regarding potential new products, or potential new indications or
labeling for existing products; regarding potential future revenues from any
Novartis Group products or potential products; regarding potential future sales
or earnings of the Group or any of its divisions; or by discussions of strategy,
plans, expectations or intentions. You should not place undue reliance on these
statements. Such forward-looking statements reflect the current views of the
Group regarding future events, and involve known and unknown risks,
uncertainties and other factors that may cause actual results to be materially
different from any future results, performance or achievements expressed or
implied by such statements. There can be no guarantee that any new products will
be approved for sale in any market, or that any new indications or labeling will
be approved for any existing products in any market, or that any approvals which
are obtained will be obtained at any particular time, or that any Group products
will achieve any particular revenue levels. Nor can there be any guarantee that
the Group, or any of its divisions, will achieve any particular financial
results. In particular, management's expectations could be affected by, among
other things, unexpected regulatory actions or delays or government regulation
generally; unexpected clinical trial results, including additional analyses of
existing clinical data or unexpected new clinical data; the Group's ability to
obtain or maintain patent or other proprietary intellectual property protection,
including the ultimate extent of the impact on the Group of the loss of patent
protection on key products which commenced last year and will continue this
year; unexpected product manufacturing issues, including the potential outcomes
of the Warning Letter issued to us with respect to three Sandoz manufacturing
facilities, and the potential outcome of the suspension of production at the
Consumer Health manufacturing facility at Lincoln, Nebraska; government,
industry, and general public pricing pressures; uncertainties regarding actual
or potential legal proceedings, including, among others, actual or potential
product liability litigation, litigation and investigations regarding sales and
marketing practices, shareholder litigation, government investigations and
intellectual property disputes; competition in general; uncertainties regarding
the after-effects of the recent global financial and economic crisis;
uncertainties regarding future global exchange rates; uncertainties regarding
future demand for our products; uncertainties involved in the development of new
healthcare products; the impact that the foregoing factors could have on the
values attributed to the Group's assets and liabilities as recorded in the
Group's consolidated balance sheet; and other risks and factors referred to in
Novartis AG's current Form 20-F on file with the US Securities and Exchange
Commission. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those described herein as anticipated, believed, estimated or
expected. Novartis is providing the information in this press release as of this
date and does not undertake any obligation to update any forward-looking
statements as a result of new information, future events or otherwise.
About Novartis
Novartis provides innovative healthcare solutions that address the evolving
needs of patients and societies. Headquartered in Basel, Switzerland, Novartis
offers a diversified portfolio to best meet these needs: innovative medicines,
eye care, cost-saving generic pharmaceuticals, preventive vaccines and
diagnostic tools, over-the-counter and animal health products. Novartis is the
only global company with leading positions in these areas. In 2011, the Group's
continuing operations achieved net sales of USD 58.6 billion, while
approximately USD 9.6 billion (USD 9.2 billion excluding impairment and
amortization charges) was invested in R&D throughout the Group. Novartis Group
companies employ approximately 124,000 full-time-equivalent associates and
operate in more than 140 countries around the world. For more information,
please visit http://www.novartis.com.
Important dates
July 19, 2012 Second quarter and half year results 2012
October 25, 2012 Third quarter results 2012
All product names appearing in italics are trademarks owned by or licensed to
Novartis Group Companies.
Please find full media release in English attached and on the following link:
http://hugin.info/134323/R/1605231/508277.pdf
Further language versions are available through the following links:
German version is available through the following link:
http://hugin.info/134323/R/1605233/508273.pdf
French version is available through the following link:
http://hugin.info/134323/R/1605232/508274.pdf
Media release (PDF):
http://hugin.info/134323/R/1605231/508277.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Novartis International AG via Thomson Reuters ONE
[HUG#1605231]
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Datum: 24.04.2012 - 01:01 Uhr
Sprache: Deutsch
News-ID 1106175
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