Ad hoc announcement pursuant to Art. 53 LR

Full year

Net sales grew +4% (cc1, -2% USD) with core operating income growing +8% (cc, 0% USD)
IM sales grew +4% (cc, -2% USD) and core operating income +8% (cc, 0% USD), with IM core margin reaching 36.9% (+130 bps cc)
Sandoz sales grew +4% (cc, -4% USD) with core operating income decreasing -1% (cc, -8% USD)
Operating income declined -13% (cc, -21% USD), mainly due to higher restructuring and impairments. Net income declined -67% (cc, -71% USD), or -9% (cc) excluding the impact of Roche income2. Free cash flow was USD 11.9 billion (-10% USD)
Core EPS was USD 6.12 +6% (cc, -3% USD); excluding Roche core income impact, core EPS grew +14% (cc)
Fourth quarter

Net sales grew +3% (cc, -4% USD) with core operating income growing +15% (cc, +6% USD), mainly driven by higher sales and productivity
Innovative Medicines (IM) sales grew +3% (cc, -3% USD), growth drivers include: Entresto (+44% cc), Kesimpta (+157% cc), Pluvicto (reaching USD 179 million) and Kisqali (+33% cc)
Sandoz sales were in line with the prior year (0% cc, -8% USD) with continued growth in biopharmaceuticals
Q4 selected innovation milestones:
Pluvicto Ph3 PSMAfore positive results in mCRPC; EC approval for progressive PSMA+ mCRPC
Iptacopan Ph3 APPLY-PNH demonstrated iptacopan superiority vs. anti-C5 in refractory PNH
Iptacopan Ph3 APPOINT-PNH met primary endpoint in complement inhibitor naive PNH patients
Share buyback, dividend and 2023 guidance

Previously announced up-to USD 15 billion share buyback ongoing; USD 4.9 billion still to be executed3
Dividend of CHF 3.20 per share, an increase of 3.2%, proposed for 2022
2023 guidance4 – Group expected to grow sales low-to-mid single digit and core operating income mid single digit. IM expected to grow sales low-to-mid single digit and core operating income mid-to-high single digit
Basel, February 1, 2023 - commenting on 2022 results, Vas Narasimhan, CEO of Novartis, said: “Novartis is on track to become a pure-play innovative medicines company, uniquely positioned to leverage its global scale and R&D platforms. Our six multi-billion brands5 now represent 32% of our Innovative Medicines sales and are growing 26%. Pluvicto and Scemblix had very strong launch performances, and the Leqvio launch continues to progress. Pivotal Ph3 readouts for two iptacopan studies and Pluvicto in earlier lines of therapy provide strong confidence for near to mid-term growth. Looking ahead, we have a catalyst rich pipeline with 15 pivotal readouts in the mid-term. We expect to continue to deliver improved financials and strengthen Novartis ESG foundations, on our journey to become most trusted and valued medicines company in the world”.

Key figures1

Q4 2022 Q4 2021 % change FY 2022 FY 2021 % change
USD m USD m USD cc USD m USD m USD cc
Net sales 12 690 13 229 -4 3 50 545 51 626 -2 4
Operating income 1 949 2 562 -24 -14 9 197 11 689 -21 -13
Net income 1 466 16 306 -91 -90 6 955 24 018 -71 -67
EPS (USD) 0.69 7.29 -91 -89 3.19 10.71 -70 -66
Free cash flow 3 552 3 027 17 11 945 13 282 -10
Core operating income 4 030 3 819 6 15 16 665 16 588 0 8
Core net income 3 251 3 135 4 14 13 352 14 094 -5 3
Core EPS (USD) 1.52 1.40 9 19 6.12 6.29 -3 6
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 50 of the Condensed Financial Report. Unless otherwise noted, all growth rates in this Release refer to same period in prior year. 2 A table showing the Q4 2022 and FY 2022 key figures excluding Roche can be found on page 8 and a reconciliation of 2021 IFRS results and non-IFRS measures core results to exclude the impacts of the 2021 divestment of our Roche investment can be found on page 58 of the Condensed Financial Report. 3 As per December 31, 2022. 4 Please see detailed guidance assumptions on page 6. 5 Potential USD sales.

Strategy Update

Our focus

During 2022, Novartis unveiled a new focused strategy with our transformation into a “pure-play” Innovative Medicines business. We have a clear focus on five core therapeutic areas (cardiovascular, immunology, neuroscience, solid tumors and hematology), with multiple significant in-market and pipeline assets in each of these areas, that address high disease burden and have substantial growth potential. In addition to two established technology platforms (chemistry and biotherapeutics), three emerging platforms (gene & cell therapy, radioligand therapy, and xRNA) are being prioritized for continued investment into new R&D capabilities and manufacturing scale. Geographically, we are focused on growing in our priority geographies - the US, China, Germany and Japan.
see & read more on
https://www.novartis.com/news/media-releases/novartis-continues-grow-further-core-margin-expansion-and-achieves-important-innovation-milestones