-
Net sales in line with prior
year (0% cc[1], -2% USD), as growth drivers offset Gleevec/Glivec Gx impact:
-
Cosentyx (USD 490 million,
+90% cc) continues strong growth in all three indications
-
Entresto (USD 110 million)
grew steadily driven by improved access and US sales force
expansion
-
Excluding Gleevec/Glivec,
Oncology grew 9% (cc), driven by Promacta,
Tafinlar + Mekinist and Jakavi
-
Sandoz declined 4% (cc) mainly impacted by
increased US pricing pressure
-
Alcon grew 3% (cc) driven by Surgical (+3% cc)
with growth in key segments, including IOLs, and Vision Care (+2%
cc)
-
Core[1] operating income
in line with prior year (0% cc, -3% USD) as gross margin expansion
and productivity offset the generic erosion and growth
investments:
-
Core EPS of USD 1.22, grew 2% (cc, -1% USD),
including the benefit from the share buyback program (approximately
+1%)
-
Net income grew 14% (cc, +10%
USD) mainly driven by divestment gains and lower
amortization
-
Free cash flow[1] grew 28%
versus prior year, to USD 3.2 billion
-
Innovation milestones
strengthening pipeline and reinforcing growth prospects:
-
RTH258 demonstrated non-inferiority to
aflibercept, majority of patients exclusively on a 12 week
interval
-
ACZ885 reduced cardiovascular risk in people who
survived a heart attack
-
CTL019 JULIET showed durable complete responses
up to 6 months in adults with r/r DLBCL
-
Rydapt approved in US for
FLT3-mutated AML and advanced systemic mastocytosis
-
Tafinlar + Mekinist
received FDA approval for BRAF+ mutant metastatic NSCLC
-
Kisqali received
positive CHMP opinion for HR+/HER2- metastatic breast cancer
-
CTL019 unanimously recommended for approval by
FDA advisory committee to treat pediatric ALL
-
Biosimilars Erelzi
(etanercept) and Rixathon (rituximab) were
approved in the EU and biosimilars for adalimumab and infliximab
were accepted for regulatory review by EMA
-
Generic Advair Diskus® regulatory
submission was accepted by FDA
-
2017 Group outlook
re-confirmed:
|
|
Key figures[1] |
Q2 2017 |
Q2 2016 |
% change |
|
H1 2017 |
H1 2016 |
% change |
|
USD m |
USD m |
USD |
cc |
|
USD m |
USD m |
USD |
cc |
Net Sales |
12 242 |
12 470 |
-2 |
0 |
|
23 781 |
24 070 |
-1 |
1 |
Operating income |
2 280 |
2 093 |
9 |
13 |
|
4 202 |
4 544 |
-8 |
-4 |
Net income |
1 979 |
1 806 |
10 |
14 |
|
3 644 |
3 817 |
-5 |
-1 |
EPS (USD) |
0.84 |
0.76 |
11 |
15 |
|
1.54 |
1.60 |
-4 |
-1 |
Free cash flow |
3 243 |
2 526 |
28 |
|
|
4 908 |
3 888 |
26 |
|
Core |
|
|
|
|
|
|
|
|
|
Operating income |
3 235 |
3 332 |
-3 |
0 |
|
6 245 |
6 593 |
-5 |
-2 |
Net income |
2 866 |
2 930 |
-2 |
1 |
|
5 556 |
5 718 |
-3 |
0 |
EPS (USD) |
1.22 |
1.23 |
-1 |
2 |
|
2.35 |
2.40 |
-2 |
1 |
[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 43 of the Condensed Interim Financial
Report. Unless otherwise noted, all growth rates in this Release
refer to same period in prior year.
Basel, July 18,
2017 - Commenting on the results, Joseph Jimenez, CEO of
Novartis, said:
"Novartis
delivered very strong innovation in Q2 including the positive
pivotal trial readouts for RTH258, ACZ885 and CTL019 JULIET,
demonstrating the strength of our pipeline. We are on track for the
full year guidance. The trajectory of the current growth drivers
reinforces our confidence in our next growth phase, which we expect
to start in 2018."
GROUP
REVIEW
Second quarter
Group financials
Net sales were USD 12.2 billion
(-2%, 0% cc) in the second quarter, as volume growth of 6
percentage points was offset by the negative impacts of generic
competition (-3 percentage points) and pricing (-3 percentage
points).
Operating income was USD 2.3
billion (+9%, +13% cc) driven by higher divestment gains and lower
amortization. Core adjustments amounted to USD 1.0 billion (2016:
USD 1.2 billion).
Core operating income was USD 3.2
billion (-3%, 0% cc). Core operating income margin in constant
currencies remained flat as generic erosion of Gleevec/Glivec and growth investments were offset by
gross margin expansion and productivity. Currency had a negative
impact of 0.3 percentage points, resulting in a net decrease of 0.3
percentage points to 26.4% of net sales.
Net income was USD 2.0 billion
(+10%, +14% cc), broadly in line with operating income.
EPS was USD 0.84 (+11%, +15% cc),
including the benefit from the share buyback program.
Core net income was USD 2.9
billion (-2%, +1% cc), broadly in line with core operating
income.
Core EPS was USD 1.22 (-1%, +2%
cc), including the benefit from the share buyback program.
Free cash flow amounted to USD 3.2
billion (+28% USD) compared to USD 2.5 billion in the prior year
quarter. The increase of USD 0.7 billion was mainly driven by
improved cash flows from operating activities, which included a
higher dividend received from GSK Consumer Healthcare Holdings
Ltd., as well as higher divestment proceeds and lower capital
expenditure.
Innovative
Medicines net sales were USD 8.3 billion (-1%, +1% cc) in the
second quarter, with volume growth of 7 percentage points driven by
Cosentyx, Entresto,
Promacta/Revolade, Tafinlar + Mekinist,
Jakavi, and Gilenya. Generic competition
had a negative impact of 4 percentage points and pricing had a
negative impact of 2 percentage points, both largely due to
Gleevec/Glivec genericization in Europe and
the US.
Operating income was USD 2.1
billion (+11%, +16% cc), up mainly due to divestment gains and
lower amortization. Core adjustments totaled USD 501 million (2016:
USD 803 million). Core operating income was USD 2.6 billion (-3%,
+1% cc). Core operating income margin in constant currencies
decreased by 0.2 percentage points due to generic erosion and
launch investments for Entresto, Cosentyx and
Kisqali, partly offset by improved gross
margin and productivity. Currency had a negative impact of 0.5
percentage points, resulting in a net decrease of 0.7 percentage
points to 31.1% of net sales.
Sandoz net
sales were USD 2.5 billion (-5%, -4% cc) in the second quarter, as
volume growth of 4 percentage points was more than offset by 8
percentage points of price erosion, mainly in the US. Sales in the
US declined 15% (cc), mainly due to pricing pressure in retail
generics and prior year launch timing. Net sales across Europe and
the rest of the world grew 3% (cc).
Operating income was USD 330
million (-13%, -13% cc). Core operating income was USD 497 million
(-7%, -7% cc). Core operating income margin in constant currencies
decreased by 0.7 percentage points, mainly due to higher M&S
investment in key ex-US markets and biosimilars. Currency had a
positive impact of 0.2 percentage points, resulting in a net
decrease of 0.5 percentage points to 20.3% of net sales.
Alcon net
sales were USD 1.5 billion (+1%, +3% cc) in the second quarter.
Surgical sales grew 3% (cc) with strong growth in cataract
consumables and vitreoretinal, intraocular lenses returning to
growth globally. Vision Care sales grew 2% (cc), driven by the
continued double-digit growth of Dailies
Total1.
Operating loss was USD 19 million
compared to USD 7 million income in the prior year quarter. Core
operating income was USD 211 million (-11%, -7% cc), impacted by
growth plan investments in M&S. Core operating income margin in
constant currencies decreased by 1.5 percentage points. Currency
had a negative impact of 0.4 percentage points, resulting in a
net decrease of 1.9 percentage points to 13.9% of net sales.
First
half
Net sales were USD 23.8 billion
(-1%, +1% cc) in the first half, as volume growth of 6 percentage
points was partially offset by the negative impacts of generic
competition (-3 percentage points) and pricing (-2 percentage
points).
Operating income was USD 4.2
billion (-8%, -4% cc). Core adjustments amounted to USD 2.0 billion
in line with the prior year period, as the RLX030 net charge was
offset mostly by lower amortization.
Core operating income was USD 6.2
billion (-5%, -2% cc). Core operating income margin in constant
currencies decreased 0.9 percentage points, mainly due to generic
erosion of Gleevec/Glivec and growth
investments. Currency had a negative impact of 0.2 percentage
points, resulting in a net decrease of 1.1 percentage points to
26.3% of net sales.
Net income was USD 3.6 billion
(-5%, -1% cc), declining less than operating income due to higher
income from associated companies.
EPS was USD 1.54 (-4%, -1% cc),
including the benefit from the share buyback program.
Core net income was USD 5.6
billion (-3%, 0% cc), including the benefit from higher core income
from associated companies.
Core EPS was USD 2.35 (-2%, +1%
cc), including the benefit from the share buyback program.
Free cash flow amounted to USD 4.9
billion (+26% USD) compared to USD 3.9 billion in the prior year
period. The increase of USD 1.0 billion was mainly driven by
improved cash flows from operating activities, which included a
higher dividend received from GSK Consumer Healthcare Holdings
Ltd.
Innovative
Medicines net sales were USD 16.0 billion (-1%, +2% cc) in the
first half, with volume growth of 7 percentage points driven by
Cosentyx, Entresto,
Promacta/Revolade, Jakavi, Tafinlar + Mekinist
and Gilenya. Generic competition had a
negative impact of 4 percentage points and pricing had a negative
impact of 1 percentage point, both largely due to Gleevec/Glivec genericization in Europe and the US.
Operating income was USD 3.8
billion (-6%, -2% cc). Core adjustments totaled USD 1.2 billion, in
line with prior year, as the RLX030 net charge was offset mostly by
lower amortization. Core operating income was USD 5.0 billion (-5%,
-1% cc). Core operating income margin in constant currencies
decreased by 1.0 percentage points mainly due to generic erosion
and launch investments for Entresto, Cosentyx
and Kisqali, partly offset by improved gross
margin and productivity. Currency had a negative impact of 0.4
percentage points, resulting in a net decrease of 1.4 percentage
points to 31.3% of net sales.
Sandoz net
sales were USD 4.9 billion (-3%, -2% cc) in the first half, as
volume growth of 6 percentage points was more than offset by 8
percentage points of price erosion. Sales in the US declined 8%
(cc) mainly due to pricing pressure in retail generics. Net sales
across Europe and the rest of the world grew 2% (cc).
Operating income was USD 673
million (-7%, -8% cc). Core operating income was USD 1.0 billion
(-6%, -6% cc). Core operating income margin in constant currencies
decreased by 1.0 percentage point, mainly due to higher M&S
investment in key ex-US markets and biosimilars. Currency had a
positive impact of 0.3 percentage points, resulting in a net
decrease of 0.7 percentage points to 19.6% of net sales.
Alcon net
sales were USD 2.9 billion (0%, +2% cc) in the first half. Surgical
sales grew 1% (cc), driven by strong performance of the
vitreoretinal portfolio and cataract consumables. Vision Care sales
grew 3% (cc) driven by the continued double-digit growth of
Dailies Total1.
Operating loss was USD 62 million
compared to USD 38 million income in the prior year period. Core
operating income was USD 398 million (-17%, -13% cc), impacted by
growth plan investments in M&S. Core operating income margin in
constant currencies decreased by 2.3 percentage points. Currency
had a negative impact of 0.5 percentage points, resulting in a
net decrease of 2.8 percentage points to 13.6% of net sales.
Key growth
drivers
Underpinning our financial results
in the second quarter is a continued focus on key growth drivers,
including Cosentyx, Entresto,
Promacta/Revolade, Tafinlar + Mekinist,
Jakavi, Tasigna, Gilenya and Kisqali, as well as Biopharmaceuticals and Emerging
Growth Markets.
Growth Drivers
-
Cosentyx (USD 490 million, +90% cc), continued its
positive launch trajectory in the second quarter of 2017 with
strong growth in PsA, AS and PsO. Cosentyx has
been used to treat more than 90,000 patients since
launch.
-
Entresto (USD 110 million, +240% cc), continued to
grow, benefitting from the impact of improved access, sales force
expansion in the US and reimbursement in Europe.
-
Promacta/Revolade (USD 210 million, +35% cc) grew
at a strong double-digit rate, driven by continued worldwide uptake
as well as growth of the thrombopoietin class for chronic immune
thrombocytopenic purpura.
-
Tafinlar +
Mekinist (USD 216 million, +28% cc) performance was driven
by double-digit growth across all regions.
-
Jakavi
(USD 186 million, +32% cc) showed continued double-digit growth
across all major markets driven by myelofibrosis and launch of the
second-line polycythemia vera indication.
-
Tasigna (USD 463 million, +7% cc) showed solid
growth in the second quarter driven by the US and Emerging Growth
Markets.
-
Gilenya (USD 837 million, +5% cc), exhibited
continued growth.
-
Kisqali (USD 8 million) CDK4/6 inhibitor continues
to gain access in the US market. Second quarter sales were modest
with multiple patient access programs available to initiate
treatment and bridge to insurance coverage.
-
Biopharmaceuticals (USD 260
million, +6% cc) grew mainly driven by Zarxio
in the US.
Emerging Growth Markets
-
Net sales in Emerging Growth Markets - which
comprise all markets except the US, Canada, Western Europe, Japan,
Australia and New Zealand - grew 4% USD, 8% cc driven by strong
performance in China (+10% cc), Russia (+9% cc) and Brazil (+8%
cc).
Strengthen
R&D
Innovation
Review
Benefitting from our continued
focus on innovation, Novartis has one of the industry's most
competitive pipelines with more than 200 projects in clinical
development.
Key developments from the second
quarter of 2017 include:
New approvals and
regulatory opinions
-
Kisqali received a positive CHMP opinion as a
first-line option for HR+/HER2- advanced or metastatic breast
cancer in combination with any aromatase inhibitor.
-
Rydapt
(midostaurin, formerly PKC412) was approved in the US to treat
newly diagnosed FLT3-mutated acute myeloid leukemia (AML) and three
types of systemic mastocytosis.
-
Zykadia received FDA and EMA approval for first
line use in ALK-positive advanced non-small cell lung cancer
(NSCLC).
-
Tafinlar +
Mekinist received FDA approval for treatment of BRAF V600E
mutant metastatic NSCLC.
-
CTL019 (tisagenlecleucel)
was unanimously recommended for approval by an FDA Oncologic Drugs
Advisory Committee in July, for the treatment of pediatric and
young adult patients with relapsed or refractory (r/r) B-cell acute
lymphoblastic leukemia.
-
Cosentyx received EMA approval in July for a label
update to include 52 week data from CLEAR study demonstrating
long-term superiority of Cosentyx versus
Stelara® in psoriasis.
The update also includes the use of Cosentyx
in moderate-to-severe scalp psoriasis, one of the most
difficult-to-treat types of psoriasis.
-
Tasigna received EMA approval for inclusion of
Treatment-free Remission data in its product label. Tasigna is the first and only tyrosine kinase inhibitor
to include information on stopping therapy in Ph+ CML-CP patients
in the EU product information.
-
PDR001 (PD-1 Antagonist)
received orphan drug designation from FDA for treatment of
neuroendocrine tumors.
-
Sandoz received approval and
launched two major biosimilars in the EU. Erelzi (etanercept) to treat immunological diseases
such as rheumatoid arthritis, psoriasis, and psoriatic arthritis.
Rixathon (rituximab) to
treat blood cancers and immunological diseases.
-
Alcon Clareon monofocal IOL was approved
in the EU. Clareon is a next-generation intraocular lens with
superior optical properties and stability.
-
Alcon CyPass Micro-stent was launched in Europe. The
device is a micro invasive Glaucoma surgical device to lower
intraocular pressure.
Regulatory
submissions and filings
-
AMG 334 (erenumab) became
the first anti-CGRP monoclonal antibody to be submitted to both FDA
and EMA for migraine prevention. Novartis confirmed EMA acceptance
of regulatory submission of AMG 334 in June.
-
Sandoz proposed biosimilars
adalimumab (AbbVie's Humira®) and
infliximab (Janssen and Merck's
Remicade®) were
accepted for regulatory review by EMA.
-
Sandoz Generic Advair
Diskus®regulatory
submission was accepted by FDA for treatment of asthma and airflow
obstruction and reducing exacerbations in patients with COPD.
Results from
ongoing trials and other highlights
-
RTH258 (brolucizumab) phase
III studies achieved the primary efficacy endpoint of
non-inferiority to aflibercept, with a majority of patients
maintained exclusively on a 12 week interval. The results of the
HAWK and HARRIER trials will be presented at the American Academy
of Ophthalmology meeting, in November.
-
ACZ885 (canakinumab)
CANTOS phase III study met the primary
endpoint showing that in combination with standard of care therapy,
ACZ885 reduces cardiovascular risk in people with a prior
myocardial infarction and inflammatory atherosclerosis.
-
CTL019 JULIET trial interim
analysis showed durable complete responses in adults with r/r
DLBCL. The three-month overall response rate was 45%, with 37%
complete response (CR); all patients in CR at three months remained
in CR at data cutoff. Primary analysis at six months confirmed the
interim analysis.
-
CTL019 ELIANA 6-month
follow-up data show durable remission rates in children and young
adults with r/r B-cell ALL.
-
CTL119 in combination with
ibrutinib showed that eight of nine patients tested had no signs of
chronic lymphocytic leukemia in their bone marrow three months
after treatment.
-
AMG 334 (erenumab) data
from Phase III trials STRIVE and ARISE was presented at American
Academy of Neurology. The data confirmed the potential of AMG 334
to substantially reduce days with migraine for people experiencing
up to 14 migraine days a month (episodic migraine). The safety
profile of AMG 334 was comparable to placebo.
-
AMG 334 data was presented
at the American Headache Society that showed significantly reduced
monthly migraine days by an average of 6.6 days from baseline for
people experiencing at least 15 migraine days a month (chronic
migraine).
-
PDR001 achieved First
Patient First Visit (FPFV) for Phase III trial in combination
with Tafinlar + Mekinist for metastatic BRAF
V600+ melanoma, Phase II trial of PDR001 in neuroendocrine tumors
and three Phase I trials of PDR001 in other tumor types.
-
Cosentyx additional data showed sustained
improvements in signs and symptoms for both AS and PsA in up to 80%
of patients at 3 years. Also additional data showed rapid and
sustained pain relief from as early as week 3, which was sustained
out to 2 years in PsA patients.
-
Tafinlar +
Mekinist study demonstrated durable survival benefit at
five years in patients with BRAF mutation-positive metastatic
melanoma.
-
Kisqali follow-up data was presented at ASCO and
reinforced the efficacy and safety of Kisqali
as a first-line option for HR+/HER2- advanced or metastatic breast
cancer. The data showed that after nearly one year of additional
follow-up, Kisqali plus letrozole demonstrated
median progression-free survival of 25.3 months compared to 16.0
months for letrozole alone.
-
Rydapt
Phase III RATIFY trial full analysis was published in the NEJM and
showed significant overall survival benefit observed for FLT3+ AML
patients consistent across FLT3 mutation subgroups, including ITD
and TKD.
-
VAY785 (emricasan)
exclusive option was exercised with Conatus granting Novartis the
license to develop and commercialize globally for the treatment of
non-alcoholic steatohepatitis (NASH).
Transform Alcon
into an agile business
The Alcon Division grew sales 3%
(cc) in the second quarter driven by Surgical (+3% cc) as well as
continued growth in Vision Care (+2% cc). These results reflect the
actions taken to accelerate innovation, strengthen customer
relationships and improve the efficiency and effectiveness of
operations. Based on these results the full year guidance for Alcon
has been revised upward to low single digit growth.
The return to sales growth in
Surgical was driven by growth in key segments, including strong
performance in vitreoretinal and cataract consumables, as well as
IOLs returning to growth globally. The division also invested in
expanding its new product launches, and CyPass
received US reimbursement in July and was launched in the EU during
the quarter.
In Vision Care, contact lenses
grew for the fifth consecutive quarter driven by Dailies Total1 growth in all regions.
In January 2017, Novartis
announced a strategic review of Alcon. Options to maximize
shareholder value of the Alcon Division are under consideration. A
status update will be provided towards the end of 2017.
Create a stronger
company for the future
We continued to advance all of our
productivity and quality programs in the second quarter:
-
Novartis Business Services (NBS), our
cross-divisional services organization, continues to deliver
sustainable savings with a disciplined approach to investment while
improving quality of services. In addition, we continue to optimize
our geographical footprint to further strengthen capabilities in
the five Novartis Global Service Centers.
-
Novartis Technical Operations (NTO) continues to
execute on its priorities of driving efficiency through
manufacturing synergy, improved resource allocation and reduction
of external spend. The integrated Supply Chain organization is
improving customer service levels, worldwide product launch
coordination and its agility to respond to near-term market
variability. NTO is additionally reviewing logistics strategies to
improve Novartis' overall competitiveness with a more efficient
distribution network.
-
Global Drug Development (GDD), implemented in
2016, oversees drug development across the innovative medicines and
the biosimilars portfolio. The enterprise-wide approach to
portfolio management is enabling better resource allocation and
increased R&D productivity.
-
Novartis continues to drive compliance, reliable
product quality and sustainable efficiency as part of the quality
strategy. A total of 107 global health authority inspections were
completed in the first half (61 in Q2), 18 of which were conducted
by the FDA (6 in Q2). All were deemed good or acceptable with one
outcome pending.
Capital structure and net debt
Retaining a good balance between
investment in the business, a strong capital structure and
attractive shareholder returns remains a priority.
In January 2017, Novartis
announced an up to USD 5 billion share buyback to be executed on
the second trading line. During the first six months of 2017,
Novartis repurchased 35.1 million shares under this buyback and 6.3
million shares to mitigate dilution related to equity-based
participation plans of associates. In addition, 2.3 million shares
were repurchased from associates, and 12.5 million treasury shares
were delivered as a result of options exercised and share
deliveries related to participation plans of associates.
Consequently, the total number of shares outstanding decreased by
31.2 million versus December 31, 2016. Novartis aims to fully
offset the dilutive impact from equity-based participation plans of
associates. These treasury share transactions resulted in a net
cash outflow of USD 2.9 billion.
As of June 30, 2017, the net debt
increased by USD 6.1 billion to USD 22.1 billion. The increase was
mainly driven by the USD 6.5 billion annual dividend payment, net
share repurchases and M&A related payments, partly offset by
USD 4.9 billion free cash flow in the first six months of 2017.
The long-term credit rating for
the company continues to be double-A (Moody's Investors Service
Aa3; S&P Global Ratings AA-; Fitch Ratings AA).
2017
Outlook
Barring
unforeseen events
We re-confirm our Group outlook as
presented at the beginning of 2017. Group net sales in 2017 are
expected to be broadly in line with the prior year (cc), after
absorbing the impact of generic competition, including the
continued genericization of Gleevec/Glivec in
the US and Europe.
From a divisional perspective, we
expect net sales performance (cc) in 2017 to be as follows:
-
Innovative Medicines: broadly in line with prior
year, to a slight increase
-
Sandoz: broadly in line with prior year
-
Alcon: revised upward to low single digit
growth
Group core operating income in
2017 is expected to be broadly in line with prior year to a low
single digit decline (cc).
If mid-July exchange rates prevail
for the remainder of 2017, the currency impact for the year would
be negative 1 percentage point on net sales and negative 2
percentage points on core operating income. The estimated impact of
exchange rates on our results is provided monthly on our
website.
Summary Financial
Performance
Innovative Medicines |
Q2 2017 |
Q2 2016 |
% change |
|
H1 2017 |
H1 2016 |
% change |
|
USD m |
USD m |
USD |
cc |
|
USD m |
USD m |
USD |
cc |
Net Sales |
8 275 |
8 387 |
-1 |
1 |
|
15 967 |
16 116 |
-1 |
2 |
Operating income |
2 075 |
1 866 |
11 |
16 |
|
3 796 |
4 046 |
-6 |
-2 |
As a %
of sales |
25.1 |
22.2 |
|
|
|
23.8 |
25.1 |
|
|
Core Operating income |
2 576 |
2 669 |
-3 |
1 |
|
5 002 |
5 271 |
-5 |
-1 |
As a % of sales |
31.1 |
31.8 |
|
|
|
31.3 |
32.7 |
|
|
Sandoz |
Q2 2017 |
Q2 2016 |
% change |
|
H1 2017 |
H1 2016 |
% change |
|
USD m |
USD m |
USD |
cc |
|
USD m |
USD m |
USD |
cc |
Net Sales |
2 451 |
2 577 |
-5 |
-4 |
|
4 881 |
5 022 |
-3 |
-2 |
Operating income |
330 |
380 |
-13 |
-13 |
|
673 |
726 |
-7 |
-8 |
As a %
of sales |
13.5 |
14.7 |
|
|
|
13.8 |
14.5 |
|
|
Core Operating income |
497 |
535 |
-7 |
-7 |
|
957 |
1 020 |
-6 |
-6 |
As a % of sales |
20.3 |
20.8 |
|
|
|
19.6 |
20.3 |
|
|
Alcon |
Q2 2017 |
Q2 2016 |
% change |
|
H1 2017 |
H1 2016 |
% change |
|
USD m |
USD m |
USD |
cc |
|
USD m |
USD m |
USD |
cc |
Net Sales |
1 516 |
1 506 |
1 |
3 |
|
2 933 |
2 932 |
0 |
2 |
Operating loss /
income |
-19 |
7 |
nm |
nm |
|
-62 |
38 |
nm |
nm |
As a %
of sales |
-1.3 |
0.5 |
|
|
|
-2.1 |
1.3 |
|
|
Core Operating income |
211 |
238 |
-11 |
-7 |
|
398 |
481 |
-17 |
-13 |
As a % of sales |
13.9 |
15.8 |
|
|
|
13.6 |
16.4 |
|
|
nm = not
meaningful |
|
|
|
|
|
|
|
Corporate |
Q2 2017 |
Q2 2016 |
% change |
|
H1 2017 |
H1 2016 |
% change |
|
USD m |
USD m |
USD |
cc |
|
USD m |
USD m |
USD |
cc |
Operating loss |
-106 |
-160 |
34 |
29 |
|
-205 |
-266 |
23 |
18 |
Core Operating loss |
-49 |
-110 |
55 |
51 |
|
-112 |
-179 |
37 |
32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Group |
Q2 2017 |
Q2 2016 |
% change |
|
H1 2017 |
H1 2016 |
% change |
|
USD m |
USD m |
USD |
cc |
|
USD m |
USD m |
USD |
cc |
Net Sales |
12 242 |
12 470 |
-2 |
0 |
|
23 781 |
24 070 |
-1 |
1 |
Operating income |
2 280 |
2 093 |
9 |
13 |
|
4 202 |
4 544 |
-8 |
-4 |
As a %
of sales |
18.6 |
16.8 |
|
|
|
17.7 |
18.9 |
|
|
Core Operating income |
3 235 |
3 332 |
-3 |
0 |
|
6 245 |
6 593 |
-5 |
-2 |
As a %
of sales |
26.4 |
26.7 |
|
|
|
26.3 |
27.4 |
|
|
Net income |
1 979 |
1 806 |
10 |
14 |
|
3 644 |
3 817 |
-5 |
-1 |
EPS (USD) |
0.84 |
0.76 |
11 |
15 |
|
1.54 |
1.60 |
-4 |
-1 |
Cash flows from operating
activities |
3 582 |
3 111 |
15 |
|
|
5 627 |
4 653 |
21 |
|
Free cash flow |
3 243 |
2 526 |
28 |
|
|
4 908 |
3 888 |
26 |
|
A condensed interim financial
report with the information listed in the index below can be found
on our website at
http://hugin.info/134323/R/2120951/808094.pdf.
Novartis Q2 and H1 2017 Condensed
Interim Financial Report - Supplementary Data
INDEX |
Page |
GROUP
AND DIVISIONAL OPERATING PERFORMANCE Q2 and H1 2017 |
|
Group |
2 |
Innovative
Medicines |
5 |
Sandoz |
13 |
Alcon |
15 |
CASH FLOW AND GROUP BALANCE SHEET |
17 |
INNOVATION REVIEW |
19 |
CONDENSED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS |
|
Consolidated income
statements |
28 |
Condensed consolidated
statements of comprehensive income |
30 |
Condensed consolidated
balance sheets |
31 |
Condensed consolidated
changes in equity |
32 |
Condensed consolidated
cash flow statements |
33 |
Notes to condensed
interim consolidated financial statements, including update on
legal proceedings |
35 |
SUPPLEMENTARY INFORMATION |
43 |
CORE
RESULTS |
|
Reconciliation from
IFRS to core results |
45 |
Group |
47 |
Innovative
Medicines |
49 |
Sandoz |
51 |
Alcon |
53 |
Corporate |
55 |
ADDITIONAL INFORMATION |
|
Condensed consolidated
changes in net debt / Share information |
57 |
Free cash flow |
58 |
Net sales of the top
20 Innovative Medicines products |
59 |
Innovative Medicines
sales by business franchise |
61 |
Net sales by
region |
63 |
Currency translation
rates |
65 |
Income from associated
companies |
66 |
DISCLAIMER |
67 |
Disclaimer
This press release contains forward-looking statements, including
"forward-looking statements" within the meaning of the United
States Private Securities Litigation Reform Act of 1995, that can
generally be identified by words such as "potential," "guidance,"
"growth drivers," "continues," "pipeline," "growth prospects,"
"positive CHMP opinion," "outlook," "expected," "on track,"
"trajectory," "confidence," "growth phase," "expect," "launch,"
"growth plan," "initiate," "continued focus," "launch trajectory,"
"pipelines," "recommended," "launched," "next-generation," "to be
filed," "proposed," "ongoing," "driven," "option," "to accelerate,"
"launches," "strategic review," "to maximize," "under
consideration," "will," "towards the end of 2017," "for the
future," "continue," "to further strengthen," "priorities,"
"improving," "reviewing," "remains a priority," "to be executed,"
"aims," "re-confirm," "continued," "would," "estimated," "Priority
Review," "investigational," "Breakthrough Therapy designation,"
"evaluating," "investigating," "commitment," "planned," "subject
to," "Fast Track designation," "being co-commercialized,"
"growing," "underway," "filed," "submitted," "can," or similar
expressions, or by express or implied discussions regarding
potential new products, potential new indications for existing
products, or regarding potential future revenues from any such
products; potential shareholder returns or credit ratings; or
regarding the potential outcome of the announced review of options
being undertaken to maximize shareholder value of the Alcon
Division; or regarding the potential financial or other impact on
Novartis or any of our divisions of the significant reorganizations
of recent years, including the creation of the Pharmaceuticals and
Oncology business units to form the Innovative Medicines Division,
the creation of the Global Drug Development organization and
Novartis Operations (including Novartis Technical Operations and
Novartis Business Services), the transfer of the Ophthalmic
Pharmaceuticals products of our Alcon Division to the Innovative
Medicines Division, the transfer of selected mature, non-promoted
pharmaceutical products from the Innovative Medicines Division to
the Sandoz Division, and the transactions with GSK, Lilly and CSL;
or regarding the potential impact of the share buyback plan; or
regarding potential future sales or earnings of the Novartis 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 are based on our
current beliefs and expectations regarding future events, and are
subject to significant known and unknown risks and uncertainties.
Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may
vary materially from those set forth in the forward looking
statements. There can be no guarantee that any new products will be
approved for sale in any market, or that any new indications 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 such products will achieve any particular revenue
levels. Nor can there be any guarantee that the review of options
being undertaken to maximize shareholder value of the Alcon
Division will reach any particular results, or at any particular
time. Neither can there be any guarantee that Novartis will
be able to realize any of the potential strategic benefits,
synergies or opportunities as a result of the significant
reorganizations of recent years, including the creation of the
Pharmaceuticals and Oncology business units to form the Innovative
Medicines Division, the creation of the Global Drug Development
organization and Novartis Operations (including Novartis Technical
Operations and Novartis Business Services), the transfer of the
Ophthalmic Pharmaceuticals products of our Alcon Division to the
Innovative Medicines Division, the transfer of selected mature,
non-promoted pharmaceutical products from the Innovative Medicines
Division to the Sandoz Division, and the transactions with GSK,
Lilly and CSL. Neither can there be any guarantee that shareholders
will achieve any particular level of shareholder returns. Nor can
there be any guarantee that the Group, or any of its divisions,
will be commercially successful in the future, or achieve any
particular credit rating or financial results. In particular, our
expectations could be affected by, among other things: regulatory
actions or delays or government regulation generally; the potential
that the strategic benefits, synergies or opportunities expected
from the significant reorganizations of recent years, including the
creation of the Pharmaceuticals and Oncology business units to form
the Innovative Medicines Division, the creation of the Global Drug
Development organization and Novartis Operations (including
Novartis Technical Operations and Novartis Business Services), the
transfer of the Ophthalmic Pharmaceuticals products of our Alcon
Division to the Innovative Medicines Division, the transfer of
selected mature, non-promoted pharmaceutical products from the
Innovative Medicines Division to the Sandoz Division, and the
transactions with GSK, Lilly and CSL may not be realized or may
take longer to realize than expected; the inherent uncertainties
involved in predicting shareholder returns or credit ratings; the
uncertainties inherent in the research and development of new
healthcare products, including clinical trial results and
additional analysis of existing clinical data; our ability to
obtain or maintain proprietary intellectual property protection,
including the ultimate extent of the impact on Novartis of the loss
of patent protection and exclusivity on key products which
commenced in prior years and will continue this year; safety,
quality or manufacturing issues; global trends toward health care
cost containment, including government, payor and general public
pricing and reimbursement pressures; the particular prescribing
preferences of physicians and patients; uncertainties regarding
actual or potential legal proceedings, including, among others,
actual or potential product liability litigation, litigation and
investigations regarding sales and marketing practices,
intellectual property disputes and government investigations
generally; general economic and industry conditions, including
uncertainties regarding the effects of the persistently weak
economic and financial environment in many countries; uncertainties
regarding future global exchange rates; uncertainties regarding
future demand for our products; and uncertainties regarding
potential significant breaches of data security or data privacy, or
disruptions of our information technology systems; and other risks
and factors referred to in Novartis AG's current Form 20-F on file
with the US Securities and Exchange Commission. 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.
All product names appearing in
italics are trademarks owned by or licensed to Novartis Group
companies. Advair Diskus® is a
registered trademark of the GSK group of companies.
Stelara® is a
trademark of Janssen Biotech, Inc. Humira® is a
registered trademark of AbbVie Inc. Remicade® is a
registered trademark of Janssen Biotech, Inc. Jakafi®
is a registered trademark of Incyte Corporation. Enbrel®
is a registered trademark of Amgen Inc. MabThera® is a
registered trademark of F. Hoffmann-la Roche AG.
Rituxan®; is a
registered trademark of Biogen. Opdivo®
and Yervoy®
are trademarks of Bristol-Myers Squibb Company.
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, cost-saving generic and
biosimilar pharmaceuticals and eye care. Novartis has leading
positions globally in each of these areas. In 2016, the Group
achieved net sales of USD 48.5 billion, while R&D throughout
the Group amounted to approximately USD 9.0 billion. Novartis Group
companies employ approximately 119,000 full-time-equivalent
associates. Novartis products are sold in approximately 155
countries around the world. For more information, please visit
http://www.novartis.com.
Important dates
October 24,
2017
Third quarter results 2017
Please find full media release in
English attached and on the following link:
http://hugin.info/134323/R/2120951/808109.pdf
Further language versions are
available through the following links:
German version is available
through the following link:
http://hugin.info/134323/R/2120965/808113.pdf
French version is available
through the following link:
http://hugin.info/134323/R/2120966/808114.pdf
IFR (PDF)
Media release (PDF)