NOVARTIS AG Barring unforeseen events; growth vs. PY in cc
Group Sales expected to grow low to mid single digit
Core operating income expected to grow mid single digit,
ahead of sales
---------- ---------------------------------------------------------
Innovative Sales expected to grow mid single digit
Medicines Core operating income revised upwards from expected
to "grow mid to high single digit" to "grow high single
digit"
Sandoz Sales expected to decline low to mid single digit
Core operating income revised downwards from expected
to "decline low to mid-teens" to "decline mid to high
teens"
Our guidance assumes that we see a continuation of the return to normal global healthcare systems including prescription dynamics, particularly oncology, in the remainder of the year. In addition, we assume that no Gilenya and no Sandostatin LAR generics enter in 2021 in the US.
We are increasing our peak sales guidance for Cosentyx and Entresto, to at least USD 7.0 billion and at least USD 5.0 billion respectively.
Foreign exchange impact
If late-October exchange rates prevail for the remainder of 2021, the foreign exchange impact for the year would be positive 2 percentage points on net sales and positive 2 percentage points on core operating income. The estimated impact of exchange rates on our results is provided monthly on our website.
Board of Directors Announcements
The Novartis Board of Directors announced today that it is nominating Ana de Pro Gonzalo for election to the Board at the Annual General Meeting on March 4 2022. Ms Ana de Pro Gonzalo has held executive positions in finance and general management in IT and other industries. From 2010-2020, she was Chief Financial Officer of Amadeus IT Group SA, a leading technology provider and transaction processor for global businesses. Ms Ana de Pro Gonzalo serves as an independent non-executive director on several listed company boards as well as not-for-profit organizations. Her strong record of leadership in global corporations and experience in finance, capital markets and technology will add greatly to the expertise of the Novartis Board of Directors.
The Board also noted the decision by Andreas von Planta that he will not stand for re-election at the AGM 2023.
Key Figures(1)
Q3 Q3
Group 2021 2020 % change 9M 2021 9M 2020 % change
USD m USD m USD cc USD m USD m USD cc
------ ------ ---- ---- ------- ------- ---- ----
Net sales 13 030 12 259 6 5 38 397 35 889 7 4
------ ------ ---- ---- ------- ------- ---- ----
Operating income 3 233 2 412 34 32 9 127 7 508 22 18
------ ------ ---- ---- ------- ------- ---- ----
As a % of sales 24.8 19.7 23.8 20.9
---------------------- ------ ------ ------- -------
Core operating
income 4 467 4 069 10 9 12 769 11 915 7 4
------ ------ ---- ---- ------- ------- ---- ----
As a % of sales 34.3 33.2 33.3 33.2
---------------------- ------ ------ ------- -------
Net income 2 758 1 932 43 41 7 712 5 972 29 26
------ ------ ---- ---- ------- ------- ---- ----
EPS (USD) 1.23 0.85 45 44 3.44 2.62 31 28
------ ------ ---- ---- ------- ------- ---- ----
Core net income 3 830 3 467 10 9 10 959 10 124 8 5
------ ------ ---- ---- ------- ------- ---- ----
Core EPS (USD) 1.71 1.52 13 11 4.88 4.44 10 7
------ ------ ---- ---- ------- ------- ---- ----
Net cash flows
from
operating activities 4 925 3 156 56 11 187 9 645 16
------ ------ ---- ------- ------- ----
Free cash flow 4 423 2 697 64 10 255 8 349 23
------ ------ ---- ------- ------- ----
Q3 Q3
Innovative Medicines 2021 2020 % change 9M 2021 9M 2020 % change
USD m USD m USD cc USD m USD m USD cc
------ ------ ---- ---- ------- ------- ---- ----
Net sales 10 628 9 837 8 7 31 291 28 780 9 6
------ ------ ---- ---- ------- ------- ---- ----
Operating income 2 801 1 998 40 38 8 220 6 786 21 18
------ ------ ---- ---- ------- ------- ---- ----
As a % of sales 26.4 20.3 26.3 23.6
---------------------- ------ ------ ------- -------
Core operating
income 4 017 3 525 14 13 11 619 10 433 11 8
------ ------ ---- ---- ------- ------- ---- ----
As a % of sales 37.8 35.8 37.1 36.3
---------------------- ------ ------ ------- -------
Q3 Q3
Sandoz 2021 2020 % change 9M 2021 9M 2020 % change
USD m USD m USD cc USD m USD m USD cc
------ ------ ---- ---- ------- ------- ---- ----
Net sales 2 402 2 422 -1 -2 7 106 7 109 0 -4
------ ------ ---- ---- ------- ------- ---- ----
Operating income 440 395 11 9 1 214 671 81 75
------ ------ ---- ---- ------- ------- ---- ----
As a % of sales 18.3 16.3 17.1 9.4
---------------------- ------ ------ ------- -------
Core operating
income 571 658 -13 -15 1 536 1 806 -15 -18
------ ------ ---- ---- ------- ------- ---- ----
As a % of sales 23.8 27.2 21.6 25.4
---------------------- ------ ------ ------- -------
Q3 Q3
Corporate 2021 2020 % change 9M 2021 9M 2020 % change
USD m USD m USD cc USD m USD m USD cc
------ ------ ---- ---- ------- ------- ---- ----
Operating
(loss)/income -8 19 nm nm -307 51 nm nm
------ ------ ---- ---- ------- ------- ---- ----
Core operating
loss -121 -114 -6 -7 -386 -324 -19 -17
------ ------ ---- ---- ------- ------- ---- ----
nm = not meaningful
(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 47 of the Condensed Interim Financial Report. Unless otherwise noted, all growth rates in this release refer to same period in prior year.
Detailed financial results accompanying this press release are included in the Condensed Interim Financial Report at the link below:
https://ml-eu.globenewswire.com/resource/download/02dda0a9-9347-4427-9a5e-6a1f527e8334/
Disclaimer
This press release contains 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 "momentum," "growth," "continued," "increasing," "guidance," "rejuvenation," "continues," "confident," "will," "driven," "launch," "expand," "anticipated," "action," "initiating," "continues," "development," "remains," "outlook," "expected," "to grow," "estimated," "to meet," "ongoing," "to support," "to gain," "innovation," "pipeline," "retaining, " "can," "resubmission," "focus," "priority," "unforeseen," "forecast," "prevail," or similar expressions, or by express or implied discussions regarding potential new products, potential new indications for existing products, potential product launches, or regarding potential future revenues from any such products; or regarding the impact of the COVID-19 pandemic on parts of our business including oncology and generics; or regarding potential future, pending or announced transactions; regarding potential future sales or earnings of the Group or any of its divisions or products; or by discussions of strategy, plans, expectations or intentions; or regarding the Group's liquidity or cash flow positions and its ability to meet its ongoing financial obligations and operational needs; or regarding our in-licensing of tislelizumab from Beigene. Such forward-looking statements are based on the current beliefs and expectations of management 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. You should not place undue reliance on these statements. In particular, our expectations could be affected by, among other things: liquidity or cash flow disruptions affecting our ability to meet our ongoing financial obligations and to support our ongoing business activities; the impact of the COVID-19 pandemic on enrollment in, initiation and completion of our clinical trials in the future, and research and development timelines; the impact of a partial or complete failure of the return to normal global healthcare systems including prescription dynamics, particularly in oncology and
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