Novartis delivered solid sales growth with strong margin expansion and major innovation in the third quarter
Oct 28, 2014
Basel, October 28, 2014 - Commenting on the results, Joseph Jimenez, CEO of Novartis, said: "Novartis delivered a very strong third quarter. We delivered solid sales growth with margin expansion. At the same time, we reached key innovation milestones, particularly with LCZ696 in heart failure and AIN457 in psoriasis, underlining the innovation power of the company."
Net sales up 4% (+5% cc)1 in Q3, with operating margin increase across Q3 and 9M
Net sales of USD 14.7 billion grew 4% (+5% cc2) in Q3
Strong operating income growth in Q3 of 14% (+18% cc)
Core2 operating income in Q3 grew 8% (+11% cc), growing faster than sales
Core EPS up 10% (+13% cc) in Q3
Free cash flow2 of USD 3.2 billion (-9%) in Q3
Strong momentum in innovation, with positive regulatory decisions and data readouts in Q3
Landmark trial showed LCZ696 cut cardiovascular deaths by 20% vs. current standard of care
FDA Advisory Committee unanimously recommended approval for AIN457 in psoriasis
Signifor LAR received positive CHMP opinion in acromegaly
Alcon’s Simbrinza approved in EU for glaucoma
Continued execution on growth products3 and expansion in Emerging Growth Markets3
Growth products grew 21% (USD) to USD 4.9 billion or 33% of Group net sales in Q3
Strong Emerging Growth Markets3 performance (+13% cc) in Q3, led by China, Brazil and Russia
Ongoing productivity initiatives contributed to core margin improvement (cc) in Q3
Core margin (+1.5 percentage points cc) improved mainly due to lower functional costs driven by productivity programs
Binding agreement to divest influenza vaccines business to CSL Limited
2014 Group outlook confirmed: Group net sales to grow low to mid-single digit(cc), core operating income to grow ahead of sales at mid to high-single digit rate (cc)
1All comparisons to prior year are based on 2013 data excluding the blood transfusion diagnostics unit. See page 81 of the Condensed Interim Financial Report.
2Constant currencies (cc), core results, free cash flow and 2013 data excluding the blood transfusion diagnostics unit are non-IFRS measures. An explanation of non-IFRS measures and reconciliation tables can be found beginning on page 52 of the Condensed Interim Financial Report.
3Growth products are defined on page 2, and Emerging Growth Markets are defined on page 9.