Novartis delivers strong underlying financial performance in 2011, expects 2012 sales to be in line with 2011

Net sales increased 4% (+5% cc) to USD 14.8 billion; full year up 16% (+12% cc) to USD 58.6 billion.

Core operating income grew 12% (+17% cc) to USD 3.6 billion in the fourth quarter; full year up 14% (+16% cc) to USD 15.9 billion; core margin of 24.0% up 2.7 percentage points in cc; full year core margin of 27.2% up 1.1 percentage points in cc.

Core EPS advanced 8% to USD 1.23 (+13% cc) from USD 1.14 in the previous-year quarter; full year core EPS up by 8% (+11% cc) to USD 5.57.

Operating income declined 47% (-38% cc) in the quarter and 5% (+1% cc) for the full year, driven by fourth quarter net exceptional charges totaling USD 1.5 billion; EPS declined 48% (-40% cc) in the quarter and 11% (-5% cc) for the full year.

Free cash flow of USD 3.9 billion; full year free cash flow of USD 12.5 billion.

Dividend of CHF 2.25 per share proposed for 2011; 15th consecutive increase.

Diversified healthcare portfolio and industry-leading pipeline expected to enhance our ability to sustain growth through patent expirations.

Alcon, world leader in eye care, fully integrated as second largest division in Novartis Group portfolio.

Portfolio rejuvenation continues to gain momentum with Group recently launched products growing 38% and contributing 25% (USD 14.4 billion) of 2011 net sales.

Strong Pharmaceuticals pipeline results with 15 approvals in the US, EU and Japan in 2011; worldwide filings underway for Afinitor in breast cancer.

Outlook 2012: Novartis expects sales to be in line with 2011 despite Diovan patent expiry and Tekturna/Rasilez decline; core operating income margin (cc) expected to be slightly below 2011.

Contact
Novartis International AG Postfach 4002 Basel Tel. 061 324 11 11 investor.relations@novartis.com