SECURITIES AND EXCHANGE COMMISSION
Form 20-F
4056 Basel, Switzerland
Chief Legal Officer
Novartis AG
CH 4056 Basel
Switzerland
Tel.: +41-61-324-1111
Fax: +41-61-324-7826
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
American Depositary Shares each representing 1 share | NVS | New York Stock Exchange |
Ordinary shares, nominal value CHF 0.50 per share* | NOVN | New York Stock Exchange* |
Large accelerated filer x | Accelerated filer o | Non-accelerated filer o | Emerging growth company o |
U.S. GAAP o | International Financial Reporting Standards as issued by the International Accounting Standards Board x | Other o |
Table of contents
Introduction and use of certain terms
Forward-looking statements
Part I
Item 1. Identity of Directors, Senior Management and Advisers
Item 2. Offer Statistics and Expected Timetable
Item 3. Key Information
3.A Selected financial data
Year ended December 31, | |||||||||||
(USD millions, except per share information) | 2020 | 2019 | 2018 | 2017 | 2016 | ||||||
INCOME STATEMENT DATA1 | |||||||||||
Net sales to third parties from continuing operations | 48 659 | 47 445 | 44 751 | 42 338 | 41 975 | ||||||
Operating income from continuing operations | 10 152 | 9 086 | 8 403 | 8 702 | 8 248 | ||||||
Income from associated companies | 673 | 659 | 6 438 | 1 108 | 703 | ||||||
Interest expense | – 869 | – 850 | – 932 | – 750 | – 675 | ||||||
Other financial income and expense | – 78 | 45 | 186 | 42 | – 385 | ||||||
Income before taxes from continuing operations | 9 878 | 8 940 | 14 095 | 9 102 | 7 891 | ||||||
Taxes | – 1 807 | – 1 793 | – 1 295 | – 1 603 | – 1 095 | ||||||
Net income from continuing operations | 8 071 | 7 147 | 12 800 | 7 499 | 6 796 | ||||||
Net (loss) / income from discontinued operations before gain on distribution of Alcon Inc. to Novartis shareholders | – 101 | – 186 | 204 | – 98 | |||||||
Gain on distribution of Alcon Inc. to Novartis AG shareholders | 4 691 | ||||||||||
Net income/(loss) from discontinued operations | 4 590 | – 186 | 204 | – 98 | |||||||
Group net income | 8 071 | 11 737 | 12 614 | 7 703 | 6 698 | ||||||
Attributable to: | |||||||||||
Shareholders of Novartis AG | 8 072 | 11 732 | 12 611 | 7 703 | 6 712 | ||||||
Non-controlling interests | – 1 | 5 | 3 | 0 | – 14 | ||||||
Basic earnings per share (USD) | |||||||||||
Continuing operations | 3.55 | 3.12 | 5.52 | 3.20 | 2.86 | ||||||
Discontinued operations | 2.00 | – 0.08 | 0.08 | – 0.04 | |||||||
Total | 3.55 | 5.12 | 5.44 | 3.28 | 2.82 | ||||||
Diluted earnings per share (USD) | |||||||||||
Continuing operations | 3.52 | 3.08 | 5.46 | 3.17 | 2.84 | ||||||
Discontinued operations | 1.98 | – 0.08 | 0.08 | – 0.04 | |||||||
Total | 3.52 | 5.06 | 5.38 | 3.25 | 2.80 | ||||||
Cash dividends2 | 6 987 | 6 645 | 6 966 | 6 495 | 6 475 | ||||||
Cash dividends per share in CHF3 | 3.00 | 2.95 | 2.85 | 2.80 | 2.75 | ||||||
Personnel cost from continuing operations4, 5 | 13 898 | 13 843 | 13 515 | 12 009 | 11 950 | ||||||
Full-time equivalent associates of continuing operations at year-end5 | 105 794 | 103 914 | 104 780 | 102 467 | 99 747 | ||||||
1 Continuing operations include the businesses of the Innovative Medicines and Sandoz Divisions and Corporate activities. Discontinued operations included the Alcon business, which was divested in 2019. To reflect these transactions, Novartis reported the Group’s financial results for 2020 to 2016 as “continuing operations” and “discontinued operations,” as required by IFRS. | |||||||||||
2 Cash dividends represent cash payments in the applicable year that generally relates to earnings of the previous year. | |||||||||||
3 Cash dividends per share represent dividends proposed that relate to earnings of the current year. Dividends for 2016 through 2019 were approved at the respective AGMs, and dividends for 2020 will be proposed to the Annual General Meeting on March 2, 2021, for approval. | |||||||||||
4 Personnel cost include wages, salaries, allowances, commissions and bonuses to staff, overtime, awards, holiday pay, severance payments and social welfare expenses. | |||||||||||
5 Own employees |
Year ended December 31, | |||||||||||
(USD millions) | 2020 | 2019 | 2018 | 2017 | 2016 | ||||||
BALANCE SHEET DATA | |||||||||||
Cash, cash equivalents, and marketable securities and derivative financial instruments | 11 563 | 11 446 | 15 964 | 9 485 | 7 777 | ||||||
Inventories | 7 131 | 5 982 | 6 956 | 6 867 | 6 255 | ||||||
Other current assets | 10 979 | 11 235 | 11 836 | 11 856 | 10 899 | ||||||
Non-current assets | 102 386 | 88 866 | 110 000 | 104 871 | 105 193 | ||||||
Assets of disposal group held for sale1 | 841 | 807 | |||||||||
Total assets | 132 059 | 118 370 | 145 563 | 133 079 | 130 124 | ||||||
Trade accounts payable | 5 403 | 5 424 | 5 556 | 5 169 | 4 873 | ||||||
Other current liabilities | 27 656 | 22 809 | 24 000 | 18 234 | 17 336 | ||||||
Non-current liabilities | 42 334 | 34 555 | 37 264 | 35 449 | 33 024 | ||||||
Liabilities of disposal group held for sale1 | 31 | 51 | |||||||||
Total liabilities | 75 393 | 62 819 | 66 871 | 58 852 | 55 233 | ||||||
Equity attributable to shareholders of Novartis AG | 56 598 | 55 474 | 78 614 | 74 168 | 74 832 | ||||||
Non-controlling interests | 68 | 77 | 78 | 59 | 59 | ||||||
Total equity | 56 666 | 55 551 | 78 692 | 74 227 | 74 891 | ||||||
Total liabilities and equity | 132 059 | 118 370 | 145 563 | 133 079 | 130 124 | ||||||
Net assets | 56 666 | 55 551 | 78 692 | 74 227 | 74 891 | ||||||
Outstanding share capital | 860 | 856 | 875 | 869 | 896 | ||||||
Total outstanding shares (millions) | 2 257 | 2 265 | 2 311 | 2 317 | 2 374 | ||||||
1 In 2019 and 2018, the disposal group held for sale related to the assets and liabilities of the planned divestment of the Sandoz US dermatology business and generic US oral solids portfolio to Aurobindo Pharma USA Inc., as announced on September 6, 2018. In March 2020, Novartis took the decision to retain these businesses. (see “Item 18. Financial Statements—Note 2. Significant transactions"). | |||||||||||
Year earned | Month and year paid | Total dividend per share (CHF) | Total dividend per share (USD) | ||||
2016 | March 2017 | 2.75 | 2.72 | ||||
2017 | March 2018 | 2.80 | 2.94 | ||||
2018 | March 2019 | 2.85 | 2.84 | ||||
2019 | March 2020 | 2.95 | 3.12 | ||||
2020 1 | March 2021 | 3.00 | 3.40 2 | ||||
1 Dividend to be proposed at the Annual General Meeting on March 2, 2021, and to be distributed from March 8, 2021. | |||||||
2 Translated into US dollars at the December 31, 2020, rate of USD 1.135 to the Swiss franc. This translation is an example only, and should not be construed as a representation that the Swiss franc amount represents, or has been or could be converted into US dollars at that or any other rate. |
3.B Capitalization and indebtedness
3.C Reasons for the offer and use of proceeds
3.D Risk factors
Item 4. Information on the Company
4.A History and development of Novartis
4.B Business overview
Innovative Medicines
Compound/ product | Common name | Mechanism of action | Potential indication | Business franchise | Formulation/ route of administration | Year project entered current development phase | Planned filing dates/current phase | ||||||||
ABL001 | asciminib | BCR-ABL inhibitor | Chronic myeloid leukemia, 3rd line | Oncology | Oral | 2017 | 2021/III | ||||||||
ACZ885 | canakinumab | IL-1 beta inhibitor | Non-small cell lung cancer, 2nd line | Oncology | Subcutaneous injection | 2019 | 2021/III | ||||||||
Non-small cell lung cancer, 1st line | Oncology | Subcutaneous injection | 2018 | 2021/III | |||||||||||
Non-small cell lung cancer, adjuvant | Oncology | Subcutaneous injection | 2018 | 2023/III | |||||||||||
AVXS-101 (OAV101) | onasemno- gene abepar- vovec | Survival motor neuron (SMN) gene therapy | Spinal muscular atrophy (IT formulation)1 | Neuroscience | Intrathecal injection | 2018 | TBC based on FDA feedback/ I/II | ||||||||
AVXS-201 (OAV201) | TBD | Methyl-CpG binding protein 2 (MECP2) gene therapy | Rett syndrome | Neuroscience | Intrathecal injection | 2018 | ≥2025/I | ||||||||
Beovu | brolucizumab | VEGF inhibitor | Diabetic macular edema | Ophthalmology | Intravitreal injection | 2018 | 2021/III | ||||||||
Retinal vein occlusion | Ophthalmology | Intravitreal injection | 2019 | 2023/III | |||||||||||
Diabetic retinopathy2 | Ophthalmology | Intravitreal injection | 2020 | 2023/III | |||||||||||
BYL719 | alpelisib | PI3K-alpha inhibitor | PIK3CA-related overgrowth spectrum | Oncology | Oral | 2020 | 2021/II | ||||||||
Triple negative breast cancer | Oncology | Oral | 2020 | 2023/III | |||||||||||
Human epidermal growth factor receptor 2-positive (HER2+) advanced breast cancer3 | Oncology | Oral | 2020 | ≥2025/III | |||||||||||
Ovarian cancer | Oncology | Oral | 20194 | 2023/III | |||||||||||
Head and neck squamous cell carcinoma, 2nd and 3rd line5 | Oncology | Oral | 20196 | ≥2025/III | |||||||||||
CEE321 | TBD | Pan-JAK inhibitor | Atopic dermatitis | Immunology, Hepatology and Dermatology | Topical | 20197 | ≥2025/I | ||||||||
CFZ5338 | iscalimab | CD40 inhibitor | Renal transplantation | Immunology, Hepatology and Dermatology | Intravenous infusion | 2018 | ≥2025/II | ||||||||
Liver transplantation | Immunology, Hepatology and Dermatology | Intravenous infusion | 2019 | ≥2025/II | |||||||||||
Sjögren's syndrome | Immunology, Hepatology and Dermatology | Intravenous infusion | 2019 | ≥2025/II | |||||||||||
Coartem | artemether + lumefantrine | PGH-1 | Malaria, uncomplicated (<5 kg patients)9 | Established Medicines | Oral | 2020 | 2024/III | ||||||||
Cosentyx | secukinumab | IL-17A inhibitor | Ankylosing spondylitis head-to-head study versus Sandoz biosimilar Hyrimoz (adalimumab) | Immunology, Hepatology and Dermatology | Subcutaneous injection | 2017 | 2022/III | ||||||||
Hidradenitis suppurativa | Immunology, Hepatology and Dermatology | Subcutaneous injection | 2019 | 2022/III | |||||||||||
Giant cell arteritis | Immunology, Hepatology and Dermatology | Subcutaneous injection | 2019 | 2024/II | |||||||||||
Lichen planus | Immunology, Hepatology and Dermatology | Subcutaneous injection | 2020 | ≥2025/II | |||||||||||
Lupus nephritis10 | Immunology, Hepatology and Dermatology | Subcutaneous injection | 2020 | ≥2025/III | |||||||||||
Psoriatic arthritis (IV formulation)11 | Immunology, Hepatology and Dermatology | Intravenous infusion | 2019 | 2022/III | |||||||||||
Ankylosing spondylitis (IV formulation)12 | Immunology, Hepatology and Dermatology | Intravenous infusion | 2019 | 2023/III | |||||||||||
CSJ117 | TBD | TSLP inhibitor | Asthma13 | Respiratory | Inhalation | 2020 | ≥2025/II | ||||||||
ECF843 | TBD | rh-Lubricin | Dry eye | Ophthalmology | Topical | 2020 | 2023/II | ||||||||
1 Preclinical studies to address partial clinical hold are on track. The FDA has acknowledged the potential of AVXS-101 IT in this patient population and recommends a pivotal confirmatory study, to be initiated after partial clinical hold is lifted. | |||||||||||||||
2 Previously disclosed as proliferative diabetic retinopathy | |||||||||||||||
3 Previously disclosed as hormone receptor-negative (HR-)/human epidermal growth factor receptor 2-positive (HER2+) advanced breast cancer | |||||||||||||||
4 Reflects the year in which the decision to enter the disclosed phase was made; “first patient, first visit” has not yet occurred | |||||||||||||||
5 Previously disclosed as head and neck squamous cell carcinoma | |||||||||||||||
6 Reflects the year in which the decision to enter the disclosed phase was made; “first patient, first visit” has not yet occurred | |||||||||||||||
7 Reflects the year in which the decision to enter the disclosed phase was made; “first patient, first visit” has not yet occurred | |||||||||||||||
8 The renal transplantation and liver transplantation indications were previously disclosed as solid organ transplantation. This has since split into two separate projects. | |||||||||||||||
9 Project added to selected development projects table in 2020 – entered Confirmatory Development | |||||||||||||||
10 Project added to selected development projects table in 2020 – entered Confirmatory Development | |||||||||||||||
11 Project added to selected development projects table in 2020 – in Confirmatory Development | |||||||||||||||
12 Project added to selected development projects table in 2020 – in Confirmatory Development | |||||||||||||||
13 Previously disclosed as severe asthma |
Compound/ product | Common name | Mechanism of action | Potential indication | Business franchise | Formulation/ route of administration | Year project entered current development phase | Planned filing dates/current phase | ||||||||
Entresto | valsartan and sacubitril (as sodium salt complex) | Angiotensin receptor/ neprilysin inhibitor | Chronic heart failure with preserved ejection fraction | Cardiovascular, Renal and Metabolism | Oral | 2020 | US registration | ||||||||
Post-acute myocardial infarction | Cardiovascular, Renal and Metabolism | Oral | 2016 | 2021/III | |||||||||||
Jakavi | ruxolitinib | JAK1/2 inhibitor | Acute graft-versus-host disease | Oncology | Oral | 2017 | 2021/III | ||||||||
Chronic graft-versus-host disease | Oncology | Oral | 2017 | 2021/III | |||||||||||
KAE609 | cipargamin | PfATP4 inhibitor | Malaria, uncomplicated14 | Established Medicines | Oral | 2017 | ≥2025/II | ||||||||
Malaria, severe15 | Established Medicines | Oral | 201916 | ≥2025/II | |||||||||||
KAF156 | ganaplacide | Imidazolopiperazines derivative | Malaria, uncomplicated17 | Established Medicines | Oral | 2017 | ≥2025/II | ||||||||
Kisqali | ribociclib | CDK4 inhibitor | Hormone receptor-positive (HR+)/human epidermal growth factor receptor 2-negative (HER2-) early breast cancer (adjuvant)18 | Oncology | Oral | 2018 | 2023/III | ||||||||
KJX83919 | inclisiran | siRNA (regulation of LDL-C) | Hyperlipidemia | Cardiovascular, Renal and Metabolism | Subcutaneous injection | 2020 | EU approved US20 | ||||||||
Secondary prevention of cardiovascular events in patients with elevated levels of LDL-C | Cardiovascular, Renal and Metabolism | Subcutaneous injection | 2018 | ≥2025/III | |||||||||||
Kymriah | tisagen- lecleucel | CD19 CAR-T | Relapsed/refractory follicular lymphoma | Oncology | Intravenous infusion | 2018 | 2021/II | ||||||||
Relapsed/refractory diffuse large B-cell lymphoma in 1st relapse | Oncology | Intravenous infusion | 2019 | 2021/III | |||||||||||
LJC242 | tropifexor, cenicriviroc (in fixed-dose combination) | FXR agonist and CCR2 inhibitor | Nonalcoholic steatohepatitis | Immunology, Hepatology and Dermatology | Oral | 2018 | ≥2025/II | ||||||||
LJN452 | tropifexor, licogliflozin (in fixed-dose combination) | FXR agonist and SGLT1/2 inhibitor | Nonalcoholic steatohepatitis | Immunology, Hepatology and Dermatology | Oral | 2019 | ≥2025/II | ||||||||
LMI070 | branaplam | SMN2 RNA splicing modulator | Spinal muscular atrophy | Neuroscience | Oral | 2015 | ≥2025/II | ||||||||
LNP023 | iptacopan | CFB inhibitor | IgA nephropathy | Cardiovascular, Renal and Metabolism | Oral | 2018 | 2023/II | ||||||||
C3 glomerulopathy | Cardiovascular, Renal and Metabolism | Oral | 2019 | 2023/II | |||||||||||
Paroxysmal nocturnal hemoglobinuria | Cardiovascular, Renal and Metabolism | Oral | 2018 | 2023/II | |||||||||||
Membranous nephropathy | Cardiovascular, Renal and Metabolism | Oral | 2019 | ≥2025/II | |||||||||||
LOU064 | remibrutinib | BTK inhibitor | Chronic spontaneous urticaria | Immunology, Hepatology and Dermatology | Oral | 2019 | ≥2025/II | ||||||||
Sjögren's syndrome21 | Immunology, Hepatology and Dermatology | Oral | 2019 | ≥2025/II | |||||||||||
Lutathera | lutetium Lu 177 dotatate/ lutetium (177Lu) oxodotreotide | Radioligand therapy targeting SSTR | Gastroenteropancreatic neuroendocrine tumors, 1st line in G2/3 tumors22 | Oncology | Intravenous infusion | 2020 | 2023/III | ||||||||
14 Previously disclosed as malaria | |||||||||||||||
15 Previously disclosed as severe malaria | |||||||||||||||
16 Reflects the year in which the decision to enter the disclosed phase was made; “first patient, first visit” has not yet occurred | |||||||||||||||
17 Previously disclosed as malaria | |||||||||||||||
18 Previously disclosed as HR+/HER2- breast cancer (adjuvant) | |||||||||||||||
19 Approved in the EU as Leqvio for primary hypercholesterolemia and mixed dyslipidemia | |||||||||||||||
20 Novartis received a complete response letter (CRL) from the FDA due to unresolved facility inspection-related conditions at a third-party manufacturing facility in Europe. The FDA has not raised any concerns related to the efficacy or safety of inclisiran. A response to the CRL is planned to be submitted in Q2-Q3 2021. | |||||||||||||||
21 Project added to selected development projects table in 2020 – in Confirmatory Development | |||||||||||||||
22 Project added to selected development projects table in 2020 – entered Confirmatory Development |
Compound/ product | Common name | Mechanism of action | Potential indication | Business franchise | Formulation/ route of administration | Year project entered current development phase | Planned filing dates/current phase | ||||||||
177Lu- PSMA-617 | TBD | Radioligand therapy targeting PSMA | Metastatic castration-resistant prostate cancer | Oncology | Intravenous infusion | 2018 | 2021/III | ||||||||
LXE408 | TBD | Protozoane inhibitor | Visceral leishmaniasis | Established Medicines | Oral | 201923 | ≥2025/II | ||||||||
MBG453 | sabatolimab | TIM-3 antagonist | Myelodysplastic syndrome | Oncology | Intravenous infusion | 2020 | 2021/III | ||||||||
Unfit acute myeloid leukemia24 | Oncology | Intravenous infusion | 2020 | 2024/II | |||||||||||
OMB15725 | ofatumumab | Anti-CD20 monoclonal antibody | Relapsing multiple sclerosis | Neuroscience | Subcutaneous injection | 2020 | US approved EU registration | ||||||||
PDR001 | spartalizumab | PD-1 inhibitor | Malignant melanoma (combo)26 | Oncology | Intravenous infusion | 2018 | ≥2025/II | ||||||||
QBW251 | icenticaftor | CFTR potentiator | Chronic obstructive pulmonary disease | Respiratory | Oral | 2019 | 2024/II | ||||||||
QGE031 | ligelizumab | IgE inhibitor | Chronic spontaneous urticaria27 | Immunology, Hepatology and Dermatology | Subcutaneous injection | 2018 | 2022/III | ||||||||
SAF312 | TBD | TRPV1 antagonist | Chronic ocular surface pain | Ophthalmology | Topical | 2016 | 2024/II | ||||||||
Tabrecta | capmatinib | c-MET inhibitor | Solid tumors | Oncology | Oral | 201928 | 2024/II | ||||||||
TQJ230 | pelacarsen | ASO targeting Lp(a) | Secondary prevention of cardiovascular events in patients with elevated levels of lipoprotein(a) | Cardiovascular, Renal and Metabolism | Subcutaneous injection | 2019 | ≥2025/III | ||||||||
UNR844 | TBD | Reduction of disulfide bonds | Presbyopia | Ophthalmology | Topical | 2019 | 2024/II | ||||||||
VAY736 | ianalumab | BAFF-R inhibitor | Autoimmune hepatitis | Immunology, Hepatology and Dermatology | Subcutaneous injection | 2018 | ≥2025/II | ||||||||
Sjögren’s syndrome29 | Immunology, Hepatology and Dermatology | Subcutaneous injection | 2017 | ≥2025/II | |||||||||||
VPM087 | gevokizumab | IL-1 beta antagonist | Colorectal cancer, 1st line | Oncology | Intravenous infusion | 2019 | ≥2025/I | ||||||||
Xolair | omalizumab | IgE inhibitor | Food allergy | Respiratory | Subcutaneous injection | 2019 | 2022/III | ||||||||
23 Reflects the year in which the decision to enter the disclosed phase was made; “first patient, first visit” has not yet occurred | |||||||||||||||
24 Previously disclosed as acute myeloid leukemia | |||||||||||||||
25 Approved in the US as Kesimpta for relapsing multiple sclerosis | |||||||||||||||
26 Previously disclosed as metastatic melanoma (combo) | |||||||||||||||
27 Previously disclosed as chronic spontaneous urticaria/chronic idiopathic urticaria | |||||||||||||||
28 Reflects the year in which the decision to enter the disclosed phase was made; “first patient, first visit” has not yet occurred | |||||||||||||||
29 Previously disclosed as primary Sjögren’s syndrome |
Compound/ product | Potential indication | Change | Reason | ||||
AVXS-101 | Spinal muscular atrophy (IV formulation) | Commercialized as Zolgensma | |||||
BYL719 | PIK3CA mutant hormone receptor-positive (HR+)/human epidermal growth factor receptor 2-negative (HER2-) postmenopausal advanced breast cancer, 2nd line (+ fulvestrant) | Commercialized as Piqray | |||||
Cosentyx | Non-radiographic axial spondyloarthritis | Commercialized | |||||
Psoriatic arthritis head-to-head study versus Humira® (adalimumab) | Publication achieved | ||||||
INC280 | Non-small cell lung cancer | Commercialized as Tabrecta | |||||
Kymriah | Relapsed/refractory diffuse large B-cell lymphoma (+ pembrolizumab) | Removed | Development discontinued | ||||
LAM320 | Multidrug-resistant tuberculosis | Removed | Planned US submission discontinued | ||||
PDR001 | Metastatic BRAF V600+ melanoma (w/ Tafinlar + Mekinist) | Removed | Development discontinued | ||||
QMF149 | Asthma | Commercialized as Atectura Breezhaler | |||||
QVM149 | Asthma | Commercialized as Enerzair Breezhaler | |||||
RTH258 | Neovascular (wet) age-related macular degeneration | Commercialized as Beovu | |||||
SEG101 | Sickle cell disease | Commercialized as Adakveo | |||||
VPM087 | Renal cell carcinoma, 1st line | Removed | Development discontinued | ||||
Xolair | Nasal polyps | Commercialized | |||||
ZPL389 | Atopic dermatitis | Removed | Development discontinued | ||||
2020 net sales to third parties | |||||
USD millions | % | ||||
United States | 14 342 | 37 | |||
Europe | 13 484 | 35 | |||
Asia, Africa, Australasia | 8 718 | 22 | |||
Canada and Latin America | 2 469 | 6 | |||
Total | 39 013 | 100 | |||
Of which in Established Markets 1 | 29 643 | 76 | |||
Of which in Emerging Growth Markets 1 | 9 370 | 24 | |||
1 Emerging Growth Markets comprise all markets other than the Established Markets of the US, Canada, Western Europe, Japan, Australia and New Zealand. |
Sandoz
Product | Originator drug | Description | |||
Amoxicillin/clavulanic acid | Augmentin® | Antibiotic | |||
Zoledronic acid | Aclasta | Osteoporosis treatment | |||
Acetylcysteine | Various | Mucolytic agent | |||
Tacrolimus | Various | Immunosuppressive agent | |||
Active ingredients | Description | ||
Oral and sterile penicillins | Anti-infectives | ||
Oral and sterile cephalosporins | Anti-infectives | ||
Clavulanic acid and mixtures with clavulanic acid | ß-lactam inhibitors | ||
Classical and semisynthetic macrolides | Anti-infectives | ||
Intermediates | Description | ||
Various cephalosporin intermediates | Anti-infectives | ||
Macrolide base intermediates | Anti-infectives | ||
Various crude compounds produced by fermentation | Cyclosporine, ascomycin, rapamycin, mycophenolic acid, etc. | ||
Product | Originator drug | Description | |||
Omnitrope | Genotropin® | Recombinant human growth hormone to treat growth disorders and growth hormone deficiency | |||
Binocrit and Epoetin alfa Hexal | Eprex®/Erypo® | Recombinant protein (erythropoiesis-stimulating) agent to treat anemia | |||
Zarzio, Zarxio and Filgrastim Hexal | Neupogen® | Recombinant protein (granulocyte colony-stimulating factor (GCSF), short-acting) used in oncology | |||
Glatopa | Copaxone® | Treatment for relapsing forms of multiple sclerosis (MS) | |||
Erelzi 1 | Enbrel® | Fusion protein (TNF-α receptor) to treat multiple immune-mediated inflammatory diseases | |||
Rixathon | MabThera® | Chimeric monoclonal antibody (directed against CD20 protein on B-cells) to treat blood cancers and immunological diseases | |||
Hyrimoz | Humira® | Monoclonal antibody (TNF-α antibody) to treat multiple immune-mediated inflammatory diseases | |||
Zessly | Remicade® | Monoclonal antibody (TNF-α antibody) to treat multiple immune-mediated inflammatory diseases | |||
Ziextenzo | Neulasta® | PEGylated form of a recombinant human granulocyte colony- stimulating factor (GCSF) (long-acting) to reduce duration of chemotherapy-induced neutropenia and incidence of chemotherapy-induced febrile neutropenia | |||
1 Approved in the US in 2016. Launch in the US pending final resolution of litigation with Amgen, which markets Enbrel®. The US District Court of New Jersey ruled against Sandoz in August 2019, which was upheld on appeal; Sandoz is now considering its further appeal options. |
Project/ product | Common name | Mechanism of action | Potential indication/indications | Therapeutic areas | Route of administration | Current phase | |||||||
GP2017 | adalimumab | TNF-α antibody | Arthritides (rheumatoid arthritis, ankylosing spondylitis, psoriatic arthritis), plaque psoriasis and others (same as originator) | Immunology | Subcutaneous | EU approved US approved1 | |||||||
GP2411 2 | denosumab | Anti-RANKL monoclonal antibody | Osteoporosis, treatment-induced bone loss, metastases to bone, giant cell tumor (indications vary in US and EU) | Endocrinology, Neurology | Subcutaneous | Phase III | |||||||
EGI014A1 3 | trastuzumab | Anti-HER2 recombinat IgG1, humanized monoclonal antibody | Breast and gastric tumors | Oncology | Intravenous | Phase III | |||||||
DST356A1 4 | natalizumab | Anti-α4 integrin monoclonal antibody | Monotherapy for relapsing-remitting forms of multiple sclerosis (RRMS); in US, second-line treatment for active Crohn’s disease | Neurology, Immunology (US only) | Intravenous | Phase III | |||||||
1 Launched as Hyrimoz in the EU in October 2018. Also in October 2018, we announced a global resolution of all intellectual property-related litigation with AbbVie concerning adalimumab. Under the terms of the agreement, AbbVie grants us a non-exclusive license to AbbVie’s intellectual property relating to Humira®, beginning on certain dates in certain countries in which AbbVie has intellectual property. We are not entitled to launch Hyrimoz in the US until the second half of 2023. | |||||||||||||
2 Development in collaboration with Hexal AG. | |||||||||||||
3 Development in collaboration with EirGenix, Inc. | |||||||||||||
4 Development in collaboration with Polpharma Biologics. |
2020 net sales to third parties | |||||
USD millions | % | ||||
Europe | 5 231 | 54 | |||
United States | 2 142 | 22 | |||
Asia, Africa, Australasia | 1 501 | 16 | |||
Canada and Latin America | 772 | 8 | |||
Total | 9 646 | 100 | |||
Of which in Established Markets 1 | 7 089 | 73 | |||
Of which in Emerging Growth Markets 1 | 2 557 | 27 | |||
1 Emerging Growth Markets comprise all markets other than the Established Markets of the US, Canada, Western Europe, Japan, Australia and New Zealand. |
4.C Organizational structure
4.D Property, plants and equipment
Location | Size of site (in square meters) | Major activity | |||
Basel, Switzerland – St. Johann | 589 000 | Global Group headquarters; global Innovative Medicines Division headquarters; Global Sandoz Division headquarters; research and development; production of drug substances and drug intermediates | |||
Kundl and Schaftenau, Austria | 480 000 | Production of biotechnological products, drug products and finished products, anti-infectives, active drug substances, product development | |||
East Hanover, New Jersey | 391 000 | Innovative Medicines Division US headquarters, research and development | |||
Barleben, Germany | 340 000 | Production of broad range of generics finished dosage forms | |||
Cambridge, Massachusetts | 201 800 | Research and development | |||
Shanghai, China | 106 500 | Research and development | |||
Stein, Switzerland | 64 700 | Production of sterile vials, pre-filled syringes and ampoules; inhalation capsules, tablets and transdermals; active pharmaceutical ingredients, and cell and gene therapies | |||
Holzkirchen, Germany | 64 200 | Global Sandoz Division, production of oral films, transdermal delivery systems, matrix patches, product development | |||
Huningue, France | 35 000 | Production of drug substances for clinical and commercial supply | |||
Princeton, New Jersey | 14 300 | Sandoz Division US headquarters | |||
Libertyville, Illinois | 9 800 | Production, warehouse and administrative offices for the Novartis Gene Therapies unit within the Innovative Medicines Division | |||
Item 4A. Unresolved Staff Comments
Item 5. Operating and Financial Review and Prospects
5.A Operating results
(USD millions unless indicated otherwise) | Year ended Dec 31, 2020 | Year ended Dec 31, 2019 | Change in USD % | Change in constant currencies % 2 | |||||
Net sales to third parties from continuing operations | 48 659 | 47 445 | 3 | 3 | |||||
Sales to discontinued operations | 53 | nm | nm | ||||||
Net sales from continuing operations | 48 659 | 47 498 | 2 | 3 | |||||
Other revenues | 1 239 | 1 179 | 5 | 5 | |||||
Cost of goods sold | – 15 121 | – 14 425 | – 5 | – 3 | |||||
Gross profit from continuing operations | 34 777 | 34 252 | 2 | 3 | |||||
Selling, general and administration | – 14 197 | – 14 369 | 1 | 1 | |||||
Research and development | – 8 980 | – 9 402 | 4 | 6 | |||||
Other income | 1 742 | 2 031 | – 14 | – 17 | |||||
Other expense | – 3 190 | – 3 426 | 7 | 9 | |||||
Operating income from continuing operations | 10 152 | 9 086 | 12 | 19 | |||||
% of net sales to third parties | 20.9 | 19.2 | |||||||
Income from associated companies | 673 | 659 | 2 | 2 | |||||
Interest expense | – 869 | – 850 | – 2 | – 4 | |||||
Other financial income and expense | – 78 | 45 | nm | nm | |||||
Income before taxes from continuing operations | 9 878 | 8 940 | 10 | 17 | |||||
Taxes | – 1 807 | – 1 793 | – 1 | – 7 | |||||
Net income from continuing operations | 8 071 | 7 147 | 13 | 20 | |||||
Net loss from discontinued operations before gain on distribution of Alcon Inc. to Novartis AG shareholders | – 101 | nm | nm | ||||||
Gain on distribution of Alcon Inc. to Novartis AG shareholders | 4 691 | nm | nm | ||||||
Net income from discontinued operations | 4 590 | nm | nm | ||||||
Net income | 8 071 | 11 737 | – 31 | – 27 | |||||
Attributable to: | |||||||||
Shareholders of Novartis AG | 8 072 | 11 732 | – 31 | – 27 | |||||
Non-controlling interests | – 1 | 5 | nm | nm | |||||
Basic earnings per share from continuing operations (USD) | 3.55 | 3.12 | 14 | 21 | |||||
Basic earnings per share from discontinued operations (USD) | 2.00 | nm | nm | ||||||
Total basic earnings per share (USD) | 3.55 | 5.12 | – 31 | – 26 | |||||
Net cash flows from operating activities from continuing operations | 13 650 | 13 547 | 1 | ||||||
Free cash flow from continuing operations 2 | 11 691 | 12 937 | – 10 | ||||||
1 Continuing operations include the businesses of the Innovative Medicines and Sandoz Divisions and the continuing Corporate activities and discontinued operations include the Alcon eye care devices business and certain Corporate activities attributable to the Alcon business prior to the spin-off, the gain on distribution of Alcon Inc. to Novartis AG shareholders in 2019 and certain other expenses related to the distribution. See “Item 18. Financial Statements—Note 1. Significant accounting policies”, “Item 18. Financial Statements—Note 2. Significant transactions—Significant transactions in 2019,” and “Item 18. Financial Statements—Note 30. Discontinued operations.” | |||||||||
2 For an explanation of non-IFRS measures and reconciliation tables, see "Item 5.A Operating results—Non-IFRS measures as defined by Novartis." | |||||||||
nm = not meaningful |
(USD millions) | Year ended Dec 31, 2020 | Year ended Dec 31, 2019 | Change in USD % | Change in constant currencies % | |||||
Innovative Medicines | 39 013 | 37 714 | 3 | 4 | |||||
Sandoz | 9 646 | 9 731 | – 1 | 0 | |||||
Net sales to third parties from continuing operations | 48 659 | 47 445 | 3 | 3 | |||||
(USD millions) | Year ended Dec 31, 2020 | Year ended Dec 31, 2019 | Change in USD % | Change in constant currencies % | |||||
Total Novartis Oncology business unit | 14 711 | 14 370 | 2 | 3 | |||||
Total Novartis Pharmaceuticals business unit | 24 302 | 23 344 | 4 | 5 | |||||
Immunology, Hepatology and Dermatology | 4 868 | 4 222 | 15 | 16 | |||||
Ophthalmology | 4 410 | 4 776 | – 8 | – 8 | |||||
Neuroscience | 4 323 | 3 773 | 15 | 14 | |||||
Cardiovascular, Renal and Metabolism | 2 498 | 1 750 | 43 | 42 | |||||
Respiratory | 1 900 | 1 825 | 4 | 5 | |||||
Established Medicines | 6 303 | 6 998 | – 10 | – 8 | |||||
Total Innovative Medicines | 39 013 | 37 714 | 3 | 4 | |||||
US | Rest of world | Total | |||||||||||||||||||
Brands | Business franchise | Indication | USD m | % change USD/cc 2 | USD m | % change USD | % change cc 2 | USD m | % change USD | % change cc 2 | |||||||||||
Cosentyx | Immunology, Hepatology and Dermatology | Psoriasis, ankylosing spondylitis, psoriatic arthritis and non-radiographic axial spondyloarthritis | 2 516 | 13 | 1 479 | 11 | 12 | 3 995 | 13 | 13 | |||||||||||
Gilenya | Neuroscience | Relapsing multiple sclerosis | 1 562 | – 10 | 1 441 | – 3 | – 3 | 3 003 | – 7 | – 7 | |||||||||||
Entresto | Cardiovascular, Renal and Metabolism | Chronic heart failure | 1 277 | 38 | 1 220 | 52 | 52 | 2 497 | 45 | 44 | |||||||||||
Tasigna | Oncology | Chronic myeloid leukemia | 859 | 7 | 1 099 | 2 | 3 | 1 958 | 4 | 5 | |||||||||||
Lucentis | Ophthalmology | Age-related macular degeneration | 1 933 | – 7 | – 8 | 1 933 | – 7 | – 8 | |||||||||||||
Promacta/Revolade | Oncology | Immune thrombocytopenia (ITP), severe aplastic anemia (SAA) | 833 | 21 | 905 | 25 | 26 | 1 738 | 23 | 23 | |||||||||||
Tafinlar + Mekinist | Oncology | BRAF V600+ metastatic and adjuvant melanoma; advanced non-small cell lung cancer (NSCLC) | 569 | 18 | 973 | 14 | 15 | 1 542 | 15 | 16 | |||||||||||
Sandostatin | Oncology | Carcinoid tumors and acromegaly | 837 | – 5 | 602 | – 14 | – 13 | 1 439 | – 9 | – 8 | |||||||||||
Jakavi | Oncology | Myelofibrosis (MF), polycythemia vera (PV) | 1 339 | 20 | 20 | 1 339 | 20 | 20 | |||||||||||||
Xolair 1 | Respiratory | Severe zllergic zsthma (SAA), chronic spontaneous urticaria (CSU) and nasal polyps | 1 251 | 7 | 8 | 1 251 | 7 | 8 | |||||||||||||
Galvus Group | Established Medicines | Type 2 diabetes | 1 199 | – 8 | – 5 | 1 199 | – 8 | – 5 | |||||||||||||
Gleevec/Glivec | Oncology | Chronic myeloid leukemia and GIST | 315 | – 6 | 873 | – 6 | – 6 | 1 188 | – 6 | – 6 | |||||||||||
Afinitor/Votubia | Oncology | Breast cancer/TSC | 644 | – 36 | 439 | – 18 | – 17 | 1 083 | – 30 | – 29 | |||||||||||
Diovan Group | Established Medicines | Hypertension | 124 | 44 | 879 | – 10 | – 8 | 1 003 | – 6 | – 4 | |||||||||||
Exforge Group | Established Medicines | Hypertension | 16 | 23 | 964 | – 5 | – 3 | 980 | – 4 | – 3 | |||||||||||
Zolgensma | Neuroscience | Spinal muscular atrophy (SMA) | 459 | 50 | 461 | nm | nm | 920 | 155 | 151 | |||||||||||
Ilaris | Immunology, Hepatology and Dermatology | Auto-inflammatory (CAPS, TRAPS, HIDS/MKD, FMF, SJIA, AOSD and gout) | 400 | 32 | 473 | 29 | 30 | 873 | 30 | 31 | |||||||||||
Kisqali | Oncology | HR+/HER2- metastatic breast cancer | 318 | 27 | 369 | 60 | 65 | 687 | 43 | 45 | |||||||||||
Exjade/Jadenu | Oncology | Chronic iron overload | 138 | – 69 | 515 | – 2 | – 2 | 653 | – 33 | – 33 | |||||||||||
Votrient | Oncology | Renal cell carcinoma | 259 | – 22 | 376 | – 11 | – 10 | 635 | – 16 | – 15 | |||||||||||
Top 20 products total | 11 126 | 3 | 18 790 | 6 | 7 | 29 916 | 5 | 5 | |||||||||||||
Rest of portfolio | 3 216 | 8 | 5 881 | – 5 | – 5 | 9 097 | – 1 | 0 | |||||||||||||
Total division sales | 14 342 | 4 | 24 671 | 3 | 4 | 39 013 | 3 | 4 | |||||||||||||
1 Net sales reflect Xolair sales for all indications. | |||||||||||||||||||||
2 Constant currencies (cc) is a non-IFRS measure. For an explanation of non-IFRS measures, see " —Item 5.A Operating results—Non-IFRS measures as defined by Novartis." | |||||||||||||||||||||
(USD millions) | Year ended Dec 31, 2020 | Year ended Dec 31, 2019 | Change in USD % | Change in constant currencies % | |||||
Retail Generics1 | 7 244 | 7 590 | – 5 | – 4 | |||||
Biopharmaceuticals | 1 928 | 1 607 | 20 | 19 | |||||
Anti-Infectives (partner label/API) | 474 | 534 | – 11 | – 12 | |||||
Total Sandoz | 9 646 | 9 731 | – 1 | 0 | |||||
1 Of which USD 694 million (2019: USD 784 million) represents anti-infectives sold under the Sandoz name |
(USD millions) | Year ended Dec 31, 2020 | % of net sales to third parties | Year ended Dec 31, 2019 | % of net sales to third parties | Change in USD % | Change in constant currencies % | |||||||
Innovative Medicines | 9 172 | 23.5 | 9 287 | 24.6 | – 1 | 4 | |||||||
Sandoz | 1 043 | 10.8 | 551 | 5.7 | 89 | 106 | |||||||
Corporate | – 63 | – 752 | nm | nm | |||||||||
Operating income from continuing operations | 10 152 | 20.9 | 9 086 | 19.2 | 12 | 19 | |||||||
(USD millions unless indicated otherwise) | Year ended Dec 31, 2020 | Year ended Dec 31, 2019 | Change in USD % | Change in constant currencies % | |||||
Core gross profit from continuing operations | 38 663 | 37 392 | 3 | 4 | |||||
Selling, general and administration | – 14 093 | – 14 319 | 2 | 2 | |||||
Research and development | – 8 484 | – 8 386 | – 1 | 0 | |||||
Other income | 323 | 495 | – 35 | – 39 | |||||
Other expense | – 993 | – 1 070 | 7 | 11 | |||||
Core operating income from continuing operations | 15 416 | 14 112 | 9 | 13 | |||||
As % of net sales to third parties | 31.7 | 29.7 | |||||||
1 For an explanation of non-IFRS measures and reconciliation tables, see "Item 5.A Operating results—Non-IFRS measures as defined by Novartis." |
(USD millions) | Year ended Dec 31, 2020 | % of net sales to third parties | Year ended Dec 31, 2019 | % of net sales to third parties | Change in USD % | Change in constant currencies % | |||||||
Innovative Medicines | 13 645 | 35.0 | 12 650 | 33.5 | 8 | 11 | |||||||
Sandoz | 2 334 | 24.2 | 2 094 | 21.5 | 11 | 15 | |||||||
Corporate | – 563 | – 632 | 11 | 14 | |||||||||
Core operating income from continuing operations | 15 416 | 31.7 | 14 112 | 29.7 | 9 | 13 | |||||||
(USD millions unless indicated otherwise) | Year ended Dec 31, 2020 | Year ended Dec 31, 2019 | Change in USD % | Change in constant currencies % | |||||
Research and exploratory development | – 2 737 | – 2 855 | 4 | 6 | |||||
Confirmatory development | – 5 381 | – 5 297 | – 2 | – 1 | |||||
Total Innovative Medicines Division research and development expense | – 8 118 | – 8 152 | 0 | 2 | |||||
As % of Innovative Medicines net sales to third parties | 20.8 | 21.6 | |||||||
Core research and exploratory development1 | – 2 682 | – 2 706 | 1 | 3 | |||||
Core confirmatory development1 | – 4 954 | – 4 879 | – 2 | – 0 | |||||
Total core Innovative Medicines Division research and development expense | – 7 636 | – 7 585 | – 1 | 1 | |||||
As % of Innovative Medicines net sales to third parties | 19.6 | 20.1 | |||||||
1 Core excludes impairments, amortization and certain other items. For an explanation of non-IFRS measures and reconciliation tables, see "Item 5.A Operating results—Non-IFRS measures as defined by Novartis." |
(USD millions unless indicated otherwise) | Year ended Dec 31, 2020 | Year ended Dec 31, 2019 | Change in USD % | Change in constant currencies % | |||||
Operating income from continuing operations | 10 152 | 9 086 | 12 | 19 | |||||
Income from associated companies | 673 | 659 | 2 | 2 | |||||
Interest expense | – 869 | – 850 | – 2 | – 4 | |||||
Other financial income and expense | – 78 | 45 | nm | nm | |||||
Income before taxes from continuing operations | 9 878 | 8 940 | 10 | 17 | |||||
Taxes | – 1 807 | – 1 793 | – 1 | – 7 | |||||
Net income from continuing operations | 8 071 | 7 147 | 13 | 20 | |||||
Net loss from discontinued operations before gain on distribution of Alcon Inc. to Novartis AG shareholders | – 101 | nm | nm | ||||||
Gain on distribution of Alcon Inc. to Novartis AG shareholders | 4 691 | nm | nm | ||||||
Net income from discontinued operations | 4 590 | nm | nm | ||||||
Net income | 8 071 | 11 737 | – 31 | – 27 | |||||
Attributable to: | |||||||||
Shareholders of Novartis AG | 8 072 | 11 732 | – 31 | – 27 | |||||
Non-controlling interests | – 1 | 5 | nm | nm | |||||
Basic earnings per share from continuing operations (USD) | 3.55 | 3.12 | 14 | 21 | |||||
Basic earnings per share from discontinued operations (USD) | 2.00 | nm | nm | ||||||
Total basic earnings per share (USD) | 3.55 | 5.12 | – 31 | – 26 | |||||
nm = not meaningful |
(USD millions unless indicated otherwise) | Year ended Dec 31, 2020 | Year ended Dec 31, 2019 | Change in USD % | Change in constant currencies % | |||||
Core operating income from continuing operations | 15 416 | 14 112 | 9 | 13 | |||||
Core income from associated companies | 1 097 | 1 086 | 1 | 1 | |||||
Core interest expense | – 869 | – 850 | – 2 | – 4 | |||||
Core other financial income and expense | – 83 | 56 | nm | nm | |||||
Core income before taxes from continuing operations | 15 561 | 14 404 | 8 | 11 | |||||
Core taxes | – 2 403 | – 2 300 | – 4 | – 8 | |||||
Core net income from continuing operations | 13 158 | 12 104 | 9 | 12 | |||||
Core basic earnings per share from continuing operations (USD) | 5.78 | 5.28 | 9 | 13 | |||||
1 For an explanation of non-IFRS measures and reconciliation tables, see "Item 5.A Operating results—Non-IFRS measures as defined by Novartis." | |||||||||
(USD millions) | 2020 | In % of gross sales to third parties | 2019 | In % of gross sales to third parties | |||||
Innovative Medicines gross sales subject to deductions | 56 067 | 100.0 | 52 956 | 100.0 | |||||
US-specific healthcare plans and program rebates | – 5 412 | – 9.7 | – 4 824 | – 9.1 | |||||
Non-US-specific healthcare plans and program rebates | – 3 746 | – 6.7 | – 3 438 | – 6.5 | |||||
Non-healthcare plans and program-related rebates, returns and other deductions | – 7 896 | – 14.0 | – 6 980 | – 13.2 | |||||
Total Innovative Medicines gross-to-net sales adjustments | – 17 054 | – 30.4 | – 15 242 | – 28.8 | |||||
Innovative Medicines net sales | 39 013 | 69.6 | 37 714 | 71.2 | |||||
(USD millions) | 2020 | 2019 | |||
Operating income from continuing operations | 10 152 | 9 086 | |||
Depreciation of property, plant and equipment | 1 318 | 1 345 | |||
Depreciation of the right-of-use-assets | 330 | 305 | |||
Amortization of intangible assets | 3 462 | 2 836 | |||
Impairments of property, plant and equipment, and intangible assets 1 | 1 354 | 1 340 | |||
EBITDA from continuing operations | 16 616 | 14 912 | |||
Operating income from discontinued operations | 71 | ||||
Depreciation of property, plant and equipment | 42 | ||||
Depreciation of the right-of-use-assets | 9 | ||||
Amortization of intangible assets | 174 | ||||
EBITDA from discontinued operations | 296 | ||||
EBITDA Total Group | 16 616 | 15 208 | |||
1 There were no impairments of right-of-use assets in 2020 and 2019. |
(USD millions) | Dec 31, 2020 | Dec 31, 2019 | |||
Market capitalization | 214 269 | 214 815 | |||
Non-controlling interests | 68 | 77 | |||
Non-current financial debts | 26 259 | 20 353 | |||
Current financial debts and derivatives financial instruments | 9 785 | 7 031 | |||
Marketable securities, commodities, time deposits and derivative financial instruments | – 1 905 | – 334 | |||
Cash and cash equivalents | – 9 658 | – 11 112 | |||
Enterprise value | 238 818 | 230 830 | |||
Innovative Medicines | Sandoz | Corporate | Group | ||||||||||||||
(USD millions unless indicated otherwise) | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||||
IFRS operating income from continuing operations | 9 172 | 9 287 | 1 043 | 551 | – 63 | – 752 | 10 152 | 9 086 | |||||||||
Amortization of intangible assets | 2 999 | 2 447 | 366 | 314 | 3 365 | 2 761 | |||||||||||
Impairments | |||||||||||||||||
Intangible assets | 759 | 632 | 141 | 503 | 900 | 1 135 | |||||||||||
Property, plant and equipment related to the Group-wide rationalization of manufacturing sites | 321 | 83 | 112 | 69 | 433 | 152 | |||||||||||
Other property, plant and equipment | 10 | 2 | 33 | 2 | 43 | ||||||||||||
Total impairment charges | 1 080 | 725 | 255 | 605 | 1 335 | 1 330 | |||||||||||
Acquisition or divestment of businesses and related items | |||||||||||||||||
- Income | – 5 | – 8 | – 73 | – 108 | – 78 | – 116 | |||||||||||
- Expense | 107 | 87 | 22 | 89 | 115 | 218 | 202 | ||||||||||
Total acquisition or divestment of businesses and related items, net | 102 | 79 | 22 | 16 | 7 | 140 | 86 | ||||||||||
Other items | |||||||||||||||||
Divestment gains | – 348 | – 1 091 | – 27 | – 39 | 2 | – 414 | – 1 089 | ||||||||||
Financial assets - fair value adjustments | – 153 | – 18 | – 183 | – 20 | – 336 | – 38 | |||||||||||
Restructuring and related items | |||||||||||||||||
- Income | – 36 | – 58 | – 30 | – 7 | – 28 | – 6 | – 94 | – 71 | |||||||||
- Expense | 484 | 509 | 252 | 390 | 35 | 113 | 771 | 1 012 | |||||||||
Legal-related items | |||||||||||||||||
- Income | – 32 | – 32 | |||||||||||||||
- Expense | 555 | 999 | 406 | 156 | – 26 | 935 | 1 155 | ||||||||||
Additional income | – 264 | – 316 | – 6 | – 4 | – 361 | – 95 | – 631 | – 415 | |||||||||
Additional expense | 54 | 87 | 53 | 121 | 86 | 119 | 193 | 327 | |||||||||
Total other items | 292 | 112 | 648 | 624 | – 516 | 113 | 424 | 849 | |||||||||
Total adjustments | 4 473 | 3 363 | 1 291 | 1 543 | – 500 | 120 | 5 264 | 5 026 | |||||||||
Core operating income from continuing operations | 13 645 | 12 650 | 2 334 | 2 094 | – 563 | – 632 | 15 416 | 14 112 | |||||||||
as % of net sales | 35.0% | 33.5% | 24.2% | 21.5% | 31.7% | 29.7% | |||||||||||
Income from associated companies | 1 | 1 | 2 | 2 | 670 | 656 | 673 | 659 | |||||||||
Core adjustments to income from associated companies, net of tax | 424 | 427 | 424 | 427 | |||||||||||||
Interest expense | – 869 | – 850 | |||||||||||||||
Other financial income and expense | – 78 | 45 | |||||||||||||||
Core adjustments to other financial income and expense | – 5 | 11 | |||||||||||||||
Taxes, adjusted for above items (core taxes) | – 2 403 | – 2 300 | |||||||||||||||
Core net income from continuing operations | 13 158 | 12 104 | |||||||||||||||
Core net income from discontinued operations 1 | 278 | ||||||||||||||||
Core net income | 13 158 | 12 382 | |||||||||||||||
Core net income attributable to shareholders of Novartis AG | 13 159 | 12 377 | |||||||||||||||
Core basic EPS from continuing operations (USD) 2 | 5.78 | 5.28 | |||||||||||||||
Core basic EPS from discontinued operations (USD) 2 | 0.12 | ||||||||||||||||
Core basic EPS (USD) 2 | 5.78 | 5.40 | |||||||||||||||
1 For details on discontinued operations reconciliation from IFRS to core net income, please refer to page 76. | |||||||||||||||||
2 Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG. |
2020 (USD millions unless indicated otherwise) | IFRS results | Amortization of intangible assets 1 | Impairments 2 | Acquisition or divestment of businesses and related items 3 | Other items 4 | Core results | |||||||
Gross profit from continuing operations | 34 777 | 3 301 | 377 | 70 | 138 | 38 663 | |||||||
Operating income from continuing operations | 10 152 | 3 365 | 1 335 | 140 | 424 | 15 416 | |||||||
Income before taxes from continuing operations | 9 878 | 3 789 | 1 335 | 140 | 419 | 15 561 | |||||||
Taxes from continuing operations 5 | – 1 807 | – 2 403 | |||||||||||
Net income from continuing operations | 8 071 | 13 158 | |||||||||||
Net income | 8 071 | 13 158 | |||||||||||
Basic EPS from continuing operations (USD) 6 | 3.55 | 5.78 | |||||||||||
Basic EPS (USD) 6 | 3.55 | 5.78 | |||||||||||
The following are adjustments to arrive at core gross profit | |||||||||||||
Other revenues | 1 239 | – 136 | 1 103 | ||||||||||
Cost of goods sold | – 15 121 | 3 301 | 377 | 70 | 274 | – 11 099 | |||||||
The following are adjustments to arrive at core operating income | |||||||||||||
Selling, general and administration | – 14 197 | 16 | 88 | – 14 093 | |||||||||
Research and development | – 8 980 | 64 | 523 | 3 | – 94 | – 8 484 | |||||||
Other income | 1 742 | – 6 | – 78 | – 1 335 | 323 | ||||||||
Other expense | – 3 190 | 441 | 129 | 1 627 | – 993 | ||||||||
The following are adjustments to arrive at core income before taxes | |||||||||||||
Income from associated companies | 673 | 424 | 1 097 | ||||||||||
Other financial income and expense | – 78 | – 5 | – 83 | ||||||||||
1 Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies; income from associated companies includes USD 424 million for the Novartis share of the estimated Roche core items | |||||||||||||
2 Impairments: cost of goods sold and research and development include impairment charges related to intangible assets; other income includes an impairment reversal related to property, plant and equipment; other expense includes impairment charges related to property, plant and equipment | |||||||||||||
3 Acquisition or divestment of businesses and related items, including restructuring and integration charges: cost of goods sold, selling, general and administration, research and development and other expense include net charges related to acquisitions; other income and other expense include transitional service-fee income and expenses related to the Alcon distribution | |||||||||||||
4 Other items: other revenues includes a settlement of royalties; cost of goods sold includes the cumulative amount of the depreciation up to December 31, 2019, recognized with the reclassification of property, plant and equipment out of assets of disposal group held for sale (see Item 18. Financial Statements–Note 2. Significant transactions–Significant transactions in 2020); cost of goods sold, other income and other expense include net restructuring and other charges related to the Group-wide rationalization of manufacturing sites; cost of goods sold, selling, general and administration, research and development, other income and other expense include other restructuring income and charges and related items; cost of goods sold and research and development also include adjustments to contingent considerations; selling, general and administration and other expense include expenses related to COVID-19 donations; selling, general and administration also includes adjustments to provisions; other income and other expense include fair value adjustments and divestment gains and losses on financial assets, and adjustments to environmental provisions; other income also includes net gains from the divestment of products, a fair value adjustment on a contingent receivable and adjustments to provisions; other expense includes adjustments to legal provisions, legal-related items and a termination fee; other financial income and expense includes a revaluation impact of a financial liability incurred through the Alcon distribution | |||||||||||||
5 Taxes on the adjustments between IFRS and core results take into account, for each individual item included in the adjustment, the tax rate that will finally be applicable to the item based on the jurisdiction where the adjustment will finally have a tax impact. Generally, this results in amortization and impairment of intangible assets and acquisition-related restructuring and integration items having a full tax impact. There is usually a tax impact on other items, although this is not always the case for items arising from legal settlements in certain jurisdictions. Adjustments related to income from associated companies are recorded net of any related tax effect. Due to these factors and the differing effective tax rates in the various jurisdictions, the tax on the total adjustments for continuing operations of USD 5.7 billion to arrive at the core results before tax amounts to USD 596 million. The average tax rate on the adjustments is 10.5%. | |||||||||||||
6 Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG. |
2019 (USD millions unless indicated otherwise) | IFRS results | Amortization of intangible assets 1 | Impairments 2 | Acquisition or divestment of businesses and related items 3 | Other items 4 | Core results | |||||||
Gross profit from continuing operations | 34 252 | 2 711 | 85 | 48 | 296 | 37 392 | |||||||
Operating income from continuing operations | 9 086 | 2 761 | 1 330 | 86 | 849 | 14 112 | |||||||
Income before taxes from continuing operations | 8 940 | 3 188 | 1 330 | 86 | 860 | 14 404 | |||||||
Taxes from continuing operations 5 | – 1 793 | – 2 300 | |||||||||||
Net income from continuing operations | 7 147 | 12 104 | |||||||||||
Net income from discontinued operations 6 | 4 590 | 278 | |||||||||||
Net income | 11 737 | 12 382 | |||||||||||
Basic EPS from continuing operations (USD) 7 | 3.12 | 5.28 | |||||||||||
Basic EPS from discontinued operations (USD) 7 | 2.00 | 0.12 | |||||||||||
Basic EPS (USD) 7 | 5.12 | 5.40 | |||||||||||
The following are adjustments to arrive at core gross profit | |||||||||||||
Other revenues | 1 179 | – 66 | 1 113 | ||||||||||
Cost of goods sold | – 14 425 | 2 711 | 85 | 48 | 362 | – 11 219 | |||||||
The following are adjustments to arrive at core operating income | |||||||||||||
Selling, general and administration | – 14 369 | 10 | 40 | – 14 319 | |||||||||
Research and development | – 9 402 | 50 | 1 078 | 10 | – 122 | – 8 386 | |||||||
Other income | 2 031 | – 2 | – 116 | – 1 418 | 495 | ||||||||
Other expense | – 3 426 | 169 | 134 | 2 053 | – 1 070 | ||||||||
The following are adjustments to arrive at core income before taxes | |||||||||||||
Income from associated companies | 659 | 427 | 1 086 | ||||||||||
Other financial income and expense | 45 | 11 | 56 | ||||||||||
1 Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies; income from associated companies includes USD 427 million for the Novartis share of the estimated Roche core items | |||||||||||||
2 Impairments: cost of goods sold, and research and development include impairment charges related to intangible assets; research and development also includes the reversal of an impairment charge; cost of goods sold, other income and other expense include net impairment charges related to property, plant and equipment | |||||||||||||
3 Acquisition or divestment of businesses and related items, including restructuring and integration charges: cost of goods sold, selling, general and administration, research and development, other income and other expense include net charges related to acquisitions; other income and other expense also include transitional service fee income and expenses related to the portfolio transformation and the Alcon distribution | |||||||||||||
4 Other items: other revenues includes income from an outlicensing agreement, and income related to an amendment of a collaboration agreement; cost of goods sold, other income and other expense include net restructuring and other charges related to the Group-wide rationalization of manufacturing sites; cost of goods sold, research and development, selling, general and administration, other income and other expense include other restructuring income and charges and related items; cost of goods sold, and research and development also include fair value adjustments of contingent consideration liabilities; cost of goods sold also includes inventory write-offs and other provisions; selling, general and administration includes receivable expected credit loss provisions and other provisions; other income and other expense include fair value adjustments and divestment gains and losses on financial assets and legal-related items as well as environmental provisions; other income also includes net gains from the divestment of products and property, plant and equipment, and provision releases; other expense includes a provision for onerous contracts and other provisions; other financial income and expense includes a revaluation impact of a financial liability incurred through the Alcon distribution | |||||||||||||
5 Taxes on the adjustments between IFRS and core results take into account, for each individual item included in the adjustment, the tax rate that will finally be applicable to the item based on the jurisdiction where the adjustment will finally have a tax impact. Generally, this results in amortization and impairment of intangible assets and acquisition-related restructuring and integration items having a full tax impact. There is usually a tax impact on other items, although this is not always the case for items arising from legal settlements in certain jurisdictions. Adjustments related to income from associated companies are recorded net of any related tax effect. Due to these factors and the differing effective tax rates in the various jurisdictions, the tax on the total adjustments for continuing operations of USD 5.5 billion to arrive at the core results before tax amounts to USD 507 million. The average tax rate on the adjustments is 9.3%. | |||||||||||||
6 For details on discontinued operations reconciliation from IFRS to core net income please refer to page 76. | |||||||||||||
7 Earnings per share (EPS) is calculated on the amount of net income, attributable to shareholders of Novartis AG. |
2020 (USD millions) | IFRS results | Amortization of intangible assets 1 | Impairments 2 | Acquisition or divestment of businesses and related items 3 | Other items 4 | Core results | |||||||
Gross profit | 29 896 | 2 935 | 250 | 48 | 146 | 33 275 | |||||||
Operating income | 9 172 | 2 999 | 1 080 | 102 | 292 | 13 645 | |||||||
The following are adjustments to arrive at core gross profit | |||||||||||||
Cost of goods sold | – 10 927 | 2 935 | 250 | 48 | 146 | – 7 548 | |||||||
The following are adjustments to arrive at core operating income | |||||||||||||
Selling, general and administration | – 11 657 | 16 | 58 | – 11 583 | |||||||||
Research and development | – 8 118 | 64 | 509 | 3 | – 94 | – 7 636 | |||||||
Other income | 922 | – 1 | – 5 | – 687 | 229 | ||||||||
Other expense | – 1 871 | 322 | 40 | 869 | – 640 | ||||||||
1 Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies | |||||||||||||
2 Impairments: cost of goods sold and research and development include impairment charges related to intangible assets; other income and other expense include net impairment charges related to property, plant and equipment | |||||||||||||
3 Acquisition or divestment of businesses and related items, including restructuring and integration charges: cost of goods sold, selling, general and administration, research and development and other expense include net charges related to acquisitions; other income and other expense include transitional service-fee income and expenses related to the Alcon distribution | |||||||||||||
4 Other items: cost of goods sold, other income and other expense include net restructuring and other charges related to the Group-wide rationalization of manufacturing sites; cost of goods sold, selling, general and administration, research and development, other income and other expense include other restructuring income and charges and related items; cost of goods sold and research and development also include adjustments to contingent considerations; selling, general and administration includes expenses related to COVID-19 donations and adjustments to provisions; other income and other expense include fair value adjustments on financial assets; other income also includes net gains from the divestment of products and financial assets and adjustments to provisions; other expense includes legal-related items and a termination fee |
2019 (USD millions) | IFRS results | Amortization of intangible assets 1 | Impairments 2 | Acquisition or divestment of businesses and related items 3 | Other items 4 | Core results | |||||||
Gross profit | 29 539 | 2 397 | 48 | 116 | 32 100 | ||||||||
Operating income | 9 287 | 2 447 | 725 | 79 | 112 | 12 650 | |||||||
The following are adjustments to arrive at core gross profit | |||||||||||||
Other revenues | 1 092 | – 66 | 1 026 | ||||||||||
Cost of goods sold | – 10 050 | 2 397 | 48 | 182 | – 7 423 | ||||||||
The following are adjustments to arrive at core operating income | |||||||||||||
Selling, general and administration | – 11 617 | 10 | 25 | – 11 582 | |||||||||
Research and development | – 8 152 | 50 | 632 | 10 | – 125 | – 7 585 | |||||||
Other income | 1 586 | – 1 | – 8 | – 1 230 | 347 | ||||||||
Other expense | – 2 069 | 94 | 19 | 1 326 | – 630 | ||||||||
1 Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies | |||||||||||||
2 Impairments: research and development includes impairment charges and a reversal of impairment charges related to intangible assets; other income and other expense include net impairment charges related to property, plant and equipment | |||||||||||||
3 Acquisition or divestment of businesses and related items, including restructuring and integration charges: cost of goods sold, selling, general and administration, research and development, other income and other expense include net charges related to acquisitions; other income and other expense also include transitional service-fee income and expenses related to the portfolio transformation and the Alcon distribution | |||||||||||||
4 Other items: other revenues includes a net income from an outlicensing agreement and an income related to an amendment of a collaboration agreement; cost of goods sold, other income and other expense include restructuring and other charges related to the Group-wide rationalization of manufacturing sites; cost of goods sold, research and development, other income and other expense include other restructuring income and charges and related items; cost of goods sold, and research and development also include fair value adjustments of contingent consideration liabilities; selling, general and administration includes other provisions; other income and other expense include fair value adjustments and divestment gains and losses on financial assets; other income also includes net gains from the divestment of products and property, plant and equipment, and provision releases; other expense includes legal-related items |
2020 (USD millions) | IFRS results | Amortization of intangible assets 1 | Impairments 2 | Acquisition or divestment of businesses and related items 3 | Other items 4 | Core results | |||||||
Gross profit | 4 636 | 366 | 127 | 22 | 128 | 5 279 | |||||||
Operating income | 1 043 | 366 | 255 | 22 | 648 | 2 334 | |||||||
The following are adjustments to arrive at core gross profit | |||||||||||||
Cost of goods sold | – 5 252 | 366 | 127 | 22 | 128 | – 4 609 | |||||||
The following are adjustments to arrive at core operating income | |||||||||||||
Selling, general and administration | – 2 076 | 30 | – 2 046 | ||||||||||
Research and development | – 862 | 14 | – 848 | ||||||||||
Other income | 176 | – 5 | – 62 | 109 | |||||||||
Other expense | – 831 | 119 | 552 | – 160 | |||||||||
1 Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets | |||||||||||||
2 Impairments: cost of goods sold and research and development include impairment charges related to intangible assets; other income includes an impairment reversal related to property, plant and equipment; other expense includes impairment charges related to property, plant and equipment | |||||||||||||
3 Acquisition or divestment of businesses and related items, including restructuring and integration charges: cost of goods sold includes net charges related to an acquisition | |||||||||||||
4 Other items: cost of goods sold includes the cumulative amount of the depreciation up to December 31, 2019, recognized with the reclassification of property, plant and equipment out of assets of disposal group held for sale (see Item 18. Financial Statements–Note 2. Significant transactions–Significant transactions in 2020); cost of goods sold and other expense include restructuring and other charges related to the Group-wide rationalization of manufacturing sites; cost of goods sold, selling, general and administration, other income and other expense include other restructuring income and charges and related items; selling, general and administration also includes expenses related to COVID-19 donations and adjustments to provisions; other income includes net gains from the divestment of a product and adjustments to provisions; other expense includes a legal provision and legal-related items |
2019 (USD millions) | IFRS results | Amortization of intangible assets 1 | Impairments 2 | Acquisition or divestment of businesses and related items | Other items 3 | Core results | |||||||
Gross profit | 4 601 | 314 | 85 | 180 | 5 180 | ||||||||
Operating income | 551 | 314 | 605 | 624 | 2 094 | ||||||||
The following are adjustments to arrive at core gross profit | |||||||||||||
Cost of goods sold | – 5 334 | 314 | 85 | 180 | – 4 755 | ||||||||
The following are adjustments to arrive at core operating income | |||||||||||||
Selling, general and administration | – 2 218 | 15 | – 2 203 | ||||||||||
Research and development | – 1 250 | 446 | 3 | – 801 | |||||||||
Other income | 167 | – 1 | – 39 | 127 | |||||||||
Other expense | – 749 | 75 | 465 | – 209 | |||||||||
1 Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets | |||||||||||||
2 Impairments: cost of goods sold, and research and development include impairment charges related to intangible assets; cost of goods sold, other income and other expense include net impairment charges related to property, plant and equipment | |||||||||||||
3 Other items: cost of goods sold and other expense include net restructuring and other charges related to the Group-wide rationalization of manufacturing sites; cost of goods sold, selling, general and administration, other income and other expense include restructuring income and charges and related items; cost of goods sold also includes inventory write-offs and other provisions; selling, general and administration includes receivable expected credit loss provisions and other provisions; other income and other expense also include legal-related items; other expense also includes an environmental provision, a provision for onerous contracts and other provisions |
2020 (USD millions) | IFRS results | Amortization of intangible assets | Impairments | Acquisition or divestment of businesses and related items 1 | Other items 2 | Core results | |||||||
Gross profit | 245 | – 136 | 109 | ||||||||||
Operating loss | – 63 | 16 | – 516 | – 563 | |||||||||
The following are adjustments to arrive at core gross profit | |||||||||||||
Other revenues | 168 | – 136 | 32 | ||||||||||
The following are adjustments to arrive at core operating loss | |||||||||||||
Other income | 644 | – 73 | – 586 | – 15 | |||||||||
Other expense | – 488 | 89 | 206 | – 193 | |||||||||
1 Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income and other expense include transitional service fee income and expenses related to the Alcon distribution | |||||||||||||
2 Other items: other revenues includes a settlement of royalties; other income and other expense include fair value adjustments and divestment gains and losses on financial assets, adjustments to environmental provisions and restructuring income and charges and related items; other income also includes a fair value adjustment on a contingent receivable and adjustments to provisions; other expense includes adjustments to legal provisions and expenses related to COVID-19 donations |
2019 (USD millions) | IFRS results | Amortization of intangible assets | Impairments | Acquisition or divestment of businesses and related items 1 | Other items 2 | Core results | |||||||
Gross profit | 112 | 112 | |||||||||||
Operating loss | – 752 | 7 | 113 | – 632 | |||||||||
The following are adjustments to arrive at core operating loss | |||||||||||||
Other income | 278 | – 108 | – 149 | 21 | |||||||||
Other expense | – 608 | 115 | 262 | – 231 | |||||||||
1 Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income and other expense include transitional service fee income and expenses related to the portfolio transformation and the Alcon distribution | |||||||||||||
2 Other items: other income and other expense include fair value adjustments and divestment gains and losses on financial assets, restructuring income and charges and related items as well as environmental provisions |
2019 (USD millions) | IFRS results | Amortization of intangible assets 1 | Impairments | Acquisition or divestment of businesses and related items 2 | Other items 3 | Core results | |||||||
Gross profit | 949 | 165 | 9 | 1 123 | |||||||||
Operating income of discontinued operations | 71 | 167 | 112 | 350 | |||||||||
Income before taxes of discontinued operations | 58 | 337 | |||||||||||
Taxes 4 | – 159 | – 59 | |||||||||||
Net (loss)/income from discontinued operations before gain on distribution of Alcon Inc. to Novartis AG shareholders | – 101 | 278 | |||||||||||
Gain on distribution of Alcon Inc. to Novartis AG shareholders | 4 691 | – 4 691 | |||||||||||
Net income from discontinued operations | 4 590 | 278 | |||||||||||
Basic EPS (USD) 5 | 2.00 | 0.12 | |||||||||||
The following are adjustments to arrive at core gross profit | |||||||||||||
Cost of goods sold | – 860 | 165 | 9 | – 686 | |||||||||
The following are adjustments to arrive at core operating income | |||||||||||||
Selling, general and administration | – 638 | 14 | – 624 | ||||||||||
Research and development | – 142 | 2 | 4 | – 136 | |||||||||
Other income | 15 | – 3 | 12 | ||||||||||
Other expense | – 113 | 88 | – 25 | ||||||||||
1 Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies | |||||||||||||
2 Acquisition or divestment of businesses and related items represents the non-taxable non-cash gain adjustment related to the distribution of Alcon Inc. (spin-off) to Novartis AG shareholders | |||||||||||||
3 Other items: cost of goods sold, selling, general and administration, research and development and other expense include other restructuring charges and related items; research and development also includes amortization of option rights and the fair value adjustment of a contingent consideration liability; other income includes fair value adjustments on a financial asset; other expense also includes legal-related items | |||||||||||||
4 Taxes on the adjustments between IFRS and core results take into account, for each individual item included in the adjustment, the tax rate that will finally be applicable to the item based on the jurisdiction where the adjustment will finally have a tax impact. Generally, this results in amortization and impairment of intangible assets and acquisition-related restructuring and integration items having a full tax impact. There is usually a tax impact on other items, although this is not always the case for items arising from legal settlements in certain jurisdictions. Due to these factors and the differing effective tax rates in the various jurisdictions, the tax on the total adjustments, excluding the non-taxable non-cash gain on the distribution (spin-off) of Alcon Inc. to Novartis AG shareholders of USD 279 million to arrive at the core results before tax amounts to USD 100 million. The 2019 core tax rate, excluding the effect of the gain on the distribution of Alcon Inc. to Novartis AG shareholders, is 17.5%. | |||||||||||||
5 Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG. |
5.B Liquidity and capital resources
(USD millions) | 2020 | 2019 | |||
Net cash flows from operating activities from continuing operations | 13 650 | 13 547 | |||
Net cash flows from operating activities from discontinued operations | 78 | ||||
Net cash flows used in investing activities from continuing operations | – 13 055 | – 1 067 | |||
Net cash flows used in investing activities from discontinued operations | – 127 | – 1 159 | |||
Net cash flows used in financing activities from continuing operations | – 2 158 | – 16 884 | |||
Net cash flows used in/from financing activities from discontinued operations | – 50 | 3 257 | |||
Effect of exchange rate changes on cash and cash equivalents | 286 | 69 | |||
Net change in cash and cash equivalents | – 1 454 | – 2 159 | |||
Change in marketable securities, commodities, time deposits and derivative financial instruments | 1 571 | – 2 359 | |||
Change in current and non-current financial debts and derivative financial instruments | – 8 660 | 4 764 | |||
Change in net debt | – 8 543 | 246 | |||
Net debt at January 1 | – 15 938 | – 16 184 | |||
Net debt at December 31 | – 24 481 | – 15 938 | |||
(USD millions) | 2020 | 2019 | |||
Operating income from continuing operations | 10 152 | 9 086 | |||
Adjustments for non-cash items | |||||
Depreciation, amortization and impairments | 6 129 | 5 788 | |||
Change in provisions and other non-current liabilities | 1 411 | 1 871 | |||
Other | 260 | – 476 | |||
Operating income adjusted for non-cash items | 17 952 | 16 269 | |||
Dividends received from associated companies and others | 490 | 463 | |||
Interest and other financial receipts | 511 | 242 | |||
Interest and other financial payments | – 742 | – 826 | |||
Taxes paid | – 1 833 | – 1 876 | |||
Payments out of provisions and other net cash movements in non-current liabilities | – 2 437 | – 924 | |||
Change in inventory and trade receivables less trade payables | – 730 | – 809 | |||
Change in other net current assets and other operating cash flow items | 439 | 1 008 | |||
Net cash flows from operating activities from continuing operations | 13 650 | 13 547 | |||
Purchases of property, plant and equipment | – 1 275 | – 1 379 | |||
Proceeds from sale of property, plant and equipment | 88 | 857 | |||
Purchases of intangible assets | – 1 310 | – 878 | |||
Proceeds from sale of intangible assets | 380 | 973 | |||
Purchases of financial assets | – 230 | – 302 | |||
Proceeds from sale of financial assets 1 | 447 | 176 | |||
Purchases of other non-current assets | – 61 | – 60 | |||
Proceeds from sale of other non-current assets | 2 | 3 | |||
Free cash flow from continuing operations | 11 691 | 12 937 | |||
Free cash flow from discontinued operations 2 | – 62 | ||||
Total free cash flow | 11 691 | 12 875 | |||
1 For the free cash flow, proceeds from the sale of financial assets excludes the cash inflows from the sale of a portion of the Alcon Inc. shares received by certain consolidated foundations through the Alcon spin-off, which amounted to USD 276 million (2019: USD 976 million). See "Item 18. Financial Statements–Note 2. Significant transactions–Significant transactions in 2019." | |||||
2 In 2019, the free cash flow from discontinued operations was a cash outflow of USD 62 million consisting of USD 78 million net cash inflows from operating activities from discontinued operations, USD 1.2 billion net cash flows used in investing activities from discontinued operations adjusted by USD 362 million of net cash outflows for acquisition and divestments of businesses and by USD 657 million for cash outflows attributable to the spin-off of the Alcon business. |
(USD millions) | Dec 31, 2020 | Dec 31, 2019 | |||
Assets | |||||
Property, plant and equipment | 12 263 | 12 069 | |||
Right-of-use assets | 1 676 | 1 677 | |||
Goodwill | 29 999 | 26 524 | |||
Intangible assets other than goodwill | 36 809 | 28 787 | |||
Investments in associated companies | 9 632 | 8 644 | |||
Deferred tax assets | 8 214 | 7 909 | |||
Financial assets and other non-current assets | 3 793 | 3 256 | |||
Total non-current assets | 102 386 | 88 866 | |||
Inventories | 7 131 | 5 982 | |||
Trade receivables | 8 217 | 8 301 | |||
Other current assets and income tax receivable | 2 762 | 2 934 | |||
Marketable securities, commodities, time deposits and derivative financial instruments | 1 905 | 334 | |||
Cash and cash equivalents | 9 658 | 11 112 | |||
Assets of disposal group held for sale | 841 | ||||
Total current assets | 29 673 | 29 504 | |||
Total assets | 132 059 | 118 370 | |||
Equity and liabilities | |||||
Total equity | 56 666 | 55 551 | |||
Liabilities | |||||
Financial debts | 26 259 | 20 353 | |||
Lease liabilities | 1 719 | 1 703 | |||
Deferred tax liabilities | 7 422 | 5 867 | |||
Provisions and other non-current liabilities | 6 934 | 6 632 | |||
Total non-current liabilities | 42 334 | 34 555 | |||
Trade payables | 5 403 | 5 424 | |||
Financial debts and derivative financial instruments | 9 785 | 7 031 | |||
Lease liabilities | 286 | 246 | |||
Provisions and other current liabilities and current income tax liabilities | 17 585 | 15 532 | |||
Liabilities of disposal group held for sale | 31 | ||||
Total current liabilities | 33 059 | 28 264 | |||
Total liabilities | 75 393 | 62 819 | |||
Total equity and liabilities | 132 059 | 118 370 | |||
(USD millions) | 2020 | 2019 | |||
Not overdue | 7 714 | 7 763 | |||
Past due for not more than one month | 150 | 161 | |||
Past due for more than one month but less than three months | 118 | 123 | |||
Past due for more than three months but less than six months | 102 | 103 | |||
Past due for more than six months but less than one year | 77 | 96 | |||
Past due for more than one year | 149 | 150 | |||
Provisions for doubtful trade receivables | – 93 | – 95 | |||
Total trade receivables, net | 8 217 | 8 301 | |||
Number of outstanding shares (in millions) | Equity attributable to Novartis AG shareholders | ||||||||
2020 | 2019 | 2020 USD millions | 2019 USD millions | ||||||
Balance at beginning of year | 2 265.0 | 2 311.2 | 55 474 | 78 614 | |||||
Impact of change in accounting policy 1 | 3 | ||||||||
Restated equity at January 1 | 55 474 | 78 617 | |||||||
Shares acquired to be canceled | – 32.6 | – 60.3 | – 2 897 | – 5 351 | |||||
Other share purchases | – 1.7 | – 1.7 | – 159 | – 160 | |||||
Exercise of options and employee transactions | 14.7 | 5.5 | 806 | 210 | |||||
Repurchase of options | – 89 | ||||||||
Equity-based compensation | 11.0 | 9.4 | 730 | 833 | |||||
Shares delivered to Alcon employees as a result of the Alcon spin-off | 0.4 | 0.9 | 30 | 18 | |||||
Taxes on treasury share transactions 2 | 32 | – 189 | |||||||
(Increase)/decrease of treasury share repurchase obligation under a share buyback trading plan | – 1 769 | 284 | |||||||
Transaction costs, net of taxes 3 | – 253 | ||||||||
Dividends | – 6 987 | – 6 645 | |||||||
Dividend in kind to effect the spin-off of Alcon Inc. 4 | – 23 434 | ||||||||
Net income of the year attributable to shareholders of Novartis AG | 8 072 | 11 732 | |||||||
Other comprehensive income attributable to shareholders of Novartis AG | 3 331 | – 207 | |||||||
Impact of change in ownership of consolidated entities | 6 | – 3 | |||||||
Other movements 5 | 18 | 22 | |||||||
Balance at end of year | 2 256.8 | 2 265.0 | 56 598 | 55 474 | |||||
1 In 2019, the impact of change in accounting policy includes USD 3 million related to the implementation of IFRS 16 Leases (see “Item 18. Financial Statements—Note 1. Significant accounting policies"). | |||||||||
2 Included in 2019 is a USD 69 million impact related to the revaluation of deferred tax liability on treasury shares. This revaluation resulted from the Swiss federal tax reform enacted in May 2019 (see “Item 18. Financial Statements—Note 12. Deferred tax assets and liabilities"). | |||||||||
3 In 2019 transaction costs, net of tax of USD 36 million, directly attributable to the distribution (spin-off) of Alcon to Novartis shareholders (see “Item 18. Financial Statements—Note 1. Significant accounting policies"). | |||||||||
4 Included in 2019 is the fair value of the dividend in kind of Alcon Inc. shares to Novartis AG shareholders and ADR (American Depositary Receipt) holders approved at the 2019 Annual General Meeting held on February 28, 2019. Distribution was effected on April 8, 2019, whereby each Novartis AG shareholder and ADR holder received one Alcon Inc. share for every five Novartis AG shares/ADRs they held on April 8, 2019, close of business (see “Item 18. Financial Statements—Note 1. Significant accounting policies"). | |||||||||
5 Impact of hyperinflationary economies (see “Item 18. Financial Statements—Note 1. Significant accounting policies"). |
2020 | 2019 | ||||||||
Currency | Net sales % | Operating expenses % 1 | Net sales % | Operating expenses % 1 | |||||
US dollar (USD) | 36 | 34 | 37 | 36 | |||||
Euro (EUR) | 29 | 27 | 28 | 26 | |||||
Swiss franc (CHF) | 2 | 18 | 2 | 16 | |||||
Japanese yen (JPY) | 6 | 3 | 6 | 3 | |||||
Chinese yuan (CNY) | 5 | 3 | 5 | 4 | |||||
Canadian dollar (CAD) | 3 | 1 | 3 | 2 | |||||
British pound (GBP) | 2 | 3 | 2 | 2 | |||||
Brazilian real (BRL) | 2 | 1 | 2 | 1 | |||||
Russian ruble (RUB) | 2 | 1 | 2 | 1 | |||||
Australian dollar (AUD) | 1 | 1 | 1 | 1 | |||||
Other currencies | 12 | 8 | 12 | 8 | |||||
1 Operating expenses include cost of goods sold; selling, general and administration; research and development; other income and other expense. |
Average for year | Year-end | ||||||||||||
USD per unit | 2020 | 2019 | Change in % | 2020 | 2019 | Change in % | |||||||
Australian dollar (AUD) | 0.690 | 0.695 | – 1 | 0.771 | 0.701 | 10 | |||||||
Brazilian real (BRL) | 0.196 | 0.254 | – 23 | 0.193 | 0.249 | – 22 | |||||||
Canadian dollar (CAD) | 0.746 | 0.754 | – 1 | 0.784 | 0.767 | 2 | |||||||
Swiss franc (CHF) | 1.066 | 1.006 | 6 | 1.135 | 1.032 | 10 | |||||||
Chinese yuan (CNY) | 0.145 | 0.145 | 0 | 0.153 | 0.144 | 6 | |||||||
Euro (EUR) | 1.141 | 1.120 | 2 | 1.229 | 1.121 | 10 | |||||||
British pound (GBP) | 1.283 | 1.277 | 0 | 1.365 | 1.313 | 4 | |||||||
Japanese yen (JPY (100)) | 0.937 | 0.918 | 2 | 0.970 | 0.920 | 5 | |||||||
Russian ruble (RUB (100)) | 1.389 | 1.546 | – 10 | 1.337 | 1.613 | – 17 | |||||||
Change in USD % 2020 | Change in constant currencies % 2020 | Percentage point currency impact 2020 | Change in USD % 2019 | Change in constant currencies % 2019 | Percentage point currency impact 2019 | ||||||||
Total Group - Continuing operations | |||||||||||||
Net sales to third parties | 3 | 3 | 0 | 6 | 9 | – 3 | |||||||
Operating income | 12 | 19 | – 7 | 8 | 14 | – 6 | |||||||
Net income | 13 | 20 | – 7 | – 44 | – 41 | – 3 | |||||||
Basic earnings per share (USD) | 14 | 21 | – 7 | – 43 | – 40 | – 3 | |||||||
Core operating income | 9 | 13 | – 4 | 12 | 17 | – 5 | |||||||
Core net income | 9 | 12 | – 3 | 11 | 15 | – 4 | |||||||
Core basic earnings per share (USD) | 9 | 13 | – 4 | 12 | 17 | – 5 | |||||||
Innovative Medicines | |||||||||||||
Net sales to third parties | 3 | 4 | – 1 | 8 | 11 | – 3 | |||||||
Operating income | – 1 | 4 | – 5 | 18 | 24 | – 6 | |||||||
Core operating income | 8 | 11 | – 3 | 13 | 18 | – 5 | |||||||
Sandoz | |||||||||||||
Net sales to third parties | – 1 | 0 | – 1 | – 1 | 2 | – 3 | |||||||
Operating income | 89 | 106 | – 17 | – 59 | – 53 | – 6 | |||||||
Core operating income | 11 | 15 | – 4 | 5 | 10 | – 5 | |||||||
Corporate | |||||||||||||
Operating loss | nm | nm | nm | 6 | 4 | 2 | |||||||
Core operating loss | 11 | 14 | – 3 | – 6 | – 9 | 3 | |||||||
nm = not meaningful |
(USD millions) | 2020 | 2019 | |||
Non-current financial debts | – 26 259 | – 20 353 | |||
Current financial debts and derivative financial instruments | – 9 785 | – 7 031 | |||
Total financial debts | – 36 044 | – 27 384 | |||
Less liquidity | |||||
Cash and cash equivalents | 9 658 | 11 112 | |||
Marketable securities, commodities, time deposits and derivative financial instruments | 1 905 | 334 | |||
Total liquidity | 11 563 | 11 446 | |||
Net debt at December 31 1 | – 24 481 | – 15 938 | |||
1 For further information about the net debt measure, which is a non-IFRS measure, see “Item 5.A Operating results—Non-IFRS measures as defined by Novartis—Net debt”. |
Liquidity in % 2020 1 | Liquidity in % 2019 1 | Financial debt in % 2020 2 | Financial debt in % 2019 2 | ||||||
USD | 57 | 72 | 55 | 53 | |||||
CHF | 11 | 14 | 10 | 12 | |||||
EUR | 23 | 7 | 30 | 29 | |||||
JPY | 1 | 2 | 3 | ||||||
Other | 9 | 6 | 3 | 3 | |||||
100 | 100 | 100 | 100 | ||||||
1 Liquidity includes cash and cash equivalents, marketable securities, commodities and time deposits. | |||||||||
2 Financial debt includes non-current and current financial debt. |
5.C Research and development, patents and licenses
5.D Trend information
5.E Off-balance sheet arrangements
5.F Tabular disclosure of contractual obligations
Payments due by period | |||||||||||
(USD millions) | Total | Less than 1 year | 2–3 years | 4–5 years | After 5 years | ||||||
Non-current financial debt, including current portion | 28 531 | 2 272 | 5 177 | 5 444 | 15 638 | ||||||
Interest on non-current financial debt, including current portion | 6 647 | 550 | 1 014 | 832 | 4 251 | ||||||
Lease liabilities, non-current and current portion | 2 005 | 286 | 415 | 277 | 1 027 | ||||||
Interest on lease liabilities, non-current and current portion | 1 502 | 52 | 85 | 66 | 1 299 | ||||||
Unfunded pensions and other post-employment benefit plans | 1 760 | 93 | 190 | 191 | 1 286 | ||||||
Research and development potential milestone commitments | 5 232 | 449 | 1 016 | 764 | 3 003 | ||||||
Contingent consideration liabilities | 1 046 | 62 | 327 | 312 | 345 | ||||||
Property, plant and equipment purchase commitments | 256 | 223 | 29 | 4 | |||||||
Acquisition of business commitments | 235 | 210 | 7 | 18 | |||||||
Research and development commitments on transactions entered into but not closed in 2020 1 | 3 296 | 549 | 408 | 930 | 1 409 | ||||||
Total contractual cash obligations | 50 510 | 4 746 | 8 668 | 8 816 | 28 280 | ||||||
1 For research and development commitments on transactions entered into but not closed in 2020, please refer to “Item 18. Financial Statements – Note 28 Commitments and contingencies – research and development commitments”. |
Item 6. Directors, Senior Management and Employees
6.A Directors and senior management
6.B Compensation
Compensation at a glance
Decision on | Decision-making authority | ||
Compensation of Chairman and other Board members | Board of Directors | ||
Compensation of CEO | Board of Directors | ||
Compensation of other Executive Committee members | Compensation Committee | ||
CHF 000s | AGM 2020-2021 annual fee | ||
Chairman of the Board | 3 800 | ||
Board membership | 280 | ||
Vice Chairman | 50 | ||
Chair of the Audit and Compliance Committee | 130 | ||
Chair of the Compensation Committee | 90 | ||
Chair of the following committees: • Governance, Nomination and Corporate Responsibilities Committee • Science & Technology Committee • Risk Committee | 70 | ||
Membership of the Audit and Compliance Committee | 70 | ||
Membership of the following committees: • Compensation Committee • Governance, Nomination and Corporate Responsibilities Committee • Science & Technology Committee • Risk Committee | 40 | ||
CHF 000s | 2020 total compensation 1 | ||
Chairman of the Board | 3 805 | ||
Other 13 members of the Board | 4 925 | ||
Total | 8 729 | ||
1 Includes an amount of CHF 26 118 for mandatory employer contributions for all Board members paid by Novartis to governmental social security systems. This amount is out of total employer contributions of CHF 430 023 , and provides a right to the maximum future insured government pension benefit for the Board member. |
Executive Committee compensation philosophy and principles
2020 Executive Committee compensation
2020 annual base salary | 2020 pension benefits1 | 2020 Annual Incentive | Long-Term Incentives | Other 2020 compensation | |||||||||||||||
LTPP 2018-2020 cycle | LTRPP 2018-2020 cycle | ||||||||||||||||||
Currency | Cash (amount) | Amount | Cash | Equity2 | Equity (value at vesting date)3 | Equity (value at vesting date)3 | Amount2,4,5 | Total realized compensation (incl. share price movement)6 | |||||||||||
Executive Committee members | |||||||||||||||||||
Vasant Narasimhan (CEO) | CHF | 1 743 750 | 175 102 | 1 318 275 | 1 318 275 | 5 605 100 | 2 449 823 | 113 841 | 12 724 166 | ||||||||||
Aggregate realized compensation of the other 12 Executive Committee members 7 | CHF | 9 792 833 | 2 320 106 | 4 901 015 | 5 997 169 | 14 416 662 | 3 863 980 | 4 803 881 | 46 095 647 | ||||||||||
Total | CHF | 11 536 583 | 2 495 208 | 6 219 290 | 7 315 444 | 20 021 762 | 6 313 803 | 4 917 722 | 58 819 813 | ||||||||||
See 2019 realized compensation for the CEO and other Executive Committee members for 2019 comparative figures. | |||||||||||||||||||
1 Includes mandatory employer contributions of CHF 8 336 for the CEO and CHF 59 591 for the other Executive Committee members paid by Novartis to governmental social security systems. This amount is out of total employer contributions of CHF 6 088 770 paid in 2020 for all Executive Committee members, and provides a right to the maximum future insured government pension benefit for the Executive Committee members. | |||||||||||||||||||
2 The portion of the Annual Incentive delivered in equity is rounded up to the nearest share, based on the closing share price on the grant date (January 20, 2021) of CHF 86.01 per Novartis share and USD 96.92 per ADR. | |||||||||||||||||||
3 The amounts represent the underlying share value of the 245'786 LTPP PSUs and 75'714 LTRPP PSUs vesting on January 18, 2021, to the CEO and other Executive Committee members for the performance cycle 2018-2020, inclusive of earned Alcon Keep Whole awards and dividend equivalents for the three-year cycle (for details see LTPP performance cycle and LTRPP performance cycle). The taxable value is determined using the closing share price on the day the Novartis Board of Directors approved the final LTPP and LTRPP performance factors (i.e., January 20, 2021) of CHF 86.01 per Novartis share and USD 96.92 per ADR. Bertrand Bodson, Shannon Thyme Klinger, Steffen Lang, Susanne Schaffert and Marie-France Tschudin were promoted to the Executive Committee during the course of the performance period 2018-2020, and as such, the information disclosed reflects their pro-rata LTPP and LTRPP 2018-2020 payouts attributable to the period in which they were a member of the Executive Committee. Klaus Moosmayer, John Tsai and Richard Saynor joined Novartis after the 2018 LTI awards being made and hence did not receive LTPP and LTRPP awards for the 2018-2020 performance period. | |||||||||||||||||||
4 Includes any other perquisites, benefits in kind, international assignment benefits as per the global mobility policy (e.g., housing, international health insurance, children's school fees, tax equalization). The 2020 tax payments for Richard Saynor were CHF 1 181 889 and for Susanne Schaffert were CHF 431 180. | |||||||||||||||||||
5 Includes 6 128 vested RSUs (CHF 471 666), of which 698 vested on March,13 2020, and 5 430 on July 28, 2020, as well as 4 022 vested PSUs (CHF 281 379) on March 13, 2020, to John Tsai in lieu of the LTI that he forfeited when leaving his previous employer. Also includes 2 421 vested RSUs (USD 229 487) on January 4, 2020, to James Bradner in lieu of the LTI that he forfeited when leaving his previous employer and 6 011 vested PSUs (CHF 550 788) on January 17, 2020, to Klaus Moosmayer in lieu of the LTI he forfeited when leaving his previous employer. Lastly, includes 2 348 vested RSUs (CHF 224 516) and 2 178 vested PSUs (CHF 208 260) on February 15, 2020, to Richard Saynor in lieu of the LTI that he forfeited when leaving his previous employer. The PSUs had the same performance measures as the LTPP for the 2017-2019 performance cycle (NCVA and long-term innovation). | |||||||||||||||||||
6 All amounts are before deduction of the social security contribution and income tax due by the Executive Committee member. | |||||||||||||||||||
7 Amounts for Executive Committee members paid in USD were converted at a rate of USD 1.00 = CHF 0.939, which is the same average exchange rate used in the Group's 2020 consolidated financial statements (similar rule applies in case of payments made in other currencies during the year). |
PSUs at grant | Shares delivered at vesting | ||||||||||||||||
PSUs (target number) | PSUs (target value at grant date) (CHF) 2 | Payout factor for LTPP (% of target) | Performance shares delivered at vesting (number) | Performance shares delivered at vesting (value at vesting date) (CHF) 3 | Dividend equivalent shares delivered at vesting (number) 4 | Dividend equivalent shares delivered at vesting (value at vesting date) (CHF) | Total shares delivered at vesting (value at vesting date) (CHF) | ||||||||||
Executive Committee members 1 | |||||||||||||||||
Vasant Narasimhan | 41 833 | 3 467 956 | 143% | 59 821 | 5 145 204 | 5 347 | 459 895 | 5 605 100 | |||||||||
Other 12 Executive Committee members | 106 674 | 8 800 729 | 143% | 152 457 | 13 285 757 | 12 984 | 1 147 618 | 14 416 662 | |||||||||
Total | 148 507 | 12 268 684 | 212 278 | 18 430 962 | 18 331 | 1 607 514 | 20 021 762 | ||||||||||
1 Bertrand Bodson, Shannon Thyme Klinger, Steffen Lang, Susanne Schaffert and Marie-France Tschudin joined the Executive Committee during the course of the performance period 2018-2020. As such, the information disclosed reflects their pro-rata LTPP 2018-2020 payout attributable to the period they were a member of the Executive Committee. Klaus Moosmayer, John Tsai and Richard Saynor joined Novartis post the 2018 LTPP awards being made and hence did not receive an LTPP award for the 2018-2020 performance period. | |||||||||||||||||
2 The shown amounts represent the underlying share value of the target number of PSUs granted to each Executive Committee member for the performance period 2018-2020, based on the closing share price on the grant date (January 18, 2018) of CHF 82.9 per Novartis share and USD 86.41 per ADR (pre-Alcon spin-off share price). | |||||||||||||||||
3 The shown amounts, inclusive of earned Alcon Keep Whole awards and dividend equivalents, represent the underlying share value of the target number of PSUs vested for the performance period 2018-2020, based on the last closing share price on the day the Novartis Board of Directors approved the final LTPP and LTRPP performance payout factors (i.e., January 20, 2021) of CHF 86.01 per Novartis share and USD 96.92 per ADR. | |||||||||||||||||
4 Dividend equivalent shares are calculated on the dividend each member of the Executive Committee would have received, based on the actual number of shares delivered at the end of the performance period 2018-2020. At vesting, the dividend equivalents are credited in shares or ADRs. |
PSUs at grant | Shares delivered at vesting | ||||||||||||||||
PSUs (target number) | PSUs (target value at grant date) (CHF) 2 | Payout factor for LTRPP (% of target) | Performance shares delivered at vesting (number) | Performance shares delivered at vesting (value at vesting date) (CHF) 3 | Dividend equivalent shares delivered at vesting (number) 4 | Dividend equivalent shares delivered at vesting (value at vesting date) (CHF) | Total shares delivered at vesting (value at vesting date) (CHF) | ||||||||||
Executive Committee members 1 | |||||||||||||||||
Vasant Narasimhan | 26 146 | 2 167 503 | 100% | 26 146 | 2 248 817 | 2 337 | 201 005 | 2 449 823 | |||||||||
Other 12 Executive Committee members | 40 722 | 3 355 831 | 100% | 40 722 | 3 559 493 | 3 486 | 309 988 | 3 863 980 | |||||||||
Total | 66 868 | 5 523 335 | 66 868 | 5 808 310 | 5 823 | 510 993 | 6 313 803 | ||||||||||
1 Shannon Thyme Klinger, Steffen Lang, Susanne Schaffert and Marie-France Tschudin joined the Executive Committee during the course of the performance period 2018-2020. As such, the information disclosed reflects their pro-rata LTRPP 2018-2020 payout attributable to the period they were a member of the Executive Committee. Klaus Moosmayer, John Tsai and Richard Saynor joined Novartis post the 2018 LTRPP awards being made and hence did not receive an LTRPP award for the 2018-2020 performance period. | |||||||||||||||||
2 The shown amounts represent the underlying share value of the target number of PSUs granted to each Executive Committee member for the performance period 2018-2020, based on the closing share price on the grant date (January 18, 2018) of CHF 82.9 per Novartis share and USD 86.41 per ADR (pre-Alcon spin-off share price). | |||||||||||||||||
3 The shown amounts, inclusive of earned Alcon Keep Whole awards and dividend equivalents, represent the underlying share value of the target number of PSUs vested for the performance period 2018-2020, based on the last closing share price on the day the Novartis Board of Directors approved the final LTPP and LTRPP performance payout factors (i.e., January 20, 2021) of CHF 86.01 per Novartis share and USD 96.92 per ADR. | |||||||||||||||||
4 Dividend equivalent shares are calculated on the dividend each member of the Executive Committee would have received, based on the actual number of shares delivered at the end of the performance period 2018-2020. At vesting, the dividend equivalents are credited in shares or ADRs. |
2019 annual base salary | 2019 pension benefits1 | 2019 Annual Incentive | Long-Term Incentives | Other 2019 compensation | |||||||||||||||
LTPP 2017-2019 cycle | LTRPP 2017-2019 cycle | ||||||||||||||||||
Currency | Cash (amount) | Amount | Cash | Equity2 | Equity (value at vesting date)3 | Equity (value at vesting date)3 | Amount2,4,5 | Total realized compensation (incl. share price movement)6 | |||||||||||
Executive Committee members | |||||||||||||||||||
Vasant Narasimhan (CEO) | CHF | 1 653 333 | 165 547 | 2 008 800 | 2 008 839 | 3 510 963 | 1 107 806 | 160 452 | 10 615 740 | ||||||||||
Aggregate realized compensation of the other 14 Executive Committee members, including the two members who stepped down during financial year 2019 7, 8 | CHF | 9 370 547 | 2 131 905 | 5 809 455 | 7 013 842 | 17 932 704 | 6 383 700 | 7 233 594 | 55 875 748 | ||||||||||
Total | CHF | 11 023 880 | 2 297 452 | 7 818 255 | 9 022 682 | 21 443 667 | 7 491 506 | 7 394 046 | 66 491 488 | ||||||||||
1 Includes mandatory employer contributions of CHF 4 373 for the CEO and CHF 63 461 for the other Executive Committee members paid by Novartis to governmental social security systems. This amount is out of total employer contributions of CHF 3 923 070 paid in 2019 for all Executive Committee members, and provides a right to the maximum future insured government pension benefit for the Executive Committee members. | |||||||||||||||||||
2 The portion of the Annual Incentive delivered in equity is rounded up to the nearest share, based on the closing share price on the grant date (January 21, 2020) of CHF 92.89 per Novartis share and USD 95.19 per ADR. | |||||||||||||||||||
3 The amounts represent the underlying share value of the 232 425 LTPP PSUs and 77 904 LTRPP PSUs vesting on January 17, 2020, to the CEO and other Executive Committee members for the performance cycle 2017-2019, inclusive of earned dividend equivalents for the three-year cycle (details in ''LTPP performance cycle and LTRPP performance cycle").The taxable value is determined using the closing share price on the day the Novartis Board of Directors approved the final LTPP and LTRPP performance factors (i.e., January 21, 2020) of CHF 92.89 per Novartis share and USD 95.19 per ADR. Shannon Thyme Klinger, Steffen Lang, Susanne Schaffert and Marie-France Tschudin were promoted to the Executive Committee during the course of the performance period 2017-2019, and as such, the information disclosed reflects their pro-rata LTPP and LTRPP 2017-2019 payouts attributable to the period they were a member of the Executive Committee. Bertrand Bodson, Klaus Moosmayer, John Tsai, Robert Weltevreden and Richard Saynor joined Novartis post the 2017 LTI awards were made and hence did not receive LTPP and LTRPP awards for the 2017-2019 performance period. | |||||||||||||||||||
4 Includes any other perquisites, benefits in kind, international assignment benefits as per the global mobility policy (e.g., housing, international health insurance, children's school fees, tax equalization) as well as vested shares under LTPP and LTRPP after the ''step down'' date. | |||||||||||||||||||
5 Includes 5 430 vested RSUs (CHF 502 003) on July 28, 2019, to John Tsai, in lieu of the LTI that he forfeited when leaving his previous employer and 1 323 vested RSUs (CHF 123 092) and 14 470 vested PSUs (CHF 1 346 289) on March 24, 2019, to Paul Hudson in lieu of the LTI that he forfeited when leaving his previous employer. The PSUs had the same performance measures as the LTPP for the 2016-2018 performance cycle (NCVA and long-term innovation). | |||||||||||||||||||
6 All amounts are before deduction of the social security contribution and income tax due by the Executive Committee member. | |||||||||||||||||||
7 Comprises the compensation of Richard Francis, the former CEO of Sandoz including the vesting of his Long-Term Incentives for performance cycle 2017-2019, as per the plan rules. Unvested shares for Paul Hudson were forfeited upon his departure from the Company. | |||||||||||||||||||
8 Amounts for Executive Committee members paid in USD were converted at a rate of USD 1.00 = CHF 0.9938, which is the same average exchange rate used in the Group's 2019 consolidated financial statements. |
Fixed compensation and pension benefits | Variable compensation | ||||||||||||||||
Actual compensation paid or granted for 2020 | Long-Term Incentive 2020-2022 cycle grants at target | ||||||||||||||||
2020 annual base salary | 2020 pension benefits | 2020 Annual Incentive (performance achieved) | LTPP 2020-2022 cycle | Other 2020 compensation | Total compensation paid, promised or granted 2020 | ||||||||||||
Currency | Cash (amount) | Amount 1 | Cash (amount) | Equity (value at grant date) 2 | PSUs (target value at grant date) 3 | Amount 4 | Amount 5 | ||||||||||
Executive Committee members active on December 31, 2020 | |||||||||||||||||
Vasant Narasimhan | CHF | 1 743 750 | 175 102 | 1 318 275 | 1 318 275 | 5 712 549 | 113 841 | 10 381 793 | |||||||||
Steven Baert | CHF | 798 617 | 167 294 | 480 000 | 480 022 | 1 679 265 | 85 587 | 3 690 785 | |||||||||
Bertrand Bodson | CHF | 634 834 | 177 088 | 256 000 | 256 052 | 1 152 115 | 131 745 | 2 607 834 | |||||||||
James Bradner 6 | USD | 1 203 654 | 373 063 | 768 900 | 768 963 | 2 911 862 | 88 472 | 6 114 914 | |||||||||
Harry Kirsch | CHF | 1 063 433 | 171 930 | 585 750 | 585 814 | 2 769 330 | 50 294 | 5 226 551 | |||||||||
Shannon Thyme Klinger | CHF | 862 500 | 182 852 | 525 000 | 525 005 | 1 925 517 | 32 773 | 4 053 647 | |||||||||
Steffen Lang | CHF | 758 333 | 171 130 | 228 000 | 684 038 | 1 367 619 | 12 918 | 3 222 037 | |||||||||
Klaus Moosmayer | CHF | 520 833 | 184 884 | 241 500 | 241 516 | 840 004 | 29 496 | 2 058 233 | |||||||||
Richard Saynor | CHF | 778 333 | 190 372 | 390 000 | 390 055 | 1 482 060 | 1 737 100 | 4 967 920 | |||||||||
Susanne Schaffert | CHF | 871 250 | 173 111 | 341 445 | 796 797 | 2 013 669 | 581 188 | 4 777 460 | |||||||||
John Tsai | CHF | 868 333 | 182 517 | 478 500 | 478 560 | 2 175 855 | 104 669 | 4 288 434 | |||||||||
Marie-France Tschudin | CHF | 871 250 | 182 216 | 437 750 | 437 791 | 2 013 669 | – | 3 942 677 | |||||||||
Robert Weltevreden | CHF | 634 834 | 186 392 | 215 040 | 399 430 | 1 152 115 | 2 925 | 2 590 735 | |||||||||
Total | 11 536 583 | 2 495 208 | 6 219 290 | 7 315 444 | 27 018 132 | 2 965 615 | 57 550 273 | ||||||||||
Based on assumption of 100% payout at target. Actual payout (0-200% of target) will be known at the end of the three-year cycle in January 2023 | |||||||||||||||||
See next page for 2019 comparative figures. | |||||||||||||||||
1 Includes mandatory employer contributions of CHF 8 336 for the CEO and CHF 59 591 for the other Executive Committee members paid by Novartis to governmental social security systems. This amount is out of total employer contributions of CHF 6 088 770 paid in 2020 for all Executive Committee members, and provides a right to the maximum future insured government pension benefit for the Executive Committee members. | |||||||||||||||||
2 The portion of the Annual Incentive delivered in equity is rounded up to the nearest share, based on the closing share price on the grant date (January 20, 2021) of CHF 86.01 per Novartis share and USD 96.92 per ADR. | |||||||||||||||||
3 The amounts represent the underlying share value of the target number of PSUs granted to Executive Committee members for the performance cycle 2020-2022, based on the closing share price on the grant date (January 21, 2020) of CHF 92.89 per Novartis share and USD 95.19 per ADR for all members. | |||||||||||||||||
4 Includes any other perquisites, benefits in kind, and international assignment benefits as per the global mobility policy (e.g., housing, international health insurance, children's school fees, tax equalization) | |||||||||||||||||
5 All amounts are before deduction of the social security contribution and income tax due by the Executive Committee member. | |||||||||||||||||
6 Amounts in USD for James Bradner were converted at a rate of CHF 1.00 = USD 1.0649, which is the average rate used in the Group’s 2020 consolidated financial statements. | |||||||||||||||||
Executive Committee member compensation at grant for financial year 2019 | ||||||||||||||||||||||||||||||||||
Fixed compensation and pension benefits | Variable compensation | |||||||||||||||||||||||||||||||||
Actual compensation paid or granted for 2019 | Long-Term Incentive 2019-2021 cycle grants at target | |||||||||||||||||||||||||||||||||
2019 annual base salary | 2019 pension benefits | 2019 Annual Incentive (performance achieved) | LTPP 2019-2021 cycle | Other 2019 compensation | Total compensation paid, promised or granted 2019 | |||||||||||||||||||||||||||||
Currency | Cash (amount) | Amount 1 | Cash (amount) | Equity (value at grant date) 2 | PSUs (target value at grant date) 3 | Amount 4 | Amount 5 | |||||||||||||||||||||||||||
Executive Committee members active on December 31, 2019 | ||||||||||||||||||||||||||||||||||
Vasant Narasimhan | CHF | 1 653 333 | 165 547 | 2 008 800 | 2 008 839 | 5 440 530 | 160 452 | 11 437 501 | ||||||||||||||||||||||||||
Steven Baert | CHF | 789 750 | 161 454 | 633 360 | 633 417 | 1 662 585 | 124 979 | 4 005 545 | ||||||||||||||||||||||||||
Bertrand Bodson | CHF | 607 500 | 170 178 | 341 040 | 341 092 | 974 476 | 137 826 | 2 572 111 | ||||||||||||||||||||||||||
James Bradner 6 | USD | 1 126 781 | 359 961 | 951 720 | 951 805 | 2 832 511 | 85 498 | 6 308 275 | ||||||||||||||||||||||||||
Harry Kirsch | CHF | 1 053 000 | 164 467 | 1 045 044 | 1 045 105 | 2 744 591 | 27 658 | 6 079 865 | ||||||||||||||||||||||||||
Shannon Thyme Klinger | CHF | 783 333 | 188 990 | 468 000 | 468 073 | 1 600 005 | 111 375 | 3 619 776 | ||||||||||||||||||||||||||
Steffen Lang | CHF | 745 000 | 167 815 | 408 000 | 612 145 | 1 200 026 | 9 810 | 3 142 796 | ||||||||||||||||||||||||||
Klaus Moosmayer | CHF | 500 000 | 125 483 | 260 000 | 260 092 | 800 047 | 171 749 | 2 117 371 | ||||||||||||||||||||||||||
Richard Saynor (from July 15, 2019) 7 | CHF | 356 021 | 87 118 | 179 315 | 179 371 | – | 1 950 908 | 2 752 732 | ||||||||||||||||||||||||||
Susanne Schaffert 7 | CHF | 850 000 | 167 096 | 459 000 | 1 071 115 | 1 870 066 | 160 252 | 4 577 528 | ||||||||||||||||||||||||||
John Tsai | CHF | 858 333 | 181 048 | 602 000 | 602 020 | 2 064 063 | 377 544 | 4 685 007 | ||||||||||||||||||||||||||
Marie-France Tschudin (from June 7, 2019) 7 | CHF | 481 667 | 92 090 | 290 630 | 290 653 | 968 249 | – | 2 123 289 | ||||||||||||||||||||||||||
Robert Weltevreden | CHF | 607 500 | 157 423 | 158 340 | 475 132 | 974 476 | 4 860 | 2 377 731 | ||||||||||||||||||||||||||
Subtotal | 10 405 223 | 2 186 434 | 7 799 341 | 8 932 950 | 23 114 040 | 3 322 378 | 55 760 366 | |||||||||||||||||||||||||||
Executive Committee members who stepped down during 2019 | ||||||||||||||||||||||||||||||||||
Richard Francis (until March 19, 2019) 8, 9 | CHF | 179 315 | 36 025 | 18 914 | 37 435 | 720 460 | 3 808 445 | 4 800 594 | ||||||||||||||||||||||||||
Paul Hudson (until June 7, 2019) 9, 10 | CHF | 439 342 | 74 994 | – | – | 270 451 | 2 885 164 | 3 669 950 | ||||||||||||||||||||||||||
Subtotal | 618 657 | 111 018 | 18 914 | 37 435 | 990 910 | 6 693 609 | 8 470 543 | |||||||||||||||||||||||||||
Total | 11 023 880 | 2 297 452 | 7 818 255 | 8 970 384 | 24 104 951 | 10 015 988 | 64 230 910 | |||||||||||||||||||||||||||
Based on assumption of 100% payout at target. Actual payout (0-200% of target) will be known at the end of the three-year cycle in January 2022. | ||||||||||||||||||||||||||||||||||
1 Includes mandatory employer contributions of CHF 4'373 for the CEO and CHF 63'461 for the other Executive Committee members paid by Novartis to governmental social security systems. This amount is out of total employer contributions of CHF 3'923'070 paid in 2019 for all Executive Committee members, and provides a right to the maximum future insured government pension benefit for the Executive Committee member. | ||||||||||||||||||||||||||||||||||
2 The portion of the Annual Incentive delivered in equity is rounded up to the nearest share, based on the closing share price on the grant date (January 21, 2020) of CHF 92.89 per Novartis share and USD 95.19 per ADR. | ||||||||||||||||||||||||||||||||||
3 The amounts represent the underlying share value of the target number of PSUs granted to Executive Committee members for the performance cycle 2019-2021, based on the closing share price on the grant date (January 22, 2019) of CHF 88.14 per Novartis share and USD 88.32 per ADR for all members except for Richard Saynor, who was not part of the Company at the annual grant date and hence did not receive an LTPP award. | ||||||||||||||||||||||||||||||||||
4 Includes any other perquisites, benefits in kind, and international assignment benefits as per the global mobility policy (e.g., housing, international health insurance, children's school fees, tax equalization). | ||||||||||||||||||||||||||||||||||
5 All amounts are before deduction of the social security contribution and income tax due by the Executive Committee member. | ||||||||||||||||||||||||||||||||||
6 Amounts in USD for James Bradner were converted at a rate of CHF 1.00 = USD 1.006, which is the average rate used in the Group’s 2019 consolidated financial statements. | ||||||||||||||||||||||||||||||||||
7 For those members who joined the Executive Committee in 2019, the information under the columns “Actual compensation paid or granted for 2019” and “Long-Term Incentive 2019-2021 cycle grants at target” includes their pro-rata compensation from the date they joined the Executive Committee to December 31, 2019, or to the end of the performance cycle in the case of the “Long-Term Incentive 2019-2021 cycle grants at target.” | ||||||||||||||||||||||||||||||||||
8 Richard Francis stepped down as CEO, Sandoz on March 19, 2019, and left the Company on March 31, 2020, in line with his contractual notice period. Until the end of the notice period, he received further contractual compensation that includes the base salary, Annual Incentive and pension benefits. In accordance with the plan rules, the LTPP 2019-2021 cycle grant (21 217 PSUs), included in full in the above table, will vest on the normal vesting date pro-rata based on the number of months of Novartis employment during the performance cycle. The vesting of this grant is subject to performance conditions assessed at the end of the period. | ||||||||||||||||||||||||||||||||||
9 For those members leaving the Executive Committee in 2019, the columns under “Actual compensation paid or granted for 2019” and “Long-Term Incentive 2019-2021 cycle grants at target” reflect the pro-rata compensation for their period as Executive Committee member. The column “Other 2019 compensation” includes inter alia their pro-rata compensation from the date they left the Executive Committee to December 31, 2019, or to the end of the performance cycle in the case of the “Long-Term Incentive 2019-2021 cycle grants at target”. See “—2019 Executive Committee member departures" for details. | ||||||||||||||||||||||||||||||||||
10 Paul Hudson stepped down as CEO, Novartis Pharmaceuticals on June 7, 2019, and left the Company on August 31, 2019, in line with his reduced contractual notice period (for more details “—2019 Executive Committee member departures.”) The Annual Incentive and LTPP 2019-2021 cycle grant (31 553 PSUs), included in the table above, were forfeited in full upon his departure. |
Variable compensation1 | |||||||
2020 Annual Incentive (performance achieved) | LTPP 2020-2022 cycle | Other | |||||
Equity (number) 2 | PSUs (target number) 3 | Equity/PSUs (number) | |||||
Executive Committee members active on December 31, 2020 | |||||||
Vasant Narasimhan | 15 327 | 61 498 | 0 | ||||
Steven Baert | 5 581 | 18 078 | 0 | ||||
Bertrand Bodson | 2 977 | 12 403 | 0 | ||||
James Bradner | 7 934 | 30 590 | 0 | ||||
Harry Kirsch | 6 811 | 29 813 | 0 | ||||
Shannon Thyme Klinger | 6 104 | 20 729 | 0 | ||||
Steffen Lang | 7 953 | 14 723 | 0 | ||||
Klaus Moosmayer | 2 808 | 9 043 | 0 | ||||
Richard Saynor | 4 535 | 15 955 | 0 | ||||
Susanne Schaffert | 9 264 | 21 678 | 0 | ||||
John Tsai | 5 564 | 23 424 | 0 | ||||
Marie-France Tschudin | 5 090 | 21 678 | 0 | ||||
Robert Weltevreden | 4 644 | 12 403 | 0 | ||||
Total | 84 592 | 292 015 | 0 | ||||
See next page for 2019 comparative figures. | |||||||
1 The values of the awards are reported in the table "2020 compensation at grant value for the CEO and other Executive Committee members." | |||||||
2 Vested shares, restricted shares and/or RSUs granted under the Annual Incentive for performance period 2020. | |||||||
3 Target number of PSUs granted under the LTPP as applicable for the performance cycle 2020-2022. | |||||||
Variable compensation1 | |||||||
2019 Annual Incentive (performance achieved) | LTPP 2019-2021 cycle | Other | |||||
Equity (number) 2 | PSUs (target number) 3 | Equity/PSUs (number) | |||||
Executive Committee members active on December 31, 2019 | |||||||
Vasant Narasimhan | 21 626 | 61 726 | 0 | ||||
Steven Baert | 6 819 | 18 863 | 0 | ||||
Bertrand Bodson | 3 672 | 11 056 | 0 | ||||
James Bradner | 9 999 | 32 071 | 0 | ||||
Harry Kirsch | 11 251 | 31 139 | 0 | ||||
Shannon Thyme Klinger | 5 039 | 18 153 | 0 | ||||
Steffen Lang | 6 590 | 13 615 | 0 | ||||
Klaus Moosmayer | 2 800 | 9 077 | 0 | ||||
Richard Saynor (from July 15, 2019) 4 | 1 931 | 0 | 11 452 | ||||
Susanne Schaffert | 11 531 | 21 217 | 0 | ||||
John Tsai | 6 481 | 23 418 | 0 | ||||
Marie-France Tschudin (from June 7, 2019) 4 | 3 129 | 11 085 | 0 | ||||
Robert Weltevreden | 5 115 | 11 056 | 0 | ||||
Subtotal | 95 983 | 262 476 | 11 452 | ||||
Executive Committee members who stepped down during 2019 | |||||||
Richard Francis (until March 19, 2019) 5, 6 | 403 | 8 841 | 0 | ||||
Paul Hudson (until June 7, 2019) 5, 7 | 0 | 4 525 | 0 | ||||
Subtotal | 403 | 13 366 | 0 | ||||
Total | 96 386 | 275 842 | 11 452 | ||||
1 The values of the awards are reported in the table "2019 compensation at grant value for the CEO and other Executive Committee members." | |||||||
2 Vested shares, restricted shares and/or RSUs granted under the Annual Incentive for performance period 2019. | |||||||
3 Target number of PSUs granted under the LTPP as applicable for the performance cycle 2019-2021. | |||||||
4 For those members who joined the Executive Committee in 2019, the information under the column “Variable compensation” includes their pro-rata number of equity instruments from the date they joined the Executive Committee to December 31, 2019, or to the end of the performance cycle in the case of the "LTPP 2019-2021 cycle." | |||||||
5 For those members leaving the Executive Committee in 2019, the column under “Variable compensation” reflects the pro-rata number of equity instruments for their period as Executive Committee member. The column “Other” includes their pro-rata compensation from the date they left the Executive Committee to December 31, 2019, or to the end of the performance cycle in the case of the “LTPP 2019-2021 cycle.” See “2019 Executive Committee member departures” for details. | |||||||
6 Richard Francis stepped down as CEO, Sandoz on March 19, 2019, and left the Company on March 31, 2020, in line with his contractual notice period. In accordance with the plan rules, the LTPP 2019-2021 cycle grant (21 217 PSUs), included in full in the above table, will vest on the normal vesting date pro-rata based on the number of months of Novartis employment during the performance cycle. The vesting of this grant is subject to performance conditions assessed at the end of the period. | |||||||
7 Paul Hudson stepped down as CEO, Novartis Pharmaceuticals on June 7, 2019, and left the Company on August 31, 2019, in line with his reduced contractual notice period (for more details “—2019 Executive Committee member departures”). The 2019 Annual Incentive and LTPP 2019-2021 cycle grant (31 553 PSUs), included in the table above, were forfeited in full upon his departure. |
Function | Ownership level | ||
CEO | 5 x base compensation | ||
Other Executive Committee members | 3 x base compensation | ||
Vested shares and ADRs 1 | Unvested shares and other equity rights 2 | Equity ownership level as a multiple of annual base salary 3 | Unvested target PSUs (e.g., LTPP/LTRPP) 4 | Matching shares under the LSSP 5 | Total at December 31, 2020 | ||||||||
Vasant Narasimhan | 104 277 | 90 466 | 9x | 159 962 | 3 342 | 358 047 | |||||||
Steven Baert | 69 679 | 28 773 | 10x | 51 501 | 0 | 149 953 | |||||||
Bertrand Bodson | 10 403 | 9 869 | 2x | 24 193 | 0 | 44 465 | |||||||
James Bradner | 69 551 | 41 274 | 8x | 83 724 | 0 | 194 549 | |||||||
Harry Kirsch | 198 331 | 37 457 | 18x | 82 446 | 0 | 318 234 | |||||||
Shannon Thyme Klinger | 29 128 | 23 248 | 5x | 37 547 | 1 884 | 91 807 | |||||||
Steffen Lang | 81 714 | 26 413 | 11x | 31 543 | 3 726 | 143 396 | |||||||
Klaus Moosmayer | 6 011 | 5 824 | 1x | 16 153 | 0 | 27 988 | |||||||
Richard Saynor | 0 | 13 746 | 1x | 9 578 | 0 | 23 324 | |||||||
Susanne Schaffert | 106 981 | 30 548 | 13x | 45 844 | 0 | 183 373 | |||||||
John Tsai | 17 783 | 28 981 | 4x | 32 896 | 0 | 79 660 | |||||||
Marie-France Tschudin | 12 300 | 29 212 | 3x | 46 636 | 0 | 88 148 | |||||||
Robert Weltevreden | 2 734 | 12 395 | 1x | 30 050 | 0 | 45 179 | |||||||
Total | 708 892 | 378 206 | 652 073 | 8 952 | 1 748 123 | ||||||||
1 Includes holdings of "persons closely linked" to Executive Committee members (see definition “Persons closely linked") | |||||||||||||
2 Includes unvested shares and ADRs as well as other equity rights applicable for the determination of equity amounts for the share ownership requirements, as per the definition above. Also includes unvested Alcon Keep Whole shares received in connection to the Alcon spin-off. | |||||||||||||
3 The multiple is calculated based on the full-year annual base salary and the closing share price as at the end of the 2020 financial year. The share price on the final trading day of 2020 was CHF 83.65 / USD 94.43 as at December 31, 2020. | |||||||||||||
4 The target number of PSUs is disclosed pro-rata to December 31, 2020, unless the award qualified for full vesting under the relevant plan rules. | |||||||||||||
5 Matching shares under the Leveraged Share Savings Plan (LSSP) are disclosed pro-rata to December 31, 2020, unless the award qualified for full vesting under the plan rules. LSSP participation for Executive Committee members ceased in 2014, although some current members received later grants under this plan prior to becoming members of the Executive Committee. Outstanding awards will vest five years from the grant date, subject to the LSSP plan rules. | |||||||||||||
Annual base salary 1 | Variable compensation 2 | ||||
Vasant Narasimhan | 17.1% | 82.9% | |||
Steven Baert | 22.7% | 77.3% | |||
Bertrand Bodson | 26.1% | 73.9% | |||
James Bradner | 21.0% | 79.0% | |||
Harry Kirsch | 21.0% | 79.0% | |||
Shannon Thyme Klinger | 22.3% | 77.7% | |||
Steffen Lang | 24.9% | 75.1% | |||
Klaus Moosmayer | 27.8% | 72.2% | |||
Richard Saynor | 16.3% | 83.7% | |||
Susanne Schaffert | 18.9% | 81.1% | |||
John Tsai | 21.1% | 78.9% | |||
Marie-France Tschudin | 23.2% | 76.8% | |||
Robert Weltevreden | 26.4% | 73.6% | |||
Total | 21.0% | 79.0% | |||
1 Excludes pension and other benefits. | |||||
2 See the table ''2020 compensation at grant value for the CEO and other Executive Committee members'' with regard to the disclosure principles of variable compensation. | |||||
Performance measures | Tracking | ||
Net sales growth CAGR (25%) | Above target | ||
Core operating income CAGR (25%) | Above target | ||
Innovation (25%) | At target | ||
Relative TSR (25%) | At median | ||
CAGR = compound annual growth rate |
Performance measures | Tracking | ||
Net sales growth CAGR (25%) | Below target | ||
Core operating income CAGR (25%) | Above target | ||
Innovation (25%) | At target | ||
Relative TSR (25%) | Below median | ||
CAGR = compound annual growth rate |
2021 Executive Committee compensation
2020 Board compensation
CHF 000s | 2020-2021 AGM annual fee | ||
Chairman of the Board | 3 800 | ||
Board membership | 280 | ||
Vice Chairman | 50 | ||
Chair of the Audit and Compliance Committee | 130 | ||
Chair of the Compensation Committee | 90 | ||
Chair of the following committees: • Governance, Nomination and Corporate Responsibilities Committee • Science & Technology Committee • Risk Committee | 70 | ||
Membership of the Audit and Compliance Committee | 70 | ||
Membership of the following committees: • Compensation Committee • Governance, Nomination and Corporate Responsibilities Committee • Science & Technology Committee • Risk Committee | 40 | ||
Board membership | Audit and Compliance Committee | Compensation Committee | Governance, Nomination and Corporate Responsibilities Committee | Science & Technology Committee | Risk Committee | Shares (number) 1 | Cash (CHF) (A) | Shares (CHF) (B) | Other (CHF) (C) 2 | Total (CHF) (A)+(B)+(C) 3 | |||||||||||||
Board members active on December 31, 2020 | |||||||||||||||||||||||
Joerg Reinhardt 4 | Chair | Chair | 22 629 | 1 900 000 | 1 900 000 | 4 501 | 3 804 501 | ||||||||||||||||
Enrico Vanni | Vice Chair | • | Chair | • | 3 156 | 265 000 | 265 000 | 3 614 | 533 614 | ||||||||||||||
Nancy C. Andrews | • | • | • | 2 143 | 180 000 | 180 000 | – | 360 000 | |||||||||||||||
Ton Buechner | • | • | • | 3 508 | 29 167 | 354 167 | 4 501 | 387 835 | |||||||||||||||
Patrice Bula | • | • | 2 750 | 133 333 | 186 666 | 4 501 | 324 500 | ||||||||||||||||
Srikant Datar | • | • | • | Chair | 3 348 | 153 333 | 306 666 | – | 459 999 | ||||||||||||||
Elizabeth Doherty | • | Chair | • | 3 424 | 131 250 | 318 750 | – | 450 000 | |||||||||||||||
Ann Fudge | • | • | • | 2 249 | 183 333 | 183 333 | – | 366 666 | |||||||||||||||
Bridgette Heller 5 | • | • | 1 059 | 133 333 | 133 333 | – | 266 666 | ||||||||||||||||
Frans van Houten | • | • | 3 810 | – | 320 000 | – | 320 000 | ||||||||||||||||
Simon Moroney 5 | • | • | 1 059 | 133 333 | 133 333 | 4 501 | 271 167 | ||||||||||||||||
Andreas von Planta | • | • | Chair | • | 2 739 | 230 000 | 230 000 | 4 501 | 464 501 | ||||||||||||||
Charles L. Sawyers | • | • | • | 2 143 | 180 000 | 180 000 | – | 360 000 | |||||||||||||||
William T. Winters | • | • | • 5 | 4 287 | – | 360 000 | – | 360 000 | |||||||||||||||
Subtotal | 58 304 | 3 652 082 | 5 051 248 | 26 118 | 8 729 448 | ||||||||||||||||||
See next page for 2019 comparative figures. | |||||||||||||||||||||||
1 The shown amounts represent the gross number of shares delivered to each Board member in 2020 for the respective Board member’s service period. The number of shares reported in this column represent: (i) the second and final equity installment delivered in February 2020 for the services from the 2019 AGM to the 2020 AGM, and (ii) the first of two equity installments delivered in August 2020 for the services from the 2020 AGM to the 2021 AGM. The second and final equity installment for the services from the 2020 AGM to the 2021 AGM will take place in February 2021. | |||||||||||||||||||||||
2 Includes an amount of CHF 26 118 for mandatory employer contributions for all Board members paid by Novartis to governmental social security systems. This amount is out of total employer contributions of CHF 430 023 , and provides a right to the maximum future insured government pension benefit for the Board member. | |||||||||||||||||||||||
3 All amounts are before deduction of the social security contribution and income tax due by the Board member. | |||||||||||||||||||||||
4 No additional committee fees for chairing the Science & Technology Committee were delivered to Joerg Reinhardt. | |||||||||||||||||||||||
5 From February 28, 2020. | |||||||||||||||||||||||
Board membership | Audit and Compliance Committee | Compensation Committee | Governance, Nomination and Corporate Responsibilities Committee | Research & Development Committee | Risk Committee | Shares (number) 1 | Cash (CHF) (A) | Shares (CHF) (B) | Other (CHF) (C) 2 | Total (CHF) (A)+(B)+(C) 3 | |||||||||||||
Board members active on December 31, 2019 | |||||||||||||||||||||||
Joerg Reinhardt 4 | Chair | Chair | 21 498 | 1 900 000 | 1 900 000 | 4 373 | 3 804 373 | ||||||||||||||||
Enrico Vanni | Vice Chair | • | Chair | • | 4 494 | 220 833 | 309 166 | 3 512 | 533 511 | ||||||||||||||
Nancy Andrews | • | • | • | 2 035 | 180 000 | 180 000 | – | 360 000 | |||||||||||||||
Ton Buechner | • | • | 2 967 | 145 833 | 204 166 | 4 373 | 354 372 | ||||||||||||||||
Patrice Bula 5 | • | • | 1 813 | – | 266 667 | 4 373 | 271 040 | ||||||||||||||||
Srikant Datar | • | • | • | Chair | 2 602 | 230 000 | 230 000 | – | 460 000 | ||||||||||||||
Elizabeth Doherty | • | Chair | • | 2 544 | 225 000 | 225 000 | – | 450 000 | |||||||||||||||
Ann Fudge | • | • | • | • | 2 262 | 200 000 | 200 000 | – | 400 000 | ||||||||||||||
Frans van Houten | • | • | 2 716 | 26 667 | 293 334 | – | 320 001 | ||||||||||||||||
Andreas von Planta | • | • | Chair | • | 2 602 | 230 000 | 230 000 | 4 373 | 464 373 | ||||||||||||||
Charles L. Sawyers | • | • | • | 2 035 | 180 000 | 180 000 | – | 360 000 | |||||||||||||||
William T. Winters | • | • | • 5 | 3 620 | – | 353 333 | – | 353 333 | |||||||||||||||
Total | 51 188 | 3 538 333 | 4 571 666 | 21 002 | 8 131 001 | ||||||||||||||||||
1 The shown amounts represent the gross number of shares delivered to each Board member in 2019 for the respective Board member’s service period. The number of shares reported in this column represent: (i) the second and final equity installment delivered in February 2019 for the services from the 2018 AGM to the 2019 AGM, and (ii) the first of two equity installments delivered in August 2019 for the services from the 2019 AGM to the 2020 AGM. | |||||||||||||||||||||||
2 Includes an amount of CHF 21'002 for mandatory employer contributions for all Board members paid by Novartis to governmental social security systems. This amount is out of total employer contributions of CHF 413'985 , and provides a right to the maximum future insured government pension benefit for the Board member. | |||||||||||||||||||||||
3 All amounts are before deduction of the social security contribution and income tax due by the Board member. | |||||||||||||||||||||||
4 No additional committee fees for chairing the Research & Development Committee were delivered to Joerg Reinhardt. | |||||||||||||||||||||||
5 From February 28, 2019. | |||||||||||||||||||||||
6 Until February 28, 2019. |
Number of shares at December 31, 2020 1,2 | |||
Joerg Reinhardt | 586 326 | ||
Enrico Vanni | 28 847 | ||
Nancy C. Andrews | 8 872 | ||
Ton Buechner | 14 338 | ||
Patrice Bula | 4 621 | ||
Srikant Datar | 43 845 | ||
Elizabeth Doherty | 8 744 | ||
Ann Fudge | 15 201 | ||
Bridgette Heller | 794 | ||
Frans van Houten | 7 621 | ||
Simon Moroney | 731 | ||
Andreas von Planta | 163 834 | ||
Charles L. Sawyers | 12 593 | ||
William T. Winters | 21 289 | ||
Total | 917 656 | ||
1 Includes holdings of "persons closely linked" to Board members (see definition “Persons closely linked"). | |||
2 Each share provides entitlement to one vote. | |||
Compensation governance
Decision on | Decision-making authority | ||
Compensation of Chairman and other Board members | Board of Directors | ||
Compensation of CEO | Board of Directors | ||
Compensation of other Executive Committee members | Compensation Committee | ||
6.C Board practices
% holding of share capital Dec 31, 2020 | |||
Shareholders registered for their own account: | |||
Emasan AG, Basel | 3.6 | ||
UBS Fund Management (Switzerland) AG, Basel | 2.3 | ||
Credit Suisse Funds AG, Zurich | 2.0 | ||
% holding of share capital Dec 31, 2020 | |||
Shareholders registered as nominees: | |||
Chase Nominees Ltd., London | 9.6 | ||
The Bank of New York Mellon, New York | 3.4 | ||
Through The Bank of New York Mellon, Everett | 1.7 | ||
Through The Bank of New York Mellon, New York | 1.2 | ||
Through The Bank of New York Mellon, SA/NV, Brussels | 0.5 | ||
Nortrust Nominees Ltd., London | 4.2 | ||
Shareholder acting as American Depositary Share (ADS) depositary: | |||
JPMorgan Chase Bank, N.A., New York | 11.7 | ||
As of December 31, 2020 1 | Number of registered shareholders | % of share capital | |||
1–100 | 31 457 | 0.07 | |||
101–1 000 | 104 629 | 1.73 | |||
1 001–10 000 | 36 429 | 4.10 | |||
10 001–100 000 | 3 230 | 3.39 | |||
100 001–1 000 000 | 478 | 5.81 | |||
1 000 001–5 000 000 | 64 | 4.72 | |||
5 000 001 or more 2 | 32 | 48.13 | |||
Total registered shareholders/shares | 176 319 | 67.95 | |||
Unregistered shares | 32.05 | ||||
Total | 100.00 | ||||
1 At the record date of the 2020 Annual General Meeting of Shareholders (AGM), unregistered shares amounted to 15%. | |||||
2 Including significant registered shareholders as listed above |
As of December 31, 2020 | Shareholders in % | Shares in % | |||
Individual shareholders | 96.61 | 14.00 | |||
Legal entities 1 | 3.34 | 34.51 | |||
Nominees, fiduciaries and ADS depositary | 0.05 | 51.49 | |||
Total | 100.00 | 100.00 | |||
1 Excluding 4.3% of the share capital held as treasury shares by Novartis AG or its fully owned subsidiaries |
As of December 31, 2020 | Shareholders in % | Shares in % | |||
Belgium | 0.12 | 1.03 | |||
France | 2.01 | 0.31 | |||
Germany | 5.68 | 1.80 | |||
Japan | 0.20 | 0.59 | |||
Luxembourg | 0.06 | 0.69 | |||
Switzerland 2 | 87.45 | 44.08 | |||
United Kingdom | 0.59 | 25.09 | |||
United States | 0.28 | 24.36 | |||
Other countries | 3.61 | 2.05 | |||
Total | 100.00 | 100.00 | |||
1 Registered shares held by nominees are shown in the country where the company/affiliate entered in the Share Register as shareholder has its registered seat. | |||||
2 Excluding 4.3% of the share capital held as treasury shares by Novartis AG or its fully owned subsidiaries |
AGM | Shareholder decision | Shares canceled | Average repurchase share price (CHF) 1 | ||||
2018 | • Capital reduction by CHF 33.11 million (from CHF 1 308 422 410 to CHF 1 275 312 410) | 66 220 000 | 78.34 | ||||
2019 | • Capital reduction by CHF 11.63 million (from CHF 1 275 312 410 to CHF 1 263 687 410) • Authorization of the Board to repurchase shares up to a maximum of CHF 10 billion until the 2022 AGM under an eighth share repurchase program | 23 250 000 | 79.08 | ||||
2020 | • Capital reduction by CHF 30.16 million (from CHF 1 263 687 410 to CHF 1 233 530 460) | 60 313 900 | 88.18 | ||||
AGM | Proposal to the shareholders | Shares to be canceled | Average repurchase share price (CHF) 1 | ||||
2021 | • Capital reduction by CHF 16.3 million (from CHF 1 233 530 460 to CHF 1 217 210 460) • Authorization of the Board to repurchase shares as deemed appropriate from time to time up to a maximum of CHF 10 billion between the 2021 AGM and the 2024 AGM | 32 640 000 | 80.57 | ||||
1 All shares were repurchased on the SIX Swiss Exchange second trading line. |
2020 | 2019 | 2018 | |||||
Issued shares | 2 467 060 920 | 2 527 374 820 | 2 550 624 820 | ||||
Treasury shares 1 | 210 238 872 | 262 366 332 | 239 453 391 | ||||
Outstanding shares at December 31 | 2 256 822 048 | 2 265 008 488 | 2 311 171 429 | ||||
Weighted average number of shares outstanding | 2 277 041 940 | 2 290 792 782 | 2 319 322 369 | ||||
1 Approximately 103 million treasury shares (2019: 118 million; 2018: 122 million) are held in Novartis entities that restrict their availability for use. |
2020 | 2019 | 2018 | |||||
Basic earnings per share from continuing operations (USD) | 3.55 | 3.12 | 5.52 | ||||
Basic earnings per share from discontinued operations (USD) | 2.00 | – 0.08 | |||||
Total basic earnings per share (USD) | 3.55 | 5.12 | 5.44 | ||||
Diluted earnings per share from continuing operations (USD) | 3.52 | 3.08 | 5.46 | ||||
Diluted earnings per share from discontinued operations (USD) | 1.98 | – 0.08 | |||||
Total diluted earnings per share (USD) | 3.52 | 5.06 | 5.38 | ||||
Net cash flow from operating activities of continuing operations (USD) | 5.99 | 5.91 | 5.63 | ||||
Year-end equity for Novartis AG shareholders (USD) | 25.07 | 24.49 | 34.01 | ||||
Dividend (CHF) 2 | 3.00 | 2.95 | 2.85 | ||||
1 Calculated on the weighted average number of shares outstanding, except year-end equity | |||||||
2 2020: proposal to shareholders for approval at the AGM on March 2, 2021 |
2020 | 2019 | 2018 | |||||
Price/earnings ratio 1 | 26.7 | 18.5 | 15.7 | ||||
Price/earnings ratio from continuing operations 1 | 26.7 | 30.4 | 15.4 | ||||
Dividend yield (%) 1 | 3.6 | 3.2 | 3.4 | ||||
1 Based on the Novartis share price at December 31 of each year |
2020 1 | 2019 1 | 2018 | |||||
Year-end ADR price (USD) | 94.43 | 94.69 | 85.81 | ||||
High 2 | 99.01 | 96.14 | 93.91 | ||||
Low 2 | 70.67 | 75.40 | 72.44 | ||||
Number of ADRs outstanding 3 | 288 755 853 | 315 073 094 | 338 641 387 | ||||
1 2020 and 2019 exclude the business of Alcon, which was spun off in April 2019 into a separately traded standalone company. | |||||||
2 Based on the daily closing prices | |||||||
3 The depositary, JPMorgan Chase Bank, N.A., holds one Novartis AG share for every ADR issued. |
2020 1 | 2019 1 | 2018 | |||||
Year-end share price | 83.65 | 91.90 | 84.04 | ||||
High 2 | 95.82 | 96.04 | 91.84 | ||||
Low 2 | 69.96 | 77.03 | 72.42 | ||||
Year-end market capitalization (USD billions) 3 | 214.3 | 214.8 | 197.0 | ||||
Year-end market capitalization (CHF billions) 3 | 188.8 | 208.2 | 194.2 | ||||
1 2020 and 2019 exclude the business of Alcon, which was spun off in April 2019 into a separately traded standalone company. | |||||||
2 Based on the daily closing prices | |||||||
3 Market capitalization is calculated based on the number of shares outstanding (excluding treasury shares). Market capitalization in USD is based on the market capitalization in CHF converted at the year-end CHF/USD exchange rate. |
Shareholder participation
Members of the Board of Directors
Audit Committee Financial Expert
Audit Committee Financial Expert
Maximum number of mandates | |||
Mandates | 10 | ||
Other listed companies 1 | 4 | ||
1 Chairmanship of the board of directors in other listed companies counts as two mandates. |
Maximum number of mandates | |||
Mandates in companies that are controlled by Novartis AG | No limit | ||
Mandates held at the request of Novartis AG or companies controlled by it | 5 | ||
Mandates in associations, charitable organizations, foundations, trusts and employee welfare foundations | 10 | ||
Executive Committee
Maximum number of mandates | |||
Mandates | 6 | ||
Other listed companies 1 | 2 | ||
1 Chairmanship of the board of directors in other listed companies is not allowed. |
Maximum number of mandates | |||
Mandates in companies that are controlled by Novartis AG | No limit | ||
Mandates held at the request of Novartis AG or companies controlled by it | 5 | ||
Mandates in associations, charitable organizations, foundations, trusts and employee welfare foundations | 10 | ||
Members of the Executive Committee
Year of birth: 1972
Year of birth: 1967
Technology Solutions (CTS) as of February 1, 2021 | Nationality: Dutch | Year of birth: 1969
Information and control systems
Auditors
2020 USD million | 2019 USD million | ||||
Audit services | 20.5 | 21.2 | |||
Audit-related services | 1.4 | 1.0 | |||
Tax services | 0.4 | 0.7 | |||
Other services | 1.2 | 1.4 | |||
Total | 23.5 | 24.3 | |||
Information policy
Topic | Information | ||
Share capital | Articles of Incorporation of Novartis AG www.novartis.com/investors/company-overview/corporate-governance Novartis key share data www.novartis.com/key-share-data | ||
Shareholder rights | Articles of Incorporation of Novartis AG www.novartis.com/investors/company-overview/corporate-governance | ||
Annual General Meeting of Shareholders | Annual General Meeting of Shareholders www.novartis.com/investors/shareholder-information/annual-general-meeting | ||
Board Regulations | Board Regulations www.novartis.com/investors/company-overview/corporate-governance | ||
Novartis code for senior financial officers | Novartis Code of Ethical Conduct for CEO and Senior Financial Officers www.novartis.com/investors/company-overview/corporate-governance | ||
Novartis in Society ESG Report | Novartis in Society ESG Report www.novartis.com/nisreport2020 | ||
Novartis financial data | Novartis financial data www.novartis.com/investors/financial-data | ||
Press releases | Press releases www.novartis.com/news/news-archive?type=press_release Free email service www.novartis.com/news/stay-up-to-date | ||
Additional information (including Novartis investors event calendar, registered office, contact and email addresses, phone numbers, etc.) | Novartis Investor Relations www.novartis.com/investors | ||
6.D Employees
For the year ended December 31, 2020 (full-time equivalents) | Marketing and sales | Production and supply | Research and development | NBS 1 | General and administration | Total | |||||||
USA | 5 978 | 2 954 | 5 554 | 636 | 820 | 15 942 | |||||||
Canada and Latin America | 3 405 | 1 286 | 504 | 928 | 401 | 6 524 | |||||||
Europe | 16 066 | 18 628 | 10 043 | 4 506 | 2 852 | 52 095 | |||||||
Asia/Africa/Australasia | 17 240 | 3 346 | 4 537 | 4 991 | 1 119 | 31 233 | |||||||
Total | 42 689 | 26 214 | 20 638 | 11 061 | 5 192 | 105 794 | |||||||
For the year ended December 31, 2019 (full-time equivalents) | Marketing and sales | Production and supply | Research and development | NBS 1 | General and administration | Total | |||||||
USA | 5 360 | 2 830 | 5 412 | 614 | 763 | 14 979 | |||||||
Canada and Latin America | 3 396 | 838 | 480 | 864 | 397 | 5 975 | |||||||
Europe | 16 395 | 19 386 | 9 988 | 4 352 | 2 666 | 52 787 | |||||||
Asia/Africa/Australasia | 17 455 | 3 163 | 4 296 | 4 233 | 1 026 | 30 173 | |||||||
Total | 42 606 | 26 217 | 20 176 | 10 063 | 4 852 | 103 914 | |||||||
For the year ended December 31, 2018 (full-time equivalents) | Marketing and sales | Production and supply | Research and development | NBS 1 | General and administration | Total | |||||||
USA | 6 825 | 7 524 | 6 700 | 1 467 | 911 | 23 427 | |||||||
Canada and Latin America | 4 584 | 960 | 508 | 899 | 490 | 7 441 | |||||||
Europe | 19 608 | 21 397 | 10 049 | 4 845 | 2 780 | 58 679 | |||||||
Asia/Africa/Australasia | 20 099 | 6 636 | 3 977 | 3 613 | 1 289 | 35 614 | |||||||
Total | 51 116 | 36 517 | 21 234 | 10 824 | 5 470 | 125 161 | |||||||
Thereof continuing operations2 | 43 954 | 25 862 | 19 803 | 10 824 | 4 337 | 104 780 | |||||||
Thereof discontinued operations2 | 7 162 | 10 655 | 1 431 | – | 1 133 | 20 381 | |||||||
1 NBS relates to full-time equivalent employees from our Novartis Business Services organizational unit. | |||||||||||||
2 Continuing operations include the businesses of the Innovative Medicines and Sandoz Divisions and the continuing Corporate activities, and discontinued operations include the Alcon eye care devices business and certain corporate activities attributable to Alcon prior to the spin-off. See “Item 18. Financial Statements—Note 2. Significant transactions—Significant transactions in 2019.” |
6.E Share ownership
Item 7. Major Shareholders and Related Party Transactions
7.A Major shareholders
% of respective share capital beneficially owned as of: | |||||||||
Ordinary shares beneficially owned as of Dec 31, 2020 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||||||
Shareholders registered for their own account: | |||||||||
Emasan AG, Basel, Switzerland | 89 135 960 | 3.6 | 3.5 | 3.5 | |||||
Novartis Foundation for Employee Participation, Basel, Switzerland 1 | - | <2.0 | 2.1 | 2.3 | |||||
UBS Fund Management (Switzerland) AG, Basel, Switzerland | 56 764 402 | 2.3 | 2.1 | 2.2 | |||||
Credit Suisse Funds AG, Zurich, Switzerland | 50 187 090 | 2.0 | <2.0 | <2.0 | |||||
1 The Novartis Foundation for Employee Participation (the "Employee Foundation") is a special purpose entity that was founded by, but is independent from, Novartis. |
% of respective share capital held as of: | |||||||||
Ordinary shares held as of Dec 31, 2020 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||||||
Shareholders registered as nominees: | |||||||||
Chase Nominees Ltd., London, England | 237 417 808 | 9.6 | 10.4 | 9.8 | |||||
The Bank of New York Mellon, New York, NY | 83 805 997 | 3.4 | 3.8 | 4.1 | |||||
Through The Bank of New York Mellon, Everett, MA | 41 574 113 | 1.7 | 2.0 | 2.1 | |||||
Through The Bank of New York Mellon, New York, NY | 28 683 674 | 1.2 | 1.2 | 1.3 | |||||
Through The Bank of New York Mellon, SA/NV, Brussels, Belgium | 13 548 210 | 0.5 | 0.6 | 0.7 | |||||
Nortrust Nominees Ltd., London, England | 104 327 562 | 4.2 | 3.9 | 3.6 | |||||
Shareholder acting as American Depositary Share (ADS) depositary: | |||||||||
JPMorgan Chase Bank, N.A., New York, NY | 288 785 853 | 11.7 | 12.5 | 13.3 | |||||
7.B Related party transactions
7.C Interests of experts and counsel
Item 8. Financial Information
8.A Consolidated statements and other financial information
8.B Significant changes
Item 9. The Offer and Listing
9.A Offer and listing details
9.B Plan of distribution
9.C Markets
9.D Selling shareholders
9.E Dilution
9.F Expenses of the issue
Item 10. Additional Information
10.A Share capital
10.B Memorandum and articles of association
10.C Material contracts
10.D Exchange controls
10.E Taxation
10.F Dividends and paying agents
10.G Statement by experts
10.H Documents on display
10.I Subsidiary information
Item 11. Quantitative and Qualitative Disclosures About Market Risk
Item 12. Description of Securities Other Than Equity Securities
12.A Debt securities
12.B Warrants and rights
12.C Other securities
12.D American Depositary Shares
Category | Depositary actions | Associated fee | |||
Depositing or substituting underlying shares | Acceptance of shares surrendered, and issuance of ADRs in exchange, including surrenders and issuances in respect of: — Share distributions — Stock split — Rights — Merger — Exchange of shares or any other transaction or event or other distribution affecting the ADSs or the deposited shares | USD 5.00 for each 100 ADSs (or portion thereof) evidenced by the new ADRs delivered | |||
Withdrawing underlying shares | Acceptance of ADRs surrendered for withdrawal of deposited shares | USD 5.00 for each 100 ADSs (or portion thereof) evidenced by the ADRs surrendered | |||
Selling or exercising rights | Distribution or sale of shares, the fee being in an amount equal to the fee for the execution and delivery of ADRs that would have been charged as a result of the deposit of such shares | USD 5.00 for each 100 ADSs (or portion thereof) | |||
Transferring, splitting or grouping receipts | Transfers, combining or grouping of depositary receipts | USD 1.50 per ADR | |||
Expenses of the depositary | Expenses incurred on behalf of holders in connection with: — Compliance with foreign exchange control regulations or any law or regulation relating to foreign investment — The depositary’s or its custodian’s compliance with applicable law, rule or regulation — Stock transfer or other taxes and other governmental charges — Cable, telex and facsimile transmission and delivery — Expenses of the depositary in connection with the conversion of foreign currency into US dollars (which are paid out of such foreign currency) — Any other charge payable by any of the depositary or its agents | Expenses payable at the sole discretion of the depositary by billing holders or by deducting charges from one or more cash dividends or other cash distributions | |||
Advance tax relief | Tax relief/reclamation process for qualified holders | A depositary service charge of USD 0.008 per ADS | |||
PART II
Item 13. Defaults, Dividend Arrearages and Delinquencies
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
Item 15. Controls and Procedures
Item 16A. Audit Committee Financial Expert
Item 16B. Code of Ethics
Item 16C. Principal Accountant Fees and Services
Item 16D. Exemptions from the Listing Standards for Audit Committees
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
2020 | Total number of shares purchased (a) 1 | Average price paid per share in USD (b) | Total number of shares purchased as part of publicly announced plans or programs (c) 2 | Maximum approximate value of shares that may yet be purchased under the plans or programs (CHF millions) (d) | Maximum approximate value of shares that may yet be purchased under the plans or programs (USD millions) (e) 3 | ||||||
Jan. 1-31 | 1 127 034 | 95.09 | 0 | 4 752 | 4 897 | ||||||
Feb. 1-28 | 315 761 | 95.18 | 0 | 4 752 | 4 913 | ||||||
Mar. 1-31 | 28 093 | 89.61 | 0 | 4 752 | 4 937 | ||||||
Apr. 1-30 | 67 831 | 83.63 | 0 | 4 752 | 4 881 | ||||||
May 1-31 | 7 990 | 85.29 | 0 | 4 752 | 4 932 | ||||||
Jun. 1-30 | 22 601 | 86.85 | 0 | 4 752 | 4 989 | ||||||
Jul. 1-31 | 13 275 | 87.91 | 0 | 4 752 | 5 245 | ||||||
Aug. 1-31 | 1 806 646 | 87.15 | 1 800 000 | 4 610 | 5 102 | ||||||
Sep. 1-30 | 12 951 800 | 88.85 | 12 917 162 | 3 559 | 3 862 | ||||||
Oct. 1-31 | 9 896 929 | 87.06 | 9 882 838 | 2 774 | 3 032 | ||||||
Nov. 1-30 | 1 350 036 | 89.71 | 1 340 000 | 2 665 | 2 953 | ||||||
Dec. 1-31 | 6 715 051 | 91.22 | 6 700 000 | 2 122 | 2 409 | ||||||
Total | 34 303 047 | 88.99 | 32 640 000 | ||||||||
1 Column (a) shows shares repurchased on the SIX Swiss Exchange second trading line plus shares we purchased from employees who had obtained the shares through a Novartis Employee Ownership Plan. See "Item 18. Financial Statements - Note 26 Equity-based participation plans for associates." | |||||||||||
2 Column (c) shows shares repurchased on the SIX Swiss Exchange second trading line under the eighth CHF 10 billion share buyback authority approved at the 2019 AGM. See "Item 6. Directors, Senior Management and Employees - Item 6C. Board Practices - Our capital structure - Changes in capital." | |||||||||||
3 Column (e) shows the Swiss franc amount from column (d) converted into US dollars as of the month-end, using the Swiss franc/US dollar exchange rate at the applicable month-end |
Item 16F. Change in Registrant’s Certifying Accountant
Item 16G. Corporate Governance
Item 16H. Mine Safety Disclosure
PART III
Item 17. Financial Statements
Item 18. Financial Statements
Item 19. Exhibits
SIGNATURES
Novartis Group consolidated financial statements
(USD millions unless indicated otherwise) | Note | 2020 | 2019 | 2018 | |||||
Net sales to third parties from continuing operations | 3 | 48 659 | 47 445 | 44 751 | |||||
Sales to discontinued segment | 53 | 82 | |||||||
Net sales from continuing operations | 48 659 | 47 498 | 44 833 | ||||||
Other revenues | 3 | 1 239 | 1 179 | 1 266 | |||||
Cost of goods sold | – 15 121 | – 14 425 | – 14 510 | ||||||
Gross profit from continuing operations | 34 777 | 34 252 | 31 589 | ||||||
Selling, general and administration | – 14 197 | – 14 369 | – 13 717 | ||||||
Research and development | – 8 980 | – 9 402 | – 8 489 | ||||||
Other income | 1 742 | 2 031 | 1 629 | ||||||
Other expense | – 3 190 | – 3 426 | – 2 609 | ||||||
Operating income from continuing operations | 10 152 | 9 086 | 8 403 | ||||||
Income from associated companies | 4 | 673 | 659 | 6 438 | |||||
Interest expense | 5 | – 869 | – 850 | – 932 | |||||
Other financial income and expense | 5 | – 78 | 45 | 186 | |||||
Income before taxes from continuing operations | 9 878 | 8 940 | 14 095 | ||||||
Taxes | 6 | – 1 807 | – 1 793 | – 1 295 | |||||
Net income from continuing operations | 8 071 | 7 147 | 12 800 | ||||||
Net loss from discontinued operations before gain on distribution of Alcon Inc. to Novartis AG shareholders | 30 | – 101 | – 186 | ||||||
Gain on distribution of Alcon Inc. to Novartis AG shareholders | 2 | 4 691 | |||||||
Net income/(loss) from discontinued operations | 30 | 4 590 | – 186 | ||||||
Net income | 8 071 | 11 737 | 12 614 | ||||||
Attributable to: | |||||||||
Shareholders of Novartis AG | 8 072 | 11 732 | 12 611 | ||||||
Non-controlling interests | – 1 | 5 | 3 | ||||||
Basic earnings per share (USD) from continuing operations | 3.55 | 3.12 | 5.52 | ||||||
Basic earnings per share (USD) from discontinued operations | 2.00 | – 0.08 | |||||||
Total basic earnings per share (USD) | 7 | 3.55 | 5.12 | 5.44 | |||||
Diluted earnings per share (USD) from continuing operations | 3.52 | 3.08 | 5.46 | ||||||
Diluted earnings per share (USD) from discontinued operations | 1.98 | – 0.08 | |||||||
Total diluted earnings per share (USD) | 7 | 3.52 | 5.06 | 5.38 | |||||
The accompanying Notes form an integral part of the consolidated financial statements. |
(USD millions) | Note | 2020 | 2019 | 2018 | |||||
Net income | 8 071 | 11 737 | 12 614 | ||||||
Other comprehensive income to be eventually recycled into the consolidated income statement: | |||||||||
Fair value adjustments on debt securities, net of taxes | 8 | 1 | |||||||
Fair value adjustments on deferred cash flow hedges, net of taxes | 8 | 1 | 12 | ||||||
Total fair value adjustments on financial instruments, net of taxes | 2 | 12 | |||||||
Novartis share of other comprehensive income recognized by associated companies, net of taxes | 4 | – 56 | – 94 | – 482 | |||||
Net investment hedge | 8 | – 201 | 44 | 95 | |||||
Currency translation effects | 8 | 3 194 | 352 | 315 | |||||
Total of items to eventually recycle | 2 937 | 304 | – 60 | ||||||
Other comprehensive income never to be recycled into the consolidated income statement: | |||||||||
Actuarial gains/(losses) from defined benefit plans, net of taxes | 8 | 143 | – 467 | – 359 | |||||
Fair value adjustments on equity securities, net of taxes | 8 | 250 | – 47 | 13 | |||||
Total of items never to be recycled | 393 | – 514 | – 346 | ||||||
Total comprehensive income | 11 401 | 11 527 | 12 208 | ||||||
Attributable to: | |||||||||
Shareholders of Novartis AG | 11 403 | 11 525 | 12 210 | ||||||
Continuing operations | 11 403 | 6 948 | 12 417 | ||||||
Discontinued operations | 4 577 | – 207 | |||||||
Non-controlling interests | – 2 | 2 | – 2 | ||||||
The accompanying Notes form an integral part of the consolidated financial statements. |
(USD millions) | Note | 2020 | 2019 | ||||
Assets | |||||||
Non-current assets | |||||||
Property, plant and equipment | 9 | 12 263 | 12 069 | ||||
Right-of-use assets | 10 | 1 676 | 1 677 | ||||
Goodwill | 11 | 29 999 | 26 524 | ||||
Intangible assets other than goodwill | 11 | 36 809 | 28 787 | ||||
Investments in associated companies | 4 | 9 632 | 8 644 | ||||
Deferred tax assets | 12 | 8 214 | 7 909 | ||||
Financial assets | 13 | 2 901 | 2 518 | ||||
Other non-current assets | 13 | 892 | 738 | ||||
Total non-current assets | 102 386 | 88 866 | |||||
Current assets | |||||||
Inventories | 14 | 7 131 | 5 982 | ||||
Trade receivables | 15 | 8 217 | 8 301 | ||||
Income tax receivables | 239 | 254 | |||||
Marketable securities, commodities, time deposits and derivative financial instruments | 16 | 1 905 | 334 | ||||
Cash and cash equivalents | 16 | 9 658 | 11 112 | ||||
Other current assets | 17 | 2 523 | 2 680 | ||||
Total current assets without disposal group | 29 673 | 28 663 | |||||
Assets of disposal group held for sale | 2 | 841 | |||||
Total current assets | 29 673 | 29 504 | |||||
Total assets | 132 059 | 118 370 | |||||
Equity and liabilities | |||||||
Equity | |||||||
Share capital | 18 | 913 | 936 | ||||
Treasury shares | 18 | – 53 | – 80 | ||||
Reserves | 55 738 | 54 618 | |||||
Equity attributable to Novartis AG shareholders | 56 598 | 55 474 | |||||
Non-controlling interests | 68 | 77 | |||||
Total equity | 56 666 | 55 551 | |||||
Liabilities | |||||||
Non-current liabilities | |||||||
Financial debts | 19 | 26 259 | 20 353 | ||||
Lease liabilities | 10 | 1 719 | 1 703 | ||||
Deferred tax liabilities | 12 | 7 422 | 5 867 | ||||
Provisions and other non-current liabilities | 20 | 6 934 | 6 632 | ||||
Total non-current liabilities | 42 334 | 34 555 | |||||
Current liabilities | |||||||
Trade payables | 5 403 | 5 424 | |||||
Financial debts and derivative financial instruments | 21 | 9 785 | 7 031 | ||||
Lease liabilities | 10 | 286 | 246 | ||||
Current income tax liabilities | 2 458 | 2 194 | |||||
Provisions and other current liabilities | 22 | 15 127 | 13 338 | ||||
Total current liabilities without disposal group | 33 059 | 28 233 | |||||
Liabilities of disposal group held for sale | 2 | 31 | |||||
Total current liabilities | 33 059 | 28 264 | |||||
Total liabilities | 75 393 | 62 819 | |||||
Total equity and liabilities | 132 059 | 118 370 | |||||
The accompanying Notes form an integral part of the consolidated financial statements. |
Reserves | |||||||||||||||||
(USD millions) | Note | Share capital | Treasury shares | Retained earnings | Total value adjustments | Equity attributable to Novartis shareholders | Non- controlling interests | Total equity | |||||||||
Total equity at December 31, 2017, as previously reported | 969 | – 100 | 77 639 | – 4 340 | 74 168 | 59 | 74 227 | ||||||||||
Impact of change in accounting policies | 237 | – 177 | 60 | 60 | |||||||||||||
Restated equity at January 1, 2018 | 969 | – 100 | 77 876 | – 4 517 | 74 228 | 59 | 74 287 | ||||||||||
Net income | 12 611 | 12 611 | 3 | 12 614 | |||||||||||||
Other comprehensive income | 8 | – 482 | 81 | – 401 | – 5 | – 406 | |||||||||||
Total comprehensive income | 12 129 | 81 | 12 210 | – 2 | 12 208 | ||||||||||||
Dividends | 18.1 | – 6 966 | – 6 966 | – 6 966 | |||||||||||||
Purchase of treasury shares | 18.2 | – 13 | – 1 960 | – 1 973 | – 1 973 | ||||||||||||
Reduction of share capital | 18 | – 25 | 34 | – 9 | |||||||||||||
Exercise of options and employee transactions | 18.2 | 4 | 430 | 434 | 434 | ||||||||||||
Other share sales | 18.2 | 2 | 261 | 263 | 263 | ||||||||||||
Equity-based compensation | 18.2 | 4 | 752 | 756 | 756 | ||||||||||||
Increase of treasury share repurchase obligation under a share buyback trading plan | 18.3 | – 284 | – 284 | – 284 | |||||||||||||
Transaction costs, net of taxes | 18.8 | – 79 | – 79 | – 79 | |||||||||||||
Fair value adjustments on financial assets sold | 8 | 16 | – 16 | ||||||||||||||
Impact of change in ownership of consolidated entities | 18.5 | – 13 | – 13 | 22 | 9 | ||||||||||||
Changes in non-controlling interests | 18.6 | – 1 | – 1 | ||||||||||||||
Other movements | 18.7 | 38 | 38 | 38 | |||||||||||||
Total of other equity movements | – 25 | 31 | – 7 814 | – 16 | – 7 824 | 21 | – 7 803 | ||||||||||
Total equity at December 31, 2018, as previously reported | 944 | – 69 | 82 191 | – 4 452 | 78 614 | 78 | 78 692 | ||||||||||
Impact of change in accounting policies | 3 | 3 | 3 | ||||||||||||||
Restated equity at January 1, 2019 | 944 | – 69 | 82 194 | – 4 452 | 78 617 | 78 | 78 695 | ||||||||||
Net income | 11 732 | 11 732 | 5 | 11 737 | |||||||||||||
Other comprehensive income | 8 | – 94 | – 113 | – 207 | – 3 | – 210 | |||||||||||
Total comprehensive income | 11 638 | – 113 | 11 525 | 2 | 11 527 | ||||||||||||
Dividends | 18.1 | – 6 645 | – 6 645 | – 6 645 | |||||||||||||
Dividend in kind to effect the spin-off of Alcon Inc. | 2 | – 23 434 | – 23 434 | – 23 434 | |||||||||||||
Purchase of treasury shares | 18.2 | – 31 | – 5 480 | – 5 511 | – 5 511 | ||||||||||||
Reduction of share capital | 18 | – 8 | 12 | – 4 | |||||||||||||
Exercise of options and employee transactions | 18.2 | 3 | 207 | 210 | 210 | ||||||||||||
Equity-based compensation | 18.2 | 5 | 828 | 833 | 833 | ||||||||||||
Shares delivered to Alcon employees as a result of the Alcon spin-off | 18.2 | 18 | 18 | 18 | |||||||||||||
Taxes on treasury share transactions | – 189 | – 189 | – 189 | ||||||||||||||
Decrease of treasury share repurchase obligation under a share buyback trading plan | 18.3 | 284 | 284 | 284 | |||||||||||||
Transaction costs, net of taxes | 18.8 | – 253 | – 253 | – 253 | |||||||||||||
Fair value adjustments on financial assets sold | 8 | 95 | – 95 | ||||||||||||||
Impact of change in ownership of consolidated entities | 18.5 | – 3 | – 3 | – 2 | – 5 | ||||||||||||
Changes in non-controlling interests | 18.6 | – 1 | – 1 | ||||||||||||||
Fair value adjustments related to divestments | 8 | – 3 | 3 | ||||||||||||||
Other movements | 18.7 | 22 | 22 | 22 | |||||||||||||
Total of other equity movements | – 8 | – 11 | – 34 557 | – 92 | – 34 668 | – 3 | – 34 671 | ||||||||||
Total equity at December 31, 2019 | 936 | – 80 | 59 275 | – 4 657 | 55 474 | 77 | 55 551 | ||||||||||
Net income | 8 072 | 8 072 | – 1 | 8 071 | |||||||||||||
Other comprehensive income | 8 | – 56 | 3 387 | 3 331 | – 1 | 3 330 | |||||||||||
Total comprehensive income | 8 016 | 3 387 | 11 403 | – 2 | 11 401 | ||||||||||||
Dividends | 18.1 | – 6 987 | – 6 987 | – 6 987 | |||||||||||||
Purchase of treasury shares | 18.2 | – 18 | – 3 038 | – 3 056 | – 3 056 | ||||||||||||
Reduction of share capital | 18 | – 23 | 31 | – 8 | |||||||||||||
Exercise of options and employee transactions | 18.2 | 8 | 798 | 806 | 806 | ||||||||||||
Repurchase of options | 18.4 | – 89 | – 89 | – 89 | |||||||||||||
Equity-based compensation | 18.2 | 6 | 724 | 730 | 730 | ||||||||||||
Shares delivered to Alcon employees as a result of the Alcon spin-off | 18.2 | 0 | 30 | 30 | 30 | ||||||||||||
Taxes on treasury share transactions | 32 | 32 | 32 | ||||||||||||||
Increase of treasury share repurchase obligation under a share buyback trading plan | 18.3 | – 1 769 | – 1 769 | – 1 769 | |||||||||||||
Fair value adjustments on financial assets sold | 8 | 150 | – 150 | ||||||||||||||
Fair value adjustments related to divestments | 8 | – 2 | 2 | ||||||||||||||
Impact of change in ownership of consolidated entities | 18.5 | 7 | – 1 | 6 | – 7 | – 1 | |||||||||||
Other movements | 18.7 | 18 | 18 | 18 | |||||||||||||
Total of other equity movements | – 23 | 27 | – 10 134 | – 149 | – 10 279 | – 7 | – 10 286 | ||||||||||
Total equity at December 31, 2020 | 913 | – 53 | 57 157 | – 1 419 | 56 598 | 68 | 56 666 | ||||||||||
The accompanying Notes form an integral part of the consolidated financial statements. |
(USD millions) | Note | 2020 | 2019 | 2018 | |||||
Net income from continuing operations | 8 071 | 7 147 | 12 800 | ||||||
Adjustments to reconcile net income from continuing operations to net cash flows from operating activities from continuing operations | |||||||||
Reversal of non-cash items and other adjustments | 23.1 | 9 881 | 9 122 | 1 486 | |||||
Dividends received from associated companies and others | 490 | 463 | 719 | ||||||
Interest received | 47 | 214 | 241 | ||||||
Interest paid | – 703 | – 793 | – 816 | ||||||
Other financial receipts | 464 | 28 | 218 | ||||||
Other financial payments | – 39 | – 33 | – 31 | ||||||
Taxes paid | 23.2 | – 1 833 | – 1 876 | – 1 506 | |||||
Net cash flows from operating activities from continuing operations before working capital and provision changes | 16 378 | 14 272 | 13 111 | ||||||
Payments out of provisions and other net cash movements in non-current liabilities | – 2 437 | – 924 | – 638 | ||||||
Change in net current assets and other operating cash flow items | 23.3 | – 291 | 199 | 576 | |||||
Net cash flows from operating activities from continuing operations | 13 650 | 13 547 | 13 049 | ||||||
Net cash flows from operating activities from discontinued operations | 78 | 1 223 | |||||||
Total net cash flows from operating activities | 13 650 | 13 625 | 14 272 | ||||||
Purchases of property, plant and equipment | – 1 275 | – 1 379 | – 1 254 | ||||||
Proceeds from sale of property, plant and equipment | 88 | 857 | 102 | ||||||
Purchases of intangible assets | – 1 310 | – 878 | – 1 394 | ||||||
Proceeds from sale of intangible assets | 380 | 973 | 823 | ||||||
Purchases of financial assets | – 230 | – 302 | – 205 | ||||||
Proceeds from sale of financial assets | 723 | 1 152 | 165 | ||||||
Purchases of other non-current assets | – 61 | – 60 | – 39 | ||||||
Proceeds from sale of other non-current assets | 2 | 3 | 9 | ||||||
Acquisitions and divestments of interests in associated companies, net | 23.4 | –���7 | – 6 | 12 854 | |||||
Acquisitions and divestments of businesses, net | 23.5 | – 9 957 | – 3 760 | – 13 683 | |||||
Purchases of marketable securities and commodities | – 1 900 | – 228 | – 2 440 | ||||||
Proceeds from sale of marketable securities and commodities | 492 | 2 561 | 472 | ||||||
Net cash flows used in investing activities from continuing operations | – 13 055 | – 1 067 | – 4 590 | ||||||
Net cash flows used in investing activities from discontinued operations | 30 | – 127 | – 1 159 | – 1 001 | |||||
Total net cash flows used in investing activities | – 13 182 | – 2 226 | – 5 591 | ||||||
Dividends paid to shareholders of Novartis AG | – 6 987 | – 6 645 | – 6 966 | ||||||
Acquisitions of treasury shares | – 2 842 | – 5 533 | – 2 036 | ||||||
Proceeds from exercised options and other treasury share transactions, net | 748 | 201 | 700 | ||||||
Increase in non-current financial debts | 23.6 | 7 126 | 93 | 2 856 | |||||
Repayments of non-current financial debts | 23.6 | – 2 003 | – 3 195 | – 366 | |||||
Change in current financial debts | 23.6 | 2 261 | – 1 582 | 1 687 | |||||
Payments of lease liabilities, net | 23.6 | – 312 | – 273 | ||||||
Impact of change in ownership of consolidated entities | – 2 | – 6 | – 19 | ||||||
Other financing cash flows, net | – 147 | 56 | 67 | ||||||
Net cash flows used in financing activities from continuing operations | – 2 158 | – 16 884 | – 4 077 | ||||||
Net cash flows used in/from financing activities from discontinued operations | 30 | – 50 | 3 257 | – 167 | |||||
Total net cash flows used in financing activities | – 2 208 | – 13 627 | – 4 244 | ||||||
Net change in cash and cash equivalents before effect of exchange rate changes | – 1 740 | – 2 228 | 4 437 | ||||||
Effect of exchange rate changes on cash and cash equivalents | 286 | 69 | – 26 | ||||||
Total net change in cash and cash equivalents | – 1 454 | – 2 159 | 4 411 | ||||||
Cash and cash equivalents at January 1 | 11 112 | 13 271 | 8 860 | ||||||
Cash and cash equivalents at December 31 | 9 658 | 11 112 | 13 271 | ||||||
The accompanying Notes form an integral part of the consolidated financial statements. |
Notes to the Novartis Group consolidated financial statements
Useful life | |||
Buildings | 20 to 40 years | ||
Machinery and other equipment | |||
Machinery and equipment | 7 to 20 years | ||
Furniture and vehicles | 5 to 10 years | ||
Computer hardware | 3 to 7 years | ||
Useful life | Income statement location for amortization and impairment charges | ||||
Currently marketed products | 5 to 20 years | "Cost of goods sold" | |||
Technologies | 10 to 20 years | "Cost of goods sold" or "Research and development" | |||
Other (including computer software) | 3 to 7 years | In the respective functional expense | |||
(USD millions) | December 31, 2019 | ||
Assets of disposal group classified as held for sale | |||
Property, plant and equipment | 169 | ||
Intangible assets other than goodwill | 475 | ||
Deferred tax assets | 11 | ||
Other non-current assets | 2 | ||
Inventories | 181 | ||
Other current assets | 3 | ||
Total | 841 | ||
(USD millions) | December 31, 2019 | ||
Liabilities of disposal group classified as held for sale | |||
Deferred tax liabilities | 2 | ||
Provisions and other non-current liabilities | 4 | ||
Provisions and other current liabilities | 25 | ||
Total | 31 | ||
(USD millions) | April 8, 2019 | ||
Net assets derecognized 1 | – 20 025 | ||
Derecognition of distribution liability | 23 434 | ||
Difference between net assets and distribution liability | 3 409 | ||
Recognition of Alcon Inc. shares obtained through consolidated foundations | 1 273 | ||
Currency translation gains recycled into the consolidated income statement | 123 | ||
Transaction costs recognized in the consolidated income statement | – 114 | ||
Gain on distribution of Alcon Inc. to Novartis AG shareholders | 4 691 | ||
1 See Note 30 for additional information. |
Innovative Medicines | Sandoz | Corporate (including eliminations) | Group | ||||||||||||||
(USD millions) | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||||
Net sales to third parties from continuing operations | 39 013 | 37 714 | 9 646 | 9 731 | 48 659 | 47 445 | |||||||||||
Sales to continuing and discontinued segments | 792 | 783 | 189 | 141 | – 981 | – 871 | 53 | ||||||||||
Net sales from continuing operations | 39 805 | 38 497 | 9 835 | 9 872 | – 981 | – 871 | 48 659 | 47 498 | |||||||||
Other revenues | 1 018 | 1 092 | 53 | 63 | 168 | 24 | 1 239 | 1 179 | |||||||||
Cost of goods sold | – 10 927 | – 10 050 | – 5 252 | – 5 334 | 1 058 | 959 | – 15 121 | – 14 425 | |||||||||
Gross profit from continuing operations | 29 896 | 29 539 | 4 636 | 4 601 | 245 | 112 | 34 777 | 34 252 | |||||||||
Selling, general and administration | – 11 657 | – 11 617 | – 2 076 | – 2 218 | – 464 | – 534 | – 14 197 | – 14 369 | |||||||||
Research and development | – 8 118 | – 8 152 | – 862 | – 1 250 | – 8 980 | – 9 402 | |||||||||||
Other income | 922 | 1 586 | 176 | 167 | 644 | 278 | 1 742 | 2 031 | |||||||||
Other expense | – 1 871 | – 2 069 | – 831 | – 749 | – 488 | – 608 | – 3 190 | – 3 426 | |||||||||
Operating income from continuing operations | 9 172 | 9 287 | 1 043 | 551 | – 63 | – 752 | 10 152 | 9 086 | |||||||||
Income from associated companies | 1 | 1 | 2 | 2 | 670 | 656 | 673 | 659 | |||||||||
Interest expense | – 869 | – 850 | |||||||||||||||
Other financial income and expense | – 78 | 45 | |||||||||||||||
Income before taxes from continuing operations | 9 878 | 8 940 | |||||||||||||||
Taxes | – 1 807 | – 1 793 | |||||||||||||||
Net income from continuing operations | 8 071 | 7 147 | |||||||||||||||
Net loss from discontinued operations before gain on distribution of Alcon Inc. to Novartis AG shareholders | – 101 | ||||||||||||||||
Gain on distribution of Alcon Inc. to Novartis AG shareholders | 4 691 | ||||||||||||||||
Net income from discontinued operations | 4 590 | ||||||||||||||||
Net income | 8 071 | 11 737 | |||||||||||||||
Attributable to: | |||||||||||||||||
Shareholders of Novartis AG | 8 072 | 11 732 | |||||||||||||||
Non-controlling interests | – 1 | 5 | |||||||||||||||
Included in net income from continuing operations are: | |||||||||||||||||
Interest income | 91 | 245 | |||||||||||||||
Depreciation of property, plant and equipment | – 912 | – 952 | – 282 | – 283 | – 124 | – 110 | – 1 318 | – 1 345 | |||||||||
Depreciation of right-of-use assets | – 273 | – 247 | – 41 | – 41 | – 16 | – 17 | – 330 | – 305 | |||||||||
Amortization of intangible assets | – 3 080 | – 2 509 | – 370 | – 315 | – 12 | – 12 | – 3 462 | – 2 836 | |||||||||
Impairment charges on property, plant and equipment, net | – 324 | – 100 | – 116 | – 101 | – 1 | – 440 | – 202 | ||||||||||
Impairment charges on intangible assets, net | – 768 | – 632 | – 141 | – 506 | – 5 | – 914 | – 1 138 | ||||||||||
Impairment charges and fair value changes on financial assets, net | 153 | 18 | 182 | 20 | 335 | 38 | |||||||||||
Additions to restructuring provisions | – 217 | – 229 | – 98 | – 165 | – 39 | – 98 | – 354 | – 492 | |||||||||
Equity-based compensation of Novartis equity plans | – 714 | – 761 | – 64 | – 67 | – 180 | – 239 | – 958 | – 1 067 | |||||||||
Innovative Medicines | Sandoz | Corporate (including eliminations) | Group | ||||||||||||||
(USD millions) | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||
Net sales to third parties from continuing operations | 37 714 | 34 892 | 9 731 | 9 859 | 47 445 | 44 751 | |||||||||||
Sales to continuing and discontinued segments | 783 | 741 | 141 | 177 | – 871 | – 836 | 53 | 82 | |||||||||
Net sales from continuing operations | 38 497 | 35 633 | 9 872 | 10 036 | – 871 | – 836 | 47 498 | 44 833 | |||||||||
Other revenues | 1 092 | 1 188 | 63 | 62 | 24 | 16 | 1 179 | 1 266 | |||||||||
Cost of goods sold | – 10 050 | – 9 870 | – 5 334 | – 5 530 | 959 | 890 | – 14 425 | – 14 510 | |||||||||
Gross profit from continuing operations | 29 539 | 26 951 | 4 601 | 4 568 | 112 | 70 | 34 252 | 31 589 | |||||||||
Selling, general and administration | – 11 617 | – 10 907 | – 2 218 | – 2 305 | – 534 | – 505 | – 14 369 | – 13 717 | |||||||||
Research and development | – 8 152 | – 7 675 | – 1 250 | – 814 | – 9 402 | – 8 489 | |||||||||||
Other income | 1 586 | 977 | 167 | 505 | 278 | 147 | 2 031 | 1 629 | |||||||||
Other expense | – 2 069 | – 1 475 | – 749 | – 622 | – 608 | – 512 | – 3 426 | – 2 609 | |||||||||
Operating income from continuing operations | 9 287 | 7 871 | 551 | 1 332 | – 752 | – 800 | 9 086 | 8 403 | |||||||||
Income from associated companies | 1 | 1 | 2 | 5 | 656 | 6 432 | 659 | 6 438 | |||||||||
Interest expense | – 850 | – 932 | |||||||||||||||
Other financial income and expense | 45 | 186 | |||||||||||||||
Income before taxes from continuing operations | 8 940 | 14 095 | |||||||||||||||
Taxes | – 1 793 | – 1 295 | |||||||||||||||
Net income from continuing operations | 7 147 | 12 800 | |||||||||||||||
Net loss from discontinued operations before gain on distribution of Alcon Inc. to Novartis AG shareholders | – 101 | – 186 | |||||||||||||||
Gain on distribution of Alcon Inc. to Novartis AG shareholders | 4 691 | ||||||||||||||||
Net income/(loss) from discontinued operations | 4 590 | – 186 | |||||||||||||||
Net income | 11 737 | 12 614 | |||||||||||||||
Attributable to: | |||||||||||||||||
Shareholders of Novartis AG | 11 732 | 12 611 | |||||||||||||||
Non-controlling interests | 5 | 3 | |||||||||||||||
Included in net income from continuing operations are: | |||||||||||||||||
Interest income | 245 | 292 | |||||||||||||||
Depreciation of property, plant and equipment | – 952 | – 1 075 | – 283 | – 285 | – 110 | – 122 | – 1 345 | – 1 482 | |||||||||
Depreciation of right-of-use assets 1 | – 247 | – 41 | – 17 | – 305 | |||||||||||||
Amortization of intangible assets | – 2 509 | – 2 214 | – 315 | – 366 | – 12 | – 7 | – 2 836 | – 2 587 | |||||||||
Impairment charges on property, plant and equipment, net | – 100 | – 239 | – 101 | – 60 | – 1 | – 2 | – 202 | – 301 | |||||||||
Impairment charges on intangible assets, net | – 632 | – 592 | – 506 | – 249 | – 1 138 | – 841 | |||||||||||
Impairment charges and fair value changes on financial assets, net | 18 | 107 | 20 | – 113 | 38 | – 6 | |||||||||||
Additions to restructuring provisions | – 229 | – 395 | – 165 | – 32 | – 98 | – 94 | – 492 | – 521 | |||||||||
Equity-based compensation of Novartis equity plans | – 761 | – 645 | – 67 | – 53 | – 239 | – 220 | – 1 067 | – 918 | |||||||||
1 Depreciation of right-of-use assets recognized from January 1, 2019, the date of implementation of IFRS 16 Leases. Note 1 provides additional disclosures. | |||||||||||||||||
Innovative Medicines | Sandoz | Corporate (including eliminations) | Group | ||||||||||||||
(USD millions) | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||||
Total assets | 83 112 | 71 225 | 16 825 | 16 468 | 32 122 | 30 677 | 132 059 | 118 370 | |||||||||
Total liabilities | – 15 472 | – 15 332 | – 3 786 | – 3 804 | – 56 135 | – 43 683 | – 75 393 | – 62 819 | |||||||||
Total equity | 56 666 | 55 551 | |||||||||||||||
Net debt 1 | 24 481 | 15 938 | 24 481 | 15 938 | |||||||||||||
Net operating assets | 67 640 | 55 893 | 13 039 | 12 664 | 468 | 2 932 | 81 147 | 71 489 | |||||||||
Included in assets and liabilities are: | |||||||||||||||||
Total property, plant and equipment | 9 863 | 9 632 | 1 849 | 1 888 | 551 | 549 | 12 263 | 12 069 | |||||||||
Additions to property, plant and equipment 2 | 926 | 1 114 | 229 | 217 | 110 | 143 | 1 265 | 1 474 | |||||||||
Total right-of-use assets | 1 489 | 1 487 | 133 | 136 | 54 | 54 | 1 676 | 1 677 | |||||||||
Additions to right-of-use assets 2 | 264 | 454 | 67 | 49 | 15 | 34 | 346 | 537 | |||||||||
Total goodwill and intangible assets | 56 839 | 46 336 | 9 817 | 8 892 | 152 | 83 | 66 808 | 55 311 | |||||||||
Additions to goodwill and intangible assets 2 | 1 235 | 647 | 105 | 68 | 85 | 52 | 1 425 | 767 | |||||||||
Total investment in associated companies | 194 | 128 | 8 | 7 | 9 430 | 8 509 | 9 632 | 8 644 | |||||||||
Additions to investment in associated companies | 24 | 44 | 7 | 11 | 31 | 55 | |||||||||||
Cash and cash equivalents, marketable securities, commodities, time deposits and derivative financial instruments | 11 563 | 11 446 | 11 563 | 11 446 | |||||||||||||
Financial debts and derivative financial instruments | 36 044 | 27 384 | 36 044 | 27 384 | |||||||||||||
Current income tax and deferred tax liabilities | 9 880 | 8 061 | 9 880 | 8 061 | |||||||||||||
1 Note 29 provides additional disclosures related to net debt | |||||||||||||||||
2 Excluding the impact of business acquisitions |
Net sales1 | Total of selected non-current assets2 | ||||||||||||||||||||
(USD millions) | 2020 | % | 2019 | % | 2018 | % | 2020 | % | 2019 | % | |||||||||||
Country | |||||||||||||||||||||
Switzerland | 800 | 2 | 848 | 2 | 795 | 2 | 34 904 | 39 | 33 032 | 43 | |||||||||||
United States | 16 484 | 34 | 16 280 | 34 | 14 618 | 33 | 39 889 | 44 | 28 893 | 37 | |||||||||||
France | 2 442 | 5 | 2 442 | 5 | 2 505 | 6 | 4 115 | 5 | 3 933 | 5 | |||||||||||
Germany | 4 518 | 9 | 4 120 | 9 | 3 972 | 9 | 2 607 | 3 | 2 554 | 3 | |||||||||||
Japan | 2 804 | 6 | 2 656 | 6 | 2 575 | 6 | 313 | 309 | |||||||||||||
China | 2 573 | 5 | 2 214 | 5 | 1 953 | 4 | 714 | 1 | 684 | 1 | |||||||||||
Other | 19 038 | 39 | 18 885 | 39 | 18 333 | 40 | 7 837 | 8 | 8 296 | 11 | |||||||||||
Group | 48 659 | 100 | 47 445 | 100 | 44 751 | 100 | 90 379 | 100 | 77 701 | 100 | |||||||||||
Region | |||||||||||||||||||||
Europe | 18 715 | 38 | 17 933 | 38 | 17 259 | 39 | 47 798 | 53 | 46 103 | 59 | |||||||||||
Americas | 19 725 | 41 | 19 713 | 41 | 18 032 | 39 | 40 391 | 45 | 29 389 | 38 | |||||||||||
Asia/Africa/Australasia | 10 219 | 21 | 9 799 | 21 | 9 460 | 22 | 2 190 | 2 | 2 209 | 3 | |||||||||||
Group | 48 659 | 100 | 47 445 | 100 | 44 751 | 100 | 90 379 | 100 | 77 701 | 100 | |||||||||||
1 Net sales to third party from continuing operations by location of customer | |||||||||||||||||||||
2 Total of property, plant and equipment; right-of-use assets; goodwill; intangible assets and investment in associated companies |
2020 USD m | 2019 USD m | Change (2019 to 2020) USD % | 2018 USD m | Change (2018 to 2019) USD % | |||||||
Innovative Medicines | |||||||||||
Europe | 13 484 | 12 818 | 5 | 12 296 | 4 | ||||||
US | 14 342 | 13 789 | 4 | 11 864 | 16 | ||||||
Asia/Africa/Australasia | 8 718 | 8 458 | 3 | 8 097 | 4 | ||||||
Canada and Latin America | 2 469 | 2 649 | – 7 | 2 635 | 1 | ||||||
Total | 39 013 | 37 714 | 3 | 34 892 | 8 | ||||||
Of which in Established Markets | 29 643 | 28 573 | 4 | 26 258 | 9 | ||||||
Of which in Emerging Growth Markets | 9 370 | 9 141 | 3 | 8 634 | 6 | ||||||
Sandoz | |||||||||||
Europe | 5 231 | 5 115 | 2 | 4 963 | 3 | ||||||
US | 2 142 | 2 491 | – 14 | 2 754 | – 10 | ||||||
Asia/Africa/Australasia | 1 501 | 1 341 | 12 | 1 363 | – 2 | ||||||
Canada and Latin America | 772 | 784 | – 2 | 779 | 1 | ||||||
Total | 9 646 | 9 731 | – 1 | 9 859 | – 1 | ||||||
Of which in Established Markets | 7 089 | 7 111 | 0 | 7 233 | – 2 | ||||||
Of which in Emerging Growth Markets | 2 557 | 2 620 | – 2 | 2 626 | 0 | ||||||
Group | |||||||||||
Europe | 18 715 | 17 933 | 4 | 17 259 | 4 | ||||||
US | 16 484 | 16 280 | 1 | 14 618 | 11 | ||||||
Asia/Africa/Australasia | 10 219 | 9 799 | 4 | 9 460 | 4 | ||||||
Canada and Latin America | 3 241 | 3 433 | – 6 | 3 414 | 1 | ||||||
Total | 48 659 | 47 445 | 3 | 44 751 | 6 | ||||||
Of which in Established Markets | 36 732 | 35 684 | 3 | 33 491 | 7 | ||||||
Of which in Emerging Growth Markets | 11 927 | 11 761 | 1 | 11 260 | 4 | ||||||
1 Net sales to third parties from continuing operations by location of customer. Emerging Growth Markets comprise all markets other than the Established Markets of the US, Canada, Western Europe, Japan, Australia and New Zealand. | |||||||||||
2020 USD m | 2019 USD m | Change (2019 to 2020) USD % | 2018 USD m | Change (2018 to 2019) USD % | |||||||
Oncology | |||||||||||
Tasigna | 1 958 | 1 880 | 4 | 1 874 | 0 | ||||||
Promacta/Revolade | 1 738 | 1 416 | 23 | 1 174 | 21 | ||||||
Tafinlar + Mekinist | 1 542 | 1 338 | 15 | 1 155 | 16 | ||||||
Sandostatin | 1 439 | 1 585 | – 9 | 1 587 | 0 | ||||||
Jakavi | 1 339 | 1 114 | 20 | 977 | 14 | ||||||
Gleevec/Glivec | 1 188 | 1 263 | – 6 | 1 561 | – 19 | ||||||
Afinitor/Votubia | 1 083 | 1 539 | – 30 | 1 556 | – 1 | ||||||
Kisqali | 687 | 480 | 43 | 235 | 104 | ||||||
Exjade/Jadenu | 653 | 975 | – 33 | 1 099 | – 11 | ||||||
Votrient | 635 | 755 | – 16 | 828 | – 9 | ||||||
Kymriah | 474 | 278 | 71 | 76 | nm | ||||||
Lutathera | 445 | 441 | 1 | 167 | 164 | ||||||
Piqray | 320 | 116 | 176 | nm | |||||||
Adakveo | 105 | 1 | nm | nm | |||||||
Tabrecta | 35 | nm | nm | ||||||||
Other | 1 070 | 1 189 | – 10 | 1 139 | 4 | ||||||
Total Novartis Oncology business unit | 14 711 | 14 370 | 2 | 13 428 | 7 | ||||||
Immunology, Hepatology and Dermatology | |||||||||||
Cosentyx | 3 995 | 3 551 | 13 | 2 837 | 25 | ||||||
Ilaris | 873 | 671 | 30 | 554 | 21 | ||||||
Other | 1 | nm | |||||||||
Total Immunology, Hepatology and Dermatology | 4 868 | 4 222 | 15 | 3 392 | 24 | ||||||
Ophthalmology | |||||||||||
Lucentis | 1 933 | 2 086 | – 7 | 2 046 | 2 | ||||||
Xiidra | 376 | 192 | 96 | nm | |||||||
Beovu | 190 | 35 | nm | nm | |||||||
Other | 1 911 | 2 463 | – 22 | 1 995 | 23 | ||||||
Total Ophthalmology | 4 410 | 4 776 | – 8 | 4 558 | 5 | ||||||
Neuroscience | |||||||||||
Gilenya | 3 003 | 3 223 | – 7 | 3 341 | – 4 | ||||||
Zolgensma | 920 | 361 | 155 | nm | |||||||
Mayzent | 170 | 26 | nm | nm | |||||||
Aimovig | 164 | 103 | 59 | 8 | nm | ||||||
Kesimpta | 15 | nm | nm | ||||||||
Other | 51 | 60 | – 15 | 80 | – 25 | ||||||
Total Neuroscience | 4 323 | 3 773 | 15 | 3 429 | 10 | ||||||
2020 USD m | 2019 USD m | Change (2019 to 2020) USD % | 2018 USD m | Change (2018 to 2019) USD % | |||||||
Cardiovascular, Renal and Metabolism | |||||||||||
Entresto | 2 497 | 1 726 | 45 | 1 028 | 68 | ||||||
Other | 1 | 24 | – 96 | 22 | 9 | ||||||
Total Cardiovascular, Renal and Metabolism | 2 498 | 1 750 | 43 | 1 050 | 67 | ||||||
Respiratory | |||||||||||
Xolair 1 | 1 251 | 1 173 | 7 | 1 039 | 13 | ||||||
Ultibro Group | 623 | 630 | – 1 | 703 | – 10 | ||||||
Other | 26 | 22 | 18 | 25 | – 12 | ||||||
Total Respiratory | 1 900 | 1 825 | 4 | 1 767 | 3 | ||||||
Established Medicines | |||||||||||
Galvus Group | 1 199 | 1 297 | – 8 | 1 284 | 1 | ||||||
Diovan Group | 1 003 | 1 064 | – 6 | 1 023 | 4 | ||||||
Exforge Group | 980 | 1 025 | – 4 | 1 002 | 2 | ||||||
Zortress/Certican | 452 | 485 | – 7 | 464 | 5 | ||||||
Neoral/Sandimmun(e) | 393 | 419 | – 6 | 463 | – 10 | ||||||
Voltaren/Cataflam | 360 | 417 | – 14 | 445 | – 6 | ||||||
Other | 1 916 | 2 291 | – 16 | 2 587 | – 11 | ||||||
Total Established Medicines | 6 303 | 6 998 | – 10 | 7 268 | – 4 | ||||||
Total Novartis Pharmaceuticals business unit | 24 302 | 23 344 | 4 | 21 464 | 9 | ||||||
Total division net sales | 39 013 | 37 714 | 3 | 34 892 | 8 | ||||||
1 Net sales reflect Xolair sales for all indications. | |||||||||||
nm = not meaningful |
Brands | Business franchise | Key indication | US USD m | Rest of world USD m | Total USD m | ||||||
Cosentyx | Immunology, Hepatology and Dermatology | Psoriasis, ankylosing spondylitis, psoriatic arthritis and non-radiographic axial spondyloarthritis | 2 516 | 1 479 | 3 995 | ||||||
Gilenya | Neuroscience | Relapsing multiple sclerosis | 1 562 | 1 441 | 3 003 | ||||||
Entresto | Cardiovascular, Renal and Metabolism | Chronic heart failure | 1 277 | 1 220 | 2 497 | ||||||
Tasigna | Oncology | Chronic myeloid leukemia | 859 | 1 099 | 1 958 | ||||||
Lucentis | Ophthalmology | Age-related macular degeneration | 1 933 | 1 933 | |||||||
Promacta/Revolade | Oncology | Immune thrombocytopenia (ITP), severe aplastic anemia (SAA) | 833 | 905 | 1 738 | ||||||
Tafinlar + Mekinist | Oncology | BRAF V600+ metastatic and adjuvant melanoma; advanced non-small cell lung cancer (NSCLC) | 569 | 973 | 1 542 | ||||||
Sandostatin | Oncology | Carcinoid tumors and acromegaly | 837 | 602 | 1 439 | ||||||
Jakavi | Oncology | Myelofibrosis (MF), polycythemia vera (PV) | 1 339 | 1 339 | |||||||
Xolair 1 | Respiratory | Severe allergic asthma (SAA) and chronic spontaneous urticaria (CSU) and nasal polyps | 1 251 | 1 251 | |||||||
Galvus Group | Established Medicines | Type 2 diabetes | 1 199 | 1 199 | |||||||
Gleevec/Glivec | Oncology | Chronic myeloid leukemia and GIST | 315 | 873 | 1 188 | ||||||
Afinitor/Votubia | Oncology | Breast cancer/TSC | 644 | 439 | 1 083 | ||||||
Diovan Group | Established Medicines | Hypertension | 124 | 879 | 1 003 | ||||||
Exforge Group | Established Medicines | Hypertension | 16 | 964 | 980 | ||||||
Zolgensma | Neuroscience | Spinal muscular atrophy (SMA) | 459 | 461 | 920 | ||||||
Ilaris | Immunology, Hepatology and Dermatology | Auto-inflammatory (CAPS, TRAPS, HIDS/MKD, FMF, SJIA, AOSD and gout) | 400 | 473 | 873 | ||||||
Kisqali | Oncology | HR+/HER2- metastatic breast cancer | 318 | 369 | 687 | ||||||
Exjade/Jadenu | Oncology | Chronic iron overload | 138 | 515 | 653 | ||||||
Votrient | Oncology | Renal cell carcinoma | 259 | 376 | 635 | ||||||
Top 20 products total | 11 126 | 18 790 | 29 916 | ||||||||
Rest of portfolio | 3 216 | 5 881 | 9 097 | ||||||||
Total division sales | 14 342 | 24 671 | 39 013 | ||||||||
1 Net sales reflect Xolair sales for all indications. |
Brands | Business franchise | Key indication | US USD m | Rest of world USD m | Total USD m | ||||||
Cosentyx | Immunology, Hepatology and Dermatology | Psoriasis, ankylosing spondylitis and psoriatic arthritis | 2 220 | 1 331 | 3 551 | ||||||
Gilenya | Neuroscience | Relapsing multiple sclerosis | 1 736 | 1 487 | 3 223 | ||||||
Lucentis | Ophthalmology | Age-related macular degeneration | 2 086 | 2 086 | |||||||
Tasigna | Oncology | Chronic myeloid leukemia | 804 | 1 076 | 1 880 | ||||||
Entresto | Cardiovascular, Renal and Metabolism | Chronic heart failure | 925 | 801 | 1 726 | ||||||
Sandostatin | Oncology | Carcinoid tumors and acromegaly | 881 | 704 | 1 585 | ||||||
Afinitor/Votubia | Oncology | Breast cancer/TSC | 1 003 | 536 | 1 539 | ||||||
Promacta/Revolade | Oncology | Immune thrombocytopenia (ITP), severe aplastic anemia (SAA) | 691 | 725 | 1 416 | ||||||
Tafinlar + Mekinist | Oncology | BRAF V600+ metastatic and adjuvant melanoma; advanced non-small cell lung cancer (NSCLC) | 481 | 857 | 1 338 | ||||||
Galvus Group | Established Medicines | Type 2 diabetes | 1 297 | 1 297 | |||||||
Gleevec/Glivec | Oncology | Chronic myeloid leukemia and GIST | 334 | 929 | 1 263 | ||||||
Xolair 1 | Respiratory | Severe allergic asthma (SAA) and chronic spontaneous urticaria (CSU) | 1 173 | 1 173 | |||||||
Jakavi | Oncology | Myelofibrosis (MF), polycythemia vera (PV) | 1 114 | 1 114 | |||||||
Diovan Group | Established Medicines | Hypertension | 86 | 978 | 1 064 | ||||||
Exforge Group | Established Medicines | Hypertension | 13 | 1 012 | 1 025 | ||||||
Exjade/Jadenu | Oncology | Chronic iron overload | 450 | 525 | 975 | ||||||
Votrient | Oncology | Renal cell carcinoma | 332 | 423 | 755 | ||||||
Ilaris | Immunology, Hepatology and Dermatology | Auto-inflammatory (CAPS, TRAPS, HIDS/MKD, FMF, SJIA, AOSD and gout) | 304 | 367 | 671 | ||||||
Zortress/Certican | Established Medicines | Transplantation | 169 | 316 | 485 | ||||||
Kisqali | Oncology | HR+/HER2- metastatic breast cancer | 250 | 230 | 480 | ||||||
Top 20 products total | 10 679 | 17 967 | 28 646 | ||||||||
Rest of portfolio | 3 110 | 5 958 | 9 068 | ||||||||
Total division sales | 13 789 | 23 925 | 37 714 | ||||||||
1 Net sales reflect Xolair sales for all indications. | |||||||||||
Brands | Business franchise | Key indication | US USD m | Rest of world USD m | Total USD m | ||||||
Gilenya | Neuroscience | Relapsing multiple sclerosis | 1 765 | 1 576 | 3 341 | ||||||
Cosentyx | Immunology, Hepatology and Dermatology | Psoriasis, ankylosing spondylitis and psoriatic arthritis | 1 674 | 1 163 | 2 837 | ||||||
Lucentis | Ophthalmology | Age-related macular degeneration | 2 046 | 2 046 | |||||||
Tasigna | Oncology | Chronic myeloid leukemia | 806 | 1 068 | 1 874 | ||||||
Sandostatin | Oncology | Carcinoid tumors and acromegaly | 817 | 770 | 1 587 | ||||||
Gleevec/Glivec | Oncology | Chronic myeloid leukemia and GIST | 440 | 1 121 | 1 561 | ||||||
Afinitor/Votubia | Oncology | Breast cancer/TSC | 929 | 627 | 1 556 | ||||||
Galvus Group | Established Medicines | Type 2 diabetes | 1 284 | 1 284 | |||||||
Promacta/Revolade | Oncology | Immune thrombocytopenia (ITP), severe aplastic anemia (SAA) | 581 | 593 | 1 174 | ||||||
Tafinlar + Mekinist | Oncology | BRAF V600+ metastatic and adjuvant melanoma; advanced non-small cell lung cancer (NSCLC) | 457 | 698 | 1 155 | ||||||
Exjade/Jadenu | Oncology | Chronic iron overload | 521 | 578 | 1 099 | ||||||
Xolair 1 | Respiratory | Severe allergic asthma (SAA) and chronic spontaneous urticaria (CSU) | 1 039 | 1 039 | |||||||
Entresto | Cardiovascular, Renal and Metabolism | Chronic heart failure | 556 | 472 | 1 028 | ||||||
Diovan Group | Established Medicines | Hypertension | 84 | 939 | 1 023 | ||||||
Exforge Group | Established Medicines | Hypertension | 19 | 983 | 1 002 | ||||||
Jakavi | Oncology | Myelofibrosis (MF), polycythemia vera (PV) | 977 | 977 | |||||||
Votrient | Oncology | Renal cell carcinoma | 404 | 424 | 828 | ||||||
Ilaris | Immunology, Hepatology and Dermatology | Auto-inflammatory (CAPS, TRAPS, HIDS/MKD, FMF, SJIA, AOSD and gout) | 262 | 292 | 554 | ||||||
Travoprost Group | Ophthalmology | Reduction of elevated intraocular pressure | 194 | 323 | 517 | ||||||
Zortress/Certican | Established Medicines | Transplantation | 145 | 319 | 464 | ||||||
Top 20 products total | 9 654 | 17 292 | 26 946 | ||||||||
Rest of portfolio | 2 210 | 5 736 | 7 946 | ||||||||
Total division sales | 11 864 | 23 028 | 34 892 | ||||||||
1 Net sales reflect Xolair sales for all indications. | |||||||||||
2020 USD m | 2019 USD m | Change (2019 to 2020) USD % | 2018 USD m | Change (2018 to 2019) USD % | |||||||
Retail Generics 1 | 7 244 | 7 590 | – 5 | 7 880 | – 4 | ||||||
Biopharmaceuticals | 1 928 | 1 607 | 20 | 1 436 | 12 | ||||||
Anti-Infectives | 474 | 534 | – 11 | 543 | – 2 | ||||||
Total division net sales | 9 646 | 9 731 | – 1 | 9 859 | – 1 | ||||||
1 Of which USD 694 million (2019: USD 784 million; 2018: USD 826 million) represents anti-infectives sold under the Sandoz name |
Innovative Medicines | Sandoz | Corporate (including eliminations) | Group | ||||||||||||||
(USD millions) | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||||
Profit-sharing income | 835 | 732 | 2 | 835 | 734 | ||||||||||||
Royalty income | 107 | 104 | 25 | 19 | 168 | 24 | 300 | 147 | |||||||||
Milestone income | 39 | 201 | 11 | 30 | 50 | 231 | |||||||||||
Other 1 | 37 | 55 | 17 | 12 | 54 | 67 | |||||||||||
Total other revenues | 1 018 | 1 092 | 53 | 63 | 168 | 24 | 1 239 | 1 179 | |||||||||
1 Other includes revenue from activities such as manufacturing or other services rendered, to the extent such revenue is not recorded under net sales. |
Innovative Medicines | Sandoz | Corporate (including eliminations) | Group | ||||||||||||||
(USD millions) | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||
Profit-sharing income | 732 | 874 | 2 | 3 | 734 | 877 | |||||||||||
Royalty income | 104 | 162 | 19 | 10 | 24 | 16 | 147 | 188 | |||||||||
Milestone income | 201 | 128 | 30 | 45 | 231 | 173 | |||||||||||
Other 1 | 55 | 24 | 12 | 4 | 67 | 28 | |||||||||||
Total other revenues | 1 092 | 1 188 | 63 | 62 | 24 | 16 | 1 179 | 1 266 | |||||||||
1 Other includes revenue from activities such as manufacturing or other services rendered, to the extent such revenue is not recorded under net sales. |
Net income statement effect | Other comprehensive income effect | Total comprehensive income effect | |||||||||||||||||
(USD millions) | 2020 | 2019 | 2018 | 2020 | 2019 | 2018 1 | 2020 | 2019 | 2018 | ||||||||||
Roche Holding AG, Switzerland | 677 | 662 | 526 | – 56 | – 94 | 75 | 621 | 568 | 601 | ||||||||||
GlaxoSmithKline Consumer Healthcare Holdings Ltd., UK | 5 910 | – 557 | 5 353 | ||||||||||||||||
Others | – 4 | – 3 | 2 | – 4 | – 3 | 2 | |||||||||||||
Associated companies related to continuing operations | 673 | 659 | 6 438 | – 56 | – 94 | – 482 | 617 | 565 | 5 956 | ||||||||||
1 In 2018, Novartis share of other comprehensive income recognized by associated companies, net of taxes of USD 511 million was recycled into the consolidated income statement as a result of the divestment of the investment in GSK Consumer Healthcare Holdings Ltd. No Novartis share of other comprehensive income recognized by associated companies, net of taxes was recycled into the consolidated income statement in 2020 and 2019. |
Balance sheet value | |||||
(USD millions) | December 31, 2020 | December 31, 2019 | |||
Roche Holding AG, Switzerland | 9 407 | 8 445 | |||
Others | 225 | 199 | |||
Total | 9 632 | 8 644 | |||
(CHF billions) | Current assets | Non-current assets | Current liabilities | Non-current liabilities | |||||
December 31, 2019 | 31.3 | 56.4 | 24.1 | 23.1 | |||||
June 30, 2020 | 27.7 | 55.7 | 22.5 | 23.1 | |||||
(CHF billions) | Revenue | Net income | Other comprehen- sive income | Total comprehen- sive income | |||||
December 31, 2019 | 63.8 | 12.3 | – 0.9 | 11.4 | |||||
June 30, 2020 | 30.4 | 7.2 | – 0.7 | 6.5 | |||||
(USD millions) | December 31, 2020 | ||
Novartis share of Roche’s estimated net assets | 2 585 | ||
Novartis share of reappraised intangible assets | 117 | ||
Implicit Novartis goodwill | 3 233 | ||
Current value of share in net identifiable assets and goodwill | 5 935 | ||
Accumulated equity accounting adjustments and translation effects less dividends received | 3 472 | ||
Balance sheet value | 9 407 | ||
(USD millions) | 2020 | 2019 | 2018 | ||||
Novartis share of Roche's estimated current-year consolidated net income | 913 | 910 | 799 | ||||
Prior-year adjustment | – 64 | – 129 | – 125 | ||||
Amortization of fair value adjustments relating to intangible assets, net of taxes of USD 26 million (2019: USD 24 million; 2018: USD 40 million) | – 172 | – 162 | – 148 | ||||
Partial release of deferred tax liability recognized | 43 | ||||||
Net income effect | 677 | 662 | 526 | ||||
(USD millions) | 2018 | ||
Novartis share of GSK Consumer Healthcare's estimated current-year consolidated net income | 119 | ||
Prior-year adjustment | 4 | ||
Amortization of fair value adjustments relating to intangible assets and inventory, net of taxes of USD 1 million | – 3 | ||
Pre-tax gain on divestment of GSK Consumer Healthcare | 5 790 | ||
Net income effect | 5 910 | ||
(USD millions) | 2020 | 2019 | 2018 | ||||
Interest expense | – 708 | – 714 | – 877 | ||||
Interest expense on lease liabilities | – 67 | – 66 | |||||
Expense arising from discounting long-term liabilities and capitalized borrowing costs | – 94 | – 70 | – 55 | ||||
Total interest expense from continuing operations | – 869 | – 850 | – 932 | ||||
(USD millions) | 2020 | 2019 | 2018 | ||||
Interest income | 91 | 245 | 292 | ||||
Other financial income | 18 | 12 | 1 | ||||
Financial expense | – 52 | – 52 | – 39 | ||||
Currency result, net | – 135 | – 160 | – 68 | ||||
Total other financial income and expense from continuing operations | – 78 | 45 | 186 | ||||
(USD millions) | 2020 | 2019 | 2018 | ||||
Switzerland | 9 786 | 8 097 | 11 887 | ||||
Foreign | 92 | 843 | 2 208 | ||||
Income before taxes from continuing operations | 9 878 | 8 940 | 14 095 | ||||
(USD millions) | 2020 | 2019 | 2018 | ||||
Switzerland | – 932 | – 1 186 | – 615 | ||||
Foreign | – 1 168 | – 961 | – 988 | ||||
Current income tax expense | – 2 100 | – 2 147 | – 1 603 | ||||
Switzerland | – 137 | – 93 | – 120 | ||||
Foreign | 430 | 447 | 428 | ||||
Deferred tax income | 293 | 354 | 308 | ||||
Income tax expense from continuing operations | – 1 807 | – 1 793 | – 1 295 | ||||
(As a percentage) | 2020 | 2019 | 2018 | ||||
Applicable tax rate | 13.6 | 11.7 | 14.3 | ||||
Effect of disallowed expenditures | 4.6 | 4.8 | 1.7 | ||||
Effect of utilization of tax losses brought forward from prior periods | – 0.3 | – 0.1 | – 0.1 | ||||
Effect of income taxed at reduced rates | – 0.3 | – 0.7 | – 0.4 | ||||
Effect of income not subject to tax 1 | – 0.7 | 0.0 | – 3.7 | ||||
Effect of tax credits and allowances | – 2.3 | – 2.3 | – 2.3 | ||||
Effect of release of contingent consideration liability | – 0.2 | – 0.5 | – 0.2 | ||||
Effect of tax rate change on current and deferred tax assets and liabilities 2 | 0.3 | – 1.4 | – 0.1 | ||||
Effect of write-off of deferred tax assets 3 | 0.2 | 4.0 | 0.2 | ||||
Effect of write-down and reversal of write-down of investments in subsidiaries | – 0.8 | – 0.6 | 0.0 | ||||
Effect of prior-year items | 2.3 | 2.2 | – 0.5 | ||||
Effect of other items 4 | 1.9 | 3.0 | 0.3 | ||||
Effective tax rate for continuing operations | 18.3 | 20.1 | 9.2 | ||||
1 Included in 2018 is the effect of income not subject to tax (-3.7%) arising from the portion of the non-taxable gain on the divestment of the Group's investment in GSK Consumer Healthcare Holdings Ltd. attributable to Switzerland. | |||||||
2 2019 is mainly related to the revaluation of the deferred tax assets and liabilities resulting from the tax reforms enacted in Switzerland in 2019. Refer to Note 12 for additional disclosures. | |||||||
3 2019 is primarily related to a non-cash, one-time deferred tax expense for the write-off of a deferred tax asset resulting from legal entity reorganizations. | |||||||
4 In 2020, other items (+1.9%) include changes in uncertain tax positions (+2.0%) and other items (-0.1%). In 2019, other items (+3.0%) include changes in uncertain tax positions (+2.6%) and other items (+0.4%). |
2020 | 2019 | 2018 | |||||
Net income attributable to shareholders of Novartis AG (USD millions) | |||||||
- Continuing operations | 8 072 | 7 142 | 12 797 | ||||
- Discontinued operations | 4 590 | – 186 | |||||
Total | 8 072 | 11 732 | 12 611 | ||||
Number of shares (in millions) | |||||||
Weighted average number of shares outstanding used in basic earnings per share | 2 277 | 2 291 | 2 319 | ||||
Adjustment for vesting of restricted shares, restricted share units and dilutive shares from options | 19 | 28 | 25 | ||||
Weighted average number of shares in diluted earnings per share | 2 296 | 2 319 | 2 344 | ||||
Basic earnings per share (USD) | |||||||
- Continuing operations | 3.55 | 3.12 | 5.52 | ||||
- Discontinued operations | 2.00 | – 0.08 | |||||
Total | 3.55 | 5.12 | 5.44 | ||||
Diluted earnings per share (USD) | |||||||
- Continuing operations | 3.52 | 3.08 | 5.46 | ||||
- Discontinued operations | 1.98 | – 0.08 | |||||
Total | 3.52 | 5.06 | 5.38 | ||||
(USD millions) | Note | Fair value adjustments on financial instruments | Actuarial gains/(losses) from defined benefit plans | Cumulative currency translation effects | Total value adjustments attributable to Novartis AG shareholders | Non- controlling interest | Total value adjustments | ||||||||
Value adjustments at December 31, 2017, as previously reported | 395 | – 5 064 | 329 | – 4 340 | – 21 | – 4 361 | |||||||||
Impact of adoption of IFRS 9 on retained earnings and OCI | – 177 | – 177 | – 177 | ||||||||||||
Restated value adjustments at January 1, 2018 | 218 | – 5 064 | 329 | – 4 517 | – 21 | – 4 538 | |||||||||
Fair value adjustments on deferred cash flow hedges, net of taxes of USD -1 million | 12 | 12 | 12 | ||||||||||||
Fair value adjustments on equity securities, net of taxes of USD -5 million 1 | 13 | 13 | 13 | ||||||||||||
Net investment hedge | 95 | 95 | 95 | ||||||||||||
Defined benefit plans, net of taxes of USD 69 million | – 359 | – 359 | – 359 | ||||||||||||
Currency translation effects | 8.1 | 320 | 320 | – 5 | 315 | ||||||||||
Total value adjustments in 2018 | 25 | – 359 | 415 | 81 | – 5 | 76 | |||||||||
Fair value adjustments on equity securities sold, reclassified to retained earnings | – 16 | – 16 | – 16 | ||||||||||||
Value adjustments at December 31, 2018 | 227 | – 5 423 | 744 | – 4 452 | – 26 | – 4 478 | |||||||||
Fair value adjustments on deferred cash flow hedges | 1 | 1 | 1 | ||||||||||||
Fair value adjustments on debt securities | 1 | 1 | 1 | ||||||||||||
Fair value adjustments on equity securities, net of taxes of USD 47 million 1 | – 47 | – 47 | – 47 | ||||||||||||
Net investment hedge | 44 | 44 | 44 | ||||||||||||
Defined benefit plans, net of taxes of USD -313 million 2 | – 466 | – 466 | – 1 | – 467 | |||||||||||
Currency translation effects | 8.1 | 354 | 354 | – 2 | 352 | ||||||||||
Total value adjustments in 2019 | – 45 | – 466 | 398 | – 113 | – 3 | – 116 | |||||||||
Fair value adjustments on equity securities sold, reclassified to retained earnings | – 95 | – 95 | – 95 | ||||||||||||
Fair value adjustments related to divestments | 33 | – 30 | 3 | 3 | |||||||||||
Value adjustments at December 31, 2019 | 120 | – 5 919 | 1 142 | – 4 657 | – 29 | – 4 686 | |||||||||
Fair value adjustments on equity securities, net of taxes of USD -36 million 1 | 250 | 250 | 250 | ||||||||||||
Net investment hedge | – 201 | – 201 | – 201 | ||||||||||||
Defined benefit plans, net of taxes of USD -3 million | 145 | 145 | – 2 | 143 | |||||||||||
Currency translation effects | 8.1 | 3 193 | 3 193 | 1 | 3 194 | ||||||||||
Total value adjustments in 2020 | 250 | 145 | 2 992 | 3 387 | – 1 | 3 386 | |||||||||
Fair value adjustments on equity securities sold, reclassified to retained earnings | – 150 | – 150 | – 150 | ||||||||||||
Fair value adjustments related to divestments | 2 | 2 | 2 | ||||||||||||
Impact of change in ownership of consolidated entities | – 1 | – 1 | 1 | ||||||||||||
Value adjustments at December 31, 2020 | 220 | – 5 773 | 4 134 | – 1 419 | – 29 | – 1 448 | |||||||||
1 Includes fair value adjustments on equity securities designated as financial assets valued at fair value through other comprehensive income with no subsequent recycling into the consolidated income statement | |||||||||||||||
2 Included in 2019 is a USD -358 million impact related to the revaluation of deferred tax assets on Swiss post-employment benefits that were previously recognized through other comprehensive income. This revaluation resulted from the Swiss tax reforms enacted by the voters in 2019. Refer to Note 12 for additional disclosures. |
(USD millions) | Land | Buildings | Construction in progress | Machinery and other equipment | Total | ||||||
Cost | |||||||||||
January 1, 2020 | 512 | 11 463 | 1 350 | 13 674 | 26 999 | ||||||
Cost of assets reclassified out of assets of disposal group held for sale 1 | 11 | 117 | 36 | 168 | 332 | ||||||
Impact of acquisitions of businesses | 2 | 19 | 5 | 26 | |||||||
Reclassifications | 10 | 433 | – 1 038 | 595 | |||||||
Additions | 7 | 115 | 847 | 296 | 1 265 | ||||||
Disposals and derecognitions | – 23 | – 465 | – 57 | – 1 656 | – 2 201 | ||||||
Currency translation effects | 36 | 695 | 110 | 956 | 1 797 | ||||||
December 31, 2020 | 555 | 12 377 | 1 248 | 14 038 | 28 218 | ||||||
Accumulated depreciation | |||||||||||
January 1, 2020 | – 20 | – 5 124 | – 60 | – 9 726 | – 14 930 | ||||||
Accumulated depreciation on assets reclassified out of assets of disposal group held for sale 1 | – 58 | – 4 | – 101 | – 163 | |||||||
Accumulated depreciation on disposals and derecognitions | 17 | 433 | 11 | 1 543 | 2 004 | ||||||
Depreciation charge 2 | – 491 | – 827 | – 1 318 | ||||||||
Impairment charge | – 15 | – 194 | – 10 | – 228 | – 447 | ||||||
Reversal of impairment charge | 7 | 7 | |||||||||
Currency translation effects | – 1 | – 373 | – 3 | – 731 | – 1 108 | ||||||
December 31, 2020 | – 19 | – 5 807 | – 66 | – 10 063 | – 15 955 | ||||||
Net book value at December 31, 2020 | 536 | 6 570 | 1 182 | 3 975 | 12 263 | ||||||
Commitments for purchases of property, plant and equipment | 256 | ||||||||||
Capitalized borrowing costs | 2 | ||||||||||
1 Note 2 provides additional disclosures related to the reclassification out of assets of the disposal group held for sale. | |||||||||||
2 Depreciation charge includes USD 38 million (USD 20 million for buildings and USD 18 million for machinery and other equipment), representing the cumulative amount of depreciation charge on the disposal group held for sale for property, plant and equipment from the date of classification to held for sale, September 2018, to March 31, 2020, the date of reclassification out of assets of disposal group held for sale. See Note 2 for further details. |
(USD millions) | Land | Buildings | Construction in progress | Machinery and other equipment | Total | ||||||
Cost | |||||||||||
January 1, 2019 | 696 | 14 135 | 2 042 | 17 155 | 34 028 | ||||||
Cost of assets related to discontinued operations 1 | – 61 | – 1 615 | – 655 | – 2 678 | – 5 009 | ||||||
Reclassification to right-of-use assets 2 | – 122 | – 3 | – 2 | – 127 | |||||||
Cost of assets related to disposal group held for sale 3 | – 3 | – 12 | – 8 | – 23 | |||||||
Impact of acquisitions of businesses | 10 | 24 | 1 | 9 | 44 | ||||||
Reclassifications | 57 | 332 | – 1 019 | 630 | |||||||
Additions | 6 | 112 | 1 001 | 355 | 1 474 | ||||||
Disposals and derecognitions | – 75 | – 1 551 | – 9 | – 1 774 | – 3 409 | ||||||
Currency translation effects | 1 | 32 | 1 | – 13 | 21 | ||||||
December 31, 2019 | 512 | 11 463 | 1 350 | 13 674 | 26 999 | ||||||
Accumulated depreciation | |||||||||||
January 1, 2019 | – 43 | – 6 328 | – 37 | – 11 924 | – 18 332 | ||||||
Accumulated depreciation on assets related to discontinued operations 1 | 8 | 562 | 7 | 1 541 | 2 118 | ||||||
Reclassification to right-of-use assets 2 | 26 | 26 | |||||||||
Accumulated depreciation on assets related to disposal group held for sale 3 | 2 | 2 | |||||||||
Accumulated depreciation on disposals and derecognitions | 1 170 | 2 | 1 674 | 2 846 | |||||||
Depreciation charge 4 | – 447 | – 898 | – 1 345 | ||||||||
Impairment charge 5 | – 10 | – 51 | – 34 | – 110 | – 205 | ||||||
Reversal of impairment charge | 1 | 2 | 3 | ||||||||
Currency translation effects | – 1 | – 33 | – 9 | – 43 | |||||||
December 31, 2019 | – 20 | – 5 124 | – 60 | – 9 726 | – 14 930 | ||||||
Net book value at December 31, 2019 | 492 | 6 339 | 1 290 | 3 948 | 12 069 | ||||||
Commitments for purchases of property, plant and equipment | 220 | ||||||||||
Capitalized borrowing costs | 4 | ||||||||||
1 Represents the cost of assets and accumulated depreciation at January 1, 2019, related to the Alcon business reported as discontinued operations. Notes 1, 2 and 30 provide information related to discontinued operations. | |||||||||||
2 Reclassification to right-of-use assets at January 1, 2019, upon adoption of IFRS 16 Leases. Refer to Note 1 for additional disclosure. | |||||||||||
3 Note 2 provides additional disclosures related to disposal group held for sale. | |||||||||||
4 No depreciation charge in the disposal group held for sale for the period from January 1, 2019, to December 31, 2019, was recorded. | |||||||||||
5 Impairments in the disposal group held for sale for the period from January 1, 2019, to December 31, 2019, were USD 2 million. | |||||||||||
(USD millions) | 2020 | 2019 | |||
Right-of-use assets at January 1 | 1 677 | 1 554 | |||
Impact of acquisitions of businesses | 32 | ||||
Additions | 346 | 537 | |||
Depreciation charge | – 330 | – 305 | |||
Lease contract terminations 1 | – 63 | – 98 | |||
Impact of divestments | – 32 | – 17 | |||
Currency translation effects | 46 | 6 | |||
Total right-of-use assets at December 31 2 | 1 676 | 1 677 | |||
1 Lease contract terminations also includes modifications to existing leases that result in reductions to the right-of-use assets, and reductions due to sub-leasing. | |||||
2 No impairment charge was recorded in 2020 (2019: nil). |
(USD millions) | December 31, 2020 carrying value | Depreciation charge 2020 | December 31, 2019 carrying value | Depreciation charge 2019 | |||||
Land | 528 | 11 | 537 | 14 | |||||
Buildings | 963 | 207 | 990 | 194 | |||||
Vehicles | 155 | 100 | 129 | 87 | |||||
Machinery and equipment, and other assets | 30 | 12 | 21 | 10 | |||||
Total right-of-use assets | 1 676 | 330 | 1 677 | 305 | |||||
(USD millions) | Lease liabilities 2020 | Lease liabilities undiscounted 2020 | Lease liabilities 2019 | Lease liabilities undiscounted 2019 | |||||
Less than one year | 286 | 338 | 246 | 295 | |||||
Between one and two years | 229 | 274 | 202 | 246 | |||||
Between two and three years | 186 | 226 | 163 | 202 | |||||
Between three and four years | 148 | 183 | 138 | 173 | |||||
Between four and five years | 129 | 160 | 119 | 150 | |||||
After five years | 1 027 | 2 326 | 1 081 | 2 419 | |||||
Total lease liabilities | 2 005 | 3 507 | 1 949 | 3 485 | |||||
Less current portion of lease liabilities | – 286 | – 338 | – 246 | – 295 | |||||
Non-current portion of lease liabilities | 1 719 | 3 169 | 1 703 | 3 190 | |||||
(USD millions) | 2020 | 2019 | |||
Interest expense on lease liabilities 1 | 67 | 66 | |||
Expense on short-term leases | 4 | 7 | |||
Expense on low-value leases | 7 | 8 | |||
Total cash outflows for leases | 379 | 339 | |||
Thereof: | |||||
Cash outflows for short-term leases and low-value leases 2 | 11 | 15 | |||
Payments of interest 3 | 56 | 51 | |||
Payments of lease liabilities 4 | 312 | 273 | |||
1 The weighted average interest rate is 3.4% (2019: 3.9%). | |||||
2 Cash flows from short-term and low-value leases are included within total net cash flows from operating activities. The portfolio of short-term leases to which the Group is committed to at December 31, 2020 and 2019, is similar to the portfolio of short-term leases the Group entered into during 2020 and 2019. | |||||
3 Included within total net cash flows from operating activities. | |||||
4 Reported as cash outflows used in financing activities net of lease incentives received of USD nil (2019: USD 33 million). |
Goodwill | Intangible assets other than goodwill | ||||||||||||
(USD millions) | Total | In-process research and development | Technologies | Currently marketed products | Other intangible assets | Total | |||||||
Cost | |||||||||||||
January 1, 2020 | 26 825 | 7 429 | 884 | 43 548 | 1 558 | 53 419 | |||||||
Cost of assets reclassified out of assets of disposal group held for sale 1 | 10 | 276 | 1 112 | 2 | 1 400 | ||||||||
Impact of acquisitions of businesses | 2 580 | 8 600 | 196 | 218 | 9 014 | ||||||||
Reclassifications 2 | – 9 272 | – 2 | 9 274 | ||||||||||
Additions 3 | 339 | 674 | 412 | 1 425 | |||||||||
Disposals and derecognitions 4 | – 421 | – 101 | – 39 | – 11 | – 572 | ||||||||
Currency translation effects | 916 | 208 | 58 | 2 568 | 205 | 3 039 | |||||||
December 31, 2020 | 30 321 | 6 893 | 1 115 | 57 333 | 2 384 | 67 725 | |||||||
Accumulated amortization | |||||||||||||
January 1, 2020 | – 301 | – 2 005 | – 721 | – 20 969 | – 937 | – 24 632 | |||||||
Accumulated amortization on assets reclassified out of assets of disposal group held for sale 1 | – 2 | – 107 | – 816 | – 925 | |||||||||
Amortization charge 5 | – 72 | – 3 215 | – 175 | – 3 462 | |||||||||
Accumulated amortization on disposals and derecognitions 4 | 421 | 101 | 39 | 6 | 567 | ||||||||
Impairment charge 6 | – 515 | – 40 | – 338 | – 21 | – 914 | ||||||||
Currency translation effects | – 21 | – 92 | – 46 | – 1 267 | – 145 | – 1 550 | |||||||
December 31, 2020 | – 322 | – 2 193 | – 885 | – 26 566 | – 1 272 | – 30 916 | |||||||
Net book value at December 31, 2020 | 29 999 | 4 700 | 230 | 30 767 | 1 112 | 36 809 | |||||||
1 Note 2 provides additional disclosures related to the reclassification out of assets of disposal group held for sale as of March 31, 2020. | |||||||||||||
2 Reclassifications between various asset categories as a result of product launches of acquired in-process research and development and completion of software development | |||||||||||||
3 No addition for the disposal group held for sale for the period from January 1, 2020, to March 31, 2020 | |||||||||||||
4 Derecognition of assets that are no longer being used or developed and are not considered to have a significant disposal value or other alternative use | |||||||||||||
5 Amortization charge includes USD 102 million (USD 73 million for currently marketed products and USD 29 million for technologies), representing the cumulative amount of amortization charge for the disposal group held for sale for intangible assets from the date of reclassification to held for sale, September 6, 2018, to March 31, 2020, the date of reclassification out of assets of disposal group held for sale. See Note 2 for further details. | |||||||||||||
6 Impairment charge includes USD 42 million on currently marketed products that were previously classified within assets of disposal group held for sale. See Note 2 for further details. |
Goodwill | Intangible assets other than goodwill | ||||||||||||||||
(USD millions) | Total | In-process research and development | Alcon brand name | Technologies | Currently marketed products | Marketing know-how | Other intangible assets | Total | |||||||||
Cost | |||||||||||||||||
January 1, 2019 | 35 700 | 16 167 | 2 980 | 6 253 | 35 412 | 5 960 | 2 253 | 69 025 | |||||||||
Cost of assets related to discontinued operations 1 | – 9 000 | – 249 | – 2 980 | – 5 369 | – 4 440 | – 5 960 | – 572 | – 19 570 | |||||||||
Cost of assets related to disposal group held for sale, net 2 | – 1 | 4 | 3 | ||||||||||||||
Impact of acquisitions of businesses | 186 | 342 | 3 550 | 22 | 3 914 | ||||||||||||
Reclassifications 3 | – 9 069 | 9 069 | |||||||||||||||
Additions 4 | 265 | 243 | 259 | 767 | |||||||||||||
Disposals and derecognitions 5 | – 75 | – 544 | – 436 | – 1 055 | |||||||||||||
Currency translation effects | – 61 | 49 | 254 | 32 | 335 | ||||||||||||
December 31, 2019 | 26 825 | 7 429 | 884 | 43 548 | 1 558 | 53 419 | |||||||||||
Accumulated amortization | |||||||||||||||||
January 1, 2019 | – 406 | – 1 120 | – 4 758 | – 21 218 | – 1 906 | – 1 304 | – 30 306 | ||||||||||
Accumulated amortization on assets related to discontinued operations 1 | 101 | 3 | 4 184 | 2 592 | 1 906 | 128 | 8 813 | ||||||||||
Amortization charge 6 | – 42 | – 2 657 | – 137 | – 2 836 | |||||||||||||
Accumulated amortization on disposals and derecognitions 5 | 70 | 494 | 419 | 983 | |||||||||||||
Impairment charge 6 | – 984 | – 105 | – 54 | – 32 | – 1 175 | ||||||||||||
Reversal of impairment charge | 37 | 37 | |||||||||||||||
Currency translation effects | 4 | – 11 | – 126 | – 11 | – 148 | ||||||||||||
December 31, 2019 | – 301 | – 2 005 | – 721 | – 20 969 | – 937 | – 24 632 | |||||||||||
Net book value at December 31, 2019 | 26 524 | 5 424 | 163 | 22 579 | 621 | 28 787 | |||||||||||
1 Represents the cost of assets and accumulated amortization at January 1, 2019, related to the Alcon business reported as discontinued operations. Notes 1, 2 and 30 provide information related to discontinued operations. | |||||||||||||||||
2 Note 2 provides additional disclosures related to assets of disposal group held for sale. | |||||||||||||||||
3 Reclassifications between various asset categories as a result of product launches of acquired in-process research and development and completion of software development | |||||||||||||||||
4 No addition in the disposal group held for sale for the period from January 1, 2019, to December 31, 2019 | |||||||||||||||||
5 Derecognition of assets that are no longer being used or developed and are not considered to have a significant disposal value or other alternative use | |||||||||||||||||
6 No amortization or impairment charges related to the disposal group held for sale for the period from January 1, 2019, to December 31, 2019. |
Goodwill | Intangible assets other than goodwill | ||||||||||||
(USD millions) | Total | In-process research and development | Technologies | Currently marketed products | Other intangible assets | Total | |||||||
Innovative Medicines | 21 718 | 4 548 | 3 | 29 645 | 925 | 35 121 | |||||||
Sandoz | 8 274 | 152 | 227 | 1 122 | 42 | 1 543 | |||||||
Corporate | 7 | 145 | 145 | ||||||||||
Net book value at December 31, 2020 | 29 999 | 4 700 | 230 | 30 767 | 1 112 | 36 809 | |||||||
Goodwill | Intangible assets other than goodwill | ||||||||||||
(USD millions) | Total | In-process research and development | Technologies | Currently marketed products | Other intangible assets | Total | |||||||
Innovative Medicines | 18 750 | 5 339 | 7 | 21 720 | 520 | 27 586 | |||||||
Sandoz | 7 767 | 85 | 156 | 859 | 25 | 1 125 | |||||||
Corporate | 7 | 76 | 76 | ||||||||||
Net book value at December 31, 2019 | 26 524 | 5 424 | 163 | 22 579 | 621 | 28 787 | |||||||
(As a percentage) | Innovative Medicines | Sandoz | |||
Terminal growth rate | 1.5 | 1.5 | |||
Discount rate (post-tax) | 6.5 | 6.5 | |||
(USD millions) | 2020 | 2019 | 2018 | ||||
Innovative Medicines 1 | – 768 | – 669 | – 592 | ||||
Sandoz 2 | – 141 | – 506 | – 249 | ||||
Corporate | – 5 | ||||||
Total | – 914 | – 1 175 | – 841 | ||||
1 2020 includes an impairment of USD 485 million related to the write-down of IPR&D related to cessation of clinical development program ZPL389 for atopic dermatitis and USD 181 million related to a partial write-down of the Votrient currently marketed product. 2019 includes an impairment of USD 416 million related to the write-down of IPR&D related to cessation of clinical development program EMA401 and a USD 108 million write-down related to the cessation of clinical development program for MOR106 for atopic dermatitis. 2018 includes an impairment of USD 400 million related to a partial write-down of the Votrient currently marketed product. | |||||||
2 2019 includes an impairment of USD 442 million related to the write-down of IPR&D related to the discontinuation of the generic Advair® development program. 2018 includes impairments of USD 220 million related to the write-down of the allocated goodwill (USD 183 million) and the currently marketed products (USD 37 million) related to the retained Sandoz US dermatology business and generic US oral solids portfolio. See Note 2. |
(USD millions) | Property, plant and equipment | Intangible assets | Pensions and other benefit obligations of associates | Inventories | Tax loss carry- forwards | Other assets, provisions and accruals | Total | ||||||||
Gross deferred tax assets at January 1, 2020 | 108 | 1 469 | 1 078 | 2 446 | 255 | 2 596 | 7 952 | ||||||||
Gross deferred tax liabilities at January 1, 2020 | – 390 | – 3 610 | – 291 | – 287 | – 7 | – 1 325 | – 5 910 | ||||||||
Net deferred tax balance at January 1, 2020 | – 282 | – 2 141 | 787 | 2 159 | 248 | 1 271 | 2 042 | ||||||||
At January 1, 2020 | – 282 | – 2 141 | 787 | 2 159 | 248 | 1 271 | 2 042 | ||||||||
Credited/(charged) to income | 89 | 110 | – 25 | 212 | – 164 | 71 | 293 | ||||||||
Charged to equity | 9 | 9 | |||||||||||||
Charged to other comprehensive income | – 3 | – 36 | – 39 | ||||||||||||
Impact of acquisitions of businesses | 5 | – 1 945 | – 3 | 408 | 34 | – 1 501 | |||||||||
Other movements | – 53 | 58 | 38 | – 25 | 5 | – 35 | – 12 | ||||||||
Net deferred tax balance at December 31, 2020 | – 241 | – 3 918 | 797 | 2 343 | 497 | 1 314 | 792 | ||||||||
Gross deferred tax assets at December 31, 2020 | 189 | 1 351 | 1 137 | 2 502 | 507 | 2 658 | 8 344 | ||||||||
Gross deferred tax liabilities at December 31, 2020 | – 430 | – 5 269 | – 340 | – 159 | – 10 | – 1 344 | – 7 552 | ||||||||
Net deferred tax balance at December 31, 2020 | – 241 | – 3 918 | 797 | 2 343 | 497 | 1 314 | 792 | ||||||||
After offsetting the following amount of deferred tax assets and liabilities within the same tax jurisdiction, the balance amounts to: | 130 | ||||||||||||||
Deferred tax assets at December 31, 2020 | 8 214 | ||||||||||||||
Deferred tax liabilities at December 31, 2020 | – 7 422 | ||||||||||||||
Net deferred tax balance at December 31, 2020 | 792 | ||||||||||||||
Gross deferred tax assets at January 1, 2019 | 191 | 1 233 | 1 188 | 3 722 | 273 | 2 175 | 8 782 | ||||||||
Gross deferred tax liabilities at January 1, 2019 | – 622 | – 5 384 | – 273 | – 474 | – 805 | – 7 558 | |||||||||
Net deferred tax balance at January 1, 2019 | – 431 | – 4 151 | 915 | 3 248 | 273 | 1 370 | 1 224 | ||||||||
At January 1, 2019 | – 431 | – 4 151 | 915 | 3 248 | 273 | 1 370 | 1 224 | ||||||||
Net deferred tax balance related to discontinued operations 1 | 82 | 1 403 | – 123 | – 248 | – 39 | – 217 | 858 | ||||||||
Credited/(charged) to income | 74 | 605 | 308 | – 818 | – 113 | 298 | 354 | ||||||||
Charged to equity | 8 | 75 | – 166 | – 83 | |||||||||||
Charged to other comprehensive income | – 313 | 24 | – 289 | ||||||||||||
Impact of acquisitions of businesses | 3 | – 45 | 21 | – 26 | – 47 | ||||||||||
Other movements | – 10 | 39 | – 23 | 31 | – 12 | 25 | |||||||||
Net deferred tax balance at December 31, 2019 | – 282 | – 2 141 | 787 | 2 159 | 248 | 1 271 | 2 042 | ||||||||
Gross deferred tax assets at December 31, 2019 | 108 | 1 469 | 1 078 | 2 446 | 255 | 2 596 | 7 952 | ||||||||
Gross deferred tax liabilities at December 31, 2019 | – 390 | – 3 610 | – 291 | – 287 | – 7 | – 1 325 | – 5 910 | ||||||||
Net deferred tax balance at December 31, 2019 | – 282 | – 2 141 | 787 | 2 159 | 248 | 1 271 | 2 042 | ||||||||
After offsetting the following amount of deferred tax assets and liabilities within the same tax jurisdiction, the balance amounts to: | 43 | ||||||||||||||
Deferred tax assets at December 31, 2019 | 7 909 | ||||||||||||||
Deferred tax liabilities at December 31, 2019 | – 5 867 | ||||||||||||||
Net deferred tax balance at December 31, 2019 | 2 042 | ||||||||||||||
1 Notes 1, 2 and 30 provide information related to discontinued operations. | |||||||||||||||
(USD billions) | 2020 | 2019 | |||
Expected to have an impact on current tax payable after more than 12 months | |||||
– Deferred tax assets | 4.5 | 4.3 | |||
– Deferred tax liabilities | 7.0 | 5.2 | |||
(USD billions) | 2020 | 2019 | |||
Investments in subsidiaries | 5 | 3 | |||
Goodwill from acquisitions | – 27 | – 24 | |||
(USD millions) | Not capitalized | Capitalized | 2020 total | ||||
One year | 20 | 20 | |||||
Two years | 1 | 5 | 6 | ||||
Three years | 2 | 6 | 8 | ||||
Four years | 23 | 23 | |||||
Five years | 11 | 40 | 51 | ||||
More than five years 1 | 3 400 | 2 291 | 5 691 | ||||
Not subject to expiry | 323 | 683 | 1 006 | ||||
Total | 3 780 | 3 025 | 6 805 | ||||
1 Not capitalized more than five years includes USD 3.2 billion attributable to US state tax-loss carry-forwards, of which USD 1.6 billion relates to The Medicines Company, which was acquired in 2020 (see Note 2). |
(USD millions) | Not capitalized | Capitalized | 2019 total | ||||
One year | 14 | 0 | 14 | ||||
Two years | 28 | 0 | 28 | ||||
Three years | 28 | 6 | 34 | ||||
Four years | 16 | 46 | 62 | ||||
Five years | 127 | 37 | 164 | ||||
More than five years | 125 | 2 214 | 2 339 | ||||
Not subject to expiry | 310 | 35 | 345 | ||||
Total | 648 | 2 338 | 2 986 | ||||
(USD millions) | 2020 | 2019 | 2018 | ||||
Tax losses carried forward that expired | 14 | 9 | 8 | ||||
(USD millions) | Income statement continuing operations | Equity | Total | ||||
Deferred tax asset and liability revaluation | |||||||
Items previously recognized in consolidated income statement | 234 | 234 | |||||
Items previously recognized in other comprehensive income 1 | – 358 | – 358 | |||||
Total revaluation of deferred tax assets and liabilities | 234 | – 358 | – 124 | ||||
1 Related to post-employment benefits |
(USD millions) | 2020 | 2019 | |||
Equity securities | 1 577 | 1 524 | |||
Debt securities | 36 | 33 | |||
Fund investments | 366 | 233 | |||
Total financial investments | 1 979 | 1 790 | |||
Long-term receivables from finance subleases | 83 | 66 | |||
Other long-term receivables | 125 | 104 | |||
Contingent consideration receivables 1 | 625 | 399 | |||
Long-term loans, advances and security deposits | 89 | 159 | |||
Total financial assets | 2 901 | 2 518 | |||
1 Note 29 provides additional disclosures related to contingent considerations. |
(USD millions) | 2020 | 2019 | |||
Deferred compensation plans | 471 | 414 | |||
Prepaid post-employment benefit plans | 202 | 148 | |||
Other non-current assets | 219 | 176 | |||
Total other non-current assets | 892 | 738 | |||
(USD millions) | 2020 | 2019 | |||
Raw material, consumables | 967 | 751 | |||
Work in progress | 3 324 | 3 024 | |||
Finished products | 2 840 | 2 207 | |||
Total inventories | 7 131 | 5 982 | |||
(USD billions) | 2020 | 2019 | 2018 | ||||
Cost of goods sold | – 8.5 | – 8.5 | – 8.3 | ||||
(USD millions) | 2020 | 2019 | 2018 | ||||
Inventory provisions | – 702 | – 752 | – 603 | ||||
Reversals of inventory provisions | 255 | 218 | 216 | ||||
(USD millions) | 2020 | 2019 | |||
Total gross trade receivables | 8 310 | 8 396 | |||
Provisions for doubtful trade receivables | – 93 | – 95 | |||
Total trade receivables, net | 8 217 | 8 301 | |||
(USD millions) | 2020 | 2019 | 2018 | ||||
January 1 | – 95 | – 126 | – 190 | ||||
Provisions related to discontinued operations 1 | 54 | ||||||
Impact of acquisitions of businesses | – 1 | ||||||
Provisions for doubtful trade receivables charged to the consolidated income statement 2 | – 59 | – 89 | – 47 | ||||
Utilization of provisions for doubtful trade receivables | 13 | 12 | 39 | ||||
Reversal of provisions for doubtful trade receivables credited to the consolidated income statement 3 | 53 | 53 | 61 | ||||
Currency translation effects | – 5 | 1 | 12 | ||||
December 31 | – 93 | – 95 | – 126 | ||||
1 Notes 1, 2 and 30 provide information related to discontinued operations. | |||||||
2 Provisions charged to the consolidated income statement from continuing operations were USD 30 million in 2018. | |||||||
3 Reversal of provisions credited to the consolidated income statement from continuing operations were USD 44 million in 2018. |
(USD millions) | 2020 | 2019 | |||
Not overdue | 7 714 | 7 763 | |||
Past due for not more than one month | 150 | 161 | |||
Past due for more than one month but less than three months | 118 | 123 | |||
Past due for more than three months but less than six months | 102 | 103 | |||
Past due for more than six months but less than one year | 77 | 96 | |||
Past due for more than one year | 149 | 150 | |||
Provisions for doubtful trade receivables | – 93 | – 95 | |||
Total trade receivables, net | 8 217 | 8 301 | |||
(USD millions) | 2020 | 2019 | |||
Total balance of gross trade receivables from closely monitored countries | 1 505 | 1 588 | |||
Past due for more than one year | 55 | 61 | |||
Provisions | 27 | 24 | |||
(USD millions) | 2020 | 2019 | |||
US dollar (USD) | 3 311 | 3 466 | |||
Euro (EUR) | 1 668 | 1 384 | |||
Japanese yen (JPY) | 437 | 466 | |||
Russian ruble (RUB) | 288 | 341 | |||
Chinese yuan (CNY) | 208 | 279 | |||
British pound (GBP) | 191 | 202 | |||
Australian dollar (AUD) | 153 | 125 | |||
Brazilian real (BRL) | 148 | 165 | |||
Canadian dollar (CAD) | 125 | 129 | |||
Swiss franc (CHF) | 124 | 89 | |||
Other currencies | 1 564 | 1 655 | |||
Total trade receivables, net | 8 217 | 8 301 | |||
(USD millions) | 2020 | 2019 | |||
Marketable securities | 26 | 61 | |||
Commodities | 111 | 110 | |||
Time deposits and short-term investments with original maturity more than 90 days | 1 609 | 61 | |||
Derivative financial instruments | 159 | 102 | |||
Total marketable securities, commodities, time deposits and derivative financial instruments | 1 905 | 334 | |||
(USD millions) | 2020 | 2019 | |||
Current accounts | 3 750 | 3 247 | |||
Time deposits and short-term investments with original maturity less than 90 days | 5 908 | 7 865 | |||
Total cash and cash equivalents | 9 658 | 11 112 | |||
(USD millions) | 2020 | 2019 | |||
VAT receivable | 544 | 508 | |||
Withholding tax recoverable | 73 | 108 | |||
Prepaid expenses | 943 | 898 | |||
Receivables from associated companies | 1 | ||||
Other receivables and current assets | 963 | 1 165 | |||
Total other current assets | 2 523 | 2 680 | |||
(USD millions) | Jan 1, 2018 | Movement in year | Dec 31, 2018 | Movement in year | Dec 31, 2019 | Movement in year | Dec 31, 2020 | ||||||||
Share capital | 969 | – 25 | 944 | – 8 | 936 | – 23 | 913 | ||||||||
Treasury shares | – 100 | 31 | – 69 | – 11 | – 80 | 27 | – 53 | ||||||||
Outstanding share capital | 869 | 6 | 875 | – 19 | 856 | 4 | 860 | ||||||||
2020 | 2019 | 2018 | |||||||||||||||||||
Number of outstanding shares (in millions) | Note | Total Novartis shares | Total treasury shares 1 | Total outstanding shares | Total Novartis shares | Total treasury shares 1 | Total outstanding shares | Total Novartis shares | Total treasury shares 1 | Total outstanding shares | |||||||||||
Balance at beginning of year | 2 527.3 | – 262.3 | 2 265.0 | 2 550.6 | – 239.4 | 2 311.2 | 2 616.8 | – 299.3 | 2 317.5 | ||||||||||||
Shares canceled for capital reduction 2 | – 60.3 | 60.3 | – 23.3 | 23.3 | – 66.2 | 66.2 | |||||||||||||||
Shares acquired to be canceled 3 | – 32.6 | – 32.6 | – 60.3 | – 60.3 | – 23.3 | – 23.3 | |||||||||||||||
Other share purchases 4 | – 1.7 | – 1.7 | – 1.7 | – 1.7 | – 1.2 | – 1.2 | |||||||||||||||
Exercise of options and employee transactions 5 | 18.9 | 14.7 | 14.7 | 5.5 | 5.5 | 7.8 | 7.8 | ||||||||||||||
Equity-based compensation 5 | 11.0 | 11.0 | 9.4 | 9.4 | 7.4 | 7.4 | |||||||||||||||
Shares delivered to Alcon employees | 0.4 | 0.4 | 0.9 | 0.9 | |||||||||||||||||
Other share sales | 3.0 | 3.0 | |||||||||||||||||||
Total movements | – 60.3 | 52.1 | – 8.2 | – 23.3 | – 22.9 | – 46.2 | – 66.2 | 59.9 | – 6.3 | ||||||||||||
Balance at end of year | 2 467.0 | – 210.2 | 2 256.8 | 2 527.3 | – 262.3 | 2 265.0 | 2 550.6 | – 239.4 | 2 311.2 | ||||||||||||
1 Approximately 103.0 million treasury shares (2019: 117.6 million; 2018: 121.6 million) are held in Novartis entities that restrict their availability for use. | |||||||||||||||||||||
2 Novartis reduced its share capital by canceling shares that were repurchased on the SIX Swiss Exchange second trading line during previous years. | |||||||||||||||||||||
3 Shares repurchased on the SIX Swiss Exchange second trading line under a CHF 10 billion share buyback authority approved at the 2016 Annual General Meeting (AGM) for transactions before February 28, 2019, and under a new CHF 10 billion share buyback authority approved at the 2019 AGM for transactions after such date | |||||||||||||||||||||
4 Shares acquired from employees, which were previously granted to them under the respective equity-based participation plans | |||||||||||||||||||||
5 Shares delivered as a result of options being exercised and physical share deliveries related to equity-based participation plans. | |||||||||||||||||||||
2020 | 2019 | 2018 | |||||
Dividend per share (in CHF) | 2.95 | 2.85 | 2.80 | ||||
Total dividend payment (in USD billion) | 7.0 | 6.6 | 7.0 | ||||
2020 | 2019 | 2018 | |||||||||||||
Note | Number of outstanding shares (in millions) | Equity impact USD m | Number of outstanding shares (in millions) | Equity impact USD m | Number of outstanding shares (in millions) | Equity impact USD m | |||||||||
Shares acquired to be canceled 1 | – 32.6 | – 2 897 | – 60.3 | – 5 351 | – 23.3 | – 1 859 | |||||||||
Other share purchases 2 | – 1.7 | – 159 | – 1.7 | – 160 | – 1.2 | – 114 | |||||||||
Purchase of treasury shares | – 34.3 | – 3 056 | – 62.0 | – 5 511 | – 24.5 | – 1 973 | |||||||||
Exercise of options and employee transactions 3 | 18.9 | 14.7 | 806 | 5.5 | 210 | 7.8 | 434 | ||||||||
Equity-based compensation 4 | 11.0 | 730 | 9.4 | 833 | 7.4 | 756 | |||||||||
Shares delivered to Alcon employees | 0.4 | 30 | 0.9 | 18 | |||||||||||
Other share sales | 3.0 | 263 | |||||||||||||
Total | – 8.2 | – 1 490 | – 46.2 | – 4 450 | – 6.3 | – 520 | |||||||||
1 Shares repurchased on the SIX Swiss Exchange second trading line under a CHF 10 billion share buyback authority approved at the 2016 AGM for transactions before February 28, 2019, and under a new CHF 10 billion share buyback authority approved at the 2019 AGM for transactions after such date | |||||||||||||||
2 Shares acquired from employees, which were previously granted to them under the respective equity-based participation plans | |||||||||||||||
3 Shares delivered as a result of options being exercised related to equity-based participation plans and the delivery of treasury shares. The average share price of the shares delivered was significantly below market price, reflecting the strike price of the options exercised. | |||||||||||||||
4 Equity-settled share-based compensation is expensed in the consolidated income statement in accordance with the vesting period of the share-based compensation plans. The value for the shares and options granted is credited to consolidated equity over the respective vesting period. In addition, tax benefits arising from tax-deductible amounts exceeding the expense recognized in the income statement are credited to equity. | |||||||||||||||
(USD millions) | 2020 | 2019 | |||
Straight bonds | 28 298 | 22 167 | |||
Liabilities to banks and other financial institutions 1 | 233 | 188 | |||
Total, including current portion of non-current financial debt | 28 531 | 22 355 | |||
Less current portion of non-current financial debt | – 2 272 | – 2 002 | |||
Total non-current financial debt | 26 259 | 20 353 | |||
1 Average interest rate 0.3% (2019: 0.2%) |
Coupon | Currency | Nominal amount (millions) | Issuance year | Maturity year | Issuer | Issue price | 2020 (USD millions) | 2019 (USD millions) | |||||||||
4.400% | USD | 1 000 | 2010 | 2020 | Novartis Capital Corporation, New York, United States | 99.237% | 1 000 | ||||||||||
2.400% | USD | 1 500 | 2012 | 2022 | Novartis Capital Corporation, New York, United States | 99.225% | 1 497 | 1 495 | |||||||||
3.700% | USD | 500 | 2012 | 2042 | Novartis Capital Corporation, New York, United States | 98.325% | 490 | 489 | |||||||||
3.400% | USD | 2 150 | 2014 | 2024 | Novartis Capital Corporation, New York, United States | 99.287% | 2 142 | 2 139 | |||||||||
4.400% | USD | 1 850 | 2014 | 2044 | Novartis Capital Corporation, New York, United States | 99.196% | 1 826 | 1 825 | |||||||||
0.750% | EUR | 600 | 2014 | 2021 | Novartis Finance S.A., Luxembourg, Luxembourg | 99.134% | 737 | 670 | |||||||||
1.625% | EUR | 600 | 2014 | 2026 | Novartis Finance S.A., Luxembourg, Luxembourg | 99.697% | 735 | 670 | |||||||||
0.250% | CHF | 500 | 2015 | 2025 | Novartis AG, Basel, Switzerland | 100.640% | 568 | 517 | |||||||||
0.625% | CHF | 550 | 2015 | 2029 | Novartis AG, Basel, Switzerland | 100.502% | 625 | 568 | |||||||||
1.050% | CHF | 325 | 2015 | 2035 | Novartis AG, Basel, Switzerland | 100.479% | 369 | 336 | |||||||||
3.000% | USD | 1 750 | 2015 | 2025 | Novartis Capital Corporation, New York, United States | 99.010% | 1 737 | 1 735 | |||||||||
4.000% | USD | 1 250 | 2015 | 2045 | Novartis Capital Corporation, New York, United States | 98.029% | 1 220 | 1 219 | |||||||||
0.125% | EUR | 1 250 | 2016 | 2023 | Novartis Finance S.A., Luxembourg, Luxembourg | 99.127% | 1 530 | 1 392 | |||||||||
0.625% | EUR | 500 | 2016 | 2028 | Novartis Finance S.A., Luxembourg, Luxembourg | 98.480% | 607 | 553 | |||||||||
1.800% | USD | 1 000 | 2017 | 2020 | Novartis Capital Corporation, New York, United States | 99.609% | 1 000 | ||||||||||
2.400% | USD | 1 000 | 2017 | 2022 | Novartis Capital Corporation, New York, United States | 99.449% | 998 | 996 | |||||||||
3.100% | USD | 1 000 | 2017 | 2027 | Novartis Capital Corporation, New York, United States | 99.109% | 992 | 990 | |||||||||
0.000% | EUR | 1 250 | 2017 | 2021 | Novartis Finance S.A., Luxembourg, Luxembourg | 99.133% | 1 536 | 1 396 | |||||||||
1.125% | EUR | 600 | 2017 | 2027 | Novartis Finance S.A., Luxembourg, Luxembourg | 99.874% | 735 | 670 | |||||||||
0.500% | EUR | 750 | 2018 | 2023 | Novartis Finance S.A., Luxembourg, Luxembourg | 99.655% | 919 | 837 | |||||||||
1.375% | EUR | 750 | 2018 | 2030 | Novartis Finance S.A., Luxembourg, Luxembourg | 99.957% | 920 | 838 | |||||||||
1.700% | EUR | 750 | 2018 | 2038 | Novartis Finance S.A., Luxembourg, Luxembourg | 99.217% | 913 | 832 | |||||||||
1.750% | USD | 1 000 | 2020 | 2025 | Novartis Capital Corporation, New York, United States | 99.852% | 996 | ||||||||||
2.000% | USD | 1 250 | 2020 | 2027 | Novartis Capital Corporation, New York, United States | 99.909% | 1 245 | ||||||||||
2.200% | USD | 1 500 | 2020 | 2030 | Novartis Capital Corporation, New York, United States | 99.869% | 1 493 | ||||||||||
2.750% | USD | 1 250 | 2020 | 2050 | Novartis Capital Corporation, New York, United States | 97.712% | 1 213 | ||||||||||
0.000% 1 | EUR | 1 850 | 2020 | 2028 | Novartis Finance S.A., Luxembourg, Luxembourg | 99.354% | 2 255 | ||||||||||
Total straight bonds | 28 298 | 22 167 | |||||||||||||||
1 The EUR 1 850 million bond issued in 2020 features a coupon step-up of 0.25% commencing with the first interest payment date after December 31, 2025, if one or both of the 2025 Patient Access Targets are not met. These 2025 Patient Access Targets are the 2025 Flagship Programs Patient Reach Target and the 2025 Strategic Innovative Therapies Patient Reach Target, as defined in the bond prospectus. As of December 31, 2020, there is no indication that these 2025 Patient Access Targets will not be met. |
(USD millions) | 2020 | 2019 | |||
2020 | 2 002 | ||||
2021 | 2 272 | 2 067 | |||
2022 | 2 631 | 2 583 | |||
2023 | 2 546 | 2 321 | |||
2024 | 2 142 | 2 139 | |||
2025 | 3 302 | 2 252 | |||
After 2025 | 15 638 | 8 991 | |||
Total | 28 531 | 22 355 | |||
(USD millions) | 2020 | 2019 | |||
US dollar (USD) | 15 848 | 12 889 | |||
Euro (EUR) | 10 888 | 7 861 | |||
Japanese yen (JPY) | 194 | 184 | |||
Swiss franc (CHF) | 1 563 | 1 421 | |||
Others | 38 | ||||
Total | 28 531 | 22 355 | |||
(USD millions) | 2020 Balance sheet | 2020 Fair values | 2019 Balance sheet | 2019 Fair values | |||||
Straight bonds | 28 298 | 31 359 | 22 167 | 23 701 | |||||
Others | 233 | 233 | 188 | 188 | |||||
Total | 28 531 | 31 592 | 22 355 | 23 889 | |||||
(USD millions) | 2020 | 2019 | |||
Accrued liability for employee benefits: | |||||
Defined benefit pension plans 1 | 3 538 | 3 469 | |||
Other long-term employee benefits and deferred compensation | 637 | 546 | |||
Other post-employment benefits 1 | 543 | 612 | |||
Environmental remediation provisions | 642 | 592 | |||
Provisions for product liabilities, governmental investigations and other legal matters | 181 | 200 | |||
Contingent consideration 2 | 984 | 958 | |||
Other non-current liabilities | 409 | 255 | |||
Total provisions and other non-current liabilities | 6 934 | 6 632 | |||
1 Note 25 provides additional disclosures related to post-employment benefits. | |||||
2 Note 29 provides additional disclosures related to contingent consideration. |
(USD millions) | 2020 | 2019 | 2018 | ||||
January 1 | 714 | 692 | 761 | ||||
Cash payments | – 10 | – 30 | – 48 | ||||
Releases 1 | – 27 | – 83 | – 21 | ||||
Additions 2 | 82 | 124 | 7 | ||||
Currency translation effects | 50 | 11 | – 7 | ||||
December 31 | 809 | 714 | 692 | ||||
Less current provision | – 167 | – 122 | – 58 | ||||
Non-current environmental remediation provisions at December 31 | 642 | 592 | 634 | ||||
1 Releases of provisions credited to the consolidated income statement from continuing operations were USD 21 million in 2018. | |||||||
2 Additions to provisions charged to the consolidated income statement from continuing operations were USD 7 million in 2018. |
(USD millions) | Expected cash outflows | ||
Due within two years | 181 | ||
Due later than two years, but within five years | 210 | ||
Due later than five years, but within 10 years | 338 | ||
Due after 10 years | 80 | ||
Total environmental remediation liability provisions | 809 | ||
(USD millions) | 2020 | 2019 | 2018 | ||||
January 1 | 1 369 | 340 | 351 | ||||
Provisions related to discontinued operations 1 | – 42 | ||||||
Impact of acquisitions of businesses | 11 | 10 | |||||
Cash payments | – 1 863 | – 116 | – 118 | ||||
Releases of provisions 2 | – 31 | – 52 | – 107 | ||||
Additions to provisions 3 | 1 018 | 1 230 | 220 | ||||
Currency translation effects | – 17 | – 1 | – 6 | ||||
December 31 | 487 | 1 369 | 340 | ||||
Less current portion | – 306 | – 1 169 | – 126 | ||||
Non-current product liabilities, governmental investigations and other legal matters provisions at December 31 | 181 | 200 | 214 | ||||
1 Notes 1, 2 and 30 provide information related to discontinued operations. | |||||||
2 Releases of provisions credited to the consolidated income statement from continuing operations were USD 107 million in 2018. | |||||||
3 Additions to provisions charged to the consolidated income statement from continuing operations were USD 220 million in 2018. |
(USD millions) | 2020 | 2019 | |||
Interest-bearing accounts of associates payable on demand 1 | 2 085 | 1 836 | |||
Bank and other financial debt 2 | 976 | 719 | |||
Commercial paper | 4 258 | 2 289 | |||
Current portion of non-current financial debt | 2 272 | 2 002 | |||
Derivative financial instruments | 194 | 185 | |||
Total current financial debt and derivative financial instruments | 9 785 | 7 031 | |||
1 Weighted average interest rate 0.4% (2019: 0.5%) | |||||
2 Weighted average interest rate 5.0% (2019: 12.9%) |
(USD millions) | 2020 | 2019 | |||
Taxes other than income taxes | 749 | 471 | |||
Restructuring provisions | 459 | 438 | |||
Accrued expenses for goods and services received but not invoiced | 1 167 | 1 046 | |||
Accruals for royalties | 732 | 653 | |||
Accrued interests on financial debt | 133 | 98 | |||
Provisions for deductions from revenue | 6 256 | 5 595 | |||
Accruals for compensation and benefits, including social security | 2 286 | 2 464 | |||
Environmental remediation liabilities | 167 | 122 | |||
Deferred income | 56 | 114 | |||
Provisions for product liabilities, governmental investigations and other legal matters 1 | 306 | 1 169 | |||
Accrued share-based payments | 269 | 326 | |||
Contingent considerations 2 | 62 | 78 | |||
Commitment for repurchase of own shares 3 | 1 769 | ||||
Other payables | 716 | 764 | |||
Total provisions and other current liabilities | 15 127 | 13 338 | |||
1 Note 20 provides additional disclosures related to legal provisions. | |||||
2 Note 29 provides additional disclosures related to contingent considerations. | |||||
3 Note 18 provides additional disclosures related to commitment for repurchase of own shares. | |||||
Income statement charge2 | |||||||||||||||||
(USD millions) | Revenue deductions provisions at January 1 | Revenue deductions provisions related to discontinued operations1 | Effect of currency translation and business combinations | Payments/ utilizations | Adjustments of prior years | Current year | Change in provisions offset against gross trade receivables | Revenue deductions provisions at December 31 | |||||||||
2020 | |||||||||||||||||
US-specific healthcare plans and program rebates | 1 981 | – 5 560 | – 107 | 5 739 | 2 053 | ||||||||||||
Non-US-specific healthcare plans and program rebates | 1 769 | 167 | – 2 597 | 7 | 2 940 | – 14 | 2 272 | ||||||||||
Non-healthcare plans and program-related rebates, returns and other deductions | 1 845 | 67 | – 11 137 | – 51 | 11 094 | 113 | 1 931 | ||||||||||
Total 2020 | 5 595 | 234 | – 19 294 | – 151 | 19 773 | 99 | 6 256 | ||||||||||
2019 | |||||||||||||||||
US-specific healthcare plans and program rebates | 1 883 | 0 | – 5 183 | – 193 | 5 474 | 1 981 | |||||||||||
Non-US-specific healthcare plans and program rebates | 1 625 | – 28 | – 19 | – 2 467 | – 2 | 2 659 | 1 | 1 769 | |||||||||
Non-healthcare plans and program-related rebates, returns and other deductions | 1 754 | – 166 | 9 | – 11 698 | – 25 | 11 868 | 103 | 1 845 | |||||||||
Total 2019 | 5 262 | – 194 | – 10 | – 19 348 | – 220 | 20 001 | 104 | 5 595 | |||||||||
2018 | |||||||||||||||||
US-specific healthcare plans and program rebates | 1 590 | – 4 158 | – 90 | 4 541 | 1 883 | ||||||||||||
Non-US-specific healthcare plans and program rebates | 1 356 | – 78 | – 2 182 | 83 | 2 555 | – 109 | 1 625 | ||||||||||
Non-healthcare plans and program-related rebates, returns and other deductions | 1 726 | – 51 | – 12 227 | – 91 | 11 956 | 441 | 1 754 | ||||||||||
Total 2018 | 4 672 | – 129 | – 18 567 | – 98 | 19 052 | 332 | 5 262 | ||||||||||
1 Notes 1, 2 and 30 provide information related to discontinued operations. | |||||||||||||||||
2 Charges to the consolidated income statement from continuing operations were USD 18 248 million in 2018. |
(USD millions) | 2020 | 2019 | 2018 | ||||
January 1 | 438 | 507 | 153 | ||||
Provisions related to discontinued operations 1 | – 8 | ||||||
Additions 2 | 354 | 492 | 534 | ||||
Cash payments | – 268 | – 479 | – 145 | ||||
Releases 3 | – 87 | – 72 | – 33 | ||||
Currency translation effects | 22 | – 2 | – 2 | ||||
December 31 | 459 | 438 | 507 | ||||
1 Notes 1, 2 and 30 provide information related to discontinued operations. | |||||||
2 Additions to provisions charged to the consolidated income statement from continuing operations were USD 521 million in 2018. | |||||||
3 Reversal of provisions credited to the consolidated income statement from continuing operations were USD 31 million in 2018. |
(USD millions) | 2020 | 2019 | 2018 | ||||
Depreciation, amortization and impairments on: | |||||||
Property, plant and equipment | 1 758 | 1 547 | 1 783 | ||||
Right-of-use assets 1 | 330 | 305 | |||||
Intangible assets | 4 376 | 3 974 | 3 428 | ||||
Financial assets 2 | – 335 | – 38 | 6 | ||||
Change in provisions and other non-current liabilities | 1 411 | 1 871 | 895 | ||||
Gains on disposal and other adjustments on property, plant and equipment; intangible assets; financial assets; and other non-current assets, net | – 478 | – 1 234 | – 902 | ||||
Equity-settled compensation expense | 738 | 758 | 673 | ||||
Income from associated companies 3 | – 673 | – 659 | – 6 438 | ||||
Taxes | 1 807 | 1 793 | 1 295 | ||||
Net financial expense | 947 | 805 | 746 | ||||
Total | 9 881 | 9 122 | 1 486 | ||||
1 Depreciation of right-of-use assets recognized from January 1, 2019, the date of implementation of IFRS 16 Leases. See Note 1. | |||||||
2 Includes fair value adjustments | |||||||
3 2018 included a reversal of a pre-tax gain (USD 5.8 billion) recognized from the divestment of the investment in GSK Consumer Healthcare Holdings Ltd. (see Note 2). The net cash proceed of USD 13.0 billion from the divestment was included in the consolidated statements of cash flows in the line "Acquisitions and divestments of interests in associated companies, net." |
(USD millions) | 2020 | 2019 | 2018 | ||||
(Increase) in inventories | – 543 | – 382 | – 387 | ||||
Decrease/(increase) in trade receivables | 137 | – 980 | – 544 | ||||
(Decrease)/increase in trade payables | – 324 | 553 | 252 | ||||
Change in other current assets | 229 | – 160 | 316 | ||||
Change in other current liabilities | 211 | 1 167 | 941 | ||||
Other adjustments, net | – 1 | 1 | – 2 | ||||
Total | – 291 | 199 | 576 | ||||
(USD millions) | Note | 2020 | 2019 | 2018 | |||||
Net assets recognized as a result of acquisitions of businesses | 24 | – 10 173 | – 4 124 | – 13 660 | |||||
Fair value of previously held equity interests | 7 | 33 | |||||||
Contingent consideration payables, net | 98 | 242 | – 5 | ||||||
Payments, deferred consideration and other adjustments, net | 62 | – 2 | – 36 | ||||||
Cash flows used for acquisitions of businesses | – 10 006 | – 3 851 | – 13 701 | ||||||
Cash flows from divestments of businesses, net 1 | 49 | 91 | 18 | ||||||
Cash flows used for acquisitions and divestments of businesses, net | – 9 957 | – 3 760 | – 13 683 | ||||||
1 In 2020, USD 49 million represented the net cash inflows from divestments in previous years. In 2019, the USD 91 million included USD 4 million of net cash outflows from divestments in previous years, and USD 95 million net cash inflows from business divestments in 2019. The net identifiable assets of the 2019 divested businesses amounted to USD 196 million, comprised of non-current assets of USD 159 million; current assets of USD 96 million, including USD 11 million cash and cash equivalents; non-current liabilities of USD 18 million; and current liabilities of USD 41 million. In 2018, USD 18 million represented the net cash inflows from divestments in previous years. |
(USD millions) | Non-current financial debts | Current financial debts and derivative financial instruments | Non-current lease liabilities | Current lease liabilities | |||||
January 1, 2020 | 20 353 | 7 031 | 1 703 | 246 | |||||
Increase in non-current financial debts | 7 126 | ||||||||
Repayments of non-current financial debts | – 2 003 | ||||||||
Change in current financial debts | 2 261 | ||||||||
Payments of lease liabilities, net | – 312 | ||||||||
Interest payments for amounts included in lease liabilities classified as cash flows from operating activities | – 56 | ||||||||
New leases | 221 | 73 | |||||||
Impact of acquisitions of businesses | 32 | 36 | 8 | ||||||
Changes in fair values, and other changes, net | – 1 | – 30 | 65 | ||||||
Amortization of bonds discount | 16 | 5 | |||||||
Currency translation effects | 832 | 392 | 39 | 12 | |||||
Reclassification from non-current to current, net | – 2 067 | 2 067 | – 250 | 250 | |||||
December 31, 2020 | 26 259 | 9 785 | 1 719 | 286 | |||||
(USD millions) | Non-current financial debts | Current financial debts and derivative financial instruments | Non-current lease liabilities | Current lease liabilities | |||||
January 1, 2019 | 22 470 | 9 678 | |||||||
Impact of adoption of IFRS 16 Leases continuing operations 1 | – 2 | – 1 | 1 471 | 268 | |||||
Impact of adoption of IFRS 16 Leases discontinued operations 2 | – 89 | 246 | 40 | ||||||
Financial debts and lease liabilities related to discontinued operations 3 | – 47 | – 246 | – 40 | ||||||
Increase in non-current financial debts | 93 | ||||||||
Repayments of non-current financial debts | – 3 195 | ||||||||
Change in current financial debts | – 1 582 | ||||||||
Payments of lease liabilities, net | – 273 | ||||||||
Interest payments for amounts included in lease liabilities classified as cash flows from operating activities | – 51 | ||||||||
New leases | 362 | 131 | |||||||
Impact of acquisitions and divestments of businesses | 2 | – 11 | – 6 | ||||||
Changes in fair values, and other changes, net | 129 | 33 | 20 | ||||||
Amortization of bonds discount | 25 | ||||||||
Currency translation effects | – 141 | 44 | 4 | 1 | |||||
Reclassification from non-current to current, net | – 2 003 | 2 003 | – 156 | 156 | |||||
December 31, 2019 | 20 353 | 7 031 | 1 703 | 246 | |||||
1 Lease liabilities recognized on January 1, 2019, the date of implementation of IFRS 16 Leases. See Note 1. | |||||||||
2 In 2018, financial debts included USD 89 million for previously reported finance lease obligations of the Alcon business that were reclassified on January 1, 2019, to lease liabilities, with the adoption of IFRS 16 Leases. Note 30 provides additional disclosures. | |||||||||
3 Represents the financial debts and lease liabilities at January 1, 2019, related to the Alcon business reported as discontinued operations. See Notes 1, 2 and 30. |
(USD millions) | Non-current financial debts | Current financial debts and derivative financial instruments | |||
January 1, 2018 | 23 224 | 5 308 | |||
Increase in non-current financial debts 1 | 2 856 | ||||
Repayments of non-current financial debts 2 | – 366 | ||||
Change in current financial debts 3 | 1 681 | ||||
Impact of acquisitions of businesses | 10 | 4 | |||
Changes in fair values, and other changes | 5 | – 48 | |||
Amortization of bonds discount | 27 | 2 | |||
Currency translation effects | – 462 | – 93 | |||
Current portion of non-current financial debt | – 3 190 | 3 190 | |||
December 31, 2018 | 22 470 | 9 678 | |||
1 Increase in non-current financial debts was only recorded in the consolidated statements of cash flows from continuing operations. | |||||
2 Repayment of non-current financial debts was only recorded in the consolidated statements of cash flows from continuing operations. | |||||
3 Changes in current financial debts included in the consolidated statements of cash flows from continuing operations were USD 1 687 million. |
(USD millions) | 2020 | 2019 | 2018 | ||||
Property, plant and equipment | 26 | 44 | 137 | ||||
Right-of-use assets | 32 | ||||||
Currently marketed products | 196 | 3 550 | 2 531 | ||||
Acquired research and development | 8 600 | 342 | 10 224 | ||||
Other intangible assets | 218 | 22 | 1 | ||||
Deferred tax assets | 476 | 60 | 381 | ||||
Non-current financial and other assets | 49 | 8 | 19 | ||||
Inventories | 84 | 195 | 20 | ||||
Trade receivables and financial and other current assets | 109 | 4 | 90 | ||||
Cash and cash equivalents | 76 | 1 112 | |||||
Deferred tax liabilities | – 1 977 | – 107 | – 2 874 | ||||
Current and non-current financial debts | – 32 | – 2 | – 14 | ||||
Current and non-current lease liabilities | – 44 | ||||||
Trade payables and other liabilities | – 144 | – 178 | – 627 | ||||
Net identifiable assets acquired | 7 669 | 3 938 | 11 000 | ||||
Acquired cash and cash equivalents | – 76 | – 1 112 | |||||
Non-controlling interests | – 26 | ||||||
Goodwill | 2 580 | 186 | 4 084 | ||||
Net assets recognized as a result of acquisitions of businesses 1 | 10 173 | 4 124 | 13 946 | ||||
1 In 2018, net assets recognized as a result of acquisitions of businesses in the consolidated balance sheet from continuing operations were USD 13 660 million. |
Pension plans | Other post-employment benefit plans | ||||||||
(USD millions) | 2020 | 2019 | 2020 | 2019 | |||||
Benefit obligation at January 1 | 23 066 | 22 179 | 746 | 1 073 | |||||
Benefit obligations related to discontinued operations 1 | – 662 | – 385 | |||||||
Current service cost | 372 | 336 | 11 | 13 | |||||
Interest cost | 222 | 330 | 20 | 29 | |||||
Past service costs and settlements | – 102 | – 168 | 1 | ||||||
Administrative expenses | 24 | 24 | |||||||
Remeasurement losses/(gains) arising from changes in financial assumptions | 1 166 | 1 791 | 40 | 76 | |||||
Remeasurement (gains)/losses arising from changes in demographic assumptions | – 28 | – 193 | – 13 | – 9 | |||||
Experience-related remeasurement losses/(gains) | 159 | 184 | – 132 | – 22 | |||||
Currency translation effects | 1 810 | 283 | – 7 | ||||||
Benefit payments | – 1 264 | – 1 256 | – 33 | – 30 | |||||
Contributions of associates | 186 | 169 | |||||||
Effect of acquisitions, divestments or transfers | – 9 | 49 | – 1 | 1 | |||||
Benefit obligation at December 31 | 25 602 | 23 066 | 632 | 746 | |||||
Fair value of plan assets at January 1 | 19 810 | 18 838 | 134 | 119 | |||||
Plan assets related to discontinued operations 1 | – 424 | – 40 | |||||||
Interest income | 166 | 257 | 4 | 3 | |||||
Return on plan assets excluding interest income | 1 318 | 1 656 | 4 | 10 | |||||
Currency translation effects | 1 620 | 304 | |||||||
Novartis Group contributions | 464 | 420 | – 20 | 74 | |||||
Contributions of associates | 186 | 169 | |||||||
Settlements | 15 | – 193 | |||||||
Benefit payments | – 1 264 | – 1 256 | – 33 | – 30 | |||||
Effect of acquisitions, divestments or transfers | 2 | 39 | – 2 | ||||||
Fair value of plan assets at December 31 | 22 317 | 19 810 | 89 | 134 | |||||
Funded status | – 3 285 | – 3 256 | – 543 | – 612 | |||||
Limitation on recognition of fund surplus at January 1 | – 65 | – 68 | |||||||
Change in limitation on recognition of fund surplus (incl. exchange rate differences) | 16 | 7 | |||||||
Interest income on limitation of fund surplus | – 2 | – 4 | |||||||
Limitation on recognition of fund surplus at December 31 | – 51 | – 65 | |||||||
Net liability in the balance sheet at December 31 | – 3 336 | – 3 321 | – 543 | – 612 | |||||
1 Notes 1, 2 and 30 provide information related to discontinued operations. |
Pension plans | Other post-employment benefit plans | ||||||||
(USD millions) | 2020 | 2019 | 2020 | 2019 | |||||
Net liability at January 1 | – 3 321 | – 3 409 | – 612 | – 954 | |||||
Less: net liability related to discontinued operations 1 | 238 | 345 | |||||||
Current service cost | – 372 | – 336 | – 11 | – 13 | |||||
Net interest expense | – 58 | – 77 | – 16 | – 26 | |||||
Administrative expenses | – 24 | – 24 | |||||||
Past service costs and settlements | 117 | – 25 | – 1 | ||||||
Remeasurements | 21 | – 126 | 109 | – 35 | |||||
Currency translation effects | – 190 | 21 | 7 | ||||||
Novartis Group contributions | 464 | 420 | – 20 | 74 | |||||
Effect of acquisitions, divestments or transfers | 11 | – 10 | 1 | – 3 | |||||
Change in limitation on recognition of fund surplus | 16 | 7 | |||||||
Net liability at December 31 | – 3 336 | – 3 321 | – 543 | – 612 | |||||
Amounts recognized in the consolidated balance sheet | |||||||||
Prepaid benefit cost | 202 | 148 | |||||||
Accrued benefit liability | – 3 538 | – 3 469 | – 543 | – 612 | |||||
1 Notes 1, 2 and 30 provide information related to discontinued operations. |
2020 | 2019 | ||||||||||||||||
(USD millions) | Switzerland | United States | Rest of the world | Total | Switzerland | United States | Rest of the world | Total | |||||||||
Benefit obligation at December 31 | 16 807 | 3 788 | 5 007 | 25 602 | 15 106 | 3 552 | 4 408 | 23 066 | |||||||||
Thereof unfunded | 701 | 516 | 1 217 | 670 | 466 | 1 136 | |||||||||||
By type of member | |||||||||||||||||
Active | 6 837 | 665 | 1 573 | 9 075 | 6 167 | 630 | 1 400 | 8 197 | |||||||||
Deferred pensioners | 1 290 | 1 819 | 3 109 | 1 205 | 1 517 | 2 722 | |||||||||||
Pensioners | 9 970 | 1 833 | 1 615 | 13 418 | 8 939 | 1 717 | 1 491 | 12 147 | |||||||||
Fair value of plan assets at December 31 | 16 396 | 2 487 | 3 434 | 22 317 | 14 457 | 2 311 | 3 042 | 19 810 | |||||||||
Funded status | – 411 | – 1 301 | – 1 573 | – 3 285 | – 649 | – 1 241 | – 1 366 | – 3 256 | |||||||||
2020 | 2019 | ||||||||||||
(USD millions) | United States | Rest of the world | Total | United States | Rest of the world | Total | |||||||
Benefit obligation at December 31 | 543 | 89 | 632 | 658 | 88 | 746 | |||||||
Thereof unfunded | 454 | 89 | 543 | 524 | 88 | 612 | |||||||
By type of member | |||||||||||||
Active | 80 | 25 | 105 | 121 | 36 | 157 | |||||||
Deferred pensioners | 17 | 0 | 17 | 15 | 0 | 15 | |||||||
Pensioners | 446 | 64 | 510 | 522 | 52 | 574 | |||||||
Fair value of plan assets at December 31 | 89 | 0 | 89 | 134 | 0 | 134 | |||||||
Funded status | – 454 | – 89 | – 543 | – 524 | – 88 | – 612 | |||||||
Pension plans | Other post-employment benefit plans | ||||||||||||
2020 | 2019 | 2018 | 2020 | 2019 | 2018 | ||||||||
Weighted average assumptions used to determine benefit obligations at December 31 | |||||||||||||
Discount rate | 0.6% | 1.0% | 1.6% | 2.9% | 3.6% | 4.4% | |||||||
Expected rate of pension increase | 0.3% | 0.3% | 0.4% | ||||||||||
Expected rate of salary increase | 2.7% | 2.8% | 2.8% | ||||||||||
Interest on savings account | 0.1% | 0.3% | 0.8% | ||||||||||
Current average life expectancy for a 65-year-old male in years | 22 | 22 | 22 | 21 | 21 | 21 | |||||||
Current average life expectancy for a 65-year-old female in years | 24 | 24 | 24 | 23 | 23 | 23 | |||||||
(USD millions) | Change in 2020 year-end defined benefit pension obligation | ||
25 basis point increase in discount rate | – 885 | ||
25 basis point decrease in discount rate | 942 | ||
One-year increase in life expectancy | 993 | ||
25 basis point increase in rate of pension increase | 589 | ||
25 basis point decrease in rate of pension increase | – 143 | ||
25 basis point increase of interest on savings account | 62 | ||
25 basis point decrease of interest on savings account | – 30 | ||
25 basis point increase in rate of salary increase | 61 | ||
25 basis point decrease in rate of salary increase | – 61 | ||
2020 | 2019 | 2018 | |||||
Healthcare cost trend rate assumed for next year | 6.3% | 6.5% | 7.0% | ||||
Rate to which the cost trend rate is assumed to decline | 4.5% | 4.5% | 4.5% | ||||
Year that the rate reaches the ultimate trend rate | 2028 | 2028 | 2028 | ||||
Pension plans | |||||||||
(as a percentage) | Long-term target minimum | Long-term target maximum | 2020 | 2019 | |||||
Equity securities | 15 | 40 | 28 | 27 | |||||
Debt securities | 20 | 60 | 34 | 36 | |||||
Real estate | 5 | 20 | 17 | 17 | |||||
Alternative investments | 0 | 20 | 13 | 15 | |||||
Cash and other investments | 0 | 15 | 8 | 5 | |||||
Total | 100 | 100 | |||||||
December 31, 2020 | December 31, 2019 | ||||
Investment in shares of Novartis AG | |||||
Number of shares (in millions) | 2.3 | 2.3 | |||
Market value (in USD billions) | 0.2 | 0.2 | |||
(USD millions) | Pension plans | Other post- employment benefit plans | |||
Novartis Group contributions | |||||
2021 (estimated) | 404 | 40 | |||
Expected future benefit payments | |||||
2021 | 1 245 | 40 | |||
2022 | 1 198 | 41 | |||
2023 | 1 191 | 41 | |||
2024 | 1 182 | 40 | |||
2025 | 1 165 | 40 | |||
2026–2030 | 5 651 | 181 | |||
(USD millions) | 2020 | 2019 | 2018 | ||||
Contributions for defined contribution plans continuing operations | 501 | 422 | 443 | ||||
(USD millions) | 2020 | 2019 | 2018 | ||||
Expense related to equity-based participation plans | 958 | 1 067 | 918 | ||||
Liabilities arising from equity-based payment transactions | 269 | 326 | 273 | ||||
2020 | 2019 | ||||||||
Options (millions) | Weighted average exercise price (USD) | Options (millions) | Weighted average exercise price (USD) | ||||||
Options outstanding at January 1 | 3.4 | 60.9 | 5.6 | 59.9 | |||||
Sold or exercised | – 0.8 | 57.3 | – 2.2 | 58.4 | |||||
Outstanding at December 31 | 2.6 | 62.0 | 3.4 | 60.9 | |||||
Exercisable at December 31 | 2.6 | 62.0 | 3.4 | 60.9 | |||||
Options outstanding | Total/ weighted average | ||||||||
Number outstanding (millions) | 0.4 | 0.8 | 1.4 | 2.6 | |||||
Remaining contractual life (years) | 0.0 | 1.0 | 2.0 | 1.4 | |||||
Exercise price (USD) | 57.0 | 57.6 | 66.0 | 62.0 | |||||
2020 | 2019 | ||||||||
ADR options (millions) | Weighted average exercise price (USD) | ADR options (millions) | Weighted average exercise price (USD) | ||||||
Options outstanding at January 1 | 9.6 | 61.9 | 15.2 | 60.7 | |||||
Sold or exercised | – 2.9 | 59.6 | – 5.6 | 58.6 | |||||
Outstanding at December 31 | 6.7 | 62.9 | 9.6 | 61.9 | |||||
Exercisable at December 31 | 6.7 | 62.9 | 9.6 | 61.9 | |||||
ADR options outstanding | Total/ weighted average | ||||||||
Number outstanding (millions) | 0.4 | 2.3 | 4.0 | 6.7 | |||||
Remaining contractual life (years) | 0.0 | 1.0 | 2.0 | 1.5 | |||||
Exercise price (USD) | 57.0 | 58.3 | 66.1 | 62.9 | |||||
2020 | 2019 | ||||||||||||
Number of shares in millions | Weighted average fair value at grant date in USD | Fair value at grant date in USD millions | Number of shares in millions | Weighted average fair value at grant date in USD | Fair value at grant date in USD millions | ||||||||
Non-vested shares at January 1 | 25.8 | 71.1 | 1 835 | 25.7 | 77.1 | 1 981 | |||||||
Granted | |||||||||||||
– Annual Incentive | 1.1 | 93.7 | 103 | 1.1 | 78.4 | 86 | |||||||
– Share savings plans | 4.2 | 95.0 | 399 | 4.2 | 83.0 | 349 | |||||||
– Select North America | 3.3 | 86.7 | 286 | 5.3 | 64.0 | 339 | |||||||
– Select outside North America | 2.0 | 89.4 | 179 | 2.6 | 67.4 | 175 | |||||||
– Long-Term Performance Plan | 2.5 | 85.1 | 213 | 2.5 | 68.9 | 172 | |||||||
– Long-Term Relative Performance Plan 1 | 0.2 | 0.0 | 0 | 0.1 | 0.0 | 0 | |||||||
– Other share awards | 1.5 | 78.0 | 117 | 1.9 | 67.7 | 129 | |||||||
Vested | – 13.8 | 74.2 | – 1 024 | – 13.3 | 80.3 | – 1 068 | |||||||
Forfeited | – 2.0 | 75.3 | – 151 | – 4.3 | 76.3 | – 328 | |||||||
Non-vested shares at December 31 | 24.8 | 78.9 | 1 957 | 25.8 | 71.1 | 1 835 | |||||||
1 LTRPP grants in 2020 represent incremental payouts based on performance criteria under the plan. In 2019 the LTRPP grants are keep whole awards granted due to the spin-off of the Alcon business. |
Executive Officers | Non-Executive Directors | Total | |||||||||||||||||
(USD millions) | 2020 | 2019 | 2018 | 2020 | 2019 | 2018 | 2020 | 2019 | 2018 | ||||||||||
Cash and other compensation | 25.6 | 20.7 | 22.5 | 4.6 | 4.1 | 4.0 | 30.2 | 24.8 | 26.5 | ||||||||||
Post-employment benefits | 2.7 | 2.6 | 2.5 | 2.7 | 2.6 | 2.5 | |||||||||||||
Equity-based compensation | 41.1 | 40.6 | 42.5 | 5.2 | 4.6 | 4.8 | 46.3 | 45.2 | 47.3 | ||||||||||
Total | 69.4 | 63.9 | 67.5 | 9.8 | 8.7 | 8.8 | 79.2 | 72.6 | 76.3 | ||||||||||
Currency | 2020 | 2019 | 2018 | ||||||
Dr. Krauer | CHF | 60 000 | 60 000 | 60 000 | |||||
Dr. Vasella | CHF | 18 228 | |||||||
(USD millions) | 2020 | ||
2021 | 449 | ||
2022 | 691 | ||
2023 | 325 | ||
2024 | 483 | ||
2025 | 281 | ||
Thereafter | 3 003 | ||
Total | 5 232 | ||
2020 | |||||||||||
(USD millions) | Note | Financial instruments at amortized costs | Financial instruments at fair value through other comprehensive income | Financial instruments at fair value through the consolidated income statement | Other financial liabilities | ||||||
Cash and cash equivalents | 16 | 9 658 | |||||||||
Time deposits and short-term investments with original maturity more than 90 days | 16 | 1 609 | |||||||||
Trade receivables | 15 | 8 217 | |||||||||
Other current assets | 17 | 963 | |||||||||
Marketable securities - debt securities | 16 | 26 | |||||||||
Long-term financial investments - equity securities | 13 | 1 111 | 466 | ||||||||
Long-term financial investments - debt securities | 13 | 36 | |||||||||
Long-term financial investments - fund investments | 13 | 366 | |||||||||
Long-term loans, advances, security deposits and other long-term receivables | 13 | 297 | |||||||||
Associated companies at fair value through profit and loss | 211 | ||||||||||
Derivative financial instruments | 16 | 159 | |||||||||
Contingent consideration receivables | 13 | 625 | |||||||||
Total financial assets | 20 744 | 1 173 | 1 827 | ||||||||
Interest-bearing accounts of associates payable on demand | 21 | 2 085 | |||||||||
Bank and other short-term financial debt | 21 | 976 | |||||||||
Commercial paper | 21 | 4 258 | |||||||||
Straight bonds | 19 | 28 298 | |||||||||
Long-term liabilities to banks and other financial institutions | 19 | 233 | |||||||||
Trade payables | 5 403 | ||||||||||
Commitment for repurchase of own shares | 18/22 | 1 769 | |||||||||
Contingent consideration liabilities (see Note 20/22) and other financial liabilities | 1 069 | ||||||||||
Derivative financial instruments | 21 | 194 | |||||||||
Lease liabilities | 10 | 2 005 | |||||||||
Total financial liabilities | 43 022 | 1 263 | 2 005 | ||||||||
2019 | |||||||||||
(USD millions) | Note | Financial instruments at amortized costs | Financial instruments at fair value through other comprehensive income | Financial instruments at fair value through the consolidated income statement | Other financial liabilities | ||||||
Cash and cash equivalents | 16 | 11 112 | |||||||||
Time deposits and short-term investments with original maturity more than 90 days | 16 | 61 | |||||||||
Trade receivables | 15 | 8 301 | |||||||||
Other current assets | 17 | 2 036 | |||||||||
Marketable securities - debt securities | 16 | 24 | |||||||||
Marketable securities - fund investments | 16 | 37 | |||||||||
Long-term financial investments - equity securities | 13 | 1 158 | 366 | ||||||||
Long-term financial investments - debt securities | 13 | 33 | |||||||||
Long-term financial investments - fund investments | 13 | 233 | |||||||||
Long-term loans, advances, security deposits and other long-term receivables | 13 | 329 | |||||||||
Associated companies at fair value through profit and loss | 186 | ||||||||||
Derivative financial instruments | 16 | 102 | |||||||||
Contingent consideration receivables | 13 | 399 | |||||||||
Total financial assets | 21 839 | 1 215 | 1 323 | ||||||||
Interest-bearing accounts of associates payable on demand | 21 | 1 836 | |||||||||
Bank and other short-term financial debt | 21 | 719 | |||||||||
Commercial paper | 21 | 2 289 | |||||||||
Straight bonds | 19 | 22 167 | |||||||||
Long-term liabilities to banks and other financial institutions | 19 | 188 | |||||||||
Trade payables | 5 424 | ||||||||||
Contingent consideration liabilities (see Note 20/22) and other financial liabilities | 1 065 | ||||||||||
Derivative financial instruments | 21 | 185 | |||||||||
Lease liabilities | 10 | 1 949 | |||||||||
Total financial liabilities | 32 623 | 1 250 | 1 949 | ||||||||
Contract or underlying principal amount | Positive fair values | Negative fair values | |||||||||||
(USD millions) | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||
Forward foreign exchange rate contracts | 13 679 | 10 779 | 151 | 96 | – 165 | – 75 | |||||||
Commodity purchase contract | 11 | 9 | 8 | 6 | |||||||||
Options on equity securities | 70 | 269 | – 29 | – 110 | |||||||||
Total derivative financial instruments included in marketable securities and in current financial debts | 13 760 | 11 057 | 159 | 102 | – 194 | – 185 | |||||||
2020 | |||||||||
(USD millions) | EUR | USD | Other | Total | |||||
Forward foreign exchange rate contracts | 2 432 | 6 376 | 4 871 | 13 679 | |||||
Commodity purchase contract | 11 | 11 | |||||||
Options on equity securities | 70 | 70 | |||||||
Total derivative financial instruments | 2 432 | 6 457 | 4 871 | 13 760 | |||||
2019 | |||||||||
(USD millions) | EUR | USD | Other | Total | |||||
Forward foreign exchange rate contracts | 1 373 | 7 760 | 1 646 | 10 779 | |||||
Commodity purchase contract | 9 | 9 | |||||||
Options on equity securities | 250 | 19 | 269 | ||||||
Total derivative financial instruments | 1 373 | 8 019 | 1 665 | 11 057 | |||||
2020 | |||||||||
(USD millions) | Level 1 | Level 2 | Level 3 | Total | |||||
Financial assets | |||||||||
Debt securities | 26 | 26 | |||||||
Total marketable securities | 26 | 26 | |||||||
Derivative financial instruments | 159 | 159 | |||||||
Total marketable securities and derivative financial instruments | 185 | 185 | |||||||
Debt and equity securities | 1 153 | 460 | 1 613 | ||||||
Fund investments | 366 | 366 | |||||||
Contingent consideration receivables | 625 | 625 | |||||||
Total long-term financial investments | 1 153 | 1 451 | 2 604 | ||||||
Associated companies at fair value through profit and loss | 211 | 211 | |||||||
Financial liabilities | |||||||||
Contingent consideration payables | – 1 046 | – 1 046 | |||||||
Other financial liabilities | – 23 | – 23 | |||||||
Derivative financial instruments | – 194 | – 194 | |||||||
Total financial liabilities at fair value | – 194 | – 1 069 | – 1 263 | ||||||
2019 | |||||||||
(USD millions) | Level 1 | Level 2 | Level 3 | Total | |||||
Financial assets | |||||||||
Debt securities | 24 | 24 | |||||||
Fund investments | 37 | 37 | |||||||
Total marketable securities | 37 | 24 | 61 | ||||||
Derivative financial instruments | 102 | 102 | |||||||
Total marketable securities and derivative financial instruments | 37 | 126 | 163 | ||||||
Debt and equity securities | 976 | 581 | 1 557 | ||||||
Fund investments | 233 | 233 | |||||||
Contingent consideration receivables | 399 | 399 | |||||||
Total long-term financial investments | 976 | 1 213 | 2 189 | ||||||
Associated companies at fair value through profit and loss | 186 | 186 | |||||||
Financial liabilities | |||||||||
Contingent consideration payables | – 1 036 | – 1 036 | |||||||
Other financial liabilities | – 29 | – 29 | |||||||
Derivative financial instruments | – 185 | – 185 | |||||||
Total financial liabilities at fair value | – 185 | – 1 065 | – 1 250 | ||||||
2020 | ||||||||||||||
(USD millions) | Associated companies at fair value through profit and loss | Fund investments | Long-term financial investments | Contingent consideration receivables | Contingent consideration payables | Other financial liabilities | ||||||||
January 1 | 186 | 233 | 581 | 399 | – 1 036 | – 29 | ||||||||
Fair value gains and other adjustments, including from divestments recognized in the consolidated income statement | 57 | 151 | 34 | 173 | 206 | |||||||||
Fair value losses (including impairments and amortizations) and other adjustments recognized in the consolidated income statement | – 18 | – 8 | – 39 | – 90 | – 3 | |||||||||
Fair value adjustments recognized in the consolidated statement of comprehensive income, including currency translation effects | 4 | 3 | 33 | 40 | – 62 | – 2 | ||||||||
Purchases | 24 | 17 | 123 | 43 | – 123 | |||||||||
Cash receipts and payments | – 30 | 63 | 11 | |||||||||||
Disposals | – 23 | – 61 | – 109 | |||||||||||
Reclassification | – 19 | 31 | – 163 | – 4 | ||||||||||
December 31 | 211 | 366 | 460 | 625 | – 1 046 | – 23 | ||||||||
Total of fair value gains and losses recognized in the consolidated income statement for assets and liabilities held at December 31, 2020 | 39 | 143 | – 5 | 173 | 116 | – 3 | ||||||||
2019 | ||||||||||||||
(USD millions) | Associated companies at fair value through profit and loss | Fund investments | Long-term financial investments | Contingent consideration receivables | Contingent consideration payables | Other financial liabilities | ||||||||
January 1 | 145 | 251 | 488 | 396 | – 907 | – 10 | ||||||||
Impact from discontinued operations 1 | – 28 | – 19 | 163 | |||||||||||
Fair value gains and other adjustments, including from divestments recognized in the consolidated income statement | 12 | 6 | 35 | 195 | 1 | |||||||||
Fair value losses (including impairments and amortizations) and other adjustments recognized in the consolidated income statement | – 15 | – 89 | – 48 | |||||||||||
Fair value adjustments recognized in the consolidated statement of comprehensive income | – 6 | |||||||||||||
Purchases | 49 | 28 | 229 | – 401 | – 5 | |||||||||
Cash receipts and payments | – 32 | 3 | 33 | |||||||||||
Disposals | – 3 | – 30 | – 53 | |||||||||||
Reclassification | 10 | – 64 | ||||||||||||
December 31 | 186 | 233 | 581 | 399 | – 1 036 | – 29 | ||||||||
Total of fair value gains and losses recognized in the consolidated income statement for assets and liabilities held at December 31, 2019 | – 15 | 12 | 6 | 35 | 106 | – 47 | ||||||||
1 Notes 1, 2 and 30 provide information related to discontinued operations. |
(USD millions) | 2020 | 2019 | |||
Listed equity securities | 862 | 843 | |||
Non-listed equity securities | 249 | 315 | |||
Total equity securities | 1 111 | 1 158 | |||
2020 | |||||||||||||
(USD millions) | Due within one month | Due later than one month but less than three months | Due later than three months but less than one year | Due later than one year but less than five years | Due after five years | Total | |||||||
Current assets | |||||||||||||
Marketable securities, time deposits and short-term investments with original maturity more than 90 days | 13 | 1 571 | 25 | 5 | 21 | 1 635 | |||||||
Commodities | 111 | 111 | |||||||||||
Derivative financial instruments and accrued interest | 38 | 110 | 4 | 4 | 3 | 159 | |||||||
Cash and cash equivalents | 8 558 | 1 100 | 9 658 | ||||||||||
Total current financial assets | 8 609 | 2 781 | 29 | 9 | 135 | 11 563 | |||||||
Non-current liabilities | |||||||||||||
Financial debt | – 10 621 | – 15 638 | – 26 259 | ||||||||||
Financial debt - undiscounted | – 10 661 | – 15 802 | – 26 463 | ||||||||||
Total non-current financial debt | – 10 621 | – 15 638 | – 26 259 | ||||||||||
Current liabilities | |||||||||||||
Financial debt | – 4 195 | – 2 218 | – 3 178 | – 9 591 | |||||||||
Financial debt - undiscounted | – 4 195 | – 2 219 | – 3 179 | – 9 593 | |||||||||
Derivative financial instruments | – 93 | – 84 | – 17 | – 194 | |||||||||
Total current financial debt | – 4 288 | – 2 302 | – 3 195 | – 9 785 | |||||||||
Net debt | 4 321 | 479 | – 3 166 | – 10 612 | – 15 503 | – 24 481 | |||||||
2019 | |||||||||||||
(USD millions) | Due within one month | Due later than one month but less than three months | Due later than three months but less than one year | Due later than one year but less than five years | Due after five years | Total | |||||||
Current assets | |||||||||||||
Marketable securities, time deposits and short-term investments with original maturity more than 90 days | 20 | 26 | 16 | 3 | 57 | 122 | |||||||
Commodities | 110 | 110 | |||||||||||
Derivative financial instruments and accrued interest | 14 | 79 | 3 | 3 | 3 | 102 | |||||||
Cash and cash equivalents | 9 712 | 1 400 | 11 112 | ||||||||||
Total current financial assets | 9 746 | 1 505 | 19 | 6 | 170 | 11 446 | |||||||
Non-current liabilities | |||||||||||||
Financial debt | – 9 110 | – 11 243 | – 20 353 | ||||||||||
Financial debt - undiscounted | – 9 150 | – 11 355 | – 20 505 | ||||||||||
Total non-current financial debt | – 9 110 | – 11 243 | – 20 353 | ||||||||||
Current liabilities | |||||||||||||
Financial debt | – 4 243 | – 1 373 | – 1 230 | – 6 846 | |||||||||
Financial debt - undiscounted | – 4 243 | – 1 373 | – 1 230 | – 6 846 | |||||||||
Derivative financial instruments | – 130 | – 29 | – 26 | – 185 | |||||||||
Total current financial debt | – 4 373 | – 1 402 | – 1 256 | – 7 031 | |||||||||
Net debt | 5 373 | 103 | – 1 237 | – 9 104 | – 11 073 | – 15 938 | |||||||
2020 | |||||||||
(USD millions) | Due within one month | Due later than one month but less than three months | Due later than three months but less than one year | Total | |||||
Derivative financial instruments and accrued interest on derivative financial instruments | |||||||||
Potential outflows in various currencies - from financial derivative liabilities | – 930 | – 4 096 | – 719 | – 5 745 | |||||
Potential inflows in various currencies - from financial derivative assets | 904 | 4 114 | 710 | 5 728 | |||||
2019 | |||||||||
(USD millions) | Due within one month | Due later than one month but less than three months | Due later than three months but less than one year | Total | |||||
Derivative financial instruments and accrued interest on derivative financial instruments | |||||||||
Potential outflows in various currencies - from financial derivative liabilities | – 814 | – 4 624 | – 952 | – 6 390 | |||||
Potential inflows in various currencies - from financial derivative assets | 807 | 4 656 | 922 | 6 385 | |||||
2020 | |||||||||||
(USD millions) | Due within three months | Due later than three months but less than one year | Due later than one year but less than five years | Due after five years | Total | ||||||
Contractual interest on non-current liabilities | – 82 | – 468 | – 1 846 | – 4 251 | – 6 647 | ||||||
Lease liabilities | – 77 | – 209 | – 692 | – 1 027 | – 2 005 | ||||||
Trade payables | – 5 239 | – 164 | – 5 403 | ||||||||
Commitment for repurchase of own shares | – 1 769 | – 1 769 | |||||||||
Contingent consideration liabilities | – 24 | – 38 | – 639 | – 345 | – 1 046 | ||||||
2019 | |||||||||||
(USD millions) | Due within three months | Due later than three months but less than one year | Due later than one year but less than five years | Due after five years | Total | ||||||
Contractual interest on non-current liabilities | – 36 | – 428 | – 1 531 | – 3 439 | – 5 434 | ||||||
Lease liabilities | – 65 | – 181 | – 622 | – 1 081 | – 1 949 | ||||||
Trade payables | – 5 222 | – 202 | – 5 424 | ||||||||
Contingent consideration liabilities | – 62 | – 9 | – 582 | – 383 | – 1 036 | ||||||
(USD millions) | 2020 | 2019 | |||
All financial instruments | 587 | 355 | |||
Analyzed by components: | |||||
Instruments sensitive to foreign currency exchange rates | 199 | 89 | |||
Instruments sensitive to equity market movements | 62 | 31 | |||
Instruments sensitive to interest rates | 197 | 187 | |||
2020 | |||||||
(USD millions) | Average | High | Low | ||||
All financial instruments | 568 | 659 | 322 | ||||
Analyzed by components: | |||||||
Instruments sensitive to foreign currency exchange rates | 225 | 515 | 71 | ||||
Instruments sensitive to equity market movements | 78 | 261 | 21 | ||||
Instruments sensitive to interest rates | 329 | 912 | 173 | ||||
2019 | |||||||
(USD millions) | Average | High | Low | ||||
All financial instruments | 348 | 385 | 303 | ||||
Analyzed by components: | |||||||
Instruments sensitive to foreign currency exchange rates | 143 | 195 | 86 | ||||
Instruments sensitive to equity market movements | 36 | 81 | 16 | ||||
Instruments sensitive to interest rates | 233 | 303 | 187 | ||||
(USD millions) | 2019 1 | 2018 | |||
Net sales to third parties from discontinued operations | 1 777 | 7 149 | |||
Sales to continuing segments | 32 | 4 | |||
Net sales from discontinued operations | 1 809 | 7 153 | |||
Cost of goods sold | – 860 | – 3 983 | |||
Gross profit from discontinued operations | 949 | 3 170 | |||
Selling, general and administration | – 638 | – 2 754 | |||
Research and development | – 142 | – 585 | |||
Other income | 15 | 61 | |||
Other expense | – 113 | – 126 | |||
Operating income/(loss) from discontinued operations | 71 | – 234 | |||
Interest expense | – 10 | – 25 | |||
Other financial income and expense | – 3 | – 1 | |||
Income/(loss) before taxes from discontinued operations | 58 | – 260 | |||
Taxes | – 159 | 74 | |||
Net loss from discontinued operations before gain on distribution of Alcon Inc. to Novartis AG shareholders | – 101 | – 186 | |||
Gain on distribution of Alcon Inc. to Novartis AG shareholders 2 | 4 691 | ||||
Net income/(loss) from discontinued operations | 4 590 | – 186 | |||
1 The consolidated income statement amounts are for the period from January 1, 2019, to the completion of the spin-off. | |||||
2 See Note 2 for further details on the non-taxable, non-cash gain on distribution of Alcon Inc. to Novartis AG shareholders. |
Useful life | Income statement location for amortization and impairment charges | ||||
Marketing know-how | 25 years | "Cost of goods sold" | |||
Alcon brand name | Not amortized, indefinite useful life | "Other expense" | |||
(USD millions) | 2019 | 2018 | |||
Interest income | 2 | ||||
Depreciation of property, plant and equipment | – 42 | – 235 | |||
Depreciation of right-of-use assets | – 9 | ||||
Amortization of intangible assets | – 174 | – 1 052 | |||
Impairment charges on property, plant and equipment | – 3 | ||||
Impairment charges on intangible assets 1 | – 391 | ||||
Additions to restructuring provisions | – 13 | ||||
Equity-based compensation of Novartis equity plans | – 9 | – 93 | |||
1 2018 includes an impairment of USD 337 million related to the write-down of the CyPass currently marketed product, which was acquired with the Alcon Division 2016 acquisition of Transcend Medical, Inc. |
(USD millions) | 2019 | ||
Additions to property, plant and equipment | 113 | ||
Additions to right-of-use assets | 3 | ||
Additions to goodwill and intangible assets | 36 | ||
(USD millions) | 2020 | 2019 | 2018 | ||||
Payments attributable to the spin-off of the Alcon business | – 39 | – 29 | |||||
Divested cash and cash equivalents | – 628 | ||||||
Cash flows attributable to the spin-off of the Alcon business | – 39 | – 657 | |||||
Other cash flows used in investing activities, net | – 88 | – 502 | – 1 001 | ||||
Net cash flows used in investing activities from discontinued operations | – 127 | – 1 159 | – 1 001 | ||||
(USD millions) | 2019 | ||
Property, plant and equipment | 2 858 | ||
Right-of-use assets | 269 | ||
Goodwill | 8 906 | ||
Intangible assets other than goodwill | 11 121 | ||
Deferred tax assets | 732 | ||
Financial and other non-current assets | 526 | ||
Inventories | 1 469 | ||
Trade receivables and other current assets | 1 787 | ||
Cash and cash equivalents | 628 | ||
Deferred tax liabilities | – 1 713 | ||
Current and non-current lease liabilities | – 269 | ||
Current and non-current financial debts | – 3 538 | ||
Trade payables, provisions and other liabilities | – 2 751 | ||
Net assets derecognized | 20 025 | ||
(USD millions) | 2019 | 2018 | |||
Contributions for defined contribution plans discontinued operations | 33 | 104 | |||
As at December 31, 2020 | Share capital 1 | Equity interest | |||||||
Algeria | |||||||||
Société par actions SANDOZ | Algiers | DZD | 650.0 | m | 100% | ||||
Argentina | |||||||||
Novartis Argentina S.A. | Buenos Aires | ARS | 906.1 | m | 100% | ||||
Australia | |||||||||
Novartis Australia Pty Ltd | Macquarie Park, NSW | AUD | 2 | 100% | |||||
Novartis Pharmaceuticals Australia Pty Ltd | Macquarie Park, NSW | AUD | 3.8 | m | 100% | ||||
Sandoz Pty Ltd | Macquarie Park, NSW | AUD | 11.6 | m | 100% | ||||
Austria | |||||||||
Novartis Austria GmbH | Vienna | EUR | 1.0 | m | 100% | ||||
Novartis Pharma GmbH | Vienna | EUR | 1.1 | m | 100% | ||||
Sandoz GmbH | Kundl | EUR | 32.7 | m | 100% | ||||
EBEWE Pharma Ges.m.b.H Nfg. KG | Unterach am Attersee | EUR | 1.0 | m | 100% | ||||
Bangladesh | |||||||||
Novartis (Bangladesh) Limited | Gazipur | BDT | 162.5 | m | 60% | ||||
Belgium | |||||||||
Novartis Pharma NV | Vilvoorde | EUR | 7.1 | m | 100% | ||||
Sandoz NV | Vilvoorde | EUR | 19.2 | m | 100% | ||||
Alcon - Couvreur NV | Puurs | EUR | 110.6 | m | 100% | ||||
Bermuda | |||||||||
Novartis Investment Ltd. | Hamilton | USD | 12 000 | 100% | |||||
Novartis Securities Investment Ltd. | Hamilton | CHF | 30 000 | 100% | |||||
Novartis Finance Services Ltd. | Hamilton | CHF | 20 000 | 100% | |||||
Triangle International Reinsurance Limited | Hamilton | CHF | 1.0 | m | 100% | ||||
Trinity River Insurance Co Ltd. | Hamilton | USD | 370 000 | 100% | |||||
Brazil | |||||||||
Novartis Biociências S.A. | São Paulo | BRL | 265.0 | m | 100% | ||||
Sandoz do Brasil Indústria Farmacêutica Ltda. | Cambé, PR | BRL | 190.0 | m | 100% | ||||
Canada | |||||||||
Novartis Pharmaceuticals Canada Inc. | Dorval, Quebec | CAD | 1.2 | m | 100% | ||||
Sandoz Canada Inc. | Boucherville, Quebec | CAD | 80.8 | m | 100% | ||||
Sandoz Manufacturing Inc. | Boucherville, Quebec | CAD | 100 | 100% | |||||
Chile | |||||||||
Novartis Chile S.A. | Santiago de Chile | CLP | 2.0 | bn | 100% | ||||
China | |||||||||
Beijing Novartis Pharma Co., Ltd. | Beijing | USD | 30.0 | m | 100% | ||||
Novartis Pharmaceuticals (HK) Limited | Hong Kong | HKD | 200 | 100% | |||||
China Novartis Institutes for BioMedical Research Co., Ltd. | Shanghai | USD | 320.0 | m | 100% | ||||
Suzhou Novartis Technical Development Co., Ltd. | Changshu | USD | 12.0 | m | 100% | ||||
Shanghai Novartis Trading Ltd. | Shanghai | USD | 3.2 | m | 100% | ||||
Sandoz (China) Pharmaceutical Co., Ltd. | Zhongshan | USD | 57.6 | m | 100% | ||||
Colombia | |||||||||
Novartis de Colombia S.A. | Santafé de Bogotá | COP | 7.9 | bn | 100% | ||||
Croatia | |||||||||
Sandoz d.o.o. farmaceutska industrija | Zagreb | HRK | 25.6 | m | 100% | ||||
Czech Republic | |||||||||
Novartis s.r.o. | Prague | CZK | 51.5 | m | 100% | ||||
Sandoz s.r.o. | Prague | CZK | 44.7 | m | 100% | ||||
Denmark | |||||||||
Novartis Healthcare A/S | Copenhagen | DKK | 14.0 | m | 100% | ||||
Sandoz A/S | Copenhagen | DKK | 12.0 | m | 100% | ||||
Ecuador | |||||||||
Novartis Ecuador S.A. | Quito | USD | 4.0 | m | 100% | ||||
Egypt | |||||||||
Novartis Pharma S.A.E. | Cairo | EGP | 193.8 | m | 99.77% | ||||
Sandoz Egypt Pharma S.A.E. | New Cairo City | EGP | 250 000 | 100% | |||||
Finland | |||||||||
Novartis Finland Oy | Espoo | EUR | 459 000 | 100% | |||||
As at December 31, 2020 | Share capital 1 | Equity interest | |||||||
France | |||||||||
Novartis Groupe France S.A. | Rueil-Malmaison | EUR | 903.0 | m | 100% | ||||
Novartis Pharma S.A.S. | Rueil-Malmaison | EUR | 43.4 | m | 100% | ||||
Advanced Accelerator Applications S.A. | Saint-Genis-Pouilly | EUR | 76 734 | 99.2% | |||||
CELLforCURE | Les Ulis | EUR | 4.2 | m | 100% | ||||
Sandoz S.A.S. | Levallois-Perret | EUR | 5.4 | m | 100% | ||||
Germany | |||||||||
Novartis Deutschland GmbH | Nuremberg | EUR | 155.5 | m | 100% | ||||
Novartis Business Services GmbH | Wehr | EUR | 25 000 | 100% | |||||
Novartis Pharma GmbH | Nuremberg | EUR | 25.6 | m | 100% | ||||
Novartis Pharma Produktions GmbH | Wehr | EUR | 2.0 | m | 100% | ||||
Sandoz International GmbH | Holzkirchen | EUR | 100 000 | 100% | |||||
1 A Pharma GmbH | Oberhaching | EUR | 26 000 | 100% | |||||
HEXAL AG | Holzkirchen | EUR | 93.7 | m | 100% | ||||
Salutas Pharma GmbH | Barleben | EUR | 42.1 | m | 100% | ||||
Aeropharm GmbH | Rudolstadt | EUR | 26 000 | 100% | |||||
Greece | |||||||||
Novartis (Hellas) S.A.C.I. | Metamorphosis / Athens | EUR | 233.9 | m | 100% | ||||
Hungary | |||||||||
Novartis Hungary Healthcare Limited Liability Company | Budapest | HUF | 545.6 | m | 100% | ||||
Sandoz Hungary Limited Liability Company | Budapest | HUF | 883.0 | m | 100% | ||||
India | |||||||||
Novartis India Limited | Mumbai | INR | 123.5 | m | 70.68% | ||||
Novartis Healthcare Private Limited | Mumbai | INR | 60.0 | m | 100% | ||||
Sandoz Private Limited | Mumbai | INR | 32.0 | m | 100% | ||||
Indonesia | |||||||||
PT. Novartis Indonesia | Jakarta | IDR | 7.7 | bn | 100% | ||||
Ireland | |||||||||
Novartis Ireland Limited | Dublin | EUR | 25 000 | 100% | |||||
Novartis Integrated Services Limited | Ringaskiddy, County Cork | EUR | 100 | 100% | |||||
Novartis Ringaskiddy Limited | Ringaskiddy, County Cork | EUR | 2.0 | m | 100% | ||||
Novartis Gene Therapies EU Limited | Dublin | EUR | 100 | 100% | |||||
Israel | |||||||||
Novartis Israel Ltd. | Tel Aviv | ILS | 1 000 | 100% | |||||
Italy | |||||||||
Novartis Farma S.p.A. | Origgio | EUR | 18.2 | m | 100% | ||||
Advanced Accelerator Applications (Italy) S.r.l. | Pozzilli | EUR | 119 000 | 99.2% | |||||
Sandoz S.p.A. | Origgio | EUR | 1.7 | m | 100% | ||||
Japan | |||||||||
Novartis Pharma K.K. | Tokyo | JPY | 6.0 | bn | 100% | ||||
Ciba-Geigy Japan Limited | Tokyo | JPY | 8.5 | bn | 100% | ||||
Sandoz K.K. | Tokyo | JPY | 100.0 | m | 100% | ||||
Aspen Japan K.K. | Tokyo | JPY | 2.2 | bn | 100% | ||||
Latvia | |||||||||
Novartis Baltics SIA | Riga | EUR | 3.0 | m | 100% | ||||
Luxembourg | |||||||||
Novartis Investments S.à r.l. | Luxembourg City | USD | 100.0 | m | 100% | ||||
Novartis Finance S.A. | Luxembourg City | USD | 100 000 | 100% | |||||
Malaysia | |||||||||
Novartis Corporation (Malaysia) Sdn. Bhd. | Kuala Lumpur | MYR | 3.3 | m | 100% | ||||
Mexico | |||||||||
Novartis Farmacéutica, S.A. de C.V. | Mexico City | MXN | 205.0 | m | 100% | ||||
Sandoz, S.A. de C.V. | Mexico City | MXN | 468.2 | m | 100% | ||||
Morocco | |||||||||
Novartis Pharma Maroc SA | Casablanca | MAD | 80.0 | m | 100% | ||||
Netherlands | |||||||||
Novartis Netherlands B.V. | Amsterdam | EUR | 1.4 | m | 100% | ||||
Novartis Pharma B.V. | Amsterdam | EUR | 4.5 | m | 100% | ||||
IDB Holland BV | Baarle-Nassau | EUR | 18 000 | 99.2% | |||||
Sandoz B.V. | Almere | EUR | 907 560 | 100% | |||||
New Zealand | |||||||||
Novartis New Zealand Ltd | Auckland | NZD | 820 000 | 100% | |||||
As at December 31, 2020 | Share capital 1 | Equity interest | |||||||
Norway | |||||||||
Novartis Norge AS | Oslo | NOK | 1.5 | m | 100% | ||||
Pakistan | |||||||||
Novartis Pharma (Pakistan) Limited | Karachi | PKR | 6.7 | bn | 99.99% | ||||
Panama | |||||||||
Novartis Pharma (Logistics), Inc. | Panama City | USD | 10 000 | 100% | |||||
Peru | |||||||||
Novartis Biosciences Perú S.A. | Lima | PEN | 6.1 | m | 100% | ||||
Philippines | |||||||||
Novartis Healthcare Philippines, Inc. | Makati City | PHP | 298.8 | m | 100% | ||||
Sandoz Philippines Corporation | Makati City | PHP | 30.0 | m | 100% | ||||
Poland | |||||||||
Novartis Poland Sp. z o.o. | Warsaw | PLN | 44.2 | m | 100% | ||||
Sandoz Polska Sp. z o.o. | Warsaw | PLN | 25.6 | m | 100% | ||||
Lek S.A. | Strykow | PLN | 11.4 | m | 100% | ||||
Portugal | |||||||||
Novartis Portugal, S.G.P.S., Lda. | Porto Salvo | EUR | 500 000 | 100% | |||||
Novartis Farma - Produtos Farmacêuticos, S.A. | Porto Salvo | EUR | 2.4 | m | 100% | ||||
Sandoz Farmacêutica, Lda. | Porto Salvo | EUR | 499 900 | 100% | |||||
Romania | |||||||||
Novartis Pharma Services Romania S.R.L. | Bucharest | RON | 3.0 | m | 100% | ||||
Sandoz S.R.L. | Targu-Mures | RON | 105.2 | m | 100% | ||||
Russian Federation | |||||||||
Novartis Pharma LLC | Moscow | RUB | 20.0 | m | 100% | ||||
Novartis Neva LLC | St. Petersburg | RUB | 500.0 | m | 100% | ||||
ZAO Sandoz | Moscow | RUB | 57.4 | m | 100% | ||||
Saudi Arabia | |||||||||
Novartis Saudi Ltd. | Riyadh | SAR | 30.0 | m | 100% | ||||
Singapore | |||||||||
Novartis (Singapore) Pte Ltd. | Singapore | SGD | 100 000 | 100% | |||||
Novartis Singapore Pharmaceutical Manufacturing Pte Ltd | Singapore | SGD | 45.0 | m | 100% | ||||
Novartis Asia Pacific Pharmaceuticals Pte Ltd | Singapore | SGD | 39.0 | m | 100% | ||||
Slovakia | |||||||||
Novartis Slovakia s.r.o. | Bratislava | EUR | 2.0 | m | 100% | ||||
Slovenia | |||||||||
Lek Pharmaceuticals d.d. | Ljubljana | EUR | 48.4 | m | 100% | ||||
Sandoz Pharmaceuticals d.d. | Ljubljana | EUR | 1.5 | m | 100% | ||||
South Africa | |||||||||
Novartis South Africa (Pty) Ltd | Midrand | ZAR | 86.3 | m | 100% | ||||
Sandoz South Africa (Pty) Ltd | Kempton Park | ZAR | 3.0 | m | 100% | ||||
South Korea | |||||||||
Novartis Korea Ltd. | Seoul | KRW | 24.5 | bn | 98.55% | ||||
Spain | |||||||||
Novartis Farmacéutica, S.A. | Barcelona | EUR | 63.0 | m | 100% | ||||
Advanced Accelerator Applications Iberica, S.L.U. | Barcelona | EUR | 22.6 | m | 99.2% | ||||
Catalana de Dispensacion sau (Cadisa) | Esplugues de Llobregat | EUR | 450 750 | 99.2% | |||||
Sandoz Farmacéutica S.A. | Madrid | EUR | 270 450 | 100% | |||||
Sandoz Industrial Products S.A. | Les Franqueses del Vallés / Barcelona | EUR | 9.3 | m | 100% | ||||
Alcon Cusi, S.A. | El Masnou / Barcelona | EUR | 10.1 | m | 100% | ||||
Abadia Retuerta S.A. | Sardón de Duero / Valladolid | EUR | 6.0 | m | 100% | ||||
Sweden | |||||||||
Novartis Sverige AB | Stockholm | SEK | 5.0 | m | 100% | ||||
Switzerland | |||||||||
Novartis International AG | Basel | CHF | 10.0 | m | 100% | ||||
Novartis Holding AG | Basel 3 | CHF | 100.2 | m | 100% | ||||
Novartis International Pharmaceutical Investment AG | Basel | CHF | 100 000 | 100% | |||||
Novartis Bioventures AG | Basel | CHF | 100 000 | 100% | |||||
Novartis Forschungsstiftung | Basel 4 | -- | -- | -- | |||||
Novartis Stiftung für Kaderausbildung | Basel 4 | -- | -- | -- | |||||
Novartis Mitarbeiterbeteiligungsstiftung | Basel 4 | -- | -- | -- | |||||
Novartis Stiftung für Mensch und Umwelt | Basel 4 | -- | -- | -- | |||||
Stiftung der Novartis AG für Erziehung, Ausbildung und Bildung | Basel 4 | -- | -- | -- | |||||
Novartis Overseas Investments AG | Basel | CHF | 1.0 | m | 100% | ||||
Japat AG | Basel | CHF | 50 000 | 100% | |||||
Novartis Pharma AG | Basel 3 | CHF | 350.0 | m | 100% | ||||
Novartis Pharma Services AG | Basel | CHF | 20.0 | m | 100% | ||||
Novartis Pharma Schweizerhalle AG | Muttenz | CHF | 18.9 | m | 100% | ||||
Novartis Pharma Stein AG | Stein | CHF | 251 000 | 100% | |||||
Novartis Pharma Schweiz AG | Risch | CHF | 5.0 | m | 100% | ||||
Novartis Ophthalmics AG | Fribourg | CHF | 100 000 | 100% | |||||
Advanced Accelerator Applications International SA | Geneva | CHF | 9.3 | m | 99.2% | ||||
Sandoz AG | Basel | CHF | 5.0 | m | 100% | ||||
Sandoz Pharmaceuticals AG | Risch | CHF | 100 000 | 100% | |||||
Roche Holding AG | Basel | CHF | 160.0 | m | 33%/6% 2 | ||||
As at December 31, 2020 | Share capital 1 | Equity interest | |||||||
Taiwan | |||||||||
Novartis (Taiwan) Co., Ltd. | Taipei | TWD | 170.0 | m | 100% | ||||
Thailand | |||||||||
Novartis (Thailand) Limited | Bangkok | THB | 302.0 | m | 100% | ||||
Turkey | |||||||||
Novartis Saglik, Gida ve Tarim Ürünleri Sanayi ve Ticaret A.S. | Istanbul | TRY | 98.0 | m | 100% | ||||
Farmanova Saglik Hizmetleri Ltd. Sti. | Istanbul | TRY | 6.7 | m | 100% | ||||
Sandoz Ilaç Sanayi ve Ticaret A.S. | Istanbul | TRY | 265.0 | m | 99.99% | ||||
Sandoz Grup Saglik Ürünleri Ilaçlari Sanayi ve Ticaret A.S. | Gebze - Kocaeli | TRY | 50.0 | m | 100% | ||||
Ukraine | |||||||||
Sandoz Ukraine LLC | Kyiv | UAH | 8.0 | m | 100% | ||||
United Arab Emirates | |||||||||
Novartis Middle East FZE | Dubai | AED | 7.0 | m | 100% | ||||
United Kingdom | |||||||||
Novartis UK Limited | London | GBP | 25.5 | m | 100% | ||||
Novartis Pharmaceuticals UK Limited | London | GBP | 5.4 | m | 100% | ||||
Novartis Grimsby Limited | London | GBP | 250.0 | m | 100% | ||||
Advanced Accelerator Applications (UK & Ireland) | London | GBP | 100 | 99.2% | |||||
Neutec Pharma Limited | London | GBP | 7.7 | m | 100% | ||||
Ziarco Group Limited | London | GBP | 3 904 | 100% | |||||
Sandoz Limited | Frimley / Camberley | GBP | 2.0 | m | 100% | ||||
Coalesce Product Development Limited | Cambridge, Cambs | GBP | 6.0 | m | 40% | ||||
United States of America | |||||||||
Novartis Corporation | East Hanover, NJ | USD | 72.2 | m | 100% | ||||
Novartis Finance Corporation | East Hanover, NJ 3 | USD | 1 000 | 100% | |||||
Novartis Capital Corporation | East Hanover, NJ | USD | 1 | 100% | |||||
Novartis Services, Inc. | East Hanover, NJ | USD | 1 | 100% | |||||
Novartis US Foundation | East Hanover, NJ 4 | -- | -- | -- | |||||
Novartis Pharmaceuticals Corporation | East Hanover, NJ 3 | USD | 650 | 100% | |||||
Advanced Accelerator Applications USA, Inc. | Millburn, NJ | USD | 1 | 99.2% | |||||
Novartis Gene Therapies, Inc. | Bannockburn, IL | USD | 1 | 100% | |||||
Novartis Technology LLC | East Hanover, NJ | -- | -- | -- | |||||
Novartis Institutes for BioMedical Research, Inc. | Cambridge, MA | USD | 1 | 100% | |||||
Novartis Optogenetics Research, Inc. | East Hanover, NJ | USD | 1 | 100% | |||||
CoStim Pharmaceuticals Inc. | Cambridge, MA | USD | 1 | 100% | |||||
Endocyte, Inc. | East Hanover, NJ | USD | 1 | 100% | |||||
Navigate BioPharma Services, Inc. | Carlsbad, CA | USD | 1 | 100% | |||||
The Medicines Company | East Hanover, NJ | USD | 1 000 | 100% | |||||
Sandoz Inc. | Princeton, NJ | USD | 25 000 | 100% | |||||
Amblyotech Inc. | East Hanover, NJ | USD | 50 | 100% | |||||
Oriel Therapeutics, Inc. | Durham, NC | USD | 50.0 | m | 100% | ||||
Fougera Pharmaceuticals Inc. | Melville, NY | USD | 1 | 100% | |||||
Eon Labs, Inc. | Princeton, NJ | USD | 1 | 100% | |||||
Novartis Vaccines and Diagnostics, Inc. | East Hanover, NJ | USD | 3 | 100% | |||||
Venezuela | |||||||||
Novartis de Venezuela, S.A. | Caracas | VES | 14 | 100% | |||||
Vietnam | |||||||||
Novartis Vietnam Company Limited | Ho Chi Minh City | VND | 70 | bn | 100% | ||||
In addition, the Group is represented by subsidiaries and associated companies with total assets or net sales to third parties below USD 25 million in the following countries: Bosnia and Herzegovina, Bulgaria, Dominican Republic, Guatemala, Kenya, Kuwait, North Macedonia, Nigeria, Puerto Rico and Uruguay | |||||||||
1 Share capital may not reflect the taxable share capital and does not include any paid-in surplus. | |||||||||
2 Approximately 33.3% of voting shares; approximately 6.2% of total net income and equity attributable to Novartis. | |||||||||
3 Significant subsidiary under SEC Regulation S-X Rule 1-02(w) | |||||||||
4 Fully consolidated Foundation | |||||||||
m = million; bn = billion |
Report of Independent Registered Public Accounting Firm