SECURITIES AND EXCHANGE COMMISSION
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 [Reserved]
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
Compound/ product | Common name | Mechanism of action | Potential indication | Category | Formulation/ route of administration | Year project entered current development phase | Planned filing dates/current phase | ||||||||
AVXS-101 (OAV101) | onasemno- gene abepar- vovec | Survival motor neuron (SMN) gene therapy | Spinal muscular atrophy (IT formulation) | Neuroscience | Intrathecal injection | 2021 | 2025/III | ||||||||
Beovu | brolucizumab | VEGF inhibitor | Diabetic retinopathy | Ophthalmology | Intravitreal injection | 2020 | 2025/III | ||||||||
CFZ533 | iscalimab | CD40 inhibitor | Sjögren's syndrome | Immunology | Subcutaneous injection | 2019 | ≥2027/II | ||||||||
Coartem | artemether + lumefantrine | PGH-1 (artemisinin combination therapy) | Malaria, uncomplicated (<5 kg patients) | Global Health | Oral | 2020 | 2024/III | ||||||||
Cosentyx | secukinumab | IL‑17A inhibitor | Giant cell arteritis | Immunology | Subcutaneous injection | 2021 | 2025/III | ||||||||
Polymyalgia rheumatica 1 | Immunology | Subcutaneous injection | 2023 | 2026/III | |||||||||||
Rotator cuff tendinopathy 1 | Immunology | Subcutaneous injection | 2023 | ≥2027/III | |||||||||||
EXV811 1 | atrasentan | ETA receptor antagonist | IgA nephropathy | Cardiovascular, Renal and Metabolic | Oral | 2023 | 2024/III | ||||||||
Fabhalta | iptacopan | CFB inhibitor | IgA nephropathy | Cardiovascular, Renal and Metabolic | Oral | 2021 | 2024/III | ||||||||
C3 glomerulopathy | Cardiovascular, Renal and Metabolic | Oral | 2021 | 2024/III | |||||||||||
IC-MPGN 1 | Cardiovascular, Renal and Metabolic | Oral | 2023 | ≥2027/III | |||||||||||
Atypical hemolytic uremic syndrome | Oncology | Oral | 2021 | ≥2027/III | |||||||||||
FUB523 1 | zigakibart | Anti-APRIL monoclonal antibody | IgA nephropathy | Cardiovascular, Renal and Metabolic | Subcutaneous injection | 2023 | ≥2027/III | ||||||||
JDQ443 | opnurasib | KRAS inhibitor | Non-small cell lung cancer 2 (monotherapy and/or combination therapy) | Oncology | Oral | 2022 | ≥2027/III | ||||||||
KAE609 | cipargamin | PfATP4 inhibitor | Malaria, uncomplicated | Global Health | Oral | 2017 | ≥2027/II | ||||||||
Malaria, severe | Global Health | Oral | 2022 | ≥2027/II | |||||||||||
Kisqali | ribociclib | CDK4 inhibitor | Hormone receptor-positive (HR+)/human epidermal growth factor receptor 2-negative (HER2-) early breast cancer (adjuvant) | Oncology | Oral | 2023 | US, EU registration | ||||||||
KLU156 3 | ganaplacide + lumefantrine | Non-artemisinin plasmodium falciparum inhibitor | Malaria, uncomplicated | Global Health | Oral | 2023 | 2026/II | ||||||||
Leqvio | inclisiran | siRNA (regulation of LDL-C) | Secondary prevention of cardiovascular events in patients with elevated levels of LDL-C | Cardiovascular, Renal and Metabolic | Subcutaneous injection | 2018 | ≥2027/III | ||||||||
Primary prevention cardiovascular 1 risk reduction | Cardiovascular, Renal and Metabolic | Subcutaneous injection | 2023 | ≥2027/III | |||||||||||
LNA043 | TBD | ANGPTL3 agonist | Osteoarthritis 4 | Immunology | Intra-articular | 2021 | ≥2027/II | ||||||||
LOU064 | remibrutinib | BTK inhibitor | Chronic spontaneous urticaria | Immunology | Oral | 2021 | 2024/III | ||||||||
Chronic inducible urticaria | Immunology | Oral | 2023 | ≥2027/III | |||||||||||
Multiple sclerosis | Neuroscience | Oral | 2021 | ≥2027/III | |||||||||||
Lutathera | lutetium Lu 177 dotatate/ lutetium (177Lu) oxodotreotide | Radioligand therapy targeting SSTR | Gastroenteropancreatic neuroendocrine tumors, 1st line in G2/3 tumors | Oncology | Intravenous infusion | 2020 | 2024/III | ||||||||
LXE408 | TBD | Proteasome inhibitor | Visceral leishmaniasis | Global Health | Oral | 2022 | ≥2027/II | ||||||||
Pluvicto | lutetium Lu 177 vipivotide tetraxetan/ lutetium (177Lu) vipivotide tetraxetan | Radioligand therapy targeting PSMA | Metastatic castration-resistant prostate cancer, pre-taxane | Oncology | Intravenous infusion | 2021 | 2024/III | ||||||||
Metastatic hormone-sensitive prostate cancer | Oncology | Intravenous infusion | 2021 | 2025/III | |||||||||||
1 Project added to selected development projects table in 2023 – entered Confirmatory Development | |||||||||||||||
2 Previously disclosed as non-small cell lung cancer, 2/3L | |||||||||||||||
3 Project added to selected development projects table in 2023 (replacing KAF156) – entered Confirmatory Development, FPFV in Phase III expected in early 2024 | |||||||||||||||
4 Previously disclosed as knee osteoarthritis |
Compound/ product | Common name | Mechanism of action | Potential indication | Category | Formulation/ route of administration | Year project entered current development phase | Planned filing dates/current phase | ||||||||
QGE031 | ligelizumab | IgE inhibitor | Food allergy | Immunology | Subcutaneous injection | 2021 | ≥2027/III | ||||||||
Scemblix | asciminib | BCR‑ABL inhibitor | Chronic myeloid leukemia, 1st line | Oncology | Oral | 2021 | 2024/III | ||||||||
TQJ230 | pelacarsen | ASO targeting lipoprotein(a) | Secondary prevention of cardiovascular events in patients with elevated levels of lipoprotein(a) | Cardiovascular, Renal and Metabolic | Subcutaneous injection | 2019 | 2025/III | ||||||||
VAY736 | ianalumab | BAFF-R inhibitor | Autoimmune hepatitis | Immunology | Subcutaneous injection | 2018 | ≥2027/II | ||||||||
Lupus nephritis | Immunology | Subcutaneous injection | 2022 | ≥2027/III | |||||||||||
Sjögren’s syndrome | Immunology | Subcutaneous injection | 2022 | 2026/III | |||||||||||
Systemic lupus erythematosus 1 | Immunology | Subcutaneous injection | 2023 | ≥2027/III | |||||||||||
Warm autoimmune hemolytic anemia (wAIHA) | Oncology | Intravenous infusion | 2022 | 2026/III | |||||||||||
Immune thrombocytopenia, 1st line 1 | Oncology | Intravenous infusion | 2023 | 2026/III | |||||||||||
Immune thrombocytopenia, 2nd line 1 | Oncology | Intravenous infusion | 2023 | 2026/III | |||||||||||
Vijoice | alpelisib | PI3K-alpha inhibitor | Lymphatic malformations | Oncology | Oral | 2023 | ≥2027/III | ||||||||
Xolair | omalizumab | IgE inhibitor | Food allergy | Immunology | Subcutaneous injection | 2019 | US registration | ||||||||
XXB750 | TBD | NPR1 agonist | Hypertension | Cardiovascular, Renal and Metabolic | Subcutaneous injection | 2022 | ≥2027/II | ||||||||
YTB323 1 | rapcabtagene autoleucel | CD19 CAR-T | Severe refractory lupus nephritis/ systemic lupus erythematosus | Immunology | Intravenous infusion | 2023 | ≥2027/II | ||||||||
High-risk large B-cell lymphoma, 1st line | Oncology | Intravenous infusion | 2023 | ≥2027/II | |||||||||||
1 Project added to selected development projects table in 2023 – entered Confirmatory Development |
Compound/product | Potential indication | Change | Reason | ||||
Cosentyx | Hidradenitis suppurativa | Commercialized | |||||
Lupus nephritis | Removed | Development discontinued | |||||
Psoriatic arthritis (IV formulation) | Commercialized | ||||||
Ankylosing spondylitis (IV formulation) | Commercialized | ||||||
Fabhalta | Paroxysmal nocturnal hemoglobinuria | Commercialized | |||||
KAF156 | Malaria, uncomplicated | Removed | Development discontinued 1 | ||||
LOU064 | Sjögren's syndrome | Removed | Development discontinued | ||||
MBG453 | Myelodysplastic syndrome | Removed | Development discontinued | ||||
Unfit acute myeloid leukemia | Removed | Development discontinued | |||||
MIJ821 | Major depressive disorder | Removed | Development discontinued | ||||
NIS793 | Pancreatic cancer, 1st line | Removed | Development discontinued | ||||
Piqray | Ovarian cancer | Removed | Development discontinued | ||||
PPY988 | Geographic atrophy | Removed | Development discontinued | ||||
SAF312 | Chronic ocular surface pain | Removed | Development discontinued | ||||
SKO136 | Coronavirus infection | Removed | Development discontinued | ||||
VDT482 | Esophageal cancer, 2nd line | Removed | Development discontinued 2 | ||||
Non‑small cell lung cancer | Removed | Development discontinued 2 | |||||
Nasopharyngeal carcinoma, 1st line | Removed | Development discontinued 2 | |||||
Gastric cancer, 1st line | Removed | Development discontinued 2 | |||||
Esophageal cancer, 1st line | Removed | Development discontinued 2 | |||||
Localized esophageal cancer | Removed | Development discontinued 2 | |||||
Hepatocellular carcinoma, 1st line | Removed | Development discontinued 2 | |||||
Small cell lung cancer, 1st line | Removed | Development discontinued 2 | |||||
Urothelial cell carcinoma, 1st line | Removed | Development discontinued 2 | |||||
VPM087 | Colorectal cancer, 1st line | Removed | Development discontinued | ||||
1 Now in development as KLU156 | |||||||
2 Mutual termination of the agreement with BeiGene, Ltd. |
2023 net sales to third parties | |||||
USD millions | % | ||||
United States | 17 959 | 40 | |||
Europe | 14 997 | 33 | |||
Asia, Africa, Australasia | 9 308 | 20 | |||
Canada and Latin America | 3 176 | 7 | |||
Total | 45 440 | 100 | |||
Of which in established markets 1 | 33 725 | 74 | |||
Of which in emerging growth markets 1 | 11 715 | 26 | |||
1 Emerging growth markets comprise all markets other than the established markets of the US, Canada, Western Europe, Japan, Australia and New Zealand. Novartis definition of Western Europe includes Austria, Belgium, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, Malta, The Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. |
4.C Organizational structure
4.D Property, plants and equipment
Location | Size of site (in square meters) | Major activity | |||
Basel, Switzerland – St. Johann | 481 448 | Global Company headquarters; International organizational unit headquarters; research and development; production of drug substances and drug intermediates | |||
Kundl and Schaftenau, Austria | 480 000 | Production of biotechnological products, active drug substances and nucleic acids, drug products and finished products; product development | |||
East Hanover, New Jersey, US | 277 015 | US organizational unit headquarters; research and development | |||
Cambridge, Massachusetts, US | 179 939 | Research and development | |||
Menges, Slovenia | 133 763 | Production of drug substances and drug intermediates; Research and development for Biologics | |||
Shanghai, China | 105 614 | China country headquarters; research and development | |||
Stein, Switzerland | 64 700 | Production of sterile vials, pre‑filled syringes and ampoules; capsules and tablets; active pharmaceutical ingredients; and cell and gene therapies | |||
Huningue, France | 35 000 | Production of drug substances for clinical and commercial supply | |||
Durham, North Carolina, US | 15 794 | Manufacture, package and release commercial Zolgensma product and certain clinical development activities | |||
Schweizerhalle, Switzerland | 8 880 | Manufacture of small-interfering RNA (siRNA) drug substance for Leqvio | |||
Indianapolis, Indiana, US | 6 500 | Manufacture, package and release clinical and commercial Pluvicto product for US and Canada | |||
Ivrea, Italy | 2 100 | Manufacture, package and release clinical and commercial Pluvicto and Lutathera products | |||
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, 2023 | Year ended Dec 31, 2022 | Change in USD % | Change in constant currencies %2 | |||||
Net sales from continuing operations | 45 440 | 42 206 | 8 | 10 | |||||
Other revenues | 1 220 | 1 255 | -3 | -3 | |||||
Cost of goods sold | -12 472 | -11 582 | -8 | -6 | |||||
Gross profit from continuing operations | 34 188 | 31 879 | 7 | 11 | |||||
Selling, general and administration | -12 517 | -12 193 | -3 | -3 | |||||
Research and development | -11 371 | -9 172 | -24 | -22 | |||||
Other income | 1 772 | 696 | 155 | 147 | |||||
Other expense | -2 303 | -3 264 | 29 | 31 | |||||
Operating income from continuing operations | 9 769 | 7 946 | 23 | 39 | |||||
Return on net sales (%) | 21.5 | 18.8 | |||||||
Loss from associated companies | -13 | -11 | -18 | 1 | |||||
Interest expense | -855 | -800 | -7 | -11 | |||||
Other financial income and expense | 222 | 42 | nm | nm | |||||
Income before taxes from continuing operations | 9 123 | 7 177 | 27 | 45 | |||||
Income taxes | -551 | -1 128 | 51 | 44 | |||||
Net income from continuing operations | 8 572 | 6 049 | 42 | 62 | |||||
Net income from discontinued operations before gain on distribution of Sandoz Group AG to Novartis AG shareholders | 422 | 906 | nm | nm | |||||
Gain on distribution of Sandoz Group AG to Novartis AG shareholders | 5 860 | nm | nm | ||||||
Net income from discontinued operations | 6 282 | 906 | nm | nm | |||||
Net income | 14 854 | 6 955 | nm | nm | |||||
Basic earnings per share from continuing operations (USD) | 4.13 | 2.77 | 49 | 70 | |||||
Basic earnings per share from discontinued operations (USD) | 3.02 | 0.42 | nm | nm | |||||
Total basic earnings per share (USD) | 7.15 | 3.19 | nm | nm | |||||
Net cash flows from operating activities from continuing operations | 14 220 | 13 039 | 9 | ||||||
Non-IFRS measures 2 | |||||||||
Free cash flow from continuing operations 2, 3 | 13 160 | 12 123 | 9 | ||||||
1 For information on continuing operations and discontinued operations, refer to the Overview section above in this Item 5 and "Item 18. Financial Statements—Note 1. Accounting policies ", "Item 18. Financial Statements—Note 2. Significant transactions—Significant transactions in 2023," and "Item 18. Financial Statements—Note 31. Discontinued operations." | |||||||||
2 For an explanation of non-IFRS measures and reconciliation tables, see "—Non-IFRS measures as defined by Novartis." | |||||||||
3 Effective January 1, 2023, Novartis revised its definition of free cash flow, to define free cash flow as net cash flows from operating activities less purchases of property, plant and equipment. To aid in comparability, the prior year free cash flow amounts have been revised to conform with the new free cash flow definition. See "—Non-IFRS measures as defined by Novartis" | |||||||||
nm = not meaningful |
(USD millions) | Year ended Dec 31, 2023 | Year ended Dec 31, 20221 | Change in USD % | Change in constant currencies %2 | |||||
Cardiovascular, renal and metabolic | 6 391 | 4 756 | 34 | 36 | |||||
Immunology | 7 798 | 7 287 | 7 | 8 | |||||
Neuroscience | 4 043 | 3 038 | 33 | 34 | |||||
Oncology | 13 590 | 11 176 | 22 | 23 | |||||
Total promoted brands | 31 822 | 26 257 | 21 | 23 | |||||
Established brands 3 | 13 618 | 15 949 | -15 | - 12 | |||||
Total net sales from continuing operations 3 | 45 440 | 42 206 | 8 | 10 | |||||
1 Reclassified to conform with the 2023 organizational structure. | |||||||||
2 For an explanation of non-IFRS measures and reconciliation tables, see "—Non-IFRS measures as defined by Novartis." | |||||||||
3 Effective January 1, 2023, the discontinued operations Sandoz business bio-technology manufacturing services to other companies’ activities and the Coartem brand were transferred to the Novartis continuing operations. The financial information of the Novartis continuing operations and discontinued operations were adapted accordingly in 2022, in compliance with IFRS Accounting Standards. See “Item 18. Financial Statements – Note 3. Operating segment.” |
US | Rest of world | Total | |||||||||||||||||||
Brands | Brand classification by therapeutic area or established brands | Key indications | USD m | % change USD/cc1 | USD m | % change USD | % change cc1 | USD m | % change USD | % change cc1 | |||||||||||
Entresto | Cardiovascular, renal and metabolic | Chronic heart failure, hypertension | 3 067 | 30 | 2 968 | 30 | 32 | 6 035 | 30 | 31 | |||||||||||
Cosentyx | Immunology | Psoriasis (PsO), ankylosing spondylitis (AS), psoriatic arthritis (PsA), non-radiographic axial spondyloarthritis (nr-axSPA), hidradenitis suppurativa (HS) | 2 636 | -5 | 2 344 | 16 | 19 | 4 980 | 4 | 5 | |||||||||||
Promacta/Revolade | Oncology | Immune thrombocytopenia (ITP), severe aplastic anemia (SAA) | 1 205 | 11 | 1 064 | 6 | 8 | 2 269 | 9 | 10 | |||||||||||
Kesimpta | Neuroscience | Relapsing-remitting multiple sclerosis (RRMS) | 1 528 | 66 | 643 | 276 | 272 | 2 171 | 99 | 99 | |||||||||||
Kisqali | Oncology | HR+/HER2- metastatic breast cancer | 1 032 | 119 | 1 048 | 38 | 47 | 2 080 | 69 | 75 | |||||||||||
Tafinlar + Mekinist | Oncology | BRAF V600+ metastatic adjuvant melanoma, advanced non-small cell lung cancer (NSCLC), tumor agnostic with BRAF mutation indication | 791 | 17 | 1 131 | 4 | 8 | 1 922 | 9 | 11 | |||||||||||
Tasigna | Oncology | Chronic myeloid leukemia (CML) | 884 | 1 | 964 | -8 | -5 | 1 848 | -4 | -3 | |||||||||||
Jakavi | Oncology | Myelofibrosis (MF), polycytomia vera (PV), graft-versus-host disease (GvHD) | 1 720 | 10 | 12 | 1 720 | 10 | 12 | |||||||||||||
Lucentis 2 | Established brands | Age-related macular degeneration (AMD), diabetic macular edema (DME), retinal vein occlusion (RVO) | 1 475 | -21 | -20 | 1 475 | -21 | -20 | |||||||||||||
Xolair 3 | Immunology | Severe allergic asthma (SAA), chronic spontaneous urticaria (CSU), nasal polyps | 1 463 | 7 | 9 | 1 463 | 7 | 9 | |||||||||||||
Ilaris | Immunology | Auto-inflammatory (CAPS, TRAPS, HIDS/MKD, FMF, SJIA, AOSD, gout) | 686 | 20 | 669 | 19 | 24 | 1 355 | 20 | 22 | |||||||||||
Sandostatin | Established brands | Carcinoid tumors, acromegaly | 829 | 4 | 485 | 11 | 15 | 1 314 | 6 | 8 | |||||||||||
Zolgensma | Neuroscience | Spinal muscular atrophy (SMA) | 372 | -14 | 842 | -10 | -7 | 1 214 | -11 | -9 | |||||||||||
Pluvicto | Oncology | PSMA-positive mCRPC patients post-ARPI, post-Taxane | 921 | 265 | 59 | 211 | 195 | 980 | 262 | 261 | |||||||||||
Gilenya 2 | Established brands | Relapsing multiple sclerosis (RMS) | 359 | -69 | 566 | -34 | -33 | 925 | -54 | -54 | |||||||||||
Exforge Group | Established brands | Hypertension | 13 | -7 | 700 | -4 | -1 | 713 | -4 | -1 | |||||||||||
Galvus Group | Established brands | Type 2 diabetes | 692 | -19 | -11 | 692 | -19 | -11 | |||||||||||||
Diovan Group | Established brands | Hypertension | 52 | -5 | 561 | -6 | -1 | 613 | -6 | -1 | |||||||||||
Lutathera | Oncology | GEP-NETs gastroenteropancreatic neuroendocrine tumors | 427 | 29 | 178 | 27 | 26 | 605 | 28 | 28 | |||||||||||
Gleevec/Glivec | Established brands | Chronic myeloid leukemia (CML), gastrointestinal stromal tumors (GIST) | 150 | -27 | 411 | -24 | -20 | 561 | -25 | -22 | |||||||||||
Top 20 brands total | 14 952 | 15 | 19 983 | 6 | 9 | 34 935 | 10 | 12 | |||||||||||||
Rest of portfolio 4 | 3 007 | 1 | 7 498 | 1 | 5 | 10 505 | 1 | 4 | |||||||||||||
Total net sales from continuing operations 4 | 17 959 | 13 | 27 481 | 5 | 8 | 45 440 | 8 | 10 | |||||||||||||
1 For an explanation of non-IFRS measures and reconciliation tables, see "—Non-IFRS measures as defined by Novartis." | |||||||||||||||||||||
2 In the first quarter of 2023 Lucentis was reclassified from other promoted brands to established brands and Gilenya was reclassified from neuroscience to established brands. | |||||||||||||||||||||
3 Net sales reflect Xolair sales for all indications. | |||||||||||||||||||||
4 Effective January 1, 2023, the discontinued operations Sandoz business bio-technology manufacturing services to other companies’ activities and the Coartem brand were transferred to the Novartis continuing operations. The financial information of the Novartis continuing operations and discontinued operations were adapted accordingly in 2022, in compliance with IFRS Accounting Standards. See “Item 18. Financial Statements – Note 3. Operating segment.” | |||||||||||||||||||||
nm = not meaningful |
(USD millions unless indicated otherwise) | Year ended Dec 31, 2023 | Year ended Dec 31, 2022 | Change in USD % | Change in constant currencies %1 | |||||
Gross profit from continuing operations | 34 188 | 31 879 | 7 | 11 | |||||
Selling, general and administration | -12 517 | -12 193 | -3 | -3 | |||||
Research and development | -11 371 | -9 172 | -24 | -22 | |||||
Other income | 1 772 | 696 | 155 | 147 | |||||
Other expense | -2 303 | -3 264 | 29 | 31 | |||||
Operating income from continuing operations | 9 769 | 7 946 | 23 | 39 | |||||
Return on net sales (%) | 21.5 | 18.8 | |||||||
1 For an explanation of non-IFRS measures and reconciliation tables, see "—Non-IFRS measures as defined by Novartis." |
(USD millions unless indicated otherwise) | Year ended Dec 31, 2023 | Year ended Dec 31, 2022 | Change in USD % | Change in constant currencies % | |||||
Core gross profit from continuing operations | 37 959 | 35 591 | 7 | 9 | |||||
Core selling, general and administration | -12 489 | -12 143 | -3 | -3 | |||||
Core research and development | -8 600 | -8 267 | -4 | -3 | |||||
Core other income | 392 | 291 | 35 | 29 | |||||
Core other expense | -890 | -678 | -31 | -33 | |||||
Core operating income from continuing operations | 16 372 | 14 794 | 11 | 18 | |||||
Core return on net sales (%) | 36.0 | 35.1 | |||||||
1 For an explanation of non-IFRS measures and reconciliation tables, see "—Non-IFRS measures as defined by Novartis." |
(USD millions unless indicated otherwise) | Year ended Dec 31, 2023 | Year ended Dec 31, 2022 | Change in USD % | Change in constant currencies %1 | |||||
Research and exploratory development | -3 640 | -2 938 | -24 | -22 | |||||
Confirmatory development | -7 731 | -6 234 | -24 | -22 | |||||
Total research and development expense | -11 371 | -9 172 | -24 | -22 | |||||
Research and development as % of net sales from continuing operations | 25.0 | 21.7 | |||||||
Non-IFRS measures | |||||||||
Core research and exploratory development1 | -2 988 | -2 784 | -7 | -5 | |||||
Core confirmatory development1 | -5 612 | -5 483 | -2 | -1 | |||||
Total core research and development expense | -8 600 | -8 267 | -4 | -3 | |||||
Core research and development as % of net sales from continuing operations | 18.9 | 19.6 | |||||||
1 Core research and development expense exclude impairments, amortization and certain other items. For an explanation of non-IFRS measures and reconciliation tables, see "—Non-IFRS measures as defined by Novartis." |
(USD millions unless indicated otherwise) | Year ended Dec 31, 2023 | Year ended Dec 31, 2022 | Change in USD % | Change in constant currencies %1 | |||||
Operating income from continuing operations | 9 769 | 7 946 | 23 | 39 | |||||
Loss from associated companies | -13 | -11 | -18 | 1 | |||||
Interest expense | -855 | -800 | -7 | -11 | |||||
Other financial income and expense | 222 | 42 | nm | nm | |||||
Income before taxes | 9 123 | 7 177 | 27 | 45 | |||||
Income taxes | -551 | -1 128 | 51 | 44 | |||||
Net income from continuing operations | 8 572 | 6 049 | 42 | 62 | |||||
Net income from discontinued operations before gain on distribution of Sandoz Group AG to Novartis AG shareholders | 422 | 906 | nm | nm | |||||
Gain on distribution of Sandoz Group AG to Novartis AG shareholders | 5 860 | nm | nm | ||||||
Net income from discontinued operations | 6 282 | 906 | nm | nm | |||||
Net income | 14 854 | 6 955 | nm | nm | |||||
Basic earnings per share from continuing operations (USD) | 4.13 | 2.77 | 49 | 70 | |||||
Basic earnings per share from discontinued operations (USD) | 3.02 | 0.42 | nm | nm | |||||
Total basic earnings per share (USD) | 7.15 | 3.19 | nm | nm | |||||
1 For an explanation of non-IFRS measures and reconciliation tables, see "—Non-IFRS measures as defined by Novartis." | |||||||||
nm = not meaningful |
(USD millions unless indicated otherwise) | Year ended Dec 31, 2023 | Year ended Dec 31, 2022 | Change in USD % | Change in constant currencies % | |||||
Core operating income from continuing operations | 16 372 | 14 794 | 11 | 18 | |||||
Core loss from associated companies | -13 | -11 | -18 | 1 | |||||
Core interest expense | -855 | -800 | -7 | -11 | |||||
Core other financial income and expense | 430 | 140 | nm | nm | |||||
Core income before taxes from continuing operations | 15 934 | 14 123 | 13 | 19 | |||||
Core income taxes | -2 488 | -2 177 | -14 | -21 | |||||
Core net income from continuing operations | 13 446 | 11 946 | 13 | 19 | |||||
Core basic EPS from continuing operations (USD) | 6.47 | 5.48 | 18 | 25 | |||||
1 For an explanation of non-IFRS measures and reconciliation tables, see "—Non-IFRS measures as defined by Novartis." | |||||||||
nm = not meaningful |
(USD millions unless indicated otherwise) | Year ended Dec 31, 2022 | Year ended Dec 31, 2021 | Change in USD % | Change in constant currencies %2 | |||||
Net sales from continuing operations | 42 206 | 42 781 | -1 | 5 | |||||
Other revenues | 1 255 | 1 193 | 5 | 7 | |||||
Cost of goods sold | -11 582 | -11 735 | 1 | -5 | |||||
Gross profit from continuing operations | 31 879 | 32 239 | -1 | 5 | |||||
Selling, general and administration | -12 193 | -12 827 | 5 | 0 | |||||
Research and development | -9 172 | -8 641 | -6 | -10 | |||||
Other income | 696 | 1 620 | -57 | -55 | |||||
Other expense | -3 264 | -2 335 | -40 | -49 | |||||
Operating income from continuing operations | 7 946 | 10 056 | -21 | -12 | |||||
Return on net sales (%) | 18.8 | 23.5 | |||||||
(Loss)/income from associated companies | -11 | 15 337 | nm | nm | |||||
Interest expense | -800 | -787 | -2 | -3 | |||||
Other financial income and expense | 42 | -76 | nm | nm | |||||
Income before taxes from continuing operations | 7 177 | 24 530 | -71 | -67 | |||||
Income taxes | -1 128 | -1 625 | 31 | 21 | |||||
Net income from continuing operations | 6 049 | 22 905 | -74 | -70 | |||||
Net income from discontinued operations | 906 | 1 113 | -19 | -11 | |||||
Net income | 6 955 | 24 018 | -71 | -67 | |||||
Basic earnings per share from continuing operations (USD) | 2.77 | 10.22 | -73 | -69 | |||||
Basic earnings per share from discontinued operations (USD) | 0.42 | 0.49 | -15 | -9 | |||||
Total basic earnings per share (USD) | 3.19 | 10.71 | -70 | -66 | |||||
Net cash flows from operating activities from continuing operations | 13 039 | 13 365 | -2 | ||||||
Non-IFRS measures 2 | |||||||||
Free cash flow from continuing operations 2, 3 | 12 123 | 12 299 | -1 | ||||||
1 For information on continuing operations and discontinued operations, refer to the Overview section above in this Item 5 and "Item 18. Financial Statements—Note 1. Accounting policies ", "Item 18. Financial Statements—Note 2. Significant transactions—Significant transactions in 2023," and "Item 18. Financial Statements—Note 31. Discontinued operations." | |||||||||
2 For an explanation of non-IFRS measures and reconciliation tables, see "—Non-IFRS measures as defined by Novartis." | |||||||||
3 Effective January 1, 2023, Novartis revised its definition of free cash flow, to define free cash flow as net cash flows from operating activities less purchases of property, plant and equipment. To aid in comparability, the prior year free cash flow amounts have been revised to conform with the new free cash flow definition. See "—Non-IFRS measures as defined by Novartis." | |||||||||
nm = not meaningful |
(USD millions) | Year ended Dec 31, 2022 | Year ended Dec 31, 20211 | Change in USD % | Change in constant currencies %2 | |||||
Cardiovascular, renal and metabolic | 4 756 | 3 561 | 34 | 40 | |||||
Immunology | 7 287 | 7 206 | 1 | 7 | |||||
Neuroscience | 3 038 | 2 220 | 37 | 42 | |||||
Oncology | 11 176 | 10 532 | 6 | 12 | |||||
Total promoted brands | 26 257 | 23 519 | 12 | 18 | |||||
Established brands 3 | 15 949 | 19 262 | -17 | - 11 | |||||
Total net sales from continuing operations 3 | 42 206 | 42 781 | -1 | 5 | |||||
1 Reclassified to conform with the 2023 organizational structure. | |||||||||
2 For an explanation of non-IFRS measures and reconciliation tables, see "—Non-IFRS measures as defined by Novartis." | |||||||||
3 Effective January 1, 2023, the discontinued operations Sandoz business bio-technology manufacturing services to other companies’ activities and the Coartem brand were transferred to the Novartis continuing operations. The financial information of the Novartis continuing operations and discontinued operations were adapted accordingly in 2022 and 2021, in compliance with IFRS Accounting Standards. See “Item 18. Financial Statements – Note 3. Operating segment.” |
US | Rest of world | Total | |||||||||||||||||||
Brands | Brand classification by therapeutic area or established brands | Key indications | USD m | % change USD/cc1 | USD m | % change USD | % change cc1 | USD m | % change USD | % change cc1 | |||||||||||
Cosentyx | Immunology | Psoriasis (PsO), ankylosing spondylitis (AS), psoriatic arthritis (PsA), non-radiographic axial spondyloarthritis (nr-axSPA) | 2 770 | -4 | 2 018 | 10 | 20 | 4 788 | 1 | 5 | |||||||||||
Entresto | Cardiovascular, renal and metabolic | Chronic heart failure, hypertension | 2 354 | 38 | 2 290 | 25 | 37 | 4 644 | 31 | 37 | |||||||||||
Promacta/Revolade | Oncology | Immune thrombocytopenia (ITP), severe aplastic anemia (SAA) | 1 083 | 14 | 1 005 | -6 | 5 | 2 088 | 4 | 9 | |||||||||||
Gilenya 2 | Established brands | Relapsing multiple sclerosis (RMS) | 1 153 | -19 | 860 | -37 | -29 | 2 013 | -28 | -24 | |||||||||||
Tasigna | Oncology | Chronic myeloid leukemia (CML) | 877 | -1 | 1 046 | -11 | -2 | 1 923 | -7 | -1 | |||||||||||
Lucentis 2 | Established brands | Age-related macular degeneration (AMD), diabetic macular edema (DME), retinal vein occlusion (RVO) | 1 874 | -13 | -4 | 1 874 | -13 | -4 | |||||||||||||
Tafinlar + Mekinist | Oncology | BRAF V600+ metastatic adjuvant melanoma, advanced non-small cell lung cancer (NSCLC), tumor agnostic with BRAF mutation indication | 678 | 12 | 1 092 | 0 | 10 | 1 770 | 5 | 11 | |||||||||||
Jakavi | Oncology | Myelofibrosis (MF), polycytomia vera (PV), graft-versus-host disease (GvHD) | 1 561 | -2 | 9 | 1 561 | -2 | 9 | |||||||||||||
Zolgensma | Neuroscience | Spinal muscular atrophy (SMA) | 434 | -7 | 936 | 6 | 12 | 1 370 | 1 | 5 | |||||||||||
Xolair 3 | Immunology | Severe allergic asthma (SAA), chronic spontaneous urticaria (CSU), nasal polyps | 1 365 | -4 | 6 | 1 365 | -4 | 6 | |||||||||||||
Sandostatin | Established brands | Carcinoid tumors, acromegaly | 800 | -5 | 438 | -23 | -16 | 1 238 | -12 | -10 | |||||||||||
Kisqali | Oncology | HR+/HER2- metastatic breast cancer | 472 | 39 | 759 | 27 | 38 | 1 231 | 31 | 38 | |||||||||||
Ilaris | Immunology | Auto-inflammatory (CAPS, TRAPS, HIDS/MKD, FMF, SJIA, AOSD, gout) | 570 | 14 | 563 | 1 | 16 | 1 133 | 7 | 15 | |||||||||||
Kesimpta | Neuroscience | Relapsing-remitting multiple sclerosis (RRMS) | 921 | 165 | 171 | nm | nm | 1 092 | 194 | 200 | |||||||||||
Galvus Group | Established brands | Type 2 diabetes | 859 | -21 | -12 | 859 | -21 | -12 | |||||||||||||
Gleevec/Glivec | Established brands | Chronic myeloid leukemia (CML), gastrointestinal stromal tumors (GIST) | 205 | -22 | 540 | -29 | -23 | 745 | -27 | -22 | |||||||||||
Exforge Group | Established brands | Hypertension | 14 | 0 | 729 | -18 | -12 | 743 | -18 | -12 | |||||||||||
Diovan Group | Established brands | Hypertension | 55 | 8 | 597 | -17 | -10 | 652 | -16 | -9 | |||||||||||
Kymriah | Oncology | r/r pediatric and young adults acute lymphoblastic leukemia (ALL), diffuse large B-cell lymphoma (DLBCL), follicular lymphoma (FL) | 196 | -15 | 340 | -5 | 7 | 536 | -9 | -2 | |||||||||||
Afinitor/Votubia | Established brands | Breast cancer/ tuberous sclerosis complex (TSC) | 171 | -67 | 341 | -18 | -8 | 512 | -45 | -41 | |||||||||||
Top 20 brands total | 12 753 | 6 | 19 384 | -5 | 5 | 32 137 | -1 | 5 | |||||||||||||
Rest of portfolio 4 | 3 182 | 10 | 6 887 | -7 | 1 | 10 069 | -3 | 4 | |||||||||||||
Total net sales from continuing operations 4 | 15 935 | 7 | 26 271 | -6 | 4 | 42 206 | -1 | 5 | |||||||||||||
1 For an explanation of non-IFRS measures and reconciliation tables, see "—Non-IFRS measures as defined by Novartis." | |||||||||||||||||||||
2 In the first quarter of 2023 Lucentis was reclassified from other promoted brands to established brands and Gilenya was reclassified from neuroscience to established brands. | |||||||||||||||||||||
3 Net sales from continuing operations reflect Xolair sales for all indications. | |||||||||||||||||||||
4 Effective January 1, 2023, the discontinued operations Sandoz business bio-technology manufacturing services to other companies’ activities and the Coartem brand were transferred to the Novartis continuing operations. The financial information of the Novartis continuing operations and discontinued operations were adapted accordingly in 2022 and 2021, in compliance with IFRS Accounting Standards. See “Item 18. Financial Statements – Note 3. Operating segment.” | |||||||||||||||||||||
nm = not meaningful |
(USD millions unless indicated otherwise) | Year ended Dec 31, 2022 | Year ended Dec 31, 2021 | Change in USD % | Change in constant currencies %1 | |||||
Gross profit from continuing operations | 31 879 | 32 239 | -1 | 5 | |||||
Selling, general and administration | -12 193 | -12 827 | 5 | 0 | |||||
Research and development | -9 172 | -8 641 | -6 | -10 | |||||
Other income | 696 | 1 620 | -57 | -55 | |||||
Other expense | -3 264 | -2 335 | -40 | -49 | |||||
Operating income from continuing operations | 7 946 | 10 056 | -21 | -12 | |||||
Return on net sales (%) | 18.8 | 23.5 | |||||||
1 For an explanation of non-IFRS measures and reconciliation tables, see "—Non-IFRS measures as defined by Novartis." |
(USD millions unless indicated otherwise) | Year ended Dec 31, 2022 | Year ended Dec 31, 2021 | Change in USD % | Change in constant currencies % | |||||
Core gross profit from continuing operations | 35 591 | 36 002 | -1 | 5 | |||||
Core selling, general and administration | -12 143 | -12 756 | 5 | 0 | |||||
Core research and development | -8 267 | -8 150 | -1 | -5 | |||||
Core other income | 291 | 296 | -2 | 8 | |||||
Core other expense | -678 | -901 | 25 | 20 | |||||
Core operating income from continuing operations | 14 794 | 14 491 | 2 | 10 | |||||
Core return on net sales (%) | 35.1 | 33.9 | |||||||
1 For an explanation of non-IFRS measures and reconciliation tables, see "—Non-IFRS measures as defined by Novartis." |
(USD millions unless indicated otherwise) | Year ended Dec 31, 2022 | Year ended Dec 31, 2021 | Change in USD % | Change in constant currencies %1 | |||||
Research and exploratory development | -2 938 | -3 209 | 8 | 6 | |||||
Confirmatory development | -6 234 | -5 432 | -15 | -20 | |||||
Total research and development expense | -9 172 | -8 641 | -6 | -10 | |||||
Research and development as % of net sales from continuing operations | 21.7 | 20.2 | |||||||
Non-IFRS measures | |||||||||
Core research and exploratory development1 | -2 784 | -2 809 | 1 | -1 | |||||
Core confirmatory development1 | -5 483 | -5 341 | -3 | -7 | |||||
Total core research and development expense | -8 267 | -8 150 | -1 | -5 | |||||
Core research and development as % of net sales from continuing operations | 19.6 | 19.1 | |||||||
1 Core research and development expense exclude impairments, amortization and certain other items. For an explanation of non-IFRS measures and reconciliation tables, see "—Non-IFRS measures as defined by Novartis." |
(USD millions unless indicated otherwise) | Year ended Dec 31, 2022 | Year ended Dec 31, 2021 | Change in USD % | Change in constant currencies %1 | |||||
Operating income from continuing operations | 7 946 | 10 056 | -21 | -12 | |||||
(Loss)/income from associated companies | -11 | 15 337 | nm | nm | |||||
Interest expense | -800 | -787 | -2 | -3 | |||||
Other financial income and expense | 42 | -76 | nm | nm | |||||
Income before taxes | 7 177 | 24 530 | -71 | -67 | |||||
Income taxes | -1 128 | -1 625 | 31 | 21 | |||||
Net income from continuing operations | 6 049 | 22 905 | -74 | -70 | |||||
Net income from discontinued operations | 906 | 1 113 | -19 | -11 | |||||
Net income | 6 955 | 24 018 | -71 | -67 | |||||
Basic earnings per share from continuing operations (USD) | 2.77 | 10.22 | -73 | -69 | |||||
Basic earnings per share from discontinued operations (USD) | 0.42 | 0.49 | -15 | -9 | |||||
Total basic earnings per share (USD) | 3.19 | 10.71 | -70 | -66 | |||||
1 For an explanation of non-IFRS measures and reconciliation tables, see "—Non-IFRS measures as defined by Novartis." | |||||||||
nm = not meaningful |
(USD millions unless indicated otherwise) | Year ended Dec 31, 2022 | Year ended Dec 31, 2021 | Change in USD % | Change in constant currencies % | |||||
Core operating income from continuing operations | 14 794 | 14 491 | 2 | 10 | |||||
Core (loss)/income from associated companies | -11 | 991 | nm | nm | |||||
Core interest expense | -800 | -787 | -2 | -3 | |||||
Core other financial income and expense | 140 | -38 | nm | nm | |||||
Core income before taxes from continuing operations | 14 123 | 14 657 | -4 | 5 | |||||
Core income taxes | -2 177 | -2 129 | -2 | -11 | |||||
Core net income from continuing operations | 11 946 | 12 528 | -5 | 4 | |||||
Core basic EPS from continuing operations (USD) | 5.48 | 5.59 | -2 | 6 | |||||
1 For an explanation of non-IFRS measures and reconciliation tables, see "—Non-IFRS measures as defined by Novartis." | |||||||||
nm = not meaningful |
(USD millions) | 2023 | 2022 | 2021 | ||||
Operating income from continuing operations | 9 769 | 7 946 | 10 056 | ||||
Depreciation of property, plant and equipment | 916 | 967 | 1 005 | ||||
Depreciation of right-of-use assets | 259 | 267 | 279 | ||||
Amortization of intangible assets | 3 960 | 3 760 | 3 665 | ||||
Impairments of property, plant and equipment, right-of-use assets and intangible assets, net 1 | 3 142 | 1 711 | 648 | ||||
EBITDA from continuing operations | 18 046 | 14 651 | 15 653 | ||||
Operating income from discontinued operations | 265 | 1 251 | 1 633 | ||||
Depreciation of property, plant and equipment | 144 | 196 | 203 | ||||
Depreciation of the right-of-use-assets | 32 | 33 | 39 | ||||
Amortization of intangible assets | 171 | 222 | 238 | ||||
Impairments of property, plant and equipment, right-of-use assets and intangible assets, net 2 | 56 | 25 | 36 | ||||
EBITDA from discontinued operations 3 | 668 | 1 727 | 2 149 | ||||
EBITDA | 18 714 | 16 378 | 17 802 | ||||
1 There were no impairments of right-of-use assets in 2021. | |||||||
2 There were no impairments of right-of-use assets. | |||||||
3 The EBITDA from discontinued operations for 2023 is for the period from January 1, 2023, to the October 3, 2023, Distribution date. |
(USD millions) | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||||
Market capitalization | 206 264 | 191 530 | 196 107 | ||||
Non-controlling interests | 83 | 81 | 167 | ||||
Non-current financial debts | 18 436 | 20 244 | 22 902 | ||||
Current financial debts and derivative financial instruments | 6 175 | 5 931 | 6 295 | ||||
Marketable securities, commodities, time deposits and derivative financial instruments | -1 035 | -11 413 | -15 922 | ||||
Cash and cash equivalents | -13 393 | -7 517 | -12 407 | ||||
Enterprise value | 216 530 | 198 856 | 197 142 | ||||
(USD millions unless indicated otherwise) | 2023 | 2022 | 2021 | ||||
IFRS Accounting Standards operating income from continuing operations | 9 769 | 7 946 | 10 056 | ||||
Amortization of intangible assets | 3 730 | 3 585 | 3 528 | ||||
Impairments | |||||||
Intangible assets | 3 044 | 1 293 | 360 | ||||
Property, plant and equipment related to the company-wide rationalization of manufacturing sites | 5 | 286 | 219 | ||||
Other property, plant and equipment | 39 | 85 | 40 | ||||
Total impairment charges | 3 088 | 1 664 | 619 | ||||
Acquisition or divestment of businesses and related items | |||||||
- Income | -174 | -4 | -66 | ||||
- Expense | 149 | 8 | 107 | ||||
Total acquisition or divestment of businesses and related items, net | -25 | 4 | 41 | ||||
Other items | |||||||
Divestment gains | -225 | -166 | -724 | ||||
Financial assets - fair value adjustments | 105 | 260 | -38 | ||||
Restructuring and related items | |||||||
- Income | -229 | -34 | -38 | ||||
- Expense | 1 180 | 1 856 | 865 | ||||
Legal-related items | |||||||
- Income | -608 | -51 | |||||
- Expense | 66 | 364 | 170 | ||||
Additional income | -602 | -698 | -277 | ||||
Additional expense | 123 | 64 | 289 | ||||
Total other items | -190 | 1 595 | 247 | ||||
Total adjustments | 6 603 | 6 848 | 4 435 | ||||
Core operating income from continuing operations | 16 372 | 14 794 | 14 491 | ||||
as % of net sales | 36.0% | 35.1% | 33.9% | ||||
(Loss)/income from associated companies | -13 | -11 | 15 337 | ||||
Core adjustments to income from associated companies, net of tax | -14 346 | ||||||
Interest expense | -855 | -800 | -787 | ||||
Other financial income and expense | 222 | 42 | -76 | ||||
Core adjustments to other financial income and expense | 208 | 98 | 38 | ||||
Income taxes, adjusted for above items (core income taxes) | -2 488 | -2 177 | -2 129 | ||||
Core net income from continuing operations | 13 446 | 11 946 | 12 528 | ||||
Core net income from discontinued operations 2 | 889 | 1 406 | 1 566 | ||||
Core net income | 14 335 | 13 352 | 14 094 | ||||
Core net income attributable to shareholders of Novartis AG | 14 331 | 13 352 | 14 097 | ||||
Core basic EPS from continuing operations (USD) 1 | 6.47 | 5.48 | 5.59 | ||||
Core basic EPS from discontinued operations (USD) 1, 2 | 0.43 | 0.64 | 0.70 | ||||
Core basic EPS (USD) 1 | 6.90 | 6.12 | 6.29 | ||||
1 Core earnings per share (EPS) is calculated by dividing core net income attributable to shareholders of Novartis AG by the weighted average number of shares used in the basic EPS calculation outstanding in a reporting period. | |||||||
2 For details on discontinued operations reconciliation from IFRS Accounting Standards net income to core net income, refer to page 70. |
2023 (USD millions unless indicated otherwise) | IFRS Accounting Standards results | Amortization of intangible assets1 | Impairments2 | Acquisition or divestment of businesses and related items3 | Other items4 | Core results | |||||||
Gross profit from continuing operations | 34 188 | 3 319 | 310 | 142 | 37 959 | ||||||||
Operating income from continuing operations | 9 769 | 3 730 | 3 088 | -25 | -190 | 16 372 | |||||||
Income before taxes from continuing operations | 9 123 | 3 730 | 3 088 | -25 | 18 | 15 934 | |||||||
Income taxes 5 | -551 | -2 488 | |||||||||||
Net income from continuing operations | 8 572 | 13 446 | |||||||||||
Net income from discontinued operations 6 | 6 282 | 889 | |||||||||||
Net income | 14 854 | 14 335 | |||||||||||
Basic EPS from continuing operations (USD) 7 | 4.13 | 6.47 | |||||||||||
Basic EPS from discontinued operations (USD) 7 | 3.02 | 0.43 | |||||||||||
Basic EPS (USD) 7 | 7.15 | 6.90 | |||||||||||
The following are adjustments to arrive at core gross profit from continuing operations | |||||||||||||
Cost of goods sold | -12 472 | 3 319 | 310 | 142 | -8 701 | ||||||||
The following are adjustments to arrive at core operating income from continuing operations | |||||||||||||
Selling, general and administration | -12 517 | 28 | -12 489 | ||||||||||
Research and development | -11 371 | 411 | 2 737 | 32 | -409 | -8 600 | |||||||
Other income | 1 772 | -10 | -174 | -1 196 | 392 | ||||||||
Other expense | -2 303 | 51 | 117 | 1 245 | -890 | ||||||||
The following are adjustments to arrive at core income before taxes from continuing operations | |||||||||||||
Other financial income and expense | 222 | 208 | 430 | ||||||||||
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 to technologies | |||||||||||||
2 Impairments: cost of goods sold, research and development, other income and other expense include net impairment charges related to intangible assets; other income and other expense includes also net impairment charges related to property, plant and equipment | |||||||||||||
3 Acquisition or divestment of businesses and related items, including restructuring and integration charges: research and development include restructuring and integration cost charges; other income includes a favorable stamp duties tax settlement related to a prior periods acquisition; other income and other expense include also transitional service-fee income and expenses related to the Sandoz distribution, restructuring and integration costs charges and reversals | |||||||||||||
4 Other items: cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the company-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold and research and development also include contingent consideration adjustments; cost of goods sold and selling, general and administration includes also adjustments to provisions; research and development also include a write-off of prepaid expenses for a terminated development project; other income and other expense include fair value adjustments, divestment gains, losses and gains on financial assets, legal related items, adjustments to environmental provisions; other income includes also gains from the divestment of products and curtailment gains; other expenses also includes a fair value adjustment on a contingent receivable and other costs and items; other financial income and expense includes the impact of IAS 29 "Financial reporting in Hyperinflation Economies" for subsidiaries operating in hyperinflation economies and foreign exchange losses | |||||||||||||
5 Taxes on the adjustments between IFRS Accounting Standards and core results, for each item included in the adjustment, take into account 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 of USD 6.8 billion to arrive at the core results before tax amounts to USD 1.9 billion and the average tax rate on the adjustments was 28.4%. | |||||||||||||
6 For details on discontinued operations reconciliation from IFRS Accounting Standards net ncome to core net income refer to page 70. | |||||||||||||
7 Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG. |
2022 (USD millions unless indicated otherwise) | IFRS Accounting Standards results | Amortization of intangible assets1 | Impairments2 | Acquisition or divestment of businesses and related items3 | Other items4 | Core results | |||||||
Gross profit from continuing operations | 31 879 | 3 427 | 314 | -29 | 35 591 | ||||||||
Operating income from continuing operations | 7 946 | 3 585 | 1 664 | 4 | 1 595 | 14 794 | |||||||
Income before taxes from continuing operations | 7 177 | 3 585 | 1 664 | 4 | 1 693 | 14 123 | |||||||
Income taxes from continuing operations 5 | -1 128 | -2 177 | |||||||||||
Net income from continuing operations | 6 049 | 11 946 | |||||||||||
Net income from discontinued operations 6 | 906 | 1 406 | |||||||||||
Net income | 6 955 | 13 352 | |||||||||||
Basic EPS from continuing operations (USD) 7 | 2.77 | 5.48 | |||||||||||
Basic EPS from discontinued operations (USD) 7 | 0.42 | 0.64 | |||||||||||
Basic EPS (USD) 7 | 3.19 | 6.12 | |||||||||||
The following are adjustments to arrive at core gross profit from continuing operations | |||||||||||||
Other revenues | 1 255 | -86 | 1 169 | ||||||||||
Cost of goods sold | -11 582 | 3 427 | 314 | 57 | -7 784 | ||||||||
The following are adjustments to arrive at core operating income | |||||||||||||
Selling, general and administration | -12 193 | 50 | -12 143 | ||||||||||
Research and development | -9 172 | 158 | 953 | -206 | -8 267 | ||||||||
Other income | 696 | -1 | -4 | -400 | 291 | ||||||||
Other expense | -3 264 | 398 | 8 | 2 180 | -678 | ||||||||
The following are adjustments to arrive at core income before taxes from continuing operations | |||||||||||||
Other financial income and expense | 42 | 98 | 140 | ||||||||||
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, research and development and other expense 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: other income and other expense include transitional service fee income and charges related to divestments; other income also includes adjustments to provisions; other expense includes stamp duties related to an acquisition | |||||||||||||
4 Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the restructuring initiative to implement a new streamlined organizational model, the company-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold, selling, general and administration, research and development and other expense include adjustments to provisions and related items; cost of goods sold and research and development also include contingent consideration adjustments; other income and other expense include fair value adjustments and divestment gains and losses on financial assets and legal-related items; other income also includes gains from the divestment of products and property, curtailment gains and an adjustment to an environmental provision; other expense includes a reversal of an accrual and other costs and items; other financial income and expense includes the impact of IAS 29 "Financial reporting in Hyperinflation Economies" for subsidiaries operating in hyperinflation economies and a revaluation impact of a financial liability incurred through the Alcon distribution | |||||||||||||
5 Taxes on the adjustments between IFRS Accounting Standards 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 of USD 6.9 billion to arrive at the core results before tax amounts to USD 1.0 billion and the average tax rate on the adjustments was 15.1%. | |||||||||||||
6 For details on discontinued operations reconciliation from IFRS Accounting Standards net income to core net income please refer to page 71. | |||||||||||||
7 Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG. |
2021 (USD millions unless indicated otherwise) | IFRS Accounting Standards results | Amortization of intangible assets1 | Impairments2 | Acquisition or divestment of businesses and related items3 | Other items4 | Core results | |||||||
Gross profit from continuing operations | 32 239 | 3 419 | 344 | 36 002 | |||||||||
Operating income from continuing operations | 10 056 | 3 528 | 619 | 41 | 247 | 14 491 | |||||||
Income before taxes from continuing operations | 24 530 | 3 738 | 619 | -14 531 | 301 | 14 657 | |||||||
Income taxes from continuing operations 5 | -1 625 | -2 129 | |||||||||||
Net income from continuing operations | 22 905 | 12 528 | |||||||||||
Net income from discontinued operations 6 | 1 113 | 1 566 | |||||||||||
Net income | 24 018 | 14 094 | |||||||||||
Basic EPS from continuing operations (USD) 7 | 10.22 | 5.59 | |||||||||||
Basic EPS from discontinued operations (USD) 7 | 0.49 | 0.70 | |||||||||||
Basic EPS (USD) 7 | 10.71 | 6.29 | |||||||||||
The following are adjustments to arrive at core gross profit from continuing operations | |||||||||||||
Cost of goods sold | -11 735 | 3 419 | 344 | -7 972 | |||||||||
The following are adjustments to arrive at core operating income from continuing operations | |||||||||||||
Selling, general and administration | -12 827 | 71 | -12 756 | ||||||||||
Research and development | -8 641 | 109 | 360 | 22 | -8 150 | ||||||||
Other income | 1 620 | -45 | -66 | -1 213 | 296 | ||||||||
Other expense | -2 335 | 304 | 107 | 1 023 | -901 | ||||||||
The following are adjustments to arrive at core income before taxes from continuing operations | |||||||||||||
Income from associated companies | 15 337 | 210 | -14 556 | 991 | |||||||||
Other financial income and expense | -76 | -16 | 54 | -38 | |||||||||
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 210 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 and other expense include reversals of impairment charges and impairment charges related to property, plant and equipment | |||||||||||||
3 Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes adjustments to portfolio transformation and Alcon spin-off accruals; other income and other expense include transitional service-fee income and expenses related to the Alcon distribution; other expense also includes adjustments to provisions; income from associated companies includes the gain related to the divestment of our investment in Roche; other financial income and expense includes other financial gains related to the divestment of our investment in Roche | |||||||||||||
4 Other items: cost of goods sold, research and development, other income and other expense include net restructuring and other charges related to the company-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; cost of goods sold, research and development, other income and other expense also include adjustments to contingent considerations; selling, general and administration, research and development, other income and other expense include adjustments to provisions; other income and other expense also include gains and losses from the divestment of products and financial assets and fair value adjustments on financial assets, adjustments to environmental provisions and legal-related items; other financial income and expense includes the impact of IAS 29 "Financial reporting in Hyperinflation Economies" for subsidiaries operating in hyperinflation economies and a revaluation impact of a financial liability incurred through the Alcon distribution | |||||||||||||
5 Taxes on the adjustments between IFRS Accounting Standards 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 of USD 9.9 billion to arrive at the core results before tax amounts to USD 504 million. Excluding the gain on the divestment of our investment in Roche, the tax on the total adjustments of USD 4.5 billion to arrive at the core results before tax amounts to USD 504 million and the average tax rate on the adjustments was 11.3%. | |||||||||||||
6 For details on discontinued operations reconciliation from IFRS Accounting Standards net income to core net income please refer to page 72. | |||||||||||||
7 Earnings per share (EPS) is calculated on the amount of net income, attributable to shareholders of Novartis AG. |
2023 (USD millions unless indicated otherwise) | IFRS Accounting Standards results | Amortization of intangible assets1 | Impairments2 | Acquisition or divestment of businesses and related items | Other items3 | Core results | |||||||
Gross profit from discontinued operations | 3 403 | 165 | 34 | 57 | 3 659 | ||||||||
Operating income from discontinued operations | 265 | 165 | 43 | 712 | 1 185 | ||||||||
Income before taxes from discontinued operations | 214 | 165 | 43 | 718 | 1 140 | ||||||||
Income taxes 4 | 208 | -251 | |||||||||||
Net income from discontinued operations before gain on distribution of Sandoz Group AG to Novartis AG shareholders | 422 | 889 | |||||||||||
Gain on distribution of Sandoz Group AG to Novartis AG shareholders | 5 860 | -5 860 | |||||||||||
Net income from discontinued operations | 6 282 | 889 | |||||||||||
Basic EPS from discontinued operations (USD) 5 | 3.02 | 0.43 | |||||||||||
The following are adjustments to arrive at core gross profit from discontinued operations | |||||||||||||
Cost of goods sold | -4 044 | 165 | 34 | 57 | -3 788 | ||||||||
The following are adjustments to arrive at core operating income from discontinued operations | |||||||||||||
Selling, general and administration | -1 728 | 25 | -1 703 | ||||||||||
Research and development | -671 | 10 | -661 | ||||||||||
Other income | 56 | -1 | -24 | 31 | |||||||||
Other expense | -795 | 654 | -141 | ||||||||||
The following are adjustments to arrive at core income before taxes from discontinued operations | |||||||||||||
Other financial income and expense | -20 | 6 | -14 | ||||||||||
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 a reversal of impairment charges related to property, plant and equipment | |||||||||||||
3 Other items: cost of goods sold, selling, general and administration, other income and other expense include charges related to the Sandoz distribution, the company-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold and selling, general and administration also include adjustments to provisions; other expense includes legal-related items; other financial income and expense includes the impact of IAS 29 "Financial reporting in Hyperinflation Economies" for subsidiaries operating in hyperinflation economies | |||||||||||||
4 Taxes on the adjustments between IFRS Accounting Standards and core results, for each item included in the adjustment, take into account 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 of USD 926 million to arrive at the core results before tax amounts to USD 459 million and the average tax rate on the adjustments was 49.5%. | |||||||||||||
5 Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG. |
2022 (USD millions unless indicated otherwise) | IFRS Accounting Standards results | Amortization of intangible assets1 | Impairments2 | Acquisition or divestment of businesses and related items | Other items3 | Core results | ||||||||
Gross profit from discontinued operations | 4 463 | 221 | 24 | 93 | 4 801 | |||||||||
Operating income from discontinued operations | 1 251 | 221 | 23 | 376 | 1 871 | |||||||||
Income before taxes from discontinued operations | 1 194 | 221 | 23 | 399 | 1 837 | |||||||||
Income taxes from discontinued operations 4 | -288 | -431 | ||||||||||||
Net income from discontinued operations | 906 | 1 406 | ||||||||||||
Basic EPS from discontinued operations (USD) 5 | 0.42 | 0.64 | ||||||||||||
The following are adjustments to arrive at core gross profit from discontinued operations | ||||||||||||||
Cost of goods sold | -4 937 | 221 | 24 | 93 | -4 599 | |||||||||
The following are adjustments to arrive at core operating loss from discontinued operations | ||||||||||||||
Selling, general and administration | -2 060 | 13 | -2 047 | |||||||||||
Research and development | -824 | 1 | 2 | -821 | ||||||||||
Other income | 109 | -2 | -14 | 93 | ||||||||||
Other expense | -437 | 282 | -155 | |||||||||||
The following are adjustments to arrive at core income before taxes from discontinued operations | ||||||||||||||
Other financial income and expense | -22 | 23 | 1 | |||||||||||
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 a reversal of an impairment charge related to property, plant and equipment | ||||||||||||||
3 Other items: cost of goods sold, selling, general and administration, research and development, other income and other expense include charges related to the Sandoz strategic review, the company-wide rationalization of manufacturing sites and other net restructuring charges and related items; other expense also includes legal-related items; cost of goods sold and selling, general and administration include adjustments to provisions and related items | ||||||||||||||
4 Taxes on the adjustments between IFRS Accounting Standards 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 of USD 643 million to arrive at the core results before tax amounts to USD 143 million and the average tax rate on the adjustments was 22.2%. | ||||||||||||||
5 Earnings per share (EPS) is calculated on the amount of net income, attributable to shareholders of Novartis AG. |
2021 (USD millions unless indicated otherwise) | IFRS Accounting Standards results | Amortization of intangible assets1 | Impairments2 | Acquisition or divestment of businesses and related items | Other items3 | Core results | ||||||||
Gross profit from discontinued operations | 4 771 | 236 | 18 | 70 | 5 095 | |||||||||
Operating income from discontinued operations | 1 633 | 236 | 34 | 194 | 2 097 | |||||||||
Income before taxes from discontinued operations | 1 607 | 236 | 34 | 195 | 2 072 | |||||||||
Income taxes from discontinued operations 4 | -494 | -506 | ||||||||||||
Net income from discontinued operations | 1 113 | 1 566 | ||||||||||||
Basic EPS from discontinued operations (USD) 5 | 0.49 | 0.70 | ||||||||||||
The following are adjustments to arrive at core gross profit from discontinued operations | ||||||||||||||
Cost of goods sold | -5 121 | 236 | 18 | 70 | -4 797 | |||||||||
The following are adjustments to arrive at core operating loss from discontinued operations | ||||||||||||||
Research and development | -899 | 9 | -1 | -891 | ||||||||||
Other income | 232 | -55 | -52 | 125 | ||||||||||
Other expense | -412 | 62 | 177 | -173 | ||||||||||
The following are adjustments to arrive at core income before taxes from discontinued operations | ||||||||||||||
Other financial income and expense | -4 | 1 | -3 | |||||||||||
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 and other expense include reversals of impairment charges and impairment charges related to property, plant and equipment | ||||||||||||||
3 Other items: cost of goods sold, other income and other expense include net restructuring charges related to the company-wide rationalization of manufacturing sites and other restructuring income and charges and related items; research and development includes adjustments to provisions; other income includes net gains from the divestment of a product; other income and other expense include legal related items | ||||||||||||||
4 Taxes on the adjustments between IFRS Accounting Standards 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 of USD 465 million to arrive at the core results before tax amounts to USD 12 million and the average tax rate on the adjustments was 2.6%. | ||||||||||||||
5 Earnings per share (EPS) is calculated on the amount of net income, attributable to shareholders of Novartis AG. |
2021 | 2022 | ||||||||||||||
(USD millions unless indicated otherwise) | Results as published1 | Our Roche investment impacts excluding the divestment gain | Gain on divestment of our investment in Roche | Results excluding impacts from the divestment of our Roche investment | Results as published | Change in USD % | Change in constant currencies % | ||||||||
Operating income from continuing operations | 10 056 | 10 056 | 7 946 | -21 | -12 | ||||||||||
Income from associated companies | 15 337 | -785 | -14 556 | -4 | -11 | nm | nm | ||||||||
Interest expense | -787 | -787 | -800 | -2 | -3 | ||||||||||
Other financial income and expense | -76 | -16 | -92 | 42 | nm | nm | |||||||||
Income taxes | -1 625 | -1 625 | -1 128 | 31 | |||||||||||
Net income from continuing operations | 22 905 | -785 | -14 572 | 7 548 | 6 049 | -20 | -9 | ||||||||
Basic earnings per share (USD) from continuing operations | 10.22 | -0.35 | -6.50 | 3.37 | 2.77 | -18 | -7 | ||||||||
Effective tax rate 2 | 6.6% | 17.7% | 15.7% | ||||||||||||
Non-IFRS measures | |||||||||||||||
Core operating income from continuing operations | 14 491 | 14 491 | 14 794 | 2 | 10 | ||||||||||
Core income from associated companies | 991 | -995 | -4 | -11 | nm | nm | |||||||||
Core interest expense | -787 | -787 | -800 | -2 | -3 | ||||||||||
Core other financial income and expense | -38 | -38 | 140 | nm | nm | ||||||||||
Core income taxes | -2 129 | -2 129 | -2 177 | -2 | -11 | ||||||||||
Core net income from continuing operations | 12 528 | -995 | 11 533 | 11 946 | 4 | 13 | |||||||||
Core basic earnings per share (USD) from continuing operations | 5.59 | -0.45 | 5.14 | 5.48 | 7 | 16 | |||||||||
Core effective tax rate 3 | 14.5% | 15.6% | 15.4% | ||||||||||||
Free cash flow from continuing operations 4,5 | 12 299 | -522 | 11 777 | 12 123 | 3 | ||||||||||
1 For information on continuing operations and discontinued operations, refer to the Overview section above in this Item 5 and “Item 18. Financial Statements - Note 1. Accounting policies “, “Item 18. Financial Statements - Note 2. Significant transactions - Significant transactions in 2023,” and “Item 18. Financial Statements - Note 31. Discontinued operations.” | |||||||||||||||
2 Effective tax rate is calculated as Income taxes divided by Income before tax. | |||||||||||||||
3 Core effective tax rate is calculated as Core income taxes divided by Core income before tax. | |||||||||||||||
4 Effective January 1, 2023, Novartis revised its definition of free cash flow, to define free cash flow as net cash flows from operating activities less purchases of property, plant and equipment. To aid in comparability, the prior year free cash flow amounts have been revised to conform with the new free cash flow definition. See “-Non-IFRS measures as defined by Novartis." | |||||||||||||||
5 The free cash flow impact represents the dividend received in Q1 2021 from Roche in relation to the distribution of its 2020 net income. |
2021 | |||||||||||
(USD millions) | Free cash flow as published1 | Dividends received from Roche in relation to the distribution of its 2020 net income2 | Free cash flow excluding dividends received from Roche | ||||||||
Operating income from continuing operations | 10 056 | 10 056 | |||||||||
Adjustments for non-cash items | 6 419 | 6 419 | |||||||||
Operating income adjusted for non-cash items from continuing operations | 16 475 | 16 475 | |||||||||
Dividends received from associated companies and others | 523 | -522 | 1 | ||||||||
Interest and other financial payments, net | -929 | -929 | |||||||||
Income taxes paid | -1 856 | -1 856 | |||||||||
Other operating cash flow items, net | -848 | -848 | |||||||||
Net cash flows from operating activities from continuing operations | 13 365 | -522 | 12 843 | ||||||||
Purchases of property, plant and equipment | -1 066 | -1 066 | |||||||||
Free cash flow from continuing operations | 12 299 | -522 | 11 777 | ||||||||
1 Effective January 1, 2023, Novartis revised its definition of free cash flow, to define free cash flow as net cash flows from operating activities less purchases of property, plant and equipment. To aid in comparability, the prior year free cash flow amounts have been revised to conform with the new free cash flow definition. See “-Non-IFRS measures as defined by Novartis." | |||||||||||
2 In 2021, the dividend received from Roche in relation to the distribution of its 2020 net income was received in Q1 2021. |
In USD | In constant currencies | ||||||||||||
% change as published 2022 | % change excluding impacts from the divestment of our Roche investment 2022 | Percentage point impact 2022 | % change as published 2022 | % change excluding impacts from the divestment of our Roche investment 2022 | Percentage point impact 2022 | ||||||||
Net income from continuing operations | -74 | -20 | -54 | -70 | -9 | -61 | |||||||
Basic earnings per share (USD) from continuing operations | -73 | -18 | -55 | -69 | -7 | -62 | |||||||
Free cash flow from continuing operations | -1 | 3 | -4 | ||||||||||
Core net income from continuing operations | -5 | 4 | -9 | 4 | 13 | -9 | |||||||
Core basic earnings per share (USD) from continuing operations | -2 | 7 | -9 | 6 | 16 | -10 | |||||||
5.B Liquidity and capital resources
(USD millions) | 2023 | 2022 | 2021 | ||||
Net cash flows from operating activities from continuing operations | 14 220 | 13 039 | 13 365 | ||||
Net cash flows from operating activities from discontinued operations | 238 | 1 197 | 1 706 | ||||
Net cash flows from investing activities from continuing operations | 6 719 | 1 904 | 4 897 | ||||
Net cash flows used in investing activities from discontinued operations | -1 123 | -436 | -689 | ||||
Net cash flows used in financing activities from continuing operations | -17 564 | -20 681 | -16 290 | ||||
Net cash flows from financing activities from discontinued operations | 3 286 | 119 | 26 | ||||
Effect of exchange rate changes on cash and cash equivalents | 100 | -32 | -266 | ||||
Net change in cash and cash equivalents | 5 876 | -4 890 | 2 749 | ||||
Change in marketable securities, commodities, time deposits and derivative financial instruments | -10 378 | -4 509 | 14 017 | ||||
Change in current and non-current financial debts and derivative financial instruments | 1 564 | 3 022 | 6 847 | ||||
Change in net debt | -2 938 | -6 377 | 23 613 | ||||
Net debt at January 1 | -7 245 | -868 | -24 481 | ||||
Net debt at December 31 | -10 183 | -7 245 | -868 | ||||
2023 | 2022 | 2021 | |||||||||||||||||
(USD millions) | IFRS Accounting Standards cash flow | Adjustments | Free cash flow | IFRS Accounting Standards cash flow | Adjustments1 | Revised Free cash flow1 | IFRS Accounting Standards cash flow | Adjustments1 | Revised Free cash flow1 | ||||||||||
Net cash flows from operating activities from continuing operations | 14 220 | 14 220 | 13 039 | 13 039 | 13 365 | 13 365 | |||||||||||||
Net cash flows from operating activities from discontinued operations | 238 | 238 | 1 197 | 1 197 | 1 706 | 1 706 | |||||||||||||
Total net cash flows from operating activities | 14 458 | 14 458 | 14 236 | 14 236 | 15 071 | 15 071 | |||||||||||||
Net cash flows from/(used in) investing activities from continuing operations | 6 719 | -7 779 | -1 060 | 1 904 | -2 820 | -916 | 4 897 | -5 963 | -1 066 | ||||||||||
Net cash flows used in investing activities from discontinued operations | -1 123 | 904 | -219 | -436 | 154 | -282 | -689 | 377 | -312 | ||||||||||
Total net cash flows from/(used in) investing activities 2 | 5 596 | -6 875 | -1 279 | 1 468 | -2 666 | -1 198 | 4 208 | -5 586 | -1 378 | ||||||||||
Net cash flows used in financing activities from continuing operations | -17 564 | 17 564 | 0 | -20 681 | 20 681 | 0 | -16 290 | 16 290 | 0 | ||||||||||
Net cash flows from financing activities from discontinued operations | 3 286 | -3 286 | 0 | 119 | -119 | 0 | 26 | -26 | 0 | ||||||||||
Total net cash flows used in financing activities 3 | -14 278 | 14 278 | 0 | -20 562 | 20 562 | 0 | -16 264 | 16 264 | 0 | ||||||||||
Non-IFRS measure free cash flow from continuing operations 1 | 13 160 | 12 123 | 12 299 | ||||||||||||||||
Non-IFRS measure free cash flow from discontinued operations 1 | 19 | 915 | 1 394 | ||||||||||||||||
Total non-IFRS measure free cash flow 1 | 13 179 | 13 038 | 13 693 | ||||||||||||||||
1 To aid in comparability, the prior year adjustments and free cash flow amounts have been revised to conform with the new free cash flow definition that was effective as of January 1, 2023. | |||||||||||||||||||
2 With the exception of purchases of property, plant and equipment, all net cash flows from/(used in) investing activities from continuing operations and from discontinued operations are excluded from the free cash flow. | |||||||||||||||||||
3 Net cash flows (used in)/from financing activities from continuing operations and from discontinued operations are excluded from the free cash flow. | |||||||||||||||||||
(USD millions) | 2023 | 2022 | 2021 | ||||
Operating income from continuing operations | 9 769 | 7 946 | 10 056 | ||||
Reversal of non-cash items and other adjustments | |||||||
Depreciation, amortization and impairments | 8 383 | 6 965 | 5 559 | ||||
Change in provisions and other non-current liabilities | 61 | 1 318 | 806 | ||||
Other | 728 | 451 | 54 | ||||
Operating income from continuing operations adjusted for non-cash items | 18 941 | 16 680 | 16 475 | ||||
Dividends received from associated companies and others | 2 | 1 | 523 | ||||
Interest received and other financial receipts | 735 | 323 | 11 | ||||
Interest paid and other financial payments | -768 | -693 | -940 | ||||
Income taxes paid | -2 787 | -1 702 | -1 856 | ||||
Payments out of provisions and other net cash movements in non-current liabilities | -1 534 | -774 | -775 | ||||
Change in inventories and trade receivables less trade payables | -1 571 | -1 138 | -565 | ||||
Change in other net current assets and other operating cash flow items | 1 202 | 342 | 492 | ||||
Net cash flows from operating activities from continuing operations | 14 220 | 13 039 | 13 365 | ||||
Purchases of property, plant and equipment | -1 060 | -916 | -1 066 | ||||
Non-IFRS measure free cash flow from continuing operations 1 | 13 160 | 12 123 | 12 299 | ||||
Non-IFRS measure free cash flow from discontinued operations 1, 2 | 19 | 915 | 1 394 | ||||
Total non-IFRS measure free cash flow 1 | 13 179 | 13 038 | 13 693 | ||||
1 To aid in comparability, the prior year free cash flow amounts have been revised to conform with the new free cash flow definition that was effective as of January 1, 2023. | |||||||
2 In 2023, the free cash flow from discontinued operations was a cash inflow of USD 19 million (2022: USD 915 million, 2021: USD 1 394 million) consisting of USD 238 million (2022: USD 1 197 million, 2021: USD 1 706 million) net cash inflows from operating activities from discontinued operations, less purchases of property, plant and equipment by discontinued operations of USD 219 million (2022: USD 282 million, 2021: USD 312 million). | |||||||
(USD millions) | Dec 31, 2023 | Dec 31, 2022 | |||
Assets | |||||
Property, plant and equipment | 9 514 | 10 764 | |||
Right-of-use assets | 1 410 | 1 431 | |||
Goodwill | 23 341 | 29 301 | |||
Intangible assets other than goodwill | 26 879 | 31 644 | |||
Investments in associated companies | 205 | 143 | |||
Deferred tax assets | 4 309 | 3 739 | |||
Financial assets and other non-current assets | 3 806 | 3 521 | |||
Total non-current assets | 69 464 | 80 543 | |||
Inventories | 5 913 | 7 175 | |||
Trade receivables | 7 107 | 8 066 | |||
Other current assets and income tax receivables | 3 033 | 2 739 | |||
Marketable securities, commodities, time deposits and derivative financial instruments | 1 035 | 11 413 | |||
Cash and cash equivalents | 13 393 | 7 517 | |||
Total current assets | 30 481 | 36 910 | |||
Total assets | 99 945 | 117 453 | |||
Equity and liabilities | |||||
Total equity | 46 750 | 59 423 | |||
Liabilities | |||||
Financial debts | 18 436 | 20 244 | |||
Lease liabilities | 1 598 | 1 538 | |||
Deferred tax liabilities | 2 248 | 2 686 | |||
Provisions and other non-current liabilities | 4 523 | 4 906 | |||
Total non-current liabilities | 26 805 | 29 374 | |||
Trade payables | 4 926 | 5 146 | |||
Financial debts and derivative financial instruments | 6 175 | 5 931 | |||
Lease liabilities | 230 | 251 | |||
Provisions and other current liabilities and current income tax liabilities | 15 059 | 17 328 | |||
Total current liabilities | 26 390 | 28 656 | |||
Total liabilities | 53 195 | 58 030 | |||
Total equity and liabilities | 99 945 | 117 453 | |||
Number of outstanding shares (in millions) | Equity attributable to Novartis AG shareholders | ||||||||
2023 | 2022 | 2023 USD millions | 2022 USD millions | ||||||
Balance at beginning of year | 2 119.6 | 2 234.9 | 59 342 | 67 655 | |||||
Shares acquired to be canceled | -87.5 | -126.2 | -8 369 | -10 787 | |||||
Other share purchases | -1.6 | -1.4 | -148 | -123 | |||||
Exercise of options and employee transactions | 2.8 | 1.9 | 146 | 88 | |||||
Equity-based compensation | 10.4 | 10.4 | 904 | 854 | |||||
Shares delivered to Alcon employees as a result of the Alcon spin-off | 0.0 | 5 | |||||||
Shares delivered to Sandoz employees as a result of the Sandoz spin-off | 0.3 | 30 | |||||||
Taxes on treasury share transactions | 14 | 14 | |||||||
Decrease of treasury share repurchase obligation under a share buyback trading plan | 2 809 | ||||||||
Transaction costs, net of taxes | -214 | ||||||||
Dividends | -7 255 | -7 506 | |||||||
Dividend in kind to effect the spin-off of Sandoz | -13 962 | ||||||||
Net income of the year attributable to shareholders of Novartis AG | 14 850 | 6 955 | |||||||
Other comprehensive income attributable to shareholders of Novartis AG | 1 200 | -839 | |||||||
Other movements | 129 | 217 | |||||||
Balance at end of year | 2 044.0 | 2 119.6 | 46 667 | 59 342 | |||||
2023 | 2022 | 2021 | |||||||||||
Currency | Net sales from continuing operations % | Operating expenses from continuing operations %1 | Net sales from continuing operations % | Operating expenses from continuing operations %1 | Net sales from continuing operations % | Operating expenses from continuing operations %1 | |||||||
US dollar (USD) | 42 | 37 | 40 | 38 | 38 | 37 | |||||||
Euro (EUR) | 24 | 20 | 25 | 21 | 27 | 23 | |||||||
Swiss franc (CHF) | 1 | 22 | 2 | 22 | 2 | 20 | |||||||
Chinese yuan (CNY) | 7 | 4 | 7 | 4 | 7 | 4 | |||||||
Japanese yen (JPY) | 4 | 2 | 4 | 2 | 5 | 3 | |||||||
Canadian dollar (CAD) | 2 | 1 | 2 | 1 | 2 | 1 | |||||||
British pound (GBP) | 2 | 5 | 2 | 2 | 3 | 2 | |||||||
Russian ruble (RUB) | 1 | 0 | 2 | 1 | 1 | 1 | |||||||
Brazilian real (BRL) | 2 | 1 | 2 | 1 | 1 | 1 | |||||||
Australian dollar (AUD) | 1 | 0 | 1 | 1 | 1 | 1 | |||||||
Other currencies | 14 | 8 | 13 | 7 | 13 | 7 | |||||||
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 | 2023 | 2022 | Change in % | 2023 | 2022 | Change in % | |||||||
Australian dollar (AUD) | 0.665 | 0.695 | -4 | 0.683 | 0.678 | 1 | |||||||
Brazilian real (BRL) | 0.200 | 0.194 | 3 | 0.206 | 0.189 | 9 | |||||||
Canadian dollar (CAD) | 0.741 | 0.769 | -4 | 0.755 | 0.738 | 2 | |||||||
Swiss franc (CHF) | 1.113 | 1.048 | 6 | 1.189 | 1.081 | 10 | |||||||
Chinese yuan (CNY) | 0.141 | 0.149 | -5 | 0.141 | 0.144 | -2 | |||||||
Euro (EUR) | 1.082 | 1.054 | 3 | 1.107 | 1.065 | 4 | |||||||
British pound (GBP) | 1.243 | 1.237 | 0 | 1.275 | 1.207 | 6 | |||||||
Japanese yen (JPY (100)) | 0.713 | 0.766 | -7 | 0.707 | 0.757 | -7 | |||||||
Russian ruble (RUB (100)) | 1.185 | 1.481 | -20 | 1.111 | 1.380 | -19 | |||||||
Change in USD % 2023 | Change in constant currencies % 2023 | Percentage point currency impact 2023 | Change in USD % 2022 | Change in constant currencies % 2022 | Percentage point currency impact 2022 | ||||||||
Net sales from continuing operations | 8 | 10 | -2 | -1 | 5 | -6 | |||||||
Operating income from continuing operations | 23 | 39 | -16 | -21 | -12 | -9 | |||||||
Net income from continuing operations | 42 | 62 | -20 | -74 | -70 | -4 | |||||||
Basic earnings per share (USD) from continuing operations | 49 | 70 | -21 | -73 | -69 | -4 | |||||||
Core operating income from continuing operations | 11 | 18 | -7 | 2 | 10 | -8 | |||||||
Core net income from continuing operations | 13 | 19 | -6 | -5 | 4 | -9 | |||||||
Core basic earnings per share (USD) from continuing operations | 18 | 25 | -7 | -2 | 6 | -8 | |||||||
nm = not meaningful |
(USD millions) | 2023 | 2022 | 2021 | ||||
Non-current financial debts | -18 436 | -20 244 | -22 902 | ||||
Current financial debts and derivative financial instruments | -6 175 | -5 931 | -6 295 | ||||
Total financial debts | -24 611 | -26 175 | -29 197 | ||||
Less liquidity | |||||||
Cash and cash equivalents | 13 393 | 7 517 | 12 407 | ||||
Marketable securities, commodities, time deposits and derivative financial instruments | 1 035 | 11 413 | 15 922 | ||||
Total liquidity | 14 428 | 18 930 | 28 329 | ||||
Net debt at December 31 1 | -10 183 | -7 245 | -868 | ||||
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 % 20231 | Liquidity in % 20221 | Liquidity in % 20211 | Financial debt in % 20232 | Financial debt in % 20222 | Financial debt in % 20212 | ||||||||
USD | 67 | 85 | 92 | 67 | 62 | 57 | |||||||
CHF | 7 | 4 | 4 | 7 | 6 | 12 | |||||||
EUR | 22 | 7 | 2 | 23 | 29 | 27 | |||||||
JPY | 1 | 1 | 1 | ||||||||||
Other | 4 | 4 | 2 | 2 | 2 | 3 | |||||||
100 | 100 | 100 | 100 | 100 | 100 | ||||||||
1 Liquidity includes cash and cash equivalents and marketable securities, including debt 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 Critical accounting estimates
Item 6. Directors, Senior Management and Employees
6.A Directors and senior management
6.B Compensation
Executive Committee and Board 2023 compensation at a glance
2023 annual base salary | 2023 pension benefits | 2023 Annual Incentive | 2021 - 2023 LTPP cycle | Other 2023 compensation | |||||||||||
Currency | Cash (amount) | Amount | Cash & Equity | Equity (value at vesting date) | Amount | Total realized compensation (incl. share price movement) | |||||||||
Vasant Narasimhan (CEO) | CHF | 1 822 334 | 170 125 | 5 075 255 | 8 921 546 | 258 918 | 16 248 178 | ||||||||
Aggregate realized compensation of the other 11 Executive Committee members, including the member who stepped down during the financial year 2023 | CHF | 8 551 936 | 1 627 708 | 15 449 571 | 15 100 093 | 6 475 697 | 47 205 005 | ||||||||
Total | CHF | 10 374 269 | 1 797 833 | 20 524 826 | 24 021 639 | 6 734 615 | 63 453 183 | ||||||||
CHF | 2023 total compensation | ||
Board Chair | 3 803 784 | ||
Other members of the Board | 4 787 933 | ||
Total | 8 591 717 | ||
CEO compensation and performance
Year ending | 20181 | 20191 | 20201 | 2021 | 2022 | 2023 | |||||||
STI payout | 145% | 160% | 100% | 100% | 100% | 185% | |||||||
LTI payout | 99% | 157% | 126% | 107% | 57% | 122% | |||||||
1 For these cycles, two LTI plans existed: LTPP and LTRPP. Payouts represent the average CEO weighted payout |
Performance measures | Tracking | ||
3rd party sales CAGR (25%) | |||
Core operating income CAGR (25%) | |||
Innovation (25%) | |||
Relative TSR (25%) | |||
Performance measures | Tracking | ||
3rd party sales CAGR (25%) | |||
Core operating income CAGR (25%) | |||
Innovation (25%) | |||
Relative TSR (25%) | |||
CEO and Executive Committee
2023 | 2022 | ||||||||||||
In CHF (gross) 1 | CEO | Other ECN2 | Total | CEO | Other ECN3 | Total | |||||||
Annual Base Salary | 1 822 334 | 8 551 936 | 10 374 269 | 1 786 500 | 9 122 792 | 10 909 292 | |||||||
Annual Incentive (performance achieved) | 5 075 255 | 15 449 571 | 20 524 826 | 2 684 321 | 10 130 159 | 12 814 480 | |||||||
Thereof cash | 2 537 599 | 6 149 179 | 8 686 778 | 1 342 125 | 4 211 841 | 5 553 966 | |||||||
Thereof equity | 2 537 656 | 9 300 392 | 11 838 048 4 | 1 342 196 | 5 918 318 | 7 260 514 5 | |||||||
LTPP | 8 921 546 | 15 100 093 | 24 021 639 6 | 3 307 422 | 10 025 047 | 13 332 469 7 | |||||||
Other payments 8 | 258 918 | 6 475 697 | 6 734 615 9 | 499 445 | 9 716 294 | 10 215 739 | |||||||
Pension benefits 10 | 170 125 | 1 627 708 | 1 797 833 11 | 174 488 | 1 978 304 | 2 152 792 12 | |||||||
Total | 16 248 178 | 47 205 005 13 | 63 453 183 | 8 452 176 | 40 972 595 14 | 49 424 771 | |||||||
1 All compensation amounts are stated gross, before the deduction of social security contributions and income tax paid by the Executive Committee members. Amounts for Executive Committee members paid in USD were converted at a rate of USD 1.00 = CHF 0.8986, which is the same average exchange rate used in the Company's 2023 consolidated financial statements (a similar rule applies to payments made in other currencies during the year). | |||||||||||||
2 Aggregate realized compensation of the other 11 Executive Committee members, including Marie-France Tschudin who stepped down during the financial year 2023. | |||||||||||||
3 Aggregate realized compensation of the other 15 Executive Committee members, including the members who stepped down during the financial year 2022. For more information, see item 6B of the 2022 Annual Report. | |||||||||||||
4 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 24, 2024) of CHF 93.53 per Novartis share and USD 107.55 per ADR. | |||||||||||||
5 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 25, 2023) of CHF 85.30 per Novartis share and USD 92.81 per ADR. | |||||||||||||
6 The amount represents the underlying share value of the 264 799 realized LTPP PSUs to the CEO and other Executive Committee members for the 2021-2023 LTPP cycle, including dividend equivalents for the three-year cycle of value CHF 759 557 for the CEO and CHF 1 228 736 for the other Executive Committee members, including the one who stepped down during the financial year 2023. The taxable value is determined using the closing share price, on the day the payout factor is approved by the Board of Directors (i.e., January 24, 2024), of CHF 93.53 per Novartis share and USD 107.55 per ADR. Includes vested keep-whole shares received in connection to the Sandoz spin-off. Robert Kowalski was promoted to the Executive Committee during the course of the 2021 performance period, and Victor Bulto during the course of the 2022 performance period. As such, the information disclosed reflects their pro-rata 2021-2023 LTPP payouts attributable to the period in which they were members of the Executive Committee. Shreeram Aradhye rejoined Novartis, and Patrick Horber, Aharon Gal and Fiona Marshall joined Novartis after the 2021-2023 LTPP awards were made, and therefore did not receive an LTPP award for the 2021-2023 LTPP cycle. | |||||||||||||
7 Based on the closing share price of January 25, 2023 of CHF 85.30 per Novartis share and USD 92.81 per ADR for all members. | |||||||||||||
8 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). The compensation and benefits elements related to the period after the step-down dates are also reported under ‘other payments’. | |||||||||||||
9 Includes 2 042 realized PSUs, which vested on March 31, 2023 and 6 212 realized RSUs, which vested on May 1, 2023 and a cash buyout of CHF 469 071 (for a total value of CHF 1 553 135), to Fiona Marshall in lieu of the Annual Incentive and LTI that she forfeited when leaving her previous employer. | |||||||||||||
10 Includes social security contributions to the extent that they result in a pension entitlement. Includes also contributions to company provided pension plans. | |||||||||||||
11 This amount is out of total social security employer contributions of CHF 1 933 476 and pension employer contributions of CHF 1 852 898 paid in 2023 for all Executive Committee members. | |||||||||||||
12 This amount is out of total social security employer contributions of CHF 3 266 972 and pension employer contributions of CHF 2 608 462 paid in 2022 for all Executive Committee members. | |||||||||||||
13 Includes CHF 5 975 824 for the member who stepped down during 2023. | |||||||||||||
14 Includes CHF 20 967 229 for members who stepped down during 2022. | |||||||||||||
Annual Incentive | 2023 | 2022 | |||
3rd party sales | Significantly above | Met | |||
Operating income | Significantly above | Met | |||
Free cash flow/3rd party sales | Significantly above | Below | |||
Share of peers | - 1 | Met | |||
Strategic objectives | Above | Met | |||
Overall assessment | Significantly above | Met | |||
CEO payout | 185% | 100% | |||
1 Share of peers was removed from the ECN Annual Incentive from performance year 2023, as disclosed in the 2022 Compensation Report |
LTPP cycle ending | 2023 | 2022 | |||
3rd party sales CAGR | 102% | 43% | |||
Core operating income CAGR | 158% | 93% | |||
Innovation | 108% | 92% | |||
Relative TSR | 120% | 0% | |||
Payout (weighted) | 122% | 57% | |||
In CHF (gross)1 | Annual Base Salary | 2023 Annual Incentive (performance achieved) | 2023-2025 LTPP cycle PSUs (target amount)2 | Other payments3 | Pension benefits4 | Total 20235 | Total 20226 | ||||||||
Vasant Narasimhan | 1 822 334 | 5 075 255 | 5 943 960 | 258 918 | 170 125 | 13 270 592 | 10 960 639 | ||||||||
Victor Bulto | 859 085 | 1 642 520 | 2 161 211 | 359 772 | 137 180 | 5 159 769 | 2 948 867 | ||||||||
Patrick Horber (from December 1, 2023) 7 | 83 333 | 132 560 | - | 6 455 092 | 14 007 | 6 684 992 | - | ||||||||
Harry Kirsch | 1 103 917 | 2 315 616 | 2 880 581 | 47 744 | 180 055 | 6 527 912 | 5 426 373 | ||||||||
Other ECN members | 5 789 756 | 10 093 882 | 12 714 201 | 1 348 250 | 1 178 184 | 31 124 272 | 30 516 250 | ||||||||
Subtotal | 9 658 425 | 19 259 833 | 23 699 952 | 8 469 775 | 1 679 551 | 62 767 536 | 49 852 130 | ||||||||
Members who stepped down | 715 845 | 1 264 993 | 2 767 559 | 731 384 | 118 282 | 5 598 062 | 20 967 229 8 | ||||||||
Subtotal | 715 845 | 1 264 993 | 2 767 559 | 731 384 | 118 282 | 5 598 062 | 20 967 229 | ||||||||
Total | 10 374 269 | 20 524 826 9 | 26 467 511 | 9 201 159 | 1 797 833 10 | 68 365 598 | 70 819 358 | ||||||||
1 All compensation amounts are stated gross, before the deduction of social security contributions and income tax paid by the Executive Committee members. Amounts for Executive Committee members paid in USD were converted at a rate of USD 1.00 = CHF 0.8986, which is the same average exchange rate used in the Company's 2023 consolidated financial statements (a similar rule applies to payments made in other currencies during the year). | |||||||||||||||
2 The amounts represent the underlying share value of the target number of PSUs granted to Executive Committee members for the 3-year performance cycle, based on the closing share price on the grant date (January 24, 2024) of CHF 93.53 per Novartis share and USD 107.55 per ADR for all members. | |||||||||||||||
3 Includes any other perquisites, benefits in kind, buyouts and international assignment benefits as per the global mobility policy (e.g., housing, international health insurance, children's school fees, tax equalization). The compensation and benefits elements related to the period after the step-down dates are also reported under ‘other payments’. | |||||||||||||||
4 Includes social security contributions to the extent that they result in a pension entitlement. Includes also contributions to company provided pension plans. | |||||||||||||||
5 Aggregate compensation at grant for the 12 Executive Committee members, including Marie-France Tschudin who stepped down during the financial year 2023. | |||||||||||||||
6 Aggregate compensation at grant for the 16 Executive Committee members, including the members who stepped down during the financial year 2022. For more information, see item 6B of the 2022 Annual Report. | |||||||||||||||
7 In line with the Company’s buyout policy (see “—CEO and Executive Committee: appointments”), Patrick Horber received buyout awards of CHF 1 058 274 in cash to be paid out in March 2024 as well as CHF 3 084 694 in PSUs, and CHF 2 292 624 in RSUs, both of which will vest between 2024 and 2026, in lieu of the Annual Incentive and LTI that he forfeited when leaving his previous employer. | |||||||||||||||
8 Includes five members (James Bradner, Richard Saynor, John Tsai, Susanne Schaffert and Robert Weltevreden) who stepped down during the financial year 2022. | |||||||||||||||
9 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 24, 2024) of CHF 93.53 per Novartis share and USD 107.55 per ADR. | |||||||||||||||
10 This amount is out of total social security employer contributions of CHF 1 933 476 and pension employer contributions of CHF 1 852 898 paid in 2023 for all Executive Committee members. | |||||||||||||||
Variable compensation1 | |||||||||||
2023 Annual Incentive (performance achieved) Equity (number)2 | 2023-2025 LTPP PSUs (target number)3 | Other Equity/PSUs (number) | Total 2023 | Total 2022 | |||||||
Vasant Narasimhan | 27 132 | 69 683 | - | 96 815 | 90 145 | ||||||
Victor Bulto | 8 498 | 25 914 | - | 34 412 | 14 016 | ||||||
Patrick Horber (from December 1, 2023) 5 | 709 | - | 62 981 | 63 690 | - | ||||||
Harry Kirsch | 24 758 | 33 770 | - | 58 528 | 43 749 | ||||||
Other ECN members | 58 099 | 149 713 | - | 207 812 | 218 563 | ||||||
Subtotal | 119 196 | 279 080 | 62 981 | 461 257 | 366 473 | ||||||
Members who stepped down 4 | 6 763 | 32 445 | - | 39 208 | 178 653 | ||||||
Subtotal | 6 763 | 32 445 | - | 39 208 | 178 653 | ||||||
Total | 125 959 | 311 525 | 62 981 | 500 465 | 545 126 | ||||||
1 The values of these awards are reported in the table "—Compensation at grant value for the CEO and Executive Committee." | |||||||||||
2 Vested shares, restricted shares and/or RSUs granted under the Annual Incentive for the 2023 performance period. | |||||||||||
3 Target number of PSUs granted under the LTPP for the 2023-2025 performance cycle. | |||||||||||
4 Marie-France Tschudin stepped down from the Executive Committee on September 15, 2023, and will end her contractual notice period on September 30, 2024. The LTPP grant for the 2023-2025 performance cycle, included in the table above, will vest at the end of the performance cycle on a pro-rata basis subject to the plan rules. | |||||||||||
5 In line with the Company’s buyout policy (see “—CEO and Executive Committee: appointments”), Patrick Horber received buyout awards of 36 129 PSUs, and 26 852 RSUs, both of which will vest between 2024 and 2026, in lieu of the Annual Incentive and LTI that he forfeited when leaving his previous employer. |
Annual Base Salary1 | Variable Compensation2 | ||||
Vasant Narasimhan | 13.9% | 86.1% | |||
Victor Bulto | 17.1% | 82.9% | |||
Patrick Horber (from December 1, 2023) | 1.2% | 98.8% | |||
Harry Kirsch | 17.4% | 82.6% | |||
Other ECN members 3, 4 | 19.3% | 80.7% | |||
Total | 15.8% | 84.2% | |||
1 Pro-rated for ECN time. | |||||
2 See the table “–Compensation at grant value for the CEO and Executive Committee” with regard to the disclosure principles of variable compensation. | |||||
3 For the other seven active members at December 31, 2023. | |||||
4 Excludes the member who stepped down during the financial year 2023. |
Vested shares and ADRs1 | Unvested shares and other equity rights2 | Equity ownership level as a multiple of annual base salary3 | Unvested target PSUs (e.g., LTPP)4 | Total as at December 31, 2023 | Total as at December 31, 2022 | |||||||
Vasant Narasimhan | 250 240 | 77 324 | 15x | 169 770 | 497 334 | 406 502 | ||||||
Shreeram Aradhye | 0 | 17 523 | 1x | 19 573 | 37 096 | 14 394 | ||||||
Victor Bulto | 1 780 | 32 000 | 3x | 28 310 | 62 090 | 36 386 | ||||||
Aharon Gal | 47 660 | 39 241 | 9x | 6 862 | 93 763 | 62 960 | ||||||
Karen Hale | 5 481 | 18 527 | 2x | 48 182 | 72 190 | 28 568 | ||||||
Patrick Horber | 0 | 27 561 | 2x | 22 083 | 49 644 | 0 | ||||||
Harry Kirsch | 342 730 | 35 944 | 29x | 82 290 | 460 964 | 399 948 | ||||||
Robert Kowalski | 0 | 21 450 | 2x | 26 085 | 47 535 | 32 495 | ||||||
Steffen Lang | 124 349 | 28 821 | 14x | 49 080 | 202 250 | 174 237 | ||||||
Fiona Marshall | 5 010 | 44 643 | 4x | 16 864 | 66 517 | 34 980 | ||||||
Klaus Moosmayer | 21 559 | 15 396 | 4x | 31 187 | 68 142 | 47 421 | ||||||
Subtotal | 798 809 | 358 430 | 500 286 | 1 657 525 | 1 237 891 | |||||||
Members who stepped down | 36 174 | 33 493 | 81 135 | 150 802 | 667 092 | |||||||
Subtotal | 36 174 | 33 493 | 81 135 | 150 802 | 667 092 | |||||||
Total | 834 983 | 391 923 | 581 421 | 1 808 327 | 1 904 983 | |||||||
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 "—CEO and Executive Committee: share ownership requirements." Also includes unvested keep-whole awards received in connection to the Sandoz 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 2023 financial year. The share price and ADR price on the final trading day of 2023 was CHF 84.87 and USD 100.97, respectively. | ||||||||||||
4 The target number of PSUs is disclosed pro-rata to December 31, 2023, unless the award qualified for full vesting under the relevant plan rules. Also includes unvested keep-whole awards received in connection to the Sandoz spin-off. |
CEO and Executive Committee compensation philosophy and system
2024 Executive Committee compensation system changes and increases
Board compensation
Positions as per 31 December | Share-Based compensation | ||||||||||||||||||||||||
Board membership | Audit and Compliance Committee | Compensation Committee | Governance, Sustainability and Nomination Committee | Science & Technology Committee | Risk Committee | Cash (CHF) (A) | Shares (number)1 | Shares (CHF) (B) | Social Security (CHF) (C) | Total 2023 (CHF) (A)+(B)+(C)2 | Total 2022 (CHF) | ||||||||||||||
Joerg Reinhardt 3 | Board Chair | Chair | 1 900 000 | 22 606 | 1 900 000 | 3 784 | 3 803 784 | 3 803 670 | |||||||||||||||||
Simon Moroney | Vice-Chair | Chair | • | 230 000 | 2 736 | 230 000 | - | 460 000 | 456 228 | ||||||||||||||||
Patrice Bula | Lead Independent Director | • | Chair | 205 000 | 2 438 | 205 000 | 3 784 | 413 784 | 398 670 | ||||||||||||||||
Nancy C. Andrews | • | • | • | 180 000 | 2 141 | 180 000 | - | 360 000 | 360 000 | ||||||||||||||||
Ton Buechner | • | • | Chair | 210 000 | 2 497 | 210 000 | 4 675 | 424 675 | 424 560 | ||||||||||||||||
Elizabeth Doherty | • | Chair | • | 225 000 | 2 676 | 225 000 | - | 450 000 | 450 000 | ||||||||||||||||
Bridgette Heller | • | • | • | • | 215 000 | 2 557 | 215 000 | - | 430 000 | 423 334 | |||||||||||||||
Daniel Hochstrasser | • | • | • | 185 833 | 2 085 | 185 833 | 4 675 | 376 341 | 237 894 | ||||||||||||||||
Frans van Houten | • | • | • | 162 500 | 3 565 | 227 500 | 4 675 | 394 675 | 390 000 | ||||||||||||||||
Ana de Pro Gonzalo | • | • | • | 195 000 | 2 319 | 195 000 | - | 390 000 | 329 560 | ||||||||||||||||
Charles L. Sawyers | • | • | • | 180 000 | 2 141 | 180 000 | - | 360 000 | 360 000 | ||||||||||||||||
William T. Winters | • | • | • | - | 4 283 | 360 000 | - | 360 000 | 360 000 | ||||||||||||||||
John D. Young 4 | • 4 | • 4 | • 4 | 150 000 | 991 | 150 000 | 4 675 | 304 675 | - | ||||||||||||||||
Subtotal | 4 038 333 | 53 035 | 4 463 333 | 26 267 | 8 527 933 | 7 993 916 | |||||||||||||||||||
Board members who stepped down 5 | 30 000 | 1 150 | 30 000 | 3 784 | 63 784 | 512 339 | |||||||||||||||||||
Subtotal | 30 000 | 1 150 | 30 000 | 3 784 | 63 784 | 512 339 | |||||||||||||||||||
Total | 4 068 333 | 54 185 | 4 493 333 | 30 051 | 8 591 717 | 8 506 255 | |||||||||||||||||||
1 The amounts shown represent the gross number of shares delivered to each Board member in 2023 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 2023 for their service from the 2022 AGM to the 2023 AGM; and (ii) the first of two equity installments delivered in August 2023 for their service from the 2023 AGM to the 2024 AGM. The second and final equity installment for their service from the 2023 AGM to the 2024 AGM will take place in February 2024. | |||||||||||||||||||||||||
2 All amounts are before the deduction of social security contributions and income tax paid by the Board members. | |||||||||||||||||||||||||
3 No additional committee fees for chairing the Science & Technology Committee were delivered to Joerg Reinhardt. | |||||||||||||||||||||||||
4 From March 7, 2023. | |||||||||||||||||||||||||
5 Includes the compensation earned by Andreas von Planta, who stepped down at the 2023 AGM, as well as Ann Fudge and Enrico Vanni, who stepped down at the 2022 AGM. | |||||||||||||||||||||||||
In CHF | Board of Directors | ||||
Compensation earned during the financial year 2023 | A | 8 591 717 | |||
Compensation earned for the period January 1 to February 28, 2023 (2 months) | B | 1 417 153 | |||
Compensation to be earned for the period from January 1 to February 29, 2024 (2 months) | C | 1 435 008 | |||
Total compensation earned for the period from the 2023 AGM to the 2024 AGM | A-B+C | 8 609 573 | |||
Amount approved by shareholders at the 2023 AGM | 8 750 000 | ||||
Compensation dispensed by the Company within the approved amount | Yes | ||||
Number of shares at December 31, 20231,2 | |||
Joerg Reinhardt | 655 336 | ||
Simon Moroney | 5 992 | ||
Patrice Bula | 11 240 | ||
Nancy C. Andrews | 10 536 | ||
Ton Buechner | 22 958 | ||
Elizabeth Doherty | 14 843 | ||
Bridgette Heller | 6 214 | ||
Daniel Hochstrasser | 2 824 | ||
Frans van Houten | 17 115 | ||
Ana de Pro Gonzalo | 2 422 | ||
Charles L. Sawyers | 17 493 | ||
William T. Winters | 30 777 | ||
John D. Young | 682 | ||
Subtotal | 798 432 | ||
Board members who stepped down at the 2023 AGM | |||
Andreas von Planta | 169 867 | ||
Subtotal | 169 867 | ||
Total | 968 299 | ||
1 Includes holdings of persons closely linked to Board members (see definition "—persons closely linked"). | |||
2 Each share provides entitlement to one vote. |
Board compensation philosophy and fee structure
CHF 000s | 2023-2024 AGM annual fee | ||
Board Chair | 3 800 | ||
Board membership | 280 | ||
Vice-Chair | 50 | ||
Lead Independent Director | 20 | ||
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 | ||
Compensation governance
CEO | Compensation Committee | Board Chair | Board of Directors | AGM | ||
Executive Compensation | ||||||
CEO | ||||||
Performance target setting and assessment | ||||||
Individual compensation | ||||||
Other EC members | ||||||
Performance target setting and assessment | ||||||
Individual compensation | ||||||
All Executive Committee | ||||||
Maximum aggregate amount of fixed and variable long-term compensation | Binding Vote | |||||
Board Compensation | ||||||
Board of Directors | ||||||
Fee structure for individual roles on the Board of Directors | ||||||
Maximum aggregate amount of compensation for the next term of office | Binding Vote | |||||
Other | ||||||
Board members, Executive Committee and other employees | ||||||
Compensation report | Consultative Vote | |||||
Compensation policy and principles | ||||||
Variable short-term and long-term compensation payout factors for the Group | ||||||
Mandates outside the Novartis Group
6.C Board practices
% holding of share capital Dec 31, 2023 | |||
Shareholders registered for their own account: | |||
Emasan AG, Basel 1 | 3.9 | ||
UBS Fund Management (Switzerland) AG, Basel | 2.7 | ||
Credit Suisse Funds AG, Zurich | 2.2 | ||
1 According to a disclosure notification filed with Novartis AG and the SIX Swiss Exchange, the beneficial owner of the shares registered for Emasan AG is Sandoz - Fondation de Famille, Liechtenstein. |
% holding of share capital Dec 31, 2023 | |||
Shareholders registered as nominees: | |||
Nortrust Nominees Ltd., London | 3.6 | ||
The Bank of New York Mellon, New York | 2.9 | ||
Through The Bank of New York Mellon, Everett | 1.5 | ||
Through The Bank of New York Mellon, New York | 1.0 | ||
Through The Bank of New York Mellon, SA/NV, Brussels | 0.4 | ||
Chase Nominees Ltd., London 1 | |||
Shareholder acting as American Depositary Share (ADS) depositary: | |||
JPMorgan Chase Bank, N.A., New York | 8.3 | ||
1 Chase Nominees, Ltd. (Chase) has informed us that as of December 2023, it will no longer register any shareholding positions on its own behalf. Shares held by customers of Chase will be registered for such customer’s own account. |
As of December 31, 20231 | Number of registered shareholders | % of share capital | |||
1–100 | 34 384 | 0.09 | |||
101–1 000 | 108 966 | 1.92 | |||
1 001–10 000 | 36 299 | 4.38 | |||
10 001–100 000 | 3 071 | 3.46 | |||
100 001–1 000 000 | 458 | 6.01 | |||
1 000 001–5 000 000 | 61 | 5.46 | |||
5 000 001 or more 2 | 26 | 35.45 | |||
Total registered shareholders/shares | 183 265 | 56.77 | |||
Unregistered shares | 43.23 | ||||
Total | 100.00 | ||||
1 At the record date of the 2023 Annual General Meeting of Shareholders (AGM), unregistered shares amounted to 16.3%. | |||||
2 Including significant registered shareholders as listed above |
As of December 31, 2023 | Shareholders in % | Shares in % | |||
Individual shareholders | 96.79 | 19.98 | |||
Legal entities 1 | 3.17 | 41.74 | |||
Nominees, fiduciaries and ADS depositary | 0.04 | 38.28 | |||
Total | 100.00 | 100.00 | |||
1 Excluding 10.2% of the share capital held as treasury shares by Novartis AG or its fully owned subsidiaries (including Swiss foundations controlled by Novartis AG) |
As of December 31, 2023 | Shareholders in % | Shares in % | |||
Belgium | 0.11 | 1.01 | |||
Canada | 0.04 | 0.68 | |||
France | 1.99 | 0.48 | |||
Germany | 5.82 | 2.15 | |||
Ireland | 0.48 | 0.55 | |||
Japan | 0.18 | 0.52 | |||
Luxembourg | 0.06 | 0.96 | |||
Switzerland 2 | 86.84 | 54.61 | |||
United Kingdom | 0.67 | 11.99 | |||
United States | 0.24 | 24.68 | |||
Other countries | 3.57 | 2.37 | |||
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 10.2% of the share capital held as treasury shares by Novartis AG or its fully owned subsidiaries (including Swiss foundations controlled by Novartis AG) |
AGM | Shareholder decision | Shares canceled | Average repurchase share price (CHF)1 | ||||
2021 | • Capital reduction by CHF 16.32 million (from CHF 1 233 530 460.00 to CHF 1 217 210 460.00) • Authorization of the Board to repurchase shares up to a maximum of CHF 10 billion between the 2021 AGM and the 2024 AGM | 32 640 000 | 80.57 | ||||
2022 | • Capital reduction by CHF 15.35 million (from CHF 1 217 210 460.00 to CHF 1 201 860 626.00) • Authorization of the Board to repurchase shares up to a maximum of CHF 10 billion between the 2022 AGM and the 2025 AGM2 | 30 699 668 | 81.82 | ||||
2023 | • Capital reduction by CHF 63.12 million (from CHF 1 201 860 626.00 to CHF 1 138 738 876.00) • Authorization of the Board to repurchase shares up to a maximum of CHF 10 billion between the 2023 AGM and the 2026 AGM3 | 126 243 500 | 81.56 | ||||
EGM | Shareholder decision | ||||||
2023 | • Capital reduction by CHF 22.77 million (from CHF 1 138 738 876.00 to CHF 1 115 964 098.48) by reducing the par value of each share from CHF 0.50 to CHF 0.49 | ||||||
AGM | Proposal to the shareholders | Shares to be canceled | Average repurchase share price (CHF)1 | ||||
2024 | • Capital reduction by CHF 42.90 million (from CHF 1 115 964 098.48 to CHF 1 073 065 943.53) | 87 547 255 | 86.36 | ||||
1 All shares were repurchased on the SIX Swiss Exchange second trading line. | |||||||
2 In addition to the remaining authorization from the 2021 AGM | |||||||
3 In addition to the remaining authorization from the 2022 AGM |
2023 | 2022 | 2021 | |||||
Issued shares | 2 277 477 752 | 2 403 721 252 | 2 434 420 920 | ||||
Treasury shares 1 | 233 443 766 | 284 112 195 | 199 480 972 | ||||
Outstanding shares at December 31 | 2 044 033 986 | 2 119 609 057 | 2 234 939 948 | ||||
Weighted average number of shares outstanding | 2 076 794 140 | 2 181 180 341 | 2 242 601 173 | ||||
1 Approximately 94 million treasury shares (2022: 99 million 2021: 102 million) are held in Novartis entities that restrict their availability for use. |
2023 | 2022 | 2021 | |||||
Basic earnings per share from continuing operations (USD) | 4.13 | 2.77 | 10.21 | ||||
Diluted earnings per share from continuing operations (USD) | 4.10 | 2.76 | 10.14 | ||||
Net cash flows from operating activities from continuing operations (USD) | 6.85 | 5.98 | 5.96 | ||||
Year-end equity for Novartis AG shareholders (USD) | 22.83 | 28.00 | 30.31 | ||||
Dividend (CHF) 2 | 3.30 | 3.20 | 3.10 | ||||
Dividend (USD) 3 | 3.92 | 3.51 | 3.33 | ||||
1 Calculated on the weighted average number of shares outstanding, except year-end equity | |||||||
2 2023: proposal to shareholders for approval at the AGM on March 5, 2024. | |||||||
3 Translated into US dollars at the December 31, 2023, rate of USD 1.189 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. 2022 and 2021, dividends are translated into US dollars at the Bloomberg Market System Rate on the payment date. |
2023 | 2022 | 2021 | |||||
Price/earnings ratio 1 | 14.1 | 28.3 | 8.2 | ||||
Dividend yield (%) 1 | 3.9 | 3.8 | 3.9 | ||||
1 Based on the Novartis share price at December 31 of each year |
2023 | 2022 | 2021 | |||||
Year-end ADR price (USD) | 100.97 | 90.72 | 87.47 | ||||
High 1 | 105.13 | 93.75 | 98.47 | ||||
Low 1 | 80.03 | 74.61 | 79.70 | ||||
Number of ADRs outstanding 2 | 189 633 312 | 225 435 680 | 269 891 321 | ||||
1 Based on daily closing prices | |||||||
2 The depositary, JPMorgan Chase Bank, N.A., holds one Novartis AG share for every ADR issued. |
2023 | 2022 | 2021 | |||||
Year-end share price | 84.87 | 83.59 | 80.28 | ||||
High 1 | 93.87 | 87.82 | 86.75 | ||||
Low 1 | 74.62 | 73.98 | 73.44 | ||||
Year-end market capitalization (USD billions) 2 | 206.3 | 191.5 | 196.1 | ||||
Year-end market capitalization (CHF billions) 2 | 173.5 | 177.2 | 179.4 | ||||
1 Based on daily closing prices | |||||||
2 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
Year of birth: 1959
Name | Position | Board | Audit and Compliance Committee | Compensation Committee | Governance, Sustainability and Nomination Committee | Risk Committee | Science & Technology Committee | ||||||||
J. Reinhardt | Board Chair | 9/9 | 3/3 | ||||||||||||
S. Moroney | Vice-Chair | 9/9 | 6/6 | 3/3 | |||||||||||
P. Bula | Lead Independent Director | 9/9 | 6/6 | 4/4 | |||||||||||
N. Andrews | Member | 9/9 | 4/4 | 3/3 | |||||||||||
T. Buechner | Member | 9/9 | 8/8 | 4/4 | |||||||||||
E. Doherty | Member | 9/9 | 8/8 | 4/4 | |||||||||||
B. Heller | Member | 9/9 | 8/8 | 6/6 | 4/4 | ||||||||||
F. van Houten | Member | 9/9 | 8/8 | 3/3 | |||||||||||
D. Hochstrasser | Member | 9/9 | 8/8 | 4/4 | |||||||||||
A. de Pro Gonzalo | Member | 9/9 | 8/8 | 4/4 | |||||||||||
C. Sawyers | Member | 9/9 | 4/4 | 3/3 | |||||||||||
W. Winters | Member | 9/9 | 6/6 | 4/4 | |||||||||||
J. Young 1 | Member | 7/7 | 4/4 | 3/3 | |||||||||||
1 Mr. Young was elected at the 2023 AGM. | |||||||||||||||
Further details can be found on pages 137 – 142. |
Maximum number of mandates | |||
Mandates | 10 | ||
Other listed companies 1 | 4 | ||
1 Holding a chair position 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 | ||
Executive Committee
Maximum number of mandates | |||
Mandates | 6 | ||
Other listed companies 1 | 2 | ||
1 Holding a chair position 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 | ||
Members of the Executive Committee
Year of birth: 1978
Information and control systems
Auditors
2023 USD million | 2022 USD million | ||||
Audit services | 26.8 | 22.5 | |||
Audit-related services | 2.5 | 0.7 | |||
Tax services | 0.3 | 1.2 | |||
Other services | 0.0 | 0.0 | |||
Total | 29.6 | 24.4 | |||
Information policy
Topic | Information | ||
Share capital | Articles of Incorporation of Novartis AG https://www.novartis.com/sites/novartiscom/files/statuten-en.pdf Novartis key share data www.novartis.com/investors/share-data-analysis | ||
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, ECN and Senior Financial Officers of Novartis www.novartis.com/investors/company-overview/corporate-governance | ||
Novartis in Society Integrated Report | Novartis in Society Integrated Report www.novartis.com/reportinghub | ||
Novartis Annual Report and Form 20-F | Novartis Annual Report and Form 20-F www.novartis.com/reportinghub | ||
Novartis Financial Data | Novartis Financial Data www.novartis.com/investors/financial-data | ||
Press releases | Press releases www.novartis.com/news/news-archive?type=media_release Email service www.novartis.com/news/stay-up-to-date | ||
Additional information (including event calendar, registered office, contact and email addresses, phone numbers, etc.) | Novartis Investor Relations www.novartis.com/investors | ||
The information on our website is not, and shall not be deemed to be, a part of this Annual Report or incorporated herein. |
Quiet periods
6.D Employees
For the year ended December 31, 2023 (full-time equivalents) | Marketing and sales | Research and development | Production and supply | Operations1 | General and administration | Total | |||||||
USA | 5 219 | 5 194 | 1 310 | 659 | 464 | 12 846 | |||||||
Canada and Latin America | 1 732 | 461 | 327 | 1 019 | 182 | 3 721 | |||||||
Europe | 8 426 | 8 519 | 11 811 | 4 035 | 1 668 | 34 459 | |||||||
Asia/Africa/Australasia | 12 347 | 4 061 | 2 718 | 5 182 | 723 | 25 031 | |||||||
Total | 27 724 | 18 235 | 16 166 | 10 895 | 3 037 | 76 057 | |||||||
For the year ended December 31, 2022 (full-time equivalents) | Marketing and sales | Research and development | Production and supply | Operations1 | General and administration | Total | |||||||
USA | 6 003 | 5 358 | 1 740 | 825 | 599 | 14 525 | |||||||
Canada and Latin America | 2 678 | 514 | 809 | 1 071 | 270 | 5 342 | |||||||
Europe | 14 078 | 10 483 | 18 781 | 5 028 | 2 483 | 50 853 | |||||||
Asia/Africa/Australasia | 15 856 | 4 841 | 3 841 | 5 513 | 932 | 30 983 | |||||||
Total | 38 615 | 21 196 | 25 171 | 12 437 | 4 284 | 101 703 | |||||||
Thereof continuing operations 2 | 30 420 | 18 681 | 14 826 | 12 437 | 3 313 | 79 677 | |||||||
Thereof discontinued operations 2 | 8 195 | 2 515 | 10 345 | 971 | 22 026 | ||||||||
For the year ended December 31, 2021 (full-time equivalents) | Marketing and sales | Research and development | Production and supply | Operations1 | General and administration | Total | |||||||
USA | 6 074 | 5 324 | 1 938 | 879 | 654 | 14 869 | |||||||
Canada and Latin America | 3 116 | 510 | 1 426 | 1 116 | 370 | 6 538 | |||||||
Europe | 15 163 | 10 307 | 17 630 | 5 108 | 2 613 | 50 821 | |||||||
Asia/Africa/Australasia | 16 927 | 4 812 | 3 570 | 5 696 | 1 090 | 32 095 | |||||||
Total | 41 280 | 20 953 | 24 564 | 12 799 | 4 727 | 104 323 | |||||||
Thereof continuing operations 2 | 32 973 | 18 425 | 14 165 | 12 799 | 3 765 | 82 127 | |||||||
Thereof discontinued operations 2 | 8 307 | 2 528 | 10 399 | 962 | 22 196 | ||||||||
1 relates to full time equivalent employees (FTEs) from our Operations unit, excluding the Operations units’ production and supply FTEs | |||||||||||||
2 Continuing operations include the retained business activities of Novartis, comprising the innovative medicines business and continued corporate activities. Discontinued operations include the Sandoz generic pharmaceuticals and biosimilars division and certain corporate activities attributable to Sandoz prior to the spin-off up to the distribution date of October 3, 2023. |
6.E Share ownership
6.F Erroneously awarded compensation
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, 2023 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||||||
Shareholders registered for their own account: | |||||||||
Emasan AG, Basel, Switzerland 1 | 89 135 960 | 3.9 | 3.7 | 3.7 | |||||
UBS Fund Management (Switzerland) AG, Basel, Switzerland | 60 962 889 | 2.7 | 2.3 | 2.3 | |||||
Credit Suisse Funds AG, Zurich, Switzerland | 50 178 623 | 2.2 | 2.1 | 2.1 | |||||
1 According to a disclosure notification filed with Novartis AG and the SIX Swiss Exchange, the beneficial owner of the shares registered for Emasan AG is Sandoz - Fondation de Famille, Liechtenstein. |
% of respective share capital held as of: | |||||||||
Ordinary shares held as of Dec 31, 2023 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||||||
Shareholders registered as nominees: | |||||||||
Nortrust Nominees Ltd., London, England | 82 324 675 | 3.6 | 3.8 | 4.2 | |||||
The Bank of New York Mellon, New York, NY | 66 451 778 | 2.9 | 2.9 | 3.0 | |||||
Through The Bank of New York Mellon, Everett, MA | 34 094 134 | 1.5 | 1.6 | 1.6 | |||||
Through The Bank of New York Mellon, New York, NY | 22 963 391 | 1.0 | 0.9 | 1.1 | |||||
Through The Bank of New York Mellon, SA/NV, Brussels, Belgium | 9 394 253 | 0.4 | 0.4 | 0.3 | |||||
Chase Nominees Ltd., London, England | — 1 | — | 8.4 | 8.8 | |||||
Shareholder acting as American Depositary Share (ADS) depositary: | |||||||||
JPMorgan Chase Bank, N.A., New York, NY | 190 038 312 | 8.3 | 9.4 | 11.1 | |||||
1 Chase Nominees Ltd. (Chase) has informed us that as of December 2023, it will no longer register any shareholding positions on its own behalf. Shares held by customers of Chase will be registered for such customer’s own account. |
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 ADSs 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) | |||
Withdrawing underlying shares | Acceptance of ADSs surrendered for withdrawal of deposited shares or for ADSs that are cancelled or reduced for any other reason | USD 5.00 (or less) for each 100 ADSs (or portion thereof) surrendered | |||
Cash distributions | Distributing cash distributions made or any elective cash/stock dividend offered | USD 0.05 (or less) per ADS | |||
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) | |||
Depositary services | Services performed by the depositary in administering the ADRs | USD 0.05 (or less) per ADS per calendar year (or portion thereof) | |||
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 | |||
Average Daily Balance Range Start | Average Daily Balance Range End | Fixed contribution | |||
At least 30 000 000 | Up to 66 999 999 | USD 340 000 | |||
At least 67 000 000 | Up to 133 999 999 | USD 680 000 | |||
At least 134 000 000 | Up to 200 999 999 | USD 1 020 000 | |||
At least 201 000 000 | Up to 267 999 999 | USD 1 360 000 | |||
At least 268 000 000 | USD 1 700 000 | ||||
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
2023 | 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 | 11 383 594 | 91.91 | 10 500 000 | 7 433 | 8 030 | ||||||
Feb. 1-28 | 10 147 593 | 87.02 | 10 000 000 | 6 628 | 7 061 | ||||||
Mar. 1-31 | 11 145 700 | 85.02 | 11 000 000 | 15 762 | 17 252 | ||||||
Apr. 1-30 | 9 092 383 | 98.58 | 9 000 000 | 14 966 | 16 736 | ||||||
May 1-31 | 10 018 880 | 102.20 | 10 000 000 | 14 050 | 15 450 | ||||||
Jun. 1-30 | 10 871 925 | 100.29 | 10 847 255 | 13 071 | 14 537 | ||||||
Jul. 1-31 | 5 026 486 | 100.98 | 5 000 000 | 12 625 | 14 493 | ||||||
Aug. 1-31 | 4 446 306 | 102.80 | 4 400 000 | 12 228 | 13 903 | ||||||
Sep. 1-30 | 4 250 523 | 101.17 | 4 200 000 | 11 846 | 12 998 | ||||||
Oct. 1-31 | 4 494 588 | 96.85 | 4 400 000 | 11 461 | 12 705 | ||||||
Nov. 1-30 | 4 426 601 | 95.48 | 4 400 000 | 11 087 | 12 701 | ||||||
Dec. 1-31 | 3 821 670 | 98.39 | 3 800 000 | 10 763 | 12 793 | ||||||
Total | 89 126 249 | 95.55 | 87 547 255 | ||||||||
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 27. Equity-based participation plans for employees." | |||||||||||
2 Column (c) shows shares repurchased on the SIX Swiss Exchange second trading line under the CHF 10 billion share buyback authority approved at the 2022 AGM for transactions in 2023. 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
Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Item 16J. Insider Trading Policies
Item 16K. Cybersecurity
PART III
Item 17. Financial Statements
Item 18. Financial Statements
Item 19. Exhibits
SIGNATURES
Novartis consolidated financial statements
(USD millions unless indicated otherwise) | Note | 2023 | 2022 | 2021 | |||||
Net sales from continuing operations | 4 | 45 440 | 42 206 | 42 781 | |||||
Other revenues | 4 | 1 220 | 1 255 | 1 193 | |||||
Cost of goods sold | -12 472 | -11 582 | -11 735 | ||||||
Gross profit from continuing operations | 34 188 | 31 879 | 32 239 | ||||||
Selling, general and administration | -12 517 | -12 193 | -12 827 | ||||||
Research and development | -11 371 | -9 172 | -8 641 | ||||||
Other income | 1 772 | 696 | 1 620 | ||||||
Other expense | -2 303 | -3 264 | -2 335 | ||||||
Operating income from continuing operations | 9 769 | 7 946 | 10 056 | ||||||
(Loss)/income from associated companies | 5 | -13 | -11 | 15 337 | |||||
Interest expense | 6 | -855 | -800 | -787 | |||||
Other financial income and expense | 6 | 222 | 42 | -76 | |||||
Income before taxes from continuing operations | 9 123 | 7 177 | 24 530 | ||||||
Income taxes | 7 | -551 | -1 128 | -1 625 | |||||
Net income from continuing operations | 8 572 | 6 049 | 22 905 | ||||||
Net income from discontinued operations before gain on distribution of Sandoz Group AG to Novartis AG shareholders | 31 | 422 | 906 | 1 113 | |||||
Gain on distribution of Sandoz Group AG to Novartis AG shareholders | 2 | 5 860 | |||||||
Net income from discontinued operations | 31 | 6 282 | 906 | 1 113 | |||||
Net income | 14 854 | 6 955 | 24 018 | ||||||
Attributable to: | |||||||||
Shareholders of Novartis AG | 14 850 | 6 955 | 24 021 | ||||||
Non-controlling interests | 4 | 0 | -3 | ||||||
Basic earnings per share (USD) from continuing operations | 4.13 | 2.77 | 10.22 | ||||||
Basic earnings per share (USD) from discontinued operations | 3.02 | 0.42 | 0.49 | ||||||
Total basic earnings per share (USD) | 8 | 7.15 | 3.19 | 10.71 | |||||
Diluted earnings per share (USD) from continuing operations | 4.10 | 2.76 | 10.14 | ||||||
Diluted earnings per share (USD) from discontinued operations | 3.00 | 0.41 | 0.49 | ||||||
Total diluted earnings per share (USD) | 8 | 7.10 | 3.17 | 10.63 | |||||
The accompanying Notes form an integral part of the consolidated financial statements. |
(USD millions) | Note | 2023 | 2022 | 2021 | |||||
Net income | 14 854 | 6 955 | 24 018 | ||||||
Other comprehensive income | |||||||||
Items that are or may be recycled into the consolidated income statement | |||||||||
Novartis share of other comprehensive income recognized by associated companies, net of taxes | 5 | 46 | |||||||
Net investment hedge, net of taxes | 9 | -50 | 91 | 216 | |||||
Currency translation effects, net of taxes | 9 | 1 375 | -450 | -4 762 | |||||
Total of items that are or may be recycled | 1 325 | -359 | -4 500 | ||||||
Items that will never be recycled into the consolidated income statement | |||||||||
Actuarial (losses)/gains from defined benefit plans, net of taxes | 9 | -160 | -103 | 1 809 | |||||
Fair value adjustments on equity securities, net of taxes | 9 | 37 | -382 | 194 | |||||
Total of items that will never be recycled | -123 | -485 | 2 003 | ||||||
Total comprehensive income | 16 056 | 6 111 | 21 521 | ||||||
Total comprehensive income for the year attributable to: | |||||||||
Shareholders of Novartis AG | 16 050 | 6 116 | 21 528 | ||||||
Continuing operations | 10 115 | 5 181 | 20 450 | ||||||
Discontinued operations | 5 935 | 935 | 1 078 | ||||||
Non-controlling interests | 6 | -5 | -7 | ||||||
The accompanying Notes form an integral part of the consolidated financial statements. |
(USD millions) | Note | 2023 | 2022 | ||||
Assets | |||||||
Non-current assets | |||||||
Property, plant and equipment | 10 | 9 514 | 10 764 | ||||
Right-of-use assets | 11 | 1 410 | 1 431 | ||||
Goodwill | 12 | 23 341 | 29 301 | ||||
Intangible assets other than goodwill | 12 | 26 879 | 31 644 | ||||
Investments in associated companies | 5 | 205 | 143 | ||||
Deferred tax assets | 13 | 4 309 | 3 739 | ||||
Financial assets | 14 | 2 607 | 2 411 | ||||
Other non-current assets | 14 | 1 199 | 1 110 | ||||
Total non-current assets | 69 464 | 80 543 | |||||
Current assets | |||||||
Inventories | 15 | 5 913 | 7 175 | ||||
Trade receivables | 16 | 7 107 | 8 066 | ||||
Income tax receivables | 426 | 268 | |||||
Marketable securities, commodities, time deposits and derivative financial instruments | 17 | 1 035 | 11 413 | ||||
Cash and cash equivalents | 17 | 13 393 | 7 517 | ||||
Other current assets | 18 | 2 607 | 2 471 | ||||
Total current assets | 30 481 | 36 910 | |||||
Total assets | 99 945 | 117 453 | |||||
Equity and liabilities | |||||||
Equity | |||||||
Share capital | 19 | 825 | 890 | ||||
Treasury shares | 19 | -41 | -92 | ||||
Reserves | 45 883 | 58 544 | |||||
Equity attributable to Novartis AG shareholders | 46 667 | 59 342 | |||||
Non-controlling interests | 83 | 81 | |||||
Total equity | 46 750 | 59 423 | |||||
Liabilities | |||||||
Non-current liabilities | |||||||
Financial debts | 20 | 18 436 | 20 244 | ||||
Lease liabilities | 11 | 1 598 | 1 538 | ||||
Deferred tax liabilities | 13 | 2 248 | 2 686 | ||||
Provisions and other non-current liabilities | 21 | 4 523 | 4 906 | ||||
Total non-current liabilities | 26 805 | 29 374 | |||||
Current liabilities | |||||||
Trade payables | 4 926 | 5 146 | |||||
Financial debts and derivative financial instruments | 22 | 6 175 | 5 931 | ||||
Lease liabilities | 11 | 230 | 251 | ||||
Current income tax liabilities | 1 893 | 2 533 | |||||
Provisions and other current liabilities | 23 | 13 166 | 14 795 | ||||
Total current liabilities | 26 390 | 28 656 | |||||
Total liabilities | 53 195 | 58 030 | |||||
Total equity and liabilities | 99 945 | 117 453 | |||||
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 January 1, 2021 | 913 | -53 | 57 157 | -1 419 | 56 598 | 68 | 56 666 | ||||||||||
Net income | 24 021 | 24 021 | -3 | 24 018 | |||||||||||||
Other comprehensive income | 9 | 46 | -2 539 | -2 493 | -4 | -2 497 | |||||||||||
Total comprehensive income | 24 067 | -2 539 | 21 528 | -7 | 21 521 | ||||||||||||
Dividends | 19.1 | -7 368 | -7 368 | -7 368 | |||||||||||||
Purchase of treasury shares | 19.2 | -18 | -2 902 | -2 920 | -2 920 | ||||||||||||
Reduction of share capital | 19 | -12 | 18 | -6 | |||||||||||||
Exercise of options and employee transactions | 19.2 | 0 | 39 | 39 | 39 | ||||||||||||
Equity-based compensation | 19.2 | 5 | 740 | 745 | 745 | ||||||||||||
Shares delivered to Alcon employees as a result of the Alcon spin-off | 19.2 | 0 | 17 | 17 | 17 | ||||||||||||
Taxes on treasury share transactions | 1 | 1 | 1 | ||||||||||||||
Increase of treasury share repurchase obligation under a share buyback trading plan | 19.4 | -1 040 | -1 040 | -1 040 | |||||||||||||
Transaction costs, net of taxes | 19.8 | 12 | 12 | 12 | |||||||||||||
Changes in non-controlling interests | 19.6 | -1 | -1 | ||||||||||||||
Fair value adjustments on financial assets sold | 9 | 164 | -164 | ||||||||||||||
Value adjustments related to divestments | 9 | 65 | -65 | ||||||||||||||
Impact of change in ownership of consolidated entities | 19.5 | -5 | 0 | -5 | 107 | 102 | |||||||||||
Other movements | 19.7 | 48 | 48 | 48 | |||||||||||||
Total of other equity movements | -12 | 5 | -10 235 | -229 | -10 471 | 106 | -10 365 | ||||||||||
Total equity at December 31, 2021 | 901 | -48 | 70 989 | -4 187 | 67 655 | 167 | 67 822 | ||||||||||
Net income | 6 955 | 6 955 | 0 | 6 955 | |||||||||||||
Other comprehensive income | 9 | -839 | -839 | -5 | -844 | ||||||||||||
Total comprehensive income | 6 955 | -839 | 6 116 | -5 | 6 111 | ||||||||||||
Dividends | 19.1 | -7 506 | -7 506 | -7 506 | |||||||||||||
Purchase of treasury shares | 19.2 | -66 | -10 844 | -10 910 | -10 910 | ||||||||||||
Reduction of share capital | 19 | -11 | 15 | -4 | |||||||||||||
Exercise of options and employee transactions | 19.2 | 1 | 87 | 88 | 88 | ||||||||||||
Equity-based compensation | 19.2 | 6 | 848 | 854 | 854 | ||||||||||||
Shares delivered to Alcon employees as a result of the Alcon spin-off | 19.2 | 0 | 5 | 5 | 5 | ||||||||||||
Taxes on treasury share transactions | 14 | 14 | 14 | ||||||||||||||
Decrease of treasury share repurchase obligation under a share buyback trading plan | 19.4 | 2 809 | 2 809 | 2 809 | |||||||||||||
Changes in non-controlling interests | 19.6 | -81 | -81 | ||||||||||||||
Fair value adjustments on financial assets sold | 9 | 4 | -4 | ||||||||||||||
Value adjustments related to divestments | 9 | -34 | 34 | ||||||||||||||
Other movements | 19.7 | 217 | 217 | 217 | |||||||||||||
Total of other equity movements | -11 | -44 | -14 404 | 30 | -14 429 | -81 | -14 510 | ||||||||||
Total equity at December 31, 2022 | 890 | -92 | 63 540 | -4 996 | 59 342 | 81 | 59 423 | ||||||||||
Net income | 14 850 | 14 850 | 4 | 14 854 | |||||||||||||
Other comprehensive income | 9 | 1 200 | 1 200 | 2 | 1 202 | ||||||||||||
Total comprehensive income | 14 850 | 1 200 | 16 050 | 6 | 16 056 | ||||||||||||
Dividends | 19.1 | -7 255 | -7 255 | -7 255 | |||||||||||||
Dividend in kind to effect the spin-off of Sandoz Group AG | 2 | -13 962 | -13 962 | -13 962 | |||||||||||||
Purchase of treasury shares | 19.2 | -51 | -8 466 | -8 517 | -8 517 | ||||||||||||
Reduction of share capital | 19.3 | -65 | 94 | -29 | |||||||||||||
Exercise of options and employee transactions | 19.2 | 2 | 144 | 146 | 146 | ||||||||||||
Equity-based compensation | 19.2 | 6 | 898 | 904 | 904 | ||||||||||||
Shares delivered to Sandoz employees as a result of the Sandoz spin-off | 19.2 | 0 | 30 | 30 | 30 | ||||||||||||
Taxes on treasury share transactions | 14 | 14 | 14 | ||||||||||||||
Transaction costs, net of taxes | 19.8 | -214 | -214 | -214 | |||||||||||||
Changes in non-controlling interests | 19.6 | -4 | -4 | ||||||||||||||
Fair value adjustments on financial assets sold | 9 | -1 | 1 | ||||||||||||||
Value adjustments related to divestments | 9 | -29 | 29 | ||||||||||||||
Other movements | 19.7 | 129 | 129 | 129 | |||||||||||||
Total of other equity movements | -65 | 51 | -28 741 | 30 | -28 725 | -4 | -28 729 | ||||||||||
Total equity at December 31, 2023 | 825 | -41 | 49 649 | -3 766 | 46 667 | 83 | 46 750 | ||||||||||
The accompanying Notes form an integral part of the consolidated financial statements. |
(USD millions) | Note | 2023 | 2022 | 2021 | |||||
Net income from continuing operations | 8 572 | 6 049 | 22 905 | ||||||
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 | 24.1 | 10 369 | 10 631 | -6 430 | |||||
Dividends received from associated companies and others | 2 | 1 | 523 | ||||||
Interest received | 645 | 252 | 11 | ||||||
Interest paid | -751 | -667 | -643 | ||||||
Other financial receipts | 90 | 71 | |||||||
Other financial payments | -17 | -26 | -297 | ||||||
Income taxes paid | 24.2 | -2 787 | -1 702 | -1 856 | |||||
Net cash flows from operating activities from continuing operations before working capital and provision changes | 16 123 | 14 609 | 14 213 | ||||||
Payments out of provisions and other net cash movements in non-current liabilities | -1 534 | -774 | -775 | ||||||
Change in net current assets and other operating cash flow items | 24.3 | -369 | -796 | -73 | |||||
Net cash flows from operating activities from continuing operations | 14 220 | 13 039 | 13 365 | ||||||
Net cash flows from operating activities from discontinued operations | 238 | 1 197 | 1 706 | ||||||
Total net cash flows from operating activities | 14 458 | 14 236 | 15 071 | ||||||
Purchases of property, plant and equipment | -1 060 | -916 | -1 066 | ||||||
Proceeds from sale of property, plant and equipment | 237 | 158 | 211 | ||||||
Purchases of intangible assets | -1 693 | -1 323 | -1 490 | ||||||
Proceeds from sale of intangible assets | 1 955 | 170 | 686 | ||||||
Purchases of financial assets | -106 | -115 | -188 | ||||||
Proceeds from sale of financial assets | 348 | 133 | 440 | ||||||
Purchases of other non-current assets | -1 | -59 | |||||||
Proceeds from sale of other non-current assets | 4 | ||||||||
Acquisitions and divestments of interests in associated companies, net | 24.4 | -11 | -24 | 20 669 | |||||
Acquisitions and divestments of businesses, net | 24.5 | -3 558 | -840 | -205 | |||||
Purchases of marketable securities, commodities and time deposits | -641 | -34 695 | -16 403 | ||||||
Proceeds from sale of marketable securities, commodities and time deposits | 11 248 | 39 357 | 2 298 | ||||||
Net cash flows from investing activities from continuing operations | 6 719 | 1 904 | 4 897 | ||||||
Net cash flows used in investing activities from discontinued operations | 31 | -1 123 | -436 | -689 | |||||
Total net cash flows from investing activities | 5 596 | 1 468 | 4 208 | ||||||
Dividends paid to shareholders of Novartis AG | -7 255 | -7 506 | -7 368 | ||||||
Acquisitions of treasury shares | -8 719 | -10 652 | -3 057 | ||||||
Proceeds from exercised options and other treasury share transactions, net | 153 | 100 | 53 | ||||||
Repayments of the current portion of non-current financial debts | 24.6 | -2 223 | -2 575 | -2 162 | |||||
Change in current financial debts | 24.6 | 546 | 252 | -3 547 | |||||
Payments of lease liabilities | 24.6 | -258 | -262 | -278 | |||||
Impact of change in ownership of consolidated entities | -3 | ||||||||
Other financing cash flows, net | 192 | -38 | 72 | ||||||
Net cash flows used in financing activities from continuing operations | -17 564 | -20 681 | -16 290 | ||||||
Net cash flows from financing activities from discontinued operations | 31 | 3 286 | 119 | 26 | |||||
Total net cash flows used in financing activities | -14 278 | -20 562 | -16 264 | ||||||
Net change in cash and cash equivalents before effect of exchange rate changes | 5 776 | -4 858 | 3 015 | ||||||
Effect of exchange rate changes on cash and cash equivalents | 100 | -32 | -266 | ||||||
Net change in cash and cash equivalents | 5 876 | -4 890 | 2 749 | ||||||
Cash and cash equivalents at January 1 | 7 517 | 12 407 | 9 658 | ||||||
Cash and cash equivalents at December 31 | 13 393 | 7 517 | 12 407 | ||||||
The accompanying Notes form an integral part of the consolidated financial statements. |
Notes to the Novartis consolidated financial statements
(USD millions) | Oct 3, 2023 | ||
Net assets derecognized 1 | -8 647 | ||
Derecognition of distribution liability | 13 962 | ||
Difference between net assets and distribution liability | 5 315 | ||
Recognition of Sandoz Group AG shares obtained through consolidated foundations | 492 | ||
Currency translation gains recycled into the consolidated income statement | 357 | ||
Transaction costs and other items recognized in the consolidated income statement | -304 | ||
Gain on distribution of Sandoz Group AG to Novartis AG shareholders | 5 860 | ||
1 See Note 31 for additional information. |
(USD millions) | 2023 | 2022 | 2021 | ||||
Net sales to third parties from continuing operations | 44 635 | 41 385 | 41 976 | ||||
Sales to discontinued operations | 805 | 821 | 805 | ||||
Net sales from continuing operations | 45 440 | 42 206 | 42 781 | ||||
Net sales from continuing operations1 | Total of selected non-current assets2 | ||||||||||||||||||||
(USD millions) | 2023 | % | 2022 | % | 2021 | % | 2023 | % | 2022 | % | |||||||||||
Country | |||||||||||||||||||||
Switzerland | 1 308 | 3 | 1 036 | 2 | 926 | 2 | 19 396 | 32 | 23 708 | 32 | |||||||||||
United States | 17 959 | 40 | 15 935 | 38 | 14 923 | 35 | 34 059 | 55 | 35 353 | 48 | |||||||||||
Germany | 3 367 | 7 | 3 101 | 7 | 3 595 | 8 | 88 | 2 229 | 3 | ||||||||||||
China | 3 267 | 7 | 2 948 | 7 | 2 849 | 7 | 547 | 1 | 599 | 1 | |||||||||||
Japan | 1 924 | 4 | 1 883 | 4 | 2 259 | 5 | 120 | 165 | |||||||||||||
France | 1 749 | 4 | 1 754 | 4 | 1 955 | 5 | 3 085 | 5 | 3 188 | 4 | |||||||||||
Other | 15 866 | 35 | 15 549 | 38 | 16 274 | 38 | 4 269 | 7 | 8 241 | 12 | |||||||||||
Total | 45 440 | 100 | 42 206 | 100 | 42 781 | 100 | 61 564 | 100 | 73 483 | 100 | |||||||||||
1 Net sales from continuing operations by location of customer | |||||||||||||||||||||
2 Total of property, plant and equipment; right-of-use assets; goodwill; intangible assets; investment in associated companies and other non-current assets excluding post-employment benefit assets |
2023 USD m | 2022 USD m | Change (2022 to 2023) USD % | 2021 USD m | Change (2021 to 2022) USD % | |||||||
US | 17 959 | 15 935 | 13 | 14 923 | 7 | ||||||
Europe | 14 997 | 14 371 | 4 | 15 721 | -9 | ||||||
Asia/Africa/Australasia | 9 308 | 8 978 | 4 | 9 355 | -4 | ||||||
Canada and Latin America | 3 176 | 2 922 | 9 | 2 782 | 5 | ||||||
Total | 45 440 | 42 206 | 8 | 42 781 | -1 | ||||||
Of which in established markets | 33 725 | 31 386 | 7 | 32 183 | -2 | ||||||
Of which in emerging growth markets | 11 715 | 10 820 | 8 | 10 598 | 2 | ||||||
1 Net sales 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. Novartis definition of Western Europe includes Austria, Belgium, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, Malta, The Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. | |||||||||||
2023 USD m | 2022 USD m1 | Change (2022 to 2023) USD % | 2021 USD m1 | Change (2021 to 2022) USD % | |||||||
Cardiovascular, renal and metabolic | |||||||||||
Entresto | 6 035 | 4 644 | 30 | 3 548 | 31 | ||||||
Leqvio | 355 | 112 | 217 | 12 | nm | ||||||
Other | 1 | nm | 1 | nm | |||||||
Total cardiovascular, renal and metabolic | 6 391 | 4 756 | 34 | 3 561 | 34 | ||||||
Immunology | |||||||||||
Cosentyx | 4 980 | 4 788 | 4 | 4 718 | 1 | ||||||
Xolair 2 | 1 463 | 1 365 | 7 | 1 428 | -4 | ||||||
Ilaris | 1 355 | 1 133 | 20 | 1 059 | 7 | ||||||
Other | 1 | nm | 1 | 0 | |||||||
Total immunology | 7 798 | 7 287 | 7 | 7 206 | 1 | ||||||
Neuroscience | |||||||||||
Kesimpta | 2 171 | 1 092 | 99 | 372 | 194 | ||||||
Zolgensma | 1 214 | 1 370 | -11 | 1 351 | 1 | ||||||
Mayzent | 392 | 357 | 10 | 281 | 27 | ||||||
Aimovig | 266 | 218 | 22 | 215 | 1 | ||||||
Other | 1 | nm | 1 | 0 | |||||||
Total neuroscience | 4 043 | 3 038 | 33 | 2 220 | 37 | ||||||
Oncology | |||||||||||
Promacta/Revolade | 2 269 | 2 088 | 9 | 2 016 | 4 | ||||||
Kisqali | 2 080 | 1 231 | 69 | 937 | 31 | ||||||
Tafinlar + Mekinist | 1 922 | 1 770 | 9 | 1 693 | 5 | ||||||
Tasigna | 1 848 | 1 923 | -4 | 2 060 | -7 | ||||||
Jakavi | 1 720 | 1 561 | 10 | 1 595 | -2 | ||||||
Pluvicto | 980 | 271 | 262 | nm | |||||||
Lutathera | 605 | 471 | 28 | 475 | -1 | ||||||
Kymriah | 508 | 536 | -5 | 587 | -9 | ||||||
Piqray/Vijoice | 505 | 373 | 35 | 329 | 13 | ||||||
Scemblix | 413 | 149 | 177 | 7 | nm | ||||||
Votrient | 390 | 474 | -18 | 577 | -18 | ||||||
Adakveo | 195 | 194 | 1 | 164 | 18 | ||||||
Tabrecta | 154 | 133 | 16 | 90 | 48 | ||||||
Other | 1 | 2 | nm | 2 | 0 | ||||||
Total oncology | 13 590 | 11 176 | 22 | 10 532 | 6 | ||||||
Total promoted brands | 31 822 | 26 257 | 21 | 23 519 | 12 | ||||||
2023 USD m | 2022 USD m1 | Change (2022 to 2023) USD % | 2021 USD m1 | Change (2021 to 2022) USD % | |||||||
Established brands | |||||||||||
Lucentis | 1 475 | 1 874 | -21 | 2 160 | -13 | ||||||
Sandostatin | 1 314 | 1 238 | 6 | 1 413 | -12 | ||||||
Gilenya | 925 | 2 013 | -54 | 2 787 | -28 | ||||||
Exforge Group | 713 | 743 | -4 | 901 | -18 | ||||||
Galvus Group | 692 | 859 | -19 | 1 092 | -21 | ||||||
Diovan Group | 613 | 652 | -6 | 773 | -16 | ||||||
Gleevec/Glivec | 561 | 745 | -25 | 1 024 | -27 | ||||||
Afinitor/Votubia | 408 | 512 | -20 | 938 | -45 | ||||||
Contract manufacturing 3 | 1 490 | 1 200 | 24 | 1 083 | 11 | ||||||
Other 3 | 5 427 | 6 113 | -11 | 7 091 | -14 | ||||||
Total established brands 3 | 13 618 | 15 949 | -15 | 19 262 | -17 | ||||||
Total net sales from continuing operations | 45 440 | 42 206 | 8 | 42 781 | -1 | ||||||
1 Reclassified to conform with the 2023 organizational structure. | |||||||||||
2 Net sales from continuing operations reflect Xolair sales for all indications. | |||||||||||
3 Effective January 1, 2023, the discontinued operations Sandoz business transferred to Novartis continuing operations its bio-technology manufacturing services to other companies’ activities (included in Contract manufacturing) and the Coartem brand (included in Other). The financial information of the Novartis continuing operations and discontinued operations were adapted accordingly in 2022 and 2021, in compliance with IFRS Accounting Standards. See Note 3 for additional information. | |||||||||||
nm = not meaningful | |||||||||||
Brands | Brand classification by therapeutic area or established brands | Key indications | US USD m | Rest of world USD m | Total USD m | ||||||
Entresto | Cardiovascular, renal and metabolic | Chronic heart failure, hypertension | 3 067 | 2 968 | 6 035 | ||||||
Cosentyx | Immunology | Psoriasis (PsO), ankylosing spondylitis (AS), psoriatic arthritis (PsA), non-radiographic axial spondyloarthritis (nr-axSPA), hidradenitis suppurativa (HS) | 2 636 | 2 344 | 4 980 | ||||||
Promacta/Revolade | Oncology | Immune thrombocytopenia (ITP), severe aplastic anemia (SAA) | 1 205 | 1 064 | 2 269 | ||||||
Kesimpta | Neuroscience | Relapsing-remitting multiple sclerosis (RRMS) | 1 528 | 643 | 2 171 | ||||||
Kisqali | Oncology | HR+/HER2- metastatic breast cancer | 1 032 | 1 048 | 2 080 | ||||||
Tafinlar + Mekinist | Oncology | BRAF V600+ metastatic adjuvant melanoma, advanced non-small cell lung cancer (NSCLC), tumor agnostic with BRAF mutation indication | 791 | 1 131 | 1 922 | ||||||
Tasigna | Oncology | Chronic myeloid leukemia (CML) | 884 | 964 | 1 848 | ||||||
Jakavi | Oncology | Myelofibrosis (MF), polycytomia vera (PV), graft-versus-host disease (GvHD) | 1 720 | 1 720 | |||||||
Lucentis 1 | Established brands | Age-related macular degeneration (AMD), diabetic macular edema (DME), retinal vein occlusion (RVO) | 1 475 | 1 475 | |||||||
Xolair 2 | Immunology | Severe allergic asthma (SAA), chronic spontaneous urticaria (CSU), nasal polyps | 1 463 | 1 463 | |||||||
Ilaris | Immunology | Auto-inflammatory (CAPS, TRAPS, HIDS/MKD, FMF, SJIA, AOSD, gout) | 686 | 669 | 1 355 | ||||||
Sandostatin | Established brands | Carcinoid tumors, acromegaly | 829 | 485 | 1 314 | ||||||
Zolgensma | Neuroscience | Spinal muscular atrophy (SMA) | 372 | 842 | 1 214 | ||||||
Pluvicto | Oncology | PSMA-positive mCRPC patients post-ARPI, post-Taxane | 921 | 59 | 980 | ||||||
Gilenya 1 | Established brands | Relapsing multiple sclerosis (RMS) | 359 | 566 | 925 | ||||||
Exforge Group | Established brands | Hypertension | 13 | 700 | 713 | ||||||
Galvus Group | Established brands | Type 2 diabetes | 692 | 692 | |||||||
Diovan Group | Established brands | Hypertension | 52 | 561 | 613 | ||||||
Lutathera | Oncology | GEP-NETs gastroenteropancreatic neuroendocrine tumors | 427 | 178 | 605 | ||||||
Gleevec/Glivec | Established brands | Chronic myeloid leukemia (CML), gastrointestinal stromal tumors (GIST) | 150 | 411 | 561 | ||||||
Top 20 brands total | 14 952 | 19 983 | 34 935 | ||||||||
Rest of portfolio | 3 007 | 7 498 | 10 505 | ||||||||
Total net sales from continuing operations | 17 959 | 27 481 | 45 440 | ||||||||
1 In the first quarter of 2023 Lucentis was reclassified from other promoted brands to established brands and Gilenya was reclassified from neuroscience to established brands. | |||||||||||
2 Net sales from continuing operations reflect Xolair sales for all indications. | |||||||||||
Brands | Brand classification by therapeutic area or established brands1 | Key indications | US USD m | Rest of world USD m | Total USD m | ||||||
Cosentyx | Immunology | Psoriasis (PsO), ankylosing spondylitis (AS), psoriatic arthritis (PsA), non-radiographic axial spondyloarthritis (nr-axSPA) | 2 770 | 2 018 | 4 788 | ||||||
Entresto | Cardiovascular, renal and metabolic | Chronic heart failure, hypertension | 2 354 | 2 290 | 4 644 | ||||||
Promacta/Revolade | Oncology | Immune thrombocytopenia (ITP), severe aplastic anemia (SAA) | 1 083 | 1 005 | 2 088 | ||||||
Gilenya 2 | Established brands | Relapsing multiple sclerosis (RMS) | 1 153 | 860 | 2 013 | ||||||
Tasigna | Oncology | Chronic myeloid leukemia (CML) | 877 | 1 046 | 1 923 | ||||||
Lucentis 2 | Established brands | Age-related macular degeneration (AMD), diabetic macular edema (DME), retinal vein occlusion (RVO) | 1 874 | 1 874 | |||||||
Tafinlar + Mekinist | Oncology | BRAF V600+ metastatic adjuvant melanoma, advanced non-small cell lung cancer (NSCLC), tumor agnostic with BRAF mutation indication | 678 | 1 092 | 1 770 | ||||||
Jakavi | Oncology | Myelofibrosis (MF), polycytomia vera (PV), graft-versus-host disease (GvHD) | 1 561 | 1 561 | |||||||
Zolgensma | Neuroscience | Spinal muscular atrophy (SMA) | 434 | 936 | 1 370 | ||||||
Xolair 3 | Immunology | Severe allergic asthma (SAA), chronic spontaneous urticaria (CSU), nasal polyps | 1 365 | 1 365 | |||||||
Sandostatin | Established brands | Carcinoid tumors, acromegaly | 800 | 438 | 1 238 | ||||||
Kisqali | Oncology | HR+/HER2- metastatic breast cancer | 472 | 759 | 1 231 | ||||||
Ilaris | Immunology | Auto-inflammatory (CAPS, TRAPS, HIDS/MKD, FMF, SJIA, AOSD, gout) | 570 | 563 | 1 133 | ||||||
Kesimpta | Neuroscience | Relapsing-remitting multiple sclerosis (RRMS) | 921 | 171 | 1 092 | ||||||
Galvus Group | Established brands | Type 2 diabetes | 859 | 859 | |||||||
Gleevec/Glivec | Established brands | Chronic myeloid leukemia (CML), gastrointestinal stromal tumors (GIST) | 205 | 540 | 745 | ||||||
Exforge Group | Established brands | Hypertension | 14 | 729 | 743 | ||||||
Diovan Group | Established brands | Hypertension | 55 | 597 | 652 | ||||||
Kymriah | Oncology | r/r pediatric and young adults acute lymphoblastic leukemia (ALL), diffuse large B-cell lymphoma (DLBCL) follicular lymphoma (FL) | 196 | 340 | 536 | ||||||
Afinitor/Votubia | Established brands | Breast cancer/ tuberous sclerosis complex (TSC) | 171 | 341 | 512 | ||||||
Top 20 products total | 12 753 | 19 384 | 32 137 | ||||||||
Rest of portfolio 4 | 3 182 | 6 887 | 10 069 | ||||||||
Total net sales from continuing operations 4 | 15 935 | 26 271 | 42 206 | ||||||||
1 Brand classifications have been changed to conform with the 2023 brand classifications. | |||||||||||
2 In the first quarter of 2023 Lucentis was reclassified from other promoted brands to established brands and Gilenya was reclassified from neuroscience to established brands. | |||||||||||
3 Net sales from continuing operations reflect Xolair sales for all indications. | |||||||||||
4 Effective January 1, 2023, the discontinued operations Sandoz business bio-technology manufacturing services to other companies’ activities and the Coartem brand were transferred to the Novartis continuing operations. The financial information of the Novartis continuing operations and discontinued operations were adapted accordingly in 2022, in compliance with IFRS Accounting Standards. See Note 3 for additional information. |
Brands | Brand classification by therapeutic area or established brands1 | Key indications | US USD m | Rest of world USD m | Total USD m | ||||||
Cosentyx | Immunology | Psoriasis (PsO), ankylosing spondylitis (AS), psoriatic arthritis (PsA), non-radiographic axial spondyloarthritis (nr-axSPA) | 2 883 | 1 835 | 4 718 | ||||||
Entresto | Cardiovascular, renal and metabolic | Chronic heart failure | 1 712 | 1 836 | 3 548 | ||||||
Gilenya 2 | Established brands | Relapsing multiple sclerosis (RMS) | 1 427 | 1 360 | 2 787 | ||||||
Lucentis 2 | Established brands | Age-related macular degeneration (AMD) | 2 160 | 2 160 | |||||||
Tasigna | Oncology | Chronic myeloid leukemia (CML) | 882 | 1 178 | 2 060 | ||||||
Promacta/Revolade | Oncology | Immune thrombocytopenia (ITP), severe aplastic anemia (SAA) | 947 | 1 069 | 2 016 | ||||||
Tafinlar + Mekinist | Oncology | BRAF V600+ metastatic adjuvant melanoma, advanced non-small cell lung cancer (NSCLC) | 606 | 1 087 | 1 693 | ||||||
Jakavi | Oncology | Myelofibrosis (MF), polycythemia vera (PV) | 1 595 | 1 595 | |||||||
Xolair 3 | Immunology | Severe allergic asthma (SAA), chronic spontaneous urticaria (CSU), nasal polyps | 1 428 | 1 428 | |||||||
Sandostatin | Established brands | Carcinoid tumors, acromegaly | 843 | 570 | 1 413 | ||||||
Zolgensma | Neuroscience | Spinal muscular atrophy (SMA) | 469 | 882 | 1 351 | ||||||
Galvus Group | Established brands | Type 2 diabetes | 1 092 | 1 092 | |||||||
Ilaris | Immunology | Auto-inflammatory (CAPS, TRAPS, HIDS/MKD, FMF, SJIA, AOSD gout) | 501 | 558 | 1 059 | ||||||
Gleevec/Glivec | Established brands | Chronic myeloid leukemia (CML), gastrointestinal stromal tumors (GIST) | 263 | 761 | 1 024 | ||||||
Afinitor/Votubia | Established brands | Breast cancer/ tuberous sclerosis complex (TSC) | 521 | 417 | 938 | ||||||
Kisqali | Oncology | HR+/HER2- metastatic breast cancer | 339 | 598 | 937 | ||||||
Exforge Group | Established brands | Hypertension | 14 | 887 | 901 | ||||||
Diovan Group | Established brands | Hypertension | 51 | 722 | 773 | ||||||
Kymriah | Oncology | r/r pediatric and young adults acute lymphoblastic leukemia (ALL), diffuse large B-cell lymphoma (DLBCL) | 230 | 357 | 587 | ||||||
Ultibro Group | Established brands | Chronic obstructive pulmonary disease (COPD) | 584 | 584 | |||||||
Top 20 products total | 11 688 | 20 976 | 32 664 | ||||||||
Rest of portfolio 4 | 3 235 | 6 882 | 10 117 | ||||||||
Total net sales from continuing operations 4 | 14 923 | 27 858 | 42 781 | ||||||||
1 Brand classifications have been changed to conform with the 2023 brand classifications. | |||||||||||
2 In the first quarter of 2023 Lucentis was reclassified from other promoted brands to established brands and Gilenya was reclassified from neuroscience to established brands. | |||||||||||
3 Net sales from continuing operations reflect Xolair sales for all indications. | |||||||||||
4 Effective January 1, 2023, the discontinued operations Sandoz business bio-technology manufacturing services to other companies’ activities and the Coartem brand were transferred to the Novartis continuing operations. The financial information of the Novartis continuing operations and discontinued operations were adapted accordingly in 2021, in compliance with IFRS Accounting Standards. See Note 3 for additional information. |
(USD millions) | 2023 | 2022 | 2021 | ||||
Profit-sharing income | 941 | 921 | 873 | ||||
Royalty income | 87 | 35 | 85 | ||||
Milestone income | 45 | 145 | 127 | ||||
Other 1 | 147 | 154 | 108 | ||||
Total other revenues | 1 220 | 1 255 | 1 193 | ||||
1 Other includes revenue from activities such as manufacturing or other services rendered, to the extent such revenue is not recorded under net sales to third parties. |
Net income statement effect | Other comprehensive income effect 1 | Total comprehensive income effect | |||||||||||||||||
(USD millions) | 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | ||||||||||
Roche Holding AG, Switzerland | 15 341 | 46 | 15 387 | ||||||||||||||||
Others | -13 | -11 | -4 | -13 | -11 | -4 | |||||||||||||
Associated companies | -13 | -11 | 15 337 | 46 | -13 | -11 | 15 383 | ||||||||||||
1 In 2021, Novartis share of other comprehensive income recognized by associated companies, net of taxes of USD 3 million was recycled into the consolidated income statement as a result of the divestment of the investment in Roche Holding AG. No Novartis share of other comprehensive income recognized by associated companies was recycled to the consolidated income statement in 2023 and 2022. |
(USD millions) | 2021 | ||
Novartis share of Roche's estimated current-year consolidated net income | 815 | ||
Prior-year adjustment | 40 | ||
Amortization of fair value adjustments relating to intangible assets, net of taxes of USD 10 million | -70 | ||
Gain on divestment of the investment in Roche 1 | 14 556 | ||
Net income effect | 15 341 | ||
1 The gain on divestment of the investment in Roche includes the recycling of currency translation effects (see Note 9.1) and other comprehensive income effects totaling USD 3.2 billion. |
(USD millions) | 2023 | 2022 | 2021 | ||||
Interest expense | -730 | -642 | -633 | ||||
Interest expense on lease liabilities | -62 | -57 | -59 | ||||
Expense arising from discounting long-term liabilities and capitalized borrowing costs | -63 | -101 | -95 | ||||
Total interest expense from continuing operations | -855 | -800 | -787 | ||||
(USD millions) | 2023 | 2022 | 2021 | ||||
Interest income | 627 | 377 | 70 | ||||
Other financial income | 21 | 19 | 12 | ||||
Monetary loss from hyperinflation accounting | -194 | -137 | -48 | ||||
Financial expense | -18 | -33 | -41 | ||||
Currency result, net | -214 | -184 | -69 | ||||
Total other financial income and expense from continuing operations | 222 | 42 | -76 | ||||
(USD millions) | 2023 | 2022 | 2021 | ||||
Switzerland 1 | 9 719 | 5 751 | 21 830 | ||||
Foreign 2 | -596 | 1 426 | 2 700 | ||||
Income before taxes from continuing operations | 9 123 | 7 177 | 24 530 | ||||
1 The 2021 income before taxes from continuing operations in Switzerland includes a USD 14.6 billion non-taxable gain on the divestment of the Company’s investment in Roche Holding AG (see Note 2 and Note 5). | |||||||
2 The 2023 foreign income before taxes from continuing operations is impacted by non-recurring events, including impairment charges on intangible assets other than goodwill. |
(USD millions) | 2023 | 2022 | 2021 | ||||
Switzerland | -1 136 | -598 | -949 | ||||
Foreign | -1 290 | -1 155 | -973 | ||||
Current income tax expense | -2 426 | -1 753 | -1 922 | ||||
Switzerland | 355 | -131 | 39 | ||||
Foreign | 1 520 | 756 | 258 | ||||
Deferred tax income | 1 875 | 625 | 297 | ||||
Income tax expense from continuing operations | -551 | -1 128 | -1 625 | ||||
(As a percentage) | 2023 | 2022 | 2021 | ||||
Applicable tax rate | 15.0 | 15.3 | 14.2 | ||||
Effect of disallowed expenditures | 1.4 | 2.6 | 1.0 | ||||
Effect of income taxed at reduced rates | -0.6 | -0.4 | -0.1 | ||||
Effect of income not subject to tax 1 | -2.5 | -0.1 | -7.9 | ||||
Effect of tax credits and allowances | -3.9 | -4.1 | -1.5 | ||||
Effect of release of contingent consideration liability | -0.3 | -0.5 | -0.1 | ||||
Effect of tax rate change on current and deferred tax assets and liabilities | -1.6 | 0.0 | 0.0 | ||||
Effect of derecognition and reversals of derecognition of deferred tax assets | 0.9 | 1.3 | 0.0 | ||||
Effect of write-down of investments in subsidiaries | -3.0 | 0.0 | 0.0 | ||||
Effect of prior-year items | 0.0 | -0.3 | 0.1 | ||||
Effect of changes in uncertain tax positions | 0.1 | 1.7 | 1.0 | ||||
Effect of other items | 0.5 | 0.2 | -0.1 | ||||
Effective tax rate from continuing operations | 6.0 | 15.7 | 6.6 | ||||
1 2021 includes the effect of income not subject to tax (-7.7%) arising from the non-taxable gain on the divestment of our investment in Roche. See Notes 2 and 5 for further details. |
2023 | 2022 | 2021 | |||||
Net income attributable to shareholders of Novartis AG (USD millions) | |||||||
- Continuing operations | 8 568 | 6 049 | 22 908 | ||||
- Discontinued operations | 6 282 | 906 | 1 113 | ||||
Net income attributable to shareholders of Novartis AG (USD millions) | 14 850 | 6 955 | 24 021 | ||||
Number of shares (in millions) | |||||||
Weighted average number of shares outstanding used in basic earnings per share | 2 077 | 2 181 | 2 243 | ||||
Adjustment for vesting of restricted shares, restricted share units and dilutive shares from options | 15 | 16 | 17 | ||||
Weighted average number of shares in diluted earnings per share | 2 092 | 2 197 | 2 260 | ||||
Basic earnings per share (USD) | |||||||
- Continuing operations | 4.13 | 2.77 | 10.22 | ||||
- Discontinued operations | 3.02 | 0.42 | 0.49 | ||||
Total basic earnings per share (USD) | 7.15 | 3.19 | 10.71 | ||||
Diluted earnings per share (USD) | |||||||
- Continuing operations | 4.10 | 2.76 | 10.14 | ||||
- Discontinued operations | 3.00 | 0.41 | 0.49 | ||||
Total diluted earnings per share (USD) | 7.10 | 3.17 | 10.63 | ||||
(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, 2020 | 220 | -5 773 | 4 134 | -1 419 | -29 | -1 448 | |||||||||
Fair value adjustments on equity securities, net of taxes of USD -44 million 1 | 194 | 194 | 194 | ||||||||||||
Net investment hedge, net of taxes of USD 33 million | 216 | 216 | 216 | ||||||||||||
Defined benefit plans, net of taxes of USD -323 million | 1 808 | 1 808 | 1 | 1 809 | |||||||||||
Currency translation effects, net of taxes of USD 17 million | 9.1 | -4 757 | -4 757 | -5 | -4 762 | ||||||||||
Total value adjustments in 2021 | 194 | 1 808 | -4 541 | -2 539 | -4 | -2 543 | |||||||||
Fair value adjustments on equity securities sold, reclassified to retained earnings net of taxes of USD 48 million | -164 | -164 | -164 | ||||||||||||
Value adjustments related to divestments | -62 | -3 | -65 | -65 | |||||||||||
Value adjustments at December 31, 2021 | 188 | -3 968 | -407 | -4 187 | -33 | -4 220 | |||||||||
Fair value adjustments on equity securities, net of taxes of USD 81 million 1 | -382 | -382 | -382 | ||||||||||||
Net investment hedge, net of taxes of USD -30 million | 91 | 91 | 91 | ||||||||||||
Defined benefit plans, net of taxes of USD -104 million | -104 | -104 | 1 | -103 | |||||||||||
Currency translation effects, net of taxes of USD 18 million | 9.1 | -444 | -444 | -6 | -450 | ||||||||||
Total value adjustments in 2022 | -382 | -104 | -353 | -839 | -5 | -844 | |||||||||
Fair value adjustments on equity securities sold, reclassified to retained earnings net of taxes of nil | -4 | -4 | -4 | ||||||||||||
Value adjustments related to divestments, net of taxes of USD -4 million | 34 | 34 | 34 | ||||||||||||
Value adjustments at December 31, 2022 | -198 | -4 038 | -760 | -4 996 | -38 | -5 034 | |||||||||
Fair value adjustments on equity securities, net of taxes of USD -6 million 1 | 37 | 37 | 37 | ||||||||||||
Net investment hedge, net of taxes of USD 19 million | -50 | -50 | -50 | ||||||||||||
Defined benefit plans, net of taxes of USD 16 million | -160 | -160 | -160 | ||||||||||||
Currency translation effects, net of taxes of USD -6 million | 9.1 | 1 373 | 1 373 | 2 | 1 375 | ||||||||||
Total value adjustments in 2023 | 37 | -160 | 1 323 | 1 200 | 2 | 1 202 | |||||||||
Fair value adjustments on equity securities sold, reclassified to retained earnings net of taxes of USD -7 million | 1 | 1 | 1 | ||||||||||||
Value adjustments related to divestments, net of taxes of USD -4 million | 2 | 27 | 29 | 29 | |||||||||||
Value adjustments at December 31, 2023 | -158 | -4 171 | 563 | -3 766 | -36 | -3 802 | |||||||||
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 |
(USD millions) | Land | Buildings | Construction in progress | Machinery and other equipment | Total | ||||||
At January 1, 2023 | |||||||||||
Cost | 451 | 11 396 | 1 184 | 11 842 | 24 873 | ||||||
Accumulated depreciation and impairment | -9 | -5 903 | -27 | -8 170 | -14 109 | ||||||
Net book value | 442 | 5 493 | 1 157 | 3 672 | 10 764 | ||||||
At January 1, 2023 | 442 | 5 493 | 1 157 | 3 672 | 10 764 | ||||||
Costs and accumulated depreciation/impairments on assets related to discontinued operations 1 | -54 | -422 | -280 | -588 | -1 344 | ||||||
Impact of acquisitions of businesses | 12 | 1 | 5 | 18 | |||||||
Reclassifications | 197 | -420 | 223 | ||||||||
Additions | 1 | 85 | 734 | 245 | 1 065 | ||||||
Disposals and derecognitions | -16 | -261 | -20 | -63 | -360 | ||||||
Depreciation charge | -343 | -573 | -916 | ||||||||
Impairment charge | -3 | -36 | -10 | -57 | -106 | ||||||
Reversal of impairment charge | 3 | 9 | 4 | 16 | |||||||
Currency translation effects | 25 | 162 | 44 | 146 | 377 | ||||||
At December 31, 2023 | 398 | 4 896 | 1 206 | 3 014 | 9 514 | ||||||
At December 31, 2023 | |||||||||||
Cost | 403 | 10 147 | 1 213 | 9 630 | 21 393 | ||||||
Accumulated depreciation and impairment | -5 | -5 251 | -7 | -6 616 | -11 879 | ||||||
Net book value | 398 | 4 896 | 1 206 | 3 014 | 9 514 | ||||||
Commitments for purchases of property, plant and equipment | 744 | ||||||||||
Capitalized borrowing costs | 3 | ||||||||||
1 Represents the cost of assets and accumulated depreciation/impairments at January 1, 2023, related to the Sandoz business reported as discontinued operations, and the net transfers between discontinued and continuing operations from January 1, 2023 to October 3, 2023. Note 31 provides disclosure of discontinued operations additions, depreciation charge, impairment charge and reversals of impairment change. |
(USD millions) | Land | Buildings | Construction in progress | Machinery and other equipment | Total | ||||||
At January 1, 2022 | |||||||||||
Cost | 492 | 11 819 | 1 508 | 13 328 | 27 147 | ||||||
Accumulated depreciation and impairment | -7 | -5 744 | -65 | -9 786 | -15 602 | ||||||
Net book value | 485 | 6 075 | 1 443 | 3 542 | 11 545 | ||||||
At January 1, 2022 | 485 | 6 075 | 1 443 | 3 542 | 11 545 | ||||||
Impact of acquisitions of businesses | 13 | 13 | |||||||||
Reclassifications | 297 | -964 | 667 | ||||||||
Additions 1 | 3 | 124 | 780 | 312 | 1 219 | ||||||
Disposals and derecognitions | -28 | -49 | -33 | -45 | -155 | ||||||
Depreciation charge 2 | -437 | -726 | -1 163 | ||||||||
Impairment charge 2 | -7 | -351 | -13 | -43 | -414 | ||||||
Reversal of impairment charge 2 | 1 | 1 | 5 | 7 | |||||||
Currency translation effects | -12 | -166 | -57 | -53 | -288 | ||||||
At December 31, 2022 | 442 | 5 493 | 1 157 | 3 672 | 10 764 | ||||||
At December 31, 2022 | |||||||||||
Cost | 451 | 11 396 | 1 184 | 11 842 | 24 873 | ||||||
Accumulated depreciation and impairment | -9 | -5 903 | -27 | -8 170 | -14 109 | ||||||
Net book value | 442 | 5 493 | 1 157 | 3 672 | 10 764 | ||||||
Commitments for purchases of property, plant and equipment | 549 | ||||||||||
Capitalized borrowing costs | 5 | ||||||||||
1 Additions in continuing operations were USD 930 million. Note 31 provides disclosure of discontinued operations additions. | |||||||||||
2 Note 31 provides disclosure of discontinued operations depreciation charge, impairment charge and reversals of impairment charge. |
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 | ||
(USD millions) | 2023 | 2022 | 2021 | ||||
Depreciation charge | -916 | -967 | -1 005 | ||||
Impairment charge | -106 | -411 | -316 | ||||
Impairment reversals | 16 | 4 | 44 | ||||
1 Note 31 provides disclosure of discontinued operations depreciation charge, impairment charge and reversals of impairment charge. |
(USD millions) | 2023 | 2022 | |||
Right-of-use assets at January 1 | 1 431 | 1 561 | |||
Costs and accumulated depreciation/impairments on assets related to discontinued operations 1 | -117 | ||||
Impact of acquisitions of businesses | 16 | 12 | |||
Additions 2 | 421 | 247 | |||
Depreciation charge | -259 | -300 | |||
Impairment charge 3 | -4 | -3 | |||
Lease contract terminations 4 | -93 | -34 | |||
Currency translation effects | 15 | -52 | |||
Total right-of-use assets at December 31 | 1 410 | 1 431 | |||
1 Represents the cost of assets and accumulated depreciation/impairments at January 1, 2023, related to the Sandoz business reported as discontinued operations, and the net transfers between discontinued and continuing operations from January 1, 2023 to October 3, 2023. Note 31 provides disclosure of discontinued operations additions, depreciation charge, impairment charge and reversals of impairment change. | |||||
2 Additions in continuing operations were USD 216 million in 2022. | |||||
3 Impairment charge in continuing operations was USD 3 million in 2022 and nil in 2021. | |||||
4 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. |
(USD millions) | December 31, 2023 carrying value | December 31, 2022 carrying value | Depreciation charge 2023 | Depreciation charge 2022 | Depreciation charge 2021 | ||||||
Land | 483 | 505 | 12 | 16 | 11 | ||||||
Buildings | 749 | 745 | 156 | 162 | 174 | ||||||
Vehicles | 112 | 117 | 80 | 82 | 89 | ||||||
Machinery and equipment, and other assets | 66 | 64 | 11 | 7 | 5 | ||||||
Total right-of-use assets | 1 410 | 1 431 | 259 | 267 | 279 | ||||||
1 Note 31 provides disclosure of discontinued operations depreciation charge. |
(USD millions) | Lease liabilities 2023 | Lease liabilities undiscounted 2023 | Lease liabilities 2022 | Lease liabilities undiscounted 2022 | |||||
Less than one year | 230 | 284 | 251 | 297 | |||||
Between one and two years | 203 | 248 | 190 | 232 | |||||
Between two and three years | 170 | 211 | 167 | 201 | |||||
Between three and four years | 149 | 184 | 137 | 172 | |||||
Between four and five years | 113 | 142 | 122 | 154 | |||||
After five years | 963 | 2 173 | 922 | 2 149 | |||||
Total lease liabilities | 1 828 | 3 242 | 1 789 | 3 205 | |||||
Less current portion of lease liabilities | -230 | -284 | -251 | -297 | |||||
Non-current portion of lease liabilities | 1 598 | 2 958 | 1 538 | 2 908 | |||||
Commitments for leases not yet commenced | 89 | 83 | |||||||
(USD millions) | 2023 | 2022 | 2021 | ||||
Interest expense on lease liabilities 1 | 62 | 57 | 59 | ||||
Expense on short-term leases | 5 | 3 | 6 | ||||
Expense on low-value leases | 6 | 6 | 7 | ||||
Total cash outflows for leases | 321 | 319 | 339 | ||||
Thereof: | |||||||
Cash outflows for short-term leases and low-value leases 2 | 11 | 9 | 13 | ||||
Payments of interest 3 | 52 | 48 | 48 | ||||
Payments of lease liabilities 4 | 258 | 262 | 278 | ||||
1 The weighted average interest rate is 3.5% (2022: 3.3%, 2021: 3.2%). Interest on lease liabilities as at December 31, 2023, is estimated to be USD 54 million for 2024 and USD 1.4 billion thereafter. | |||||||
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 Company is committed to at December 31, 2023, 2022 and 2021, is similar to the portfolio of short-term leases the Company entered into during 2023, 2022 and 2021. | |||||||
3 Included within total net cash flows from operating activities | |||||||
4 Reported as cash outflows in financing activities net of lease incentives received, if any. |
Goodwill | Intangible assets other than goodwill | ||||||||||
(USD millions) | Total | In-process research and development | Currently marketed products | Other intangible assets | Total | ||||||
At January 1, 2023 | |||||||||||
Cost | 29 596 | 7 092 | 58 249 | 4 343 | 69 684 | ||||||
Accumulated amortization and impairment | -295 | -2 671 | -32 736 | -2 633 | -38 040 | ||||||
Net book value | 29 301 | 4 421 | 25 513 | 1 710 | 31 644 | ||||||
At January 1, 2023 | 29 301 | 4 421 | 25 513 | 1 710 | 31 644 | ||||||
Costs and accumulated amortization/impairments on assets related to discontinued operations 1 | -7 445 | -235 | -1 026 | -199 | -1 460 | ||||||
Impact of acquisitions of businesses | 1 094 | 2 931 | 15 | 2 946 | |||||||
Reclassifications | -235 | 23 | 212 | ||||||||
Additions | 770 | 290 | 516 | 1 576 | |||||||
Disposals and derecognitions 2 | -1 842 | -3 | -1 845 | ||||||||
Amortization charge | -3 319 | -641 | -3 960 | ||||||||
Impairment charge | -2 544 | -310 | -194 | -3 048 | |||||||
Currency translation effects | 391 | 221 | 688 | 117 | 1 026 | ||||||
At December 31, 2023 | 23 341 | 5 329 | 20 017 | 1 533 | 26 879 | ||||||
At December 31, 2023 | |||||||||||
Cost | 23 391 | 7 822 | 46 909 | 3 588 | 58 319 | ||||||
Accumulated amortization and impairment | -50 | -2 493 | -26 892 | -2 055 | -31 440 | ||||||
Net book value | 23 341 | 5 329 | 20 017 | 1 533 | 26 879 | ||||||
1 Represents the cost of assets and accumulated depreciation/impairments at January 1, 2023, related to the Sandoz business reported as discontinued operations, and the net transfers between discontinued and continuing operations from January 1, 2023 to October 3, 2023. Note 31 provides disclosure of discontinued operations additions, depreciation charge, impairment charge and reversals of impairment change. | |||||||||||
2 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. Disposals include the divested currently marketed product Xiidra. |
Goodwill | Intangible assets other than goodwill | ||||||||||
(USD millions) | Total | In-process research and development | Currently marketed products | Other intangible assets | Total | ||||||
At January 1, 2022 | |||||||||||
Cost | 29 900 | 8 013 | 56 213 | 3 985 | 68 211 | ||||||
Accumulated amortization and impairment | -305 | -2 514 | -29 107 | -2 408 | -34 029 | ||||||
Net book value | 29 595 | 5 499 | 27 106 | 1 577 | 34 182 | ||||||
At January 1, 2022 | 29 595 | 5 499 | 27 106 | 1 577 | 34 182 | ||||||
Impact of acquisitions of businesses | 161 | 1 209 | 1 209 | ||||||||
Reclassifications 1 | -1 429 | 1 403 | 26 | ||||||||
Additions 2 | 330 | 1 175 | 588 | 2 093 | |||||||
Disposals and derecognitions 3 | -28 | -95 | -3 | -2 | -100 | ||||||
Amortization charge 4 | -3 603 | -379 | -3 982 | ||||||||
Impairment charge 4 | -917 | -322 | -87 | -1 326 | |||||||
Currency translation effects | -427 | -176 | -243 | -13 | -432 | ||||||
At December 31, 2022 | 29 301 | 4 421 | 25 513 | 1 710 | 31 644 | ||||||
At December 31, 2022 | |||||||||||
Cost | 29 596 | 7 092 | 58 249 | 4 343 | 69 684 | ||||||
Accumulated amortization and impairment | -295 | -2 671 | -32 736 | -2 633 | -38 040 | ||||||
Net book value | 29 301 | 4 421 | 25 513 | 1 710 | 31 644 | ||||||
1 Reclassifications between various asset categories as a result of product launches of acquired in-process research and development and completion of software development | |||||||||||
2 Additions in continuing operations were USD 1 930 million. Note 31 provides disclosure of discontinued operations additions. | |||||||||||
3 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 | |||||||||||
4 Note 31 provides disclosure of discontinued operations amortization charge and impairment charge. |
Useful life | Income statement line for amortization and impairment charges | ||||
Currently marketed products | 5 to 20 years | "Cost of goods sold" | |||
Other (including software and technologies) | 3 to 15 years | In the relevant functional expense, and for technologies in "Cost of goods sold" or "Research and Development" | |||
(As a percentage) | |||
Terminal growth rate | 1.3 | ||
Discount rate (post-tax) | 8.0 | ||
(USD millions) | 2023 | 2022 | 2021 | ||||
Amortization charge | -3 960 | -3 760 | -3 665 | ||||
Impairment charge 2 | -3 048 | -1 301 | -376 | ||||
1 Note 31 provides disclosure of discontinued operations amortization charge and impairment charge. | |||||||
2 2023 impairment charge includes the write-down of IPR&D on the cessation of clinical development programs, including PPY988 (USD 1.0 billion), which was acquired with the 2022 acquisition of Gyroscope Therapeutics Holdings plc (see Note 2), VDT482 (USD 0.4 billion), and MBG453 (USD 0.3 billion), and the clinical research program NIZ985 (USD 0.3 billion); as well as the write-down of a currently marketed product by USD 0.3 billion to reflect the reduction in its recoverable amount. | |||||||
2022 intangible asset impairment charges include the write-down of IPR&D on the cessation of clinical development programs, including UNR844 (USD 0.6 billion). | |||||||
2021 intangible asset impairment charges includes the write down of IPR&D on the cessation of clinical development programs, including GTX312 (USD 0.2 billion). |
(USD millions) | Property, plant and equipment | Intangible assets | Pensions and other benefit obligations of employees | Inventories | Tax loss carry- forwards | Other assets, provisions and accruals | Total | ||||||||
Gross deferred tax assets at January 1, 2023 | 158 | 1 726 | 739 | 2 214 | 425 | 2 789 | 8 051 | ||||||||
Gross deferred tax liabilities at January 1, 2023 | -343 | -4 785 | -420 | -138 | -1 312 | -6 998 | |||||||||
Net deferred tax balance at January 1, 2023 | -185 | -3 059 | 319 | 2 076 | 425 | 1 477 | 1 053 | ||||||||
At January 1, 2023 | -185 | -3 059 | 319 | 2 076 | 425 | 1 477 | 1 053 | ||||||||
Net deferred tax balance related to discontinued operations 1 | 60 | 120 | -36 | -311 | -13 | -233 | -413 | ||||||||
Credited/(charged) to income | -13 | 1 344 | 32 | 386 | 173 | -47 | 1 875 | ||||||||
Credited/(charged) to other comprehensive income | -3 | 16 | -34 | -21 | |||||||||||
Impact of acquisitions of businesses | -2 | -530 | 111 | -19 | -440 | ||||||||||
Other movements | -50 | 85 | 13 | -28 | 17 | -30 | 7 | ||||||||
Net deferred tax balance at December 31, 2023 | -193 | -2 040 | 344 | 2 123 | 713 | 1 114 | 2 061 | ||||||||
Gross deferred tax assets at December 31, 2023 | 117 | 2 188 | 764 | 2 200 | 713 | 2 206 | 8 188 | ||||||||
Gross deferred tax liabilities at December 31, 2023 | -310 | -4 228 | -420 | -77 | -1 092 | -6 127 | |||||||||
Net deferred tax balance at December 31, 2023 | -193 | -2 040 | 344 | 2 123 | 713 | 1 114 | 2 061 | ||||||||
After offsetting the following amount of deferred tax assets and liabilities within the same tax jurisdiction, the balance amounts to: | 3 879 | ||||||||||||||
Deferred tax assets at December 31, 2023 | 4 309 | ||||||||||||||
Deferred tax liabilities at December 31, 2023 | -2 248 | ||||||||||||||
Net deferred tax balance at December 31, 2023 | 2 061 | ||||||||||||||
Gross deferred tax assets at January 1, 2022 | 125 | 1 307 | 1 026 | 2 273 | 374 | 2 727 | 7 832 | ||||||||
Gross deferred tax liabilities at January 1, 2022 | -381 | -4 704 | -591 | -148 | -1 335 | -7 159 | |||||||||
Net deferred tax balance at January 1, 2022 | -256 | -3 397 | 435 | 2 125 | 374 | 1 392 | 673 | ||||||||
At January 1, 2022 | -256 | -3 397 | 435 | 2 125 | 374 | 1 392 | 673 | ||||||||
Credited/(charged) to income 2 | 69 | 628 | -5 | -43 | 5 | 1 | 655 | ||||||||
Charged to equity | 1 | 1 | |||||||||||||
Credited/(charged) to other comprehensive income 2 | -2 | -104 | 63 | -43 | |||||||||||
Impact of acquisitions of businesses | -300 | 55 | 1 | -244 | |||||||||||
Other movements 2 | 4 | 10 | -7 | -6 | -9 | 19 | 11 | ||||||||
Net deferred tax balance at December 31, 2022 | -185 | -3 059 | 319 | 2 076 | 425 | 1 477 | 1 053 | ||||||||
Gross deferred tax assets at December 31, 2022 | 158 | 1 726 | 739 | 2 214 | 425 | 2 789 | 8 051 | ||||||||
Gross deferred tax liabilities at December 31, 2022 | -343 | -4 785 | -420 | -138 | -1 312 | -6 998 | |||||||||
Net deferred tax balance at December 31, 2022 | -185 | -3 059 | 319 | 2 076 | 425 | 1 477 | 1 053 | ||||||||
After offsetting the following amount of deferred tax assets and liabilities within the same tax jurisdiction, the balance amounts to: | 4 312 | ||||||||||||||
Deferred tax assets at December 31, 2022 | 3 739 | ||||||||||||||
Deferred tax liabilities at December 31, 2022 | -2 686 | ||||||||||||||
Net deferred tax balance at December 31, 2022 | 1 053 | ||||||||||||||
1 Represents the net deferred tax balance at January 1, 2023, related to the Sandoz business reported as discontinued operations. Notes 1, 2 and 31 provide disclosures related to discontinued operations. | |||||||||||||||
2 In 2022 the total related to continuing operations for the charge to income was USD 625 million, for the charge to other comprehensive income was USD -20 million and for the charge to other movements was USD 8 million. |
(USD millions) | Unrecognized | Recognized | 2023 total | ||||
One year | 23 | 44 | 67 | ||||
Two years | 12 | 15 | 27 | ||||
Three years | 67 | 79 | 146 | ||||
Four years | 22 | 569 | 591 | ||||
Five years | 1 569 | 580 | 2 149 | ||||
More than five years | 2 891 | 2 975 | 5 866 | ||||
Not subject to expiry | 687 | 2 258 | 2 945 | ||||
Total | 5 271 | 6 520 | 11 791 | ||||
(USD millions) | Unrecognized | Recognized | 2022 total | ||||
One year | 18 | 0 | 18 | ||||
Two years | 37 | 5 | 42 | ||||
Three years | 25 | 5 | 30 | ||||
Four years | 138 | 0 | 138 | ||||
Five years | 79 | 688 | 767 | ||||
More than five years | 3 880 | 2 380 | 6 260 | ||||
Not subject to expiry | 433 | 452 | 885 | ||||
Total | 4 610 | 3 530 | 8 140 | ||||
(USD millions) | 2023 | 2022 | 2021 | ||||
Tax losses carried forward that expired | 8 | 6 | 18 | ||||
(USD millions) | 2023 | 2022 | |||
Equity securities | 1 403 | 1 145 | |||
Debt securities | 29 | 37 | |||
Fund investments | 190 | 281 | |||
Total financial investments | 1 622 | 1 463 | |||
Long-term receivables from finance subleases | 104 | 59 | |||
Other long-term receivables | 214 | 197 | |||
Contingent consideration receivables 1 | 553 | 607 | |||
Long-term loans, advances and security deposits | 114 | 85 | |||
Total financial assets | 2 607 | 2 411 | |||
1 Note 30 provides additional disclosures related to contingent consideration. |
(USD millions) | 2023 | 2022 | |||
Deferred compensation plans | 439 | 419 | |||
Prepaid post-employment benefit plans 1 | 545 | 491 | |||
Other non-current assets | 215 | 200 | |||
Total other non-current assets | 1 199 | 1 110 | |||
1 Note 26 provides additional disclosures related to post-employment benefits. |
(USD millions) | 2023 | 2022 | |||
Raw material, consumables | 963 | 934 | |||
Work in progress | 3 502 | 3 673 | |||
Finished products | 1 448 | 2 568 | |||
Total inventories | 5 913 | 7 175 | |||
(USD billions) | 2023 | 2022 | 2021 | ||||
Cost of goods sold | -5.8 | -5.2 | -5.4 | ||||
(USD millions) | 2023 | 2022 | 2021 | ||||
Inventory provisions | -467 | -373 | -283 | ||||
Reversals of inventory provisions | 111 | 121 | 97 | ||||
(USD millions) | 2023 | 2022 | |||
Total gross trade receivables | 7 158 | 8 128 | |||
Provisions for doubtful trade receivables | -51 | -62 | |||
Total trade receivables | 7 107 | 8 066 | |||
(USD millions) | 2023 | 2022 | |||
Not overdue | 6 791 | 7 664 | |||
Past due for not more than one month | 146 | 190 | |||
Past due for more than one month but less than three months | 66 | 110 | |||
Past due for more than three months but less than six months | 64 | 62 | |||
Past due for more than six months but less than one year | 38 | 23 | |||
Past due for more than one year | 53 | 79 | |||
Provisions for doubtful trade receivables | -51 | -62 | |||
Total trade receivables | 7 107 | 8 066 | |||
(USD millions) | 2023 | 2022 | |||
US dollar (USD) | 3 520 | 3 709 | |||
Euro (EUR) | 1 138 | 1 426 | |||
Japanese yen (JPY) | 288 | 177 | |||
Russian ruble (RUB) | 240 | 430 | |||
Chinese yuan (CNY) | 231 | 155 | |||
British pound (GBP) | 146 | 176 | |||
Brazilian real (BRL) | 130 | 145 | |||
Australian dollar (AUD) | 96 | 137 | |||
Swiss franc (CHF) | 84 | 108 | |||
Canadian dollar (CAD) | 75 | 151 | |||
Other currencies | 1 159 | 1 452 | |||
Total trade receivables | 7 107 | 8 066 | |||
(USD millions) | 2023 | 2022 | |||
Commodities | 111 | 111 | |||
Debt securities | 9 | ||||
Time deposits and short-term investments with original maturity more than 90 days | 569 | 11 089 | |||
Derivative financial instruments | 355 | 204 | |||
Total marketable securities, commodities, time deposits and derivative financial instruments | 1 035 | 11 413 | |||
(USD millions) | 2023 | 2022 | |||
Current accounts | 3 207 | 2 877 | |||
Time deposits and short-term investments with original maturity less than 90 days | 10 186 | 4 640 | |||
Total cash and cash equivalents | 13 393 | 7 517 | |||
(USD millions) | 2023 | 2022 | |||
VAT receivable | 462 | 509 | |||
Withholding tax recoverable | 64 | 50 | |||
Prepaid expenses | 764 | 911 | |||
Contingent consideration receivable 1 | 65 | 43 | |||
Other receivables and current assets | 1 252 | 958 | |||
Total other current assets | 2 607 | 2 471 | |||
1 Note 30 provides additional disclosures related to contingent consideration. |
(USD millions) | Jan 1, 2021 | Movement in year | Dec 31, 2021 | Movement in year | Dec 31, 2022 | Movement in year | Dec 31, 2023 | ||||||||
Share capital 1 | 913 | -12 | 901 | -11 | 890 | -65 | 825 | ||||||||
Treasury shares | -53 | 5 | -48 | -44 | -92 | 51 | -41 | ||||||||
Outstanding share capital | 860 | -7 | 853 | -55 | 798 | -14 | 784 | ||||||||
1 At December 31, 2023, the Novartis AG share capital consists of registered shares with a nominal value of CHF 0.49 each. Prior to the 2023 capital decrease (see Note 19.3), Novartis AG share capital at December 31, 2022 and 2021 consists of registered shares with a nominal value of CHF 0.50 each. No authorized and conditional capital exists. |
2023 | 2022 | 2021 | |||||||||||||||||||
Number of outstanding shares (in millions) | Note | Total Novartis shares | Total treasury shares1 | Total outstanding shares | Total Novartis shares | Total treasury shares1 | Total outstanding shares | Total Novartis shares | Total treasury shares1 | Total outstanding shares | |||||||||||
Balance at beginning of year | 2 403.7 | -284.1 | 2 119.6 | 2 434.4 | -199.5 | 2 234.9 | 2 467.0 | -210.2 | 2 256.8 | ||||||||||||
Shares canceled for capital reduction 2 | -126.2 | 126.2 | -30.7 | 30.7 | -32.6 | 32.6 | |||||||||||||||
Shares acquired to be canceled 3 | -87.5 | -87.5 | -126.2 | -126.2 | -30.7 | -30.7 | |||||||||||||||
Other share purchases 4 | -1.6 | -1.6 | -1.4 | -1.4 | -1.5 | -1.5 | |||||||||||||||
Exercise of options and employee transactions 5 | 19.9 | 2.8 | 2.8 | 1.9 | 1.9 | 0.6 | 0.6 | ||||||||||||||
Equity-based compensation 5 | 10.4 | 10.4 | 10.4 | 10.4 | 9.6 | 9.6 | |||||||||||||||
Shares delivered to Alcon employees | 0.0 | 0.0 | 0.1 | 0.1 | |||||||||||||||||
Shares delivered to Sandoz employees | 0.3 | 0.3 | |||||||||||||||||||
Total movements | -126.2 | 50.6 | -75.6 | -30.7 | -84.6 | -115.3 | -32.6 | 10.7 | -21.9 | ||||||||||||
Balance at end of year | 2 277.5 | -233.5 | 2 044.0 | 2 403.7 | -284.1 | 2 119.6 | 2 434.4 | -199.5 | 2 234.9 | ||||||||||||
1 Approximately 93.8 million treasury shares (2022: 99.0 million; 2021: 102.5 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 2019 Annual General Meeting (AGM) for transactions after February 28, 2019, until March 2, 2021. Transactions after March 2, 2021, were executed under the CHF 10 billion share buyback authority approved at the 2021 AGM and the additional CHF 10 billion authority approved at the 2022 AGM. | |||||||||||||||||||||
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 | |||||||||||||||||||||
2023 | 2022 | 2021 | |||||
Dividend per share (in CHF) | 3.20 | 3.10 | 3.00 | ||||
Total dividend payment (in USD billion) | 7.3 | 7.5 | 7.4 | ||||
2023 | 2022 | 2021 | |||||||||||||
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 | -87.5 | -8 369 | -126.2 | -10 787 | -30.7 | -2 775 | |||||||||
Other share purchases 2 | -1.6 | -148 | -1.4 | -123 | -1.5 | -145 | |||||||||
Purchase of treasury shares | -89.1 | -8 517 | -127.6 | -10 910 | -32.2 | -2 920 | |||||||||
Exercise of options and employee transactions 3 | 19.9 | 2.8 | 146 | 1.9 | 88 | 0.6 | 39 | ||||||||
Equity-based compensation 4 | 10.4 | 904 | 10.4 | 854 | 9.6 | 745 | |||||||||
Shares delivered to Alcon employees | 0.0 | 5 | 0.1 | 17 | |||||||||||
Shares delivered to Sandoz employees | 0.3 | 30 | |||||||||||||
Total | -75.6 | -7 437 | -115.3 | -9 963 | -21.9 | -2 119 | |||||||||
1 Shares repurchased on the SIX Swiss Exchange second trading line under a CHF 10 billion share buyback authority approved at the 2019 Annual General Meeting (AGM) for transactions after February 28, 2019, until March 2, 2021. Transactions after March 2, 2021, were executed under the CHF 10 billion share buyback authority approved at the 2021 AGM and the additional CHF 10 billion authority approved at the 2022 AGM. | |||||||||||||||
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) | 2023 | 2022 | |||
Straight bonds | 20 585 | 22 341 | |||
Liabilities to banks and other financial institutions 1 | 42 | 144 | |||
Total, including current portion of non-current financial debt | 20 627 | 22 485 | |||
Less current portion of non-current financial debt | -2 191 | -2 241 | |||
Total non-current financial debt | 18 436 | 20 244 | |||
1 Average interest rate during the year 2023 2.6% (2022: 2.3%) |
Coupon | Currency | Notional amount (millions) | Issuance year | Maturity year | Issuer | Issue price | 2023 (USD millions) | 2022 (USD millions) | |||||||||
3.700% | USD | 500 | 2012 | 2042 | Novartis Capital Corporation, New York, United States | 98.325% | 491 | 490 | |||||||||
3.400% | USD | 2 150 | 2014 | 2024 | Novartis Capital Corporation, New York, United States | 99.287% | 2 150 | 2 147 | |||||||||
4.400% | USD | 1 850 | 2014 | 2044 | Novartis Capital Corporation, New York, United States | 99.196% | 1 828 | 1 827 | |||||||||
1.625% | EUR | 600 | 2014 | 2026 | Novartis Finance S.A., Luxembourg, Luxembourg | 99.697% | 663 | 638 | |||||||||
0.250% | CHF | 500 | 2015 | 2025 | Novartis AG, Basel, Switzerland | 100.640% | 595 | 541 | |||||||||
0.625% | CHF | 550 | 2015 | 2029 | Novartis AG, Basel, Switzerland | 100.502% | 654 | 595 | |||||||||
1.050% | CHF | 325 | 2015 | 2035 | Novartis AG, Basel, Switzerland | 100.479% | 387 | 352 | |||||||||
3.000% | USD | 1 750 | 2015 | 2025 | Novartis Capital Corporation, New York, United States | 99.010% | 1 745 | 1 742 | |||||||||
4.000% | USD | 1 250 | 2015 | 2045 | Novartis Capital Corporation, New York, United States | 98.029% | 1 222 | 1 221 | |||||||||
0.125% | EUR | 1 250 | 2016 | 2023 | Novartis Finance S.A., Luxembourg, Luxembourg | 99.127% | 1 330 | ||||||||||
0.625% | EUR | 500 | 2016 | 2028 | Novartis Finance S.A., Luxembourg, Luxembourg | 98.480% | 549 | 528 | |||||||||
3.100% | USD | 1 000 | 2017 | 2027 | Novartis Capital Corporation, New York, United States | 99.109% | 995 | 994 | |||||||||
1.125% | EUR | 600 | 2017 | 2027 | Novartis Finance S.A., Luxembourg, Luxembourg | 99.874% | 662 | 638 | |||||||||
0.500% | EUR | 750 | 2018 | 2023 | Novartis Finance S.A., Luxembourg, Luxembourg | 99.655% | 798 | ||||||||||
1.375% | EUR | 750 | 2018 | 2030 | Novartis Finance S.A., Luxembourg, Luxembourg | 99.957% | 828 | 797 | |||||||||
1.700% | EUR | 750 | 2018 | 2038 | Novartis Finance S.A., Luxembourg, Luxembourg | 99.217% | 823 | 792 | |||||||||
1.750% | USD | 1 000 | 2020 | 2025 | Novartis Capital Corporation, New York, United States | 99.852% | 999 | 998 | |||||||||
2.000% | USD | 1 250 | 2020 | 2027 | Novartis Capital Corporation, New York, United States | 99.909% | 1 247 | 1 246 | |||||||||
2.200% | USD | 1 500 | 2020 | 2030 | Novartis Capital Corporation, New York, United States | 99.869% | 1 495 | 1 494 | |||||||||
2.750% | USD | 1 250 | 2020 | 2050 | Novartis Capital Corporation, New York, United States | 97.712% | 1 216 | 1 215 | |||||||||
0.000% 1 | EUR | 1 850 | 2020 | 2028 | Novartis Finance S.A., Luxembourg, Luxembourg | 99.354% | 2 036 | 1 958 | |||||||||
Total straight bonds | 20 585 | 22 341 | |||||||||||||||
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, 2023, there is no indication that these 2025 Patient Access Targets will not be met. |
(USD millions) | 2023 | 2022 | |||
2023 | 2 241 | ||||
2024 | 2 191 | 2 147 | |||
2025 | 3 338 | 3 281 | |||
2026 | 663 | 638 | |||
2027 | 2 906 | 2 909 | |||
2028 | 2 585 | 2 485 | |||
After 2028 | 8 944 | 8 784 | |||
Total | 20 627 | 22 485 | |||
(USD millions) | 2023 | 2022 | |||
US dollar (USD) | 13 388 | 13 376 | |||
Euro (EUR) | 5 563 | 7 478 | |||
Japanese yen (JPY) | 76 | ||||
Swiss franc (CHF) | 1 635 | 1 488 | |||
Others | 41 | 67 | |||
Total | 20 627 | 22 485 | |||
(USD millions) | 2023 Balance sheet | 2023 Fair values | 2022 Balance sheet | 2022 Fair values | |||||
Straight bonds | 20 585 | 19 194 | 22 341 | 20 277 | |||||
Others | 42 | 42 | 144 | 144 | |||||
Total | 20 627 | 19 236 | 22 485 | 20 421 | |||||
(USD millions) | 2023 | 2022 | |||
Accrued liability for employee benefits: | |||||
Defined benefit pension plans 1 | 1 815 | 1 723 | |||
Other long-term employee benefits and deferred compensation | 546 | 554 | |||
Other post-employment benefits 1 | 369 | 362 | |||
Environmental remediation provisions | 518 | 535 | |||
Provisions for product liabilities, governmental investigations and other legal matters | 82 | 154 | |||
Contingent consideration 2 | 389 | 704 | |||
Other non-current liabilities | 804 | 874 | |||
Total provisions and other non-current liabilities | 4 523 | 4 906 | |||
1 Note 26 provides additional disclosures related to post-employment benefits. | |||||
2 Note 30 provides additional disclosures related to contingent consideration. |
(USD millions) | 2023 | 2022 | 2021 | ||||
January 1 | 588 | 616 | 809 | ||||
Provisions related to discontinued operations 1 | -53 | ||||||
Cash payments 2 | -4 | -6 | -169 | ||||
Releases of provisions 3 | -54 | - 18 | -105 | ||||
Additions to provisions 4 | 14 | 6 | 105 | ||||
Currency translation effects | 47 | -10 | -24 | ||||
December 31 | 538 | 588 | 616 | ||||
Less current provision | -20 | -53 | -49 | ||||
Non-current environmental remediation provisions at December 31 | 518 | 535 | 567 | ||||
1 Represents the environmental remediation provision at January 1, 2023, related to the Sandoz business reported as discontinued operations. Notes 1, 2 and 31 provide disclosures related to discontinued operations. | |||||||
2 Cash payments from continuing operations were USD 5 million in 2022, and USD 169 million in 2021. | |||||||
3 Releases of provisions credited to the consolidated income statement from continuing operations were USD 18 million in 2022, and USD 105 million in 2021. | |||||||
4 Additions to provisions charged to the consolidated income statement from continuing operations were USD 6 million in 2022, and USD 105 million in 2021. |
(USD millions) | Expected cash outflows | ||
Due within two years | 82 | ||
Due later than two years, but within five years | 158 | ||
Due later than five years, but within 10 years | 217 | ||
Due after 10 years | 81 | ||
Total environmental remediation provisions | 538 | ||
(USD millions) | 2023 | 2022 | 2021 | ||||
January 1 | 702 | 397 | 487 | ||||
Provisions related to discontinued operations 1 | -97 | ||||||
Impact of acquisitions of businesses | 4 | ||||||
Cash payments 2 | -448 | -105 | -292 | ||||
Releases of provisions 3 | -219 | -52 | -44 | ||||
Additions to provisions 4 | 170 | 466 | 251 | ||||
Currency translation effects | 16 | -8 | -5 | ||||
December 31 | 124 | 702 | 397 | ||||
Less current portion | -42 | -548 | -56 | ||||
Non-current product liabilities, governmental investigations and other legal matters provisions at December 31 | 82 | 154 | 341 | ||||
1 Represents the provisions for product liability, governmental investigations and other legal matters at January 1, 2023, related to the Sandoz business reported as discontinued operations. Notes 1, 2 and 31 provide disclosures related to discontinued operations. | |||||||
2 Cash payments from continuing operations were USD 67 million in 2022, and USD 64 million in 2021. | |||||||
3 Releases of provisions credited to the consolidated income statement from continuing operations were USD 38 million in 2022, and USD 18 million in 2021. | |||||||
4 Additions to provisions charged to the consolidated income statement from continuing operations were USD 435 million in 2022, and USD 190 million in 2021. |
(USD millions) | 2023 | 2022 | |||
Bank and other financial debt 1 | 624 | 863 | |||
Commercial paper | 3 269 | 2 772 | |||
Current portion of non-current financial debt | 2 191 | 2 241 | |||
Derivative financial instruments | 91 | 55 | |||
Total current financial debt and derivative financial instruments | 6 175 | 5 931 | |||
1 Weighted average interest rate during the year 2023 13.2% (2022: 9.7%) |
(USD millions) | 2023 | 2022 | |||
Taxes other than income taxes | 516 | 836 | |||
Restructuring provisions | 703 | 1 131 | |||
Accrued expenses for goods and services received but not invoiced | 1 026 | 1 059 | |||
Accruals for royalties | 844 | 767 | |||
Accrued interests on financial debt | 116 | 116 | |||
Provisions for deductions from revenue | 6 315 | 6 732 | |||
Accruals for compensation and benefits, including social security | 2 330 | 2 321 | |||
Environmental remediation provisions | 20 | 53 | |||
Deferred income | 98 | 123 | |||
Provisions for product liabilities, governmental investigations and other legal matters 1 | 42 | 548 | |||
Accrued share-based payments | 322 | 235 | |||
Contingent consideration 2 | 14 | 131 | |||
Other payables | 820 | 743 | |||
Total provisions and other current liabilities | 13 166 | 14 795 | |||
1 Note 21 provides additional disclosures related to legal provisions. | |||||
2 Note 30 provides additional disclosures related to contingent consideration. | |||||
(USD millions) | 2023 | 2022 | 2021 | ||||
January 1 | 6 732 | 6 481 | 6 256 | ||||
Provisions related to discontinued operations 1 | -1 415 | ||||||
Effect of currency translation, business combinations | 68 | -210 | -218 | ||||
Payments/utilizations 2 | -16 703 | -22 261 | -19 838 | ||||
Adjustments of prior years charged to income statement 3 | -206 | -322 | -245 | ||||
Current year income statement charge 4 | 17 798 | 23 072 | 20 413 | ||||
Change in provisions offset against gross trade receivables 5 | 41 | -28 | 113 | ||||
December 31 | 6 315 | 6 732 | 6 481 | ||||
1 Represents the provision for deductions from revenue at January 1, 2023, related to the Sandoz business reported as discontinued operations. Notes 1, 2 and 31 provide disclosures related to discontinued operations. | |||||||
2 Payments/utilizations from continuing operations were USD 14 691 million in 2022 and USD 12 473 million in 2021. | |||||||
3 Adjustments of prior years charged to income statement from continuing operations were USD 218 million in 2022, and USD 251 million in 2021. | |||||||
4 Current year income statement charge from continuing operations were USD 15 231 million in 2022 and USD 13 084 million in 2021. | |||||||
5 Change in provisions offset against gross trade receivables from continuing operations were USD 2 million in 2022 and USD -44 million in 2021. |
(USD millions) | 2023 | 2022 | 2021 | ||||
January 1 | 1 131 | 345 | 459 | ||||
Provisions related to discontinued operations 1 | -51 | ||||||
Additions to provisions 2 | 658 | 1 368 | 328 | ||||
Cash payments 3 | -816 | -468 | -344 | ||||
Releases of provisions 4 | -193 | -42 | -54 | ||||
Transfers 5 | -57 | -53 | - 27 | ||||
Currency translation effects | 31 | -19 | -17 | ||||
December 31 | 703 | 1 131 | 345 | ||||
1 Represents the restructuring provisions at January 1, 2023, related to the Sandoz business reported as discontinued operations. Notes 1, 2 and 31 provide disclosures related to discontinued operations. | |||||||
2 Additions to provisions charged to the consolidated income statement from continuing operations were USD 1.3 billion in 2022 and USD 266 million in 2021. | |||||||
3 Cash-payments from continuing operations were USD 421 million in 2022 and USD 259 million in 2021. | |||||||
4 Releases of provisions credited to the consolidated income statement from continuing operations were USD 33 million in 2022 and USD 29 million in 2021. | |||||||
5 Transfers from continuing operations were USD 53 million in 2022 and USD 24 million in 2021. | |||||||
(USD millions) | 2023 | 2022 | 2021 | ||||
Depreciation, amortization and impairments on: | |||||||
Property, plant and equipment | 1 006 | 1 374 | 1 277 | ||||
Right-of-use assets | 263 | 270 | 279 | ||||
Intangible assets | 7 008 | 5 061 | 4 041 | ||||
Financial assets 1 | 106 | 260 | -38 | ||||
Change in provisions and other non-current liabilities | 61 | 1 318 | 806 | ||||
Gains on disposal and other adjustments on property, plant and equipment; intangible assets; financial assets and other non-current assets, net | -180 | -308 | -646 | ||||
Equity-settled compensation expense | 865 | 791 | 700 | ||||
Loss/(income) from associated companies 2 | 13 | 11 | -15 337 | ||||
Income taxes | 551 | 1 128 | 1 625 | ||||
Net financial expense | 633 | 758 | 863 | ||||
Other | 43 | -32 | |||||
Total | 10 369 | 10 631 | -6 430 | ||||
1 Includes fair value changes | |||||||
2 2021 included the gain of USD 14.6 billion recognized from the divestment of the Company's investment in Roche (see Notes 2 and 5). |
(USD millions) | 2023 | 2022 | 2021 | ||||
Increase in inventories | -546 | -560 | -102 | ||||
Increase in trade receivables | -1 504 | -397 | -352 | ||||
Increase/(decrease) in trade payables | 479 | -181 | -111 | ||||
Change in other current and non-current assets | -125 | -84 | -179 | ||||
Change in other current liabilities | 1 327 | 426 | 671 | ||||
Total | -369 | -796 | -73 | ||||
(USD millions) | Note | 2023 | 2022 | 2021 | |||||
Net assets recognized as a result of acquisitions of businesses | 25 | -3 699 | -1 077 | -320 | |||||
Fair value of previously held equity interests | 26 | 21 | 42 | ||||||
Contingent consideration payables, net | 146 | 224 | 18 | ||||||
Payments, deferred consideration and other adjustments, net | -34 | 0 | 1 | ||||||
Cash flows used for acquisitions of businesses | -3 561 | -832 | -259 | ||||||
Cash flows from/(used for) divestments of businesses, net 1 | 3 | -8 | 54 | ||||||
Cash flows used for acquisitions and divestments of businesses, net | -3 558 | -840 | -205 | ||||||
1 In 2023, USD 3 million represented net cash inflows from divestments in previous years. | |||||||||
In 2022, USD 8 million net cash outflows from divestments of businesses included USD 20 million reduction to cash and cash equivalents due to the derecognized cash and cash equivalents following a loss of control of a company upon expiry of an option to purchase the company, partly offset by USD 12 million net cash inflows from business divestments in 2022 and in prior years. | |||||||||
In 2022, the net identifiable assets of divested businesses amounted to USD 139 million, comprised of non-current assets of USD 127 million, current assets of USD 70 million, including USD 62 million cash and cash equivalents and of non-current and current liabilities of USD 58 million. The deferred sale price receivable and other adjustments amounted to USD 19 million. | |||||||||
In 2021, USD 54 million included net cash inflows from divestments in previous years. |
2023 | 2022 | 2021 | |||||||||||||||||
(USD millions) | Financial debts | Derivative financial instruments | Lease liabilities | Financial debts | Derivative financial instruments | Lease liabilities | Financial debts | Derivative financial instruments | Lease liabilities | ||||||||||
January 1 | 26 120 | 55 | 1 789 | 29 129 | 68 | 1 896 | 35 850 | 194 | 2 005 | ||||||||||
Financial debts, derivative financial instruments and lease liabilities related to discontinued operations 1 | -214 | -1 | -98 | ||||||||||||||||
Increase in non-current financial debts 2 | 16 | 16 | |||||||||||||||||
Repayments of the current portion of non-current financial debts 3 | -2 223 | -2 575 | -2 162 | ||||||||||||||||
Change in current financial debts 4 | 546 | 295 | -3 524 | ||||||||||||||||
Payments of lease liabilities 5 | -258 | -295 | -316 | ||||||||||||||||
Interest payments for amounts included in lease liabilities classified as cash flows from operating activities 6 | -52 | -51 | -52 | ||||||||||||||||
New, modified and terminated leases, net | 349 | 222 | 253 | ||||||||||||||||
Impact of acquisitions and divestments of businesses, net | 51 | 12 | 1 | ||||||||||||||||
Changes in fair values, lease interest and other changes, net | -2 | 37 | 28 | -13 | 60 | 1 | -125 | 62 | |||||||||||
Amortization of bonds discount | 17 | 22 | 29 | ||||||||||||||||
Currency translation effects | 276 | 19 | -767 | -55 | -1 082 | -1 | -56 | ||||||||||||
December 31 | 24 520 | 91 | 1 828 | 26 120 | 55 | 1 789 | 29 129 | 68 | 1 896 | ||||||||||
Non-current 7 | 18 436 | 1 598 | 20 244 | 1 538 | 22 902 | 1 621 | |||||||||||||
Current 7 | 6 084 | 91 | 230 | 5 876 | 55 | 251 | 6 227 | 68 | 275 | ||||||||||
1 Represents the financial debts, derivative financial instruments and lease liabilities at January 1, 2023 related to the Sandoz business reported as discontinued operations. Notes 1, 2 and 31 provide disclosures related to discontinued operations. | |||||||||||||||||||
2 Increases in non-current financial debts included in the consolidated statements of cash flows from continuing operations were nil in 2022 and 2021. | |||||||||||||||||||
3 Repayments of the current portion of non-current financial debts were only recorded in the consolidated statements of cash flows from continuing operations. | |||||||||||||||||||
4 Changes in current financial debts included in the consolidated statements of cash flows from continuing operations were USD 252 million in 2022 (2021: USD 3 547 million) which included net cash outflows from interest-bearing accounts of employees payable on demand amounting to USD 1.7 billion. | |||||||||||||||||||
5 Payments of lease liabilities included in the consolidated statements of cash flows from continuing operations were USD 262 million in 2022 (2021: USD 278 million). | |||||||||||||||||||
6 Interest payments for amounts included in lease liabilities classified as cash flows from operating activities within the consolidated statements of cash flows from continuing operations were USD 48 million in 2022 (2021: USD 48 million). | |||||||||||||||||||
7 Note 11 provides additional disclosures related to lease liabilities, Note 20 provides additional disclosures related to non-current financial debt, and Note 22 provides additional disclosures related to current financial debt and derivative financial instruments. |
(USD millions) | 2023 | 2022 | 2021 | ||||
Property, plant and equipment | 18 | 13 | |||||
Right-of-use assets | 16 | 12 | |||||
Currently marketed products | 292 | ||||||
Acquired research and development | 2 931 | 1 209 | 262 | ||||
Other intangible assets | 15 | 98 | |||||
Deferred tax assets | 34 | 56 | 28 | ||||
Non-current financial and other assets | 164 | ||||||
Trade receivables and financial and other current assets | 183 | 5 | 1 | ||||
Cash and cash equivalents | 226 | 89 | 10 | ||||
Deferred tax liabilities | -474 | -300 | -74 | ||||
Current and non-current financial debts | -1 | ||||||
Current and non-current lease liabilities | -51 | -12 | |||||
Trade payables and other liabilities | -231 | -67 | -4 | ||||
Net identifiable assets acquired | 2 831 | 1 005 | 612 | ||||
Acquired cash and cash equivalents | -226 | -89 | -10 | ||||
Non-controlling interests | -105 | ||||||
Goodwill | 1 094 | 161 | 238 | ||||
Net assets recognized as a result of acquisitions of businesses 1 | 3 699 | 1 077 | 735 | ||||
1 In 2023 and 2022 all net assets recognized relate to business combinations of continuing operations. In 2021, net assets recognized as a result of acquisitions of businesses from continuing operations were USD 320 million. |
Pension plans | Other post-employment benefit plans | ||||||||
(USD millions) | 2023 | 2022 | 2023 | 2022 | |||||
Benefit obligation at January 1 | 17 533 | 23 583 | 422 | 560 | |||||
Benefit obligations related to discontinued operations 1 | -529 | -26 | |||||||
Current service cost | 260 | 348 | 9 | 12 | |||||
Interest cost | 504 | 249 | 22 | 17 | |||||
Past service costs and settlements | 28 | -40 | 1 | ||||||
Administrative expenses | 25 | 23 | |||||||
Remeasurement gains arising from changes in financial assumptions 2 | 1 350 | -5 046 | 13 | -94 | |||||
Remeasurement (gains)/losses arising from changes in demographic assumptions | -303 | -53 | -14 | ||||||
Experience-related remeasurement losses/(gains) | 23 | 199 | 44 | -28 | |||||
Currency translation effects | 1 304 | -650 | 4 | -2 | |||||
Benefit payments | -1 384 | -1 253 | -34 | -44 | |||||
Contributions of employees | 174 | 174 | |||||||
Effect of acquisitions, divestments or transfers | 52 | -1 | |||||||
Benefit obligation at December 31 | 19 037 | 17 533 | 440 | 422 | |||||
Fair value of plan assets at January 1 | 18 945 | 22 420 | 60 | 73 | |||||
Plan assets related to discontinued operations 1 | -386 | ||||||||
Interest income | 514 | 220 | 2 | 2 | |||||
Return on plan assets excluding interest income | 175 | -2 500 | 10 | -12 | |||||
Currency translation effects | 1 524 | -539 | |||||||
Novartis contributions | 408 | 424 | 33 | 41 | |||||
Contributions of employees | 174 | 174 | |||||||
Settlements | -35 | -1 | |||||||
Benefit payments | -1 384 | -1 253 | -34 | -44 | |||||
Effect of acquisitions, divestments or transfers | -1 | ||||||||
Fair value of plan assets at December 31 | 19 934 | 18 945 | 71 | 60 | |||||
Funded status | 897 | 1 412 | -369 | -362 | |||||
Limitation on recognition of fund surplus at January 1 | -2 644 | -62 | |||||||
Limitation on recognition of fund surplus at January 1, related to discontinued operations | 6 | ||||||||
Change in limitation on recognition of fund surplus | 740 | -2 504 | |||||||
Currency translation effects | -209 | -76 | |||||||
Interest income on limitation of fund surplus | -60 | -2 | |||||||
Limitation on recognition of fund surplus at December 31 3 | -2 167 | -2 644 | |||||||
Net liability in the balance sheet at December 31 | -1 270 | -1 232 | -369 | -362 | |||||
1 Represents the benefit obligation, respectively the plan assets at January 1, 2023, related to the Sandoz business reported as discontinued operations. Notes 1, 2 and 31 provide disclosures related to discontinued operations. | |||||||||
2 The remeasurement gains arising from changes in financial assumptions is driven mainly by changes in the actuarial discount rates used to determine the benefit obligation. | |||||||||
3 The most significant pension plans where the asset ceiling was required to be applied were in Switzerland and amounted to USD 2 112 million (2022: USD 2 587 million). |
Pension plans | Other post-employment benefit plans | ||||||||
(USD millions) | 2023 | 2022 | 2023 | 2022 | |||||
Net liability at January 1 | -1 232 | -1 225 | -362 | -487 | |||||
Less: net liability related to discontinued operations 1 | 149 | 26 | |||||||
Current service cost | -260 | -348 | -9 | -12 | |||||
Net interest expense | -50 | -31 | -20 | -15 | |||||
Administrative expenses | -25 | -23 | |||||||
Past service costs and settlements | -63 | 39 | -1 | ||||||
Remeasurements | -895 | 2 400 | -33 | 110 | |||||
Currency translation effects | 11 | 35 | -4 | 2 | |||||
Novartis contributions | 408 | 424 | 33 | 41 | |||||
Effect of acquisitions, divestments or transfers | -53 | 1 | |||||||
Change in limitation on recognition of fund surplus | 740 | -2 504 | |||||||
Net liability at December 31 | -1 270 | -1 232 | -369 | -362 | |||||
Amounts recognized in the consolidated balance sheet | |||||||||
Prepaid benefit cost | 545 | 491 | |||||||
Accrued benefit liability | -1 815 | -1 723 | -369 | -362 | |||||
1 Represents the net liability at January 1, 2023, related to the Sandoz business reported as discontinued operations. Notes 1, 2 and 31 provide disclosures related to discontinued operations |
2023 | 2022 | ||||||||||||||||
(USD millions) | Switzerland | United States | Rest of the world | Total | Switzerland | United States | Rest of the world | Total | |||||||||
Benefit obligation at December 31 | 13 453 | 2 574 | 3 010 | 19 037 | 11 824 | 2 746 | 2 963 | 17 533 | |||||||||
Thereof unfunded | 538 | 390 | 928 | 556 | 363 | 919 | |||||||||||
By type of member | |||||||||||||||||
Active | 5 557 | 389 | 847 | 6 793 | 4 799 | 431 | 931 | 6 161 | |||||||||
Deferred pensioners | 770 | 912 | 1 682 | 830 | 861 | 1 691 | |||||||||||
Pensioners | 7 896 | 1 415 | 1 251 | 10 562 | 7 025 | 1 485 | 1 171 | 9 681 | |||||||||
Fair value of plan assets at December 31 | 15 892 | 1 835 | 2 207 | 19 934 | 14 701 | 1 978 | 2 266 | 18 945 | |||||||||
Funded status | 2 439 | -739 | -803 | 897 | 2 877 | -768 | -697 | 1 412 | |||||||||
2023 | 2022 | ||||||||||||
(USD millions) | United States | Rest of the world | Total | United States | Rest of the world | Total | |||||||
Benefit obligation at December 31 | 356 | 84 | 440 | 346 | 76 | 422 | |||||||
Thereof unfunded | 285 | 84 | 369 | 286 | 76 | 362 | |||||||
By type of member | |||||||||||||
Active | 30 | 10 | 40 | 30 | 18 | 48 | |||||||
Deferred pensioners | 1 | 0 | 1 | 8 | 0 | 8 | |||||||
Pensioners | 325 | 74 | 399 | 308 | 58 | 366 | |||||||
Fair value of plan assets at December 31 | 71 | 0 | 71 | 60 | 0 | 60 | |||||||
Funded status | -285 | -84 | -369 | -286 | -76 | -362 | |||||||
Pension plans | Other post-employment benefit plans | ||||||||||||
2023 | 2022 | 2021 | 2023 | 2022 | 2021 | ||||||||
Weighted average assumptions used to determine benefit obligations at December 31 | |||||||||||||
Discount rate | 2.2% | 3.0% | 0.9% | 5.5% | 6.3% | 3.3% | |||||||
Expected rate of pension increase | 0.3% | 0.4% | 0.5% | ||||||||||
Expected rate of salary increase | 3.0% | 2.9% | 2.7% | ||||||||||
Interest on savings account | 1.3% | 2.2% | 0.5% | ||||||||||
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 2023 year-end defined benefit pension obligation | Change in 2022 year-end defined benefit pension obligation | |||
25 basis point increase in discount rate | -528 | -466 | |||
25 basis point decrease in discount rate | 557 | 491 | |||
One-year increase in life expectancy | 644 | 535 | |||
25 basis point increase in rate of pension increase | 366 | 316 | |||
25 basis point decrease in rate of pension increase | -61 | -63 | |||
25 basis point increase of interest on savings account | 43 | 38 | |||
25 basis point decrease of interest on savings account | -42 | -37 | |||
25 basis point increase in rate of salary increase | 41 | 37 | |||
25 basis point decrease in rate of salary increase | -42 | -37 | |||
2023 | 2022 | 2021 | |||||
Healthcare cost trend rate assumed for next year | 6.3% | 6.5% | 6.0% | ||||
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 | 2031 | 2031 | 2028 | ||||
Pension plans | |||||||||
(as a percentage) | Long-term target minimum | Long-term target maximum | 2023 | 2022 | |||||
Equity securities | 15 | 40 | 25 | 24 | |||||
Debt securities | 20 | 60 | 34 | 31 | |||||
Real estate | 5 | 30 | 19 | 21 | |||||
Alternative investments | 0 | 20 | 17 | 18 | |||||
Cash and other investments | 0 | 15 | 5 | 6 | |||||
Total | 100 | 100 | |||||||
December 31, 2023 | December 31, 2022 | ||||
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 | |||
Company contributions | |||||
2024 (estimated) | 388 | 39 | |||
Expected future benefit payments | |||||
2024 | 1 434 | 40 | |||
2025 | 1 317 | 40 | |||
2026 | 1 186 | 40 | |||
2027 | 1 159 | 39 | |||
2028 | 1 132 | 38 | |||
2029–2033 | 5 316 | 175 | |||
(USD millions) | 2023 | 2022 | 2021 | ||||
Contributions for defined contribution plans continuing operations | 477 | 483 | 484 | ||||
(USD millions) | 2023 | 2022 | 2021 | ||||
Expense related to equity-based participation plans | 1 142 | 982 | 910 | ||||
Liabilities arising from equity-based payment transactions | 322 | 235 | 253 | ||||
2023 | 2022 | ||||||||
Options (millions) | Weighted average exercise price (USD) | Options (millions) | Weighted average exercise price (USD) | ||||||
Options outstanding at January 1 | 0.5 | 66.0 | 1.7 | 63.6 | |||||
Sold or exercised | -0.5 | 66.0 | -1.2 | 62.6 | |||||
Outstanding at December 31 | 0.0 | 0.5 | 66.0 | ||||||
Exercisable at December 31 | 0.0 | 0.5 | 66.0 | ||||||
2023 | 2022 | ||||||||
ADR options (millions) | Weighted average exercise price (USD) | ADR options (millions) | Weighted average exercise price (USD) | ||||||
Options outstanding at January 1 | 1.1 | 66.1 | 4.0 | 64.4 | |||||
Sold or exercised | -1.1 | 66.1 | -2.9 | 63.7 | |||||
Outstanding at December 31 | 0.0 | 1.1 | 66.1 | ||||||
Exercisable at December 31 | 0.0 | 1.1 | 66.1 | ||||||
2023 | 2022 | ||||||||
Number of shares in millions | Weighted average fair value at grant date in USD | Number of shares in millions | Weighted average fair value at grant date in USD | ||||||
Annual Incentive | |||||||||
– RSU | 0.3 | 74.2 | 0.2 | 74.7 | |||||
– Restricted shares | 0.1 | 92.3 | 0.1 | 85.0 | |||||
Share savings plans | |||||||||
– RSU | 0.4 | 71.3 | 0.4 | 75.0 | |||||
– Shares | 1.0 | 92.3 | 1.2 | 85.0 | |||||
Novartis Employee Share Purchase Plan | 0.9 | 96.2 | 0.8 | 82.8 | |||||
Select North America (RSU) | 4.5 | 73.9 | 4.9 | 74.5 | |||||
Select outside North America | |||||||||
– RSU | 1.9 | 73.3 | 2.0 | 75.1 | |||||
– Restricted shares | 0.6 | 92.3 | 0.7 | 85.0 | |||||
Long-Term Performance Plan (PSU) | 1.8 | 80.6 | 1.7 | 82.0 | |||||
Other share awards | |||||||||
– RSU | 0.6 | 75.9 | 0.5 | 76.3 | |||||
– Restricted shares | 0.1 | 86.9 | |||||||
– Shares | 0.1 | 86.1 | |||||||
Executive Officers | Non-Executive Directors | Total | |||||||||||||||||
(USD millions) | 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | ||||||||||
Cash and other compensation | 18.0 | 25.0 | 20.3 | 4.9 | 4.6 | 4.7 | 22.9 | 29.6 | 25.0 | ||||||||||
Post-employment benefits | 2.1 | 2.8 | 2.5 | 2.1 | 2.8 | 2.5 | |||||||||||||
Equity-based compensation | 62.2 | 42.6 | 37.3 | 5.0 | 4.8 | 5.2 | 67.2 | 47.4 | 42.5 | ||||||||||
Total | 82.3 | 70.4 | 60.1 | 9.9 | 9.4 | 9.9 | 92.2 | 79.8 | 70.0 | ||||||||||
(USD millions) | 2023 | ||
2024 | 202 | ||
2025 | 269 | ||
2026 | 493 | ||
2027 | 316 | ||
2028 | 597 | ||
Thereafter | 4 206 | ||
Total | 6 083 | ||
2023 | |||||||||||
(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 at amortized costs | ||||||
Cash and cash equivalents | 17 | 13 343 | 50 | ||||||||
Time deposits and short-term investments with original maturity more than 90 days | 17 | 569 | |||||||||
Trade receivables | 16 | 7 107 | |||||||||
Other receivables and current assets | 18 | 1 127 | 124 | 1 | |||||||
Long-term financial investments - equity securities | 14 | 1 086 | 317 | ||||||||
Long-term financial investments - debt securities | 14 | 29 | |||||||||
Long-term financial investments - fund investments | 14 | 190 | |||||||||
Long-term loans, advances, security deposits and other long-term receivables | 14 | 432 | |||||||||
Associated companies at fair value through profit and loss | 101 | ||||||||||
Derivative financial instruments | 17 | 355 | |||||||||
Contingent consideration receivables | 14/18 | 618 | |||||||||
Total financial assets | 22 578 | 1 289 | 1 582 | ||||||||
Bank and other short-term financial debt | 22 | 624 | |||||||||
Commercial paper | 22 | 3 269 | |||||||||
Straight bonds | 20 | 20 585 | |||||||||
Long-term liabilities to banks and other financial institutions | 20 | 42 | |||||||||
Trade payables | 4 926 | ||||||||||
Contingent consideration liabilities (see Note 21/23) and other financial liabilities | 491 | ||||||||||
Derivative financial instruments | 22 | 91 | |||||||||
Lease liabilities | 11 | 1 828 | |||||||||
Total financial liabilities | 29 446 | 582 | 1 828 | ||||||||
2022 | |||||||||||
(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 at amortized costs | ||||||
Cash and cash equivalents | 17 | 7 517 | |||||||||
Time deposits and short-term investments with original maturity more than 90 days | 17 | 11 089 | |||||||||
Trade receivables | 16 | 8 066 | |||||||||
Other receivables and current assets | 18 | 958 | |||||||||
Marketable securities - debt securities | 17 | 9 | |||||||||
Long-term financial investments - equity securities | 14 | 828 | 317 | ||||||||
Long-term financial investments - debt securities | 14 | 37 | |||||||||
Long-term financial investments - fund investments | 14 | 281 | |||||||||
Long-term loans, advances, security deposits and other long-term receivables | 14 | 341 | |||||||||
Associated companies at fair value through profit and loss | 129 | ||||||||||
Derivative financial instruments | 17 | 204 | |||||||||
Contingent consideration receivables | 14 | 650 | |||||||||
Total financial assets | 27 971 | 874 | 1 581 | ||||||||
Bank and other short-term financial debt | 22 | 863 | |||||||||
Commercial paper | 22 | 2 772 | |||||||||
Straight bonds | 20 | 22 341 | |||||||||
Long-term liabilities to banks and other financial institutions | 20 | 144 | |||||||||
Trade payables | 5 146 | ||||||||||
Contingent consideration liabilities (see Note 21/23) and other financial liabilities | 1 067 | ||||||||||
Derivative financial instruments | 22 | 55 | |||||||||
Lease liabilities | 11 | 1 789 | |||||||||
Total financial liabilities | 31 266 | 1 122 | 1 789 | ||||||||
Contract or underlying principal amounts | Positive fair values | Negative fair values | |||||||||||
(USD millions) | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||
Forward foreign exchange rate contracts | 11 944 | 7 907 | 335 | 189 | -91 | -41 | |||||||
Commodity purchase contracts | 76 | 97 | 20 | 15 | |||||||||
Options on equity securities | 39 | -14 | |||||||||||
Total derivative financial instruments included in marketable securities and in current financial debts | 12 020 | 8 043 | 355 | 204 | -91 | -55 | |||||||
2023 | |||||||||
(USD millions) | EUR | USD | Other | Total | |||||
Forward foreign exchange rate contracts | 1 629 | 8 980 | 1 335 | 11 944 | |||||
Commodity purchase contracts | 61 | 15 | 76 | ||||||
Total derivative financial instruments | 1 690 | 8 995 | 1 335 | 12 020 | |||||
2022 | |||||||||
(USD millions) | EUR | USD | Other | Total | |||||
Forward foreign exchange rate contracts | 687 | 5 659 | 1 561 | 7 907 | |||||
Commodity purchase contracts | 80 | 17 | 97 | ||||||
Options on equity securities | 39 | 39 | |||||||
Total derivative financial instruments | 767 | 5 715 | 1 561 | 8 043 | |||||
2023 | |||||||||
(USD millions) | Level 1 | Level 2 | Level 3 | Total | |||||
Financial assets | |||||||||
Cash and cash equivalents | |||||||||
Debt securities 1 | 50 | 50 | |||||||
Total cash and cash equivalents at fair value | 50 | 50 | |||||||
Marketable securities | |||||||||
Derivative financial instruments | 355 | 355 | |||||||
Total marketable securities and derivative financial instruments at fair value | 355 | 355 | |||||||
Fund investments and equity securities current | 94 | 31 | 125 | ||||||
Current contingent consideration receivables | 65 | 65 | |||||||
Long-term financial investments | |||||||||
Debt and equity securities | 796 | 20 | 616 | 1 432 | |||||
Fund investments | 7 | 183 | 190 | ||||||
Non-current contingent consideration receivables | 553 | 553 | |||||||
Total long-term financial investments at fair value | 803 | 20 | 1 352 | 2 175 | |||||
Associated companies at fair value through profit and loss | 101 | 101 | |||||||
Financial liabilities | |||||||||
Current contingent consideration liabilities | -14 | -14 | |||||||
Other financial liabilities current | -88 | -88 | |||||||
Derivative financial instruments | -91 | -91 | |||||||
Total current financial liabilities at fair values | -91 | -102 | -193 | ||||||
Non-current contingent consideration liabilities | -389 | -389 | |||||||
Total non-current financial liabilities at fair value | -389 | -389 | |||||||
1 Includes short-term highly rated government-backed debt securities, with an original maturity of three months or less |
2022 | |||||||||
(USD millions) | Level 1 | Level 2 | Level 3 | Total | |||||
Financial assets | |||||||||
Marketable securities and derivative financial instruments | |||||||||
Debt securities | 9 | 9 | |||||||
Derivative financial instruments | 204 | 204 | |||||||
Total marketable securities and derivative financial instruments at fair value | 213 | 213 | |||||||
Current contingent consideration receivables | 43 | 43 | |||||||
Long-term financial investments | |||||||||
Debt and equity securities | 473 | 10 | 699 | 1 182 | |||||
Fund investments | 20 | 261 | 281 | ||||||
Non-current contingent consideration receivables | 607 | 607 | |||||||
Total long-term financial investments at fair value | 493 | 10 | 1 567 | 2 070 | |||||
Associated companies at fair value through profit and loss | 129 | 129 | |||||||
Financial liabilities | |||||||||
Contingent consideration liabilities | -131 | -131 | |||||||
Derivative financial instruments | -55 | -55 | |||||||
Total current financial liabilities at fair value | -55 | -131 | -186 | ||||||
Non-current contingent consideration liabilities | -704 | -704 | |||||||
Other financial liabilities | -232 | -232 | |||||||
Total non-current financial liabilities at fair value | -936 | -936 | |||||||
2023 | |||||||||||||
(USD millions) | Associated companies at fair value through profit and loss | Fund investments | Debt and equity securities | Contingent consideration receivables | Contingent consideration liabilities | Other financial liabilities | |||||||
January 1 | 129 | 261 | 699 | 650 | -835 | -232 | |||||||
Impact from discontinued operations 1 | 101 | ||||||||||||
Fair value gains and other adjustments, including from divestments recognized in the consolidated income statement | 4 | 1 | 11 | 48 | 552 | ||||||||
Fair value losses (including impairments and amortizations) and other adjustments recognized in the consolidated income statement | -28 | -48 | -63 | -31 | -65 | -9 | |||||||
Fair value adjustments recognized in the consolidated statement of comprehensive income, including currency translation effects | 2 | 3 | 71 | -32 | |||||||||
Purchases | 9 | 14 | 82 | -180 | |||||||||
Cash receipts and payments | -49 | 20 | 153 | ||||||||||
Disposals | -6 | -47 | -80 | 36 | |||||||||
Reclassification | -9 | -73 | |||||||||||
December 31 | 101 | 184 | 647 | 618 | -403 | -88 | |||||||
Total of fair value gains and losses recognized in the consolidated income statement for assets and liabilities held at December 31, 2023 | -24 | -47 | -52 | 17 | 487 | -9 | |||||||
1 Represents the carrying values associated with Level 3 financial instruments at January 1, 2023, related to the Sandoz business reported as discontinued operations. Notes 1, 2 and 31 provide disclosures related to discontinued operations. |
2022 | |||||||||||||
(USD millions) | Associated companies at fair value through profit and loss | Fund investments | Debt and equity securities | Contingent consideration receivables | Contingent consideration liabilities | Other financial liabilities | |||||||
January 1 | 192 | 338 | 617 | 641 | -1 075 | -19 | |||||||
Fair value gains and other adjustments, including from divestments recognized in the consolidated income statement | 4 | 35 | 53 | 530 | 15 | ||||||||
Fair value losses (including impairments and amortizations) and other adjustments recognized in the consolidated income statement | -63 | -78 | -84 | -114 | -18 | ||||||||
Fair value adjustments recognized in the consolidated statement of comprehensive income, including currency translation effects | 24 | 11 | |||||||||||
Purchases | 4 | 11 | 160 | -231 | -238 | ||||||||
Cash receipts and payments | -44 | 44 | 28 | ||||||||||
Disposals | -12 | -13 | |||||||||||
Reclassification | -4 | -2 | -40 | ||||||||||
December 31 | 129 | 261 | 699 | 650 | -835 | -232 | |||||||
Total of fair value gains and losses recognized in the consolidated income statement for assets and liabilities held at December 31, 2022 | -63 | -74 | -49 | 53 | 416 | -3 | |||||||
(USD millions) | 2023 | 2022 | |||
Listed equity securities | 861 | 438 | |||
Non-listed equity securities | 349 | 390 | |||
Total equity securities | 1 210 | 828 | |||
2023 | |||||||||||||
(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 and accrued interest | 12 | 516 | 41 | 569 | |||||||||
Commodities | 111 | 111 | |||||||||||
Derivative financial instruments | 24 | 310 | 1 | 20 | 355 | ||||||||
Cash and cash equivalents | 7 641 | 5 752 | 13 393 | ||||||||||
Total current financial assets | 7 677 | 6 578 | 42 | 131 | 14 428 | ||||||||
Non-current liabilities | |||||||||||||
Financial debt | -9 492 | -8 944 | -18 436 | ||||||||||
Financial debt - undiscounted | -9 522 | -9 050 | -18 572 | ||||||||||
Total non-current financial debt | -9 492 | -8 944 | -18 436 | ||||||||||
Current liabilities | |||||||||||||
Financial debt | -3 328 | -372 | -2 384 | -6 084 | |||||||||
Financial debt - undiscounted | -3 328 | -372 | -2 384 | -6 084 | |||||||||
Derivative financial instruments | -43 | -39 | -9 | -91 | |||||||||
Total current financial debt | -3 371 | -411 | -2 393 | -6 175 | |||||||||
Net debt | 4 306 | 6 167 | -2 351 | -9 492 | -8 813 | -10 183 | |||||||
2022 | |||||||||||||
(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 and accrued interest | 4 142 | 6 911 | 36 | 9 | 11 098 | ||||||||
Commodities | 111 | 111 | |||||||||||
Derivative financial instruments | 23 | 147 | 19 | 15 | 204 | ||||||||
Cash and cash equivalents | 4 011 | 3 506 | 7 517 | ||||||||||
Total current financial assets | 8 176 | 10 564 | 55 | 135 | 18 930 | ||||||||
Non-current liabilities | |||||||||||||
Financial debt | -8 975 | -11 269 | -20 244 | ||||||||||
Financial debt - undiscounted | -9 002 | -11 394 | -20 396 | ||||||||||
Total non-current financial debt | -8 975 | -11 269 | -20 244 | ||||||||||
Current liabilities | |||||||||||||
Financial debt | -3 215 | -146 | -2 515 | -5 876 | |||||||||
Financial debt - undiscounted | -3 215 | -146 | -2 517 | -5 878 | |||||||||
Derivative financial instruments | -38 | -13 | -4 | -55 | |||||||||
Total current financial debt | -3 253 | -159 | -2 519 | -5 931 | |||||||||
Net debt | 4 923 | 10 405 | -2 464 | -8 975 | -11 134 | -7 245 | |||||||
2023 | |||||||||
(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 | -4 329 | -6 604 | -556 | -11 489 | |||||
Potential inflows in various currencies - from financial derivative assets | 4 311 | 6 841 | 623 | 11 775 | |||||
2022 | |||||||||
(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 | -2 029 | -4 598 | -316 | -6 943 | |||||
Potential inflows in various currencies - from financial derivative assets | 2 029 | 4 712 | 321 | 7 062 | |||||
2023 | |||||||||||
(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 financial debt, including current portion | -64 | -372 | -1 258 | -3 376 | -5 070 | ||||||
Lease liabilities 1 | -65 | -165 | -635 | -963 | -1 828 | ||||||
Trade payables | -4 793 | -133 | -4 926 | ||||||||
Contingent consideration liabilities | -14 | -205 | -184 | -403 | |||||||
1 Note 11 provides additional disclosures related to lease liabilities. |
2022 | |||||||||||
(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 financial debt, including current portion | -64 | -412 | -1 432 | -3 624 | -5 532 | ||||||
Lease liabilities 1 | -71 | -180 | -616 | -922 | -1 789 | ||||||
Trade payables | -5 020 | -126 | -5 146 | ||||||||
Contingent consideration liabilities | -16 | -115 | -437 | -267 | -835 | ||||||
1 Note 11 provides additional disclosures related to lease liabilities. |
(USD millions) | 2023 | 2022 | |||
5% increase in foreign currency exchange rates against USD | 3 | -6 | |||
5% decrease in foreign currency exchange rates against USD | -3 | 7 | |||
(USD millions) | 2023 | 2022 | |||
5% increase in foreign currency exchange rates against USD | 97 | 93 | |||
5% decrease in foreign currency exchange rates against USD | -102 | -98 | |||
(USD millions) | 2023 | 2022 | |||
15% increase in equity prices | 91 | 109 | |||
15% decrease in equity prices | -91 | -109 | |||
(USD millions) | 2023 | 2022 | |||
15% increase in equity prices | 182 | 124 | |||
15% decrease in equity prices | -182 | -124 | |||
(USD millions) | 20231 | 2022 | 2021 | ||||
Net sales to third parties from discontinued operations | 7 128 | 9 160 | 9 650 | ||||
Sales to continuing segments | 300 | 212 | 184 | ||||
Net sales from discontinued operations | 7 428 | 9 372 | 9 834 | ||||
Other revenues | 19 | 28 | 58 | ||||
Cost of goods sold | -4 044 | -4 937 | -5 121 | ||||
Gross profit from discontinued operations | 3 403 | 4 463 | 4 771 | ||||
Selling, general and administration | -1 728 | -2 060 | -2 059 | ||||
Research and development | -671 | -824 | -899 | ||||
Other income | 56 | 109 | 232 | ||||
Other expense | -795 | -437 | -412 | ||||
Operating income from discontinued operations | 265 | 1 251 | 1 633 | ||||
Income from associated companies | 2 | 2 | 2 | ||||
Interest expense | -33 | -37 | -24 | ||||
Other financial income and expense | -20 | -22 | -4 | ||||
Income before taxes from discontinued operations | 214 | 1 194 | 1 607 | ||||
Income taxes 2 | 208 | -288 | -494 | ||||
Net income from discontinued operations before gain on distribution of Sandoz Group AG to Novartis AG shareholders | 422 | 906 | 1 113 | ||||
Gain on distribution of Sandoz Group AG to Novartis AG shareholders 3 | 5 860 | ||||||
Net income from discontinued operations | 6 282 | 906 | 1 113 | ||||
1 The net income from discontinued operations for 2023 is for the period from January 1, 2023, to the October 3, 2023, Distribution date. | |||||||
2 The tax rate in 2023 was impacted by non-recurring items such as tax benefits arising from intercompany transactions to effect the spin-off of the Sandoz business, net decreases in uncertain tax positions of the Sandoz business and the favorable settlement of a tax matter related to the Alcon business, which was spun-off in 2019. Excluding these impacts, the tax rate would have been 31.2% in 2023, compared to 24.1% and 30.7% in 2022 and 2021, respectively. The tax rate in 2023 is higher than 2022 primarily due to a change in profit mix between years. | |||||||
3 See Note 2 for further details on the non-taxable, non-cash gain on distribution of Sandoz Group AG to Novartis AG shareholders. |
(USD millions) | Oct 3, 2023 | ||
Property, plant and equipment | 1 447 | ||
Right-of-use assets | 133 | ||
Goodwill | 7 424 | ||
Intangible assets other than goodwill | 1 481 | ||
Deferred tax assets | 624 | ||
Financial assets, investments in associated companies and other non-current assets | 142 | ||
Inventories | 2 565 | ||
Trade receivables and other current assets | 2 935 | ||
Cash and cash equivalents | 686 | ||
Deferred tax liabilities | -270 | ||
Current and non-current lease liabilities | -139 | ||
Current and non-current financial debts | -3 691 | ||
Trade payables, provisions, current income tax liabilities and other liabilities | -4 690 | ||
Net assets derecognized | 8 647 | ||
(USD millions unless indicated otherwise) | 20231 | 2022 | 2021 | ||||
Interest income | 2 | 2 | 1 | ||||
Depreciation of property, plant and equipment | -144 | -196 | -203 | ||||
Depreciation of right-of-use assets | -32 | -33 | -39 | ||||
Amortization of intangible assets | -171 | -222 | -238 | ||||
Impairment charges on property, plant and equipment | -5 | -3 | -68 | ||||
Impairment charges on right-of-use assets | -8 | ||||||
Impairment charges on intangible assets | -44 | -25 | -27 | ||||
Impairment reversals of property, plant and equipment | 1 | 3 | 59 | ||||
Additions to restructuring provisions | -27 | -40 | -62 | ||||
Equity-based compensation expense related to Novartis equity-based participation plans | -60 | -66 | -69 | ||||
1 2023 amounts are for the period from January 1, 2023, to the October 3, 2023, Distribution date. |
(USD millions) | 20231 | 2022 | |||
Additions to property, plant and equipment | 245 | 289 | |||
Additions to right-of-use assets | 66 | 32 | |||
Additions to goodwill and intangible assets | 221 | 163 | |||
1 The additions for 2023 are for the period from January 1, 2023, to the October 3, 2023, Distribution date. |
(USD millions) | 2023 | 2022 | 2021 | ||||
Payments out of provision for transaction cost attributable to the spin-off of the Sandoz business | -52 | ||||||
Derecognized cash and cash equivalents attributable to the spin-off of the Sandoz business | -686 | ||||||
Other cash flows used in investing activities, net | -385 | -436 | -689 | ||||
Net cash flows used in investing activities from discontinued operations | -1 123 | -436 | -689 | ||||
As at December 31, 2023 | Share capital1 | Equity interest | |||||||
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% | ||||
Austria | |||||||||
Novartis Holding GmbH | Vienna | EUR | 35 000 | 100% | |||||
Novartis Pharmaceutical Manufacturing GmbH | Langkampfen | EUR | 763 070 | 100% | |||||
Novartis Pharma GmbH | Vienna | EUR | 1.1 | m | 100% | ||||
Bangladesh | |||||||||
Novartis (Bangladesh) Limited | Gazipur | BDT | 162.5 | m | 60% | ||||
Belgium | |||||||||
Novartis Pharma NV | Vilvoorde | EUR | 7.1 | m | 100% | ||||
Alcon - Couvreur NV | Puurs | EUR | 110.6 | m | 100% | ||||
Bermuda | |||||||||
Novartis Investment Ltd. | Hamilton 2 | 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 | 507.1 | m | 100% | ||||
Canada | |||||||||
Novartis Pharmaceuticals Canada Inc. | Montreal, Quebec | CAD | 420 717 | 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% | ||||
Colombia | |||||||||
Novartis de Colombia S.A. | Santafé de Bogotá | COP | 7.9 | bn | 100% | ||||
Czech Republic | |||||||||
Novartis s.r.o. | Prague | CZK | 51.5 | m | 100% | ||||
Denmark | |||||||||
Novartis Healthcare A/S | Copenhagen | DKK | 14.0 | m | 100% | ||||
Dominican Republic | |||||||||
Novartis Caribe, S.A. | Santo Domingo | DOP | 20.0 | m | 100% | ||||
Ecuador | |||||||||
Novartis Ecuador S.A. | Quito | USD | 4.0 | m | 100% | ||||
Egypt | |||||||||
Novartis Pharma S.A.E. | Cairo | EGP | 2.1 | bn | 99.98% | ||||
Finland | |||||||||
Novartis Finland Oy | Espoo | EUR | 459 000 | 100% | |||||
France | |||||||||
Novartis Groupe France S.A.S. | Rueil-Malmaison | EUR | 903.0 | m | 100% | ||||
Novartis Pharma S.A.S. | Rueil-Malmaison | EUR | 43.4 | m | 100% | ||||
Advanced Accelerator Applications S.A. | Rueil-Malmaison | EUR | 9.6 | m | 99.23% | ||||
Advanced Accelerator Applications Molecular Imaging France | Saint-Genis-Pouilly | EUR | 7.5 | m | 99.23% | ||||
Germany | |||||||||
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% | ||||
Novartis Pharma Vertriebs GmbH | Nuremberg | EUR | 25 000 | 100% | |||||
Greece | |||||||||
Novartis (Hellas) S.A.C.I. | Metamorphosis / Athens | EUR | 233.9 | m | 100% | ||||
As at December 31, 2023 | Share capital1 | Equity interest | |||||||
Hungary | |||||||||
Novartis Hungary Healthcare Limited Liability Company | Budapest | HUF | 545.6 | m | 100% | ||||
India | |||||||||
Novartis India Limited | Mumbai | INR | 123.5 | m | 70.68% | ||||
Novartis Healthcare Private Limited | Mumbai | INR | 60.0 | 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 | Cork City | EUR | 100 | 100% | |||||
Israel | |||||||||
Novartis Israel Ltd. | Tel Aviv | ILS | 1 000 | 100% | |||||
Italy | |||||||||
Novartis Farma S.p.A. | Milan | EUR | 18.2 | m | 100% | ||||
Advanced Accelerator Applications (Italy) S.r.l. | Pozzilli | EUR | 119 000 | 99.23% | |||||
Japan | |||||||||
Novartis Pharma K.K. | Tokyo | JPY | 100.0 | m | 100% | ||||
Ciba-Geigy Japan Limited | Tokyo | JPY | 100.0 | m | 100% | ||||
Latvia | |||||||||
Novartis Baltics SIA | Riga | EUR | 3.0 | m | 100% | ||||
Luxembourg | |||||||||
Novartis Investments S.à r.l. | Luxembourg City 2 | USD | 100.0 | m | 100% | ||||
Novartis Finance S.A. | Luxembourg City | USD | 100 000 | 100% | |||||
Malaysia | |||||||||
Novartis Corporation (Malaysia) Sdn. Bhd. | Petaling Jaya | MYR | 3.3 | m | 100% | ||||
Mexico | |||||||||
Novartis Farmacéutica, S.A. de C.V. | Mexico City | MXN | 206.7 | 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% | ||||
Aduro Netherlands Coöperatief U.A. | Rosmalen 4 | -- | -- | -- | |||||
Aduro Biotech Holdings Europe B.V. | Rosmalen | EUR | 46 216 | 100% | |||||
IDB Holland BV | Baarle-Nassau | EUR | 18 000 | 99.23% | |||||
New Zealand | |||||||||
Novartis New Zealand Ltd | Auckland | NZD | 820 000 | 100% | |||||
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% | |||||
Philippines | |||||||||
Novartis Healthcare Philippines, Inc. | Makati City | PHP | 298.8 | m | 100% | ||||
Poland | |||||||||
Novartis Poland Sp. z o.o. | Warsaw | PLN | 44.2 | 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% | ||||
Romania | |||||||||
Novartis Pharma Services Romania S.R.L. | Bucharest | RON | 3.0 | m | 100% | ||||
Sandoz S.R.L. | Targu-Mures | RON | 119.5 | m | 100% | ||||
Russian Federation | |||||||||
Novartis Pharma LLC | Moscow | RUB | 20.0 | m | 100% | ||||
Novartis Neva LLC | St. Petersburg | RUB | 500 | m | 100% | ||||
Saudi Arabia | |||||||||
Novartis Saudi Company | Riyadh | SAR | 30.0 | m | 100% | ||||
As at December 31, 2023 | Share capital1 | Equity interest | |||||||
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 | |||||||||
Novartis farmacevtska proizvodnja d.o.o. | Ljubljana | EUR | 7 500 | 100% | |||||
South Africa | |||||||||
Novartis South Africa (Pty) Ltd | Midrand | ZAR | 86.3 | m | 100% | ||||
South Korea | |||||||||
Novartis Korea Ltd. | Seoul | KRW | 24.5 | bn | 100% | ||||
Spain | |||||||||
Novartis Farmacéutica, S.A. | Barcelona | EUR | 63.0 | m | 100% | ||||
Advanced Accelerator Applications Iberica, S. L. U. | Esplugues de Llobregat | EUR | 22.6 | m | 99.23% | ||||
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 2 | 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 3 | -- | -- | -- | |||||
Novartis Stiftung für Kaderausbildung | Basel 3 | -- | -- | -- | |||||
Novartis-Mitarbeiterbeteiligungsstiftung | Basel 3 | -- | -- | -- | |||||
Novartis Stiftung für Mensch und Umwelt | Basel 3 | -- | -- | -- | |||||
Stiftung der Novartis AG für Erziehung, Ausbildung und Bildung | Basel 3 | -- | -- | -- | |||||
Novartis Overseas Investments AG | Basel | CHF | 1.0 | m | 100% | ||||
Japat AG | Basel | CHF | 100 000 | 100% | |||||
Novartis Pharma AG | Basel 2 | 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% | ||||
Cellerys AG | Schlieren | CHF | 129 630 | 20% | |||||
Novartis Innovative Therapies AG | Risch | CHF | 100 000 | 100% | |||||
Advanced Accelerator Applications International SA | Geneva | CHF | 9.3 | m | 99.23% | ||||
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 | 448.0 | m | 100% | ||||
As at December 31, 2023 | Share capital1 | Equity interest | |||||||
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 | 99.23% | |||||
Neutec Pharma Limited | London | GBP | 7.7 | m | 100% | ||||
Gyroscope Therapeutics Limited | London | GBP | 1 492 | 100% | |||||
United States of America | |||||||||
Novartis Corporation | East Hanover, NJ | USD | 72.2 | m | 100% | ||||
Novartis Finance Corporation | East Hanover, NJ 2 | 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 3 | -- | -- | -- | |||||
Novartis Pharmaceuticals Corporation | East Hanover, NJ 2 | USD | 650 | 100% | |||||
Advanced Accelerator Applications USA, Inc. | Millburn, NJ | USD | 1 | 99.23% | |||||
Novartis Gene Therapies, Inc. | Bannockburn, IL | USD | 1 | 100% | |||||
Novartis Technology LLC | East Hanover, NJ 4 | -- | -- | -- | |||||
Novartis Institutes for BioMedical Research, Inc. | Cambridge, MA | USD | 1 | 100% | |||||
Novartis Manufacturing LLC | East Hanover, NJ 4 | -- | -- | -- | |||||
Cadent Therapeutics, Inc. | Cambridge, MA | USD | 0.1 | 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% | |||||
DTX Pharma, Inc. | San Diego, CA | USD | 1 | 100% | |||||
Chinook Therapeutics, Inc. | Seattle, WA | USD | 1 | 100% | |||||
Chinook Therapeutics U.S., Inc. | Seattle, WA | USD | 1 | 100% | |||||
Venezuela | |||||||||
Novartis de Venezuela, S.A. | Caracas | VES | 0 | 100% | |||||
Vietnam | |||||||||
Novartis Vietnam Company Limited | Ho Chi Minh City | VND | 70 | bn | 100% | ||||
In addition, the Company 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, Cameroon, Croatia, Ghana, Guatemala, Ivory Coast, Kenya, Kuwait, Nigeria, Peru, Senegal, Ukraine and Uruguay. | |||||||||
1 Share capital may not reflect the taxable share capital and does not include any paid-in surplus. | |||||||||
2 Significant subsidiary under SEC Regulation S-X Rule 1-02(w) | |||||||||
3 Fully consolidated Foundation | |||||||||
4 Fully consolidated entity | |||||||||
m = million; bn = billion |
Report of Independent Registered Public Accounting Firm
Report of Independent Registered Public Accounting Firm