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Published on 22 October 2009

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Novartis excels in product momentum and operational performance

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Novartis delivers strong new product momentum and operational performance in first nine months of 2009

The sustained underlying business expansion in Pharmaceuticals, with net sales rising 11% in local currencies (+4% in US dollars), strengthened the Group’s healthcare portfolio in the first nine months of 2009.

Group net sales rose 8% in local currencies, but were steady at USD 31.3 billion in US dollars. Sandoz (+4% lc) and Consumer Health (+3% lc) also provided contributions.

Top-performing regions included Europe (USD 12.9 billion, +7% lc) and the United States (USD 10.1 billion, +5% lc) as well as the top six emerging markets (USD 2.8 billion, +16% lc).

Higher volumes provided seven percentage points of growth, while net price changes added one percentage point.

However, the stronger US dollar compared to the 2008 period offset the underlying business expansion by eight percentage points.

Operating income rose 1% to USD 7.3 billion, and at a faster 11% pace when adjusted for the impact of currency movements, exceptional items and amortization of intangible assets in both periods.

Pharmaceuticals, where operating income rose 8%, and productivity gains in all divisions provided resources for business expansion and led to the Group operating income margin improving 0.2 percentage points to 23.4% of net sales.

Net income, however, fell 8% to USD 6.1 billion from the impact of Alcon-related financing costs as well as significantly reduced income from investments in Roche and Alcon in the third quarter of 2009 and a higher tax rate.

Basic earnings per share (EPS) fell to USD 2.69 in the first nine months of 2009 from USD 2.93 in the 2008 period.

Novartis



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