Novartis Ag · SIX:NOVN
Novartis — H1 2002 Earnings Presentation
20 slides from Novartis's earnings presentation, Jul 23, 2002
Slide 1: SMI Index performance
SRPaS zo +9% -T% -14% ec01 Feb 02 Mar 02 May 02 June 02 SMI Index
Slide 2: Sales growth and sales by region
Sales growth in % (LC) Sales by region in% Pharmaceuticals 15 Generics 22 Asia/Australia/ Africa 16% OTC } AnimalHeaith [| _]10 cee Medical Nutrition ] 2 Infant & Baby im CIBA Vision 8 fre GROUP L 13 42%
Slide 3: Sales growth drivers: volume, price, acquisitions, currency
14% 12% 10% 8% 6% 4% 2% 0% 11% Volume Price Acq./Div. Currency
Slide 4: Integration costs associated with Wesley Jessen acquisition
Including integration costs associated with the Wesley Jessen acquisition of CHF 31m in 2001.
Slide 5: Sandimmun/Neoral total prescriptions
Total Prescriptions Months since launch 6 12 18 24 30 Sandimmun®/Neoral® Azathioprine * H1 sales worldwide: CHF 877 m, +0% in LC * Continued slow generic erosion in US * Little impact from generics in EU
Slide 6: Cardiovascular market share
Source: IMS * Cardiovascular: Antihypertensives, Statins, Fibrates, OAD
Slide 7: US TRx share in ARB segment
Source: IMS weekly, US TRx share in ARB segment
Slide 8: Lotrel H1 sales and share growth
• H1 sales CHF 486 m, +46% (LC) • Share growth continues 4.0% NRx 1 (+0.5% pts) in Hypertension • Lotrel 10/20 approved • Better blood pressure control, less edema than Norvasc 2 • Powerful blood pressure control, with the benefits of an ACE • Convenience for patient 1 Source: IMS weekly 2 LOGIC stu
Slide 9: Market data graph (IMS Monthly)
Data source for graph: IMS Monthly, May YTD
Slide 10: H1 sales growth and CNV patient penetration
• H1 sales CHF 228 m, +35% (LC) • Patient penetration increased to 26% of total CNV 1 potential • Positive opinion received in EU for occult subfoveal CNV 1 • Filed in Japan (April) • Reimbursement is key to sales growth Public Service Announcement Canada 1 Choroidal neovascularisation secondary to
Slide 11: Elidel NRx share
NRx Share’ 16% ae ¢#1 branded topical in atopic 12% se. dermatitis after 3 months ww *NRx share! 9.2%, vs. Protopic 8% x 4% ¢ Other approvals: Denmark, Mexico, Colombia, Peru, New Zealand 0% + Feb Mar Apr May June July ~~ Elidel — Protopic Elocon
Slide 12: Research sites and focus areas
Maryland: Great Britain: Austria: Gene therapy Chronic pain Dermatology Respiratory Japan: Various research projects California: New Jersey: Switzerland: “ ad Functional —Arthritis/Bone eArthritis/Bone genomics *Oncolox Nervous system GNF) Functional Genomics *Oncology «Transplantation Ophthalmics F
Slide 13: US Campus and European Campus Basel
US Campus - somone + Access to extensive pool of high quality, diverse scientific talent Proximity to world-class academic and biotech network + Supportive environment (political, regulatory, economic) + Close to key physicians and hospitals + European Campus - Basel + Existing assets: critical mass
Slide 14: 1H/2002 income statement in CHF m
1H/2002 CHF m Sales 16 254 Cost of goods sold -3 903 Marketing & Distribution -5 628 Research & Development -2 100 General & Administration -666 Operating income 3957 Change in % In CHF
Slide 15: Currencies and growth: operating income
20 15 +3% “1% 414% +13% 1 10 5 -1% 0 LS s] Currencies Growth Operating Marketing Operating Sales ments investments growth - Operating income growth driven by volume increases and operating improvements
Slide 16: Average exchange rates
Average rates Average rates first half 2002 _ first half 2001 Change in % 1USD 1.637 1.708 100 JPY 1.263 1.415 1 EUR 1.469 1.531 1 GBP 2.364 2.457 1CAD 1.040 1.112
Slide 17: Transactional risk and currency hedging
+ Transactional risk in USD and JPY 2002 fully hedged at USD 1.59 and at Yen 1.33 * Euro not hedged USD JPY EUR’ CHF Other ‘11H 2002 Sales (11H 2002 Costs
Slide 18: Asset allocation and currency distribution
Asset allocation Currency distribution Equity GBP USD 4% 3% 6% Money market Bonds| 60% 36% CHF 44%
Slide 19: Cash Flow
Cash Flow Increase in net current assets Cash Flow from operating activities ts 9! Net change of other operating assets Dividends paid to third parties Free Cash Flow Change vs1H/2001, CHF m [+571 [+472 -90[] -124(] -100(| -99[ |
Slide 20: Operating margins in %
Operating margins in % 101H/2001 0 1H/2002 27.8 28.9 24.3 22.8 17.2 17.6 18.0 Pharma- Generics OTC Animal Medical Infant & cpg GROUP ceuticals Health Nutrition Baby 1 margin would have been 13.4% operating