Novartis Ag · SIX:NOVN
Novartis — Merger or Acquisition (June 2018)
25 slides from Novartis's merger presentation, Jun 29, 2018
Slide 1: Novartis concludes strategic review of Alcon, initiates share buyback of up to USD 5bn
Novartis AG Investor Relations Novartis concludes strategic review of Alcon, initiates share buyback of up to USD 5bn Investor presentation | June 29, 2018
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements that can be identified by terminology such as such as “potential,” “expected,” “will,” “planned,” “pipeline,” “outlook,” or similar expressions, or by express or implied discussions regarding the potential completion of the announced s
Slide 3: Agenda
Agenda 1. Novartis strategy and transaction rationale 2. Transaction overview 3. Alcon investment highlights 3 Novartis concludes strategic review of Alcon, initiates share buyback of up to USD 5bn | June 29, 2018 | Investor presentation
Slide 4: Novartis long-term strategy
Novartis long-term strategy Focus the company and our capital Pursue 5 priorities to drive growth Medicinal chemistry and Portfolio industrials transformation 1. Operational Execution 2. Breakthrough Innovation 1920 - 1996 1996 - 2009 2009 - 2017 2018+ 3. Data / Digital Leadership Diversified Focuse
Slide 5: Today's announcements reflect our strategy and capital allocation priorities
Today’s announcements reflect our strategy and capital allocation priorities Proposed 100% spinoff of Alcon Share buyback, dividend commitment Capital allocation priorities: Strategic review concludes 100% spinoff1 of Investments in Alcon would be in best interest of shareholders 1 organic business
Slide 6: Rationale for separation of the Alcon eye care devices business
Rationale for separation of the Alcon eye care devices business1 Consistent with Novartis strategy of focusing Focus Alcon eye care devices business on as a leading medicines company its distinct business model, product development cycles and customer base Focus Novartis capital allocation int
Slide 7: Strategic review concludes 100% spinoff of Alcon would be in best interest of shareholders
Strategic review concludes 100% spinoff of Alcon would be in best interest of shareholders1 Spinoff would allow shareholders to benefit from potential future successes of a more focused Novartis and a standalone Alcon Spinoff allows a tax neutral transaction to Novartis Spinoffs have been the prefer
Slide 8: Planned spinoff would create the world-leading standalone eye care devices company
Planned spinoff would create the world-leading standalone eye care devices company1 Revenue by eye care segment FY 2017, USD bn Surgical Vision Care 2 2 3 1.0 3 1. The planned spinoff is subject to general market conditions, tax rulings and opinions, final Board endorsement and shareholder approval
Slide 9: Highly experienced leadership team with successful track record in medical devices and ophthalmology
Highly experienced leadership team with successful track record in medical devices and ophthalmology Mike Ball David Endicott Chairman-designate Chief Executive Officer Joined Alcon in February 2016 and Joined Alcon in July 2016 and successfully led turnaround played an integral role in the turn
Slide 10: An Alcon spinoff would further focus Novartis' portfolio as a leading medicines company
An Alcon spinoff1 would further focus Novartis’ portfolio as a leading medicines company 2014 pre portfolio 2017 pre Alcon 2017 post Alcon transformation spinoff spinoff 2% 5% 14% 3% 24% 13% 38% 41% 20% 47% 19% 29% 20% 25% Net sales = USD 58bn Net sales = USD 49bn Net sales = USD 42bn Pharmaceutical
Slide 11: Novartis retains leading ophthalmology pharmaceuticals business
Novartis retains leading ophthalmology pharmaceuticals business Novartis retains benefits of prior Alcon portfolio of in-market and pipeline ophthalmology pharmaceuticals products Novartis Ophthalmology franchise USD 4.6bn1 In-market products Lucentis® USD 1.9bn Leading franchise with global reach a
Slide 12: We are announcing a share buyback of up to USD 5bn...
We are announcing a share buyback of up to USD 5bn... Reflects strict financial discipline and is in line with strategic capital allocation priorities Largely funded by the proceeds from the Consumer Health Joint Venture stake divestment (USD 13.0bn), net of AveXis acquisition (USD 8.7bn) Current AG
Slide 13: ...which reflects our confidence in top-line growth and margin expansion
...which reflects our confidence in top-line growth and margin expansion Illustrative sales growth3 Plan to drive margin expansion FY 2017–2022, in cc Innovative Medicines, core margin in % Mid 30’s 31 IM Division Large Pharma 2017 average2 1. Aimovig™ is developed in collaboration with Amgen. Compa
Slide 14: Agenda
Agenda 1. Novartis strategy and transaction rationale 2. Transaction overview 3. Alcon investment highlights 14 Novartis concludes strategic review of Alcon, initiates share buyback of up to USD 5bn | June 29, 2018 | Investor presentation
Slide 15: Dual-listing planned on SIX and NYSE
Dual-listing planned on SIX and NYSE Natural listing location for a Swiss company Access to large US investor base Main listing location of Novartis Enables geographically restricted Enables maximum number of Novartis shareholders to invest listing shareholders to remain invested Main listing venue
Slide 16: Global company to be incorporated in Switzerland
Global company to be incorporated in Switzerland Global reach and scale serving patients in over 140 countries % OF TOTAL NET SALES AMERICAS EMEA ASIA/JAPAN USD 7bn in sales in 2017 Surgical 51% 25% 24% More than 20,000 employees FY 2017 sales: 3.7bn Headquarters would be in Switzerland Fort
Slide 17: Key transaction milestones
Key transaction milestones 1. Preparations for planned Alcon spinoff1 well advanced, expected completion in H1 2019 2. Alcon Capital Markets Days planned for Q4 2018 in New York and London 3. Subject to final Board of Directors endorsement and shareholder approval at the 2019 AGM 1. The planned spin
Slide 18: Agenda
Agenda 1. Novartis strategy and transaction rationale 2. Transaction overview 3. Alcon investment highlights 18 Novartis concludes strategic review of Alcon, initiates share buyback of up to USD 5bn | June 29, 2018 | Investor presentation
Slide 19: Eye care is a large, attractive and growing market
Eye care is a large, attractive and growing market Large and profitable eye care devices market expected to grow mid-single digits USD Changing lifestyles and patient desire for spectacle independence ~20bn Aging population with high unmet needs Growing middle class in emerging markets Surgica
Slide 20: Alcon is the global leader in this market, with a broad product portfolio
Alcon is the global leader in this market, with a broad product portfolio across Surgical and Vision Care... Surgical 2017 net sales Vision Care 2017 net sales USD billion USD billion 3.7 3.0 Daily disposable contact lenses Implantables 1.0 Contact lenses Weekly/monthly contact lenses Consumables 2.
Slide 21: ...and a robust pipeline to fuel future growth
...and a robust pipeline to fuel future growth Recent launches 2018 – 2020 planned launches 2020+ planned launches Surgical Clareon® with AutonoMe™ – OUS Non-diffractive extended depth of focus IOL – OUS New IOL platforms UltraSert™ – US/OUS PanOptix® Trifocal – US Next generation cataract and vitre
Slide 22: Alcon is embarking on the next phase of the growth acceleration strategy
Alcon is embarking on the next phase of the growth acceleration strategy 2016 - 2017 2018 - 2020 2021 & beyond ✓ Phase 1 Phase 2 Phase 3 Fix the foundation Execute the growth plan Accelerate the growth Strengthen execution Superior execution Deliver on the next wave Invest in promotion Fur
Slide 23: Alcon actions resulted in growth in 2017 and expect to deliver long-term sustainable growth
Alcon actions resulted in growth in 2017 and expect to deliver long-term sustainable growth Net sales growth1 vs. PY, % cc 7%2 6%2 6%2 3% 1% Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 1. Alcon Division Q1 2017 to Q4 2017 growth rates updated to include the Ophthalmic OTC and Diagnostics products, trans
Slide 24: Alcon summary
Alcon summary 1 Alcon is the global leader in eye care devices, with leading positions in Surgical and Vision Care Alcon is ideally positioned in the attractive USD 20bn eye care market, which exhibits sound 2 fundamentals and considerable opportunities for future growth Alcon invested behind key gr
Slide 25: Summary
Summary Proposed 100% spinoff1 of Alcon Strategic review concludes 100% spinoff of Alcon would be in best interest of shareholders Alcon Capital Markets Days planned for Q4 2018 in New York and London Subject to final Board of Directors endorsement and shareholder approval at the 2019 AGM Pr