Novartis AG · SIX:NOVN
Novartis — UBS Conference 2008
19 slides from Novartis's conference presentation, Jan 18, 2008
Slide 1: Preparing the new growth cycle
Preparing the new growth cycle Joe Jimenez CEO, Novartis Pharma January 18, 2008 These materials contain certain forward-looking statements relating to the Group's business, which can be identified by the use of forward-looking terminology such as "outlook", "expected", "will", "potential", "pipelin
Slide 2: Agenda; 2007 Group total operations as reported
Agenda Group performance 2007 Pharma overview 2007 performance Key strategies Outlook Group outlook and conclusions 3 | UBS Conference: Preparing the new growth cycle| Joe Jimenez | January 18, 2008 2007 Novartis Group total operations1 as reported – Another record year Group key figures
Slide 3: 2007 overview of one-timers; continuing operations
2007 – Overview of one-timers Net income impact After-tax gains from nutrition USD 5.2bn divestments • Medical Nutrition USD 1.6bn • Gerber USD 3.6bn Increased environmental provisions (USD 590m) Forward restructuring provision (USD 444m) 5 | UBS Conference: Preparing the new growth cycle| Joe
Slide 4: 2007 Group continuing net sales advance +6% LC
2007 Group continuing net sales advance +6% LC1 driven by Sandoz and V&D % net sales growth 12 M 2007 LC USD 2 Driven by Diovan®, Glivec™ and launches Pharmaceuticals Offset by Zelnorm®, Lotrel®, Lamisil®, Trileptal® and 6 Famvir® 20 Tick, pediatric components and flu drove V&D2 vaccines perfo
Slide 5: Key messages 2007 Pharmaceuticals highlights
Agenda Group performance 2007 Pharma overview 2007 performance Key strategies Outlook Group outlook and conclusions 9 | UBS Conference: Preparing the new growth cycle| Joe Jimenez | January 18, 2008 Key messages 2007 Pharmaceuticals highlights Strong underlying performance 2007, impact
Slide 6: 2007 performance: strong underlying growth
2007 performance Growth vs. 2006 USD m in USD in LC1 Net sales 24 025 +6% +2% Operating income 6 086 -9% Op. Inc. before restructuring 6 418 Return on net sales (ROS) 25.3% -4.4 ppt ROS before restructuring 26.7% Associates2 54 613 +1% 1 Local currency 2 At period end, in full time equivalents 11 |
Slide 7: Growth by region and key franchises
Growth strong in all regions excl. North America Net sales 2007, in USD bn Growth (LC1) vs. PY Rest of World North America -7% 2.3 Japan Latin America +17% 2.2 9.3 North America Europe +9% Japan +7% Rest of World +12% Europe 8.7 1.5 Total +2% Latin America 1 Local currency 13 | UBS Conference: Prepa
Slide 8: Unrivaled position in hypertension and growing
Unrivaled position in hypertension...and growing Hypertension 3rd party sales growth In USD bn2 No. 1 selling branded 5.9 antihypertensive1 5.6 0.7 1.4 Combination of 2 most prescribed antihypertensives 5.2 4.2 1st direct renin inhibitor 1st new class in 10 years 2006 2007 1 In terms of sale
Slide 9: Oncology continues to build; regulatory performance
Oncology continues to build +14% vs. PY1 88% 6-year overall survival in CML2 +25% vs. PY1 Most potent aromatase inhibitor +13% vs. PY1,3 Most prescribed treatment for acromegaly and neuroendocrine tumors +141% vs. PY1 Only oral qd4 treatment for iron overload -2% vs. PY1 Most prescribed bi
Slide 10: Lucentis, Exforge and Tekturna contribute to 2007 sales
Lucentis®, Exforge® and Tekturna® contribute more than half a billion USD to 2007 sales 2007 sales USD 393 m First and only drug shown in controlled clinical trials to improve vision in wet AMD1 patients USD 103 m Combination of the two most prescribed antihypertensives USD 40 m First new class of a
Slide 11: Other launches also performing well
Other launches also performing well Aclasta® is the first once-per-year treatment for patients with osteoporosis, guaranteeing annual compliance Strong early uptake in the US, sales well ahead of benchmarks Novel approach to treating dementia providing smooth and continuous drug delivery over
Slide 12: Positioning Novartis Pharma to win
Positioning Novartis Pharma to win Positioning Novartis Pharma to win Tougher 1 Development regulatory • Streamlining processes/accelerate decision making environment • Elevating voice of science in strategic product decisions More aggressive 2 Innovation generics • New commercial models • New pri
Slide 13: Innovation: tailoring commercial models; productivity savings
2 Innovation – tailoring commercial models to market EXAMPLES Texas California Washington France Germany UK Listing Relevance Pricing Share of field force voice Time High doctor High payor Transition autonomy influence 25 | UBS Conference: Preparing the new growth cycle| Joe Jimenez | January 18, 20
Slide 14: Growth: more focus on emerging markets
4 Growth – more focus on emerging markets Brazil: Novartis has No. 1 pharma brand in the market (Diovan®1) Î Leverage strong customer relationship to maximize launch products Turkey: Novartis Group is largest pharma company in Turkey Î Build on leadership in the market China: Diovan® estimated
Slide 15: 2008 outlook
Agenda Group performance 2007 Pharma overview 2007 performance Key strategies Outlook Group outlook and conclusions 29 | UBS Conference: Preparing the new growth cycle| Joe Jimenez | January 18, 2008 2008 outlook 2008 – a year of focusing on fundamentals and driving successful product la
Slide 16: Net sales growth returning to high-single-digit in H2 2008
Net sales growth returning to high-single-digit rate in H2 2008 Sales growth 2008 vs. PY (LC1) Key drivers In % Negative baseline effect of Plus • Zelnorm® suspension Q1 07 high-single- • Lotrel® Gx Q2 07 digit Plus • Lamisil® Gx Q3 07 mid-single- • Famvir® Gx Q3 07 Plus digit low-single- • Trilep
Slide 17: New policy for cash return to shareholders
Agenda Group performance 2007 Pharma overview 2007 performance Key strategies Outlook Group outlook and conclusions 33 | UBS Conference: Preparing the new growth cycle| Joe Jimenez | January 18, 2008 New policy for cash return to our shareholders Increased dividend pay-out ratio of 35%
Slide 18: Outlook for 2008; Backup
Outlook for 2008 – Return to growth in H2 barring unforeseen events Mid single-digit sales growth (in LC) • Q1 and Q2 impacted by negative Pharma growth • H2 with mid to high single-digit Pharma growth Continued market-share gains except in Pharma Record operating and net income 35 | UBS Confe
Slide 19: Eleventh consecutive dividend increase; share buy-backs
Eleventh consecutive dividend increase CHF per share 1.60 CAGR 1.35 +11% 1.15 1.05 0.95 1.00 0.80 0.85 0.90 0.73 0.63 0.50 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Proposed 2007 dividend: CHF 1.60 per share, + 19% versus 2006 37 | UBS Conference: Preparing the new growth cycle| Jo