Novartis International AG / Novartis delivered strong sales growth with core margin expansion, built leading advanced therapy platforms and focused the company in 2018 . Processed and transmitted by West Corporation. The issuer is solely responsible for the content of this announcement.
- Full year net sales up 5% (cc[1], +6% USD) driven by strong performance of growth drivers:
- Pharmaceuticals BU grew 7% (cc) driven by Cosentyx USD 2.8 billion (+36% cc) and Entresto USD 1.0 billion (+102% cc)
- Oncology BU grew 9% (cc) driven by AAA[2] (USD 0.4 billion) including Lutathera, Promacta/Revolade USD 1.2 billion (+35% cc) and Tafinlar + Mekinist USD 1.2 billion (+31% cc)
- Full year core[1] operating income grew 8% mainly driven by higher sales and gross margin expansion
- Net income was USD 12.6 billion (+64%) including a USD 5.7 billion net gain from the divestment of OTC JV. Operating income declined 5% mainly due to M&A transactions and restructurings
- Free cash flow[1] grew 12% to USD 11.7 billion driven by strong operating cash flows
- Focused the company with transformational deals during 2018:
- Consumer healthcare JV stake divested to GSK for USD 13.0 billion
- Announced proposal to spin-off Alcon Division[3]; on track for H1 2019
- Sandoz began transformation with reshaping the portfolio[4], geographic focus and a leaner cost structure
- Built leading advanced therapy platforms:
- Gene therapy – Acquired AveXis and in-licensed Luxturna
- Radioligand therapy – Acquired AAA and Endocyte
- Cell therapy – Expanding Kymriah global manufacturing including multiple collaborations
- Four additional products reached blockbuster status in 2018; Lutathera, Aimovig and Kymriah for DLBCL were launched; additional ten key launches on track by 2020
- Alcon sales grew 5% (cc, +6% USD) and core operating income grew 10%; expanding core margin
- Sandoz sales down -3% (cc, -2% USD) due to US price pressure; Biopharmaceuticals grew 24% (cc)
- Dividend of CHF 2.85 per share, an increase of 2%, proposed for 2018
- 2019 Group guidance[5]:
- New focused medicines company[6] – Net sales expected to grow mid single digit (cc); core operating income expected to grow mid to high single digit (cc)
- Current Group structure[7] – Net sales expected to grow low to mid single digit (cc); core operating income expected to grow mid single digit (cc)
2019 Outlook
Barring unforeseen events
New focused medicines company guidance*
Excluding Alcon and the Sandoz US oral solids and dermatology business from both 2018 and 2019
Excluding Alcon and the Sandoz US oral solids and dermatology business from both 2018 and 2019
- Group net sales in 2019 are expected to grow mid-single digit (cc).
- From a divisional perspective, we expect net sales performance (cc) in 2019 to be as follows:
- Innovative Medicines: grow mid single digit
- Sandoz: broadly in line with prior year
- Group core operating income in 2019 is expected to grow mid to high single digit (cc).
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