January 27, 2012: Novartis has announced its 2011 financial results, reporting a net sales increase of 16% to $58.6 billion, with a positive currency impact of 4% arising from the weakness of the US dollar against most major currencies during much of the year. Recently launched products sales grew by 38% over 2010 to $14.4 billion.
Pharmaceuticals net sales grew by 7% to $32.5 billion, and Alcon net sales of $10 billion rose 10% on a pro forma basis. Sandoz net sales also grew by 10%, to $9.5 billion. Vaccines and Diagnostics net sales were down 32% to $2.0 billion, mainly due to the high sales figure of A(H1N1) pandemic flu vaccine sales in 2010. Net sales of the two Consumer Health businesses together grew by 6% to $4.6 billion.
Operating income was down 5% to $11.0 billion. Exceptional income and expense in 2011 amounted to a net $1.9 billion expense compared to $1.3 billion expense in the prior year. The weakness of the US dollar, combined with the strong Swiss franc, resulted in a negative currency impact of 6 percentage points.
Core operating income increased by 14% to $15.9 billion. Core operating income margin in constant currencies increased by 1.1 percentage points. However, this improvement was offset by a negative currency impact of 1.6 percentage points, resulting in a net decrease in core operating income margin of 0.5 percentage points to 27.2% of net sales.
Net income decreased by 7% to $9.2 billion as a result of lower associated company income, higher financing costs following the Alcon acquisition, and EPS declined by 11%, more than the decline in net income, mainly as a result of the increase in issued shares following the Alcon merger, partially offset by a lower impact from non-controlling interests.
Commenting on the results, Joseph Jimenez, CEO of Novartis, said: “Novartis achieved solid sales growth and strong operating leverage in the fourth quarter and for the year as a whole. We maintained our innovation momentum this year, achieving 15 key approvals and expanding our already robust pipeline. We also improved core margins through targeted productivity initiatives. However, we experienced some disappointments in the fourth quarter, with Tekturna/Rasilez and with the need to improve our quality standards at some manufacturing sites. We are committed to ensuring one single high-quality standard across Novartis and will invest the necessary resources to achieve this goal in all divisions. Novartis is well positioned as we face the expected patent expirations and will continue discovering new treatments to improve the health of patients across the globe.”
The company stated that recently launched products had fueled its growth. Novartis has several potential blockbuster products in its pharmaceuticals portfolio, and products launched since 2007 contributed $14.4 billion (25% of net sales) for the full year. It said strong underlying growth in the fourth quarter was driven by Pharmaceuticals, Alcon and Vaccines and Diagnostics but that loss of exclusivity and pricing pressures from generic competition had had a strong impact on results.
- RSS Feed
