Basel, March 1, 2005 - Novartis shareholders today approved all proposals of the Board of Directors, including the eighth consecutive annual dividend increase to CHF 1.05 per share and a fifth share buyback program designed to return capital to shareholders.
The 2'506 shareholders present at the Annual General Meeting held in Basel represented 974'750'130 voting shares and 35.10% of the 2'777'210'000 shares issued.
Chairman's Address
Dr. Daniel Vasella, Chairman and CEO of Novartis, told shareholders that their company's continued success was the result of a clear and consistently implemented strategy focused on healthcare and innovation, including extensive investments in research and development and in marketing to bring new and more effective treatments to patients and physicians. Dr. Vasella credited the expertise and commitment of Novartis associates in increasing productivity and driving strong business results.
Dr. Vasella said dynamic growth in sales and operating income at both the Group and Pharmaceutical Division level was driven by the exceptional performance of the Oncology and Cardiovascular franchises, which posted gains of +28% and +21% respectively. He said Novartis continued to demonstrate its marketing strength as five products generated more than USD 1 billion in sales in 2004.
Looking to the future, Dr. Vasella highlighted the strength of the Novartis pipeline as the key driver of sustained growth. "A pharmaceuticals company must have a full pipeline to maintain attractive growth rates going forward," Dr. Vasella said. "With 75 projects in clinical development, including 43 new molecular entities, six of which have the potential to be first-in-class medicines, our research and development program is among the best in the industry."
Dr. Vasella also commented on the recently announced acquisition of Hexal AG and Eon Labs, a transformational merger that will create the world leader in the fast-growing generics industry. "In the future, generic medicines will play an increasing role in managing rising costs due to the aging of the population and the subsequent higher demand for drugs and healthcare services. With the successful completion of these transactions, Sandoz will become the world's largest manufacturer of generic medicines, with leading positions in a number of European markets, including Germany - the largest generics market in Europe - and in the US. We will also strengthen our market position in Asia, especially in India, China and Japan. Our leading position in generics expands our pharmaceutical business portfolio and provides synergies not only in the manufacture of our branded and generic products, but also in negotiations with key customers such as government and major pharmacy chains."
Dr. Vasella said that Novartis will continue to focus on good corporate citizenship. "Overall, we provided USD 570 million worth of support to patients in need in 2004," Dr. Vasella said. "This commitment is not only an expression of our solidarity with patients, but also a recognition of the unique social expectations placed upon healthcare companies."
In closing, Dr. Vasella said he expects yet another strong performance in 2005. "Our outlook remains positive as we continue to focus our energies on expanding our medicines business," Dr. Vasella said. "Our chances for further increasing market share remain good and we expect high single digit sales growth and further improvement in profits, provided there are no unforeseen, negative events."
Fifth share buyback program approved, share capital reduced
The new share buyback program worth CHF 4 billion is further proof of the commitment to return surplus liquidity to shareholders. In addition, shareholders approved the annulment of 38 million shares acquired in 2004. Novartis also completed share buyback programs totaling CHF 4 billion each in 1999 and 2001 and a further buyback worth over CHF 3 billion in 2004.
Elections to the Board of Directors and terms in office
Dr. h.c. Birgit Breuel was re-elected to the Board for a further two-year term. Prof. Dr. Peter Burckhardt, Alexandre F. Jetzer, Pierre Landolt and Prof. Dr. Ulrich Lehner were each re-elected by Novartis shareholders for a three-year term in office. The Board of Directors will continue to consist of 12 members.
Disclaimer
This release contains certain "forward-looking statements", relating to the Company's business, which can be identified by the use of forward-looking terminology such as "expected", "designed", "looking to the future", "potential", "will", "expect" or similar expressions, or by or by express or implied discussions regarding potential new products or regarding potential future revenues. Such statements reflect the current views of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performances or achievements that may be expressed or implied by such forward-looking statements. There can be no guarantee that any of the development projects described in this release will succeed, or that any new products will be brought to market. Similarly, there can be no guarantee that Novartis, or any present or future product will achieve any particular level of revenue. In particular, management's expectations could be affected by, among other things, new clinical data; unexpected clinical trial results; unexpected regulatory actions or delays or government regulation generally; the company's ability to obtain or maintain patent or other proprietary intellectual property protection; competition in general; government, industry, and general public pricing pressures; and other risks and factors referred to in the Company's current Form 20-F on file with the US Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. Novartis is providing the information in this press release as of this date and does not undertake any obligation to update any forward-looking statements contained in this press release as a result of new information, future events or otherwise.
About Novartis
Novartis AG (NYSE: NVS) is a world leader in pharmaceuticals and consumer health. In 2004, the Group's businesses achieved sales of USD 28.2 billion and a net income of USD 5.8 billion. The Group invested approximately USD 4.2 billion in R&D. Headquartered in Basel, Switzerland, Novartis Group companies employ about 81,400 people and operate in over 140 countries around the world. Further information is available at www.novartis.com.
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