Press Release: Novartis continues to grow with -4-

If late-January exchange rates prevail for the remainder of 2023, the foreign exchange impact for the year would be zero to positive 1 percentage points on net sales and negative 1 percentage points on core operating income. The estimated impact of exchange rates on our results is provided monthly on our website.

Annual General Meeting

Dividend proposal

The Novartis Board of Directors proposes a dividend payment of CHF 3.20 per share for 2022, up 3.2% from CHF 3.10 per share in the prior year, representing the 26th consecutive dividend increase since the creation of Novartis in December 1996. Shareholders will vote on this proposal at the Annual General Meeting on March 7, 2023.

Reduction of share Capital

The Novartis Board of Directors proposes to cancel 126 243 500 shares (repurchased under the authorizations of March 2, 2021 and March 4, 2022) and to reduce the share capital accordingly by CHF 63.1 million, from CHF 1 201 860 626 to CHF 1 138 738 876.

Potential further share repurchases

As of December 31, 2022, the remaining available amount under the existing shareholder authorities granted at the 2021 and 2022 annual general meetings is CHF 8.3 billion. To allow for the full execution of the already announced share buyback of up to USD 15 billion and potential additional share buybacks, the Board of Directors proposes that shareholders, in addition to the remaining authorization of CHF 8.3 billion, authorize the Board of Directors to repurchase shares as deemed appropriate from time to time up to a maximum of CHF 10 billion between the 2023 Annual General Meeting and the 2026 Annual General Meeting.

Nomination for election to the Board of Directors

The Novartis Board of Directors announced today that it is nominating John D. Young for election to the Board. He retired from Pfizer in June 2022 where he held several senior positions over more than 30 years and served as a member of Pfizer's Executive Leadership Team since 2012. John successfully led and developed multi-ten-billion dollar global businesses and brings a wealth of industry experience in leadership, strategy, business development and commercialization of innovative medicines to the Board of Directors. John D. Young currently serves on the Boards of Johnson Controls International, Haleon PLC, Arvinas Inc, and privately held biotech, Imbria Pharmaceuticals.

Re-elections of the Board Chair and the members of the Board of Directors

The Novartis Board of Directors proposes the re-election of Joerg Reinhardt (also as Board Chair), Nancy C. Andrews, Ton Buechner, Patrice Bula, Elizabeth Doherty, Bridgette Heller, Frans van Houten, Daniel Hochstrasser, Simon Moroney, Ana de Pro Gonzalo, Charles L. Sawyers, and William T. Winters as members of the Board of Directors.

Andreas von Planta has already announced that he will not stand for re-election. The Board of Directors and the Executive Committee of Novartis thank him for many years of distinguished services on the Board and his outstanding contributions to the company.

Re-elections and elections to the Compensation Committee

The Novartis Board of Directors proposes the re-election of Patrice Bula, Bridgette Heller, Simon Moroney, and William T. Winters as members of the Compensation Committee. The Board of Directors intends to designate Simon Moroney again as Chairman of the Compensation Committee.

Key figures(1)

Excluding Roche income Reported

Group Q4 2022 Q4 2021 % change Q4 2021 % change

USD m USD m USD cc USD m USD cc

------- -------- ----- ----- ------- ---- ----

Net sales 12 690 13 229 -4 3 13 229 -4 3

---------------------- ------- -------- ----- ----- ------- ---- ----

Operating income 1 949 2 562 -24 -14 2 562 -24 -14

---------------------- ------- -------- ----- ----- ------- ---- ----

As a % of sales 15.4 19.4 19.4

---------------------- ------- -------- ----- ----- ------- ---- ----

Core operating income 4 030 3 819 6 15 3 819 6 15

---------------------- ------- -------- ----- ----- ------- ---- ----

As a % of sales 31.8 28.9 28.9

---------------------- ------- -------- ----- ----- ------- ---- ----

Net income 1 466 1 671 -12 2 16 306 -91 -90

---------------------- ------- -------- ----- ----- ------- ---- ----

EPS (USD) 0.69 0.75 -8 7 7.29 -91 -89

---------------------- ------- -------- ----- ----- ------- ---- ----

Core net income 3 251 3 044 7 17 3 135 4 14

---------------------- ------- -------- ----- ----- ------- ---- ----

Core EPS (USD) 1.52 1.36 12 23 1.40 9 19

---------------------- ------- -------- ----- ----- ------- ---- ----

Cash flows from

operating activities 4 111 3 884 6 3 884 6

---------------------- ------- -------- ----- ----- ------- ---- ----

Free cash flow 3 552 3 027 17 3 027 17

---------------------- ------- -------- ----- ----- ------- ---- ----

Innovative Medicines Q4 2022 Q4 2021 % change

USD m USD m USD cc

---------------------- ------- -------- ----- -----

Net sales 10 360 10 704 -3 3

---------------------- ------- -------- ----- -----

Operating income 1 945 2 468 -21 -12

---------------------- ------- -------- ----- -----

As a % of sales 18.8 23.1

---------------------- ------- -------- ----- -----

Core operating income 3 768 3 596 5 14

---------------------- ------- -------- ----- -----

As a % of sales 36.4 33.6

---------------------- ------- -------- ----- -----

Sandoz Q4 2022 Q4 2021 % change

USD m USD m USD cc

---------------------- ------- -------- ----- -----

Net sales 2 330 2 525 -8 0

---------------------- ------- -------- ----- -----

Operating income 273 386 -29 -20

---------------------- ------- -------- ----- -----

As a % of sales 11.7 15.3

---------------------- ------- -------- ----- -----

Core operating income 391 528 -26 -18

---------------------- ------- -------- ----- -----

As a % of sales 16.8 20.9

---------------------- ------- -------- ----- -----

Corporate Q4 2022 Q4 2021 % change

USD m USD m USD cc

---------------------- ------- -------- ----- -----

Operating loss -269 -292 8 2

---------------------- ------- -------- ----- -----

Core operating loss -129 -305 58 57

---------------------- ------- -------- ----- -----

Excluding Roche income Reported

Group FY 2022 FY 2021 % change FY 2021 % change

USD m USD m USD cc USD m USD cc

------- -------- ----- ----- ------- ---- ----

Net sales 50 545 51 626 -2 4 51 626 -2 4

---------------------- ------- -------- ----- ----- ------- ---- ----

Operating income 9 197 11 689 -21 -13 11 689 -21 -13

---------------------- ------- -------- ----- ----- ------- ---- ----

As a % of sales 18.2 22.6 22.6

---------------------- ------- -------- ----- ----- ------- ---- ----

Core operating income 16 665 16 588 0 8 16 588 0 8

---------------------- ------- -------- ----- ----- ------- ---- ----

As a % of sales 33.0 32.1 32.1

---------------------- ------- -------- ----- ----- ------- ---- ----

Net income 6 955 8 661 -20 -9 24 018 -71 -67

---------------------- ------- -------- ----- ----- ------- ---- ----

EPS (USD) 3.19 3.86 -17 -7 10.71 -70 -66

---------------------- ------- -------- ----- ----- ------- ---- ----

Core net income 13 352 13 099 2 11 14 094 -5 3

---------------------- ------- -------- ----- ----- ------- ---- ----

Core EPS (USD) 6.12 5.84 5 14 6.29 -3 6

---------------------- ------- -------- ----- ----- ------- ---- ----

Cash flows from

operating activities 14 236 14 549 -2 15 071 -6

---------------------- ------- -------- ----- ----- ------- ---- ----

Free cash flow 11 945 12 760 -6 13 282 -10

---------------------- ------- -------- ----- ----- ------- ---- ----

Innovative Medicines FY 2022 FY 2021 % change

USD m USD m USD cc

---------------------- ------- -------- ----- -----

Net sales 41 296 41 995 -2 4

---------------------- ------- -------- ----- -----

Operating income 8 786 10 688 -18 -9

---------------------- ------- -------- ----- -----

As a % of sales 21.3 25.5

---------------------- ------- -------- ----- -----

Core operating income 15 237 15 215 0 8

---------------------- ------- -------- ----- -----

As a % of sales 36.9 36.2

---------------------- ------- -------- ----- -----

Sandoz FY 2022 FY 2021 % change

USD m USD m USD cc

---------------------- ------- -------- ----- -----

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February 01, 2023 01:00 ET (06:00 GMT)