Press Release: Novartis delivers strong sales -3-

In Q1 2023, Novartis repurchased a total of 31.5 million shares for USD 2.8 billion on the SIX Swiss Exchange second trading line under the up-to USD 15 billion share buyback announced in December 2021. In addition, 1.2 million shares (for an equity value of USD 0.1 billion) were repurchased from associates. In the same period, 10.5 million shares (for an equity value of USD 0.3 billion) were delivered as a result of options exercised and share deliveries related to participation plans of associates. Novartis aims to offset the dilutive impact from equity based participation plans of associates over the remainder of the year. Consequently, the total number of shares outstanding decreased by 22.2 million versus December 31, 2022. These treasury share transactions resulted in an equity decrease of USD 2.5 billion and a net cash outflow of USD 2.7 billion.

As of March 31, 2023, net debt increased to USD 15.1 billion compared to USD 7.2 billion at December 31, 2022. The increase was mainly due to the USD 7.3 billion annual dividend payment and net cash outflow for treasury share transactions of USD 2.7 billion, partially offset by USD 2.7 billion free cash flow in Q1 2023.

As of Q1 2023, the long-term credit rating for the company is A1 with Moody's Investors Service and AA- with S&P Global Ratings.

2023 outlook raised due to strong growth momentum

Barring unforeseen events; growth vs prior year in cc

Innovative Medicines Sales expected to grow mid-single digit (from low-to-mid

single digit)

Core OpInc expected to grow high single to low double

digit (from mid-to-high single digit)

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

Novartis ex. Sandoz Sales expected to grow mid-single digit (from low-to-mid

(IM + Corporate) single digit)

Core OpInc expected to grow high single digit to low

double digit (from mid-to-high single digit)

Novartis incl. Sandoz Sales expected to grow mid-single digit (from low-to-mid

(IM + Sandoz + Corporate)* single digit)

Core OpInc expected to grow high single digit (from

mid-single digit)

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

* Novartis Group guidance, assuming Sandoz would remain within the Group for the entire FY 2023

Barring unforeseen events; growth vs prior year in cc

Sandoz Sales expected to grow mid-single digit (from low-to-mid

single digit)

Core OpInc expected to decline low double digit, reflecting

required stand-up investments to transition Sandoz

to a separate company and continued inflationary pressures

Our guidance assumes that no Sandostatin LAR generics enter in the US in 2023. We continue to expect that the planned Sandoz spin-off is completed in H2 2023.

Foreign exchange impact

If late-April exchange rates prevail for the remainder of 2023, the foreign exchange impact for the year would be negligible on net sales and negative 3 to negative 4 percentage points on core operating income. The estimated impact of exchange rates on our results is provided monthly on our website.

Key figures(1)

Group Q1 2023 Q1 2022 % change

USD m USD m USD cc

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

Net sales 12 953 12 531 3 8

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

Operating income 2 856 2 852 0 9

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

As a % of sales 22.0 22.8

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

Core operating income 4 413 4 083 8 15

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

As a % of sales 34.1 32.6

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

Net income 2 294 2 219 3 14

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

EPS (USD) 1.09 1.00 9 20

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

Core net income 3 614 3 251 11 18

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

Core EPS (USD) 1.71 1.46 17 25

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

Cash flows from

operating activities 2 957 1 649 79

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

Free cash flow(2) 2 720 1 392 95

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

Innovative Medicines Q1 2023 Q1 2022 % change

restated(3)

USD m USD m USD cc

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

Net sales 10 570 10 230 3 7

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

Operating income 2 675 2 627 2 11

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

As a % of sales 25.3 25.7

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

Core operating income 4 088 3 672 11 18

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

As a % of sales 38.7 35.9

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

Sandoz Q1 2023 Q1 2022 % change

restated(3)

USD m USD m USD cc

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

Net sales 2 383 2 301 4 8

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

Operating income 319 394 -19 -14

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

As a % of sales 13.4 17.1

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

Core operating income 504 513 -2 3

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

As a % of sales 21.1 22.3

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

Corporate Q1 2023 Q1 2022 % change

restated(3)

USD m USD m USD cc

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

Operating loss -138 -169 18 16

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

Core operating loss -179 -102 -75 -78

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

(1) Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 35 of the Condensed Interim Financial Report. Unless otherwise noted, all growth rates in this Release refer to same period in prior year.

(2) To aid in comparability, the prior year free cash flow amounts have been revised to conform with the new free cash flow definition that was effective as of January 1, 2023.

(3) Restated to reflect the transfers of the Sandoz division's biotechnology manufacturing services to other companies' activities and the Coartem brand to the Innovative Medicines division that was effective as of January 1, 2023 (see Note 9 of the Condensed Interim Financial Report).

Detailed financial results accompanying this press release are included in the Condensed Interim Financial Report at the link below:

https://ml-eu.globenewswire.com/resource/download/c0540159-3aae-4e2d-9a9b-97f92af073e3/

Disclaimer

This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, that can generally be identified by words such as "continue," "progresses," "remain," "growth," "on track," "confidence," "upcoming," "prioritizing," "expect," "continued," "ongoing," "optimistic," "outlook, " "focus," "pipeline," "growth," "potential," "expected," "will," "guidance," "continuing," "estimated," "launch," "continue," "to deliver, " "transformation," "address," "growing," "accelerate," "remains," "scaling," "expected," "driven," "long-term," "innovation," "transformative," "priority," "can," "to develop," "to experience," "look forward," "momentum," or similar expressions, or by express or implied discussions regarding potential new products, potential new indications for existing products, potential product launches, or regarding potential future revenues from any such products; or regarding potential future, pending or announced transactions; or regarding the research collaboration with Bicycle Therapeutics; or regarding potential future sales or earnings of the Group or any of its divisions; or regarding discussions of strategy, priorities, plans, expectations or intentions, including our transforming into a "pure-play" Innovative Medicines business; or regarding the Group's liquidity or cash flow positions and its ability to meet its ongoing financial obligations and operational needs; or regarding our planned spin-off of Sandoz. Such forward-looking statements are based on the current beliefs and expectations of management regarding future events and are subject to significant known and unknown risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those set forth in the forward-looking statements. You should not place undue reliance on these statements. In particular, our expectations could be affected by, among other things: liquidity or cash flow disruptions affecting our ability to meet our ongoing financial obligations and to support our ongoing business activities; the impact of a partial or complete failure of the return to normal global healthcare systems including prescription dynamics; global trends toward

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April 25, 2023 01:00 ET (05:00 GMT)