Net sales grew 28% (+20% lc) to USD 12.9 billion. Pharmaceuticals (+13% lc) maintained its industry-leading performance based on growth of recently launched products. Results in Vaccines and Diagnostics (+166% lc) included USD 1.0 billion of A (H1N1) pandemic vaccine and adjuvant sales. Sandoz (+10% lc) benefited from the EBEWE Pharma specialty generics business acquisition in September, which added five percentage points to sales growth. Consumer Health (+13% lc) had better results in all businesses, particularly in OTC on the first-to-market OTC launch of Prevacid24HR in the US.
Operating income rose 57% to USD 2.6 billion, with favorable currency movements having a positive impact of five percentage points. The operating income margin improved to 20.4% in the 2009 quarter from 16.7% in 2008. Core operating income rose 53% to USD 3.2 billion in the 2009 quarter on double-digit contributions from all businesses, with the core operating income margin expanding to 24.8% of net sales in the 2009 period from 20.8% in the year-ago quarter.
Net income rose 54% to USD 2.3 billion, while basic EPS rose at the same pace to USD 1.01 in the 2009 period from USD 0.66 in 2008. Core net income was up 47% to USD 2.9 billion, which reflected higher financing charges and reduced income from associated companies. Core basic earnings per share (EPS) rose 47% to USD 1.26 in the 2009 quarter from USD 0.86 in the 2008.
The underlying double-digit expansion in Pharmaceuticals, ranked as one of the industry's fastest-growing businesses based on market share, led the Group's healthcare portfolio in 2009 to another year of record results. Vaccines and Diagnostics achieved exceptionally high sales by rapidly developing and delivering influenza A (H1N1) pandemic vaccines to address the public health threat.
Net sales rose 7% (+11% in local currencies, lc) to USD 44.3 billion on the underlying expansion in all divisions: Pharmaceuticals (+12% lc), Vaccines and Diagnostics (+39% lc), Sandoz (+5% lc) and Consumer Health (+5% lc). Top-performing regions included Europe (USD 18.4 billion, +10% lc) and the United States (USD 14.3 billion, +11% lc) as well as the top six emerging markets (USD 4.0 billion, +17% lc) of Brazil, China, India, Russia, South Korea and Turkey. Higher volumes contributed 10 percentage points of growth, while acquisitions and price changes together added one percentage point of sales growth. The stronger US dollar compared to 2008 reduced full-year growth by four percentage points.
Operating income grew 11% to USD 10.0 billion in 2009, which resulted in the operating income margin rising to 22.5% of net sales from 21.6% in 2008. The stronger US dollar compared to 2008 reduced operating income growth by nine percentage points. Core operating income, which excludes exceptional items and amortization of intangible assets in both periods, grew 11% to USD 11.4 billion on improvements in Pharmaceuticals and Vaccines and Diagnostics as well as productivity gains in all divisions. The core operating income margin rose to 25.8% of net sales from 25.0% in 2008.
Net income rose 4% to USD 8.5 billion, while basic EPS was up 3% to USD 3.70. Core net income of USD 10.3 billion (+8%) rose at a slower pace than operating income as increased contributions from associated companies were partially reduced by Alcon-related financing costs. Core earnings per share were USD 4.50 in 2009, up from USD 4.18 in 2008.
Commenting on the results, Dr. Daniel Vasella, Chairman and CEO of Novartis, said: "Novartis delivered an excellent performance in 2009 driven by strong underlying growth across our entire healthcare portfolio. Over the past 12 months, we sustained our lead in approvals for new products, achieving more than 30 major new product approvals in the US, Europe and Japan. Our productivity efforts improved profitability and allowed for continued investments in drug discovery. The planned acquisition of Alcon will propel Novartis to the global leadership position in eye-care and create a new growth platform. After 14 years as CEO it is the right time to complete the carefully planned CEO succession process, which started over a year ago. The Board appointed Joe Jimenez, currently division head of our pharmaceutical business as new CEO and also agreed to delayer and simplify the top leadership structure. The international experience in pharmaceuticals and consumer businesses together with an excellent track record destine Joe Jimenez to lead Novartis into a next phase of expansion and growth. I am convinced 2010 will be a year of significant progress."
Novartis provides healthcare solutions that address the evolving needs of patients and societies. Focused solely on healthcare, Novartis offers a diversified portfolio to best meet these needs: innovative medicines, cost-saving generic pharmaceuticals, preventive vaccines, diagnostic tools and consumer health products. Novartis is the only company with leading positions in these areas. In 2009, the Group's continuing operations achieved net sales of USD 44.3 billion, while approximately USD 7.5 billion was invested in R&D activities throughout the Group. Headquartered in Basel, Switzerland, Novartis Group companies employ approximately 100,000 full-time-equivalent associates and operate in more than 140 countries around the world. For more information, please visit http://www.novartis.com.