NovartisNovartis net sales increased 2% (+4% cc) to USD 14.0 billion in the first quarter, with all divisions contributing to growth. Currency had a negative impact of 2 percentage points. Excluding the impact of patent expiries, underlying sales grew 7%. This was fueled by growth products such as Gilenya, Afinitor, Tasigna, Galvus, Lucentis, Xolair, Arcapta Neohaler/Onbrez Breezhaler and Jakavi, which together contributed USD 4.2 billion or 30% of Group net sales, up 14% over the prior-year period. Generics impacted sales by approximately USD 500 million, mainly due to Diovan. US sales continued to benefit from the delayed entry of generic competition for Diovan monotherapy.

Group operating income increased 6% (+10% cc) to USD 2.9 billion. Operating income margin increased by 0.8 percentage points to 20.7% of net sales. Core operating income was up 3% (+6% cc) to USD 3.7 billion. Core operating income margin in constant currencies increased by 0.6 percentage points, partly offset by a negative currency impact of 0.4 percentage points, to 26.5% of net sales. Excluding the impact of generic competition, core operating income grew by 16% (cc). The adjustments made to Group operating income to arrive at core operating income amounted to USD 818 million (2012: USD 871 million).

Group net income was USD 2.4 billion (+7%, +13% cc). EPS was up 5% (+12% cc) to USD 0.98.

Group core net income increased 7% (+10% cc) to USD 3.2 billion. Core EPS increased 6% (+9% cc) to USD 1.32.

Free cash flow reached USD 1.3 billion for the quarter compared to USD 2.1 billion in 2012.

Pharmaceuticals net sales were in line with previous year (0%, +3% cc) at USD 7.9 billion, with strong volume growth of 9 percentage points more than offsetting generic competition (6 percentage points). Pricing was flat. Growth products - including Gilenya, Afinitor, Tasigna, Galvus, Lucentis, Xolair, Arcapta Neohaler/Onbrez Breezhaler and Jakavi - continued to drive sales expansion and rejuvenate the portfolio.

Pharmaceuticals operating income increased 6% (+9% cc) to USD 2.5 billion, primarily due to restructuring charges taken in 2012 related to the US General Medicine business. Pharmaceuticals core operating income was USD 2.6 billion (-1%, +2% cc). Core operating income margin in constant currencies decreased by 0.2 percentage points. Currency had a negative impact of 0.1 percentage points, resulting in a core operating income margin of 32.7% of net sales.

Commenting on the results, Joseph Jimenez, CEO of Novartis, said: "Novartis delivered a solid quarter, with all divisions contributing to growth. Significant expansion in our growth products helped to offset the impact of patent expirations. Vaccines and Diagnostics performance improved, and achieved a key approval for Bexsero in the EU while Consumer Health returned to sales growth. Our focus on innovation continued to pay off, with eight approvals in the EU and US, and an FDA Breakthrough Therapy designation for LDK378 in lung cancer. I am pleased with our solid start to the year."

Commenting on the change in the CFO position, Joseph Jimenez said: "I want to welcome Harry Kirsch to the position of CFO of Novartis. His deep knowledge of Novartis pharmaceuticals operations and his productivity focus will now benefit the full portfolio. I want to thank Jon Symonds for the enhancements he brought to the business, our finance processes and organization. I am pleased that Jon will continue to work as an advisor to me until the end of the year, and to facilitate the transition."

About Novartis
Novartis provides innovative healthcare solutions that address the evolving needs of patients and societies. Headquartered in Basel, Switzerland, Novartis offers a diversified portfolio to best meet these needs: innovative medicines, eye care, cost-saving generic pharmaceuticals, preventive vaccines and diagnostic tools, over-the-counter and animal health products. Novartis is the only global company with leading positions in these areas. In 2012, the Group achieved net sales of USD 56.7 billion, while R&D throughout the Group amounted to approximately USD 9.3 billion (USD 9.1 billion excluding impairment and amortization charges). Novartis Group companies employ approximately 129,000 full-time-equivalent associates and operate in more than 140 countries around the world.