# EDGAR Filing Document

**Accession Number:** 0001114448
**File Stem:** 0001370368-23-000008
**Filing Date:** 2023-2
**Character Count:** 418461
**Document Hash:** 0db76d08c7c3ee53c9a0e387df8956a7
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001370368-23-000008.hdr.sgml**: 20230201

**ACCESSION NUMBER**: 0001370368-23-000008

**CONFORMED SUBMISSION TYPE**: 6-K

**PUBLIC DOCUMENT COUNT**: 5

**CONFORMED PERIOD OF REPORT**: 20221231

**FILED AS OF DATE**: 20230201

**DATE AS OF CHANGE**: 20230201

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** NOVARTIS AG
- **CENTRAL INDEX KEY:** 0001114448
- **STANDARD INDUSTRIAL CLASSIFICATION:** PHARMACEUTICAL PREPARATIONS [2834]
- **IRS NUMBER:** 000000000
- **STATE OF INCORPORATION:** V8
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 6-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-15024
- **FILM NUMBER:** 23574763

**BUSINESS ADDRESS:**
- **STREET 1:** LICHTSTRASSE 35
- **CITY:** BASEL
- **STATE:** V8
- **ZIP:** CH 4056
- **BUSINESS PHONE:** 01141613241111

**MAIL ADDRESS:**
- **STREET 1:** LICHTSTRASSE 35
- **CITY:** BASEL
- **STATE:** V8
- **ZIP:** CH 4056

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**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 6-K**

**REPORT OF FOREIGN PRIVATE ISSUER**

**PURSUANT TO RULE 13a-16 or 15d-16 OF**

**THE SECURITIES EXCHANGE ACT OF 1934**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Report on Form 6-K dated February 1, 2023**

**(Commission File No. 1-15024)**

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**Novartis AG**

(Name of Registrant)

**Lichtstrasse 35**

**4056 Basel**

**Switzerland**

(Address of Principal Executive Offices)

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Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

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|:---|:---|
| **Form 20-F: ⌧** | Form 40-F: □ |

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Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

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|:---|:---|
| Yes: □ | **No**: ⌧ |

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Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

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| | |
|:---|:---|
| Yes: □ | **No**: ⌧ |

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Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

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| | |
|:---|:---|
| Yes: □ | **No**: ⌧ |

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**Exhibits:**

[99.1 Financial Report Q4 2022](a230201-99_1.htm)

[99.2 Interim Financial Report](a230201-99_2.htm)

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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| | | | |
|:---|:---|:---|:---|
|  | **Novartis AG** | **Novartis AG** | **Novartis AG** |
| Date: February 1, 2023 | By: | /s/ PAUL PENEPENT | /s/ PAUL PENEPENT |
|  | Name: | Name: | Paul Penepent |
|  | Title: | Title: | Head Group Financial Reporting and Accounting |

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## Ex-99

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| | |
|:---|:---|
| <br> **<u>Ad hoc announcement pursuant to Art. 53 LR</u>**<br> **** <br>![](logo.jpg) **** <br>**FINANCIAL RESULTS \| RÉSULTATS FINANCIERS \| FINANZERGEBNISSE**<br>| <br>**Novartis International AG**<br> **Novartis Global Communications**<br> CH-4002 Basel<br> Switzerland<br> https://www.novartis.com<br>|

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#### Novartis continues to grow with further core margin expansion and achieves important innovation milestones

#### Full year
&nbsp;&nbsp;&nbsp;&nbsp;• **Net sales grew +4% (cc<sup>1</sup>, -2% USD) with core operating income growing +8% (cc, 0% USD)** 

&nbsp;&nbsp;&nbsp;&nbsp;o IM sales grew +4% (cc, -2% USD) and core operating income +8% (cc, 0% USD), with IM core margin reaching 36.9% (+130 bps cc)

&nbsp;&nbsp;&nbsp;&nbsp;o Sandoz sales grew +4% (cc, -4% USD) with core operating income decreasing -1% (cc, -8% USD)

&nbsp;&nbsp;&nbsp;&nbsp;• **Operating income declined -13% (cc, -21% USD)**, mainly due to higher restructuring and impairments. **Net income declined -67% (cc, -71% USD), or -9% (cc) excluding the impact of Roche income** <sup>2</sup>. Free cash flow was USD 11.9 billion (-10% USD)

&nbsp;&nbsp;&nbsp;&nbsp;• **Core EPS was USD 6.12 +6% (cc, -3% USD)**; excluding Roche core income impact, core EPS grew +14% (cc)

#### Fourth quarter
&nbsp;&nbsp;&nbsp;&nbsp;• **Net sales grew +3% (cc, -4% USD) with core operating income growing +15% (cc, +6% USD)**, mainly driven by higher sales and productivity

&nbsp;&nbsp;&nbsp;&nbsp;o Innovative Medicines (IM) sales grew +3% (cc, -3% USD), growth drivers include: *Entresto* (+44% cc), *Kesimpta* (+157% cc), *Pluvicto* (reaching USD 179 million) and *Kisqali* (+33% cc)

&nbsp;&nbsp;&nbsp;&nbsp;o Sandoz sales were in line with the prior year (0% cc, -8% USD) with continued growth in biopharmaceuticals

&nbsp;&nbsp;&nbsp;&nbsp;• **Q4 selected innovation milestones:** 

&nbsp;&nbsp;&nbsp;&nbsp;o  ***Pluvicto*** Ph3 PSMAfore positive results in mCRPC; EC approval for progressive PSMA+ mCRPC

&nbsp;&nbsp;&nbsp;&nbsp;o **Iptacopan** Ph3 APPLY-PNH demonstrated iptacopan superiority vs. anti-C5 in refractory PNH

&nbsp;&nbsp;&nbsp;&nbsp;o **Iptacopan** Ph3 APPOINT-PNH met primary endpoint in complement inhibitor naive PNH patients

#### Share buyback, dividend and 2023 guidance
&nbsp;&nbsp;&nbsp;&nbsp;• Previously announced up-to USD 15 billion share buyback ongoing; USD 4.9 billion still to be executed<sup>3</sup>

&nbsp;&nbsp;&nbsp;&nbsp;• **Dividend of CHF 3.20 per share, an increase of 3.2%**, proposed for 2022

&nbsp;&nbsp;&nbsp;&nbsp;• **2023 guidance** <sup>4</sup> – Group expected to grow sales low-to-mid single digit and core operating income mid single digit. IM expected to grow sales low-to-mid single digit and core operating
 income mid-to-high single digit

**Basel, February 1, 2023 -** commenting on 2022 results, Vas Narasimhan, CEO of Novartis, said: *"Novartis is on track to become a pure-play innovative medicines company, uniquely positioned to leverage its global scale and R&D platforms. Our six multi-billion brands*<sup>5</sup> *now represent 32% of our Innovative Medicines sales and are growing 26%.* Pluvicto *and* Scemblix *had very strong launch performances, and the* Leqvio *launch continues to progress. Pivotal Ph3 readouts for two iptacopan studies and* Pluvicto *in earlier lines of therapy provide strong confidence for near to mid-term growth. Looking ahead, we have a catalyst rich pipeline with 15 pivotal readouts in the mid-term. We expect to continue to deliver improved financials and strengthen Novartis ESG foundations, on our journey to become most trusted and valued medicines company in the world".*

#### Key figures<sup>1</sup>

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | | | % change | % change | | | % change | % change |
|  | **Q4 2022**<br>**USD m** | **Q4 2021**<br>**USD m** | USD | cc | **FY 2022**<br>**USD m** | **FY 2021**<br>**USD m** | USD | cc |
| **Net sales** | **12 690** | 13 229 | -4 | 3 | **50 545** | 51 626 | -2 | 4 |
| **Operating income** | **1 949** | 2 562 | -24 | -14 | **9 197** | 11 689 | -21 | -13 |
| **Net income** | **1 466** | 16 306 | -91 | -90 | **6 955** | 24 018 | -71 | -67 |
| **EPS (USD)** | 0.69 | 7.29 | -91 | -89 | 3.19 | 10.71 | -70 | -66 |
| **Free cash flow** | **3 552** | 3 027 | 17 |  | **11 945** | 13 282 | -10 |  |
| **Core operating income** | **4 030** | 3 819 | 6 | 15 | **16 665** | 16 588 | 0 | 8 |
| **Core net income** | **3 251** | 3 135 | 4 | 14 | **13 352** | 14 094 | -5 | 3 |
| **Core EPS (USD)** | 1.52 | 1.40 | 9 | 19 | 6.12 | 6.29 | -3 | 6 |

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#### <br>

<sup>1</sup> Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 50 of the Condensed Financial Report. Unless otherwise noted, all growth rates in this Release refer to same period in prior year. <sup>2</sup> A table showing the Q4 2022 and FY 2022 key figures excluding Roche can be found on page 8 and a reconciliation of 2021 IFRS results and non-IFRS measures core results to exclude the impacts of the 2021 divestment of our Roche investment can be found on page 58 of the Condensed Financial Report. <sup>3</sup> As per December 31, 2022. <sup>4</sup> Please see detailed guidance assumptions on page 6. <sup>5</sup> Potential USD sales.

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#### Strategy Update

#### Our focus
During 2022, Novartis unveiled a new focused strategy with our transformation into a "pure-play" Innovative Medicines business. We have a clear focus on **five core therapeutic areas** (cardiovascular, immunology, neuroscience, solid tumors and hematology), with multiple significant in-market and pipeline assets in each of these areas, that address high disease burden and have substantial growth potential. In addition to two established **technology platforms** (chemistry and biotherapeutics), three emerging platforms (gene & cell therapy, radioligand therapy, and xRNA) are being prioritized for continued investment into new R&D capabilities and manufacturing scale. Geographically, we are focused on growing in our **priority geographies** - the US, China, Germany and Japan.

#### Our priorities
&nbsp;&nbsp;&nbsp;&nbsp;1. **Accelerate growth**: Renewed attention to deliver high-value medicines (NMEs) and focus on launch excellence, with a rich pipeline across our core therapeutic areas.

&nbsp;&nbsp;&nbsp;&nbsp;2. **Deliver returns**: Continuing to embed operational excellence and deliver improved financials. Novartis remains disciplined and shareholder-focused in our approach to capital allocation, with
 substantial cash generation and a strong capital structure supporting continued flexibility.

&nbsp;&nbsp;&nbsp;&nbsp;3. **Strengthening foundations**: Unleashing the power of our people, scaling data science and technology and continuing to build trust with society.

#### Sandoz planned spin-off
The planned spin-off remains on track for H2 2023. Completion of the transaction is subject to certain conditions, including consultation with works councils and employee representatives (as required), general market conditions, tax rulings and opinions, final Board of Directors endorsement and shareholder approval in line with Swiss corporate law. The transaction is expected to be tax neutral to Novartis.

#### Financials

#### Fourth quarter
Net sales were USD 12.7 billion (-4%, +3% cc) in the fourth quarter driven by volume growth of 10 percentage points, partly offset by price erosion of 3 percentage points and the negative impact from generic competition of 4 percentage points.

Operating income was USD 1.9 billion (-24%, -14% cc), mainly due to higher restructuring costs (USD 0.6 billion), primarily related to the implementation of the previously announced streamlined organizational model.

Net income was USD 1.5 billion (-91%, -90% cc), impacted by Roche income in the prior year of USD 14.6 billion. Excluding the impact of Roche income, net income grew +2% (cc). EPS was USD 0.69 (-91%, -89% cc). Excluding the impact of Roche income, EPS grew +7% (cc).

Core operating income was USD 4.0 billion (+6%, +15% cc) driven by higher sales and productivity, including initial savings from the previously announced streamlined organizational model. Core operating income margin was 31.8% of net sales, increasing by 2.9 percentage points (+3.5 percentage points cc).

Core net income was USD 3.3 billion (+4%, +14% cc), mainly driven by growth in core operating income, partly offset by the loss of Roche core income. Excluding the impact of Roche core income, core net income grew +17% (cc). Core EPS was USD 1.52 (+9%, +19% cc), benefiting from lower weighted average number of shares outstanding. Excluding the impact of Roche core income, core EPS grew +23% (cc).

Free cash flow amounted to USD 3.6 billion (+17% USD), mainly driven by higher net cash flows from operating activities and lower purchases of intangible assets.

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**** 

<br> **Innovative Medicines** net sales were USD 10.4 billion (-3%, +3% cc) with volume contributing 11 percentage points to growth, mainly driven by continued strong performance from *Entresto*, *Kesimpta*, *Pluvicto* and *Kisqali*. Generic competition had a negative impact of 5 percentage points, mainly due to *Gilenya, Exjade* and *Afinitor*. Pricing had a negative impact of 3 percentage points, including approximately 1 percentage point impact from a revenue deduction true-up for *Cosentyx* in the US, which was related to prior quarters in 2022. Sales growth for the quarter was also negatively impacted by the prior year reclassification of contract manufacturing from other revenues to sales. Excluding the contract manufacturing reclassification impact, sales would have grown +4% (cc). Sales in the US were USD 4.2 billion (+7%) and in the rest of the world USD 6.2 billion (-9%, +1% cc).

**Sandoz** net sales were USD 2.3 billion (-8%, 0% cc) with volume contributing 5 percentage points to growth. Pricing had a negative impact of 5 percentage points. Sales in Europe were USD 1.3 billion (-7%, +3% cc), in the US USD 429 million (-10%) and in the rest of the world USD 612 million (-8%, +1% cc). Sales were negatively impacted by a prior year biopharmaceuticals contract manufacturing revenue reclassification. Excluding this impact, overall Sandoz sales would have grown +1% (cc). Global sales of Biopharmaceuticals grew to USD 517 million (-7%, +3% cc), with growth in Europe, Canada and Latin America.

#### Full year
Net sales were USD 50.5 billion (-2%, +4% cc) in the full year, driven by volume growth of 11 percentage points, partly offset by price erosion of 4 percentage points and the negative impact from generic competition of 3 percentage points.

Operating income was USD 9.2 billion (-21%, -13% cc), mainly due to higher restructuring (USD 1.2 billion) primarily related to the implementation of the previously announced streamlined organizational model, higher impairments (USD 1.0 billion) and lower divestment gains (USD 0.6 billion).

Net income was USD 7.0 billion (-71%, -67% cc), impacted by Roche income in the prior year. Excluding the impact of Roche income, net income declined -9% (cc). EPS was USD 3.19 (-70%, -66% cc). Excluding the impact of Roche income, EPS declined -7% (cc).

Core operating income was USD 16.7 billion (0%, +8% cc) benefiting from higher sales, partly offset by higher R&D investments. Core operating income margin was 33.0% of net sales, increasing by 0.9 percentage points (+1.3 percentage points cc).

Core net income was USD 13.4 billion (-5%, +3% cc) as growth in core operating income was partly offset by the loss of Roche core income. Excluding the impact of Roche core income, core net income grew +11% (cc). Core EPS was USD 6.12 (-3%, +6% cc), benefiting from lower weighted average number of shares outstanding. Excluding the impact of Roche core income, core EPS grew +14% (cc).

Free cash flow amounted to USD 11.9 billion (-10% USD), mainly due to a decrease in net cash flows from operating activities and lower divestment proceeds, partly offset by lower purchases of property, plant and equipment.

**Innovative Medicines** net sales were USD 41.3 billion (-2%, +4% cc), with volume contributing 12 percentage points to growth. Sales growth was mainly driven by continued strong growth from *Entresto*, *Kesimpta*, *Kisqali*, *Pluvicto* and *Cosentyx*. Generic competition had a negative impact of 4 percentage points, mainly due to *Gilenya, Afinitor/Votubia* and *Gleevec/Glivec*. Pricing had a negative impact of 4 percentage points. Sales in the US were USD 15.9 billion (+6%) and in the rest of the world USD 25.4 billion (-6%, +3% cc).

**Sandoz** net sales were USD 9.2 billion (-4%, +4% cc) with volume contributing 10 percentage points to growth. Pricing had a negative impact of 6 percentage points. Sales in Europe were USD 4.9 billion (-7%, +4% cc), in the US USD 1.8 billion (-4%) and in the rest of the world USD 2.6 billion (+2%, +9% cc). Global sales of Biopharmaceuticals grew to USD 2.1 billion (-1%, +9% cc) across all regions.

#### Q4 key growth drivers
Underpinning our financial results in the quarter is a continued focus on key growth drivers (ranked in order of contribution to Q4 growth) including:

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|:---|:---|
| ***Entresto*** | (USD 1,291 million, +44% cc) sustained robust demand-led growth, with increased patient share across all geographies |

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| | |
|:---|:---|
| ***Kesimpta*** | (USD 369 million, 157% cc) driven by strong launch uptake, access and increased demand; approved in 80 countries |
| ***Pluvicto*** | (USD 179 million, nm cc) with strong US launch performance, more than 160 active centers |
| ***Kisqali*** | (USD 357 million, +33% cc) grew strongly across all geographies, based on increasing recognition of its overall survival and quality of life benefits in HR+/HER2- advanced breast cancer |
| ***Promacta/Revolade*** | (USD 540 million, +11% cc) showed growth across most regions, driven by increased use in chronic ITP and as first-line and/or second-line treatment for severe aplastic anemia |
| ***Scemblix*** | (USD 52 million, nm cc) continued its strong launch uptake demonstrating the high unmet need in CML, particularly patients previously treated with 2 or more tyrosine kinase inhibitors, or with the T315I mutation |
| ***Leqvio*** | (USD 42 million, nm cc) launch is ongoing, with focus on patient on-boarding, removing access hurdles and enhancing medical education |
| ***Ilaris*** | (USD 301 million, +14% cc) showed continued growth across all geographies |
| ***Tafinlar + Mekinist*** | (USD 465 million, +8% cc) sales grew across all geographies, driven by demand in BRAF+ adjuvant melanoma and NSCLC indications |
| ***Jakavi*** | (USD 388 million, +8% cc) sales grew (cc) mainly in Europe, Emerging Growth Markets and Japan, driven by strong demand in both the myelofibrosis and polycythemia vera indications |
| ***Piqray*** | (USD 112 million, +30% cc) sales grew mainly in the US, benefiting from indication expansion into PIK3CA-related overgrowth spectrum (PROS) |
| ***Mayzent*** | (USD 99 million, +28% cc) continued to grow in patients with multiple sclerosis showing signs of progression despite being on other treatments |
| ***Lutathera*** | (USD 128 million, +15% cc) sales grew across all geographies, with approximately 500 centers actively treating patients globally |
| ***Cosentyx*** | (USD 1,080 million, -9% cc), with ex-US growing +5% (cc). US sales growth was impacted by a revenue deduction true-up for *Cosentyx* (mainly due to higher than expected Medicaid patient mix), which was related to prior quarters in 2022. For the full year, *Cosentyx* grew +5% (cc) worldwide |
| **Sandoz Biopharmaceuticals** | (USD 517 million, +3% cc) with growth in Europe, Canada and Latin America |
| **Emerging Growth Markets\*** | Grew +5% (cc) overall. China declined (-2% cc) to USD 581 million, with sales impacted by COVID-19 related regional lockdowns. For the full year, China grew +6% (cc)<br> \*All markets except the US, Canada, Western Europe, Japan, Australia, and New Zealand |

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#### nm= not meaningful <br>

#### Net sales of the top 20 Innovative Medicines products in 2022

**---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | Q4 2022 | % change | % change | FY 2022 | % change | % change |
|  | USD m | USD | cc | USD m | USD | cc |
| *Cosentyx /* excl. revenue deduction true-up\* | 1 080 | -13 / -6\* | -9 / -2\* | 4 788 | 1 | 5 |
| *Entresto* | 1 291 | 36 | 44 | 4 644 | 31 | 37 |
| *Promacta/Revolade* | 540 | 4 | 11 | 2 088 | 4 | 9 |
| *Gilenya* | 346 | -47 | -44 | 2 013 | -28 | -24 |
| *Tasigna* | 475 | -6 | 0 | 1 923 | -7 | -1 |
| *Lucentis* | 398 | -22 | -12 | 1 874 | -13 | -4 |
| *Tafinlar + Mekinist* | 465 | 2 | 8 | 1 770 | 5 | 11 |
| *Jakavi* | 388 | -5 | 8 | 1 561 | -2 | 9 |

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**

#### <br>
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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| *Zolgensma* | **309** | -10 | -5 | **1 370** | 1 | 5 |
| *Xolair* | **323** | -13 | -3 | **1 365** | -4 | 6 |
| *Sandostatin* | **305** | -12 | -8 | **1 238** | -12 | -10 |
| *Kisqali* | **357** | 25 | 33 | **1 231** | 31 | 38 |
| *Ilaris* | **301** | 6 | 14 | **1 133** | 7 | 15 |
| *Kesimpta* | **369** | 151 | 157 | **1 092** | 194 | 200 |
| *Galvus* Group | **209** | -25 | -16 | **859** | -21 | -12 |
| *Gleevec/Glivec* | **175** | -25 | -18 | **745** | -27 | -22 |
| *Exforge* Group | **159** | -19 | -12 | **743** | -18 | -12 |
| *Diovan* Group | **142** | -25 | -16 | **652** | -16 | -9 |
| *Kymriah* | **139** | -3 | 5 | **536** | -9 | -2 |
| *Afinitor/Votubia* | **106** | -39 | -32 | **512** | -45 | -41 |
| **Top 20 products total** | **7 877** | **-4** | **2** | **32 137** | **-1** | **5** |

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\* Sales growth with/without true-up: US *Cosentyx* sales growth was impacted by a revenue deduction true-up (mainly due to higher than expected Medicaid patient mix), which was related to prior quarters in 2022

#### R&D update - key developments from the fourth quarter

#### New approvals

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|:---|:---|
| ***Pluvicto*** | EC approval for treatment of patients with progressive PSMA-positive metastatic castration-resistant prostate cancer (mCRPC) who have been treated with androgen-receptor pathway inhibition and taxane-based chemotherapy |

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#### Results from ongoing trials and other highlights

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|:---|:---|
| ***Pluvicto*** | Ph3 PSMAfore trial met its primary endpoint, demonstrating statistically significant and clinically meaningful improvement in radiographic PFS in patients with PSMA-positive mCRPC who have been treated with androgen-receptor pathway inhibition. No unexpected safety findings were observed. Detailed data to be presented at an upcoming medical meeting with submission to regulatory authorities for approval planned for 2023 |
| **Iptacopan** | Ph3 APPLY-PNH study met both primary and most secondary endpoints demonstrating iptacopan's superiority over anti-C5 treatment in adult PNH patients with residual anemia despite prior anti-C5 treatment. Iptacopan demonstrated an 80% difference to anti-C5 in the estimated proportion of patients achieving ≥2 g/dL Hb-level increases from baseline and a 67% difference to anti-C5 in the estimated proportion of patients achieving ≥12 g/dL Hb levels without the need for red blood cell transfusions. Iptacopan also provided blood-transfusion independence for almost all patients with no serious cases of breakthrough hemolysis and clinically meaningful patient-reported fatigue improvements. Data presented at ASH 2022<br>Ph3 APPOINT-PNH study (evaluating iptacopan in complement-inhibitor-naïve PNH patients) met its primary endpoint. With iptacopan, a significant proportion of patients achieved clinically meaningful Hb-level increases of ≥2 g/dL from baseline without the need for blood transfusions at 24 weeks. Detailed data to be presented at an upcoming medical meeting and included in iptacopan PNH global regulatory submissions planned in 2023 |
| ***Kisqali*** | Ph2 RIGHT Choice trial demonstrated approximately one year PFS benefit of *Kisqali* plus ET over combination chemotherapy (24 months compared to 12.3 months; HR=0.54; p=.0007) in the 1L setting for pre- and perimenopausal patients with aggressive forms of HR+/HER2- mBC, including patients with visceral crisis. RIGHT Choice is the first randomized study comparing a CDK4/6i plus ET vs. combination CT in aggressive HR+/HER2- mBC. Data presented at SABCS 2022 |
| **Leqvio** | New long-term data from the ORION-3 open-label study demonstrated effective and sustained reductions in LDL cholesterol over four years of treatment. At any<br>|

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**---

| | |
|:---|:---|
|  | time throughout the trial, approximately 80% of patients reached an LDL-C level of <70mg/dL. Data presented at AHA 2022 |
| Ganaplacide/ lumefantrine-SDF combination | Novartis and Medicines for Malaria Venture announced that ganaplacide/ lumefantrine would advance to a Ph3 study in patients with acute uncomplicated malaria due to Plasmodium falciparum |
| Branaplam | Novartis ended the development of branaplam in Huntington's Disease based on an overall assessment of potential benefit-risk from the Ph2b VIBRANT-HD study |

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**

#### Capital structure and net debt
Retaining a good balance between investment in the business, a strong capital structure and attractive shareholder returns remains a priority.

In 2022, Novartis repurchased a total of 126.2 million shares for USD 10.8 billion on the SIX Swiss Exchange second trading line, including 115.3 million shares (USD 9.9 billion) under the up-to USD 15 billion share buyback announced in December 2021 and 10.9 million shares (USD 0.9 billion) to mitigate dilution related to participation plans of associates. In addition, 1.4 million shares (USD 0.1 billion) were repurchased from associates. In the same period, 12.3 million shares (for an equity value of USD 0.9 billion) were delivered as a result of option exercises and share deliveries related to participation plans of associates. Consequently, the total number of shares outstanding decreased by 115.3 million versus December 31, 2021. These treasury share transactions resulted in a decrease in equity of USD 10.0 billion and a net cash outflow of USD 10.6 billion.

As of December 31, 2022, the net debt increased to USD 7.2 billion compared to USD 0.9 billion at December 31, 2021. The increase was mainly due to the USD 7.5 billion annual dividend payment and the net cash outflow for treasury share transactions of USD 10.6 billion, partially offset by USD 11.9 billion free cash flow during 2022.

As of Q4 2022, the long-term credit rating for the company is A1 with Moody's Investors Service and AA- with S&P Global Ratings.

#### 2023 outlook

Barring unforeseen events; growth vs prior year in cc

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| | |
|:---|:---|
| **Innovative Medicines** | Sales expected to **grow low-to-mid single digit**<br> Core OpInc expected to **grow mid-to-high single digit** |
| **Novartis ex. Sandoz**<br> (IM + Corporate) | Sales expected to **grow low-to-mid single digit**<br> Core OpInc expected to **grow mid-to-high single digit** |
| **Novartis incl. Sandoz**<br> (IM + Sandoz + Corporate)\* | Sales expected to **grow low-to-mid single digit**<br> Core OpInc expected to **grow mid single digit** |

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

Barring unforeseen events; growth vs prior year in cc

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| | |
|:---|:---|
| **Sandoz** | Sales expected to **grow low-to-mid single digit**<br> Core OpInc expected to **decline low double digit**, reflecting required stand-up investments to transition Sandoz to a separate company and continued inflationary pressures |

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Our guidance assumes that we see a continuing return to normal global healthcare systems, including prescription dynamics, and 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.

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#### <br>

#### Foreign exchange impact
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**<br>

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**<br>

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.

___

------

#### <br>

#### Key figures<sup>1</sup>

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  | Excluding Roche income | Excluding Roche income | Excluding Roche income | Reported | Reported | Reported |
| **Group** | **Q4 2022** | **Q4 2021** | % change | % change | **Q4 2021** | % change | % 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** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *As a % of sales* | 15.4 | 19.4 |  |  | 19.4 |  |  |
| **Core operating income** | **4 030** | **3 819** | **6** | **15** | **3 819** | **6** | **15** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *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<br> 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 | % change |  |  |  |
|  | **USD m** | USD m | USD | cc |  |  |  |
| **Net sales** | **10 360** | **10 704** | **-3** | **3** |  |  |  |
| **Operating income** | **1 945** | **2 468** | **-21** | **-12** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *As a % of sales* | 18.8 | 23.1 |  |  |  |  |  |
| **Core operating income** | **3 768** | **3 596** | **5** | **14** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *As a % of sales* | 36.4 | 33.6 |  |  |  |  |  |
| **Sandoz** | **Q4 2022** | **Q4 2021** | % change | % change |  |  |  |
|  | **USD m** | USD m | USD | cc |  |  |  |
| **Net sales** | **2 330** | **2 525** | **-8** | **0** |  |  |  |
| **Operating income** | **273** | **386** | **-29** | **-20** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *As a % of sales* | 11.7 | 15.3 |  |  |  |  |  |
| **Core operating income** | **391** | **528** | **-26** | **-18** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *As a % of sales* | 16.8 | 20.9 |  |  |  |  |  |
| **Corporate** | **Q4 2022** | **Q4 2021** | % change | % change |  |  |  |
|  | **USD m** | USD m | USD | cc |  |  |  |
| **Operating loss** | **-269** | **-292** | **8** | **2** |  |  |  |
| **Core operating loss** | **-129** | **-305** | **58** | **57** |  |  |  |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  | Excluding Roche income | Excluding Roche income | Excluding Roche income | Reported | Reported | Reported |
| **Group** | **FY 2022** | **FY 2021** | % change | % change | **FY 2021** | % change | % 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** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *As a % of sales* | 18.2 | 22.6 |  |  | 22.6 |  |  |
| **Core operating income** | **16 665** | **16 588** | **0** | **8** | **16 588** | **0** | **8** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *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<br> 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** | **&nbsp;&nbsp;&nbsp;&nbsp;FY 2021** | % change | % change |
|  | **USD m** | USD m | USD | cc |
| **Net sales** | **41 296** | **41 995** | **-2** | **4** |
| **Operating income** | **8 786** | **10 688** | **-18** | **-9** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *As a % of sales* | 21.3 | 25.5 |  |  |
| **Core operating income** | **15 237** | **15 215** | **0** | **8** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *As a % of sales* | 36.9 | 36.2 |  |  |
| **Sandoz** | **FY 2022** | **FY 2021** | % change | % change |
|  | **USD m** | USD m | USD | cc |
| **Net sales** | **9 249** | **9 631** | **-4** | **4** |
| **Operating income** | **1 448** | **1 600** | **-10** | **-2** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *As a % of sales* | 15.7 | 16.6 |  |  |
| **Core operating income** | **1 903** | **2 064** | **-8** | **-1** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *As a % of sales* | 20.6 | 21.4 |  |  |
| **Corporate** | **FY 2022** | **FY 2021** | % change | % change |
|  | **USD m** | USD m | USD | cc |
| **Operating loss** | **-1 037** | **-599** | **-73** | **-84** |
| **Core operating loss** | **-475** | **-691** | **31** | **28** |

---

<sup>1</sup>Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 50 of the Condensed Financial Report. Unless otherwise noted, all growth rates in this Release refer to same period in prior year.

#### Detailed financial results accompanying this press release are included in the Condensed Financial Report at the link below:
<u>https://ml-eu.globenewswire.com/resource/download/0651bdfc-55fc-4463-8b19-a498f6d67337/</u> <br>

___

------

#### 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 "continued," "growth," "ongoing," "to grow," "on track," "to become, "to leverage," "growing," "building," "launch," "looking ahead," "expect," "continue," "to deliver," "transformation," "focus," "address," "growing," "accelerate," "continuing," "remains," "scaling," "on track," "expected," "guidance," "to be presented," "outlook," "driven," "long-term," "driven," "innovation," "transformative," "priority," "potential," "can," "submissions," "will," "proposes," "proposal," "to reduce," "advance," 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; regarding potential future sales or earnings of the Group or any of its divisions; or by discussions of strategy, plans, expectations or intentions; or regarding the Group's liquidity or cash flow positions and its ability to meet its ongoing financial obligations and operational needs; or regarding the conclusion of the strategic review of Sandoz, our planned 100% spin-off of Sandoz, through which we plan to become a fully focused Innovative Medicines business. 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 healthcare cost containment, including ongoing government, payer and general public pricing and reimbursement pressures and requirements for increased pricing transparency; uncertainties regarding potential significant breaches of data security or data privacy, or disruptions of our information technology systems; regulatory actions or delays or government regulation generally, including potential regulatory actions or delays with respect to the development of the products described in this press release; the potential that the benefits and opportunities expected from our planned 100% spin-off of Sandoz may not be realized or may be more difficult or take longer to realize than expected; the uncertainties in the research and development of new healthcare products, including clinical trial results and additional analysis of existing clinical data; our ability to obtain or maintain proprietary intellectual property protection, including the ultimate extent of the impact on Novartis of the loss of patent protection and exclusivity on key products; safety, quality, data integrity, or manufacturing issues; uncertainties involved in the development or adoption of potentially transformational technologies and business models; uncertainties regarding actual or potential legal proceedings, investigations or disputes; our performance on environmental, social and governance measures; general political, economic and business conditions, including the effects of and efforts to mitigate pandemic diseases such as COVID-19; uncertainties regarding future global exchange rates; uncertainties regarding future demand for our products; and other risks and factors referred to in Novartis AG's current Form 20-F on file with the US Securities and Exchange Commission. 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 as a result of new information, future events or otherwise.

All product names appearing in italics are trademarks owned by or licensed to Novartis Group companies.

___

------

#### About Novartis
Novartis is reimagining medicine to improve and extend people's lives. We deliver high-value medicines that alleviate society's greatest disease burdens through technology leadership in R&D and novel access approaches. In our quest to find new medicines, we consistently rank among the world's top companies investing in research and development. About 106,000 people of more than 140 nationalities work together to bring Novartis products to nearly 800 million people around the world. Find out more at <u>https://www.novartis.com</u>.

Novartis will conduct a conference call with investors to discuss this news release today at 14:00 Central European time and 8:00 Eastern Time. A simultaneous webcast of the call for investors and other interested parties may be accessed by visiting the Novartis website. A replay will be available after the live webcast by visiting <u>https://www.novartis.com/investors/event-calendar</u>.

Detailed financial results accompanying this press release are included in the condensed financial report at the link below. Additional information is provided on Novartis divisions and pipeline of selected compounds in late stage development and a copy of today's earnings call presentation can be found at <u>https://www.novartis.com/investors/event-calendar</u>.

Novartis issued its 2022 Annual Report today, and it is available at <u>www.novartis.com</u>. Novartis will also file its 2022 Annual Report on Form 20-F with the US Securities and Exchange Commission today, and will post this document on <u>www.novartis.com</u>. Novartis shareholders may receive a hard copy of either of these documents, each of which contains our complete audited financial statements, free of charge, upon request. Novartis also issued its Novartis in Society Integrated Report 2022 today, and it is available at <u>www.novartis.com</u>.

#### Important dates

---

| | |
|:---|:---|
| March 7, 2023 <br>| Annual General Meeting |
| April 25, 2023 | First quarter 2023 results |
| July 18, 2023 | Second quarter & Half year 2023 results |
| October 24, 2023 | Third quarter & Nine months 2023 results |

---

___

## Ex-99

![](coverifr.jpg) <br>

------

## Novartis Fourth Quarter and Full Year 2022 Condensed Financial Report – Supplementary Data
INDEX

Page

**GROUP AND DIVISIONAL OPERATING PERFORMANCE** 

Group

Innovative Medicines

Sandoz

**CASH FLOW AND GROUP BALANCE SHEET

16**

**INNOVATION REVIEW

19**

**CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

Consolidated income statements

Consolidated statements of comprehensive income

Consolidated balance sheets

Consolidated statements of changes in equity

Consolidated statements of cash flows

Notes to condensed consolidated financial statements, including update on legal proceedings

**SUPPLEMENTARY INFORMATION

50**

*CORE RESULTS*

Reconciliation from IFRS results to core results

Group

Innovative Medicines

Sandoz

Corporate

*ADDITIONAL INFORMATION* 

Reconciliation of 2021 IFRS results and non-IFRS measures core results and free cash flow to

exclude the impacts of the 2021 divestment of our Roche investment

Condensed consolidated changes in net debt

Share information / Free cash flow

Effects of currency fluctuations

**DISCLAIMER

66**

2<br>

------

**Group**

#### Key Figures

#### Fourth quarter

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  | Excluding Roche investment impacts<sup>2</sup> | Excluding Roche investment impacts<sup>2</sup> | Excluding Roche investment impacts<sup>2</sup> | Reported | Reported | Reported |
|  | **Q4 2022<br> USD m**  | Q4 2021<br> USD m  | % change<br> USD  | % change<br> cc <sup>1</sup> | Q4 2021<br> USD m  | % change<br> USD  | % change<br> cc <sup>1</sup> |
| **Net sales to third parties** | **12 690** | **13 229** | **-4** | **3** | **13 229** | **-4** | **3** |
| Divisional operating income | 2 218 | 2 854 | -22 | -13 | 2 854 | -22 | -13 |
| Corporate income and expense, net | &nbsp;&nbsp;&nbsp;&nbsp;-269 | &nbsp;&nbsp;&nbsp;&nbsp;-292 | &nbsp;&nbsp;&nbsp;&nbsp;8 | &nbsp;&nbsp;&nbsp;&nbsp;2 | &nbsp;&nbsp;&nbsp;&nbsp;-292 | &nbsp;&nbsp;&nbsp;&nbsp;8 | &nbsp;&nbsp;&nbsp;&nbsp;2 |
| **Operating income** | **1 949** | **2 562** | **-24** | **-14** | **2 562** | **-24** | **-14** |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;As % of net sales* | 15.4 | 19.4 |  |  | 19.4 |  |  |
| (Loss)/income from associated companies | -3 | 2 | nm | nm | 14 621 | nm | nm |
| Interest expense | -219 | -206 | -6 | -8 | -206 | – 6 | -8 |
| Other financial income and expense | 14 | -42 | nm | nm | -26 | nm | nm |
| Income taxes | -275 | -645 | 57 | 50 | -645 | 57 | 50 |
| **Net income** | **1 466** | **1 671** | **-12** | **2** | **16 306** | **-91** | **-90** |
| **Basic earnings per share (USD)** | 0.69 | 0.75 | **-8** | **7** | 7.29 | **-91** | **-89** |
| **Net cash flows from operating activities** | **4 111** | **3 884** | **6** |  | **3 884** | **6** |  |
| **Free cash flow <sup>1</sup>** | **3 552** | **3 027** | **17** |  | **3 027** | **17** |  |
| **Core <sup>1</sup>** |  |  |  |  |  |  |  |
| **Core operating income** | **4 030** | **3 819** | **6** | **15** | **3 819** | **6** | **15** |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;As % of net sales* | 31.8 | 28.9 |  |  | 28.9 |  |  |
| **Core net income** | **3 251** | **3 044** | **7** | **17** | **3 135** | **4** | **14** |
| **Core basic earnings per share (USD)** | 1.52 | 1.36 | **12** | **23** | 1.40 | **9** | **19** |
|  <sup>1</sup> Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 50. Unless otherwise noted, all growth rates in this release refer to same period in prior year.  | <sup>1</sup> Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 50. Unless otherwise noted, all growth rates in this release refer to same period in prior year.  | <sup>1</sup> Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 50. Unless otherwise noted, all growth rates in this release refer to same period in prior year.  | <sup>1</sup> Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 50. Unless otherwise noted, all growth rates in this release refer to same period in prior year.  | <sup>1</sup> Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 50. Unless otherwise noted, all growth rates in this release refer to same period in prior year.  | <sup>1</sup> Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 50. Unless otherwise noted, all growth rates in this release refer to same period in prior year.  | <sup>1</sup> Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 50. Unless otherwise noted, all growth rates in this release refer to same period in prior year.  | <sup>1</sup> Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 50. Unless otherwise noted, all growth rates in this release refer to same period in prior year.  |
|  <sup>2</sup> A reconciliation of 2021 IFRS results and non-IFRS measures core results and free cash flow to exclude the impacts of the 2021 divestment of our Roche investment can be found on page 58 of the Condensed Financial Report. The free cash flow impact represents the dividend received in Q1 2021 from Roche in relation to the distribution of its 2020 net income.  | <sup>2</sup> A reconciliation of 2021 IFRS results and non-IFRS measures core results and free cash flow to exclude the impacts of the 2021 divestment of our Roche investment can be found on page 58 of the Condensed Financial Report. The free cash flow impact represents the dividend received in Q1 2021 from Roche in relation to the distribution of its 2020 net income.  | <sup>2</sup> A reconciliation of 2021 IFRS results and non-IFRS measures core results and free cash flow to exclude the impacts of the 2021 divestment of our Roche investment can be found on page 58 of the Condensed Financial Report. The free cash flow impact represents the dividend received in Q1 2021 from Roche in relation to the distribution of its 2020 net income.  | <sup>2</sup> A reconciliation of 2021 IFRS results and non-IFRS measures core results and free cash flow to exclude the impacts of the 2021 divestment of our Roche investment can be found on page 58 of the Condensed Financial Report. The free cash flow impact represents the dividend received in Q1 2021 from Roche in relation to the distribution of its 2020 net income.  | <sup>2</sup> A reconciliation of 2021 IFRS results and non-IFRS measures core results and free cash flow to exclude the impacts of the 2021 divestment of our Roche investment can be found on page 58 of the Condensed Financial Report. The free cash flow impact represents the dividend received in Q1 2021 from Roche in relation to the distribution of its 2020 net income.  | <sup>2</sup> A reconciliation of 2021 IFRS results and non-IFRS measures core results and free cash flow to exclude the impacts of the 2021 divestment of our Roche investment can be found on page 58 of the Condensed Financial Report. The free cash flow impact represents the dividend received in Q1 2021 from Roche in relation to the distribution of its 2020 net income.  | <sup>2</sup> A reconciliation of 2021 IFRS results and non-IFRS measures core results and free cash flow to exclude the impacts of the 2021 divestment of our Roche investment can be found on page 58 of the Condensed Financial Report. The free cash flow impact represents the dividend received in Q1 2021 from Roche in relation to the distribution of its 2020 net income.  | <sup>2</sup> A reconciliation of 2021 IFRS results and non-IFRS measures core results and free cash flow to exclude the impacts of the 2021 divestment of our Roche investment can be found on page 58 of the Condensed Financial Report. The free cash flow impact represents the dividend received in Q1 2021 from Roche in relation to the distribution of its 2020 net income.  |
| nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful |

---

------

#### Full year

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  | Excluding Roche investment impacts<sup>2</sup> | Excluding Roche investment impacts<sup>2</sup> | Excluding Roche investment impacts<sup>2</sup> | Reported | Reported | Reported |
|  | **FY 2022<br> USD m**  | FY 2021<br> USD m  | % change<br> USD  | % change<br> cc <sup>1</sup> | FY 2021<br> USD m  | % change<br> USD  | % change<br> cc <sup>1</sup> |
| **Net sales to third parties** | **50 545** | **51 626** | **-2** | **4** | **51 626** | **– 2** | **4** |
| Divisional operating income | 10 234 | 12 288 | -17 | -8 | 12 288 | -17 | -8 |
| Corporate income and expense, net | &nbsp;&nbsp;&nbsp;&nbsp;-1 037 | &nbsp;&nbsp;&nbsp;&nbsp;-599 | &nbsp;&nbsp;&nbsp;&nbsp;-73 | &nbsp;&nbsp;&nbsp;&nbsp;-84 | &nbsp;&nbsp;&nbsp;&nbsp;-599 | &nbsp;&nbsp;&nbsp;&nbsp;-73 | &nbsp;&nbsp;&nbsp;&nbsp;-84 |
| **Operating income** | **9 197** | **11 689** | **-21** | **-13** | **11 689** | **-21** | **-13** |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;As % of net sales* | 18.2 | 22.6 |  |  | 22.6 |  |  |
| (Loss)/income from associated companies | -9 | -2 | nm | nm | 15 339 | nm | nm |
| Interest expense | -837 | -811 | -3 | -5 | -811 | – 3 | -5 |
| Other financial income and expense | 20 | -96 | nm | nm | -80 | nm | nm |
| Income taxes | -1 416 | -2 119 | 33 | 25 | -2 119 | 33 | 25 |
| **Net income** | **6 955** | **8 661** | **-20** | **-9** | **24 018** | **-71** | **-67** |
| **Basic earnings per share (USD)** | 3.19 | 3.86 | **-17** | **-7** | 10.71 | **-70** | **-66** |
| **Net cash flows from operating activities** | **14 236** | **14 549** | **-2** |  | **15 071** | **-6** |  |
| **Free cash flow <sup>1</sup>** | **11 945** | **12 760** | **-6** |  | **13 282** | **-10** |  |
| **Core <sup>1</sup>** |  |  |  |  |  |  |  |
| **Core operating income** | **16 665** | **16 588** | **0** | **8** | **16 588** | **0** | **8** |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;As % of net sales* | 33.0 | 32.1 |  |  | 32.1 |  |  |
| **Core net income** | **13 352** | **13 099** | **2** | **11** | **14 094** | **-5** | **3** |
| **Core basic earnings per share (USD)** | 6.12 | 5.84 | **5** | **14** | 6.29 | **-3** | **6** |
|  <sup>1</sup> Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 50. Unless otherwise noted, all growth rates in this release refer to same period in prior year.  | <sup>1</sup> Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 50. Unless otherwise noted, all growth rates in this release refer to same period in prior year.  | <sup>1</sup> Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 50. Unless otherwise noted, all growth rates in this release refer to same period in prior year.  | <sup>1</sup> Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 50. Unless otherwise noted, all growth rates in this release refer to same period in prior year.  | <sup>1</sup> Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 50. Unless otherwise noted, all growth rates in this release refer to same period in prior year.  | <sup>1</sup> Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 50. Unless otherwise noted, all growth rates in this release refer to same period in prior year.  | <sup>1</sup> Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 50. Unless otherwise noted, all growth rates in this release refer to same period in prior year.  | <sup>1</sup> Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 50. Unless otherwise noted, all growth rates in this release refer to same period in prior year.  |
|  <sup>2</sup> A reconciliation of 2021 IFRS results and non-IFRS measures core results and free cash flow to exclude the impacts of the 2021 divestment of our Roche investment can be found on page 58 of the Condensed Financial Report. The free cash flow impact represents the dividend received in Q1 2021 from Roche in relation to the distribution of its 2020 net income.  | <sup>2</sup> A reconciliation of 2021 IFRS results and non-IFRS measures core results and free cash flow to exclude the impacts of the 2021 divestment of our Roche investment can be found on page 58 of the Condensed Financial Report. The free cash flow impact represents the dividend received in Q1 2021 from Roche in relation to the distribution of its 2020 net income.  | <sup>2</sup> A reconciliation of 2021 IFRS results and non-IFRS measures core results and free cash flow to exclude the impacts of the 2021 divestment of our Roche investment can be found on page 58 of the Condensed Financial Report. The free cash flow impact represents the dividend received in Q1 2021 from Roche in relation to the distribution of its 2020 net income.  | <sup>2</sup> A reconciliation of 2021 IFRS results and non-IFRS measures core results and free cash flow to exclude the impacts of the 2021 divestment of our Roche investment can be found on page 58 of the Condensed Financial Report. The free cash flow impact represents the dividend received in Q1 2021 from Roche in relation to the distribution of its 2020 net income.  | <sup>2</sup> A reconciliation of 2021 IFRS results and non-IFRS measures core results and free cash flow to exclude the impacts of the 2021 divestment of our Roche investment can be found on page 58 of the Condensed Financial Report. The free cash flow impact represents the dividend received in Q1 2021 from Roche in relation to the distribution of its 2020 net income.  | <sup>2</sup> A reconciliation of 2021 IFRS results and non-IFRS measures core results and free cash flow to exclude the impacts of the 2021 divestment of our Roche investment can be found on page 58 of the Condensed Financial Report. The free cash flow impact represents the dividend received in Q1 2021 from Roche in relation to the distribution of its 2020 net income.  | <sup>2</sup> A reconciliation of 2021 IFRS results and non-IFRS measures core results and free cash flow to exclude the impacts of the 2021 divestment of our Roche investment can be found on page 58 of the Condensed Financial Report. The free cash flow impact represents the dividend received in Q1 2021 from Roche in relation to the distribution of its 2020 net income.  | <sup>2</sup> A reconciliation of 2021 IFRS results and non-IFRS measures core results and free cash flow to exclude the impacts of the 2021 divestment of our Roche investment can be found on page 58 of the Condensed Financial Report. The free cash flow impact represents the dividend received in Q1 2021 from Roche in relation to the distribution of its 2020 net income.  |
| nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful |

---

------

**Strategy Update**

#### Our focus
During 2022, Novartis unveiled a new focused strategy with our transformation into a "pure-play" Innovative Medicines business. We have a clear focus on five core therapeutic areas (cardiovascular, immunology, neuroscience, solid tumors and hematology), with multiple significant in-market and pipeline assets in each of these areas, that address high disease burden and have substantial growth potential. In addition to two established technology platforms (chemistry and biotherapeutics), three emerging platforms (gene & cell therapy, radioligand therapy, and xRNA) are being prioritized for continued investment into new R&D capabilities and manufacturing scale. Geographically, we are focused on growing in our priority geographies - the US, China, Germany and Japan.

#### Our priorities
1. **Accelerate growth**: Renewed attention to deliver high-value medicines (NMEs) and focus on launch excellence, with a rich pipeline across our core therapeutic areas.

2. **Deliver returns**: Continuing to embed operational excellence and deliver improved financials. Novartis remains disciplined and shareholder-focused in our approach to capital allocation, with substantial cash generation and a strong capital structure supporting continued flexibility.

3. **Strengthening foundations**: Unleashing the power of our people, scaling data science and technology and continuing to build trust with society.

#### Sandoz planned spin-off
The planned spin-off remains on track for H2 2023. Completion of the transaction is subject to certain conditions, including consultation with works councils and employee representatives (as required), general market conditions, tax rulings and opinions, final Board of Directors endorsement and shareholder approval in line with Swiss corporate law. The transaction is expected to be tax neutral to Novartis.

**Financials** 

#### Fourth quarter

#### Net sales
Net sales were USD 12.7 billion (-4%, +3% cc) in the fourth quarter driven by volume growth of 10 percentage points, partly offset by price erosion of 3 percentage points and the negative impact from generic competition of 4 percentage points.

#### Corporate income and expense, net
Corporate income and expense, which includes the cost of Group headquarter and coordination functions, amounted to an expense of USD 269 million compared to an expense of USD 292 million in the fourth quarter of 2021, mainly driven by prior year adjustments to provisions on M&A transactions partly offset by higher restructuring costs and lower contributions from the Novartis Venture Fund.

#### Operating income
Operating income was USD 1.9 billion (-24%, -14% cc), mainly due to higher restructuring costs (USD 0.6 billion), primarily related to the implementation of the previously announced streamlined organizational model. Operating income margin was 15.4% of net sales, decreasing by 4.0 percentage points (-3.2 percentage points cc).

Core operating income was USD 4.0 billion (+6%, +15% cc) driven by higher sales and productivity, including initial savings from the previously announced streamlined organizational model. Core operating income margin was 31.8% of net sales, increasing by 2.9 percentage points (+3.5 percentage points cc).

#### Income from associated companies
Income from associated companies was a loss of USD 3 million in the fourth quarter compared to an income of USD 14.6 billion in prior year and core income from associated companies was a loss of USD 3 million in the fourth quarter compared to an income of USD 93 million in prior year. These decreases were due to the divestment of our investment in Roche that closed in the fourth quarter of 2021 where a gain of USD 14.6 billion was recognized.

------

#### Interest expense and other financial income/expense
Interest expense amounted to USD 219 million and was broadly in line with the prior year. Other ﬁnancial income and expense amounted to an income of USD 14 million compared to an expense of USD 26 million in the prior year and core other ﬁnancial income and expense amounted to an income of USD 54 million compared to an expense of USD 24 million in the prior year quarter, as higher interest income was only partly offset by currency losses.

#### Income taxes
The tax rate in the fourth quarter was 15.8% compared to 3.8% in the prior year. The current and the prior year fourth quarter tax rate include a favorable adjustment to true-up to the estimated full year tax rate, which was lower than previously estimated. The prior year quarter's tax rate decreased due to the impact of the divestment gain recognized on the sale of our investment in Roche, partly offset by uncertain tax positions and prior year items.

For comparability, excluding these impacts, the prior year rate would have been 15.9%, broadly in line with 15.8% in the current year.

The core tax rate (core taxes as a percentage of core income before tax) was 15.8% compared to 14.9% in the prior year. The current and prior year core tax rates were both favorably impacted by the effect of adjusting to the full year core tax rate, which was less than previously estimated.

#### Net income, EPS and free cash flow
Net income was USD 1.5 billion (-91%, -90% cc), impacted by Roche income in the prior year of USD 14.6 billion. Excluding the impact of Roche income, net income grew +2% (cc). EPS was USD 0.69 (-91%, -89% cc). Excluding the impact of Roche income, EPS grew +7% (cc).

Core net income was USD 3.3 billion (+4%, +14% cc), mainly driven by growth in core operating income, partly offset by the loss of Roche core income. Excluding the impact of Roche core income, core net income grew +17% (cc). Core EPS was USD 1.52 (+9%, +19% cc), benefiting from lower weighted average number of shares outstanding. Excluding the impact of Roche core income, core EPS grew +23% (cc).

Free cash flow amounted to USD 3.6 billion (+17% USD), mainly driven by higher net cash flows from operating activities and lower purchases of intangible assets.

#### Full year

#### Net sales
Net sales were USD 50.5 billion (-2%, +4% cc) in the full year, driven by volume growth of 11 percentage points, partly offset by price erosion of 4 percentage points and the negative impact from generic competition of 3 percentage points.

#### Corporate income and expense, net
Corporate income and expense, which includes the cost of Group headquarter and coordination functions, amounted to an expense of USD 1.0 billion, compared to an expense of USD 599 million in 2021, mainly driven by higher restructuring costs, lower contributions from the Novartis Venture Fund and prior year income from a fair value adjustment on contingent receivables related to intellectual property rights, partly offset by prior year adjustments to provisions on M&A transactions.

#### Operating income
Operating income was USD 9.2 billion (-21%, -13% cc), mainly due to higher restructuring (USD 1.2 billion) primarily related to the implementation of the previously announced streamlined organizational model, higher impairments (USD 1.0 billion) and lower divestment gains (USD 0.6 billion). Operating income margin was 18.2% of net sales, decreasing by 4.4 percentage points (-3.8 percentage points cc).

Core operating income was USD 16.7 billion (0%, +8% cc) benefiting from higher sales, partly offset by higher R&D investments. Core operating income margin was 33.0% of net sales, increasing by 0.9 percentage points (+1.3 percentage points cc).

------

#### Income from associated companies
Income from associated companies was a loss of USD 9 million compared to an income of USD 15.3 billion in prior year and core income from associated companies was a loss of USD 9 million compared to an income of USD 993 million in prior year. These decreases were due to the divestment of our investment in Roche that closed in the fourth quarter of 2021 where a gain of USD 14.6 billion was recognized.

#### Interest expense and other financial income/expense
Interest expense amounted to USD 837 million and was broadly in line with the prior year. Other ﬁnancial income and expense amounted to an income of USD 20 million compared to an expense of USD 80 million in the prior year, as higher interest income was partly offset by financial expenses and currency losses. Core other ﬁnancial income and expense amounted to an income of USD 141 million compared to an expense of USD 41 million in the prior year as higher interest income was only partly offset by currency losses.

#### Income taxes
The tax rate was 16.9% compared to 8.1% in the prior year. In the prior year, the tax rate was impacted by the Roche income from associated companies (including the divestment gain recognized on the sale of our investment in Roche in December 2021), the impact of increases in uncertain tax positions and prior year items.

For comparability, excluding these impacts, the prior year tax rate would have been 16.8%, broadly in line with 16.9% in the current year.

The core tax rate (core taxes as a percentage of core income before tax) was 16.3% compared to 15.8% in the prior year. For comparability, excluding Roche Income from associated companies (divested in December 2021), the prior year core tax rate would have been 16.7% compared to 16.3% in the current year, decreasing mainly the result of a change in core profit mix.

#### Net income, EPS and free cash flow
Net income was USD 7.0 billion (-71%, -67% cc), impacted by Roche income in the prior year. Excluding the impact of Roche income, net income declined -9% (cc). EPS was USD 3.19 (-70%, -66% cc). Excluding the impact of Roche income, EPS declined -7% (cc).

Core net income was USD 13.4 billion (-5%, +3% cc) as growth in core operating income was partly offset by the loss of Roche core income. Excluding the impact of Roche core income, core net income grew +11% (cc). Core EPS was USD 6.12 (-3%, +6% cc), benefiting from lower weighted average number of shares outstanding. Excluding the impact of Roche core income, core EPS grew +14% (cc).

Free cash flow amounted to USD 11.9 billion (-10% USD), mainly due to a decrease in net cash flows from operating activities and lower divestment proceeds, partly offset by lower purchases of property, plant and equipment.

------

**Innovative Medicines**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Q4 2022<br> USD m**  | Q4 2021<br> USD m  | % change<br> USD  | % change<br> cc  | **FY 2022<br> USD m**  | FY 2021<br> USD m  | % change<br> USD  | % change<br> cc  |
| **Net sales** | **10 360** | **10 704** | **-3** | **3** | **41 296** | **41 995** | **– 2** | **4** |
| **Operating income** | **1 945** | **2 468** | **-21** | **-12** | **8 786** | **10 688** | **-18** | **-9** |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;As % of net sales* | 18.8 | 23.1 |  |  | 21.3 | 25.5 |  |  |
| **Core operating income** | **3 768** | **3 596** | **5** | **14** | **15 237** | **15 215** | **0** | **8** |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;As % of net sales* | 36.4 | 33.6 |  |  | 36.9 | 36.2 |  |  |

---

#### Fourth quarter

#### Net sales
Net sales were USD 10.4 billion (-3%, +3% cc) with volume contributing 11 percentage points to growth. Generic competition had a negative impact of 5 percentage points. Pricing had a negative impact of 3 percentage points, including approximately 1 percentage point impact from a revenue deduction true-up for *Cosentyx* in the US, which was related to prior quarters in 2022. Sales growth for the quarter was also negatively impacted by the prior year reclassification of contract manufacturing from other revenues to sales. Excluding the contract manufacturing reclassification impact, sales would have grown +4% (cc). Sales in the US were USD 4.2 billion (+7%) and in the rest of the world USD 6.2 billion (-9%, +1% cc).

Sales growth was mainly driven by continued strong performance from *Entresto* (USD 1.3 billion, +36%, +44% cc), *Kesimpta* (USD 369 million, +151%, +157% cc), *Pluvicto* (USD 179 million) and *Kisqali* (USD 357 million, +25%, +33% cc), partly offset by generic competition mainly for *Gilenya, Exjade* and *Afinitor* and the *Cosentyx* US revenue deduction true-up.

In the US (USD 4.2 billion, +7%), sales growth was mainly driven by *Kesimpta, Entresto* and *Pluvicto*, partly offset by the impact of generic competition mainly on *Gilenya.* In Europe (USD 3.4 billion, -10%, -1% cc), sales decline was driven by increased generic competition for *Gilenya* and *Exjade*, partly offset by growth for *Entresto* and *Kesimpta*. Emerging Growth Markets grew +7% (cc, -2% USD), with China sales USD 0.6 billion (-9%, +1% cc) in which *Entresto* growth was offset by Volume-Based Procurement impact on *Diovan* and *Exforge*.

#### Operating income
Operating income was USD 1.9 billion (-21%, -12% cc), driven by higher restructuring and impairments, partly offset by higher gross margin and lower SG&A investments. Operating income margin was 18.8% of net sales, decreasing 4.3 percentage points (-3.4 percentage points in cc).

Core adjustments were USD 1.8 billion, mainly due to amortization, restructuring and impairments, compared to USD 1.1 billion in prior year. Core adjustments increased compared to prior year, mainly due to higher restructuring and impairments, partly offset by contingent consideration adjustment.

Core operating income was USD 3.8 billion (+5%, +14% cc), mainly driven by higher gross margin and lower SG&A investments. Core operating income margin was 36.4% of net sales, increasing 2.8 percentage points (+3.5 percentage points cc). Other revenue as a percentage of sales increased by 0.5 percentage points (cc). Core cost of goods sold as a percentage of sales decreased by 0.5 percentage points (cc). Core R&D expenses as a percentage of net sales decreased by 0.2 percentage points (cc). Core SG&A expenses as a percentage of net sales decreased by 2.0 percentage points (cc). Core other income and expense as a percentage of net sales increased the margin by 0.3 percentage points (cc).

#### Full year

#### Net sales
Net sales were USD 41.3 billion (-2%, +4% cc) with volume contributing 12 percentage points to growth. Generic competition had a negative impact of 4 percentage points. Pricing had a negative impact of 4 percentage points. Sales in the US were USD 15.9 billion (+6%) and in the rest of the world USD 25.4 billion (-6%, +3% cc).

Sales growth was mainly driven by continued strong growth from *Entresto* (USD 4.6 billion, +31%, +37% cc), *Kesimpta* (USD 1.1 billion, +194%, +200% cc), *Kisqali* (USD 1.2 billion, +31%, +38% cc), *Pluvicto* (USD 271 million) and *Cosentyx*

------

(USD 4.8 billion, +1%, +5% cc), partly offset by generic competition mainly for *Gilenya*, *Afinitor*/*Votubia* and *Gleevec*/*Glivec*.

In the US (USD 15.9 billion +6%), sales growth was mainly driven by *Entresto, Kesimpta* and *Pluvicto*, partly offset by the impact of generic competition on *Afinitor*/*Votubia* and *Gilenya*. In Europe (USD 13.6 billion, -9%, +1% cc) sales growth was driven by *Entresto, Kisqali* and *Kesimpta*, partly offset by increased generic competition for *Gilenya*. Emerging Growth Markets grew +2% (+9% cc), with China sales USD 2.9 billion (+3%, +7% cc) driven by *Cosentyx*.

#### Operating income
Operating income was USD 8.8 billion (-18%, -9% cc), driven by higher impairments, restructuring, lower divestment gains and higher R&D expenses, partly offset by higher gross margin. Operating income margin was 21.3% of net sales, decreasing 4.2 percentage points (-3.4 percentage points in cc).

Core adjustments were USD 6.5 billion, mainly due to amortization, impairments and restructuring, compared to USD 4.5 billion in prior year. Core adjustments increased compared to prior year, mainly due to higher impairments and restructuring.

Core operating income was USD 15.2 billion (0%, +8% cc), mainly driven by higher gross margin, partly offset by higher R&D investments. Core operating income margin was 36.9% of net sales, increasing 0.7 percentage points (+1.3 percentage points cc). Revenues as a percentage of sales increased by 0.1 percentage points (cc). Core cost of goods sold as a percentage of sales was in-line with the prior year. Core R&D expenses as a percentage of net sales increased by 0.2 percentage points (cc). Core SG&A expenses as a percentage of net sales decreased by 1.4 percentage points (cc). Core other income and expense as a percentage of net sales was in-line with the prior year.

#### Product commentary (relating to Q4 performance)

#### Cardiovascular

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Q4 2022** | Q4 2021 | % change | % change | **FY 2022** | FY 2021 | % change | % change |
|  | **USD m** | USD m | USD | cc | **USD m** | USD m | USD | cc |
| **Cardiovascular** |  |  |  |  |  |  |  |  |
| *Entresto* | 1 291 | 949 | 36 | 44 | 4 644 | 3 548 | 31 | 37 |
| *Leqvio* | 42 | 4 | nm | nm | 112 | 12 | nm | nm |
| **Total Cardiovascular** | **1 333** | **953** | **40** | **47** | **4 756** | **3 560** | **34** | **40** |
| nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful |

---

***Entresto*** (USD 1,291 million, +36%, +44% cc) sustained robust demand-led growth, with increased patient share across all geographies. Guidelines position *Entresto* as the first choice RASi versus ACEi/ARB in patients with HFrEF. *Entresto* benefits from the adoption of guideline-directed medical therapy for these patients in all geographies. In the US, *Entresto* benefits from being added to guidelines for patients with HFpEF (with LVEF below normal). In China and Japan, *Entresto* volume growth is fueled by increased penetration in hypertension in addition to growth in heart failure. It is estimated that around 10 million patients are on treatment with *Entresto*. In the US, Novartis is in ANDA litigation with generic manufacturers.

***Leqvio*** (USD 42 million) launch in the US and other markets is ongoing, with focus on patient on-boarding, removing access hurdles and enhancing medical education. In the US, *Leqvio* is covered at or near label for 76% of patients eleven months after launch. *Leqvio* in the US has been assigned a unique Healthcare Common Procedure Coding System code (J-code) and average sales price. *Leqvio* is the first and only small interfering RNA (siRNA) therapy to lower LDL cholesterol approved in the US. *Leqvio* is now approved in 70 countries. Novartis obtained global rights to develop, manufacture and commercialize *Leqvio* under a license and collaboration agreement with Alnylam Pharmaceuticals.

------

#### Immunology

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Q4 2022** | Q4 2021 | % change | % change | **FY 2022** | FY 2021 | % change | % change |
|  | **USD m** | USD m | USD | cc | **USD m** | USD m | USD | cc |
| **Immunology** |  |  |  |  |  |  |  |  |
| *Cosentyx* | 1 080 | 1 243 | -13 | -9 | 4 788 | 4 718 | 1 | 5 |
| *Xolair* | 323 | 373 | -13 | -3 | 1 365 | 1 428 | -4 | 6 |
| *Ilaris* | 301 | 284 | 6 | 14 | 1 133 | 1 059 | 7 | 15 |
| Other |  |  |  |  | 1 |  | nm | nm |
| **Total Immunology** | **1 704** | **1 900** | **-10** | **-5** | **7 287** | **7 205** | **1** | **7** |
| Net sales reflect *Xolair* sales for all indications. | Net sales reflect *Xolair* sales for all indications. | Net sales reflect *Xolair* sales for all indications. | Net sales reflect *Xolair* sales for all indications. | Net sales reflect *Xolair* sales for all indications. | Net sales reflect *Xolair* sales for all indications. | Net sales reflect *Xolair* sales for all indications. | Net sales reflect *Xolair* sales for all indications. | Net sales reflect *Xolair* sales for all indications. |
| nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful |

---

***Cosentyx*** (USD 1,080 million, -13%, -9% cc) continued volume growth across key geographies, offset by a revenue deduction true-up in the US (mainly due to higher than expected Medicaid patient mix), which was related to prior quarters in 2022. Ex-US sales grew +5% (cc). Since initial approval in 2015, *Cosentyx* has proven its sustained efficacy and consistent safety profile across five systemic inflammatory conditions and has treated more than 960,000 patients worldwide. For the full year, *Cosentyx* grew +5% (cc) worldwide.

***Xolair*** (USD 323 million, -13%, -3% cc) sales declined, with growth in Emerging Growth Markets offset by lower sales in other markets. Novartis co-promotes *Xolair* with Genentech in the US and shares a portion of revenue as operating income but does not record any US sales.

***Ilaris*** (USD 301 million, +6%, +14% cc) showed continued growth across all geographies. Contributors to growth include the adult-onset Still's disease indication, together with the other adult rheumatology indications in the US and Europe, as well as strong performance for the Periodic Fevers Syndrome indications in Japan.

#### Neuroscience

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Q4 2022** | Q4 2021 | % change | % change | **FY 2022** | FY 2021 | % change | % change |
|  | **USD m** | USD m | USD | cc | **USD m** | USD m | USD | cc |
| **Neuroscience** |  |  |  |  |  |  |  |  |
| *Gilenya* | 346 | 656 | -47 | -44 | 2 013 | 2 787 | -28 | -24 |
| *Zolgensma* | 309 | 342 | -10 | -5 | 1 370 | 1 351 | 1 | 5 |
| *Kesimpta* | 369 | 147 | 151 | 157 | 1 092 | 372 | 194 | 200 |
| *Mayzent* | 99 | 81 | 22 | 28 | 357 | 281 | 27 | 32 |
| *Aimovig* | 59 | 59 | 0 | 9 | 218 | 215 | 1 | 11 |
| Other |  | 1 | nm | nm | 1 | 1 | 0 | nm |
| **Total Neuroscience** | **1 182** | **1 286** | **-8** | **-4** | **5 051** | **5 007** | **1** | **5** |
| nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful |

---

***Gilenya*** (USD 346 million, -47%, -44% cc) sales declined due to generic pressure mainly in the US and Europe. Novartis is in litigation in the US on the method of treatment patent, and in Europe on the dosing regimen patent, against generic manufacturers. In June 2022, an appeals court held the *Gilenya* US dosing regimen patent invalid. Novartis has filed a petition seeking further review with the US Supreme Court.

***Zolgensma*** (USD 309 million, -10%, -5% cc) sales declined due to timing of access and reimbursement decisions, as well as timing of prior year patient bolus in certain markets. Quarter on quarter sales are relatively stable reflecting that the addressable market is now mainly incident patients, having launched in most major markets. *Zolgensma* is now approved in 47 countries.

***Kesimpta*** (USD 369 million, +151%, +157% cc) sales growth was driven by strong launch uptake, access and increased demand. *Kesimpta* is a targeted B-cell therapy that can deliver powerful and sustained high efficacy, with a favorable safety and tolerability profile and the flexibility of an at home self-administration for a broad population of RMS patients. *Kesimpta* is now approved in 80 countries with more than 36,000 patients treated.

***Mayzent*** (USD 99 million, +22%, +28% cc) sales grew across key geographies. Sales continued to grow in patients with multiple sclerosis showing signs of progression despite being on other treatments. *Mayzent* is the first and

------

only oral disease-modifying therapy studied and proven to delay disease progression in a broad SPMS patient population.

***Aimovig*** (USD 59 million, ex-US, ex-Japan 0%, +9% cc) sales grew (cc) in Europe and Emerging Growth Markets. *Aimovig* is reimbursed in 32 markets and has been prescribed to over 759,000 patients worldwide. Novartis reached an agreement in Germany by which *Aimovig* is reimbursed as a 1st line prophylactic migraine treatment based on the HER-MES trial.

#### SOLID TUMORS

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Q4 2022** | Q4 2021 | % change | % change | **FY 2022** | FY 2021 | % change | % change |
|  | **USD m** | USD m | USD | cc | **USD m** | USD m | USD | cc |
| **Solid Tumors** |  |  |  |  |  |  |  |  |
| *Tafinlar* + *Mekinist* <sup>1</sup> | 465 | 458 | 2 | 8 | 1 770 | 1 693 | 5 | 11 |
| *Kisqali* | 357 | 285 | 25 | 33 | 1 231 | 937 | 31 | 38 |
| *Votrient* | 103 | 139 | -26 | -21 | 474 | 577 | -18 | -13 |
| *Lutathera* | 128 | 115 | 11 | 15 | 471 | 475 | -1 | 3 |
| *Piqray* | 112 | 87 | 29 | 30 | 373 | 329 | 13 | 14 |
| *Pluvicto* | 179 |  | nm | nm | 271 |  | nm | nm |
| *Tabrecta* | 36 | 27 | 33 | 35 | 133 | 90 | 48 | 48 |
| **Total Solid Tumors** | **1 380** | **1 111** | **24** | **30** | **4 723** | **4 101** | **15** | **21** |
|  <sup>1</sup> Majority of sales for *Mekinist* and *Tafinlar* are combination, but both can be used as monotherapy  | <sup>1</sup> Majority of sales for *Mekinist* and *Tafinlar* are combination, but both can be used as monotherapy  | <sup>1</sup> Majority of sales for *Mekinist* and *Tafinlar* are combination, but both can be used as monotherapy  | <sup>1</sup> Majority of sales for *Mekinist* and *Tafinlar* are combination, but both can be used as monotherapy  | <sup>1</sup> Majority of sales for *Mekinist* and *Tafinlar* are combination, but both can be used as monotherapy  | <sup>1</sup> Majority of sales for *Mekinist* and *Tafinlar* are combination, but both can be used as monotherapy  | <sup>1</sup> Majority of sales for *Mekinist* and *Tafinlar* are combination, but both can be used as monotherapy  | <sup>1</sup> Majority of sales for *Mekinist* and *Tafinlar* are combination, but both can be used as monotherapy  | <sup>1</sup> Majority of sales for *Mekinist* and *Tafinlar* are combination, but both can be used as monotherapy  |
| nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful |

---

***Tafinlar* + *Mekinist*** (USD 465 million, +2%, +8% cc) sales grew across all geographies, driven by demand in BRAF+ adjuvant melanoma and NSCLC indications, while maintaining demand in the highly competitive BRAF+ metastatic melanoma market. *Tafinlar* + *Mekinist* remains the worldwide targeted therapy leader in BRAF+ melanoma.

***Kisqali*** (USD 357 million, +25%, +33% cc) sales grew strongly across all geographies, based on increasing recognition of its overall survival and quality of life benefits in HR+/HER2- advanced breast cancer. *Kisqali* has proven overall survival benefit across all three Phase III trials of the MONALEESA program regardless of menopausal status, line of therapy, site or number of metastases, endocrine resistance, or endocrine partner. Novartis is in US ANDA litigation with generic manufacturers.

***Votrient*** (USD 103 million, -26%, -21% cc) sales declined due to increased competition, especially from immuno-oncology agents in metastatic renal cell carcinoma.

***Lutathera*** (USD 128 million, +11%, +15% cc) sales grew across all geographies, with approximately 500 centers actively treating patients globally.

***Piqray*** (USD 112 million, +29%, +30% cc) sales grew mainly in the US, benefiting from indication expansion into PIK3CA-related overgrowth spectrum (PROS). *Piqray* is the first and only therapy specifically developed for the approximately 40% of HR+/HER2- advanced breast cancer patients who have a PIK3CA mutation, which is associated with a worse prognosis.

***Pluvicto*** (USD 179 million) strong US launch performance, with more than 160 active centers. *Pluvicto* is the first and only radioligand therapy approved by the FDA for the treatment of progressive, PSMA-positive metastatic castration-resistant prostate cancer, who have already been treated with other anticancer treatments (ARPI and taxane-based chemotherapy).

***Tabrecta*** (USD 36 million, +33%, +35% cc) sales grew mainly in the US and Europe, as the first therapy approved by the FDA to specifically target metastatic NSCLC with a mutation that leads to MET exon 14 skipping (METex14).

------

#### HEMATOLOGY

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Q4 2022** | Q4 2021 | % change | % change | **FY 2022** | FY 2021 | % change | % change |
|  | **USD m** | USD m | USD | cc | **USD m** | USD m | USD | cc |
| **Hematology** |  |  |  |  |  |  |  |  |
| *Promacta/Revolade* | 540 | 518 | 4 | 11 | 2 088 | 2 016 | 4 | 9 |
| *Tasigna* | 475 | 508 | -6 | 0 | 1 923 | 2 060 | -7 | -1 |
| *Jakavi* | 388 | 408 | -5 | 8 | 1 561 | 1 595 | -2 | 9 |
| *Kymriah* | 139 | 143 | -3 | 5 | 536 | 587 | -9 | -2 |
| *Adakveo* | 51 | 43 | 19 | 19 | 194 | 164 | 18 | 19 |
| *Scemblix* | 52 | 7 | nm | nm | 149 | 7 | nm | nm |
| Other |  |  |  |  | 1 | 1 | 0 | nm |
| **Total Hematology** | **1 645** | **1 627** | **1** | **9** | **6 452** | **6 430** | **0** | **7** |
| nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful |

---

***Promacta/Revolade*** (USD 540 million, +4%, +11% cc) showed growth across most geographies, driven by increased use in second-line persistent and chronic immune thrombocytopenia and as first-line and/or second-line treatment for severe aplastic anemia.

***Tasigna*** (USD 475 million, -6%, 0% cc) sales were stable (cc), with decline in the US, Europe and Japan, offset by growth in Emerging Growth Markets.

***Jakavi*** (USD 388 million, -5%, +8% cc) sales grew (cc) mainly in Europe, Emerging Growth Markets and Japan, driven by strong demand in both the myelofibrosis and polycythemia vera indications.

***Kymriah*** (USD 139 million, -3%, +5% cc) sales grew (cc) in Emerging Growth Markets and Japan, partly offset by decline in the US and Europe, due to lower DLBCL demand, mainly driven by competitive entry into earlier line of treatment.

***Adakveo*** (USD 51 million, +19%, +19% cc) continued to grow worldwide, reaching more than 11,800 patients with vaso-occlusive crises caused by sickle cell disease to date.

***Scemblix*** (USD 52 million) continued its strong launch uptake demonstrating the high unmet need in CML, particularly patients previously treated with 2 or more tyrosine kinase inhibitors, or with the T315I mutation. In October 2022, US FDA converted the accelerated approval of *Scemblix* to a full approval, confirming the clinical benefit after longer exposure.

#### Other promoted brands

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Q4 2022** | Q4 2021 | % change | % change | **FY 2022** | FY 2021 | % change | % change |
|  | **USD m** | USD m | USD | cc | **USD m** | USD m | USD | cc |
| **Other Promoted Brands** |  |  |  |  |  |  |  |  |
| *Lucentis* | 398 | 508 | -22 | -12 | 1 874 | 2 160 | -13 | -4 |
| *Xiidra* | 145 | 134 | 8 | 8 | 487 | 468 | 4 | 4 |
| *Ultibro* Group | 113 | 148 | -24 | -13 | 479 | 584 | -18 | -9 |
| *Beovu* | 49 | 51 | -4 | 7 | 203 | 186 | 9 | 18 |
| Other respiratory | 26 | 16 | 63 | 69 | 84 | 53 | 58 | 79 |
| **Total Other Promoted Brands** | **731** | **857** | **-15** | **-6** | **3 127** | **3 451** | **-9** | **-1** |
| **Total Promoted Brands <sup>1</sup>** | **7 975** | **7 734** | **3** | **10** | **31 396** | **29 754** | **6** | **12** |
|  <sup>1</sup> Total Promoted Brands refer to the sum of Total Other Promoted Brands and all Therapeutic Areas brands (Hematology, Solid Tumors, Immunology, Neuroscience and Cardiovascular).  | <sup>1</sup> Total Promoted Brands refer to the sum of Total Other Promoted Brands and all Therapeutic Areas brands (Hematology, Solid Tumors, Immunology, Neuroscience and Cardiovascular).  | <sup>1</sup> Total Promoted Brands refer to the sum of Total Other Promoted Brands and all Therapeutic Areas brands (Hematology, Solid Tumors, Immunology, Neuroscience and Cardiovascular).  | <sup>1</sup> Total Promoted Brands refer to the sum of Total Other Promoted Brands and all Therapeutic Areas brands (Hematology, Solid Tumors, Immunology, Neuroscience and Cardiovascular).  | <sup>1</sup> Total Promoted Brands refer to the sum of Total Other Promoted Brands and all Therapeutic Areas brands (Hematology, Solid Tumors, Immunology, Neuroscience and Cardiovascular).  | <sup>1</sup> Total Promoted Brands refer to the sum of Total Other Promoted Brands and all Therapeutic Areas brands (Hematology, Solid Tumors, Immunology, Neuroscience and Cardiovascular).  | <sup>1</sup> Total Promoted Brands refer to the sum of Total Other Promoted Brands and all Therapeutic Areas brands (Hematology, Solid Tumors, Immunology, Neuroscience and Cardiovascular).  | <sup>1</sup> Total Promoted Brands refer to the sum of Total Other Promoted Brands and all Therapeutic Areas brands (Hematology, Solid Tumors, Immunology, Neuroscience and Cardiovascular).  | <sup>1</sup> Total Promoted Brands refer to the sum of Total Other Promoted Brands and all Therapeutic Areas brands (Hematology, Solid Tumors, Immunology, Neuroscience and Cardiovascular).  |

---

***Lucentis*** (USD 398 million, -22%, -12% cc) sales declined in Europe, Japan and Emerging Growth Markets mainly due to competition.

***Xiidra*** (USD 145 million, +8%, +8% cc) sales grew mainly in the US due to favorable revenue deductions. In the US, Novartis is in ANDA litigation with generic manufacturers.

------

***Ultibro* Group** (USD 113 million, -24%, -13% cc) sales declined mainly in Europe, Emerging Growth Markets due to competition. *Ultibro* Group consists of *Ultibro Breezhaler*, *Seebri Breezhaler* and *Onbrez Breezhaler*.

***Beovu*** (USD 49 million, -4%, +7% cc) sales grew (cc) in Europe, Emerging Growth Markets and Japan, partly offset by decline in the US.

#### Established BRANDS

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Q4 2022** | Q4 2021 | % change | % change | **FY 2022** | FY 2021 | % change | % change |
|  | **USD m** | USD m | USD | cc | **USD m** | USD m | USD | cc |
| **Established Brands** |  |  |  |  |  |  |  |  |
| *Sandostatin* | 305 | 345 | -12 | -8 | 1 238 | 1 413 | -12 | -10 |
| *Galvus* Group | 209 | 278 | -25 | -16 | 859 | 1 092 | -21 | -12 |
| *Gleevec/Glivec* | 175 | 233 | -25 | -18 | 745 | 1 024 | -27 | -22 |
| *Exforge* Group | 159 | 197 | -19 | -12 | 743 | 901 | -18 | -12 |
| *Diovan* Group | 142 | 189 | -25 | -16 | 652 | 773 | -16 | -9 |
| *Afinitor/Votubia* | 106 | 174 | -39 | -32 | 512 | 938 | -45 | -41 |
| *Voltaren/Cataflam* | 81 | 97 | -16 | -4 | 334 | 373 | -10 | 0 |
| *Zortress/Certican* | 80 | 110 | -27 | -18 | 329 | 431 | -24 | -14 |
| *Exjade/Jadenu* | 61 | 129 | -53 | -48 | 323 | 563 | -43 | -38 |
| *Neoral/Sandimmun(e)* | 74 | 89 | -17 | -6 | 310 | 368 | -16 | -8 |
| Contract manufacturing | 82 | 108 | -24 | -23 | 214 | 108 | 98 | 110 |
| Other | 911 | 1 021 | -11 | -6 | 3 641 | 4 257 | -14 | -9 |
| **Total Established Brands** | **2 385** | **2 970** | **-20** | **-13** | **9 900** | **12 241** | **-19** | **-13** |

---

***Sandostatin*** (USD 305 million, -12%, -8% cc) declined across all geographies due to ongoing competitive pressure, including generic competition ex-US.

***Galvus* Group** (USD 209 million, -25%, -16% cc) declined in Europe, Japan and Emerging Growth Markets.

***Gleevec/Glivec*** (USD 175 million, -25%, -18% cc) declined due to increased generic competition.

***Exforge* Group** (USD 159 million, -19%, -12% cc) declined across all geographies.

***Diovan* Group** (USD 142 million, -25%, -16% cc) declined in Emerging Growth Markets, Europe and Japan due to generic competition.

***Afinitor/Votubia*** (USD 106 million, -39%, -32% cc) declined in the US and Europe driven by generic competition.

***Voltaren/Cataflam*** (USD 81 million, -16%, -4% cc) declined in Emerging Growth Markets.

***Zortress/Certican*** (USD 80 million, -27%, -18% cc) declined in the US and Japan.

***Exjade/Jadenu*** (USD 61 million, -53%, -48% cc) declined due to pressure from generic competition.

***Neoral/Sandimmun(e)*** (USD 74 million, -17%, -6% cc) declined mainly in Japan and Europe.

------

**Sandoz**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Q4 2022<br> USD m**  | Q4 2021<br> USD m  | % change<br> USD  | % change<br> cc  | **FY 2022<br> USD m**  | FY 2021<br> USD m  | % change<br> USD  | % change<br> cc  |
| **Net sales** | **2 330** | **2 525** | **-8** | **0** | **9 249** | **9 631** | **-4** | **4** |
| **Operating income** | **273** | **386** | **-29** | **-20** | **1 448** | **1 600** | **-10** | **-2** |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;As % of net sales* | 11.7 | 15.3 |  |  | 15.7 | 16.6 |  |  |
| **Core operating income** | **391** | **528** | **-26** | **-18** | **1 903** | **2 064** | **-8** | **-1** |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;As % of net sales* | 16.8 | 20.9 |  |  | 20.6 | 21.4 |  |  |

---

#### Fourth quarter

#### Net sales
Sandoz net sales were USD 2.3 billion (-8%, 0% cc), with volume contributing 5 percentage points to growth. Pricing had a negative impact of 5 percentage points. Sales were negatively impacted by a prior year biopharmaceuticals contract manufacturing revenue reclassification. Excluding this impact, overall Sandoz sales would have grown +1% (cc).

Sales in Europe were USD 1.3 billion (-7%, +3% cc), in the US USD 429 million (-10%), in Asia / Africa / Australasia USD 387 million (-14%, -4% cc) and in Canada and Latin America USD 225 million (+4%, +10% cc). Ex-US sales grew +3% (cc).

Retail sales were USD 1.7 billion (-9%, -1% cc). Total Anti-Infectives sales were USD 329 million (-2%, +5% cc).

Global sales of Biopharmaceuticals grew to USD 517 million (-7%, +3% cc), with growth in Europe, Canada and Latin America.

#### Operating income
Operating income was USD 273 million (-29%, -20% cc), with the decline mainly due to higher SG&A and lower gross margin from inflationary pressures on input costs and the impact of prior year milestone income. Operating income margin was 11.7% of net sales, decreasing 3.6 percentage points (-3.0 percentage points in cc).

Core adjustments were USD 118 million, including USD 54 million of amortization. Prior year core adjustments were USD 142 million including USD 61 million of amortization. The change in core adjustments compared to prior year was mainly driven by lower impacts from manufacturing footprint changes.

Core operating income was USD 391 million (-26%, -18% cc), with the decline mainly due to higher SG&A and lower gross margin from inflationary pressures on input costs and the impact of prior year milestone income as well as lower divestment income. Core operating margin was 16.8% of net sales, decreasing by 4.1 percentage points (-3.8 percentage points cc). Core gross margin as a percentage of sales decreased by 1.5 percentage points (cc). Core R&D expenses as a percentage of net sales increased by 0.2 percentage points (cc). Core SG&A expenses as a percentage of net sales increased by 1.6 percentage points (cc). Core other income and expense decreased the margin by 0.5 percentage points (cc), mainly due to lower divestment income.

#### Full year

#### Net sales
Sandoz net sales were USD 9.2 billion (-4%, +4% cc) with volume contributing 10 percentage points to growth. Pricing had a negative impact of 6 percentage points.

Sales in Europe were USD 4.9 billion (-7%, +4% cc), in the US USD 1.8 billion (-4%) in Asia / Africa / Australasia USD 1.6 billion (-3%, +6% cc) and in Canada and Latin America USD 969 million (+11%, +15% cc) driven by volume increases and tender wins.

Retail sales were USD 6.8 billion (-4%, +4% cc), growing across all regions ex-US. Total Anti-Infectives sales were USD 1.2 billion (+2%, +10% cc).

Global sales of Biopharmaceuticals grew to USD 2.1 billion (-1%, +9% cc), growing across all regions.

------

#### Operating income
Operating income was USD 1.4 billion (-10%, -2% cc), with the decline mainly due to higher SG&A investments to drive higher sales and inflationary pressures on input costs, which were partly offset by higher sales. Operating income margin was 15.7% of net sales, decreasing by 0.9 percentage points (-1.0 percentage points in cc).

Core adjustments were USD 455 million, including USD 221 million of amortization. Prior year core adjustments were USD 464 million, including USD 236 million of amortization.

Core operating income was USD 1.9 billion (-8%, -1% cc), with the decline mainly due to higher SG&A, partly offset by higher sales. Core operating margin was 20.6% of net sales, decreasing by 0.8 percentage points (-1.1 percentage points cc). Core gross margin as a percentage of sales decreased by 0.3 percentage points (cc), due to higher inflation and input costs. Core R&D expenses as a percentage of net sales decreased by 0.5 percentage points (cc). Core SG&A expenses increased by 0.9 percentage points (cc). Core other income and expense decreased margin by 0.4 percentage points (cc).

------

**Group Cash Flow and Balance Sheet**

**Cash Flow**

#### Fourth quarter
Net cash flows from operating activities amounted to USD 4.1 billion, compared with USD 3.9 billion in the prior year quarter. This increase was mainly driven by lower income taxes paid and lower payments out of provisions, partly offset by unfavorable changes in working capital.

Net cash outflows used in investing activities amounted to USD 1.5 billion, compared with USD 4.6 billion net cash inflows in the prior year quarter.

The current year quarter cash outflows were driven by USD 0.9 billion for net purchases of marketable securities, commodities and time deposits; USD 0.4 billion for purchases of property, plant and equipment; and USD 0.3 billion for purchases of intangible assets. These cash outflows were partly offset by cash inflows of USD 0.1 billion from the sale of intangible assets.

In the prior year quarter, net cash inflows from investing activities of USD 4.6 billion were driven by proceeds of USD 20.7 billion from the divestment of our investment in Roche; USD 0.7 billion from the sale of marketable securities, commodities and time deposits; and USD 0.2 billion from the sale of intangible assets, financial assets and property, plant and equipment. These cash inflows were partly offset mainly by USD 15.6 billion cash outflows for purchases of marketable securities and time deposits, mainly due to the investment of a portion of the proceeds from the divestment of our investment in Roche; USD 0.3 billion for acquisitions and divestments of businesses, net (including the acquisition of GSK's cephalosporin antibiotics business for USD 351 million); and USD 1.0 billion for purchases of intangible assets, financial assets and of property, plant and equipment.

Net cash outflows used in financing activities amounted to USD 4.0 billion, compared with USD 3.3 billion in the prior year quarter.

The current year quarter cash outflows were driven by USD 2.7 billion for net treasury share transactions and USD 1.2 billion from the net decrease in current financial debts. Payments of lease liabilities and other financing cash flows resulted in a net cash outflow of USD 0.1 billion.

In the prior year quarter, net cash outflows used in financing activities of USD 3.3 billion were driven by USD 2.4 billion net decrease in current financial debts; USD 0.7 billion for the repayment of a bond denominated in euro (notional amount of EUR 0.6 billion) at maturity; and USD 0.1 billion for net treasury share transactions. Payments of lease liabilities amounted to USD 0.1 billion.

Free cash flow amounted to USD 3.6 billion (+17% USD), compared with USD 3.0 billion in the prior year quarter, mainly driven by higher net cash flows from operating activities and lower purchases of intangible assets.

#### Full year
Net cash flows from operating activities amounted to USD 14.2 billion, compared with USD 15.1 billion in 2021. This decrease was mainly due to unfavorable changes in working capital and lower dividends from associated companies (2021 included the USD 0.5 billion dividends received from our investment in Roche, which was divested in the fourth quarter of 2021), partly offset by lower income taxes paid and favorable hedging results.

Net cash inflows from investing activities amounted to USD 1.5 billion, compared with USD 4.2 billion in 2021.

The current year cash inflows were driven by net proceeds of USD 4.7 billion from the sale of marketable securities, commodities and time deposits; USD 0.5 billion from the sale of intangible assets, financial assets and property, plant and equipment. These cash inflows were partly offset by cash outflows of USD 1.5 billion for purchases of intangible assets; USD 1.2 billion for purchases of property, plant and equipment; USD 0.1 billion for purchases of financial assets; and USD 0.9 billion for acquisitions and divestments of businesses, net (primarily the acquisition of Gyroscope Therapeutics Holdings plc for USD 0.8 billion).

In 2021, net cash inflows from investing activities of USD 4.2 billion were driven by proceeds of USD 20.7 billion from the divestment of our investment in Roche; USD 2.3 billion from the sale of marketable securities, commodities and time deposits; and USD 1.4 billion from the sale of intangible assets, financial assets and property, plant and equipment. These cash inflows were partly offset by USD 16.4 billion cash outflows for purchases of marketable securities and time deposits, mainly due to the investment of a portion of the proceeds from the divestment of our

------

investment in Roche; USD 1.6 billion for purchases of intangible assets (including the upfront payment to in-license tislelizumab from an affiliate of BeiGene, Ltd); USD 1.4 billion for purchases of property, plant and equipment; USD 0.6 billion for acquisitions and divestments of businesses, net (including the acquisition of GSK's cephalosporin antibiotics business for USD 351 million); and USD 0.2 billion for purchases of financial assets.

Net cash outflows used in financing activities amounted to USD 20.6 billion, compared with USD 16.3 billion in 2021.

The current year cash outflows were mainly driven by USD 10.6 billion for net treasury share transactions; USD 7.5 billion for the dividend payment; USD 2.5 billion in aggregate for the repayment of two US dollar bonds; and USD 0.3 billion payments of lease liabilities. These cash outflows were partly offset by cash inflows of USD 0.3 billion from the net increase in current financial debts.

In 2021, net cash outflows used in financing activities of USD 16.3 billion were driven by USD 7.4 billion for the dividend payment; USD 3.0 billion for net treasury share transactions; USD 3.5 billion net decrease in current financial debts; and USD 2.2 billion for the repayment of two bonds denominated in euro (notional amount of EUR 1.25 billion and of EUR 0.6 billion) at maturity. Payments of lease liabilities and other financing cash flows resulted in a net cash outflow of USD 0.2 billion.

Free cash flow amounted to USD 11.9 billion (-10% USD), compared with USD 13.3 billion in 2021, mainly due to a decrease in net cash flows from operating activities and lower divestment proceeds, partly offset by lower purchases of property, plant and equipment.

**Balance sheet**

#### Assets
**Total non-current assets** of USD 80.5 billion decreased by USD 5.5 billion compared to December 31, 2021.

Intangible assets other than goodwill decreased by USD 2.5 billion as additions (including from the acquisition of Gyroscope Therapeutics Holdings plc) were more than offset by amortization, impairments and unfavorable currency translation adjustments.

Goodwill decreased by USD 0.3 billion, mainly due to unfavorable currency translation adjustments.

Property, plant and equipment decreased by USD 0.8 billion as net additions were more than offset by depreciation, unfavorable currency translation adjustments and impairments.

Financial assets decreased by USD 0.6 billion, driven mainly by fair value losses on listed equity and fund investments.

Other non-current assets decreased by USD 1.1 billion driven by the decrease of the prepaid post-employment benefit plans of USD 0.9 billion, resulting mainly from the pension accounting effects from increases in actuarial discount rates.

Right-of-use assets, investments in associated companies and deferred tax assets were broadly in line with December 31, 2021.

**Total current assets** of USD 36.9 billion at December 31, 2022 decreased by USD 8.8 billion compared to December 31, 2021.

Cash and cash equivalents decreased by USD 4.9 billion, mainly due to the dividend payment, the purchase of treasury shares and net repayments of financial debt, partly offset by the cash generated from operating activities and from investing activities, which includes the net proceeds from the sales of marketable securities, commodities and, time deposits.

Marketable securities, commodities, time deposits and derivative financial instruments decreased by USD 4.5 billion mainly driven by the net sales of marketable securities, commodities and time deposits.

Inventories increased by USD 0.5 billion and trade receivables, income tax receivables and other current assets were broadly in line with December 31, 2021.

#### Liabilities
**Total non-current liabilities** of USD 29.4 billion decreased by USD 4.4 billion compared to December 31, 2021.

------

Non-current financial debts decreased by USD 2.7 billion, mainly due to the reclassification of USD 2.3 billion from non-current to current financial debts of two EUR denominated bonds with notional amounts of EUR 750 million and EUR 1.25 billion maturing in 2023 and favorable foreign currency translation adjustments of USD 0.4 billion.

Provisions and other non-current liabilities decreased by USD 1.3 billion, mainly driven by decreases in accrued liabilities for employee benefits of USD 1.2 billion (primarily due to a decrease in accrued liabilities for defined benefit pension plans of USD 0.9 billion, resulting from the pension accounting effects from increases in actuarial discount rates), and in contingent consideration of USD 0.3 billion, a reclassification of non-current legal matters provisions to current portion of USD 0.2 billion, partly offset by the increase in other non-current liabilities of USD 0.4 billion.

Deferred tax liabilities decreased by USD 0.4 billion and non-current lease liabilities were broadly in line with December 31, 2021.

**Total current liabilities** of USD 28.7 billion decreased by USD 1.6 billion compared to December 31, 2021.

Provisions and other current liabilities decreased by USD 0.9 billion, mainly driven by the decrease in the commitment for repurchase of own shares liability of USD 2.8 billion, partly offset by increases in restructuring provisions of USD 0.8 billion (primarily due to the initiative announced in April 2022 to implement a new streamlined organizational model), in provisions for legal matters of USD 0.5 billion, including a USD 0.2 billion reclassification from non-current provisions for legal matters, and in provisions for revenue deductions of USD 0.3 billion.

Current financial debts and derivative financial instruments decreased by USD 0.4 billion, mainly due to the repayment of two US dollar bonds of USD 1.0 billion and USD 1.5 billion, the closure during the third quarter of 2022 of the interest-bearing accounts of employees payable on demand, which amounted to USD 1.8 billion at December 31, 2021, and favorable currency translation adjustments, partly offset by the reclassification from non-current to current financial debts of USD 2.3 billion and an increase of USD 1.9 billion in commercial paper.

Trade payables decreased by USD 0.4 billion and current lease liabilities and current income tax liabilities were broadly in line with December 31, 2021.

#### Equity
The Group's equity decreased by USD 8.4 billion to USD 59.4 billion at December 31, 2022 compared to December 31, 2021.

This decrease was mainly due to the cash-dividend payment of USD 7.5 billion, purchase of treasury shares of USD 10.9 billion, unfavorable currency translation differences of USD 0.5 billion and fair value adjustments on equity securities of USD 0.4 billion. This was partially offset by the net income of USD 7.0 billion, decrease of the treasury share repurchase obligation of USD 2.8 billion, and equity-based compensation of USD 0.9 billion.

#### Net debt and debt/equity ratio
The Group's liquidity amounted to USD 18.9 billion at December 31, 2022, compared to USD 28.3 billion at December 31, 2021. Total non-current and current ﬁnancial debts, including derivatives, amounted to USD 26.2 billion at December 31, 2022 compared to USD 29.2 billion at December 31, 2021.

The debt/equity ratio increased to 0.44:1 at December 31, 2022 compared to 0.43:1 at December 31, 2021. As of December 31, 2022 the net debt was USD 7.2 billion, compared to USD 0.9 billion at December 31, 2021.

------

**Innovation Review**

Benefiting from our continued focus on innovation, Novartis has one of the industry's most innovative and inventive pipelines with ~150 projects in clinical development.

#### Selected Innovative Medicines approvals: US, EU and Japan in Q4

---

| | | |
|:---|:---|:---|
| **<br>Product**  | **<br> Indication**  | **<br> Region**  |
| *Pluvicto*<br> lutetium (<sup>177</sup>Lu) <br> vipivotide tetraxetan  | Metastatic castration-resistant<br> prostate cancer, post-taxane  | EU - Dec<br>|

---

#### Selected Innovative Medicines projects awaiting regulatory decisions

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  | Completed submissions | Completed submissions | Completed submissions |  |
| **Product** | **Indication** | **US** | **EU** | **Japan** | **News update** |
| *Cosentyx* | 300mg auto-injector <br> and pre-filled syringe  | Q4 2022<br>| Approved<br>| Approved<br>| – US resubmission<br>|
| *Cosentyx* | Intravenous formulation for <br> psoriatic arthritis (PsA), <br> ankylosing spondylitis (AS), <br> and non-radiographic axial <br> SpA (nr-axSpA)  | Q4 2022<br>|  |  |  |
| *Cosentyx* | Hidradenitis suppurativa | Q3 2022 | Q2 2022 |  |  |
| *Jakavi* | Acute graft-versus-host <br> disease (GvHD)  |  | Approved<br>| Q1 2021<br>| – US filing by Incyte<br>|
|  | Chronic GvHD |  | Approved | Q1 2021 | – US filing by Incyte |
| SEG101<br>(crizanlizumab)  | Sickle cell disease, pediatrics<br>|  |  |  | – Results from the ongoing global<br> Ph3 STAND study did not show<br> superiority compared to placebo;<br> health authorities have been informed  |
| VDT482 <br> (tislelizumab)  | 2L Esophageal cancer (ESCC)<br>| Q3 2021<br>| Q1 2022<br>|  | – FDA deferred action pending completion <br> of required inspections  |
|  | NSCLC |  | Q1 2022 |  |  |

---

#### Selected Innovative Medicines pipeline projects

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Compound/<br>product**  | **Potential indication/<br> Disease area**  | **First planned<br> submissions**  | **Current <br> Phase**  | **<br> News update**  |
| *Aimovig* | Migraine, pediatrics | ≥2026 | 3 |  |
| AVXS-101 <br>(OAV101)  | Spinal muscular atrophy <br> (IT formulation)  | 2025<br>| 3<br>|  |
| *Beovu* | Diabetic retinopathy | 2025 | 3 |  |
| CFZ533<br>(iscalimab)  | Sjögren's syndrome<br>| ≥2026<br>| 2<br>|  |
| *Coartem* | Malaria, uncomplicated (<5 kg patients)<br>| 2024<br>| 3<br>| – Submission will use the MAGHP procedure<br> in Switzerland to facilitate rapid approval in <br> developing countries  |
| *Cosentyx* | Giant cell arteritis | 2025 | 3 |  |
|  | Lupus nephritis | ≥2026 | 3 |  |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Compound/<br>product**  | **Potential indication/<br> Disease area**  | **First planned<br> submissions**  | **Current <br> Phase**  | **<br> News update**  |
| JDQ443 | Non-small cell lung cancer, 2/3L | 2024 | 3 |  |
|  | Non-small cell lung cancer (combos) | ≥2026 | 2 |  |
| KAE609 <br> (cipargamin)  | Malaria, uncomplicated<br>| ≥2026<br>| 2<br>|  |
|  | Malaria, severe | ≥2026 | 2 |  |
| KAF156 <br>(ganaplacide)  | Malaria, uncomplicated<br>| ≥2026<br>| 2<br>| – FDA Orphan Drug designation <br> – FDA Fast Track designation <br> for the ganaplacide-containing combination<br> therapy  |
| *Kisqali* + <br>endocrine therapy  | Hormone receptor-positive <br> (HR+)/human epidermal growth <br> factor receptor 2-negative (HER2-)<br> early breast cancer (adjuvant)  | 2023<br>| 3<br>|  |
| *Leqvio* | Secondary prevention of cardiovascular <br> events in patients with elevated levels of LDL-C  | ≥2026<br>| 3<br>|  |
| LMI070 <br>(branaplam)  | Huntington's disease<br>|  | 2<br>| – Program discontinued based on an overall <br> assessment of potential benefit-risk from the<br> Ph2b VIBRANT-HD study  |
| LNA043 | Osteoarthritis | ≥2026 | 2 | – FDA Fast Track designation |
| LNP023 <br> (iptacopan)  | Paroxysmal nocturnal hemoglobinuria<br>| 2023<br>| 3<br>| – FDA, EU Orphan Drug designation<br> – FDA Breakthrough Therapy designation<br> – Ph3 APPLY-PNH full data presentation <br> at ASH<br> – Ph3 APPOINT-PNH trial met primary<br> endpoint  |
|  | IgA nephropathy<br>| 2024<br>| 3<br>| – EU Orphan Drug designation <br> – Few months submission delay<br> but readout confirmed for 2023<br> (Slightly slower recruitment than planned)  |
|  | C3 glomerulopathy<br>| 2024<br>| 3<br>| – EU Orphan Drug designation <br> – EU PRIME designation <br> – FDA Rare Pediatric designation <br> – China Breakthrough Therapy designation <br> – Few months submission delay<br> but readout confirmed for 2023<br> (Slightly slower recruitment than planned)  |
|  | Membranous nephropathy<br>|  | 2<br>| – Program discontinued (uncompelling <br> competitive profile)  |
|  | IC-MPGN | ≥2026 | 3 | – Ph3 start planned in H2 2023 |
|  | Atypical haemolytic uraemic syndrome<br>| ≥2026<br>| 3<br>| – Recruitment slower than<br> anticipated  |
| LOU064 <br> (remibrutinib)  | Chronic spontaneous urticaria<br>| 2024<br>| 3<br>|  |
|  | Multiple sclerosis | ≥2026 | 3 |  |
|  | Sjögren's syndrome | ≥2026 | 2 |  |
| *Lutathera* | Gastroenteropancreatic <br> neuroendocrine tumors, <br> 1L in G2/3 tumors  | 2023<br>| 3<br>|  |
| <sup>177</sup>Lu-NeoB | Multiple solid tumors | ≥2026 | 1 |  |
| LXE408 | Visceral leishmaniasis | ≥2026 | 2 |  |
| MBG453 <br> (sabatolimab)  | Myelodysplastic syndrome<br>| 2024<br>| 3<br>| – FDA Fast Track designation <br> – EU Orphan Drug designation  |
|  | Unfit acute myeloid leukemia | ≥2026 | 2 |  |
| MIJ821 <br>(onfasprodil)  | Depression<br>| ≥2026<br>| 2<br>|  |
| NIS793 | 1L Pancreatic cancer | 2025 | 3 | – FDA Orphan Drug designation |
| *Piqray* | Triple negative breast cancer<br>|  | 3<br>| – Project will be discontinued to prioritize<br> other key programs in portfolio  |
|  | Human epidermal growth factor <br> receptor 2-positive (HER2+) <br> advanced breast cancer  |  | 3<br>| – Project will be discontinued to prioritize<br> other key programs in portfolio<br>|
|  | Ovarian cancer | 2023 | 3 |  |
| *Pluvicto* | Metastatic castration-resistant <br> prostate cancer pre-taxane  | 2023<br>| 3<br>| – Ph3 PSMAfore trial met primary <br> endpoint  |
|  | Metastatic hormone sensitive prostate cancer | 2024 | 3 |  |
| PPY988 <br>(GT005)  | Geographic atrophy<br>| ≥2026<br>| 2<br>| – Gyroscope acquisition<br>|

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Compound/<br>product**  | **Potential indication/<br> Disease area**  | **First planned<br> submissions**  | **Current <br> Phase**  | **<br> News update**  |
| QGE031 <br>(ligelizumab)  | Food allergy<br>| ≥2026<br>| 3<br>| – Optimized clinical program <br> strategy to maximize potential  |
| SAF312<br>(libvatrep)  | Chronic ocular surface pain<br>| ≥2026<br>| 2<br>|  |
| *Scemblix* | 1L Chronic myeloid leukemia<br>| 2025<br>| 3<br>| – Ph3 ASC4FIRST trial completed <br> enrollment  |
| TQJ230 <br>(pelacarsen)  | Secondary prevention of cardiovascular <br> events in patients with elevated levels <br> of lipoprotein(a)  | 2025<br>| 3<br>| – FDA Fast Track designation <br> – China Breakthrough Therapy designation<br>|
| VAY736 <br> (ianalumab)  | Auto-immune hepatitis<br>| ≥2026<br>| 2<br>|  |
|  | Sjögren's syndrome | ≥2026 | 3 | – FDA Fast Track designation |
|  | Lupus nephritis | ≥2026 | 3 |  |
|  | Systemic lupus erythematosus | ≥2026 | 2 |  |
|  | 1L Immune thrombocytopenia | ≥2026 | 3 | – Ph3 study VAYHIT1 initiating |
|  | 2L Immune thrombocytopenia | ≥2026 | 3 | – Ph3 study VAYHIT2 initiating |
|  | warm Autoimmune hemolytic anemia | ≥2026 | 3 | – Ph3 study VAYHIA initiated |
| VDT482 <br> (tislelizumab)  | 1L Nasopharyngeal carcinoma<br>| 2023<br>| 3<br>| – FDA Orphan designation<br>|
|  | 1L Gastric cancer | 2023 | 3 |  |
|  | 1L ESCC | 2023 | 3 |  |
|  | Localized ESCC | 2024 | 3 | – Protocol amendment |
|  | 1L Hepatocellular carcinoma | 2023 | 3 |  |
|  | 1L Small cell lung cancer | 2024 | 3 |  |
|  | 1L Urothelial cell carcinoma | ≥2026 | 3 |  |
|  | Adj/Neo adj. NSCLC | ≥2026 | 3 |  |
| VPM087 <br>(gevokizumab)  | Colorectal cancer, 1L<br>| ≥2026<br>| 1<br>|  |
| *Xolair* | Food allergy | 2023 | 3 |  |
| YTB323 | 1L High-risk large B-cell lymphoma<br>| ≥2026<br>| 2<br>| – Development plan<br> update  |
| XXB750 | Hypertension | ≥2026 | 2 | – Ph2b initiated |

---

#### Selected Sandoz approvals and pipeline projects

---

| | | |
|:---|:---|:---|
| **Project/<br>Compound**  | **Potential indication/ <br> Disease area**  | **<br> News update**  |
| GP2411 <br>(denosumab)  | Osteoporosis (same as originator)<br>| – In Ph3<br>|
| SOK583<br>(aflibercept)  | Ophthalmology (same as originator)<br>| – In Ph3<br>|
| Insulin glargine, <br>lispro, aspart  | Diabetes<br>| – Collaboration with Gan & Lee<br>|
| Natalizumab | Multiple sclerosis and Crohn's disease<br>| – Collaboration Polpharma Biologics<br> – In registration  |
| Trastuzumab | HER2-positive cancer tumors<br>| – Collaboration EirGenix <br> – In registration  |
| Bevacizumab | Solid tumors<br>| – Collaboration Bio-Thera Solutions<br> – In registration  |

---

------

## Condensed Consolidated Financial Statements
**Consolidated income statements**

**Fourth quarter** (unaudited)

---

| | | | |
|:---|:---|:---|:---|
| (USD millions unless indicated otherwise) | Note | **Q4 2022** | Q4 2021 |
| **Net sales to third parties** | 11 | **12 690** | **13 229** |
| Other revenues | 11 | 397 | 293 |
| Cost of goods sold |  | -4 073 | -3 976 |
| **Gross profit** |  | **9 014** | **9 546** |
| Selling, general and administration |  | -3 747 | -3 985 |
| Research and development |  | -2 442 | -2 409 |
| Other income |  | 172 | 371 |
| Other expense |  | -1 048 | -961 |
| **Operating income** |  | **1 949** | **2 562** |
| (Loss)/income from associated companies | 3 | -3 | 14 621 |
| Interest expense |  | -219 | -206 |
| Other financial income and expense |  | 14 | -26 |
| **Income before taxes** |  | **1 741** | **16 951** |
| Income taxes |  | -275 | -645 |
| **Net income** |  | **1 466** | **16 306** |
| *Attributable to:* |  |  |  |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;Shareholders of Novartis AG* |  | *1 466* | *16 308* |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;Non-controlling interests* |  | *0* | *-2* |
| Weighted average number of shares outstanding – Basic (million) |  | 2 135 | 2 237 |
| **Basic earnings per share (USD) <sup>1</sup>** |  | 0.69 | 7.29 |
| Weighted average number of shares outstanding – Diluted (million) |  | 2 150 | 2 253 |
| **Diluted earnings per share (USD) <sup>1</sup>** |  | 0.68 | 7.24 |
|  <sup>1</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>1</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>1</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>1</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  |

---

------

**Consolidated income statements**

**Full year** (audited)

---

| | | | |
|:---|:---|:---|:---|
| (USD millions unless indicated otherwise) | Note | **FY 2022** | FY 2021 |
| **Net sales to third parties** | 11 | **50 545** | **51 626** |
| Other revenues | 11 | 1 283 | 1 251 |
| Cost of goods sold |  | -15 486 | -15 867 |
| **Gross profit** |  | **36 342** | **37 010** |
| Selling, general and administration |  | -14 253 | -14 886 |
| Research and development |  | -9 996 | -9 540 |
| Other income |  | 805 | 1 852 |
| Other expense |  | -3 701 | -2 747 |
| **Operating income** |  | **9 197** | **11 689** |
| (Loss)/income from associated companies | 3 | -9 | 15 339 |
| Interest expense |  | -837 | -811 |
| Other financial income and expense |  | 20 | -80 |
| **Income before taxes** |  | **8 371** | **26 137** |
| Income taxes |  | -1 416 | -2 119 |
| **Net income** |  | **6 955** | **24 018** |
| *Attributable to:* |  |  |  |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;Shareholders of Novartis AG* |  | *6 955* | *24 021* |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;Non-controlling interests* |  | *0* | *-3* |
| Weighted average number of shares outstanding – Basic (million) |  | 2 181 | 2 243 |
| **Basic earnings per share (USD) <sup>1</sup>** |  | 3.19 | 10.71 |
| Weighted average number of shares outstanding – Diluted (million) |  | 2 197 | 2 260 |
| **Diluted earnings per share (USD) <sup>1</sup>** |  | 3.17 | 10.63 |
|  <sup>1</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>1</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>1</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>1</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  |

---

------

**Consolidated statements of comprehensive income**

**Fourth quarter** (unaudited)

---

| | | |
|:---|:---|:---|
| (USD millions) | **Q4 2022** | Q4 2021 |
| **Net income** | **1 466** | **16 306** |
| **Other comprehensive income** |  |  |
| **Items that are or may be recycled into the consolidated income statement** |  |  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Novartis share of other comprehensive income recognized by associated companies, net of taxes  |  | 3 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Net investment hedge, net of taxes | -118 | 89 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Currency translation effects, net of taxes | 1 652 | -2 699 |
| Total of items that are or may be recycled | 1 534 | -2 607 |
| **Items that will never be recycled into the consolidated income statement** |  |  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Actuarial (losses)/gains from defined benefit plans, net of taxes | -1 920 | 6 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Fair value adjustments on equity securities, net of taxes | -97 | -48 |
| Total of items that will never be recycled | -2 017 | -42 |
| **Total comprehensive income** | **983** | **13 657** |
| *Attributable to:* |  |  |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;Shareholders of Novartis AG* | *980* | *13 660* |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;Non-controlling interests* | *3* | *-3* |
|  |  |  |

---

**Full year** (audited)

---

| | | |
|:---|:---|:---|
| (USD millions) | **FY 2022** | FY 2021 |
| **Net income** | **6 955** | **24 018** |
| **Other comprehensive income** |  |  |
| **Items that are or may be recycled into the consolidated income statement** |  |  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Novartis share of other comprehensive income recognized by associated companies, net of taxes  |  | 46 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Net investment hedge, net of taxes | 91 | 216 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Currency translation effects, net of taxes | -450 | -4 762 |
| Total of items that are or may be recycled | -359 | -4 500 |
| **Items that will never be recycled into the consolidated income statement** |  |  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Actuarial (losses)/gains from defined benefit plans, net of taxes | -103 | 1 809 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Fair value adjustments on equity securities, net of taxes | -382 | 194 |
| Total of items that will never be recycled | -485 | 2 003 |
| **Total comprehensive income** | **6 111** | **21 521** |
| *Attributable to:* |  |  |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;Shareholders of Novartis AG* | *6 116* | *21 528* |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;Non-controlling interests* | *-5* | *-7* |

---

------

**Consolidated balance sheets** 

---

| | | | |
|:---|:---|:---|:---|
| <br>(USD millions)  | <br>Note  | **Dec 31, <br> 2022<br> (audited)**  | Dec 31, <br> 2021<br> (audited)  |
| **Assets** |  |  |  |
| **Non-current assets** |  |  |  |
| Property, plant and equipment | 11 | 10 764 | 11 545 |
| Right-of-use assets |  | 1 431 | 1 561 |
| Goodwill | 11 | 29 301 | 29 595 |
| Intangible assets other than goodwill | 11 | 31 644 | 34 182 |
| Investments in associated companies |  | 143 | 205 |
| Deferred tax assets |  | 3 739 | 3 743 |
| Financial assets |  | 2 411 | 3 036 |
| Other non-current assets | 4 | 1 110 | 2 210 |
| **Total non-current assets** |  | **80 543** | **86 077** |
| **Current assets** |  |  |  |
| Inventories |  | 7 175 | 6 666 |
| Trade receivables |  | 8 066 | 8 005 |
| Income tax receivables |  | 268 | 278 |
| Marketable securities, commodities, time deposits and derivative financial instruments |  | 11 413 | 15 922 |
| Cash and cash equivalents |  | 7 517 | 12 407 |
| Other current assets |  | 2 471 | 2 440 |
| **Total current assets** |  | **36 910** | **45 718** |
| **Total assets** |  | **117 453** | **131 795** |
| **Equity and liabilities** |  |  |  |
| **Equity** |  |  |  |
| Share capital |  | 890 | 901 |
| Treasury shares |  | -92 | -48 |
| Reserves |  | 58 544 | 66 802 |
| **Equity attributable to Novartis AG shareholders** |  | **59 342** | **67 655** |
| Non-controlling interests |  | 81 | 167 |
| **Total equity** |  | **59 423** | **67 822** |
| **Liabilities** |  |  |  |
| **Non-current liabilities** |  |  |  |
| Financial debts |  | 20 244 | 22 902 |
| Lease liabilities |  | 1 538 | 1 621 |
| Deferred tax liabilities |  | 2 686 | 3 070 |
| Provisions and other non-current liabilities |  | 4 906 | 6 172 |
| **Total non-current liabilities** |  | **29 374** | **33 765** |
| **Current liabilities** |  |  |  |
| Trade payables |  | 5 146 | 5 553 |
| Financial debts and derivative financial instruments | 5 | 5 931 | 6 295 |
| Lease liabilities |  | 251 | 275 |
| Current income tax liabilities |  | 2 533 | 2 415 |
| Provisions and other current liabilities |  | 14 795 | 15 670 |
| **Total current liabilities** |  | **28 656** | **30 208** |
| **Total liabilities** |  | **58 030** | **63 973** |
| **Total equity and liabilities** |  | **117 453** | **131 795** |

---

------

**Consolidated statements of changes in equity**

**Fourth quarter** (unaudited)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  | Reserves | Reserves |  |  |  |
| <br>(USD millions)  | <br>Note  | <br>Share<br> capital  | <br>Treasury<br> shares  | <br>Retained<br> earnings  | <br>Total value<br> adjustments  | Issued share <br> capital and <br> reserves <br> attributable <br> to Novartis <br> shareholders  | <br>Non-<br> controlling<br> interests  | <br>Total<br> equity  |
| **Total equity at October 1, 2022** |  | **890** | **-70** | **64 543** | **-4 543** | **60 820** | **78** | **60 898** |
| Net income |  |  |  | 1 466 |  | 1 466 | 0 | 1 466 |
| Other comprehensive income |  |  |  |  | -486 | -486 | 3 | -483 |
| **Total comprehensive income** |  |  |  | **1 466** | **-486** | **980** | **3** | **983** |
| Purchase of treasury shares |  |  | -22 | -2 685 |  | -2 707 |  | -2 707 |
| Exercise of options and employee transactions |  |  |  | -1 |  | -1 |  | -1 |
| Equity-based compensation |  |  | 0 | 203 |  | 203 |  | 203 |
| Taxes on treasury share transactions |  |  |  | 2 |  | 2 |  | 2 |
| Fair value adjustments on financial assets sold |  |  |  | 1 | -1 |  |  |  |
| Value adjustments related to divestments |  |  |  | -34 | 34 |  |  |  |
| Other movements | 6.3 |  |  | 45 |  | 45 |  | 45 |
| **Total of other equity movements** |  |  | **-22** | **-2 469** | **33** | **-2 458** |  | **-2 458** |
| **Total equity at December 31, 2022** |  | **890** | **-92** | **63 540** | **-4 996** | **59 342** | **81** | **59 423** |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  | Reserves | Reserves |  |  |  |
| <br>(USD millions)  | <br>Note  | <br>Share<br> capital  | <br>Treasury<br> shares  | <br>Retained<br> earnings  | <br>Total value<br> adjustments  | Issued share <br> capital and <br> reserves <br> attributable <br> to Novartis <br> shareholders  | <br>Non-<br> controlling<br> interests  | <br>Total<br> equity  |
| **Total equity at October 1, 2021** |  | **901** | **-47** | **57 437** | **-1 520** | **56 771** | **166** | **56 937** |
| Net income |  |  |  | 16 308 |  | 16 308 | -2 | 16 306 |
| Other comprehensive income |  |  |  | 3 | -2 651 | -2 648 | -1 | -2 649 |
| **Total comprehensive income** |  |  |  | **16 311** | **-2 651** | **13 660** | **-3** | **13 657** |
| Purchase of treasury shares |  |  | -1 | -224 |  | -225 |  | -225 |
| Equity-based compensation |  |  |  | 247 |  | 247 |  | 247 |
| Taxes on treasury share transactions |  |  |  | 1 |  | 1 |  | 1 |
| Increase of treasury share repurchase obligation <br>under a share buyback trading plan  | <br> 6.1  |  |  | <br> -2 809  |  | <br> -2 809  |  | <br> -2 809  |
| Transaction costs, net of taxes | 6.2 |  |  | 2 |  | 2 |  | 2 |
| Fair value adjustments on financial assets sold |  |  |  | -46 | 46 |  |  |  |
| Value adjustments related to divestments |  |  |  | 62 | -62 |  |  |  |
| Impact of change in ownership of consolidated entities |  |  |  | -3 |  | -3 | 4 | 1 |
| Other movements | 6.3 |  |  | 11 |  | 11 |  | 11 |
| **Total of other equity movements** |  |  | **-1** | **-2 759** | **-16** | **-2 776** | **4** | **-2 772** |
| **Total equity at December 31, 2021** |  | **901** | **-48** | **70 989** | **-4 187** | **67 655** | **167** | **67 822** |

---

------

**Consolidated statements of changes in equity**

**Full year** (audited)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  | Reserves | Reserves |  |  |  |
| <br>(USD millions)  | <br>Note  | <br>Share<br> capital  | <br>Treasury<br> shares  | <br>Retained<br> earnings  | <br>Total value<br> adjustments  | Issued share <br> capital and <br> reserves <br> attributable <br> to Novartis <br> shareholders  | <br>Non-<br> controlling<br> interests  | <br>Total<br> equity  |
| **Total equity at January 1, 2022** |  | **901** | **-48** | **70 989** | **-4 187** | **67 655** | **167** | **67 822** |
| Net income |  |  |  | 6 955 |  | 6 955 | 0 | 6 955 |
| Other comprehensive income |  |  |  |  | -839 | -839 | -5 | -844 |
| **Total comprehensive income** |  |  |  | **6 955** | **-839** | **6 116** | **-5** | **6 111** |
| Dividends |  |  |  | -7 506 |  | -7 506 |  | -7 506 |
| Purchase of treasury shares |  |  | -66 | -10 844 |  | -10 910 |  | -10 910 |
| Reduction of share capital |  | -11 | 15 | -4 |  |  |  |  |
| Exercise of options and employee transactions |  |  | 1 | 87 |  | 88 |  | 88 |
| Equity-based compensation |  |  | 6 | 848 |  | 854 |  | 854 |
| Shares delivered to Alcon employees <br>as a result of the Alcon spin-off  |  |  | <br> 0  | <br> 5  |  | <br> 5  |  | <br> 5  |
| Taxes on treasury share transactions |  |  |  | 14 |  | 14 |  | 14 |
| Decrease of treasury share repurchase obligation <br>under a share buyback trading plan  | <br> 6.1  |  |  | <br> 2 809  |  | <br> 2 809  |  | <br> 2 809  |
| Changes in non-controlling interests |  |  |  |  |  |  | -81 | -81 |
| Value adjustments on financial assets sold |  |  |  | 4 | -4 |  |  |  |
| Value adjustments related to divestments |  |  |  | -34 | 34 |  |  |  |
| Other movements | 6.3 |  |  | 217 |  | 217 |  | 217 |
| **Total of other equity movements** |  | **-11** | **-44** | **-14 404** | **30** | **-14 429** | **-81** | **-14 510** |
| **Total equity at December 31, 2022** |  | **890** | **-92** | **63 540** | **-4 996** | **59 342** | **81** | **59 423** |
|  |  |  |  |  |  |  |  |  |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  | Reserves | Reserves |  |  |  |
| <br>(USD millions)  | <br>Note  | <br>Share<br> capital  | <br>Treasury<br> shares  | <br>Retained<br> earnings  | <br>Total value<br> adjustments  | Issued share <br> capital and <br> reserves <br> attributable <br> to Novartis <br> shareholders  | <br>Non-<br> controlling<br> interests  | <br>Total<br> equity  |
| **Total equity at January 1, 2021** |  | **913** | **-53** | **57 157** | **-1 419** | **56 598** | **68** | **56 666** |
| Net income |  |  |  | 24 021 |  | 24 021 | -3 | 24 018 |
| Other comprehensive income |  |  |  | 46 | -2 539 | -2 493 | -4 | -2 497 |
| **Total comprehensive income** |  |  |  | **24 067** | **-2 539** | **21 528** | **-7** | **21 521** |
| Dividends |  |  |  | -7 368 |  | -7 368 |  | -7 368 |
| Purchase of treasury shares |  |  | -18 | -2 902 |  | -2 920 |  | -2 920 |
| Reduction of share capital |  | -12 | 18 | -6 |  |  |  |  |
| Exercise of options and employee transactions |  |  | 0 | 39 |  | 39 |  | 39 |
| Equity-based compensation |  |  | 5 | 740 |  | 745 |  | 745 |
| Shares delivered to Alcon employees <br>as a result of the Alcon spin-off  |  |  | <br> 0  | <br> 17  |  | <br> 17  |  | <br> 17  |
| Taxes on treasury share transactions |  |  |  | 1 |  | 1 |  | 1 |
| Increase of treasury share repurchase obligation <br>under a share buyback trading plan  | <br> 6.1  |  |  | <br> -1 040  |  | <br> -1 040  |  | <br> -1 040  |
| Transaction costs, net of taxes | 6.2 |  |  | 12 |  | 12 |  | 12 |
| Changes in non-controlling interests |  |  |  |  |  |  | -1 | -1 |
| Fair value adjustments on financial assets sold |  |  |  | 164 | -164 |  |  |  |
| Value adjustments related to divestments |  |  |  | 65 | -65 |  |  |  |
| Impact of change in ownership of consolidated entities |  |  |  | -5 | 0 | -5 | 107 | 102 |
| Other movements | 6.3 |  |  | 48 |  | 48 |  | 48 |
| **Total of other equity movements** |  | **-12** | **5** | **-10 235** | **-229** | **-10 471** | **106** | **-10 365** |
| **Total equity at December 31, 2021** |  | **901** | **-48** | **70 989** | **-4 187** | **67 655** | **167** | **67 822** |

---

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**Consolidated statements of cash flows** 

**Fourth quarter** (unaudited)

---

| | | | |
|:---|:---|:---|:---|
| (USD millions) | Note | **Q4 2022** | Q4 2021 |
| **Net income** |  | **1 466** | **16 306** |
| *Adjustments to reconcile net income to net cash flows from operating activities* |  |  |  |
| Reversal of non-cash items and other adjustments | 8.1 | 2 960 | -11 941 |
| Dividends received from associated companies and others |  |  | 2 |
| Interest received |  | 133 | 5 |
| Interest paid |  | -221 | -206 |
| Other financial receipts |  | -18 |  |
| Other financial payments |  | -7 | 14 |
| Income taxes paid |  | -416 | -883 |
| **Net cash flows from operating activities before working capital <br>and provision changes**  |  | **<br> 3 897**  | **<br> 3 297**  |
| Payments out of provisions and other net cash movements in non-current liabilities |  | -371 | -589 |
| Change in net current assets and other operating cash flow items | 8.2 | 585 | 1 176 |
| **Net cash flows from operating activities** |  | **4 111** | **3 884** |
| Purchases of property, plant and equipment |  | -397 | -460 |
| Proceeds from sale of property, plant and equipment |  | 103 | 74 |
| Purchases of intangible assets |  | -250 | -517 |
| Proceeds from sale of intangible assets |  | 5 | 84 |
| Purchases of financial assets |  | -31 | -67 |
| Proceeds from sale of financial assets |  | 11 | 34 |
| Purchases of other non-current assets |  |  | -5 |
| Proceeds from sale of other non-current assets |  |  | 0 |
| Acquisitions and divestments of interests in associated companies, net |  | -2 | 20 675 |
| Acquisitions and divestments of businesses, net | 8.3 | -9 | -343 |
| Purchases of marketable securities, commodities and time deposits |  | -10 548 | -15 567 |
| Proceeds from sale of marketable securities, commodities and time deposits |  | 9 651 | 655 |
| **Net cash flows (used in)/from investing activities from continuing operations** |  | **-1 467** | **4 563** |
| **Net cash flows (used in)/from investing activities** |  | **-1 467** | **4 563** |
| Acquisitions of treasury shares |  | -2 678 | -148 |
| Increase in non-current financial debts |  | 2 | 16 |
| Repayments of the current portion of non-current financial debts |  |  | -696 |
| Change in current financial debts |  | -1 202 | -2 350 |
| Payments of lease liabilities |  | -72 | -80 |
| Impact of change in ownership of consolidated entities |  |  | 1 |
| Other financing cash flows, net |  | -44 | 6 |
| **Net cash flows used in financing activities from continuing operations** |  | **-3 994** | **-3 251** |
| **Net cash flows used in financing activities** |  | **-3 994** | **-3 251** |
| **Net change in cash and cash equivalents before effect of exchange rate changes** |  | **-1 350** | **5 196** |
| Effect of exchange rate changes on cash and cash equivalents |  | 141 | 0 |
| **Net change in cash and cash equivalents** |  | **-1 209** | **5 196** |
| Cash and cash equivalents at October 1 |  | 8 726 | 7 211 |
| **Cash and cash equivalents at December 31** |  | **7 517** | **12 407** |

---

------

**Consolidated statements of cash flows** 

**Full year** (audited)

---

| | | | |
|:---|:---|:---|:---|
| (USD millions) | Note | **FY 2022** | FY 2021 |
| **Net income** |  | **6 955** | **24 018** |
| *Adjustments to reconcile net income to net cash flows from operating activities* |  |  |  |
| Reversal of non-cash items and other adjustments | 8.1 | 11 546 | -5 299 |
| Dividends received from associated companies and others |  | 1 | 525 |
| Interest received |  | 254 | 13 |
| Interest paid |  | -696 | -664 |
| Other financial receipts |  | 71 |  |
| Other financial payments |  | -32 | -302 |
| Income taxes paid |  | -1 975 | -2 342 |
| **Net cash flows from operating activities before working capital <br>and provision changes**  |  | **<br> 16 124**  | **<br> 15 949**  |
| Payments out of provisions and other net cash movements in non-current liabilities |  | -885 | -1 119 |
| Change in net current assets and other operating cash flow items | 8.2 | -1 003 | 241 |
| **Net cash flows from operating activities** |  | **14 236** | **15 071** |
| Purchases of property, plant and equipment |  | -1 198 | -1 378 |
| Proceeds from sale of property, plant and equipment |  | 167 | 240 |
| Purchases of intangible assets |  | -1 473 | -1 593 |
| Proceeds from sale of intangible assets |  | 202 | 748 |
| Purchases of financial assets |  | -121 | -191 |
| Proceeds from sale of financial assets |  | 133 | 442 |
| Purchases of other non-current assets |  | -1 | -61 |
| Proceeds from sale of other non-current assets |  |  | 4 |
| Acquisitions and divestments of interests in associated companies, net |  | -24 | 20 669 |
| Acquisitions and divestments of businesses, net | 8.3 | -879 | -567 |
| Purchases of marketable securities, commodities and time deposits |  | -34 695 | -16 403 |
| Proceeds from sale of marketable securities, commodities and time deposits |  | 39 357 | 2 298 |
| **Net cash flows from investing activities from continuing operations** |  | **1 468** | **4 208** |
| **Net cash flows from investing activities** |  | **1 468** | **4 208** |
| Dividends paid to shareholders of Novartis AG |  | -7 506 | -7 368 |
| Acquisitions of treasury shares |  | -10 652 | -3 057 |
| Proceeds from exercised options and other treasury share transactions, net |  | 100 | 53 |
| Increase in non-current financial debts |  | 16 | 16 |
| Repayments of the current portion of non-current financial debts |  | -2 575 | -2 162 |
| Change in current financial debts |  | 295 | -3 524 |
| Payments of lease liabilities |  | -295 | -316 |
| Impact of change in ownership of consolidated entities |  |  | -3 |
| Other financing cash flows, net |  | 55 | 97 |
| **Net cash flows used in financing activities from continuing operations** |  | **-20 562** | **-16 264** |
| **Net cash flows used in financing activities** |  | **-20 562** | **-16 264** |
| **Net change in cash and cash equivalents before effect of exchange rate changes** |  | **-4 858** | **3 015** |
| Effect of exchange rate changes on cash and cash equivalents |  | -32 | -266 |
| **Net change in cash and cash equivalents** |  | **-4 890** | **2 749** |
| Cash and cash equivalents at January 1 |  | 12 407 | 9 658 |
| **Cash and cash equivalents at December 31** |  | **7 517** | **12 407** |

---

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## Notes to the Condensed Consolidated Financial Statements for the three-month interim period (unaudited) and year ended December 31, 2022 (audited)
1. Basis of preparation

These Condensed Consolidated Financial Statements for the three-month and year ended December 31, 2022, were prepared in accordance with International Accounting Standard 34 *Interim Financial Reporting* and accounting policies set out in the 2022 Annual Report published on February 1, 2023.

2. Selected critical accounting policies

The Group's principal accounting policies are set out in Note 1 to the Consolidated Financial Statements in the 2022 Annual Report and conform with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.

The preparation of financial statements requires management to make certain estimates and assumptions, either at the balance sheet date or during the year, which affect the reported amounts of revenues, expenses, assets, liabilities and contingent amounts.

Estimates are based on historical experience and other assumptions that are considered reasonable under the given circumstances and are regularly monitored. Actual outcomes and results could differ from those estimates and assumptions. Revisions to estimates are recognized in the period in which the estimate is revised.

As disclosed in the 2022 Annual Report, goodwill, and acquired In-Process Research & Development projects are reviewed for impairment at least annually and these, as well as all other investments in intangible assets, are reviewed for impairment whenever an event or decision occurs that raises concern about their balance sheet carrying value. The amount of goodwill and other intangible assets on the Group's consolidated balance sheet has risen significantly in recent years, primarily from acquisitions. Impairment testing may lead to potentially significant impairment charges in the future that could have a materially adverse impact on the Group's results of operations and financial condition.

The Group's activities are not subject to significant seasonal fluctuations.

3. Significant transactions

The Group applied the acquisition method of accounting for businesses acquired, and did not elect to apply the optional concentration test to account for acquired business as an asset separately acquired.

**Significant transactions in 2022**

#### Innovative Medicines – acquisition of Gyroscope Therapeutics Holdings plc
On December 22, 2021, Novartis entered into an agreement to acquire all outstanding shares of Gyroscope Therapeutics Holdings plc (Gyroscope), a UK-based ocular gene therapy company. Gyroscope focuses on the discovery and development of gene therapy treatments for retinal indications. The purchase price consisted of a cash payment of USD 0.8 billion, subject to certain customary purchase price adjustments, and potential additional milestone payments of up to USD 0.7 billion, which Gyroscope shareholders are eligible to receive upon achievement of specified milestones. The acquisition closed on February 17, 2022.

The fair value of the total purchase consideration was USD 1.0 billion. The amount consisted of an upfront cash payment of USD 0.8 billion (including customary purchase price adjustments) and the fair value of contingent consideration of USD 0.2 billion, which Gyroscope shareholders are eligible to receive upon achievement of specified milestones. The purchase price allocation resulted

------

in net identifiable assets of USD 0.9 billion, consisting primarily of intangible assets of USD 1.1 billion and net deferred tax liabilities of USD 0.2 billion. Goodwill amounted to USD 0.1 billion.

The results of operations since the date of acquisition are not material.

**Significant transactions in 2021**

#### Sandoz – acquisition of GSK's cephalosporin antibiotics business
On February 10, 2021, Sandoz entered into an agreement with certain subsidiaries of GlaxoSmithKline plc (GSK) for the acquisition of the GSK's cephalosporin antibiotics business.

Under the agreement, Sandoz acquired the global rights to three established brands (Zinnat®, Zinacef® and Fortum®) in more than 100 markets. It excluded the rights in the US, Australia and Germany to certain of those brands, which were previously divested by GSK, and the rights in India, Pakistan, Egypt, Japan (to certain of the brands) and China, which will be retained by GSK. The transaction closed on October 8, 2021.

The purchase price consisted of a USD 350 million upfront payment paid at closing and potential milestone payments up to USD 150 million, which GSK will be eligible to receive upon the achievement of certain annual sales milestones for the portfolio.

The fair value of the total purchase consideration was USD 415 million. The amount consisted of a payment of USD 351 million, including purchase price adjustments, and the fair value of contingent consideration of USD 64 million, which GSK is eligible to receive upon the achievement of specified milestones. The purchase price allocation resulted in net identifiable assets of USD 308 million, consisting of USD 292 million intangible assets and USD 16 million deferred tax assets. Goodwill amounted to USD 107 million.

The 2021 results of operations since the date of acquisition were not material.

#### Corporate – divestment of the investment in Roche Holding AG
On November 3, 2021, Novartis entered into a Share Repurchase Agreement with Roche Holding AG under which Novartis agreed to sell 53.3 million (approximately 33.3%) bearer shares of Roche Holding AG voting shares in a bilateral transaction to Roche Holding AG for a total consideration of USD 20.7 billion. As a result, Novartis discontinued the use of equity method accounting starting from November 3, 2021.

The transaction closed on December 6, 2021. In the fourth quarter of 2021, Novartis realized a gain of USD 14.6 billion, recorded in income from associated companies.

4. Other non-current assets

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| | | |
|:---|:---|:---|
| <br>(USD millions)  | **Dec 31, <br> 2022**  | Dec 31, <br> 2021  |
| Deferred compensation plans | 419 | 520 |
| Prepaid post-employment benefit plans | 491 | 1 415 |
| Other non-current assets | 200 | 275 |
| **Total other non-current assets** | **1 110** | **2 210** |

---

5. Financial debt

In the second quarter of 2022, Novartis repaid the 2.4% coupon bond with a notional amount of USD 1.0 billion issued in 2017 by Novartis Capital Corporation, New York, United States, in advance of its maturity date at no additional cost. In the third quarter of 2022, Novartis repaid the 2.4% coupon bond with a notional amount of USD 1.5 billion issued in 2012 by Novartis Capital Corporation, New York, United States, in accordance with its terms.

During the third quarter of 2022, Novartis closed the interest-bearing accounts of employees payable on demand, and paid out USD 0.9 billion to the respective beneficiaries on October 3, 2022. The net cash outflows from interest-bearing accounts of employees payable on demand were reported within the line change in current financial debts in the consolidated statements of cash flows.

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6. Summary of equity attributable to Novartis AG shareholders

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  | **Number of outstanding shares (in millions)**  | **Number of outstanding shares (in millions)**  | **Issued share capital and reserves attributable to Novartis AG shareholders (in USD millions)** | **Issued share capital and reserves attributable to Novartis AG shareholders (in USD millions)** |
|  | Note | **2022** | 2021 | **FY 2022** | FY 2021 |
| **Balance at beginning of year** |  | **2 234.9** | **2 256.8** | **67 655** | **56 598** |
| Shares acquired to be canceled |  | -126.2 | -30.7 | -10 787 | -2 775 |
| Other share purchases |  | -1.4 | -1.5 | -123 | -145 |
| Exercise of options and employee transactions |  | 1.9 | 0.6 | 88 | 39 |
| Equity-based compensation |  | 10.4 | 9.6 | 854 | 745 |
| Shares delivered to Alcon employees as a result of the Alcon spin-off |  | 0.0 | 0.1 | 5 | 17 |
| Taxes on treasury share transactions |  |  |  | 14 | 1 |
| Decrease/(increase) of treasury share repurchase obligation <br>under a share buyback trading plan  | <br> 6.1  |  |  | <br> 2 809  | <br> -1 040  |
| Transaction costs, net of taxes | 6.2 |  |  |  | 12 |
| Dividends |  |  |  | -7 506 | -7 368 |
| Net income of the period attributable to shareholders of Novartis AG |  |  |  | 6 955 | 24 021 |
| Other comprehensive income attributable to shareholders of Novartis AG |  |  |  | -839 | -2 493 |
| Impact of change in ownership of consolidated entities |  |  |  |  | -5 |
| Other movements | 6.3 |  |  | 217 | 48 |
| **Balance at December 31** |  | **2 119.6** | **2 234.9** | **59 342** | **67 655** |
|  |  |  |  |  |  |

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6.1. In December 2021, Novartis entered into an irrevocable, non-discretionary arrangement with a bank to repurchase Novartis shares on the second trading line under its up-to USD 15.0 billion share buyback. The arrangement was updated in July 2022. Novartis is able to cancel this arrangement at any time but could be subject to a 90-day waiting period. As of December 31, 2022, these waiting period conditions were not applicable and as a result, there was no requirement to record a liability under this arrangement as of December 31, 2022.

6.2. Transaction costs, that were directly attributable to the distribution (spin-off) of Alcon Inc. to Novartis AG shareholders and that would otherwise have been avoided, were recorded to equity.

6.3. Other movements include, for subsidiaries in hyperinflationary economies, the impact of the restatement of the equity balances of the current year as well as restatement of the non-monetary assets and liabilities with the general price index at the beginning of the period. See Note 7 for additional disclosures.

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7. Financial instruments

**Fair value by hierarchy**

The following table illustrates the three hierarchical levels for valuing financial instruments at fair value as of December 31, 2022, and December 31, 2021. For additional information on the hierarchies and other matters, please refer to the Consolidated Financial Statements in the 2022 Annual Report, published on February 1, 2023.

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Level 1** | **Level 1** | **Level 2** | **Level 2** | **Level 3** | **Level 3** | **Total** | **Total** |
| <br>(USD millions)  | **Dec 31, <br> 2022**  | Dec 31, <br> 2021  | **Dec 31, <br> 2022**  | Dec 31, <br> 2021  | **Dec 31, <br> 2022**  | Dec 31, <br> 2021  | **Dec 31, <br> 2022**  | Dec 31, <br> 2021  |
| **Financial assets** |  |  |  |  |  |  |  |  |
| **Cash and cash equivalents** |  |  |  |  |  |  |  |  |
| Debt securities |  | 2 010 |  |  |  |  |  | 2 010 |
| **Total cash and cash equivalents at fair value** |  | **2 010** |  |  |  |  |  | **2 010** |
| **Marketable securities** |  |  |  |  |  |  |  |  |
| Debt securities |  | 2 719 | 9 | 22 |  |  | 9 | 2 741 |
| Derivative financial instruments |  |  | 204 | 105 |  |  | 204 | 105 |
| **Total marketable securities and derivative financial instruments at fair value** |  | **&nbsp;&nbsp;&nbsp;&nbsp;2 719** | **&nbsp;&nbsp;&nbsp;&nbsp;213** | **&nbsp;&nbsp;&nbsp;&nbsp;127** |  |  | **&nbsp;&nbsp;&nbsp;&nbsp;213** | **&nbsp;&nbsp;&nbsp;&nbsp;2 846** |
| **Current contingent consideration receivables** |  |  |  |  | **43** |  | **43** |  |
| **Long-term financial investments** |  |  |  |  |  |  |  |  |
| Debt and equity securities | 473 | 1 080 | 10 |  | 699 | 617 | 1 182 | 1 697 |
| Fund investments | 20 | 28 |  |  | 261 | 338 | 281 | 366 |
| Non-current contingent consideration receivables |  |  |  |  | 607 | 641 | 607 | 641 |
| **Total long-term financial investments at fair value** | **493** | **1 108** | **10** |  | **1 567** | **1 596** | **2 070** | **2 704** |
| **Associated companies at fair value through profit or loss** |  |  |  |  | **129** | **192** | **129** | **192** |
| **Financial liabilities** |  |  |  |  |  |  |  |  |
| Current contingent consideration liabilities |  |  |  |  | -131 | -119 | -131 | -119 |
| Derivative financial instruments |  |  | -55 | -68 |  |  | -55 | -68 |
| **Total current financial liabilities at fair value** |  |  | **-55** | **-68** | **-131** | **-119** | **-186** | **-187** |
| Non-current contingent consideration liabilities |  |  |  |  | -704 | -956 | -704 | -956 |
| Other financial liabilities |  |  |  |  | -232 | -19 | -232 | -19 |
| **Total non-current financial liabilities at fair value** |  |  |  |  | **-936** | **-975** | **-936** | **-975** |

---

During 2022, there was one transfer of equity securities from Level 3 to Level 1 for USD 44 million due to an Initial Public Offering. There were no transfers across levels in the fourth quarter of 2022.

The fair value of straight bonds amounted to USD 20.3 billion at December 31, 2022 (USD 27.1 billion at December 31, 2021) compared with the carrying amount of USD 20.3 billion at December 31, 2022 (USD 25.3 billion at December 31, 2021). For all other financial assets and liabilities, the carrying amount is a reasonable approximation of the fair value.

The carrying amount of financial assets included in the line total long-term financial investments of USD 2.1 billion at December 31, 2022 (USD 2.7 billion at December 31, 2021) is included in the line "Financial assets" of the consolidated balance sheets. The carrying amount of non-current contingent consideration liabilities and other financial liabilities included in the line total non-current financial liabilities at fair value of USD 1.0 billion at December 31, 2022 (USD 1.0 billion at December 31, 2021) is included in the line "Provisions and other non-current liabilities" of the consolidated balance sheet.

#### Foreign currency exchange rate risk
Subsidiaries whose functional currencies have experienced a cumulative inflation rate of more than 100% over the past three years apply the rules of IAS 29 "Financial reporting in Hyperinflationary Economies." The hyperinflationary economies in which Novartis operates are Argentina, Venezuela and Turkey. Venezuela and Argentina were hyperinflationary for all periods presented, and Turkey became hyperinflationary effective May 1, 2022, requiring retroactive implementation of hyperinflation accounting as of January 1, 2022. The impacts of applying IAS 29 were not significant in all periods presented.

The Group's exposure to financial risks has not changed significantly during the period and there have been no major changes to the risk management department or in any risk management policies.

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8. Details to the consolidated statements of cash flows

**8.1. Non-cash items and other adjustments**

The following table shows the reversal of non-cash items and other adjustments in the consolidated statements of cash flows.

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| | | |
|:---|:---|:---|
| (USD millions) | **Q4 2022** | Q4 2021 |
| Depreciation, amortization and impairments on: |  |  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Property, plant and equipment | 400 | 440 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Right-of-use assets | 77 | 80 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Intangible assets | 1 471 | 999 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Financial assets <sup>1</sup> | -28 | 12 |
| Change in provisions and other non-current liabilities | 508 | 100 |
| Gains on disposal and other adjustments on property, plant and equipment; intangible assets; <br>financial assets; and other non-current assets, net  | <br> -128  | <br> -23  |
| Equity-settled compensation expense | 197 | 195 |
| Loss/(income) from associated companies <sup>2</sup> | 3 | -14 621 |
| Income taxes | 275 | 645 |
| Net financial expense | 205 | 232 |
| Other | -20 |  |
| **Total** | **2 960** | **-11 941** |
|  <sup>1</sup> Includes fair value changes  | <sup>1</sup> Includes fair value changes  | <sup>1</sup> Includes fair value changes  |
|  <sup>2</sup> The fourth quarter 2021 included the gain of USD 14.6 billion recognized from the divestment of the Group's investment in Roche (see Note 3).  | <sup>2</sup> The fourth quarter 2021 included the gain of USD 14.6 billion recognized from the divestment of the Group's investment in Roche (see Note 3).  | <sup>2</sup> The fourth quarter 2021 included the gain of USD 14.6 billion recognized from the divestment of the Group's investment in Roche (see Note 3).  |

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| | | |
|:---|:---|:---|
| (USD millions) | **FY 2022** | FY 2021 |
| Depreciation, amortization and impairments on: |  |  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Property, plant and equipment | 1 570 | 1 489 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Right-of-use assets | 303 | 318 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Intangible assets | 5 308 | 4 306 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Financial assets <sup>1</sup> | 260 | -38 |
| Change in provisions and other non-current liabilities | 1 403 | 896 |
| Gains on disposal and other adjustments on property, plant and equipment; intangible assets; <br>financial assets; and other non-current assets, net  | <br> -333  | <br> -677  |
| Equity-settled compensation expense | 823 | 736 |
| Loss/(income) from associated companies <sup>2</sup> | 9 | -15 339 |
| Income taxes | 1 416 | 2 119 |
| Net financial expense | 817 | 891 |
| Other | -30 |  |
| **Total** | **11 546** | **-5 299** |
|  <sup>1</sup> Includes fair value changes  | <sup>1</sup> Includes fair value changes  | <sup>1</sup> Includes fair value changes  |
|  <sup>2</sup> 2021 included the gain of USD 14.6 billion recognized from the divestment of the Group's investment in Roche (see Note 3).  | <sup>2</sup> 2021 included the gain of USD 14.6 billion recognized from the divestment of the Group's investment in Roche (see Note 3).  | <sup>2</sup> 2021 included the gain of USD 14.6 billion recognized from the divestment of the Group's investment in Roche (see Note 3).  |

---

In the fourth quarter of 2022, there were no additions to intangible assets with deferred payments. In the fourth quarter of 2021, other than through business combinations, there were also no additions to intangible assets with deferred payment terms. In the fourth quarter of 2022, there were USD 60 million (Q4 2021: USD 100 million) additions to right-of-use assets recognized.

In 2022, other than through business combinations, there were USD 635 million additions to intangible assets with deferred payments. In 2022, there were USD 247 million (2021: USD 321 million) additions to right-of-use assets recognized.

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**8.2. Cash flows from changes in working capital and other operating items included in the net cash flows from operating activities**

---

| | | | | |
|:---|:---|:---|:---|:---|
| (USD millions) | **Q4 2022** | Q4 2021 | **FY 2022** | FY 2021 |
| (Increase)/decrease in inventories | -29 | 165 | -830 | 81 |
| Decrease/(increase) in trade receivables | 463 | 176 | -589 | -389 |
| Increase/(decrease) in trade payables | 202 | 552 | -48 | -21 |
| Change in other current and non-current assets | 4 | 251 | -194 | -202 |
| Change in other current liabilities | -55 | 32 | 658 | 772 |
| Other adjustments, net |  | 0 |  | 0 |
| **Total** | **585** | **1 176** | **-1 003** | **241** |

---

**8.3. Cash flows arising from acquisitions and divestments of businesses, net**

The following table is a summary of the cash flow impact of acquisitions and divestments of businesses. The most significant transactions are described in Note 3.

---

| | | | | |
|:---|:---|:---|:---|:---|
| (USD millions) | **Q4 2022** | Q4 2021 | **FY 2022** | FY 2021 |
| **Net assets recognized as a result of acquisitions of businesses** |  | **-415** | **-1 077** | **-735** |
| Fair value of previously held equity interests | -1 |  | 21 | 42 |
| Contingent consideration payable, net |  | 59 | 205 | 59 |
| Payments, deferred consideration and other adjustments, net |  | -2 | -13 | 1 |
| **Cash flows used for acquisitions of businesses** | **-1** | **-358** | **-864** | **-633** |
| **Cash flows (used for)/from divestments of businesses, net <sup>1</sup>** | **-8** | **15** | **-15** | **66** |
| **Cash flows used for acquisitions and divestments of businesses, net** | **-9** | **-343** | **-879** | **-567** |
|  <sup>1</sup> In 2022, USD 15 million (Q4 2022: USD 8 million) net cash outflows from divestments of businesses included USD 20 million (Q4 2022: nil) reduction to cash and cash equivalents due to the derecognized cash and cash equivalents following a loss of control of a company upon expiry of an option to purchase the company, partly offset by USD 5 million net cash inflows (Q4 2022: USD 8 million net cash outflows) from business divestments in 2022 and in prior years.  | <sup>1</sup> In 2022, USD 15 million (Q4 2022: USD 8 million) net cash outflows from divestments of businesses included USD 20 million (Q4 2022: nil) reduction to cash and cash equivalents due to the derecognized cash and cash equivalents following a loss of control of a company upon expiry of an option to purchase the company, partly offset by USD 5 million net cash inflows (Q4 2022: USD 8 million net cash outflows) from business divestments in 2022 and in prior years.  | <sup>1</sup> In 2022, USD 15 million (Q4 2022: USD 8 million) net cash outflows from divestments of businesses included USD 20 million (Q4 2022: nil) reduction to cash and cash equivalents due to the derecognized cash and cash equivalents following a loss of control of a company upon expiry of an option to purchase the company, partly offset by USD 5 million net cash inflows (Q4 2022: USD 8 million net cash outflows) from business divestments in 2022 and in prior years.  | <sup>1</sup> In 2022, USD 15 million (Q4 2022: USD 8 million) net cash outflows from divestments of businesses included USD 20 million (Q4 2022: nil) reduction to cash and cash equivalents due to the derecognized cash and cash equivalents following a loss of control of a company upon expiry of an option to purchase the company, partly offset by USD 5 million net cash inflows (Q4 2022: USD 8 million net cash outflows) from business divestments in 2022 and in prior years.  | <sup>1</sup> In 2022, USD 15 million (Q4 2022: USD 8 million) net cash outflows from divestments of businesses included USD 20 million (Q4 2022: nil) reduction to cash and cash equivalents due to the derecognized cash and cash equivalents following a loss of control of a company upon expiry of an option to purchase the company, partly offset by USD 5 million net cash inflows (Q4 2022: USD 8 million net cash outflows) from business divestments in 2022 and in prior years.  |
|  &nbsp;&nbsp;&nbsp;&nbsp; In 2022, the net identifiable assets of divested businesses amounted to USD 173 million (Q4 2022: USD 33 million), comprised of non-current assets of USD 132 million (Q4 2022: USD 14 million), current assets of USD 113 million (Q4 2022: USD 48 million), including USD 71 million (Q4 2022: USD 42 million) cash and cash equivalents and of non-current and current liabilities of USD 72 million (Q4 2022: USD 29 million). The deferred sale price receivable and other adjustments amounted to USD 41 million (Q4 2022: USD 19 million).  | &nbsp;&nbsp;&nbsp;&nbsp; In 2022, the net identifiable assets of divested businesses amounted to USD 173 million (Q4 2022: USD 33 million), comprised of non-current assets of USD 132 million (Q4 2022: USD 14 million), current assets of USD 113 million (Q4 2022: USD 48 million), including USD 71 million (Q4 2022: USD 42 million) cash and cash equivalents and of non-current and current liabilities of USD 72 million (Q4 2022: USD 29 million). The deferred sale price receivable and other adjustments amounted to USD 41 million (Q4 2022: USD 19 million).  | &nbsp;&nbsp;&nbsp;&nbsp; In 2022, the net identifiable assets of divested businesses amounted to USD 173 million (Q4 2022: USD 33 million), comprised of non-current assets of USD 132 million (Q4 2022: USD 14 million), current assets of USD 113 million (Q4 2022: USD 48 million), including USD 71 million (Q4 2022: USD 42 million) cash and cash equivalents and of non-current and current liabilities of USD 72 million (Q4 2022: USD 29 million). The deferred sale price receivable and other adjustments amounted to USD 41 million (Q4 2022: USD 19 million).  | &nbsp;&nbsp;&nbsp;&nbsp; In 2022, the net identifiable assets of divested businesses amounted to USD 173 million (Q4 2022: USD 33 million), comprised of non-current assets of USD 132 million (Q4 2022: USD 14 million), current assets of USD 113 million (Q4 2022: USD 48 million), including USD 71 million (Q4 2022: USD 42 million) cash and cash equivalents and of non-current and current liabilities of USD 72 million (Q4 2022: USD 29 million). The deferred sale price receivable and other adjustments amounted to USD 41 million (Q4 2022: USD 19 million).  | &nbsp;&nbsp;&nbsp;&nbsp; In 2022, the net identifiable assets of divested businesses amounted to USD 173 million (Q4 2022: USD 33 million), comprised of non-current assets of USD 132 million (Q4 2022: USD 14 million), current assets of USD 113 million (Q4 2022: USD 48 million), including USD 71 million (Q4 2022: USD 42 million) cash and cash equivalents and of non-current and current liabilities of USD 72 million (Q4 2022: USD 29 million). The deferred sale price receivable and other adjustments amounted to USD 41 million (Q4 2022: USD 19 million).  |
|  &nbsp;&nbsp;&nbsp;&nbsp; In 2021, USD 66 million (Q4 2021: USD 15 million) included USD 52 million (Q4 2021: USD 15 million) net cash inflows from divestments in previous years, and a USD 14 million (Q4 2021: nil) net cash inflow from a business divestment in 2021, comprised of an intangible asset.  | &nbsp;&nbsp;&nbsp;&nbsp; In 2021, USD 66 million (Q4 2021: USD 15 million) included USD 52 million (Q4 2021: USD 15 million) net cash inflows from divestments in previous years, and a USD 14 million (Q4 2021: nil) net cash inflow from a business divestment in 2021, comprised of an intangible asset.  | &nbsp;&nbsp;&nbsp;&nbsp; In 2021, USD 66 million (Q4 2021: USD 15 million) included USD 52 million (Q4 2021: USD 15 million) net cash inflows from divestments in previous years, and a USD 14 million (Q4 2021: nil) net cash inflow from a business divestment in 2021, comprised of an intangible asset.  | &nbsp;&nbsp;&nbsp;&nbsp; In 2021, USD 66 million (Q4 2021: USD 15 million) included USD 52 million (Q4 2021: USD 15 million) net cash inflows from divestments in previous years, and a USD 14 million (Q4 2021: nil) net cash inflow from a business divestment in 2021, comprised of an intangible asset.  | &nbsp;&nbsp;&nbsp;&nbsp; In 2021, USD 66 million (Q4 2021: USD 15 million) included USD 52 million (Q4 2021: USD 15 million) net cash inflows from divestments in previous years, and a USD 14 million (Q4 2021: nil) net cash inflow from a business divestment in 2021, comprised of an intangible asset.  |

---

Notes 3 and 9 provide further information regarding acquisitions and divestments of businesses. All acquisitions were for cash.

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9. Acquisitions of businesses

Fair value of assets and liabilities arising from acquisitions of businesses:

---

| | | |
|:---|:---|:---|
| (USD millions) | **FY 2022** | FY 2021 |
| Property, plant and equipment | 13 |  |
| Right-of-use assets | 12 |  |
| Currently marketed products |  | 292 |
| Acquired research and development | 1 209 | 262 |
| Other intangible assets |  | 98 |
| Deferred tax assets | 56 | 28 |
| Trade receivables and financial and other current assets | 5 | 1 |
| Cash and cash equivalents | 89 | 10 |
| Deferred tax liabilities | -300 | -74 |
| Current and non-current financial debts |  | -1 |
| Current and non-current lease liabilities | -12 |  |
| Trade payables and other liabilities | -67 | -4 |
| **Net identifiable assets acquired** | **1 005** | **612** |
| Acquired cash and cash equivalents | -89 | -10 |
| Non-controlling interests |  | -105 |
| Goodwill | 161 | 238 |
| **Net assets recognized as a result of acquisitions of businesses** | **1 077** | **735** |

---

Note 3 details significant acquisitions of businesses, specifically, the acquisition of Gyroscope in the first quarter of 2022 and the acquisition of GSK's cephalosporin antibiotic business in 2021. The goodwill arising out of the Gyroscope acquisition is mainly attributable to the accounting for deferred tax liabilities on acquired assets and the assembled workforce. The goodwill for 2021 acquisition relates to buyer-specific synergies and the assembled workforce. In 2022, no goodwill (2021: USD 107 million) is tax deductible.

10. Legal proceedings update

A number of Novartis companies are, and will likely continue to be, subject to various legal proceedings, including litigations, arbitrations and governmental investigations, that arise from time to time. Legal proceedings are inherently unpredictable. As a result, the Group may become subject to substantial liabilities that may not be covered by insurance and may in the future incur judgments or enter into settlements of claims that could have a material adverse effect on its results of operations or cash flow. Note 20 to the Consolidated Financial Statements in our 2021 Annual Report and 2021 Form 20-F contains a summary as of the date of these reports of significant legal proceedings to which Novartis or its subsidiaries were a party. The following is a summary as of January 31, 2023, of significant developments in those proceedings, as well as any new significant proceedings commenced since the date of the 2021 Annual Report and 2021 Form 20-F.

**Investigations and related litigations** 

#### Southern District of New York (S.D.N.Y.) Gilenya marketing practices investigation and litigation
In 2013, Novartis Pharmaceuticals Corporation (NPC) received a civil investigative demand from the United States Attorney's Office for the S.D.N.Y. requesting the production of documents and information relating to marketing practices for *Gilenya*, including the remuneration of healthcare providers in connection therewith. In 2017, the S.D.N.Y. and New York State declined to intervene in claims raised by an individual relator in a qui tam complaint. In 2022, NPC's motion to dismiss this complaint was granted, which was appealed. The claims are being vigorously contested.

#### Government generic pricing antitrust investigations, antitrust class actions
Since 2016, Sandoz Inc. has received a grand jury subpoena and a civil investigative demand and interrogatories from the Antitrust and Civil Divisions of the US Department of Justice (DOJ) into alleged price fixing and market allocation of generic drugs in the United States

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as well as alleged federal False Claims Act (FCA) violations. Sandoz Inc. also received a subpoena and interrogatories from the Attorney General of the State of Connecticut in connection with a similar States' investigation. In 2020, Sandoz Inc. reached a resolution with the DOJ Antitrust Division, pursuant to which Sandoz Inc. paid USD 195 million and entered into a deferred prosecution agreement. The Sandoz Inc. resolution related to instances of misconduct at the Company between 2013 and 2015 with regard to certain generic drugs sold in the United States. Under the terms of that agreement, Sandoz Inc. will continue to take steps to enhance its compliance program, employee training and monitoring, and will continue to cooperate with the US government's ongoing investigation into the generic pharmaceutical industry. Sandoz Inc. also finalized a resolution with the DOJ Civil Division and in 2021 paid USD 185 million, which includes interest from the date of the agreement in principle, to settle related claims arising under the FCA, and entered into a corporate integrity agreement with the Office of Inspector General (OIG) of the US Department of Health and Human Services (HHS). This resolution with the DOJ resolves all federal government matters related to price fixing allegations.

Since the third quarter of 2016, Sandoz Inc. and Fougera Pharmaceuticals Inc. have been sued alongside other generic pharmaceutical companies in numerous individual and putative class action complaints by direct and indirect private purchasers and by over 50 US states and territories, represented by their respective Attorneys General. Plaintiffs claim that defendants, including Sandoz Inc., engaged in price fixing and market allocation of generic drugs in the United States, and seek damages and injunctive relief. The litigation includes complaints alleging product-specific conspiracies, as well as complaints alleging the existence of an overarching industry conspiracy, and assert claims for damages and penalties under federal and state antitrust and consumer protection acts. The cases have been consolidated for pretrial purposes in the United States District Court (USDC) for the Eastern District of Pennsylvania, and the claims are being vigorously contested.

#### Lucentis/Avastin® matters
In connection with an investigation into whether Novartis entities, F. Hoffmann-La Roche AG, Genentech Inc. and Roche S.p.A. colluded to artificially preserve the market positions of Avastin® and Lucentis, in 2014 the Italian Competition Authority (ICA) imposed a fine equivalent to USD 125 million on the Novartis entities. Novartis paid the fine, subject to the right to later claim recoupment, and appealed before the Consiglio di Stato (CdS). In 2014 and 2015, the Italian Ministry of Health and the Lombardia region sent letters with payment requests for a total equivalent of approximately USD 1.3 billion in damages from Novartis and Roche entities based on these allegations. In 2019, the CdS upheld the ICA decision and fine. Following that CdS decision, several additional Italian regions and hospitals sent letters claiming damages for an aggregate amount of approximately USD 330 million. None of these claims have been asserted in legal proceedings and no further letters have been sent since. Novartis continues to appeal the CdS decision. In 2019, the French Competition Authority (FCA) issued a Statement of Objections against Novartis entities, alleging anti-competitive practices on the French market for anti-vascular endothelial growth factor treatments for wet age-related macular degeneration from 2008 to 2013. In 2020, the FCA issued a decision finding that the Novartis entities had infringed competition law by abusing a dominant position and imposing a fine equivalent to approximately USD 452 million. Novartis paid the fine, again subject to recoupment, and is appealing the FCA's decision. Novartis is the subject of similar investigations and proceedings involving competition authorities in Belgium and Greece and is currently in the appeal process in Turkey. Novartis continues to vigorously contest all claims in all those countries. Novartis is also challenging policies and regulations allowing off-label/unlicensed use and reimbursement for economic reasons in Turkey.

#### Greece Investigation
The Greek authorities are investigating legacy allegations of potentially inappropriate economic benefits to HCPs, government officials and others in Greece. These authorities include the Greek Coordinating Body for Inspection and Control, and the Greek Body of Prosecution of Financial Crime (SDOE), from which the Company received a summons in 2018 and 2020. Novartis has cooperated in these investigations. In 2021, SDOE imposed on Novartis Hellas a fine equivalent to approximately USD 1.2 million, which Novartis Hellas has appealed. In 2022, the Greek State served a civil lawsuit on Novartis Hellas, seeking approximately USD 225 million for moral damages allegedly arising from the conduct that was the subject of the Company's 2020 settlement with the DOJ regarding allegations of inappropriate economic benefits in Greece that was disclosed in the 2020 Annual Report and 2020 Form 20-F. The claims are being vigorously contested.

#### 340B Drug Pricing Program investigation
In 2021, NPC received a notification from the US Health Resources and Services Administration (HRSA) which stated that HRSA believes NPC's contract pharmacy policy violates the 340B statute and threatened potential enforcement action. NPC subsequently sued HRSA in the USDC for the District of Columbia to challenge HRSA's determination and to enjoin HRSA from taking action with respect to NPC's contract pharmacy policy. HRSA then referred the matter regarding NPC's contract pharmacy policy to OIG, which could result in the imposition of civil monetary penalties on NPC. The USDC issued a decision rejecting HRSA's interpretation of the 340B statute, vacating the violation notification and remanding the matter to HRSA. HRSA appealed, and the United States Court of Appeals for the DC Circuit heard argument on the case in 2022. In addition, in 2021, Emory University Hospital Midtown filed an Administrative Dispute Resolution (ADR) proceeding against NPC, seeking the return of alleged overcharges resulting from NPC's contract pharmacy policy. NPC has moved to dismiss the proceeding pending resolution of the HRSA litigation. Finally, also in 2021, NPC received a civil investigative subpoena from the Office of the Attorney General of the State of Vermont requesting the production of documents and information concerning NPC's participation in the 340B Drug Pricing Program in Vermont; NPC

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provided documents and information to the Office of the Attorney General.

#### Swiss and EU investigation
In September 2022, the Swiss Competition Commission (COMCO) initiated an investigation of Novartis acquisition of certain patents from Genentech in April 2020 and their subsequent enforcement against Eli Lilly and other parties, allegedly in an attempt to protect *Cosentyx* from competing products. COMCO is investigating whether enforcement of the patents violates the Swiss Cartel Act. The European Commission also requested information from Novartis regarding this matter. Novartis is cooperating with the authorities and will vigorously contest any allegations.

**Antitrust class actions**

#### Exforge
Since 2018, Novartis Group companies as well as other pharmaceutical companies have been sued by various direct and indirect purchasers of *Exforge* in multiple US individual and putative class action complaints. They claim that Novartis made a reverse payment in the form of an agreement not to launch an authorized generic, alleging violations of federal antitrust law and state antitrust, consumer protection and common laws, and seeking damages as well as injunctive relief. The cases have been consolidated in the S.D.N.Y. In 2022, Novartis agreed to a settlement in principle to pay USD 245 million to resolve these cases. These settlements are subject to mutually agreeable terms, finalization of documentation and, in some cases, court approval.

**Product liability litigation**

#### Taxotere® (docetaxel)
Sandoz is a defendant in more than 3 100 US product liability actions involving Taxotere® (docetaxel), an oncology product, many of which have been transferred to a multidistrict litigation in the Eastern District of Louisiana. The complaints allege misleading marketing and that Sanofi, as innovator, and several 505(b)(2) NDA holders (including Sandoz) failed to warn of the risk of permanent alopecia/hair loss. In 2022, actions involving claims related to alleged eye injuries caused by the use of Taxotere® were coordinated in a separate multidistrict litigation in the Eastern District of Louisiana. The claims are being vigorously contested.

#### Amiodarone
Sandoz entities are named in two multi-plaintiff US product liability cases involving amiodarone, a cardiac drug indicated to treat life-threatening arrhythmias that have not responded to other treatment. The complaints allege failure to warn, off-label promotion, and failure to include medication guides to pharmacies. The claims are being vigorously contested.

#### Tasigna
NPC is a defendant in more than 400 US product liability actions involving *Tasigna*, alleging that the product caused various cardiovascular effects and that NPC failed to provide adequate warnings about those alleged side effects. State court actions are pending in a multicounty litigation in Bergen County, New Jersey, and federal cases are pending in a multidistrict litigation in the Middle District of Florida. The claims are being vigorously contested.

**Other matters**

#### Shareholder derivative lawsuit
In 2021, NPC, Sandoz Inc., Novartis Capital Corporation and certain present and former directors and officers of Novartis were named as defendants, and Novartis was named as a nominal defendant, in a purported shareholder derivative lawsuit filed in New York state court. The plaintiffs, derivatively as purported Novartis shareholders on behalf of Novartis, seek damages and other remedies based on alleged conduct by the corporate and individual defendants. In 2022, the court granted Novartis motion to dismiss the lawsuit, which the plaintiffs have appealed.

In addition to the matters described above, there have been other developments in the other legal matters described in Note 20 to the Consolidated Financial Statements contained in our 2021 Annual Report and 2021 Form 20-F.

Novartis believes that its total provisions for investigations, product liability, arbitration and other legal matters are adequate based upon currently available information. However, given the inherent difficulties in estimating liabilities, there can be no assurance that additional liabilities and costs will not be incurred beyond the amounts provided.

**Concluded legal matters**

#### Average Wholesale Price (AWP) litigation – Concluded matter
Lawsuits were brought, the latest in February 2016, by various US state governmental entities and private parties against various pharmaceutical companies, including NPC, alleging that they fraudulently overstated the AWP that is or has been used by payers, including state Medicaid agencies, to calculate reimbursements to healthcare providers. In 2022, NPC settled a putative class action brought by private payers in New Jersey, which resolved the last AWP lawsuit. This matter is now concluded.

#### Entresto matter – Concluded matter
In 2021, NPC received a civil investigative demand from the DOJ seeking information from 2016 to the present regarding the marketing and pricing of *Entresto*, including remuneration provided to HCPs. In December 2022, the DOJ advised that it has no additional requests and that the matter is considered closed. This matter is now concluded.

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#### South Korea investigation – Concluded matter
In 2016, the Seoul Western District Prosecutor initiated a criminal investigation into, among other things, allegations that Novartis Korea utilized medical journals to provide inappropriate economic benefits to healthcare professionals (HCPs). This resulted in a non-material fine, which the prosecutor appealed. In 2021, the appellate court upheld the fine, and the prosecutor appealed that decision. In January 2023, the Supreme Court dismissed the appeal. This matter is now concluded.

11. Segmentation of key figures

The businesses of Novartis are divided operationally on a worldwide basis into two identified reporting segments: Innovative Medicines and Sandoz. In addition, we separately report Corporate activities.

Reporting segments are presented in a manner consistent with the internal reporting to the chief operating decision-maker, which is the Executive Committee of Novartis. The reporting segments are managed separately because they each research, develop, manufacture, distribute and sell distinct products that require differing marketing strategies.

The Executive Committee of Novartis is responsible for allocating resources and assessing the performance of the reporting segments.

The reporting segments are as follows:

Innovative Medicines researches, develops, manufactures, distributes and sells patented pharmaceuticals. Effective as of April 4, 2022, the Innovative Medicines Division is organized in two commercial organizational units: Innovative Medicines International and Innovative Medicines US, and is focused on the core therapeutic areas: cardiovascular; immunology; neuroscience; solid tumors and hematology; as well as other promoted brands (in the therapeutic areas of ophthalmology and respiratory) and established brands. Prior to the announcement on April 4, 2022, the Innovative Medicines Division was organized into two global business units: Novartis Oncology and Novartis Pharmaceuticals.

Sandoz develops, manufactures and markets finished dosage form medicines as well as intermediary products including active pharmaceutical ingredients. Sandoz is organized globally into three franchises: Retail Generics, Anti-Infectives and Biopharmaceuticals. In Retail Generics, Sandoz develops, manufactures and markets finished dosage forms of small molecule pharmaceuticals for sale to third parties across a broad range of therapeutic areas, including finished dosage form of anti-infectives sold to third parties. In Anti-Infectives, Sandoz manufactures and supplies active pharmaceutical ingredients and intermediates, mainly antibiotics, for internal use by Retail Generics and for sale to third-party companies. In Biopharmaceuticals, Sandoz develops, manufactures and markets protein- or other biotechnology-based products, including biosimilars, and provides biotechnology manufacturing services to other companies.

Corporate includes the costs of the Group headquarters and those of corporate coordination functions in major countries, and items that are not specific to one segment.

Our divisions are supported by Novartis Institutes for BioMedical Research, Global Drug Development, and the Operations unit, which combined the Novartis Technical Operations (NTO) and Customer & Technology Solutions (CTS) organizational units, following the internal reorganization announced on April 4, 2022.

Further details are provided in Note 3 to the Consolidated Financial Statements of the 2022 Annual Report.

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**Segmentation – Consolidated income statements**

**Fourth quarter**

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Innovative Medicines** | **Innovative Medicines** | **Sandoz**  | **Sandoz**  | **Corporate (including eliminations)<sup>1</sup>** | **Corporate (including eliminations)<sup>1</sup>** | **Group**  | **Group**  |
| (USD millions) | **Q4 2022** | Q4 2021 | **Q4 2022** | Q4 2021 | **Q4 2022** | Q4 2021 | **Q4 2022** | Q4 2021 |
| **Net sales to third parties** | **10 360** | **10 704** | **2 330** | **2 525** |  |  | **12 690** | **13 229** |
| Sales to other segments | 193 | 184 | 61 | 42 | -254 | -226 |  |  |
| **Net sales** | **10 553** | **10 888** | **2 391** | **2 567** | **-254** | **-226** | **12 690** | **13 229** |
| Other revenues | 390 | 281 | 7 | 10 |  | 2 | 397 | 293 |
| Cost of goods sold | -3 026 | -2 873 | -1 300 | -1 341 | 253 | 238 | -4 073 | -3 976 |
| **Gross profit** | **7 917** | **8 296** | **1 098** | **1 236** | **-1** | **14** | **9 014** | **9 546** |
| Selling, general and administration | -3 036 | -3 274 | -565 | -568 | -146 | -143 | -3 747 | -3 985 |
| Research and development | -2 216 | -2 169 | -226 | -240 |  |  | -2 442 | -2 409 |
| Other income | 106 | 186 | 17 | 50 | 49 | 135 | 172 | 371 |
| Other expense | -826 | -571 | -51 | -92 | -171 | -298 | -1 048 | -961 |
| **Operating income** | **1 945** | **2 468** | **273** | **386** | **-269** | **-292** | **1 949** | **2 562** |
| *as % of net sales* | *18.8%* | *23.1%* | *11.7%* | *15.3%* |  |  | *15.4%* | *19.4%* |
| (Loss)/income from associated companies | -1 | 4 |  |  | -2 | 14 617 | -3 | 14 621 |
| Interest expense |  |  |  |  |  |  | -219 | -206 |
| Other financial income and expense |  |  |  |  |  |  | 14 | -26 |
| **Income before taxes** |  |  |  |  |  |  | **1 741** | **16 951** |
| Income taxes |  |  |  |  |  |  | -275 | -645 |
| **Net income** |  |  |  |  |  |  | **1 466** | **16 306** |
|  <sup>1</sup> Eliminations mainly relate to the elimination of sales to other segments and the corresponding cost of goods sold.  | <sup>1</sup> Eliminations mainly relate to the elimination of sales to other segments and the corresponding cost of goods sold.  | <sup>1</sup> Eliminations mainly relate to the elimination of sales to other segments and the corresponding cost of goods sold.  | <sup>1</sup> Eliminations mainly relate to the elimination of sales to other segments and the corresponding cost of goods sold.  | <sup>1</sup> Eliminations mainly relate to the elimination of sales to other segments and the corresponding cost of goods sold.  | <sup>1</sup> Eliminations mainly relate to the elimination of sales to other segments and the corresponding cost of goods sold.  | <sup>1</sup> Eliminations mainly relate to the elimination of sales to other segments and the corresponding cost of goods sold.  | <sup>1</sup> Eliminations mainly relate to the elimination of sales to other segments and the corresponding cost of goods sold.  | <sup>1</sup> Eliminations mainly relate to the elimination of sales to other segments and the corresponding cost of goods sold.  |

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**Full year**

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Innovative Medicines** | **Innovative Medicines** | **Sandoz**  | **Sandoz**  | **Corporate (including eliminations)<sup>1</sup>** | **Corporate (including eliminations)<sup>1</sup>** | **Group**  | **Group**  |
| (USD millions) | **FY 2022** | FY 2021 | **FY 2022** | FY 2021 | **FY 2022** | FY 2021 | **FY 2022** | FY 2021 |
| **Net sales to third parties** | **41 296** | **41 995** | **9 249** | **9 631** |  |  | **50 545** | **51 626** |
| Sales to other segments | 825 | 795 | 205 | 180 | -1 030 | -975 |  |  |
| **Net sales** | **42 121** | **42 790** | **9 454** | **9 811** | **-1 030** | **-975** | **50 545** | **51 626** |
| Other revenues | 1 249 | 1 179 | 28 | 61 | 6 | 11 | 1 283 | 1 251 |
| Cost of goods sold | -11 569 | -11 751 | -4 978 | -5 147 | 1 061 | 1 031 | -15 486 | -15 867 |
| **Gross profit** | **31 801** | **32 218** | **4 504** | **4 725** | **37** | **67** | **36 342** | **37 010** |
| Selling, general and administration | -11 679 | -12 306 | -2 062 | -2 062 | -512 | -518 | -14 253 | -14 886 |
| Research and development | -9 172 | -8 641 | -824 | -899 |  |  | -9 996 | -9 540 |
| Other income | 531 | 1 149 | 103 | 233 | 171 | 470 | 805 | 1 852 |
| Other expense | -2 695 | -1 732 | -273 | -397 | -733 | -618 | -3 701 | -2 747 |
| **Operating income** | **8 786** | **10 688** | **1 448** | **1 600** | **-1 037** | **-599** | **9 197** | **11 689** |
| *as % of net sales* | *21.3%* | *25.5%* | *15.7%* | *16.6%* |  |  | *18.2%* | *22.6%* |
| (Loss)/income from associated companies | -2 | 5 | 2 | 2 | -9 | 15 332 | -9 | 15 339 |
| Interest expense |  |  |  |  |  |  | -837 | -811 |
| Other financial income and expense |  |  |  |  |  |  | 20 | -80 |
| **Income before taxes** |  |  |  |  |  |  | **8 371** | **26 137** |
| Income taxes |  |  |  |  |  |  | -1 416 | -2 119 |
| **Net income** |  |  |  |  |  |  | **6 955** | **24 018** |
|  <sup>1</sup> Eliminations mainly relate to the elimination of sales to other segments and the corresponding cost of goods sold.  | <sup>1</sup> Eliminations mainly relate to the elimination of sales to other segments and the corresponding cost of goods sold.  | <sup>1</sup> Eliminations mainly relate to the elimination of sales to other segments and the corresponding cost of goods sold.  | <sup>1</sup> Eliminations mainly relate to the elimination of sales to other segments and the corresponding cost of goods sold.  | <sup>1</sup> Eliminations mainly relate to the elimination of sales to other segments and the corresponding cost of goods sold.  | <sup>1</sup> Eliminations mainly relate to the elimination of sales to other segments and the corresponding cost of goods sold.  | <sup>1</sup> Eliminations mainly relate to the elimination of sales to other segments and the corresponding cost of goods sold.  | <sup>1</sup> Eliminations mainly relate to the elimination of sales to other segments and the corresponding cost of goods sold.  | <sup>1</sup> Eliminations mainly relate to the elimination of sales to other segments and the corresponding cost of goods sold.  |

---

------

**Segmentation – Additional consolidated balance sheets and income statements disclosure**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Innovative Medicines** | **Innovative Medicines** | **Sandoz**  | **Sandoz**  | **Corporate (including eliminations)<sup>1</sup>** | **Corporate (including eliminations)<sup>1</sup>** | **Group**  | **Group**  |
| <br>(USD millions)  | **Dec 31, <br> 2022**  | Dec 31, <br> 2021  | **Dec 31, <br> 2022**  | Dec 31, <br> 2021  | **Dec 31, <br> 2022**  | Dec 31, <br> 2021  | **Dec 31, <br> 2022**  | Dec 31, <br> 2021  |
| **Total assets** | **75 510** | **79 220** | **16 078** | **16 192** | **25 865** | **36 383** | **117 453** | **131 795** |
| **Total liabilities** | **-16 966** | **-15 929** | **-3 710** | **-3 632** | **-37 354** | **-44 412** | **-58 030** | **-63 973** |
| **Total equity** |  |  |  |  |  |  | **59 423** | **67 822** |
| Net debt <sup>2</sup> |  |  |  |  | 7 245 | 868 | 7 245 | 868 |
| **Net operating assets** | **58 544** | **63 291** | **12 368** | **12 560** | **-4 244** | **-7 161** | **66 668** | **68 690** |
| Included in net operating assets are: |  |  |  |  |  |  |  |  |
| Property, plant and equipment | 8 488 | 9 168 | 1 861 | 1 901 | 415 | 476 | 10 764 | 11 545 |
| Goodwill | 21 531 | 21 562 | 7 770 | 8 026 |  | 7 | 29 301 | 29 595 |
| Intangible assets other than goodwill | 29 826 | 32 357 | 1 460 | 1 577 | 358 | 248 | 31 644 | 34 182 |
|  <sup>1</sup> Eliminations mainly relate to the elimination of intercompany receivables and payables to other segments and inventories  | <sup>1</sup> Eliminations mainly relate to the elimination of intercompany receivables and payables to other segments and inventories  | <sup>1</sup> Eliminations mainly relate to the elimination of intercompany receivables and payables to other segments and inventories  | <sup>1</sup> Eliminations mainly relate to the elimination of intercompany receivables and payables to other segments and inventories  | <sup>1</sup> Eliminations mainly relate to the elimination of intercompany receivables and payables to other segments and inventories  | <sup>1</sup> Eliminations mainly relate to the elimination of intercompany receivables and payables to other segments and inventories  | <sup>1</sup> Eliminations mainly relate to the elimination of intercompany receivables and payables to other segments and inventories  | <sup>1</sup> Eliminations mainly relate to the elimination of intercompany receivables and payables to other segments and inventories  | <sup>1</sup> Eliminations mainly relate to the elimination of intercompany receivables and payables to other segments and inventories  |
|  <sup>2</sup> See page 60 for additional disclosures related to net debt.  | <sup>2</sup> See page 60 for additional disclosures related to net debt.  | <sup>2</sup> See page 60 for additional disclosures related to net debt.  | <sup>2</sup> See page 60 for additional disclosures related to net debt.  | <sup>2</sup> See page 60 for additional disclosures related to net debt.  | <sup>2</sup> See page 60 for additional disclosures related to net debt.  | <sup>2</sup> See page 60 for additional disclosures related to net debt.  | <sup>2</sup> See page 60 for additional disclosures related to net debt.  | <sup>2</sup> See page 60 for additional disclosures related to net debt.  |

---

The following table shows the property, plant and equipment impairment charges and reversals, the right-of-use assets impairment charges, the intangible assets impairment charges and additions to restructuring provisions:

**Fourth quarter**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Innovative Medicines** | **Innovative Medicines** | **Sandoz**  | **Sandoz**  | **Corporate**  | **Corporate**  | **Group**  | **Group**  |
| (USD millions) | **Q4 2022** | Q4 2021 | **Q4 2022** | Q4 2021 | **Q4 2022** | Q4 2021 | **Q4 2022** | Q4 2021 |
| Property, plant and equipment impairment charges | -92 | -131 | -2 | -8 | 1 | -1 | **-93** | **-140** |
| Property, plant and equipment impairment reversals | 2 | 1 |  | 1 |  |  | **2** | **2** |
| Right-of-use assets impaiment charges | -3 |  | 1 |  |  |  | **-2** |  |
| Intangible assets impairment charges | -441 | -5 | -14 | -9 | -2 | -7 | **-457** | **-21** |
| Additions to restructuring provisions | -438 | -80 | -5 | -10 | -74 | -10 | **-517** | **-100** |

---

**Full year**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Innovative Medicines** | **Innovative Medicines** | **Sandoz**  | **Sandoz**  | **Corporate**  | **Corporate**  | **Group**  | **Group**  |
| (USD millions) | **FY 2022** | FY 2021 | **FY 2022** | FY 2021 | **FY 2022** | FY 2021 | **FY 2022** | FY 2021 |
| Property, plant and equipment impairment charges | -411 | -315 | -3 | -68 |  | -1 | **-414** | **-384** |
| Property, plant and equipment impairment reversal | 4 | 44 | 3 | 59 |  |  | **7** | **103** |
| Right-of-use assets impaiment charges | -3 |  |  |  |  |  | **-3** |  |
| Intangible assets impairment charges <sup>1</sup> | -1 299 | -367 | -25 | -28 | -2 | -8 | **-1 326** | **-403** |
| Additions to restructuring provisions | -1 069 | -240 | -40 | -62 | -259 | -26 | **-1 368** | **-328** |
|  <sup>1</sup> 2021 includes an impairment of USD 201 million in Innovative Medicines related to the write-down of IPR&D related to cessation of clinical development program GTX312.  | <sup>1</sup> 2021 includes an impairment of USD 201 million in Innovative Medicines related to the write-down of IPR&D related to cessation of clinical development program GTX312.  | <sup>1</sup> 2021 includes an impairment of USD 201 million in Innovative Medicines related to the write-down of IPR&D related to cessation of clinical development program GTX312.  | <sup>1</sup> 2021 includes an impairment of USD 201 million in Innovative Medicines related to the write-down of IPR&D related to cessation of clinical development program GTX312.  | <sup>1</sup> 2021 includes an impairment of USD 201 million in Innovative Medicines related to the write-down of IPR&D related to cessation of clinical development program GTX312.  | <sup>1</sup> 2021 includes an impairment of USD 201 million in Innovative Medicines related to the write-down of IPR&D related to cessation of clinical development program GTX312.  | <sup>1</sup> 2021 includes an impairment of USD 201 million in Innovative Medicines related to the write-down of IPR&D related to cessation of clinical development program GTX312.  | <sup>1</sup> 2021 includes an impairment of USD 201 million in Innovative Medicines related to the write-down of IPR&D related to cessation of clinical development program GTX312.  | <sup>1</sup> 2021 includes an impairment of USD 201 million in Innovative Medicines related to the write-down of IPR&D related to cessation of clinical development program GTX312.  |

---

In the fourth quarter and full year period of 2022, there were no reversals of prior-year impairment charges on intangible assets (Q4 and FY 2021: nil) and right-of-use assets (Q4 and FY 2021: nil).

**Restructuring provisions movements**

---

| | | | | |
|:---|:---|:---|:---|:---|
| (USD millions) | **Q4 2022** | Q4 2021 | **FY 2022** | FY 2021 |
| **Balance at beginning of period** | **903** | **361** | **345** | **459** |
| Additions | 517 | 100 | 1 368 | 328 |
| Cash payments | -237 | -71 | -468 | -344 |
| Releases | -7 | -23 | -42 | -54 |
| Transfers | -52 | -22 | -53 | -27 |
| Currency translation effects | 7 | 0 | -19 | -17 |
| **Balance at closing of period** | **1 131** | **345** | **1 131** | **345** |

---

------

In 2022, additions to provisions of USD 1.4 billion (Q4: USD 517 million) were mainly related to the following reorganizations:

• Initiative announced in April 2022 to implement a new streamlined organizational model designed to support innovation, growth and productivity.

• The continuation of the Innovative Medicines Division and the Operations unit (formerly the Novartis Technical Operations and the Customer & Technology Solutions) 2021 restructuring initiatives.

In 2021, additions to provisions of USD 328 million (Q4: USD 100 million) were mainly related to the following reorganizations:

• The Innovative Medicines Division commenced a plan to restructure its field force and supporting functions in response to changes in its go-to-market structure with increased utilization of digital technology.

• Group-wide initiatives to streamline manufacturing platforms and manufacturing functions and implement new technologies continued. In addition, the Operations unit (formerly Customer & Technology Solutions) continued the phased implementation of the new operating model to transition activities to service centers.

**Segmentation – Net sales to third parties**

#### Net sales by region<sup>1</sup>
**Fourth quarter**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Q4 2022<br> USD m**  | Q4 2021<br> USD m  | % change<br> USD  | % change<br> cc <sup>2</sup> | **Q4 2022<br> % of total**  | Q4 2021<br> % of total  |
| **Innovative Medicines** |  |  |  |  |  |  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Europe | 3 405 | 3 795 | -10 | -1 | 33 | 35 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;US | 4 207 | 3 945 | 7 | 7 | 41 | 37 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Asia/Africa/Australasia | 2 022 | 2 246 | -10 | 3 | 20 | 21 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Canada and Latin America | 726 | 718 | 1 | 10 | 6 | 7 |
| **Total** | **10 360** | **10 704** | **-3** | **3** | **100** | **100** |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;Of which in Established Markets* | 7 789 | 8 082 | -4 | 2 | 75 | 76 |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;Of which in Emerging Growth Markets* | 2 571 | 2 622 | -2 | 7 | 25 | 24 |
| **Sandoz** |  |  |  |  |  |  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Europe | 1 289 | 1 382 | -7 | 3 | 55 | 55 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;US | 429 | 475 | -10 | -10 | 18 | 19 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Asia/Africa/Australasia | 387 | 452 | -14 | -4 | 17 | 18 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Canada and Latin America | 225 | 216 | 4 | 10 | 10 | 8 |
| **Total** | **2 330** | **2 525** | **-8** | **0** | **100** | **100** |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;Of which in Established Markets* | 1 625 | 1 774 | -8 | 0 | 70 | 70 |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;Of which in Emerging Growth Markets* | 705 | 751 | -6 | 1 | 30 | 30 |
| **Group** |  |  |  |  |  |  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Europe | 4 694 | 5 177 | -9 | 0 | 37 | 39 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;US | 4 636 | 4 420 | 5 | 5 | 37 | 33 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Asia/Africa/Australasia | 2 409 | 2 698 | -11 | 2 | 19 | 20 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Canada and Latin America | 951 | 934 | 2 | 10 | 7 | 8 |
| **Total** | **12 690** | **13 229** | **-4** | **3** | **100** | **100** |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;Of which in Established Markets* | 9 414 | 9 856 | -4 | 2 | 74 | 75 |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;Of which in Emerging Growth Markets* | 3 276 | 3 373 | -3 | 5 | 26 | 25 |
|  <sup>1</sup> Net sales to third parties by location of customer. Emerging Growth Markets comprise all markets other than the Established Markets of the US, Canada, Western Europe, Japan, Australia and New Zealand.  | <sup>1</sup> Net sales to third parties by location of customer. Emerging Growth Markets comprise all markets other than the Established Markets of the US, Canada, Western Europe, Japan, Australia and New Zealand.  | <sup>1</sup> Net sales to third parties by location of customer. Emerging Growth Markets comprise all markets other than the Established Markets of the US, Canada, Western Europe, Japan, Australia and New Zealand.  | <sup>1</sup> Net sales to third parties by location of customer. Emerging Growth Markets comprise all markets other than the Established Markets of the US, Canada, Western Europe, Japan, Australia and New Zealand.  | <sup>1</sup> Net sales to third parties by location of customer. Emerging Growth Markets comprise all markets other than the Established Markets of the US, Canada, Western Europe, Japan, Australia and New Zealand.  | <sup>1</sup> Net sales to third parties by location of customer. Emerging Growth Markets comprise all markets other than the Established Markets of the US, Canada, Western Europe, Japan, Australia and New Zealand.  | <sup>1</sup> Net sales to third parties by location of customer. Emerging Growth Markets comprise all markets other than the Established Markets of the US, Canada, Western Europe, Japan, Australia and New Zealand.  |
|  <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  |

---

------

#### Net sales to third parties by region<sup>1</sup>
**Full year**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **FY 2022<br> USD m**  | FY 2021<br> USD m  | % change<br> USD  | % change<br> cc <sup>2</sup> | **FY 2022<br> % of total**  | FY 2021<br> % of total  |
| **Innovative Medicines** |  |  |  |  |  |  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Europe | 13 554 | 14 919 | -9 | 1 | 33 | 36 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;US | 15 899 | 14 999 | 6 | 6 | 39 | 36 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Asia/Africa/Australasia | 8 929 | 9 304 | -4 | 4 | 22 | 22 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Canada and Latin America | 2 914 | 2 773 | 5 | 10 | 6 | 6 |
| **Total** | **41 296** | **41 995** | **-2** | **4** | **100** | **100** |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;Of which in Established Markets* | 30 548 | 31 459 | -3 | 3 | 74 | 75 |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;Of which in Emerging Growth Markets* | 10 748 | 10 536 | 2 | 9 | 26 | 25 |
| **Sandoz** |  |  |  |  |  |  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Europe | 4 913 | 5 278 | -7 | 4 | 53 | 55 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;US | 1 754 | 1 819 | -4 | -4 | 19 | 19 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Asia/Africa/Australasia | 1 613 | 1 662 | -3 | 6 | 17 | 17 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Canada and Latin America | 969 | 872 | 11 | 15 | 11 | 9 |
| **Total** | **9 249** | **9 631** | **-4** | **4** | **100** | **100** |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;Of which in Established Markets* | 6 460 | 6 855 | -6 | 2 | 70 | 71 |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;Of which in Emerging Growth Markets* | 2 789 | 2 776 | 0 | 9 | 30 | 29 |
| **Group** |  |  |  |  |  |  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Europe | 18 467 | 20 197 | -9 | 2 | 37 | 39 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;US | 17 653 | 16 818 | 5 | 5 | 35 | 33 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Asia/Africa/Australasia | 10 542 | 10 966 | -4 | 5 | 21 | 21 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Canada and Latin America | 3 883 | 3 645 | 7 | 11 | 7 | 7 |
| **Total** | **50 545** | **51 626** | **-2** | **4** | **100** | **100** |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;Of which in Established Markets* | 37 008 | 38 314 | -3 | 3 | 73 | 74 |
| &nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;Of which in Emerging Growth Markets* | 13 537 | 13 312 | 2 | 9 | 27 | 26 |
|  <sup>1</sup> Net sales to third parties by location of customer. Emerging Growth Markets comprise all markets other than the Established Markets of the US, Canada, Western Europe, Japan, Australia and New Zealand.  | <sup>1</sup> Net sales to third parties by location of customer. Emerging Growth Markets comprise all markets other than the Established Markets of the US, Canada, Western Europe, Japan, Australia and New Zealand.  | <sup>1</sup> Net sales to third parties by location of customer. Emerging Growth Markets comprise all markets other than the Established Markets of the US, Canada, Western Europe, Japan, Australia and New Zealand.  | <sup>1</sup> Net sales to third parties by location of customer. Emerging Growth Markets comprise all markets other than the Established Markets of the US, Canada, Western Europe, Japan, Australia and New Zealand.  | <sup>1</sup> Net sales to third parties by location of customer. Emerging Growth Markets comprise all markets other than the Established Markets of the US, Canada, Western Europe, Japan, Australia and New Zealand.  | <sup>1</sup> Net sales to third parties by location of customer. Emerging Growth Markets comprise all markets other than the Established Markets of the US, Canada, Western Europe, Japan, Australia and New Zealand.  | <sup>1</sup> Net sales to third parties by location of customer. Emerging Growth Markets comprise all markets other than the Established Markets of the US, Canada, Western Europe, Japan, Australia and New Zealand.  |
|  <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  |

---

------

#### Innovative Medicines Division net sales to third parties by core therapeutic area; other promoted brands; and established brands
**Fourth quarter**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Q4 2022** | Q4 2021 | % change | % change |
|  | **USD m** | USD m <sup>1</sup> | USD | cc <sup>2</sup> |
| **Cardiovascular** |  |  |  |  |
| *Entresto* | 1 291 | 949 | 36 | 44 |
| *Leqvio* | 42 | 4 | nm | nm |
| **Total Cardiovascular** | **1 333** | **953** | **40** | **47** |
| **Immunology** |  |  |  |  |
| *Cosentyx* | 1 080 | 1 243 | -13 | -9 |
| *Xolair <sup>3</sup>* | 323 | 373 | -13 | -3 |
| *Ilaris* | 301 | 284 | 6 | 14 |
| **Total Immunology** | **1 704** | **1 900** | **-10** | **-5** |
| **Neuroscience** |  |  |  |  |
| *Gilenya* | 346 | 656 | -47 | -44 |
| *Zolgensma* | 309 | 342 | -10 | -5 |
| *Kesimpta* | 369 | 147 | 151 | 157 |
| *Mayzent* | 99 | 81 | 22 | 28 |
| *Aimovig* | 59 | 59 | 0 | 9 |
| Other |  | 1 | nm | nm |
| **Total Neuroscience** | **1 182** | **1 286** | **-8** | **-4** |
| **Solid Tumors** |  |  |  |  |
| *Tafinlar* + *Mekinist* | 465 | 458 | 2 | 8 |
| *Kisqali* | 357 | 285 | 25 | 33 |
| *Votrient* | 103 | 139 | -26 | -21 |
| *Lutathera* | 128 | 115 | 11 | 15 |
| *Piqray* | 112 | 87 | 29 | 30 |
| *Pluvicto* | 179 |  | nm | nm |
| *Tabrecta* | 36 | 27 | 33 | 35 |
| **Total Solid Tumors** | **1 380** | **1 111** | **24** | **30** |
| **Hematology** |  |  |  |  |
| *Promacta/Revolade* | 540 | 518 | 4 | 11 |
| *Tasigna* | 475 | 508 | -6 | 0 |
| *Jakavi* | 388 | 408 | -5 | 8 |
| *Kymriah* | 139 | 143 | -3 | 5 |
| *Adakveo* | 51 | 43 | 19 | 19 |
| *Scemblix* | 52 | 7 | nm | nm |
| **Total Hematology** | **1 645** | **1 627** | **1** | **9** |
| **Other Promoted Brands** |  |  |  |  |
| *Lucentis* | 398 | 508 | -22 | -12 |
| *Xiidra* | 145 | 134 | 8 | 8 |
| *Ultibro* Group | 113 | 148 | -24 | -13 |
| *Beovu* | 49 | 51 | -4 | 7 |
| Other respiratory | 26 | 16 | 63 | 69 |
| **Total Other Promoted Brands** | **731** | **857** | **-15** | **-6** |
| **Total Promoted Brands** | **7 975** | **7 734** | **3** | **10** |
| **Established Brands** |  |  |  |  |
| *Sandostatin* | 305 | 345 | -12 | -8 |
| *Galvus* Group | 209 | 278 | -25 | -16 |
| *Gleevec/Glivec* | 175 | 233 | -25 | -18 |
| *Exforge* Group | 159 | 197 | -19 | -12 |
| *Diovan* Group | 142 | 189 | -25 | -16 |
| *Afinitor/Votubia* | 106 | 174 | -39 | -32 |
| *Voltaren/Cataflam* | 81 | 97 | -16 | -4 |
| *Zortress/Certican* | 80 | 110 | -27 | -18 |
| *Exjade/Jadenu* | 61 | 129 | -53 | -48 |
| *Neoral/Sandimmun(e)* | 74 | 89 | -17 | -6 |
| Contract manufacturing | 82 | 108 | -24 | -23 |
| Other | 911 | 1 021 | -11 | -6 |
| **Total Established Brands** | **2 385** | **2 970** | **-20** | **-13** |
| **Total division net sales to third parties** | **10 360** | **10 704** | **-3** | **3** |
|  <sup>1</sup> Reclassified to reflect the new Innovative Medicines divisional structures announced on April 4, 2022  | <sup>1</sup> Reclassified to reflect the new Innovative Medicines divisional structures announced on April 4, 2022  | <sup>1</sup> Reclassified to reflect the new Innovative Medicines divisional structures announced on April 4, 2022  | <sup>1</sup> Reclassified to reflect the new Innovative Medicines divisional structures announced on April 4, 2022  | <sup>1</sup> Reclassified to reflect the new Innovative Medicines divisional structures announced on April 4, 2022  |
|  <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  |
|  <sup>3</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>3</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>3</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>3</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>3</sup> Net sales to third parties reflect *Xolair* sales for all indications.  |
| nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful |

---

------

**Full year**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **FY 2022** | FY 2021 | % change | % change |
|  | **USD m** | USD m <sup>1</sup> | USD | cc <sup>2</sup> |
| **Cardiovascular** |  |  |  |  |
| *Entresto* | 4 644 | 3 548 | 31 | 37 |
| *Leqvio* | 112 | 12 | nm | nm |
| **Total Cardiovascular** | **4 756** | **3 560** | **34** | **40** |
| **Immunology** |  |  |  |  |
| *Cosentyx* | 4 788 | 4 718 | 1 | 5 |
| *Xolair <sup>3</sup>* | 1 365 | 1 428 | -4 | 6 |
| *Ilaris* | 1 133 | 1 059 | 7 | 15 |
| Other | 1 |  | nm | nm |
| **Total Immunology** | **7 287** | **7 205** | **1** | **7** |
| **Neuroscience** |  |  |  |  |
| *Gilenya* | 2 013 | 2 787 | -28 | -24 |
| *Zolgensma* | 1 370 | 1 351 | 1 | 5 |
| *Kesimpta* | 1 092 | 372 | 194 | 200 |
| *Mayzent* | 357 | 281 | 27 | 32 |
| *Aimovig* | 218 | 215 | 1 | 11 |
| Other | 1 | 1 | 0 | nm |
| **Total Neuroscience** | **5 051** | **5 007** | **1** | **5** |
| **Solid Tumors** |  |  |  |  |
| *Tafinlar* + *Mekinist* | 1 770 | 1 693 | 5 | 11 |
| *Kisqali* | 1 231 | 937 | 31 | 38 |
| *Votrient* | 474 | 577 | -18 | -13 |
| *Lutathera* | 471 | 475 | -1 | 3 |
| *Piqray* | 373 | 329 | 13 | 14 |
| *Pluvicto* | 271 |  | nm | nm |
| *Tabrecta* | 133 | 90 | 48 | 48 |
| **Total Solid Tumors** | **4 723** | **4 101** | **15** | **21** |
| **Hematology** |  |  |  |  |
| *Promacta/Revolade* | 2 088 | 2 016 | 4 | 9 |
| *Tasigna* | 1 923 | 2 060 | -7 | -1 |
| *Jakavi* | 1 561 | 1 595 | -2 | 9 |
| *Kymriah* | 536 | 587 | -9 | -2 |
| *Adakveo* | 194 | 164 | 18 | 19 |
| *Scemblix* | 149 | 7 | nm | nm |
| Other | 1 | 1 | 0 | nm |
| **Total Hematology** | **6 452** | **6 430** | **0** | **7** |
| **Other Promoted Brands** |  |  |  |  |
| *Lucentis* | 1 874 | 2 160 | -13 | -4 |
| *Xiidra* | 487 | 468 | 4 | 4 |
| *Ultibro* Group | 479 | 584 | -18 | -9 |
| *Beovu* | 203 | 186 | 9 | 18 |
| Other respiratory | 84 | 53 | 58 | 79 |
| **Total Other Promoted Brands** | **3 127** | **3 451** | **-9** | **-1** |
| **Total Promoted Brands** | **31 396** | **29 754** | **6** | **12** |
| **Established Brands** |  |  |  |  |
| *Sandostatin* | 1 238 | 1 413 | -12 | -10 |
| *Galvus* Group | 859 | 1 092 | -21 | -12 |
| *Gleevec/Glivec* | 745 | 1 024 | -27 | -22 |
| *Exforge* Group | 743 | 901 | -18 | -12 |
| *Diovan* Group | 652 | 773 | -16 | -9 |
| *Afinitor/Votubia* | 512 | 938 | -45 | -41 |
| *Voltaren/Cataflam* | 334 | 373 | -10 | 0 |
| *Zortress/Certican* | 329 | 431 | -24 | -14 |
| *Exjade/Jadenu* | 323 | 563 | -43 | -38 |
| *Neoral/Sandimmun(e)* | 310 | 368 | -16 | -8 |
| Contract manufacturing | 214 | 108 | 98 | 110 |
| Other | 3 641 | 4 257 | -14 | -9 |
| **Total Established Brands** | **9 900** | **12 241** | **-19** | **-13** |
| **Total division net sales to third parties** | **41 296** | **41 995** | **-2** | **4** |
|  <sup>1</sup> Reclassified to reflect the new Innovative Medicines divisional structures announced on April 4, 2022  | <sup>1</sup> Reclassified to reflect the new Innovative Medicines divisional structures announced on April 4, 2022  | <sup>1</sup> Reclassified to reflect the new Innovative Medicines divisional structures announced on April 4, 2022  | <sup>1</sup> Reclassified to reflect the new Innovative Medicines divisional structures announced on April 4, 2022  | <sup>1</sup> Reclassified to reflect the new Innovative Medicines divisional structures announced on April 4, 2022  |
|  <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  |
|  <sup>3</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>3</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>3</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>3</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>3</sup> Net sales to third parties reflect *Xolair* sales for all indications.  |
| nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful |

---

------

#### Net sales to third parties of the top 20 Innovative Medicines Division brands in 2022
**Fourth quarter**

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  | US | US | Rest of world | Rest of world | Rest of world | **Total** | **Total** | **Total** |
| **<br>Brands**  | **Brand classification by<br> therapeutic area, other<br> promoted brands or<br> established brands**  | **<br>Key indications**  | <br>USD m  | <br> % <br> change<br> USD/cc <sup>2</sup> | <br>USD m  | <br> % <br> change<br> USD  | <br> % <br> change<br> cc <sup>2</sup> | <br>USD m  | <br> % <br> change<br> USD  | <br> % <br> change<br> cc <sup>2</sup> |
| *Cosentyx* | Immunology<br>| Psoriasis (PsO), <br> ankylosing spondylitis<br> (AS), psoriatic arthritis <br> (PsA), non-radiographic <br> axial spondyloarthritis <br> (nr-axSPA)  | 633<br>| -18<br>| 447<br>| -5<br>| 5<br>| 1 080<br>| -13<br>| -9<br>|
| *Entresto* | Cardiovascular<br>| Chronic heart failure,<br> hypertension  | 694<br>| 33<br>| 597<br>| 39<br>| 56<br>| 1 291<br>| 36<br>| 44<br>|
| *Promacta/Revolade* | Hematology<br>| Immune <br> thrombocytopenia (ITP), <br> severe aplastic anemia (SAA)  | 282<br>| 15<br>| 258<br>| -5<br>| 7<br>| 540<br>| 4<br>| 11<br>|
| *Gilenya* | Neuroscience<br>| Relapsing multiple sclerosis<br> (RMS)  | 189<br>| -45<br>| 157<br>| -50<br>| -43<br>| 346<br>| -47<br>| -44<br>|
| *Tasigna* | Hematology<br>| Chronic myeloid leukemia<br> (CML)  | 223<br>| -3<br>| 252<br>| -9<br>| 1<br>| 475<br>| -6<br>| 0<br>|
| *Lucentis* | Other Promoted<br> Brands<br>| Age-related <br> macular degeneration (AMD), <br> diabetic macular edema (DME),<br> retinal vein occlusion (RVO)  |  |  | 398<br>| -22<br>| -12<br>| 398<br>| -22<br>| -12<br>|
| *Tafinlar* + *Mekinist* | Solid Tumors<br>| BRAF V600+ metastatic <br> adjuvant melanoma,<br> advanced non-small cell <br> lung cancer (NSCLC), <br> tumor agnostic with <br> BRAF mutation indication  | 175<br>| 9<br>| 290<br>| -2<br>| 7<br>| 465<br>| 2<br>| 8<br>|
| *Jakavi* | Hematology<br>| Myelofibrosis (MF), <br> polycytomia vera (PV), <br> graft-versus-host disease<br> (GvHD)  |  |  | 388<br>| -5<br>| 8<br>| 388<br>| -5<br>| 8<br>|
| *Zolgensma* | Neuroscience<br>| Spinal muscular atrophy<br> (SMA)  | 99<br>| -15<br>| 210<br>| -6<br>| 0<br>| 309<br>| -10<br>| -5<br>|
| *Xolair <sup>1</sup>* | Immunology<br>| Severe allergic asthma (SAA), <br> chronic spontaneous urticaria <br> (CSU), nasal polyps  |  |  | 323<br>| -13<br>| -3<br>| 323<br>| -13<br>| -3<br>|
| *Sandostatin* | Established Brands<br>| Carcinoid tumors,<br> acromegaly  | 203<br>| -2<br>| 102<br>| -26<br>| -16<br>| 305<br>| -12<br>| -8<br>|
| *Kisqali* | Solid Tumors<br>| HR+/HER2- <br> metastatic breast cancer  | 149<br>| 52<br>| 208<br>| 11<br>| 23<br>| 357<br>| 25<br>| 33<br>|
| *Ilaris* | Immunology<br>| Auto-inflammatory (CAPS,<br> TRAPS, HIDS/MKD, FMF,<br> SJIA, AOSD, gout)  | 165<br>| 14<br>| 136<br>| -2<br>| 14<br>| 301<br>| 6<br>| 14<br>|
| *Kesimpta* | Neuroscience<br>| Relapsing-remitting <br> multiple sclerosis (RRMS)  | 306<br>| 132<br>| 63<br>| nm<br>| nm<br>| 369<br>| 151<br>| 157<br>|
| *Galvus* Group | Established Brands | Type 2 diabetes |  |  | 209 | -25 | -16 | 209 | -25 | -16 |
| *Gleevec/Glivec* | Established Brands<br>| Chronic myeloid<br> leukemia (CML), <br> gastrointestinal stromal<br> tumors (GIST)  | 49<br>| -20<br>| 126<br>| -27<br>| -17<br>| 175<br>| -25<br>| -18<br>|
| *Exforge* Group | Established Brands | Hypertension | 2 | -50 | 157 | -19 | -11 | 159 | -19 | -12 |
| *Diovan* Group | Established Brands | Hypertension | 17 | 55 | 125 | -30 | -21 | 142 | -25 | -16 |
| *Kymriah* | Hematology<br>| r/r pediatric and young <br> adults acute lymphoblastic <br> leukemia (ALL), diffuse large <br> B-cell lymphoma (DLBCL), <br> follicular lymphoma (FL)  | 54<br>| -7<br>| 85<br>| 0<br>| 14<br>| 139<br>| -3<br>| 5<br>|
| *Afinitor/Votubia* | Established Brands  | Breast cancer/ tuberous sclerosis complex (TSC) | 24  | -68  | 82  | -18  | -7  | 106  | -39  | -32  |
| **Top 20 brands total** |  |  | **3 264** | **3** | **4 613** | **-9** | **2** | **7 877** | **-4** | **2** |
| Rest of portfolio |  |  | 943 | 23 | 1 540 | -9 | -1 | 2 483 | 1 | 6 |
| **Total division net sales to third parties** |  |  | **&nbsp;&nbsp;&nbsp;&nbsp;4 207** | **&nbsp;&nbsp;&nbsp;&nbsp;7** | **&nbsp;&nbsp;&nbsp;&nbsp;6 153** | **&nbsp;&nbsp;&nbsp;&nbsp;-9** | **&nbsp;&nbsp;&nbsp;&nbsp;1** | **&nbsp;&nbsp;&nbsp;&nbsp;10 360** | **&nbsp;&nbsp;&nbsp;&nbsp;-3** | **&nbsp;&nbsp;&nbsp;&nbsp;3** |
|  <sup>1</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>1</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>1</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>1</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>1</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>1</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>1</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>1</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>1</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>1</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>1</sup> Net sales to third parties reflect *Xolair* sales for all indications.  |
|  <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  |
| nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful |

---

------

**Full year**

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  | US | US | Rest of world | Rest of world | Rest of world | **Total** | **Total** | **Total** |
| **<br>Brands**  | **Brand classification by<br> therapeutic area, other<br> promoted brands or<br> established brands**  | **<br>Key indications**  | <br>USD m  | <br> % <br> change<br> USD/cc <sup>2</sup> | <br>USD m  | <br> % <br> change<br> USD  | <br> % <br> change<br> cc <sup>2</sup> | <br>USD m  | <br> % <br> change<br> USD  | <br> % <br> change<br> cc <sup>2</sup> |
| *Cosentyx* | Immunology<br>| Psoriasis (PsO), <br> ankylosing spondylitis<br> (AS), psoriatic arthritis <br> (PsA), non-radiographic <br> axial spondyloarthritis <br> (nr-axSPA)  | 2 770<br>| -4<br>| 2 018<br>| 10<br>| 20<br>| 4 788<br>| 1<br>| 5<br>|
| *Entresto* | Cardiovascular<br>| Chronic heart failure,<br> hypertension  | 2 354<br>| 38<br>| 2 290<br>| 25<br>| 37<br>| 4 644<br>| 31<br>| 37<br>|
| *Promacta/Revolade* | Hematology<br>| Immune <br> thrombocytopenia (ITP), <br> severe aplastic anemia (SAA)  | 1 083<br>| 14<br>| 1 005<br>| -6<br>| 5<br>| 2 088<br>| 4<br>| 9<br>|
| *Gilenya* | Neuroscience<br>| Relapsing multiple sclerosis<br> (RMS)  | 1 153<br>| -19<br>| 860<br>| -37<br>| -29<br>| 2 013<br>| -28<br>| -24<br>|
| *Tasigna* | Hematology<br>| Chronic myeloid leukemia<br> (CML)  | 877<br>| -1<br>| 1 046<br>| -11<br>| -2<br>| 1 923<br>| -7<br>| -1<br>|
| *Lucentis* | Other Promoted<br> Brands<br>| Age-related <br> macular degeneration (AMD), <br> diabetic macular edema (DME),<br> retinal vein occlusion (RVO)  |  |  | 1 874<br>| -13<br>| -4<br>| 1 874<br>| -13<br>| -4<br>|
| *Tafinlar* + *Mekinist* | Solid Tumors<br>| BRAF V600+ metastatic <br> adjuvant melanoma,<br> advanced non-small cell <br> lung cancer (NSCLC), <br> tumor agnostic with <br> BRAF mutation indication  | 678<br>| 12<br>| 1 092<br>| 0<br>| 10<br>| 1 770<br>| 5<br>| 11<br>|
| *Jakavi* | Hematology<br>| Myelofibrosis (MF), <br> polycytomia vera (PV), <br> graft-versus-host disease<br> (GvHD)  |  |  | 1 561<br>| -2<br>| 9<br>| 1 561<br>| -2<br>| 9<br>|
| *Zolgensma* | Neuroscience<br>| Spinal muscular atrophy<br> (SMA)  | 434<br>| -7<br>| 936<br>| 6<br>| 12<br>| 1 370<br>| 1<br>| 5<br>|
| *Xolair <sup>1</sup>* | Immunology<br>| Severe allergic asthma (SAA), <br> chronic spontaneous urticaria <br> (CSU), nasal polyps  |  |  | 1 365<br>| -4<br>| 6<br>| 1 365<br>| -4<br>| 6<br>|
| *Sandostatin* | Established Brands<br>| Carcinoid tumors,<br> acromegaly  | 800<br>| -5<br>| 438<br>| -23<br>| -16<br>| 1 238<br>| -12<br>| -10<br>|
| *Kisqali* | Solid Tumors<br>| HR+/HER2- <br> metastatic breast cancer  | 472<br>| 39<br>| 759<br>| 27<br>| 38<br>| 1 231<br>| 31<br>| 38<br>|
| *Ilaris* | Immunology<br>| Auto-inflammatory (CAPS,<br> TRAPS, HIDS/MKD, FMF,<br> SJIA, AOSD, gout)  | 570<br>| 14<br>| 563<br>| 1<br>| 16<br>| 1 133<br>| 7<br>| 15<br>|
| *Kesimpta* | Neuroscience<br>| Relapsing-remitting <br> multiple sclerosis (RRMS)  | 921<br>| 165<br>| 171<br>| nm<br>| nm<br>| 1 092<br>| 194<br>| 200<br>|
| *Galvus* Group | Established Brands | Type 2 diabetes |  |  | 859 | -21 | -12 | 859 | -21 | -12 |
| *Gleevec/Glivec* | Established Brands<br>| Chronic myeloid<br> leukemia (CML), <br> gastrointestinal stromal<br> tumors (GIST)  | 205<br>| -22<br>| 540<br>| -29<br>| -23<br>| 745<br>| -27<br>| -22<br>|
| *Exforge* Group | Established Brands | Hypertension | 14 | 0 | 729 | -18 | -12 | 743 | -18 | -12 |
| *Diovan* Group | Established Brands | Hypertension | 55 | 8 | 597 | -17 | -10 | 652 | -16 | -9 |
| *Kymriah* | Hematology<br>| r/r pediatric and young <br> adults acute lymphoblastic <br> leukemia (ALL), diffuse large <br> B-cell lymphoma (DLBCL), <br> follicular lymphoma (FL)  | 196<br>| -15<br>| 340<br>| -5<br>| 7<br>| 536<br>| -9<br>| -2<br>|
| *Afinitor/Votubia* | Established Brands  | Breast cancer/ tuberous sclerosis complex (TSC) | 171  | -67  | 341  | -18  | -8  | 512  | -45  | -41  |
| **Top 20 brands total** |  |  | **12 753** | **6** | **19 384** | **-5** | **5** | **32 137** | **-1** | **5** |
| Rest of portfolio |  |  | 3 146 | 6 | 6 013 | -9 | 0 | 9 159 | -4 | 2 |
| **Total division net sales to third parties** |  |  | **&nbsp;&nbsp;&nbsp;&nbsp;15 899** | **&nbsp;&nbsp;&nbsp;&nbsp;6** | **&nbsp;&nbsp;&nbsp;&nbsp;25 397** | **&nbsp;&nbsp;&nbsp;&nbsp;-6** | **&nbsp;&nbsp;&nbsp;&nbsp;3** | **&nbsp;&nbsp;&nbsp;&nbsp;41 296** | **&nbsp;&nbsp;&nbsp;&nbsp;-2** | **&nbsp;&nbsp;&nbsp;&nbsp;4** |
|  <sup>1</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>1</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>1</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>1</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>1</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>1</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>1</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>1</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>1</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>1</sup> Net sales to third parties reflect *Xolair* sales for all indications.  | <sup>1</sup> Net sales to third parties reflect *Xolair* sales for all indications.  |
|  <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  |
| nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful |

---

------

#### Sandoz Division net sales to third parties by business franchise
**Fourth quarter**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Q4 2022** | Q4 2021 | % change | % change |
|  | **USD m** | USD m | USD | cc <sup>2</sup> |
| Retail Generics <sup>1</sup> | 1 692 | 1 853 | -9 | -1 |
| Biopharmaceuticals | 517 | 555 | -7 | 3 |
| Anti-Infectives <sup>1</sup> | 121 | 117 | 3 | 8 |
| **Total division net sales to third parties** | **2 330** | **2 525** | **-8** | **0** |
|  <sup>1</sup> Sandoz total anti-infectives net sales to third parties amounted to USD 329 million (Q4 2021: USD 337 million), of which USD 208 million (Q4 2021: USD 220 million) were sold through the Retail Generics business franchise and USD 121 million (Q4 2021: USD 117 million) were sold to other third-party companies through the Anti-Infectives business franchise.  | <sup>1</sup> Sandoz total anti-infectives net sales to third parties amounted to USD 329 million (Q4 2021: USD 337 million), of which USD 208 million (Q4 2021: USD 220 million) were sold through the Retail Generics business franchise and USD 121 million (Q4 2021: USD 117 million) were sold to other third-party companies through the Anti-Infectives business franchise.  | <sup>1</sup> Sandoz total anti-infectives net sales to third parties amounted to USD 329 million (Q4 2021: USD 337 million), of which USD 208 million (Q4 2021: USD 220 million) were sold through the Retail Generics business franchise and USD 121 million (Q4 2021: USD 117 million) were sold to other third-party companies through the Anti-Infectives business franchise.  | <sup>1</sup> Sandoz total anti-infectives net sales to third parties amounted to USD 329 million (Q4 2021: USD 337 million), of which USD 208 million (Q4 2021: USD 220 million) were sold through the Retail Generics business franchise and USD 121 million (Q4 2021: USD 117 million) were sold to other third-party companies through the Anti-Infectives business franchise.  | <sup>1</sup> Sandoz total anti-infectives net sales to third parties amounted to USD 329 million (Q4 2021: USD 337 million), of which USD 208 million (Q4 2021: USD 220 million) were sold through the Retail Generics business franchise and USD 121 million (Q4 2021: USD 117 million) were sold to other third-party companies through the Anti-Infectives business franchise.  |
|  <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  |

---

**Full year**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **FY 2022** | FY 2021 | % change | % change |
|  | **USD m** | USD m | USD | cc <sup>2</sup> |
| Retail Generics <sup>1</sup> | 6 776 | 7 092 | -4 | 4 |
| Biopharmaceuticals | 2 093 | 2 116 | -1 | 9 |
| Anti-Infectives <sup>1</sup> | 380 | 423 | -10 | -5 |
| **Total division net sales to third parties** | **9 249** | **9 631** | **-4** | **4** |
|  <sup>1</sup> Sandoz total anti-infectives net sales to third parties amounted to USD 1.2 billion (2021: USD 1.1 billion), of which USD 777 million (2021: USD 707 million) were sold through the Retail Generics business franchise and USD 380 million (2021: USD 423 million) were sold to other third-party companies through the Anti-Infectives business franchise.  | <sup>1</sup> Sandoz total anti-infectives net sales to third parties amounted to USD 1.2 billion (2021: USD 1.1 billion), of which USD 777 million (2021: USD 707 million) were sold through the Retail Generics business franchise and USD 380 million (2021: USD 423 million) were sold to other third-party companies through the Anti-Infectives business franchise.  | <sup>1</sup> Sandoz total anti-infectives net sales to third parties amounted to USD 1.2 billion (2021: USD 1.1 billion), of which USD 777 million (2021: USD 707 million) were sold through the Retail Generics business franchise and USD 380 million (2021: USD 423 million) were sold to other third-party companies through the Anti-Infectives business franchise.  | <sup>1</sup> Sandoz total anti-infectives net sales to third parties amounted to USD 1.2 billion (2021: USD 1.1 billion), of which USD 777 million (2021: USD 707 million) were sold through the Retail Generics business franchise and USD 380 million (2021: USD 423 million) were sold to other third-party companies through the Anti-Infectives business franchise.  | <sup>1</sup> Sandoz total anti-infectives net sales to third parties amounted to USD 1.2 billion (2021: USD 1.1 billion), of which USD 777 million (2021: USD 707 million) were sold through the Retail Generics business franchise and USD 380 million (2021: USD 423 million) were sold to other third-party companies through the Anti-Infectives business franchise.  |
|  <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  | <sup>2</sup> Constant currencies (cc) is a non-IFRS measure. A definition of non-IFRS measures used by Novartis can be found starting on page 50.  |

---

The product portfolio of Sandoz is widely spread in 2022 and 2021.

**Segmentation – Other revenue** 

**Fourth quarter**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Innovative Medicines** | **Innovative Medicines** | **Sandoz** | **Sandoz** | **Corporate** | **Corporate** | **Group** | **Group** |
| (USD millions) | **Q4 2022** | Q4 2021 | **Q4 2022** | Q4 2021 | **Q4 2022** | Q4 2021 | **Q4 2022** | Q4 2021 |
| Profit sharing income | 247 | 236 |  |  |  |  | 247 | 236 |
| Royalty income | 13 | 14 | 5 | 6 |  | 2 | 18 | 22 |
| Milestone income | 98 | 9 |  | 24 |  |  | 98 | 33 |
| Other <sup>1</sup> | 32 | 22 | 2 | -20 |  |  | 34 | 2 |
| **Total other revenues** | **390** | **281** | **7** | **10** |  | **2** | **397** | **293** |
|  <sup>1</sup> Other includes revenue from activities such as manufacturing or other services rendered, to the extent such revenue is not recorded under net sales.  | <sup>1</sup> Other includes revenue from activities such as manufacturing or other services rendered, to the extent such revenue is not recorded under net sales.  | <sup>1</sup> Other includes revenue from activities such as manufacturing or other services rendered, to the extent such revenue is not recorded under net sales.  | <sup>1</sup> Other includes revenue from activities such as manufacturing or other services rendered, to the extent such revenue is not recorded under net sales.  | <sup>1</sup> Other includes revenue from activities such as manufacturing or other services rendered, to the extent such revenue is not recorded under net sales.  | <sup>1</sup> Other includes revenue from activities such as manufacturing or other services rendered, to the extent such revenue is not recorded under net sales.  | <sup>1</sup> Other includes revenue from activities such as manufacturing or other services rendered, to the extent such revenue is not recorded under net sales.  | <sup>1</sup> Other includes revenue from activities such as manufacturing or other services rendered, to the extent such revenue is not recorded under net sales.  | <sup>1</sup> Other includes revenue from activities such as manufacturing or other services rendered, to the extent such revenue is not recorded under net sales.  |

---

**Full year**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Innovative Medicines** | **Innovative Medicines** | **Sandoz** | **Sandoz** | **Corporate** | **Corporate** | **Group** | **Group** |
| (USD millions) | **FY 2022** | FY 2021 | **FY 2022** | FY 2021 | **FY 2022** | FY 2021 | **FY 2022** | FY 2021 |
| Profit sharing income | 921 | 873 |  |  |  |  | 921 | 873 |
| Royalty income | 28 | 74 | 18 | 24 | 6 | 11 | 52 | 109 |
| Milestone income | 145 | 127 | 3 | 28 |  |  | 148 | 155 |
| Other <sup>1</sup> | 155 | 105 | 7 | 9 |  |  | 162 | 114 |
| **Total other revenues** | **1 249** | **1 179** | **28** | **61** | **6** | **11** | **1 283** | **1 251** |
|  <sup>1</sup> Other includes revenue from activities such as manufacturing or other services rendered, to the extent such revenue is not recorded under net sales.  | <sup>1</sup> Other includes revenue from activities such as manufacturing or other services rendered, to the extent such revenue is not recorded under net sales.  | <sup>1</sup> Other includes revenue from activities such as manufacturing or other services rendered, to the extent such revenue is not recorded under net sales.  | <sup>1</sup> Other includes revenue from activities such as manufacturing or other services rendered, to the extent such revenue is not recorded under net sales.  | <sup>1</sup> Other includes revenue from activities such as manufacturing or other services rendered, to the extent such revenue is not recorded under net sales.  | <sup>1</sup> Other includes revenue from activities such as manufacturing or other services rendered, to the extent such revenue is not recorded under net sales.  | <sup>1</sup> Other includes revenue from activities such as manufacturing or other services rendered, to the extent such revenue is not recorded under net sales.  | <sup>1</sup> Other includes revenue from activities such as manufacturing or other services rendered, to the extent such revenue is not recorded under net sales.  | <sup>1</sup> Other includes revenue from activities such as manufacturing or other services rendered, to the extent such revenue is not recorded under net sales.  |

---

------

### 12.Events subsequent to the December 31, 2022, consolidated balance sheet

#### South Korea investigation– Concluded matter
In January 2023, the Supreme Court dismissed the appeal by the Seoul Western District Prosecutor on the criminal investigation on, among other things, allegations that Novartis Korea utilized medical journals to provide inappropriate economic benefits to healthcare professionals (HCPs). This matter is now concluded. For additional information see Note 10.

#### Dividend proposal for 2022 and approval of the Group's 2022 consolidated financial statements
On January 31, 2023, the Novartis AG Board of Directors proposed the acceptance of the 2022 consolidated financial statements of the Novartis Group for approval by the Annual General Meeting on March 7, 2023. Furthermore, also on January 31, 2023, the Board proposed a dividend of CHF 3.20 per share to be approved at the Annual General Meeting on March 7, 2023. If approved, total dividend payments would amount to approximately USD 7.3 billion (2021: USD 7.5 billion), using the CHF/USD December 31, 2022, exchange rate.

------

## Supplementary information (unaudited)
**Non-IFRS disclosures**

Novartis uses certain non-IFRS metrics when measuring performance, especially when measuring current-year results against prior periods, including core results, constant currencies and free cash flow.

Despite the use of these measures by management in setting goals and measuring the Group's performance, these are non-IFRS measures that have no standardized meaning prescribed by IFRS. As a result, such measures have limits in their usefulness to investors.

Because of their non-standardized definitions, the non-IFRS measures (unlike IFRS measures) may not be comparable to the calculation of similar measures of other companies. These non-IFRS measures are presented solely to permit investors to more fully understand how the Group's management assesses underlying performance. These non-IFRS measures are not, and should not be viewed as, a substitute for IFRS measures.

As an internal measure of Group performance, these non-IFRS measures have limitations, and the Group's performance management process is not solely restricted to these metrics.

#### Core results
The Group's core results – including core operating income, core net income and core earnings per share – exclude fully the amortization and impairment charges of intangible assets, excluding software, net gains and losses on fund investments and equity securities valued at fair value through profit and loss, and certain acquisition- and divestment-related items. The following items that exceed a threshold of USD 25 million are also excluded: integration- and divestment-related income and expenses; divestment gains and losses; restructuring charges/releases and related items; legal-related items; impairments of property, plant and equipment, software, and financial assets, and income and expense items that management deems exceptional and that are or are expected to accumulate within the year to be over a USD 25 million threshold.

Novartis believes that investor understanding of the Group's performance is enhanced by disclosing core measures of performance since, core measures exclude items that can vary significantly from year to year, they enable better comparison of business performance across years. For this same reason, Novartis uses these core measures in addition to IFRS and other measures as important factors in assessing the Group's performance.

The following are examples of how these core measures are utilized:

• In addition to monthly reports containing financial information prepared under International Financial Reporting Standards (IFRS), senior management receives a monthly analysis incorporating these core measures.

• Annual budgets are prepared for both IFRS and core measures.

As an internal measure of Group performance, the core results measures have limitations, and the Group's performance management process is not solely restricted to these metrics. A limitation of the core results measures is that they provide a view of the Group's operations without including all events during a period, such as the effects of an acquisition, divestment, or amortization/impairments of purchased intangible assets, impairments to property, plant and equipment and restructurings and related items.

#### Constant currencies
Changes in the relative values of non-US currencies to the US dollar can affect the Group's financial results and financial position. To provide additional information that may be useful to investors, including changes in sales volume, we present information about our net sales and various values relating to operating and net income that are adjusted for such foreign currency effects.

Constant currency calculations have the goal of eliminating two exchange rate effects so that an estimate can be made of underlying changes in the consolidated income statement excluding the impact of fluctuations in exchanges rates:

• The impact of translating the income statements of consolidated entities from their non-USD functional currencies to USD

• The impact of exchange rate movements on the major transactions of consolidated entities performed in currencies other than their functional currency.

We calculate constant currency measures by translating the current year's foreign currency values for sales and other income statement items into USD (excluding the IAS 29 "Financial Reporting in Hyperinflationary Economies" adjustments to the local currency income statements of subsidiaries operating in hyperinflationary economies), using the average exchange rates from the prior year and comparing them to the prior year values in USD.

We use these constant currency measures in evaluating the Group's performance, since they may assist us in evaluating our ongoing performance from year to year. However, in performing our evaluation, we also consider equivalent measures of performance that are not affected by changes in the relative value of currencies.

#### Growth rate calculation
For ease of understanding, Novartis uses a sign convention for its growth rates such that a reduction in operating expenses or losses compared with the prior year is shown as a positive growth.

#### Free cash flow
Novartis defines free cash flow as net cash flows from operating activities and cash flows from investing activities associated with purchases and sales of property, plant and equipment, of intangible assets, of financial assets and of other non-current assets. Excluded from free cash flow are cash flows from investing activities

------

associated with acquisitions and divestments of businesses and of interests in associated companies, purchases and sales of marketable securities, commodities, time deposits and net cash flows from financing activities.

Free cash flow is a non-IFRS measure and is not intended to be a substitute measure for net cash flows from operating activities as determined under IFRS. Free cash flow is presented as additional information because management believes it is a useful supplemental indicator of the Group's ability to operate without reliance on additional borrowing or use of existing cash. Free cash flow is a measure of the net cash generated that is available for investment in strategic opportunities, returning to shareholders and for debt repayment. Free cash flow is a non-IFRS measure, which means it should not be interpreted as a measure determined under IFRS.

**Additional information**

#### Net debt
Novartis calculates net debt as current financial debts and derivative financial instruments plus non-current financial debts less cash and cash equivalents and marketable securities, commodities, time deposits and derivative financial instruments.

Net debt is presented as additional information because it sets forth how management monitors net debt or liquidity and management believes it is a useful supplemental indicator of the Group's ability to pay dividends, to meet financial commitments, and to invest in new strategic opportunities, including strengthening its balance sheet.

See page 60 for additional disclosures related to net debt.

------

#### CORE RESULTS – Reconciliation from IFRS results to core results – Group
**Fourth quarter**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Innovative Medicines** | **Innovative Medicines** | **Sandoz** | **Sandoz** | **Corporate** | **Corporate** | **Group** | **Group** |
| (USD millions unless indicated otherwise) | **Q4 2022** | Q4 2021 | **Q4 2022** | Q4 2021 | **Q4 2022** | Q4 2021 | **Q4 2022** | Q4 2021 |
| **IFRS operating income** | **1 945** | **2 468** | **273** | **386** | **-269** | **-292** | **1 949** | **2 562** |
| **Amortization of intangible assets** | **910** | **877** | **54** | **61** |  |  | **964** | **938** |
| Impairments |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Intangible assets | 436 |  | 14 | 8 | 2 |  | 452 | 8 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Property, plant and equipment related to the Group-wide <br> rationalization of manufacturing sites  | <br> -23  | <br> 125  |  | <br> 7  |  |  | <br> -23  | <br> 132  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Other property, plant and equipment | 84 | -2 |  |  |  |  | 84 | -2 |
| **Total impairment charges** | **497** | **123** | **14** | **15** | **2** |  | **513** | **138** |
| Acquisition or divestment of businesses and related items |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;- Income | 1 |  |  |  | -2 | -11 | -1 | -11 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;- Expense | 1 |  |  |  |  | 89 | 1 | 89 |
| **Total acquisition or divestment of businesses and related items, net** | **&nbsp;&nbsp;&nbsp;&nbsp;2** |  |  |  | **&nbsp;&nbsp;&nbsp;&nbsp;-2** | **&nbsp;&nbsp;&nbsp;&nbsp;78** |  | **&nbsp;&nbsp;&nbsp;&nbsp;78** |
| Other items |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Divestment gains | -27 | -57 |  |  |  | -9 | -27 | -66 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Financial assets - fair value adjustments | -26 | 39 |  |  | -2 | -27 | -28 | 12 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Restructuring and related items |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;- Income | -7 | -11 | 1 | -12 | 2 | -1 | -4 | -24 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;- Expense | 601 | 154 | 41 | 70 | 140 | 12 | 782 | 236 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Legal-related items |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;- Income |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;- Expense | 244 |  | 11 | 6 |  |  | 255 | 6 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Additional income | -400 | -115 | -1 | 2 | -1 | -84 | -402 | -197 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Additional expense | 29 | 118 | -2 |  | 1 | 18 | 28 | 136 |
| **Total other items** | **414** | **128** | **50** | **66** | **140** | **-91** | **604** | **103** |
| **Total adjustments** | **1 823** | **1 128** | **118** | **142** | **140** | **-13** | **2 081** | **1 257** |
| **Core operating income** | **3 768** | **3 596** | **391** | **528** | **-129** | **-305** | **4 030** | **3 819** |
| *as % of net sales* | *36.4%* | *33.6%* | *16.8%* | *20.9%* |  |  | *31.8%* | *28.9%* |
| (Loss)/income from associated companies | -1 | 4 |  |  | -2 | 14 617 | -3 | 14 621 |
| Core adjustments to income from associated companies, net of tax |  |  |  |  |  | -14 528 |  | -14 528 |
| Interest expense |  |  |  |  |  |  | -219 | -206 |
| Other financial income and expense |  |  |  |  |  |  | 14 | -26 |
| Core adjustments to other financial income and expense |  |  |  |  |  |  | 40 | 2 |
| Income taxes, adjusted for above items (core income taxes) |  |  |  |  |  |  | -611 | -547 |
| **Core net income** |  |  |  |  |  |  | **3 251** | **3 135** |
| **Core net income attributable to shareholders of Novartis AG** |  |  |  |  |  |  | **3 251** | **3 137** |
| **Core basic EPS (USD) <sup>1</sup>** |  |  |  |  |  |  | 1.52 | 1.40 |
|  <sup>1</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>1</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>1</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>1</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>1</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>1</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>1</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>1</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>1</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  |

---

------

**Full year**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Innovative Medicines** | **Innovative Medicines** | **Sandoz** | **Sandoz** | **Corporate** | **Corporate** | **Group** | **Group** |
| (USD millions unless indicated otherwise) | **FY 2022** | FY 2021 | **FY 2022** | FY 2021 | **FY 2022** | FY 2021 | **FY 2022** | FY 2021 |
| **IFRS operating income** | **8 786** | **10 688** | **1 448** | **1 600** | **-1 037** | **-599** | **9 197** | **11 689** |
| **Amortization of intangible assets** | **3 585** | **3 528** | **221** | **236** |  |  | **3 806** | **3 764** |
| Impairments |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Intangible assets | 1 291 | 360 | 25 | 27 | 2 |  | 1 318 | 387 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Property, plant and equipment related to the Group-wide <br> rationalization of manufacturing sites  | <br> 286  | <br> 219  | <br> -2  | <br> 7  |  |  | <br> 284  | <br> 226  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Other property, plant and equipment | 85 | 40 |  |  |  |  | 85 | 40 |
| **Total impairment charges** | **1 662** | **619** | **23** | **34** | **2** |  | **1 687** | **653** |
| Acquisition or divestment of businesses and related items |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;- Income |  | -2 |  |  | -4 | -64 | -4 | -66 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;- Expense | 8 | 1 |  |  |  | 106 | 8 | 107 |
| **Total acquisition or divestment of businesses and related items, net** | **&nbsp;&nbsp;&nbsp;&nbsp;8** | **&nbsp;&nbsp;&nbsp;&nbsp;-1** |  |  | **&nbsp;&nbsp;&nbsp;&nbsp;-4** | **&nbsp;&nbsp;&nbsp;&nbsp;42** | **&nbsp;&nbsp;&nbsp;&nbsp;4** | **&nbsp;&nbsp;&nbsp;&nbsp;41** |
| Other items |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Divestment gains | -161 | -649 |  | -4 | -5 | -75 | -166 | -728 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Financial assets - fair value adjustments | 134 | -43 |  |  | 126 | 5 | 260 | -38 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Restructuring and related items |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;- Income | -33 | -32 | -14 | -36 | -1 | -6 | -48 | -74 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;- Expense | 1 572 | 833 | 167 | 193 | 449 | 32 | 2 188 | 1 058 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Legal-related items |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;- Income | -51 |  |  | -11 |  |  | -51 | -11 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;- Expense | 364 | 170 | 56 | 53 |  |  | 420 | 223 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Additional income | -692 | -139 | -6 | -1 | -6 | -138 | -704 | -278 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Additional expense | 63 | 241 | 8 |  | 1 | 48 | 72 | 289 |
| **Total other items** | **1 196** | **381** | **211** | **194** | **564** | **-134** | **1 971** | **441** |
| **Total adjustments** | **6 451** | **4 527** | **455** | **464** | **562** | **-92** | **7 468** | **4 899** |
| **Core operating income** | **15 237** | **15 215** | **1 903** | **2 064** | **-475** | **-691** | **16 665** | **16 588** |
| *as % of net sales* | *36.9%* | *36.2%* | *20.6%* | *21.4%* |  |  | *33.0%* | *32.1%* |
| (Loss)/income from associated companies | -2 | 5 | 2 | 2 | -9 | 15 332 | -9 | 15 339 |
| Core adjustments to income from associated companies, net of tax |  |  |  |  |  | -14 346 |  | -14 346 |
| Interest expense |  |  |  |  |  |  | -837 | -811 |
| Other financial income and expense |  |  |  |  |  |  | 20 | -80 |
| Core adjustments to other financial income and expense |  |  |  |  |  |  | 121 | 39 |
| Income taxes, adjusted for above items (core income taxes) |  |  |  |  |  |  | -2 608 | -2 635 |
| **Core net income** |  |  |  |  |  |  | **13 352** | **14 094** |
| **Core net income attributable to shareholders of Novartis AG** |  |  |  |  |  |  | **13 352** | **14 097** |
| **Core basic EPS (USD) <sup>1</sup>** |  |  |  |  |  |  | 6.12 | 6.29 |
|  <sup>1</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>1</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>1</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>1</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>1</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>1</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>1</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>1</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>1</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  |

---

------

**Fourth quarter**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| <br>(USD millions unless indicated otherwise)  | **<br>Q4 2022<br> IFRS results**  | **<br> Amortization <br> of intangible<br> assets <sup>1</sup>** | **<br>Impairments <sup>2</sup>** | **Acquisition or <br> divestment of <br> businesses and<br> related items <sup>3</sup>** | **<br>Other <br> items <sup>4</sup>** | **<br>Q4 2022<br> Core results**  | **<br>Q4 2021<br> Core results**  |
| **Gross profit** | **9 014** | **922** | **326** |  | **-176** | **10 086** | **10 430** |
| **Operating income** | **1 949** | **964** | **513** |  | **604** | **4 030** | **3 819** |
| **Income before taxes** | **1 741** | **964** | **513** |  | **644** | **3 862** | **3 682** |
| Income taxes <sup>5</sup> | -275 |  |  |  |  | -611 | -547 |
| **Net income** | **1 466** |  |  |  |  | **3 251** | **3 135** |
| **Basic EPS (USD) <sup>6</sup>** | 0.69 |  |  |  |  | 1.52 | 1.40 |
| **The following are adjustments to arrive at core gross profit** |  |  |  |  |  |  |  |
| Other revenues | 397 |  |  |  | -86 | 311 | 293 |
| Cost of goods sold | -4 073 | 922 | 326 |  | -90 | -2 915 | -3 092 |
| **The following are adjustments to arrive at core operating income** |  |  |  |  |  |  |  |
| Selling, general and administration | -3 747 |  |  |  | 48 | -3 699 | -3 984 |
| Research and development | -2 442 | 42 | 109 |  | -27 | -2 318 | -2 369 |
| Other income | 172 |  |  | -1 | -71 | 100 | 118 |
| Other expense | -1 048 |  | 78 | 1 | 830 | -139 | -376 |
| **The following are adjustments to arrive at core income before taxes** |  |  |  |  |  |  |  |
| Other financial income and expense | 14 |  |  |  | 40 | 54 | -24 |
|  <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  |
|  <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other expense also includes impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other expense also includes impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other expense also includes impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other expense also includes impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other expense also includes impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other expense also includes impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other expense also includes impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other expense also includes impairment charges related to property, plant and equipment  |
|  <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes adjustments to provisions; other expense includes stamp duties related to an acquisition  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes adjustments to provisions; other expense includes stamp duties related to an acquisition  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes adjustments to provisions; other expense includes stamp duties related to an acquisition  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes adjustments to provisions; other expense includes stamp duties related to an acquisition  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes adjustments to provisions; other expense includes stamp duties related to an acquisition  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes adjustments to provisions; other expense includes stamp duties related to an acquisition  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes adjustments to provisions; other expense includes stamp duties related to an acquisition  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes adjustments to provisions; other expense includes stamp duties related to an acquisition  |
|  <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the restructuring initiative to implement a new streamlined organizational model, the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold, selling, general and administration and research and development include adjustments to provisions and related items; cost of goods sold and research and development also include contingent consideration adjustments; other income and other expense include fair value adjustments and divestment gains and losses on financial assets; other income also includes gains from the divestment of property, a curtailment gain and an adjustment to an environmental provision; other expense includes legal-related items and other costs and items; other financial income and expense includes the monetary loss on the restatement of non-monetary items for subsidiaries in hyperinflationary economies and a revaluation impact of a financial liability incurred through the Alcon distribution  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the restructuring initiative to implement a new streamlined organizational model, the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold, selling, general and administration and research and development include adjustments to provisions and related items; cost of goods sold and research and development also include contingent consideration adjustments; other income and other expense include fair value adjustments and divestment gains and losses on financial assets; other income also includes gains from the divestment of property, a curtailment gain and an adjustment to an environmental provision; other expense includes legal-related items and other costs and items; other financial income and expense includes the monetary loss on the restatement of non-monetary items for subsidiaries in hyperinflationary economies and a revaluation impact of a financial liability incurred through the Alcon distribution  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the restructuring initiative to implement a new streamlined organizational model, the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold, selling, general and administration and research and development include adjustments to provisions and related items; cost of goods sold and research and development also include contingent consideration adjustments; other income and other expense include fair value adjustments and divestment gains and losses on financial assets; other income also includes gains from the divestment of property, a curtailment gain and an adjustment to an environmental provision; other expense includes legal-related items and other costs and items; other financial income and expense includes the monetary loss on the restatement of non-monetary items for subsidiaries in hyperinflationary economies and a revaluation impact of a financial liability incurred through the Alcon distribution  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the restructuring initiative to implement a new streamlined organizational model, the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold, selling, general and administration and research and development include adjustments to provisions and related items; cost of goods sold and research and development also include contingent consideration adjustments; other income and other expense include fair value adjustments and divestment gains and losses on financial assets; other income also includes gains from the divestment of property, a curtailment gain and an adjustment to an environmental provision; other expense includes legal-related items and other costs and items; other financial income and expense includes the monetary loss on the restatement of non-monetary items for subsidiaries in hyperinflationary economies and a revaluation impact of a financial liability incurred through the Alcon distribution  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the restructuring initiative to implement a new streamlined organizational model, the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold, selling, general and administration and research and development include adjustments to provisions and related items; cost of goods sold and research and development also include contingent consideration adjustments; other income and other expense include fair value adjustments and divestment gains and losses on financial assets; other income also includes gains from the divestment of property, a curtailment gain and an adjustment to an environmental provision; other expense includes legal-related items and other costs and items; other financial income and expense includes the monetary loss on the restatement of non-monetary items for subsidiaries in hyperinflationary economies and a revaluation impact of a financial liability incurred through the Alcon distribution  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the restructuring initiative to implement a new streamlined organizational model, the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold, selling, general and administration and research and development include adjustments to provisions and related items; cost of goods sold and research and development also include contingent consideration adjustments; other income and other expense include fair value adjustments and divestment gains and losses on financial assets; other income also includes gains from the divestment of property, a curtailment gain and an adjustment to an environmental provision; other expense includes legal-related items and other costs and items; other financial income and expense includes the monetary loss on the restatement of non-monetary items for subsidiaries in hyperinflationary economies and a revaluation impact of a financial liability incurred through the Alcon distribution  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the restructuring initiative to implement a new streamlined organizational model, the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold, selling, general and administration and research and development include adjustments to provisions and related items; cost of goods sold and research and development also include contingent consideration adjustments; other income and other expense include fair value adjustments and divestment gains and losses on financial assets; other income also includes gains from the divestment of property, a curtailment gain and an adjustment to an environmental provision; other expense includes legal-related items and other costs and items; other financial income and expense includes the monetary loss on the restatement of non-monetary items for subsidiaries in hyperinflationary economies and a revaluation impact of a financial liability incurred through the Alcon distribution  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the restructuring initiative to implement a new streamlined organizational model, the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold, selling, general and administration and research and development include adjustments to provisions and related items; cost of goods sold and research and development also include contingent consideration adjustments; other income and other expense include fair value adjustments and divestment gains and losses on financial assets; other income also includes gains from the divestment of property, a curtailment gain and an adjustment to an environmental provision; other expense includes legal-related items and other costs and items; other financial income and expense includes the monetary loss on the restatement of non-monetary items for subsidiaries in hyperinflationary economies and a revaluation impact of a financial liability incurred through the Alcon distribution  |
|  <sup>5</sup> Taxes on the adjustments between IFRS and core results take into account, for each individual item included in the adjustment, the tax rate that will finally be applicable to the item based on the jurisdiction where the adjustment will finally have a tax impact. Generally, this results in amortization and impairment of intangible assets and acquisition-related restructuring and integration items having a full tax impact. There is usually a tax impact on other items, although this is not always the case for items arising from legal settlements in certain jurisdictions. Adjustments related to income from associated companies are recorded net of any related tax effect. Due to these factors and the differing effective tax rates in the various jurisdictions, the tax on the total adjustments of USD 2.1 billion to arrive at the core results before tax amounts to USD 336 million. The average tax rate on the adjustments is 15.8% since the quarterly core tax charge of 15.8% has been applied to the pre-tax income of the period.  | <sup>5</sup> Taxes on the adjustments between IFRS and core results take into account, for each individual item included in the adjustment, the tax rate that will finally be applicable to the item based on the jurisdiction where the adjustment will finally have a tax impact. Generally, this results in amortization and impairment of intangible assets and acquisition-related restructuring and integration items having a full tax impact. There is usually a tax impact on other items, although this is not always the case for items arising from legal settlements in certain jurisdictions. Adjustments related to income from associated companies are recorded net of any related tax effect. Due to these factors and the differing effective tax rates in the various jurisdictions, the tax on the total adjustments of USD 2.1 billion to arrive at the core results before tax amounts to USD 336 million. The average tax rate on the adjustments is 15.8% since the quarterly core tax charge of 15.8% has been applied to the pre-tax income of the period.  | <sup>5</sup> Taxes on the adjustments between IFRS and core results take into account, for each individual item included in the adjustment, the tax rate that will finally be applicable to the item based on the jurisdiction where the adjustment will finally have a tax impact. Generally, this results in amortization and impairment of intangible assets and acquisition-related restructuring and integration items having a full tax impact. There is usually a tax impact on other items, although this is not always the case for items arising from legal settlements in certain jurisdictions. Adjustments related to income from associated companies are recorded net of any related tax effect. Due to these factors and the differing effective tax rates in the various jurisdictions, the tax on the total adjustments of USD 2.1 billion to arrive at the core results before tax amounts to USD 336 million. The average tax rate on the adjustments is 15.8% since the quarterly core tax charge of 15.8% has been applied to the pre-tax income of the period.  | <sup>5</sup> Taxes on the adjustments between IFRS and core results take into account, for each individual item included in the adjustment, the tax rate that will finally be applicable to the item based on the jurisdiction where the adjustment will finally have a tax impact. Generally, this results in amortization and impairment of intangible assets and acquisition-related restructuring and integration items having a full tax impact. There is usually a tax impact on other items, although this is not always the case for items arising from legal settlements in certain jurisdictions. Adjustments related to income from associated companies are recorded net of any related tax effect. Due to these factors and the differing effective tax rates in the various jurisdictions, the tax on the total adjustments of USD 2.1 billion to arrive at the core results before tax amounts to USD 336 million. The average tax rate on the adjustments is 15.8% since the quarterly core tax charge of 15.8% has been applied to the pre-tax income of the period.  | <sup>5</sup> Taxes on the adjustments between IFRS and core results take into account, for each individual item included in the adjustment, the tax rate that will finally be applicable to the item based on the jurisdiction where the adjustment will finally have a tax impact. Generally, this results in amortization and impairment of intangible assets and acquisition-related restructuring and integration items having a full tax impact. There is usually a tax impact on other items, although this is not always the case for items arising from legal settlements in certain jurisdictions. Adjustments related to income from associated companies are recorded net of any related tax effect. Due to these factors and the differing effective tax rates in the various jurisdictions, the tax on the total adjustments of USD 2.1 billion to arrive at the core results before tax amounts to USD 336 million. The average tax rate on the adjustments is 15.8% since the quarterly core tax charge of 15.8% has been applied to the pre-tax income of the period.  | <sup>5</sup> Taxes on the adjustments between IFRS and core results take into account, for each individual item included in the adjustment, the tax rate that will finally be applicable to the item based on the jurisdiction where the adjustment will finally have a tax impact. Generally, this results in amortization and impairment of intangible assets and acquisition-related restructuring and integration items having a full tax impact. There is usually a tax impact on other items, although this is not always the case for items arising from legal settlements in certain jurisdictions. Adjustments related to income from associated companies are recorded net of any related tax effect. Due to these factors and the differing effective tax rates in the various jurisdictions, the tax on the total adjustments of USD 2.1 billion to arrive at the core results before tax amounts to USD 336 million. The average tax rate on the adjustments is 15.8% since the quarterly core tax charge of 15.8% has been applied to the pre-tax income of the period.  | <sup>5</sup> Taxes on the adjustments between IFRS and core results take into account, for each individual item included in the adjustment, the tax rate that will finally be applicable to the item based on the jurisdiction where the adjustment will finally have a tax impact. Generally, this results in amortization and impairment of intangible assets and acquisition-related restructuring and integration items having a full tax impact. There is usually a tax impact on other items, although this is not always the case for items arising from legal settlements in certain jurisdictions. Adjustments related to income from associated companies are recorded net of any related tax effect. Due to these factors and the differing effective tax rates in the various jurisdictions, the tax on the total adjustments of USD 2.1 billion to arrive at the core results before tax amounts to USD 336 million. The average tax rate on the adjustments is 15.8% since the quarterly core tax charge of 15.8% has been applied to the pre-tax income of the period.  | <sup>5</sup> Taxes on the adjustments between IFRS and core results take into account, for each individual item included in the adjustment, the tax rate that will finally be applicable to the item based on the jurisdiction where the adjustment will finally have a tax impact. Generally, this results in amortization and impairment of intangible assets and acquisition-related restructuring and integration items having a full tax impact. There is usually a tax impact on other items, although this is not always the case for items arising from legal settlements in certain jurisdictions. Adjustments related to income from associated companies are recorded net of any related tax effect. Due to these factors and the differing effective tax rates in the various jurisdictions, the tax on the total adjustments of USD 2.1 billion to arrive at the core results before tax amounts to USD 336 million. The average tax rate on the adjustments is 15.8% since the quarterly core tax charge of 15.8% has been applied to the pre-tax income of the period.  |
|  <sup>6</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>6</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>6</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>6</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>6</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>6</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>6</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>6</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  |

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------

**Full year**

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| <br>(USD millions unless indicated otherwise)  | **<br>FY 2022<br> IFRS results**  | **<br> Amortization <br> of intangible <br> assets <sup>1</sup>** | **<br>Impairments <sup>2</sup>** | **Acquisition or <br> divestment of <br> businesses and<br> related items <sup>3</sup>** | **<br>Other <br> items <sup>4</sup>** | **<br>FY 2022<br> Core results**  | **<br>FY 2021<br> Core results**  |
| **Gross profit** | **36 342** | **3 648** | **338** |  | **64** | **40 392** | **41 097** |
| **Operating income** | **9 197** | **3 806** | **1 687** | **4** | **1 971** | **16 665** | **16 588** |
| **Income before taxes** | **8 371** | **3 806** | **1 687** | **4** | **2 092** | **15 960** | **16 729** |
| Income taxes <sup>5</sup> | -1 416 |  |  |  |  | -2 608 | -2 635 |
| **Net income** | **6 955** |  |  |  |  | **13 352** | **14 094** |
| **Basic EPS (USD) <sup>6</sup>** | 3.19 |  |  |  |  | 6.12 | 6.29 |
| **The following are adjustments to arrive at core gross profit** |  |  |  |  |  |  |  |
| Other revenues | 1 283 |  |  |  | -86 | 1 197 | 1 251 |
| Cost of goods sold | -15 486 | 3 648 | 338 |  | 150 | -11 350 | -11 780 |
| **The following are adjustments to arrive at core operating income** |  |  |  |  |  |  |  |
| Selling, general and administration | -14 253 |  |  |  | 63 | -14 190 | -14 815 |
| Research and development | -9 996 | 158 | 954 |  | -204 | -9 088 | -9 041 |
| Other income | 805 |  | -3 | -4 | -414 | 384 | 421 |
| Other expense | -3 701 |  | 398 | 8 | 2 462 | -833 | -1 074 |
| **The following are adjustments to arrive at core income before taxes** |  |  |  |  |  |  |  |
| Other financial income and expense | 20 |  |  |  | 121 | 141 | -41 |
|  <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  |
|  <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other income and other expense include net impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other income and other expense include net impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other income and other expense include net impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other income and other expense include net impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other income and other expense include net impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other income and other expense include net impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other income and other expense include net impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other income and other expense include net impairment charges related to property, plant and equipment  |
|  <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income and other expense include transitional service fee income and charges related to divestments; other income also includes adjustments to provisions; other expense includes stamp duties related to an acquisition  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income and other expense include transitional service fee income and charges related to divestments; other income also includes adjustments to provisions; other expense includes stamp duties related to an acquisition  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income and other expense include transitional service fee income and charges related to divestments; other income also includes adjustments to provisions; other expense includes stamp duties related to an acquisition  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income and other expense include transitional service fee income and charges related to divestments; other income also includes adjustments to provisions; other expense includes stamp duties related to an acquisition  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income and other expense include transitional service fee income and charges related to divestments; other income also includes adjustments to provisions; other expense includes stamp duties related to an acquisition  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income and other expense include transitional service fee income and charges related to divestments; other income also includes adjustments to provisions; other expense includes stamp duties related to an acquisition  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income and other expense include transitional service fee income and charges related to divestments; other income also includes adjustments to provisions; other expense includes stamp duties related to an acquisition  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income and other expense include transitional service fee income and charges related to divestments; other income also includes adjustments to provisions; other expense includes stamp duties related to an acquisition  |
|  <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the restructuring initiative to implement a new streamlined organizational model, the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold, selling, general and administration, research and development and other expense include adjustments to provisions and related items; cost of goods sold and research and development also include contingent consideration adjustments; other income and other expense include fair value adjustments and divestment gains and losses on financial assets and legal-related items; other income also includes gains from the divestment of products and property, curtailment gains and an adjustment to an environmental provision; other expense includes a reversal of an accrual and other costs and items; other financial income and expense includes the monetary loss on the restatement of non-monetary items for subsidiaries in hyperinflationary economies and a revaluation impact of a financial liability incurred through the Alcon distribution  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the restructuring initiative to implement a new streamlined organizational model, the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold, selling, general and administration, research and development and other expense include adjustments to provisions and related items; cost of goods sold and research and development also include contingent consideration adjustments; other income and other expense include fair value adjustments and divestment gains and losses on financial assets and legal-related items; other income also includes gains from the divestment of products and property, curtailment gains and an adjustment to an environmental provision; other expense includes a reversal of an accrual and other costs and items; other financial income and expense includes the monetary loss on the restatement of non-monetary items for subsidiaries in hyperinflationary economies and a revaluation impact of a financial liability incurred through the Alcon distribution  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the restructuring initiative to implement a new streamlined organizational model, the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold, selling, general and administration, research and development and other expense include adjustments to provisions and related items; cost of goods sold and research and development also include contingent consideration adjustments; other income and other expense include fair value adjustments and divestment gains and losses on financial assets and legal-related items; other income also includes gains from the divestment of products and property, curtailment gains and an adjustment to an environmental provision; other expense includes a reversal of an accrual and other costs and items; other financial income and expense includes the monetary loss on the restatement of non-monetary items for subsidiaries in hyperinflationary economies and a revaluation impact of a financial liability incurred through the Alcon distribution  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the restructuring initiative to implement a new streamlined organizational model, the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold, selling, general and administration, research and development and other expense include adjustments to provisions and related items; cost of goods sold and research and development also include contingent consideration adjustments; other income and other expense include fair value adjustments and divestment gains and losses on financial assets and legal-related items; other income also includes gains from the divestment of products and property, curtailment gains and an adjustment to an environmental provision; other expense includes a reversal of an accrual and other costs and items; other financial income and expense includes the monetary loss on the restatement of non-monetary items for subsidiaries in hyperinflationary economies and a revaluation impact of a financial liability incurred through the Alcon distribution  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the restructuring initiative to implement a new streamlined organizational model, the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold, selling, general and administration, research and development and other expense include adjustments to provisions and related items; cost of goods sold and research and development also include contingent consideration adjustments; other income and other expense include fair value adjustments and divestment gains and losses on financial assets and legal-related items; other income also includes gains from the divestment of products and property, curtailment gains and an adjustment to an environmental provision; other expense includes a reversal of an accrual and other costs and items; other financial income and expense includes the monetary loss on the restatement of non-monetary items for subsidiaries in hyperinflationary economies and a revaluation impact of a financial liability incurred through the Alcon distribution  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the restructuring initiative to implement a new streamlined organizational model, the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold, selling, general and administration, research and development and other expense include adjustments to provisions and related items; cost of goods sold and research and development also include contingent consideration adjustments; other income and other expense include fair value adjustments and divestment gains and losses on financial assets and legal-related items; other income also includes gains from the divestment of products and property, curtailment gains and an adjustment to an environmental provision; other expense includes a reversal of an accrual and other costs and items; other financial income and expense includes the monetary loss on the restatement of non-monetary items for subsidiaries in hyperinflationary economies and a revaluation impact of a financial liability incurred through the Alcon distribution  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the restructuring initiative to implement a new streamlined organizational model, the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold, selling, general and administration, research and development and other expense include adjustments to provisions and related items; cost of goods sold and research and development also include contingent consideration adjustments; other income and other expense include fair value adjustments and divestment gains and losses on financial assets and legal-related items; other income also includes gains from the divestment of products and property, curtailment gains and an adjustment to an environmental provision; other expense includes a reversal of an accrual and other costs and items; other financial income and expense includes the monetary loss on the restatement of non-monetary items for subsidiaries in hyperinflationary economies and a revaluation impact of a financial liability incurred through the Alcon distribution  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the restructuring initiative to implement a new streamlined organizational model, the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold, selling, general and administration, research and development and other expense include adjustments to provisions and related items; cost of goods sold and research and development also include contingent consideration adjustments; other income and other expense include fair value adjustments and divestment gains and losses on financial assets and legal-related items; other income also includes gains from the divestment of products and property, curtailment gains and an adjustment to an environmental provision; other expense includes a reversal of an accrual and other costs and items; other financial income and expense includes the monetary loss on the restatement of non-monetary items for subsidiaries in hyperinflationary economies and a revaluation impact of a financial liability incurred through the Alcon distribution  |
|  <sup>5</sup> Taxes on the adjustments between IFRS and core results take into account, for each individual item included in the adjustment, the tax rate that will finally be applicable to the item based on the jurisdiction where the adjustment will finally have a tax impact. Generally, this results in amortization and impairment of intangible assets and acquisition-related restructuring and integration items having a full tax impact. There is usually a tax impact on other items, although this is not always the case for items arising from legal settlements in certain jurisdictions. Adjustments related to income from associated companies are recorded net of any related tax effect. Due to these factors and the differing effective tax rates in the various jurisdictions, the tax on the total adjustments of USD 7.6 billion to arrive at the core results before tax amounts to USD 1.2 billion. The average tax rate on the adjustments is 15.7% since the full year core tax charge of 16.3% has been applied to the pre-tax income of the period.  | <sup>5</sup> Taxes on the adjustments between IFRS and core results take into account, for each individual item included in the adjustment, the tax rate that will finally be applicable to the item based on the jurisdiction where the adjustment will finally have a tax impact. Generally, this results in amortization and impairment of intangible assets and acquisition-related restructuring and integration items having a full tax impact. There is usually a tax impact on other items, although this is not always the case for items arising from legal settlements in certain jurisdictions. Adjustments related to income from associated companies are recorded net of any related tax effect. Due to these factors and the differing effective tax rates in the various jurisdictions, the tax on the total adjustments of USD 7.6 billion to arrive at the core results before tax amounts to USD 1.2 billion. The average tax rate on the adjustments is 15.7% since the full year core tax charge of 16.3% has been applied to the pre-tax income of the period.  | <sup>5</sup> Taxes on the adjustments between IFRS and core results take into account, for each individual item included in the adjustment, the tax rate that will finally be applicable to the item based on the jurisdiction where the adjustment will finally have a tax impact. Generally, this results in amortization and impairment of intangible assets and acquisition-related restructuring and integration items having a full tax impact. There is usually a tax impact on other items, although this is not always the case for items arising from legal settlements in certain jurisdictions. Adjustments related to income from associated companies are recorded net of any related tax effect. Due to these factors and the differing effective tax rates in the various jurisdictions, the tax on the total adjustments of USD 7.6 billion to arrive at the core results before tax amounts to USD 1.2 billion. The average tax rate on the adjustments is 15.7% since the full year core tax charge of 16.3% has been applied to the pre-tax income of the period.  | <sup>5</sup> Taxes on the adjustments between IFRS and core results take into account, for each individual item included in the adjustment, the tax rate that will finally be applicable to the item based on the jurisdiction where the adjustment will finally have a tax impact. Generally, this results in amortization and impairment of intangible assets and acquisition-related restructuring and integration items having a full tax impact. There is usually a tax impact on other items, although this is not always the case for items arising from legal settlements in certain jurisdictions. Adjustments related to income from associated companies are recorded net of any related tax effect. Due to these factors and the differing effective tax rates in the various jurisdictions, the tax on the total adjustments of USD 7.6 billion to arrive at the core results before tax amounts to USD 1.2 billion. The average tax rate on the adjustments is 15.7% since the full year core tax charge of 16.3% has been applied to the pre-tax income of the period.  | <sup>5</sup> Taxes on the adjustments between IFRS and core results take into account, for each individual item included in the adjustment, the tax rate that will finally be applicable to the item based on the jurisdiction where the adjustment will finally have a tax impact. Generally, this results in amortization and impairment of intangible assets and acquisition-related restructuring and integration items having a full tax impact. There is usually a tax impact on other items, although this is not always the case for items arising from legal settlements in certain jurisdictions. Adjustments related to income from associated companies are recorded net of any related tax effect. Due to these factors and the differing effective tax rates in the various jurisdictions, the tax on the total adjustments of USD 7.6 billion to arrive at the core results before tax amounts to USD 1.2 billion. The average tax rate on the adjustments is 15.7% since the full year core tax charge of 16.3% has been applied to the pre-tax income of the period.  | <sup>5</sup> Taxes on the adjustments between IFRS and core results take into account, for each individual item included in the adjustment, the tax rate that will finally be applicable to the item based on the jurisdiction where the adjustment will finally have a tax impact. Generally, this results in amortization and impairment of intangible assets and acquisition-related restructuring and integration items having a full tax impact. There is usually a tax impact on other items, although this is not always the case for items arising from legal settlements in certain jurisdictions. Adjustments related to income from associated companies are recorded net of any related tax effect. Due to these factors and the differing effective tax rates in the various jurisdictions, the tax on the total adjustments of USD 7.6 billion to arrive at the core results before tax amounts to USD 1.2 billion. The average tax rate on the adjustments is 15.7% since the full year core tax charge of 16.3% has been applied to the pre-tax income of the period.  | <sup>5</sup> Taxes on the adjustments between IFRS and core results take into account, for each individual item included in the adjustment, the tax rate that will finally be applicable to the item based on the jurisdiction where the adjustment will finally have a tax impact. Generally, this results in amortization and impairment of intangible assets and acquisition-related restructuring and integration items having a full tax impact. There is usually a tax impact on other items, although this is not always the case for items arising from legal settlements in certain jurisdictions. Adjustments related to income from associated companies are recorded net of any related tax effect. Due to these factors and the differing effective tax rates in the various jurisdictions, the tax on the total adjustments of USD 7.6 billion to arrive at the core results before tax amounts to USD 1.2 billion. The average tax rate on the adjustments is 15.7% since the full year core tax charge of 16.3% has been applied to the pre-tax income of the period.  | <sup>5</sup> Taxes on the adjustments between IFRS and core results take into account, for each individual item included in the adjustment, the tax rate that will finally be applicable to the item based on the jurisdiction where the adjustment will finally have a tax impact. Generally, this results in amortization and impairment of intangible assets and acquisition-related restructuring and integration items having a full tax impact. There is usually a tax impact on other items, although this is not always the case for items arising from legal settlements in certain jurisdictions. Adjustments related to income from associated companies are recorded net of any related tax effect. Due to these factors and the differing effective tax rates in the various jurisdictions, the tax on the total adjustments of USD 7.6 billion to arrive at the core results before tax amounts to USD 1.2 billion. The average tax rate on the adjustments is 15.7% since the full year core tax charge of 16.3% has been applied to the pre-tax income of the period.  |
|  <sup>6</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>6</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>6</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>6</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>6</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>6</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>6</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  | <sup>6</sup> Earnings per share (EPS) is calculated on the amount of net income attributable to shareholders of Novartis AG.  |

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#### CORE RESULTS – Reconciliation from IFRS results to core results – Innovative Medicines
**Fourth quarter** 

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| <br>(USD millions)  | **<br>Q4 2022<br> IFRS results**  | **<br> Amortization<br> of intangible<br> assets <sup>1</sup>** | **<br>Impairments <sup>2</sup>** | **Acquisition or <br> divestment of <br> businesses and<br> related items <sup>3</sup>** | **<br>Other <br> items <sup>4</sup>** | **<br>Q4 2022<br> Core results**  | **<br>Q4 2021<br> Core results**  |
| **Gross profit** | **7 917** | **868** | **312** |  | **-197** | **8 900** | **9 084** |
| **Operating income** | **1 945** | **910** | **497** | **2** | **414** | **3 768** | **3 596** |
| **The following are adjustments to arrive at core gross profit** |  |  |  |  |  |  |  |
| Other revenues | 390 |  |  |  | -86 | 304 | 281 |
| Cost of goods sold | -3 026 | 868 | 312 |  | -111 | -1 957 | -2 085 |
| **The following are adjustments to arrive at core operating income** |  |  |  |  |  |  |  |
| Selling, general and administration | -3 036 |  |  |  | 43 | -2 993 | -3 275 |
| Research and development | -2 216 | 42 | 109 |  | -29 | -2 094 | -2 136 |
| Other income | 106 |  |  | 1 | -64 | 43 | 119 |
| Other expense | -826 |  | 76 | 1 | 661 | -88 | -196 |
|  <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  |
|  <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other expense also includes impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other expense also includes impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other expense also includes impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other expense also includes impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other expense also includes impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other expense also includes impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other expense also includes impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other expense also includes impairment charges related to property, plant and equipment  |
|  <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes transitional service fee income related to divestments; other expense includes stamp duties related to an acquisition  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes transitional service fee income related to divestments; other expense includes stamp duties related to an acquisition  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes transitional service fee income related to divestments; other expense includes stamp duties related to an acquisition  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes transitional service fee income related to divestments; other expense includes stamp duties related to an acquisition  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes transitional service fee income related to divestments; other expense includes stamp duties related to an acquisition  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes transitional service fee income related to divestments; other expense includes stamp duties related to an acquisition  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes transitional service fee income related to divestments; other expense includes stamp duties related to an acquisition  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes transitional service fee income related to divestments; other expense includes stamp duties related to an acquisition  |
|  <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold and research and development also include contingent consideration adjustments and adjustments to provisions and related items; other income and other expense include fair value adjustments and divestment gains and losses on financial assets; other income also includes gains from the divestment of property, a curtailment gain and an adjustment to an environmental provision; other expense includes legal-related items and other costs and items  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold and research and development also include contingent consideration adjustments and adjustments to provisions and related items; other income and other expense include fair value adjustments and divestment gains and losses on financial assets; other income also includes gains from the divestment of property, a curtailment gain and an adjustment to an environmental provision; other expense includes legal-related items and other costs and items  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold and research and development also include contingent consideration adjustments and adjustments to provisions and related items; other income and other expense include fair value adjustments and divestment gains and losses on financial assets; other income also includes gains from the divestment of property, a curtailment gain and an adjustment to an environmental provision; other expense includes legal-related items and other costs and items  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold and research and development also include contingent consideration adjustments and adjustments to provisions and related items; other income and other expense include fair value adjustments and divestment gains and losses on financial assets; other income also includes gains from the divestment of property, a curtailment gain and an adjustment to an environmental provision; other expense includes legal-related items and other costs and items  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold and research and development also include contingent consideration adjustments and adjustments to provisions and related items; other income and other expense include fair value adjustments and divestment gains and losses on financial assets; other income also includes gains from the divestment of property, a curtailment gain and an adjustment to an environmental provision; other expense includes legal-related items and other costs and items  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold and research and development also include contingent consideration adjustments and adjustments to provisions and related items; other income and other expense include fair value adjustments and divestment gains and losses on financial assets; other income also includes gains from the divestment of property, a curtailment gain and an adjustment to an environmental provision; other expense includes legal-related items and other costs and items  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold and research and development also include contingent consideration adjustments and adjustments to provisions and related items; other income and other expense include fair value adjustments and divestment gains and losses on financial assets; other income also includes gains from the divestment of property, a curtailment gain and an adjustment to an environmental provision; other expense includes legal-related items and other costs and items  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold and research and development also include contingent consideration adjustments and adjustments to provisions and related items; other income and other expense include fair value adjustments and divestment gains and losses on financial assets; other income also includes gains from the divestment of property, a curtailment gain and an adjustment to an environmental provision; other expense includes legal-related items and other costs and items  |

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**Full year** 

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| <br>(USD millions)  | **<br>FY 2022<br> IFRS results**  | **<br> Amortization<br> of intangible<br> assets <sup>1</sup>** | **<br>Impairments <sup>2</sup>** | **Acquisition or<br> divestment of<br> businesses and<br> related items <sup>3</sup>** | **<br>Other <br> items <sup>4</sup>** | **<br>FY 2022<br> Core results**  | **<br>FY 2021<br> Core results**  |
| **Gross profit** | **31 801** | **3 427** | **314** |  | **-29** | **35 513** | **35 981** |
| **Operating income** | **8 786** | **3 585** | **1 662** | **8** | **1 196** | **15 237** | **15 215** |
| **The following are adjustments to arrive at core gross profit** |  |  |  |  |  |  |  |
| Other revenues | 1 249 |  |  |  | -86 | 1 163 | 1 179 |
| Cost of goods sold | -11 569 | 3 427 | 314 |  | 57 | -7 771 | -7 988 |
| **The following are adjustments to arrive at core operating income** |  |  |  |  |  |  |  |
| Selling, general and administration | -11 679 |  |  |  | 50 | -11 629 | -12 235 |
| Research and development | -9 172 | 158 | 953 |  | -206 | -8 267 | -8 150 |
| Other income | 531 |  | -1 |  | -311 | 219 | 265 |
| Other expense | -2 695 |  | 396 | 8 | 1 692 | -599 | -646 |
|  <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets; research and development includes the amortization of acquired rights for technologies  |
|  <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other income and other expense include net impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other income and other expense include net impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other income and other expense include net impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other income and other expense include net impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other income and other expense include net impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other income and other expense include net impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other income and other expense include net impairment charges related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold, research and development and other expense include impairment charges related to intangible assets; other income and other expense include net impairment charges related to property, plant and equipment  |
|  <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other expense includes stamp duties related to an acquisition and transitional service fee charges related to divestments  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other expense includes stamp duties related to an acquisition and transitional service fee charges related to divestments  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other expense includes stamp duties related to an acquisition and transitional service fee charges related to divestments  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other expense includes stamp duties related to an acquisition and transitional service fee charges related to divestments  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other expense includes stamp duties related to an acquisition and transitional service fee charges related to divestments  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other expense includes stamp duties related to an acquisition and transitional service fee charges related to divestments  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other expense includes stamp duties related to an acquisition and transitional service fee charges related to divestments  | <sup>3</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other expense includes stamp duties related to an acquisition and transitional service fee charges related to divestments  |
|  <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold and research and development also include contingent consideration adjustments and adjustments to provisions and related items; other income and other expense include fair value adjustments and divestment gains and losses on financial assets and legal-related items; other income also includes gains from the divestment of products and property, curtailment gains and an adjustment to an environmental provision; other expense includes a reversal of an accrual and other costs and items  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold and research and development also include contingent consideration adjustments and adjustments to provisions and related items; other income and other expense include fair value adjustments and divestment gains and losses on financial assets and legal-related items; other income also includes gains from the divestment of products and property, curtailment gains and an adjustment to an environmental provision; other expense includes a reversal of an accrual and other costs and items  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold and research and development also include contingent consideration adjustments and adjustments to provisions and related items; other income and other expense include fair value adjustments and divestment gains and losses on financial assets and legal-related items; other income also includes gains from the divestment of products and property, curtailment gains and an adjustment to an environmental provision; other expense includes a reversal of an accrual and other costs and items  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold and research and development also include contingent consideration adjustments and adjustments to provisions and related items; other income and other expense include fair value adjustments and divestment gains and losses on financial assets and legal-related items; other income also includes gains from the divestment of products and property, curtailment gains and an adjustment to an environmental provision; other expense includes a reversal of an accrual and other costs and items  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold and research and development also include contingent consideration adjustments and adjustments to provisions and related items; other income and other expense include fair value adjustments and divestment gains and losses on financial assets and legal-related items; other income also includes gains from the divestment of products and property, curtailment gains and an adjustment to an environmental provision; other expense includes a reversal of an accrual and other costs and items  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold and research and development also include contingent consideration adjustments and adjustments to provisions and related items; other income and other expense include fair value adjustments and divestment gains and losses on financial assets and legal-related items; other income also includes gains from the divestment of products and property, curtailment gains and an adjustment to an environmental provision; other expense includes a reversal of an accrual and other costs and items  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold and research and development also include contingent consideration adjustments and adjustments to provisions and related items; other income and other expense include fair value adjustments and divestment gains and losses on financial assets and legal-related items; other income also includes gains from the divestment of products and property, curtailment gains and an adjustment to an environmental provision; other expense includes a reversal of an accrual and other costs and items  | <sup>4</sup> Other items: other revenues includes a net income from an outlicensing agreement; cost of goods sold, selling, general and administration, research and development, other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; cost of goods sold and research and development also include contingent consideration adjustments and adjustments to provisions and related items; other income and other expense include fair value adjustments and divestment gains and losses on financial assets and legal-related items; other income also includes gains from the divestment of products and property, curtailment gains and an adjustment to an environmental provision; other expense includes a reversal of an accrual and other costs and items  |

---

------

#### CORE RESULTS – Reconciliation from IFRS results to core results – Sandoz
**Fourth quarter** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| <br>(USD millions)  | **<br>Q4 2022<br> IFRS results**  | **<br> Amortization<br> of intangible<br> assets <sup>1</sup>** | **<br>Impairments <sup>2</sup>** | **Acquisition or <br> divestment of <br> businesses and<br> related items**  | **<br>Other <br> items <sup>3</sup>** | **<br>Q4 2022<br> Core results**  | **<br>Q4 2021<br> Core results**  |
| **Gross profit** | **1 098** | **54** | **14** |  | **21** | **1 187** | **1 332** |
| **Operating income** | **273** | **54** | **14** |  | **50** | **391** | **528** |
| **The following are adjustments to arrive at core gross profit** |  |  |  |  |  |  |  |
| Cost of goods sold | -1 300 | 54 | 14 |  | 21 | -1 211 | -1 245 |
| **The following are adjustments to arrive at core operating income** |  |  |  |  |  |  |  |
| Selling, general and administration | -565 |  |  |  | 5 | -560 | -566 |
| Research and development | -226 |  |  |  | 2 | -224 | -233 |
| Other income | 17 |  |  |  | 1 | 18 | 41 |
| Other expense | -51 |  |  |  | 21 | -30 | -46 |
|  <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets  |
|  <sup>2</sup> Impairments: cost of goods sold includes impairment charges related to intangible assets  | <sup>2</sup> Impairments: cost of goods sold includes impairment charges related to intangible assets  | <sup>2</sup> Impairments: cost of goods sold includes impairment charges related to intangible assets  | <sup>2</sup> Impairments: cost of goods sold includes impairment charges related to intangible assets  | <sup>2</sup> Impairments: cost of goods sold includes impairment charges related to intangible assets  | <sup>2</sup> Impairments: cost of goods sold includes impairment charges related to intangible assets  | <sup>2</sup> Impairments: cost of goods sold includes impairment charges related to intangible assets  | <sup>2</sup> Impairments: cost of goods sold includes impairment charges related to intangible assets  |
|  <sup>3</sup> Other items: cost of goods sold, selling, general and administration, research and development, other income and other expense include charges related to the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; selling, general and administration also includes a provision release; other expense includes legal-related items  | <sup>3</sup> Other items: cost of goods sold, selling, general and administration, research and development, other income and other expense include charges related to the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; selling, general and administration also includes a provision release; other expense includes legal-related items  | <sup>3</sup> Other items: cost of goods sold, selling, general and administration, research and development, other income and other expense include charges related to the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; selling, general and administration also includes a provision release; other expense includes legal-related items  | <sup>3</sup> Other items: cost of goods sold, selling, general and administration, research and development, other income and other expense include charges related to the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; selling, general and administration also includes a provision release; other expense includes legal-related items  | <sup>3</sup> Other items: cost of goods sold, selling, general and administration, research and development, other income and other expense include charges related to the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; selling, general and administration also includes a provision release; other expense includes legal-related items  | <sup>3</sup> Other items: cost of goods sold, selling, general and administration, research and development, other income and other expense include charges related to the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; selling, general and administration also includes a provision release; other expense includes legal-related items  | <sup>3</sup> Other items: cost of goods sold, selling, general and administration, research and development, other income and other expense include charges related to the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; selling, general and administration also includes a provision release; other expense includes legal-related items  | <sup>3</sup> Other items: cost of goods sold, selling, general and administration, research and development, other income and other expense include charges related to the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; selling, general and administration also includes a provision release; other expense includes legal-related items  |

---

**Full year** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| <br>(USD millions)  | **<br>FY 2022<br> IFRS results**  | **<br> Amortization<br> of intangible<br> assets <sup>1</sup>** | **<br>Impairments <sup>2</sup>** | **Acquisition or <br> divestment of <br> businesses and<br> related items**  | **<br>Other <br> items <sup>3</sup>** | **<br>FY 2022<br> Core results**  | **<br>FY 2021<br> Core results**  |
| **Gross profit** | **4 504** | **221** | **24** |  | **93** | **4 842** | **5 049** |
| **Operating income** | **1 448** | **221** | **23** |  | **211** | **1 903** | **2 064** |
| **The following are adjustments to arrive at core gross profit** |  |  |  |  |  |  |  |
| Cost of goods sold | -4 978 | 221 | 24 |  | 93 | -4 640 | -4 823 |
| **The following are adjustments to arrive at core operating income** |  |  |  |  |  |  |  |
| Selling, general and administration | -2 062 |  |  |  | 9 | -2 053 | -2 062 |
| Research and development | -824 |  | 1 |  | 2 | -821 | -891 |
| Other income | 103 |  | -2 |  | -14 | 87 | 127 |
| Other expense | -273 |  |  |  | 121 | -152 | -159 |
|  <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets  | <sup>1</sup> Amortization of intangible assets: cost of goods sold includes the amortization of acquired rights to currently marketed products and other production-related intangible assets  |
|  <sup>2</sup> Impairments: cost of goods sold and research and development include impairment charges related to intangible assets; other income includes a reversal of an impairment charge related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold and research and development include impairment charges related to intangible assets; other income includes a reversal of an impairment charge related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold and research and development include impairment charges related to intangible assets; other income includes a reversal of an impairment charge related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold and research and development include impairment charges related to intangible assets; other income includes a reversal of an impairment charge related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold and research and development include impairment charges related to intangible assets; other income includes a reversal of an impairment charge related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold and research and development include impairment charges related to intangible assets; other income includes a reversal of an impairment charge related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold and research and development include impairment charges related to intangible assets; other income includes a reversal of an impairment charge related to property, plant and equipment  | <sup>2</sup> Impairments: cost of goods sold and research and development include impairment charges related to intangible assets; other income includes a reversal of an impairment charge related to property, plant and equipment  |
|  <sup>3</sup> Other items: cost of goods sold, selling, general and administration, research and development, other income and other expense include charges related to the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; other expense also includes legal-related items; cost of goods sold and selling, general and administration include adjustments to provisions and related items  | <sup>3</sup> Other items: cost of goods sold, selling, general and administration, research and development, other income and other expense include charges related to the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; other expense also includes legal-related items; cost of goods sold and selling, general and administration include adjustments to provisions and related items  | <sup>3</sup> Other items: cost of goods sold, selling, general and administration, research and development, other income and other expense include charges related to the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; other expense also includes legal-related items; cost of goods sold and selling, general and administration include adjustments to provisions and related items  | <sup>3</sup> Other items: cost of goods sold, selling, general and administration, research and development, other income and other expense include charges related to the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; other expense also includes legal-related items; cost of goods sold and selling, general and administration include adjustments to provisions and related items  | <sup>3</sup> Other items: cost of goods sold, selling, general and administration, research and development, other income and other expense include charges related to the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; other expense also includes legal-related items; cost of goods sold and selling, general and administration include adjustments to provisions and related items  | <sup>3</sup> Other items: cost of goods sold, selling, general and administration, research and development, other income and other expense include charges related to the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; other expense also includes legal-related items; cost of goods sold and selling, general and administration include adjustments to provisions and related items  | <sup>3</sup> Other items: cost of goods sold, selling, general and administration, research and development, other income and other expense include charges related to the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; other expense also includes legal-related items; cost of goods sold and selling, general and administration include adjustments to provisions and related items  | <sup>3</sup> Other items: cost of goods sold, selling, general and administration, research and development, other income and other expense include charges related to the Sandoz strategic review, the Group-wide rationalization of manufacturing sites and other net restructuring charges and related items; other expense also includes legal-related items; cost of goods sold and selling, general and administration include adjustments to provisions and related items  |

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------

#### CORE RESULTS – Reconciliation from IFRS results to core results – Corporate
**Fourth quarter** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| <br>(USD millions)  | **<br>Q4 2022<br> IFRS results**  | **<br> Amortization<br> of intangible<br> assets**  | **<br>Impairments <sup>1</sup>** | **Acquisition or <br> divestment of <br> businesses and<br> related items <sup>2</sup>** | **<br>Other <br> items <sup>3</sup>** | **<br>Q4 2022<br> Core results**  | **<br>Q4 2021<br> Core results**  |
| **Gross profit** | **-1** |  |  |  |  | **-1** | **14** |
| **Operating loss** | **-269** |  | **2** | **-2** | **140** | **-129** | **-305** |
| **The following are adjustments to arrive at core operating loss** |  |  |  |  |  |  |  |
| Other income | 49 |  |  | -2 | -8 | 39 | -42 |
| Other expense | -171 |  | 2 |  | 148 | -21 | -134 |
|  <sup>1</sup> Impairments: Other expense includes impairment charges related to intangible assets  | <sup>1</sup> Impairments: Other expense includes impairment charges related to intangible assets  | <sup>1</sup> Impairments: Other expense includes impairment charges related to intangible assets  | <sup>1</sup> Impairments: Other expense includes impairment charges related to intangible assets  | <sup>1</sup> Impairments: Other expense includes impairment charges related to intangible assets  | <sup>1</sup> Impairments: Other expense includes impairment charges related to intangible assets  | <sup>1</sup> Impairments: Other expense includes impairment charges related to intangible assets  | <sup>1</sup> Impairments: Other expense includes impairment charges related to intangible assets  |
|  <sup>2</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes adjustments to provisions  | <sup>2</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes adjustments to provisions  | <sup>2</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes adjustments to provisions  | <sup>2</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes adjustments to provisions  | <sup>2</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes adjustments to provisions  | <sup>2</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes adjustments to provisions  | <sup>2</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes adjustments to provisions  | <sup>2</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes adjustments to provisions  |
|  <sup>3</sup> Other items: other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Sandoz strategic review and other net restructuring charges and related items; other income and other expense also include fair value adjustments and divestment gains and losses on financial assets  | <sup>3</sup> Other items: other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Sandoz strategic review and other net restructuring charges and related items; other income and other expense also include fair value adjustments and divestment gains and losses on financial assets  | <sup>3</sup> Other items: other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Sandoz strategic review and other net restructuring charges and related items; other income and other expense also include fair value adjustments and divestment gains and losses on financial assets  | <sup>3</sup> Other items: other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Sandoz strategic review and other net restructuring charges and related items; other income and other expense also include fair value adjustments and divestment gains and losses on financial assets  | <sup>3</sup> Other items: other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Sandoz strategic review and other net restructuring charges and related items; other income and other expense also include fair value adjustments and divestment gains and losses on financial assets  | <sup>3</sup> Other items: other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Sandoz strategic review and other net restructuring charges and related items; other income and other expense also include fair value adjustments and divestment gains and losses on financial assets  | <sup>3</sup> Other items: other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Sandoz strategic review and other net restructuring charges and related items; other income and other expense also include fair value adjustments and divestment gains and losses on financial assets  | <sup>3</sup> Other items: other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Sandoz strategic review and other net restructuring charges and related items; other income and other expense also include fair value adjustments and divestment gains and losses on financial assets  |

---

**Full year** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| <br>(USD millions)  | **<br>FY 2022<br> IFRS results**  | **<br> Amortization<br> of intangible<br> assets**  | **<br>Impairments <sup>1</sup>** | **Acquisition or <br> divestment of <br> businesses and<br> related items <sup>2</sup>** | **<br>Other <br> items <sup>3</sup>** | **<br>FY 2022<br> Core results**  | **<br>FY 2021<br> Core results**  |
| **Gross profit** | **37** |  |  |  |  | **37** | **67** |
| **Operating loss** | **-1 037** |  | **2** | **-4** | **564** | **-475** | **-691** |
| **The following are adjustments to arrive at core operating loss** |  |  |  |  |  |  |  |
| Selling, general and administration | -512 |  |  |  | 4 | -508 | -518 |
| Other income | 171 |  |  | -4 | -89 | 78 | 29 |
| Other expense | -733 |  | 2 |  | 649 | -82 | -269 |
|  <sup>1</sup> Impairments: other expense includes impairment charges related to intangible assets  | <sup>1</sup> Impairments: other expense includes impairment charges related to intangible assets  | <sup>1</sup> Impairments: other expense includes impairment charges related to intangible assets  | <sup>1</sup> Impairments: other expense includes impairment charges related to intangible assets  | <sup>1</sup> Impairments: other expense includes impairment charges related to intangible assets  | <sup>1</sup> Impairments: other expense includes impairment charges related to intangible assets  | <sup>1</sup> Impairments: other expense includes impairment charges related to intangible assets  | <sup>1</sup> Impairments: other expense includes impairment charges related to intangible assets  |
|  <sup>2</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes adjustments to provisions and transitional service fee income related to divestments  | <sup>2</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes adjustments to provisions and transitional service fee income related to divestments  | <sup>2</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes adjustments to provisions and transitional service fee income related to divestments  | <sup>2</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes adjustments to provisions and transitional service fee income related to divestments  | <sup>2</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes adjustments to provisions and transitional service fee income related to divestments  | <sup>2</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes adjustments to provisions and transitional service fee income related to divestments  | <sup>2</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes adjustments to provisions and transitional service fee income related to divestments  | <sup>2</sup> Acquisition or divestment of businesses and related items, including restructuring and integration charges: other income includes adjustments to provisions and transitional service fee income related to divestments  |
|  <sup>3</sup> Other items: selling, general and administration, other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Sandoz strategic review and other net restructuring charges and related items; other income and other expense also include fair value adjustments and divestment gains and losses on financial assets; other income also includes a curtailment gain  | <sup>3</sup> Other items: selling, general and administration, other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Sandoz strategic review and other net restructuring charges and related items; other income and other expense also include fair value adjustments and divestment gains and losses on financial assets; other income also includes a curtailment gain  | <sup>3</sup> Other items: selling, general and administration, other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Sandoz strategic review and other net restructuring charges and related items; other income and other expense also include fair value adjustments and divestment gains and losses on financial assets; other income also includes a curtailment gain  | <sup>3</sup> Other items: selling, general and administration, other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Sandoz strategic review and other net restructuring charges and related items; other income and other expense also include fair value adjustments and divestment gains and losses on financial assets; other income also includes a curtailment gain  | <sup>3</sup> Other items: selling, general and administration, other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Sandoz strategic review and other net restructuring charges and related items; other income and other expense also include fair value adjustments and divestment gains and losses on financial assets; other income also includes a curtailment gain  | <sup>3</sup> Other items: selling, general and administration, other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Sandoz strategic review and other net restructuring charges and related items; other income and other expense also include fair value adjustments and divestment gains and losses on financial assets; other income also includes a curtailment gain  | <sup>3</sup> Other items: selling, general and administration, other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Sandoz strategic review and other net restructuring charges and related items; other income and other expense also include fair value adjustments and divestment gains and losses on financial assets; other income also includes a curtailment gain  | <sup>3</sup> Other items: selling, general and administration, other income and other expense include restructuring income and charges related to the initiative to implement a new streamlined organizational model, the Sandoz strategic review and other net restructuring charges and related items; other income and other expense also include fair value adjustments and divestment gains and losses on financial assets; other income also includes a curtailment gain  |

---

**Reconciliation of 2021 IFRS results and non-IFRS measures core results and free cash flow to exclude the impacts of the 2021 divestment of our Roche investment**

To enhance investor understanding of the Group's performance in comparison with the prior year, we presented the 2021 IFRS results and non-IFRS measures core results and free cash flow excluding the impacts related to our Roche investment, due to its divestment in the fourth quarter of 2021.

The following tables provide a reconciliation of our 2021 published IFRS results and non-IFRS measures core results and free cash flow with the 2021 results, excluding the impacts related to our Roche investment, due to its divestment.

------

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Q4 2021 | Q4 2021 | Q4 2021 | Q4 2021 | FY 2021 | FY 2021 | FY 2021 | FY 2021 |
| <br>(USD millions unless indicated otherwise)  | <br>Results as <br> published  | <br> Our Roche <br> investment <br> impacts<br> excluding<br> the divestment<br> gain  | <br>Gain on<br> divestment<br> of our<br> investment<br> in Roche  | Results <br> excluding <br> impacts <br> from the <br> divestment <br> of our Roche<br> investment  | <br>Results as <br> published  | <br> Our Roche <br> investment <br> impacts<br> excluding<br> the divestment<br> gain  | <br>Gain on<br> divestment<br> of our<br> investment<br> in Roche  | Results <br> excluding <br> impacts <br> from the <br> divestment <br> of our Roche<br> investment  |
| **Operating income** | **2 562** |  |  | **2 562** | **11 689** |  |  | **11 689** |
| Income from associated companies | 14 621 | -63 | -14 556 | 2 | 15 339 | -785 | -14 556 | -2 |
| Interest expense and other financial income and expense | &nbsp;&nbsp;&nbsp;&nbsp;-232 |  | &nbsp;&nbsp;&nbsp;&nbsp;-16 | &nbsp;&nbsp;&nbsp;&nbsp;-248 | &nbsp;&nbsp;&nbsp;&nbsp;-891 |  | &nbsp;&nbsp;&nbsp;&nbsp;-16 | &nbsp;&nbsp;&nbsp;&nbsp;-907 |
| **Income before tax** | **16 951** | **-63** | **-14 572** | **2 316** | **26 137** | **-785** | **-14 572** | **10 780** |
| Income taxes | -645 |  |  | -645 | -2 119 |  |  | -2 119 |
| **Net income** | **16 306** | **-63** | **-14 572** | **1 671** | **24 018** | **-785** | **-14 572** | **8 661** |
| **Earnings per share (USD)** | 7.29 | **-0.03** | **-6.51** | 0.75 | 10.71 | **-0.35** | **-6.50** | 3.86 |
| *Effective tax rate <sup>1</sup>* | *3.8%* |  |  | *27.8%* | *8.1%* |  |  | *19.7%* |
| **Core operating income** | **3 819** |  |  | **3 819** | **16 588** |  |  | **16 588** |
| Core income from associated companies | 93 | -91 |  | 2 | 993 | -995 |  | -2 |
| Core interest expense and core other financial income and expense | &nbsp;&nbsp;&nbsp;&nbsp;-230 |  |  | &nbsp;&nbsp;&nbsp;&nbsp;-230 | &nbsp;&nbsp;&nbsp;&nbsp;-852 |  |  | &nbsp;&nbsp;&nbsp;&nbsp;-852 |
| **Core income before tax** | **3 682** | **-91** |  | **3 591** | **16 729** | **-995** |  | **15 734** |
| Core income taxes | -547 |  |  | -547 | -2 635 |  |  | -2 635 |
| **Core net income** | **3 135** | **-91** |  | **3 044** | **14 094** | **-995** |  | **13 099** |
| **Core earnings per share (USD)** | 1.40 | **-0.04** |  | 1.36 | 6.29 | **-0.45** |  | 5.84 |
| *Core effective tax rate <sup>2</sup>* | *14.9%* |  |  | *15.2%* | *15.8%* |  |  | *16.7%* |
| **Free cash flow <sup>3</sup>** | **3 027** |  |  | **3 027** | **13 282** | **-522** |  | **12 760** |
|  <sup>1</sup> Effective tax rate is calculated as Income taxes divided by Income before tax.  | <sup>1</sup> Effective tax rate is calculated as Income taxes divided by Income before tax.  | <sup>1</sup> Effective tax rate is calculated as Income taxes divided by Income before tax.  | <sup>1</sup> Effective tax rate is calculated as Income taxes divided by Income before tax.  | <sup>1</sup> Effective tax rate is calculated as Income taxes divided by Income before tax.  | <sup>1</sup> Effective tax rate is calculated as Income taxes divided by Income before tax.  | <sup>1</sup> Effective tax rate is calculated as Income taxes divided by Income before tax.  | <sup>1</sup> Effective tax rate is calculated as Income taxes divided by Income before tax.  | <sup>1</sup> Effective tax rate is calculated as Income taxes divided by Income before tax.  |
|  <sup>2</sup> Core effective tax rate is calculated as Core income taxes divided by Core income before tax.  | <sup>2</sup> Core effective tax rate is calculated as Core income taxes divided by Core income before tax.  | <sup>2</sup> Core effective tax rate is calculated as Core income taxes divided by Core income before tax.  | <sup>2</sup> Core effective tax rate is calculated as Core income taxes divided by Core income before tax.  | <sup>2</sup> Core effective tax rate is calculated as Core income taxes divided by Core income before tax.  | <sup>2</sup> Core effective tax rate is calculated as Core income taxes divided by Core income before tax.  | <sup>2</sup> Core effective tax rate is calculated as Core income taxes divided by Core income before tax.  | <sup>2</sup> Core effective tax rate is calculated as Core income taxes divided by Core income before tax.  | <sup>2</sup> Core effective tax rate is calculated as Core income taxes divided by Core income before tax.  |
|  <sup>3</sup> The free cash flow impact represents the dividend received in Q1 2021 from Roche in relation to the distribution of its 2020 net income.  | <sup>3</sup> The free cash flow impact represents the dividend received in Q1 2021 from Roche in relation to the distribution of its 2020 net income.  | <sup>3</sup> The free cash flow impact represents the dividend received in Q1 2021 from Roche in relation to the distribution of its 2020 net income.  | <sup>3</sup> The free cash flow impact represents the dividend received in Q1 2021 from Roche in relation to the distribution of its 2020 net income.  | <sup>3</sup> The free cash flow impact represents the dividend received in Q1 2021 from Roche in relation to the distribution of its 2020 net income.  | <sup>3</sup> The free cash flow impact represents the dividend received in Q1 2021 from Roche in relation to the distribution of its 2020 net income.  | <sup>3</sup> The free cash flow impact represents the dividend received in Q1 2021 from Roche in relation to the distribution of its 2020 net income.  | <sup>3</sup> The free cash flow impact represents the dividend received in Q1 2021 from Roche in relation to the distribution of its 2020 net income.  | <sup>3</sup> The free cash flow impact represents the dividend received in Q1 2021 from Roche in relation to the distribution of its 2020 net income.  |

---

---

| | | | |
|:---|:---|:---|:---|
|  | FY 2021 | FY 2021 | FY 2021 |
| <br>(USD millions)  | <br>Free cash flow <br> as published  | Dividends <br> received from <br> Roche in <br> relation to <br> the distribution<br> of its 2020 <br> net income <sup>1</sup> | <br>Free cash <br> flow excluding<br> dividends <br> received <br> from Roche  |
| **Operating income** | **11 689** |  | **11 689** |
| Adjustments for non-cash items | 7 030 |  | 7 030 |
| **Operating income adjusted for non-cash items** | **18 719** |  | **18 719** |
| Dividends received from associated companies and others | 525 | -522 | 3 |
| Interest and other financial payments, net | -953 |  | -953 |
| Income taxes paid | -2 342 |  | -2 342 |
| Other operating cash flow items, net | -878 |  | -878 |
| **Net cash flows from operating activities** | **15 071** | **-522** | **14 549** |
| Net purchases of property, plant and equipment, intangible assets, financial assets and other non-current assets  | &nbsp;&nbsp;&nbsp;&nbsp;-1 789 |  | &nbsp;&nbsp;&nbsp;&nbsp;-1 789 |
| **Free cash flow** | **13 282** | **-522** | **12 760** |
|  <sup>1</sup> In 2021, the dividend received from Roche in relation to the distribution of its 2020 net income was received in Q1 2021.  | <sup>1</sup> In 2021, the dividend received from Roche in relation to the distribution of its 2020 net income was received in Q1 2021.  | <sup>1</sup> In 2021, the dividend received from Roche in relation to the distribution of its 2020 net income was received in Q1 2021.  | <sup>1</sup> In 2021, the dividend received from Roche in relation to the distribution of its 2020 net income was received in Q1 2021.  |

---

------

The following table provides a summary of the percentage point impact from excluding the effect of the divestment of our investment in Roche (in Q4 2021) on the USD and constant currencies % change on key Group figures.

**Fourth quarter** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **In USD** | **In USD** | **In USD** | **In constant currencies** | **In constant currencies** | **In constant currencies** |
|  | **% change<br> as published<br> Q4 2022**  | **% change<br> excluding <br> impacts <br> from the <br> divestment <br> of our Roche<br> investment<br> Q4 2022**  | **<br>Percentage<br> point <br> impact<br> Q4 2022**  | **% change<br> as published<br> Q4 2022**  | **% change<br> excluding <br> impacts <br> from the <br> divestment <br> of our Roche<br> investment<br> Q4 2022**  | **<br>Percentage<br> point <br> impact<br> Q4 2022**  |
| Net income | -91 | -12 | -79 | -90 | 2 | -92 |
| Basic earnings per share (USD) | -91 | -8 | -83 | -89 | 7 | -96 |
| Free cash flow | 17 | 17 | 0 |  |  |  |
| Core net income | 4 | 7 | -3 | 14 | 17 | -3 |
| Core basic earnings per share (USD) | 9 | 12 | -3 | 19 | 23 | -4 |

---

**Full year** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **In USD** | **In USD** | **In USD** | **In constant currencies** | **In constant currencies** | **In constant currencies** |
|  | **% change<br> as published<br> FY 2022**  | **% change<br> excluding <br> impacts <br> from the <br> divestment <br> of our Roche<br> investment<br> FY 2022**  | **<br>Percentage<br> point <br> impact<br> FY 2022**  | **% change<br> as published<br> FY 2022**  | **% change<br> excluding <br> impacts <br> from the <br> divestment <br> of our Roche<br> investment<br> FY 2022**  | **<br>Percentage<br> point <br> impact<br> FY 2022**  |
| Net income | -71 | -20 | -51 | -67 | -9 | -58 |
| Basic earnings per share (USD) | -70 | -17 | -53 | -66 | -7 | -59 |
| Free cash flow | -10 | -6 | -4 |  |  |  |
| Core net income | -5 | 2 | -7 | 3 | 11 | -8 |
| Core basic earnings per share (USD) | -3 | 5 | -8 | 6 | 14 | -8 |

---

#### Net debt
**Condensed consolidated changes in net debt** 

**Fourth quarter**

---

| | | |
|:---|:---|:---|
| (USD millions) | **Q4 2022** | Q4 2021 |
| **Net change in cash and cash equivalents** | **-1 209** | **5 196** |
| Change in marketable securities, commodities, time deposits, financial debts and derivatives financial instruments | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1 648 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18 212 |
| **Change in net debt** | **439** | **23 408** |
| Net debt at October 1 | -7 684 | -24 276 |
| **Net debt at December 31** | **-7 245** | **-868** |

---

**Condensed consolidated changes in net debt**

**Full year**

---

| | | |
|:---|:---|:---|
| (USD millions) | **FY 2022** | FY 2021 |
| **Net change in cash and cash equivalents** | **-4 890** | **2 749** |
| Change in marketable securities, commodities, time deposits, financial debts and derivatives financial instruments | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-1 487 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20 864 |
| **Change in net debt** | **-6 377** | **23 613** |
| Net debt at January 1 | -868 | -24 481 |
| **Net debt at December 31** | **-7 245** | **-868** |

---

**Components of net debt**

---

| | | |
|:---|:---|:---|
| <br>(USD millions)  | **Dec 31, <br> 2022**  | Dec 31, <br> 2021  |
| Non-current financial debts | -20 244 | -22 902 |
| Current financial debts and derivative financial instruments | &nbsp;&nbsp;&nbsp;&nbsp;-5 931 | &nbsp;&nbsp;&nbsp;&nbsp;-6 295 |
| **Total financial debts** | **-26 175** | **-29 197** |
| Less liquidity |  |  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | 7 517 | 12 407 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Marketable securities, commodities, time deposits and derivative financial instruments | &nbsp;&nbsp;&nbsp;&nbsp;11 413 | &nbsp;&nbsp;&nbsp;&nbsp;15 922 |
| **Total liquidity** | **18 930** | **28 329** |
| **Net debt at end of period** | **-7 245** | **-868** |

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------

#### Share information

---

| | | |
|:---|:---|:---|
|  | **Dec 31, <br> 2022**  | Dec 31, <br> 2021  |
| Number of shares outstanding | **2 119 609 057** | 2 234 939 948 |
| Registered share price (CHF) | 83.59 | 80.28 |
| ADR price (USD) | 90.72 | 87.47 |
| Market capitalization (USD billions) <sup>1</sup> | 191.5 | 196.1 |
| Market capitalization (CHF billions) <sup>1</sup> | 177.2 | 179.4 |
|  <sup>1</sup> Market capitalization is calculated based on the number of shares outstanding (excluding treasury shares). Market capitalization in USD is based on the market capitalization in CHF converted at the year end CHF/USD exchange rate.  | <sup>1</sup> Market capitalization is calculated based on the number of shares outstanding (excluding treasury shares). Market capitalization in USD is based on the market capitalization in CHF converted at the year end CHF/USD exchange rate.  | <sup>1</sup> Market capitalization is calculated based on the number of shares outstanding (excluding treasury shares). Market capitalization in USD is based on the market capitalization in CHF converted at the year end CHF/USD exchange rate.  |

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#### Free cash flow
The following table is a reconciliation of the three major categories of the IFRS consolidated statements of cash flows to free cash flow:

**Fourth quarter**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Q4 2022** | **Q4 2022** | **Q4 2022** | Q4 2021 | Q4 2021 | Q4 2021 |
| <br>(USD millions)  | **IFRS <br> cash flow**  | **<br> Adjustments**  | **Free <br> cash flow**  | **IFRS <br> cash flow**  | **<br> Adjustments**  | **Free <br> cash flow**  |
| **Net cash flows from operating activities** | **4 111** |  | **4 111** | **3 884** |  | **3 884** |
| **Net cash flows (used in)/from investing activities <sup>1</sup>** | **-1 467** | **908** | **-559** | **4 563** | **-5 420** | **-857** |
| **Net cash flows used in financing activities <sup>2</sup>** | **-3 994** | **3 994** | **0** | **-3 251** | **3 251** | **0** |
| **Free cash flow** |  |  | **3 552** |  |  | **3 027** |
|  <sup>1</sup> Excluded from the free cash flow are cash flows from investing activities associated with acquisitions and divestments of businesses and of interest in associated companies, purchases and sales of marketable securities, commodities and time deposits.  | <sup>1</sup> Excluded from the free cash flow are cash flows from investing activities associated with acquisitions and divestments of businesses and of interest in associated companies, purchases and sales of marketable securities, commodities and time deposits.  | <sup>1</sup> Excluded from the free cash flow are cash flows from investing activities associated with acquisitions and divestments of businesses and of interest in associated companies, purchases and sales of marketable securities, commodities and time deposits.  | <sup>1</sup> Excluded from the free cash flow are cash flows from investing activities associated with acquisitions and divestments of businesses and of interest in associated companies, purchases and sales of marketable securities, commodities and time deposits.  | <sup>1</sup> Excluded from the free cash flow are cash flows from investing activities associated with acquisitions and divestments of businesses and of interest in associated companies, purchases and sales of marketable securities, commodities and time deposits.  | <sup>1</sup> Excluded from the free cash flow are cash flows from investing activities associated with acquisitions and divestments of businesses and of interest in associated companies, purchases and sales of marketable securities, commodities and time deposits.  | <sup>1</sup> Excluded from the free cash flow are cash flows from investing activities associated with acquisitions and divestments of businesses and of interest in associated companies, purchases and sales of marketable securities, commodities and time deposits.  |
|  <sup>2</sup> Net cash flows used in financing activities are excluded from the free cash flow.  | <sup>2</sup> Net cash flows used in financing activities are excluded from the free cash flow.  | <sup>2</sup> Net cash flows used in financing activities are excluded from the free cash flow.  | <sup>2</sup> Net cash flows used in financing activities are excluded from the free cash flow.  | <sup>2</sup> Net cash flows used in financing activities are excluded from the free cash flow.  | <sup>2</sup> Net cash flows used in financing activities are excluded from the free cash flow.  | <sup>2</sup> Net cash flows used in financing activities are excluded from the free cash flow.  |

---

**Full year**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **FY 2022** | **FY 2022** | **FY 2022** | FY 2021 | FY 2021 | FY 2021 |
| <br>(USD millions)  | **IFRS <br> cash flow**  | **<br> Adjustments**  | **Free <br> cash flow**  | **IFRS <br> cash flow**  | **<br> Adjustments**  | **Free <br> cash flow**  |
| **Net cash flows from operating activities** | **14 236** |  | **14 236** | **15 071** |  | **15 071** |
| **Net cash flows from/(used in) investing activities <sup>1</sup>** | **1 468** | **-3 759** | **-2 291** | **4 208** | **-5 997** | **-1 789** |
| **Net cash flows used in financing activities <sup>2</sup>** | **-20 562** | **20 562** | **0** | **-16 264** | **16 264** | **0** |
| **Free cash flow** |  |  | **11 945** |  |  | **13 282** |
|  <sup>1</sup> Excluded from the free cash flow are cash flows from investing activities associated with acquisitions and divestments of businesses and of interest in associated companies, purchases and sales of marketable securities, commodities and time deposits.  | <sup>1</sup> Excluded from the free cash flow are cash flows from investing activities associated with acquisitions and divestments of businesses and of interest in associated companies, purchases and sales of marketable securities, commodities and time deposits.  | <sup>1</sup> Excluded from the free cash flow are cash flows from investing activities associated with acquisitions and divestments of businesses and of interest in associated companies, purchases and sales of marketable securities, commodities and time deposits.  | <sup>1</sup> Excluded from the free cash flow are cash flows from investing activities associated with acquisitions and divestments of businesses and of interest in associated companies, purchases and sales of marketable securities, commodities and time deposits.  | <sup>1</sup> Excluded from the free cash flow are cash flows from investing activities associated with acquisitions and divestments of businesses and of interest in associated companies, purchases and sales of marketable securities, commodities and time deposits.  | <sup>1</sup> Excluded from the free cash flow are cash flows from investing activities associated with acquisitions and divestments of businesses and of interest in associated companies, purchases and sales of marketable securities, commodities and time deposits.  | <sup>1</sup> Excluded from the free cash flow are cash flows from investing activities associated with acquisitions and divestments of businesses and of interest in associated companies, purchases and sales of marketable securities, commodities and time deposits.  |
|  <sup>2</sup> Net cash flows used in financing activities are excluded from the free cash flow.  | <sup>2</sup> Net cash flows used in financing activities are excluded from the free cash flow.  | <sup>2</sup> Net cash flows used in financing activities are excluded from the free cash flow.  | <sup>2</sup> Net cash flows used in financing activities are excluded from the free cash flow.  | <sup>2</sup> Net cash flows used in financing activities are excluded from the free cash flow.  | <sup>2</sup> Net cash flows used in financing activities are excluded from the free cash flow.  | <sup>2</sup> Net cash flows used in financing activities are excluded from the free cash flow.  |
|  |  |  |  |  |  |  |

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------

The following table is a summary of the free cash flow:

**Fourth quarter**

---

| | | |
|:---|:---|:---|
| (USD millions) | **Q4 2022** | Q4 2021 |
| **Operating income** | **1 949** | **2 562** |
| Adjustments for non-cash items |  |  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Depreciation, amortization and impairments | 1 920 | 1 531 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Change in provisions and other non-current liabilities | 508 | 100 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Other | 49 | 172 |
| **Operating income adjusted for non-cash items** | **4 426** | **4 365** |
| Dividends received from associated companies and others |  | 2 |
| Interest and other financial receipts | 115 | 5 |
| Interest and other financial payments | -228 | -192 |
| Income taxes paid | -416 | -883 |
| Payments out of provisions and other net cash movements in non-current liabilities | -371 | -589 |
| Change in inventories and trade receivables less trade payables | 636 | 893 |
| Change in other net current assets and other operating cash flow items | -51 | 283 |
| **Net cash flows from operating activities** | **4 111** | **3 884** |
| Purchases of property, plant and equipment | -397 | -460 |
| Proceeds from sale of property, plant and equipment | 103 | 74 |
| Purchases of intangible assets | -250 | -517 |
| Proceeds from sale of intangible assets | 5 | 84 |
| Purchases of financial assets | -31 | -67 |
| Proceeds from sale of financial assets | 11 | 34 |
| Purchases of other non-current assets |  | -5 |
| Proceeds from sale of other non-current assets |  | 0 |
| **Free cash flow** | **3 552** | **3 027** |

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------

**Full year**

---

| | | |
|:---|:---|:---|
| (USD millions) | **FY 2022** | FY 2021 |
| **Operating income** | **9 197** | **11 689** |
| Adjustments for non-cash items |  |  |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Depreciation, amortization and impairments | 7 441 | 6 075 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Change in provisions and other non-current liabilities | 1 403 | 896 |
| &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;Other | 460 | 59 |
| **Operating income adjusted for non-cash items** | **18 501** | **18 719** |
| Dividends received from associated companies and others | 1 | 525 |
| Interest and other financial receipts | 325 | 13 |
| Interest and other financial payments | -728 | -966 |
| Income taxes paid | -1 975 | -2 342 |
| Payments out of provisions and other net cash movements in non-current liabilities | -885 | -1 119 |
| Change in inventories and trade receivables less trade payables | -1 467 | -329 |
| Change in other net current assets and other operating cash flow items | 464 | 570 |
| **Net cash flows from operating activities** | **14 236** | **15 071** |
| Purchases of property, plant and equipment | -1 198 | -1 378 |
| Proceeds from sale of property, plant and equipment | 167 | 240 |
| Purchases of intangible assets | -1 473 | -1 593 |
| Proceeds from sale of intangible assets | 202 | 748 |
| Purchases of financial assets | -121 | -191 |
| Proceeds from sale of financial assets | 133 | 442 |
| Purchases of other non-current assets | -1 | -61 |
| Proceeds from sale of other non-current assets |  | 4 |
| **Free cash flow** | **11 945** | **13 282** |
|  |  |  |

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**Effects of currency fluctuations**

**Principal currency translation rates**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| <br>(USD per unit)  | **<br> Average <br> rates<br> Q4 2022**  | <br> Average <br> rates<br> Q4 2021  | **<br> Average <br> rates<br> FY 2022**  | <br> Average <br> rates<br> FY 2021  | **Period-end <br> rates<br> Dec 31, <br> 2022**  | Period-end <br> rates<br> Dec 31, <br> 2021  |
| 1 CHF | 1.038 | 1.085 | 1.048 | 1.094 | 1.081 | 1.093 |
| 1 CNY | 0.141 | 0.156 | 0.149 | 0.155 | 0.144 | 0.157 |
| 1 EUR | 1.020 | 1.144 | 1.054 | 1.183 | 1.065 | 1.131 |
| 1 GBP | 1.173 | 1.349 | 1.237 | 1.376 | 1.207 | 1.351 |
| 100 JPY | 0.708 | 0.880 | 0.766 | 0.912 | 0.757 | 0.868 |
| 100 RUB | 1.589 | 1.377 | 1.481 | 1.357 | 1.380 | 1.336 |

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#### Currency impact on key figures
The following table provides a summary of the currency impact on key Group figures due to their conversion into US dollars, the Group's reporting currency, of the financial data from entities reporting in non-US dollars. Constant currency (cc) calculations apply the exchange rates of the prior year period to the current period financial data for entities reporting in non-US dollars.

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**Fourth quarter**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **<br> Change in<br> USD %<br> Q4 2022**  | **Change in<br> constant<br> currencies %<br> Q4 2022**  | **Percentage<br> point currency<br> impact<br> Q4 2022**  | <br> Change in<br> USD %<br> Q4 2021  | Change in<br> constant<br> currencies %<br> Q4 2021  | Percentage<br> point currency<br> impact<br> Q4 2021  |
| **Total Group** |  |  |  |  |  |  |
| Net sales to third parties | -4 | 3 | -7 | 4 | 6 | -2 |
| Operating income | -24 | -14 | -10 | -3 | -1 | -2 |
| Net income | -91 | -90 | -1 | nm | nm | nm |
| Basic earnings per share (USD) | -91 | -89 | -2 | nm | nm | nm |
| Core operating income | 6 | 15 | -9 | 9 | 12 | -3 |
| Core net income | 4 | 14 | -10 | 3 | 6 | -3 |
| Core basic earnings per share (USD) | 9 | 19 | -10 | 4 | 7 | -3 |
| **Innovative Medicines** |  |  |  |  |  |  |
| Net sales to third parties | -3 | 3 | -6 | 5 | 7 | -2 |
| Operating income | -21 | -12 | -9 | 3 | 6 | -3 |
| Core operating income | 5 | 14 | -9 | 12 | 15 | -3 |
| **Sandoz** |  |  |  |  |  |  |
| Net sales to third parties | -8 | 0 | -8 | 0 | 2 | -2 |
| Operating income | -29 | -20 | -9 | 4 | 4 | 0 |
| Core operating income | -26 | -18 | -8 | 0 | 0 | 0 |
| **Corporate** |  |  |  |  |  |  |
| Operating loss | 8 | 2 | 6 | -156 | -154 | -2 |
| Core operating loss | 58 | 57 | 1 | -28 | -28 | 0 |
|  |  |  |  |  |  |  |
| nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful |

---

------

**Full year**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **<br> Change in<br> USD %<br> FY 2022**  | **Change in<br> constant<br> currencies %<br> FY 2022**  | **Percentage<br> point currency<br> impact<br> FY 2022**  | <br> Change in<br> USD %<br> FY 2021  | Change in<br> constant<br> currencies %<br> FY 2021  | Percentage<br> point currency<br> impact<br> FY 2021  |
| **Total Group** |  |  |  |  |  |  |
| Net sales to third parties | – 2 | 4 | -6 | 6 | 4 | 2 |
| Operating income | -21 | -13 | -8 | 15 | 13 | 2 |
| Net income | -71 | -67 | -4 | 198 | 195 | 3 |
| Basic earnings per share (USD) | -70 | -66 | -4 | 202 | 200 | 2 |
| Core operating income | 0 | 8 | -8 | 8 | 6 | 2 |
| Core net income | -5 | 3 | -8 | 7 | 5 | 2 |
| Core basic earnings per share (USD) | -3 | 6 | -9 | 9 | 7 | 2 |
| **Innovative Medicines** |  |  |  |  |  |  |
| Net sales to third parties | – 2 | 4 | -6 | 8 | 6 | 2 |
| Operating income | -18 | -9 | -9 | 17 | 15 | 2 |
| Core operating income | 0 | 8 | -8 | 12 | 10 | 2 |
| **Sandoz** |  |  |  |  |  |  |
| Net sales to third parties | -4 | 4 | -8 | 0 | -2 | 2 |
| Operating income | -10 | -2 | -8 | 53 | 48 | 5 |
| Core operating income | -8 | -1 | -7 | -12 | -14 | 2 |
| **Corporate** |  |  |  |  |  |  |
| Operating loss | -73 | -84 | 11 | nm | nm | nm |
| Core operating loss | 31 | 28 | 3 | -23 | -20 | -3 |
|  |  |  |  |  |  |  |
| nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful | nm = not meaningful |

---

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**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 "continued," "growth," "ongoing," "to grow," "on track," "to become, "to leverage," "growing," "building," "launch," "looking ahead," "expect," "continue," "to deliver," "transformation," "focus," "address," "growing," "accelerate," "continuing," "remains," "scaling," "on track," "expected," "guidance," "to be presented," "outlook," "driven," "long-term," "driven," "innovation," "transformative," "priority," "potential," "can," "submissions," "will," "proposes," "proposal," "to reduce," "advance," 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; regarding potential future sales or earnings of the Group or any of its divisions; or by discussions of strategy, plans, expectations or intentions; or regarding the Group's liquidity or cash flow positions and its ability to meet its ongoing financial obligations and operational needs; or regarding the conclusion of the strategic review of Sandoz, our planned 100% spin-off of Sandoz, through which we plan to become a fully focused Innovative Medicines business. 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 healthcare cost containment, including ongoing government, payer and general public pricing and reimbursement pressures and requirements for increased pricing transparency; uncertainties regarding potential significant breaches of data security or data privacy, or disruptions of our information technology systems; regulatory actions or delays or government regulation generally, including potential regulatory actions or delays with respect to the development of the products described in this press release; the potential that the benefits and opportunities expected from our planned 100% spin-off of Sandoz may not be realized or may be more difficult or take longer to realize than expected; the uncertainties in the research and development of new healthcare products, including clinical trial results and additional analysis of existing clinical data; our ability to obtain or maintain proprietary intellectual property protection, including the ultimate extent of the impact on Novartis of the loss of patent protection and exclusivity on key products; safety, quality, data integrity, or manufacturing issues; uncertainties involved in the development or adoption of potentially transformational technologies and business models; uncertainties regarding actual or potential legal proceedings, investigations or disputes; our performance on environmental, social and governance measures; general political, economic and business conditions, including the effects of and efforts to mitigate pandemic diseases such as COVID-19; uncertainties regarding future global exchange rates; uncertainties regarding future demand for our products; and other risks and factors referred to in Novartis AG's current Form 20-F on file with the US Securities and Exchange Commission. 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 as a result of new information, future events or otherwise.

All product names appearing in italics are trademarks owned by or licensed to Novartis Group companies.

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**About Novartis**

Novartis is reimagining medicine to improve and extend people's lives. We deliver high-value medicines that alleviate society's greatest disease burdens through technology leadership in R&D and novel access approaches. In our quest to find new medicines, we consistently rank among the world's top companies investing in research and development. About 106,000 people of more than 140 nationalities work together to bring Novartis products to nearly 800 million people around the world. Find out more at https://www.novartis.com.

Novartis will conduct a conference call with investors to discuss this news release today at 14:00 Central European time and 8:00 Eastern Time. A simultaneous webcast of the call for investors and other interested parties may be accessed by visiting the Novartis website. A replay will be available after the live webcast by visiting https://www.novartis.com/investors/event-calendar.

Additional information is provided on Novartis divisions and pipeline of selected compounds in late stage development and a copy of today's earnings call presentation can be found at https://www.novartis.com/investors/event-calendar.

**Important dates**

March 7, 2023

Annual General Meeting

April 25, 2023

First quarter 2023 results

July 18, 2023

Second quarter & Half year 2023 results

October 24, 2023

Third quarter & Nine months 2023 results

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