23% rise in free cash flow in 2003, on top of strong liquidity, prompts buy-back for up to CHF 3 billion
Basel, 22 January 2004 - Novartis AG announced today that its Board of Directors will propose a new share repurchase program for up to CHF 3 billion to the shareholders at their forthcoming Annual General Meeting (AGM). The Board will also propose reducing Novartis' share capital by the amounts repurchased each year, starting in 2005.
"Our strong full-year performance generated record levels of net income and a 23% increase in free cash flow. We are continuing our policy of using up to half the free cash flow not reserved for acquisitions to repurchase shares, and thus to return surplus liquidity to our shareowners", said Daniel Vasella, Chairman and CEO of Novartis. "The share buyback still enables us to maintain a high degree of strategic flexibility and financial muscle to capture attractive opportunities, when they arise," he added.
Novartis completed similar programs in 1999 and 2001, both for CHF 4 billion. A third, also for a total of CHF 4 billion, was initiated in July 2002 and is still ongoing. By the end of 2003, approximately 24 million shares for a total of CHF 2.7 billion had been repurchased and are to be cancelled subject to approval by the AGM on 24 February 2004.
Once approved by the AGM, the new program will start after the ongoing one has been completed. Shares will be repurchased over an unspecified period via a second trading line on virt-x. The program will apply exclusively to Novartis shares listed on the SWX Swiss Exchange and not to Novartis American Depositary Shares (ADSs) traded on the New York Stock Exchange.
Novartis AG (NYSE: NVS) is a world leader in pharmaceuticals and consumer health. In 2003, the Group's businesses achieved sales of USD 24.9 billion and a net income of USD 5.0 billion. The Group invested approximately USD 3.8 billion in R&D. Headquartered in Basel, Switzerland, Novartis Group companies employ about 78 500 people and operate in over 140 countries around the world. For further information please consult http://www.novartis.com.
This release contains certain "forward-looking statements", relating to the Group's business, which can be identified by the use of forward-looking terminology such as "will", "are to be", or similar expressions, or by express or implied statements regarding future cash flow, amounts of shares to be bought back under the program described above, or potential acquisitions. Such statements reflect the current views of the Group with respect to this share repurchase program and are subject to certain risks, uncertainties and assumptions. There can be no guarantee that Novartis will achieve any particular level of cash flow in the future, or that Novartis will repurchase any particular amount of shares under the program described above. Neither can there be any guarantees regarding the existence or non-existence of major acquisitions in the future. Many factors could cause Novartis' actual performance, and the actual performance of the share repurchase program to be materially different from any future results, performances or achievements that may be expressed or implied by such forward-looking statements. In particular, subsequent events may limit the amount of capital available for such repurchases, or could otherwise make the repurchase program and the intended reduction of share capital unattractive. Other factors are discussed in the Group's Form 20-F filed with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected.
The following applies, among others, to the United States of America and to US persons:
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