Driven by record results in 2003, annual dividend reaches CHF 1.00 per share(+5%), increasing for the 7th year in a row
New share buyback program for up to 3 billion CHF approved
Continued dynamic business growth and new record income level expected for 2004
Basel, 24 February 2004 - At the Annual General Meeting held in Basel today, 2,714 shareholders, representing 933,365,449 votes or 33.32% of the 2,801,470,000 shares issued, approved all proposals of the Board of Directors, including a 5% rise in the dividend to CHF 1.00 per share. The increase marked the seventh year, since the merger, that the dividend has climbed. The company's consistent strategic focus drove record results in 2003, with performance outpacing the market, and all business units gaining market share.
Chairman's address
In his address, Dr. Vasella attributed the company's strong 2003 performance to the success of its core pharmaceuticals business, which showed particularly dynamic growth in the key oncology and cardiovascular franchises, with cancer medicines Glivec, Femara, Zometa, and the blood pressure medication Diovan delivering especially impressive results. The company's commitment to innovation is evident in the full pipeline of 79 projects, of which 64 are in Phase II or III. Dr. Vasella highlighted the company's unique position of providing both innovative medicines and high quality generics in an environment where costs are spiraling due to an aging population.
"Novartis seeks to offer patients, physicians and health insurers the best possible range of medicines - a combination of innovative medicines and high-quality, cost effective generics," Dr. Vasella said. "Our commitment to continuously innovate will improve medical therapies, as novel drugs meet patients needs. By providing doctors with a range of treatment options, we make a unique contribution to improving patients' health and controlling costs."
Dr. Vasella thanked Novartis associates for their commitment, which is the foundation for the company's good results. The positive culture and working environment was recognized by Fortune magazine as Novartis was just named one of "10 Great Companies to Work for in Europe."
Dr. Vasella emphasized the priority placed on transparency and good corporate governance. In 2003, the company implemented the new regulations of Sarbanes-Oxley Section 302, and this year will implement Section 404.
In terms of outlook, Dr. Vasella concluded. "Overall, we expect to see further dynamic growth in the high single-digit region, additional gains in market share, and a new record level of income, barring any unforeseen events."
Further share repurchase program approved
The new CHF 3 billion share buyback program continues a strategy of returning surplus liquidity to shareholders by using up to half of free cash flow to repurchase company stock and reduce share capital. Novartis completed buyback programs of CHF 4 billion each in 1999 and 2001.
Board elections and terms of office
Shareholders also amended the Articles of Incorporation to allow a director who has reached the statutory age of retirement or completed twelve years in office to be re-elected for more than one further three-year term.
Directors Hans-Jörg Rudloff, Professor Dr. Helmut Sihler and Dr. Daniel Vasella were re-elected for three-year terms. Professor Sihler, who stood for re-election at the board's request, has announced his intention to retire from the board after two years.
Two new directors were added in 2003, Professor Srikant Datar and Dr. Wendelin Wiedeking. With the retirement of directors Walter G. Frehner and Heini Lippuner, the board now comprises twelve members.
This release contains certain "forward-looking statements", relating to the Company's business, which can be identified by the use of forward-looking terminology such as "expected", "will", "intention", "expect" or similar expressions, or by discussions of strategy, plans or intentions. Such statements reflect the current views of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performances or achievements that may be expressed or implied by such forward-looking statements. In particular, management's expectations could be affected by, among other things, new clinical data; unexpected clinical trial results; unexpected regulatory actions or delays or government regulation generally; the company's ability to obtain or maintain patent or other proprietary intellectual property protection; competition in general; and other risks and factors referred to in the Company's current Form 20-F on file with the US 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. 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 contained in this press release as a result of new information, future events or otherwise.
About Novartis
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.
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