Chairman’s letter

Novartis delivered strong performance in 2019. New product launches together with a disciplined focus on costs and operational efficiency helped us increase sales, operating income and operating profit margin. Looking ahead, we are well positioned to continue our growth trajectory as we pursue our goal of driving science-based medical innovation.

Joerg Reinhardt – Chairman of the Board of Directors (Photo)

With the successful spin-off of our former eye care division, Alcon, in early 2019, we concluded a major step in our portfolio transformation to create a more focused medicines company. We are active in disease areas with high unmet needs and have a leading portfolio of highly innovative drugs, including recently launched breast cancer therapy Piqray, eye care treatment Beovu, multiple sclerosis drug Mayzent, and our gene therapy Zolgensma for spinal muscular atrophy.

Going forward, we continue to strive for business excellence across all our divisions and functions. We are continually streamlining our business services and production platforms. We are also introducing innovative digital technologies to support our research, development and production efforts. As the digitization of our operations and the overall healthcare industry gains pace, we are also taking action to minimize cyber risks and protect patient data.

Our recent moves in the areas of gene therapies, radioligand therapies and digital health reflect our position at the forefront of scientific discovery

As a global healthcare leader, we are working to spearhead cutting-edge medical development. Our recent moves in the areas of gene therapies, radioligand therapies and digital health reflect our position at the forefront of scientific discovery. To develop breakthrough therapies that can help change the practice of medicine, we are intent on attracting the best industry talent, collaborating with leading technology partners, and pursuing acquisitions to strengthen and expand high-tech therapy platforms.

We have also established clear environmental, social and governance (ESG) targets for our management. With a view to reaching the highest international environmental standards, we aim to become carbon neutral by 2025, and plastic and water neutral by 2030, and have put processes in place to minimize the carbon footprint of our supply chain. Likewise, the implementation of our Access Principles is gaining pace with the approval of innovative medicines in low- and middle-income countries, including migraine treatment Aimovig and cancer drug Kisqali.

Although we still have work to do, we are also making good progress in efforts to enhance our integrity standards as part of a broader cultural transformation. In our strengthened governance framework, our Ethics, Risk & Compliance (ERC) function is developing a principles-based Code of Ethics to support our employees in navigating the increasingly complex healthcare landscape and managing associated risks. The Board of Directors and the Executive Committee are fully committed to further improving our business ethics principles to become one of the most trusted healthcare partners in the industry.

I thank you for the confidence you have placed in our company and am pleased to be able to propose a dividend increase of 4% to CHF 2.95 at the next Annual General Meeting.

Sincerely,
Joerg Reinhardt
Chairman of the Board of Directors