Novartis Reports Q4 Net Sales Down 4% YoY, Forecasts Modest Revenue Growth for 2023

SmartCom APP learned that Swiss pharmaceutical giant Novartis (NVS.US) announced on Wednesday that its net sales in the fourth quarter were $12.69 billion, a year-on-year decrease of 4%, or an increase of 3% at constant exchange rates, falling short of market expectations of $13.13 billion; net profit was $1.47 billion, a plunge of 91% from $16.31 billion in the same period last year; earnings per share were $0.69, down from $7.29 in the same period last year.

Sales volume increased by 10 percentage points, but sales revenue was negatively affected by price reductions and generic drug competition.

The sharp drop in Q4 profits is related to the Roche equity deal in 2021. In November 2021, Novartis agreed to sell its entire stake in Roche—53.3 million freely tradable shares—for $20.7 billion, adding $14.6 billion to Novartis' net profit. Excluding the impact of the Roche equity transaction, Novartis Pharmaceuticals’ net profit increased by 2% at constant exchange rates.

Core net profit was $3.25 billion, compared to $3.14 billion in the same period last year; core earnings per share were $1.52, surpassing market expectations of $1.44, and were $1.40 in the same period last year.

Core operating profit was US$4.03 billion, a year-on-year increase of 6%.

In addition, the Board of Directors of Novartis AG has proposed a dividend of CHF 3.20 per share for 2022, representing a 3.2% increase over the previous year. Shareholders will vote on this proposal at the Annual General Meeting on March 7.

Looking ahead to the 2023 fiscal year, Novartis expects sales to grow in the low to mid-single digits and core operating profit to grow in the mid-single digits, assuming Sandoz remains part of the group for the entire year.

Excluding Sandoz, Novartis expects sales growth in the low to mid-single digits and core operating profit growth in the mid to high single digits for the 2023 fiscal year.

Novartis stated that the company will proceed with the planned spin-off of its generics division, Sandoz, in the second half of the year. The tax impact of the transaction is expected to be neutral for Novartis.