Novartis completes CEO succession process with appointment of Joe
Jimenez as new CEO and simplified leadership organization
• Group delivers sustained business expansion and profit improvement with all divisions contributing to strong performance in 2009
o Net sales rise 11% in local currencies (lc) to USD 44.3 billion (+7% in USD), as innovative products drive Pharmaceuticals to industry-leading growth and Vaccines and Diagnostics sells over 100 million influenza A (H1N1) pandemic vaccine doses
o Core operating income grows 11% to USD 11.4 billion, as margin improves to 25.8% of net sales on business expansion and productivity gains
o Core net income rises 8% to USD 10.3 billion, at a lower pace than core operating income mainly due to Alcon-related financing costs
o Core EPS up 8% to USD 4.50
o Free cash flow before dividends advances 24% to USD 9.4 billion
• More than 30 drug approvals and full pipeline with 145 projects in pharmaceutical clinical development, of which 60 involve new molecular entities
• Forward productivity program exceeds savings goal by nearly 50% and a year ahead of schedule
• Access-to-medicine programs including medication for malaria and leprosy reach 80 million patients in 2009 with contributions valued at USD 1.5 billion, or 3% of sales
• New management in place for the next phase of growth

o Dr. Vasella to focus on strategic priorities as Chairman, Board names Joe Jimenez CEO and simplifies organizational structure completing the CEO succession process begun in 2008
o Novartis to become the first large, listed Swiss company to include a consultative vote on Compensation System in its Articles of Incorporation, further strengthening governance in wake of global financial crisis
• 13th consecutive dividend increase: CHF 2.10 per share proposed for 2009
• 2010 to be a year of significant progress in implementing strategic priorities with continued focus on innovation, growth and productivity.

1 Core results for operating income, net income and earnings per share (EPS) eliminate the impact of acquisition-related factors and other significant exceptional items. See page 35 for further information.
All product names appearing in italics are trademarks owned by or licensed to Novartis Group Companies.

Key figures
Full year Fourth quarter
2009 2008 % change 2009 2008 % change
USD m USD m USD lc USD m USD m USD lc
Net sales 44 267 41 459 7 11 12 926 10 077 28 20
Operating income 9 982 8 964 11 2 637 1 680 57
Net income 8 454 8 163 4 2 323 1 507 54
Basic EPS (USD) 3.70 3.59 3 1.01 0.66 53
Core1
Operating income 11 437 10 319 11 3 204 2 090 53
Net income 10 267 9 501 8 2 892 1 967 47
Basic EPS (USD) 4.50 4.18 8 1.26 0.86 47

Basel, January 26, 2010 — Commenting on the results, Dr. Daniel Vasella, Chairman and CEO of
Novartis, said: “Novartis delivered an excellent performance in 2009 driven by strong underlying
growth across our entire healthcare portfolio. Over the past 12 months, we sustained our lead in
approvals for new products, achieving more than 30 major new product approvals in the US, Europe
and Japan. Our productivity efforts improved profitability and allowed for continued investments in
drug discovery. The planned acquisition of Alcon will propel Novartis to the global leadership
position in eye-care and create a new growth platform. After 14 years as CEO it is the right time to
complete the carefully planned CEO succession process, which started over a year ago. The Board
appointed Joe Jimenez, currently division head of our pharmaceutical business as new CEO and
also agreed to delayer and simplify the top leadership structure. The international experience in
pharmaceuticals and consumer businesses together with an excellent track record destine Joe
Jimenez to lead Novartis into a next phase of expansion and growth. I am convinced 2010 will be a
year of significant progress.”

OVERVIEW
Full year
The underlying double-digit expansion in Pharmaceuticals, ranked as one of the industry’s fastestgrowing
businesses based on market share, led the Group’s healthcare portfolio in 2009 to another
year of record results. Vaccines and Diagnostics achieved exceptionally high sales by rapidly
developing and delivering influenza A (H1N1) pandemic vaccines to address the public health threat.
Net sales rose 7% (+11% in local currencies, lc) to USD 44.3 billion on the underlying expansion in
all divisions: Pharmaceuticals (+12% lc), Vaccines and Diagnostics (+39% lc), Sandoz (+5% lc) and
Consumer Health (+5% lc). Top-performing regions included Europe (USD 18.4 billion, +10% lc) and
the United States (USD 14.3 billion, +11% lc) as well as the top six emerging markets (USD 4.0
billion, +17% lc) of Brazil, China, India, Russia, South Korea and Turkey. Higher volumes contributed
10 percentage points of growth, while acquisitions and price changes together added one
percentage point of sales growth. The stronger US dollar compared to 2008 reduced full-year growth
by four percentage points.
Operating income grew 11% to USD 10.0 billion in 2009, which resulted in the operating income
margin rising to 22.5% of net sales from 21.6% in 2008. The stronger US dollar compared to 2008
reduced operating income growth by nine percentage points. Core operating income, which excludes
exceptional items and amortization of intangible assets in both periods, grew 11% to USD 11.4 billion
on improvements in Pharmaceuticals and Vaccines and Diagnostics as well as productivity gains in all
divisions. The core operating income margin rose to 25.8% of net sales from 25.0% in 2008.
Net income rose 4% to USD 8.5 billion, while basic EPS was up 3% to USD 3.70. Core net income
of USD 10.3 billion (+8%) rose at a slower pace than operating income as increased contributions
from associated companies were partially reduced by Alcon-related financing costs. Core earnings
per share were USD 4.50 in 2009, up from USD 4.18 in 2008.

Fourth quarter
Novartis ended 2009 strongly, delivering double-digit net sales and earnings growth that reflected
operational progress in all divisions and more favorable currency conditions over the 2008 period.
Net sales grew 28% (+20% lc) to USD 12.9 billion. Pharmaceuticals (+13% lc) maintained its
industry-leading performance based on growth of recently launched products. Results in Vaccines
and Diagnostics (+166% lc) included USD 1.0 billion of A (H1N1) pandemic vaccine and adjuvant
sales. Sandoz (+10% lc) benefited from the EBEWE Pharma specialty generics business
acquisition in September, which added five percentage points to sales growth. Consumer Health
(+13% lc) had better results in all businesses, particularly in OTC on the first-to-market OTC
launch of Prevacid24HR in the US.
Operating income rose 57% to USD 2.6 billion, with favorable currency movements having a positive
impact of five percentage points. The operating income margin improved to 20.4% in the 2009
quarter from 16.7% in 2008. Core operating income rose 53% to USD 3.2 billion in the 2009 quarter
on double-digit contributions from all businesses, with the core operating income margin expanding
to 24.8% of net sales in the 2009 period from 20.8% in the year-ago quarter.
Net income rose 54% to USD 2.3 billion, while basic EPS rose at the same pace to USD 1.01 in the
2009 period from USD 0.66 in 2008. Core net income was up 47% to USD 2.9 billion, which
reflected higher financing charges and reduced income from associated companies. Core basic
earnings per share (EPS) rose 47% to USD 1.26 in the 2009 quarter from USD 0.86 in the 2008.
More than 30 major approvals in 2009
Novartis is transforming its portfolio through long-term investments in innovation. More than 30
major regulatory approvals in 2009 included the new medicines Afinitor (cancer), Onbrez Breezhaler
(chronic obstructive pulmonary disease) and Ilaris (CAPS); A (H1N1) pandemic flu vaccines; the
first-ever biosimilars in Japan and Canada; and the Prevacid24HR OTC brand in the US. Among
regulatory submissions completed in 2009 included Gilenia (FTY720, multiple sclerosis) in the US
and Europe. Other key submissions involved new indications for Tasigna (first-line CML), Zometa
(adjuvant breast cancer) and Lucentis (diabetic macular edema). Novartis gained approvals in
Japan for six new medicines, while three more approvals were received in January 2010 for Equa
(Galvus), Exforge (hypertension) and Afinitor. Many submissions are planned for 2010, with up to
five in oncology: Afinitor (neuroendocrine tumors) and the development projects SOM230 (Cushing's
disease), LBH589 (Hodgkin's lymphoma) and EPO906 (ovarian cancer).
Improving organizational productivity
Novartis is integrating the drive for greater productivity and increased efficiency into its operations,
improving speed while freeing up resources to focus on customers and growth initiatives. This is
expected to lead to further improvement in the Group’s operating income margin in 2010.
Forward, the Group-wide initiative launched in late 2007 to simplify structures and redesign the
way Novartis operates, has been completed a year ahead of schedule after progressing rapidly
and achieving more than USD 2.3 billion of cumulative cost savings since 2007 and exceeding its
2010 goal of USD 1.6 billion.
Commitment to patients
Business success enables Novartis to continue its commitment to patients around the world, an
integral part of the Group’s strategy. Medicines and vaccines from Novartis were used in 2009 to
treat and protect more than 930 million people around the world, according to internal estimates.
Novartis is helping patients in the developing world through key initiatives focused on neglected
diseases, especially malaria, leprosy, dengue fever and treatment-resistant tuberculosis.
Treatments worth USD 1.5 billion were contributed through Novartis access-to-medicine programs
in 2009, reaching 79.5 million patients in need.

2010: Delivering on strategic priorities
Novartis expects 2010 to be a year of significant progress in implementing its strategy to meet the
growing needs of patients and aging societies worldwide through its healthcare portfolio.
Industry-leading growth
Novartis expects to maintain momentum in 2010 and increase Group net sales at a mid-singledigit
percentage rate in local currencies* based on the rapidly growing contributions of recently
launched products and targeted investments in emerging growth markets.
Pharmaceuticals expects to continue the strong volume growth achieved in 2009 on the rapid
expansion of recently launched products, implementing new commercial models to adapt to local
market needs while expanding in high-growth markets. However, pricing conditions are uncertain
given industry challenges that include healthcare reforms (particularly in the US and Turkey) and
biennial price cuts in Japan, while therapeutic-class generic competition is also set to start for
Diovan in 2010 ahead of the end of exclusivity in Europe (2011) and the US (September 2012).
Reflecting these factors, Pharmaceuticals net sales in 2010 are expected to grow at a mid- to
high-single digit rate in local currencies.
Vaccines and Diagnostics is preparing the launch of Menveo, a developmental vaccine against
four serogroups of meningococcal meningitis. European approval is expected in early 2010 after a
positive opinion in December 2009, while a US regulatory decision is also expected in the first half
of the year. Novartis plans to continue delivering A (H1N1) pandemic influenza vaccines and
adjuvants in 2010; however, sales estimates for the year are well below 2009 levels.
Sandoz expects to increase its pace of growth in 2010. The addition of EBEWE Pharma’s specialty injectables business in September 2009 has created a new global growth platform by improving access to price competitive quality oncology medicines.
Consumer Health aims to keep growing ahead of its markets in 2010. The late 2009 US launch of Prevacid24HR, the first OTC version of this drug for frequent heartburn pain, has created an important new brand. Novartis will launch an OTC version of pantoprazole, another proton pump inhibitor, in 14 European countries in the second quarter of 2010 after gaining rights from Nycomed.
The addition of Alcon, the global leader in eye care, will strengthen the Novartis healthcare portfolio and provide a greater presence in the fast-growing global eye care sector. Novartis announced on January 4 its intention to gain full ownership of Alcon by first completing the April 2008 agreement with Nestlé S.A. to acquire a 77% majority stake and subsequently entering into
an all-share direct merger with Alcon for the remaining 23% minority stake. This merger, which will be implemented under the Swiss Merger Act, is in the interest of all stakeholders and will provide the needed clarity on Alcon’s future. Following the merger, Alcon will become a new Novartis
division that incorporates CIBA Vision and certain Novartis ophthalmic medicines.
Board selects new CEO and simplifies the top leadership organization
The Board has accepted Dr. Daniel Vasella's proposal to complete the CEO succession process after serving 14 years as CEO and 11 years as Chairman and CEO, by appointing Joe Jimenez, currently Head of the Pharmaceuticals Division as Novartis' new CEO. Dr. Vasella will continue in his role as Chairman of the Board concentrating on strategic priorities. This completes the
succession plan which began in 2008 with the creation of a transitional COO position and the appointment of new divisional management. The business portfolio has been successfully transformed to focus on healthcare, the research organization is highly respected and the pipeline is full and highly valued. Novartis' reputation is among the best in its industry and beyond, led by a world-class leadership team. So, it is timely to transition to a new CEO.
The Board has selected Joe Jimenez with complete trust in his global leadership capabilities, based on his outstanding performance track record, broad international business experience and his ability to provide direction, align and engage people. These skills will be crucial for implementing Novartis' strategy. Jimenez will take over the CEO responsibilities as of February 1, 2010.

* Excluding Alcon acquisition