Novartis AG · SIX:NOVN
Novartis — JP Morgan Conference 2015
29 slides from Novartis's conference presentation, Jan 12, 2015
Slide 1: Novartis: transforming our company for the future market
Novartis: transforming our company for the future market Joe Jimenez | CEO Novartis JP Morgan Conference | San Francisco | January 12, 2015
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements that can be identified by words such as “potential,” “expected,” “will,” “planned,” or similar terms, or by express or implied discussions regarding potential new products, potential new indications for existing products, or regarding
Slide 3: Agenda
Agenda How we see our industry evolving 2014: delivering results and transforming our company Priorities for 2015 Q&A 3 | JPM | J. Jimenez | 12 January 2015 | Novartis: transforming our company
Slide 4: Powerful trends are changing the healthcare landscape
Powerful trends are changing the healthcare landscape Population Additional Chronic will increase by 50+ year olds diseases 1 >500 70% billion million of all illnesses 2 0 1 5 - 2 0 2 5 Source: Projections from UN; WHO 4 | JPM | J. Jimenez | 12 January 2015 | Novartis: transforming our company
Slide 5: Healthcare spending will double as a result
Healthcare spending will double as a result Healthcare spending to double1 2x 2 0 1 5 - 2 0 2 5 1Projected Global Healthcare Spend, expressed in nominal terms | Source: Economist intelligence Unit, World Bank, Global Insights, BMI, OECD, McKinsey Strategy & Trend Analytic Center 5 | JPM | J. Jimenez
Slide 6: We expect competition to intensify
We expect competition to intensify More breakthrough Tech companies drugs and devices entering healthcare 2 0 1 5 - 2 0 2 5 6 | JPM | J. Jimenez | 12 January 2015 | Novartis: transforming our company
Slide 7: The implications for Novartis
The implications for Novartis To succeed, industry leaders will need: Science-based R&D and innovation power Global scale Broad partnerships to deliver outcomes 7 | JPM | J. Jimenez | 12 January 2015 | Novartis: transforming our company
Slide 8: Agenda
Agenda How we see our industry evolving 2014: delivering results and transforming our company Priorities for 2015 Q&A 8 | JPM | J. Jimenez | 12 January 2015 | Novartis: transforming our company
Slide 9: Our strategy to lead in this environment
Our strategy to lead in this environment PAT I E N T S To deliver In Science- better growing based patient areas of innovation outcomes healthcare 9 | JPM | J. Jimenez | 12 January 2015 | Novartis: transforming our company
Slide 10: 2014 focus
2014 focus To set us up for future success, we focused in 2014 on operational excellence and transforming Novartis Operational Strengthened innovation excellence Delivered strong financial results Transformed the portfolio1 Transforming Captured cross-divisional synergies the company Reshaping the c
Slide 11: Our pipeline produced several exciting innovative products
Our pipeline produced several Operational excellence Strengthened innovation exciting innovative products Select 2014 milestones LCZ696 AIN457 US FDA approval Chronic heart failure Psoriasis • FDA Fast Track designation Superior efficacy to Enbrel® • Positive CHMP opinion • 20% reduction in • Positi
Slide 12: We continued to invest in breakthrough therapies
We continued to invest in Operational excellence Strengthened innovation breakthrough therapies Immuno-oncology Regenerative medicine Accommodating lenses Cellular immunotherapy, Examples Partnering with Google to with CTL019 BYM338 for muscle weakness develop accommodating Building competitive targ
Slide 13: ...While delivering strong financial results
Operational excellence Delivered financial results ...While delivering strong financial results Our key financial accomplishments In CC, vs PY Core operating margin Total Shareholder Sales growth1 9M 2014 improvement1 Return growth (CHF) 9M 2014 FY 2014 +3% +1.2 ppts +34.0% Emerging Growth Markets +
Slide 14: We continued our strong track record in Emerging Growth Markets
We continued our strong track record Operational excellence Delivered financial results in Emerging Growth Markets Emerging Growth Markets growth +10%1 In CC, vs PY +10% Led by China 9M growth +18% in cc +6% 9M 2011 9M 2012 9M 2013 9M 2014 1 2014 group growth rates are based on 2013 data excluding t
Slide 15: 2014 focus
2014 focus To set us up for future success, we focused in 2014 on operational excellence and transforming Novartis Operational Strengthened innovation excellence Delivered strong financial results Transformed the portfolio1 Transforming Captured cross-divisional synergies the company Reshaping the c
Slide 16: Novartis portfolio transformation is progressing on track
Novartis portfolio transformation is Transforming the company Portfolio transformation progressing on track 2014 milestones 1 8 Jan 22 Apr 1 Jul 26 Oct 1 Jan Closed Announced agreement to: Established Announced Closed divestiture of • Acquire GSK oncology Novartis agreement to divestiture of blood p
Slide 17: This transformation positions Novartis for success
This transformation positions Transforming the company Portfolio transformation Novartis for success1 Deliver right medicine, Improve the Increase affordability of to right patient, world’s vision medicines and access at right time 1 All uncompleted transactions are subject to closing conditions 17
Slide 18: We created Novartis Business Services
Transforming the company Cross-divisional opportunities We created Novartis Business Services To deliver standardized services at lower cost to the divisions Financial Human Real Estate Global Information Reporting & Procurement Resources & Facility Business Technology Accounting Services Services S
Slide 19: We are reshaping the company culture
Transforming the company Re-shaping our culture We are reshaping the company culture Key 2014 activities Focused our Appointed Accelerated our values and Chief Ethics, corporate responsibility behaviors Compliance and activities, appointed Policy Officer new head of CR 19 | JPM | J. Jimenez | 12 Jan
Slide 20: The market is recognizing our future growth potential
The market is recognizing our future growth potential YTD Share Price Performance 30-Dec-2013 to 30-Dec-2014 Share Price CHF % TSR(1) CHF % Novartis 29.7% 34.0% 94 91 Novartis (ORD (2)) in CHF 88 85 CHF 82 79 Source: 76 Bloomberg, 73 retrieved 5-Jan-2015; (1) TSR = Total 70 Shareholder Return; 30-De
Slide 21: Agenda
Agenda How we see our industry evolving 2014: delivering results and transforming our company Priorities for 2015 Q&A 21 | JPM | J. Jimenez | 12 January 2015 | Novartis: transforming our company
Slide 22: Our priorities in 2015 are expected to continue to position us for future success
Our priorities in 2015 are expected to continue to position us for future success 2015 priorities 1 2 3 4 5 Strong financial Strengthen Complete Capture Build a results and innovation the portfolio cross-divisional high-performing discipline transformation synergies organization 22 | JPM | J. Jimene
Slide 23: In innovation, we will invest in our breakthrough therapies
2 Innovation In innovation, we will invest in our breakthrough therapies LCZ696 AIN457 CTL019 Heart failure Psoriasis Oncology 23 | JPM | J. Jimenez | 12 January 2015 | Novartis: transforming our company
Slide 24: We expect to complete the closing of the portfolio transformation
3 We expect to complete the closing of the Complete the portfolio portfolio transformation transformation Close Integrate Separate Start-up Close GSK Execute Execute Ensure transactions in integration of separation of successful first half 2015 GSK oncology Vaccines start-up of business Consumer Hea
Slide 25: We expect NBS to continue to deliver synergies
4 Capture cross-divisional We expect NBS to continue to deliver synergies opportunities Execute NBS plans • Deliver cost targets Capture additional • Execute transformation and cross-divisional synergies change management plans e.g. TechOps • Delivery high-quality services 25 | JPM | J. Jimenez | 12
Slide 26: We will continue our efforts to build a high-performing organization
We will continue our efforts to build a 5 Build a high-performing high-performing organization organization Compliance & Talent Reputation & Values Quality Strengthen compliance Improve talent retention Embed quality culture and company and development, across divisions reputation embedding values a
Slide 27: Why should you own Novartis?
Why should you own Novartis? Strong and growing pipeline Further margin expansion opportunities Portfolio of leading businesses with innovation power and global scale 27 | JPM | J. Jimenez | 12 January 2015 | Novartis: transforming our company
Slide 28: Agenda
Agenda How we see our industry evolving 2014: delivering results and transforming our company Priorities for 2015 Q&A 28 | JPM | J. Jimenez | 12 January 2015 | Novartis: transforming our company
Slide 29: 1) NOVARTIS
1) NOVARTIS