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Novartis International AG: Novartis delivers strong sales and innovation in 2013; underlying business performance reinforces



 Novartis International AG: Novartis delivers strong sales and innovation in
      2013; underlying business performance reinforces growth prospects

Novartis International AG / Novartis delivers strong sales and innovation in
2013; underlying business performance reinforces growth prospects . Processed
and transmitted by NASDAQ OMX Corporate Solutions. The issuer is solely
responsible for the content of this announcement.

  * Net sales up 4% in constant currencies[1] in 2013, despite generic erosion
    of USD 2.2 billion

       * Net sales of USD 57.9 billion (+2%, +4% cc)
       * Operating income of USD 10.9 billion (-3%, +5% cc)
       * Core[1] operating income of USD 14.5 billion (-2%, +3% cc)
       * Core EPS of USD 5.09 (-1%, +4% cc)  
       * Free cash flow[1] of USD 9.9 billion (-13%)

  * Dividend of CHF 2.45 per share, up 7%, proposed for 2013; 74% payout of
    net income

  * Strong momentum in innovation continued with 18 approvals in 2013

       * Major approvals for Ultibro Breezhaler in COPD and Bexsero in MenB
         infections; first European approval for AirFluSal Forspiro in asthma
         and COPD in fourth quarter
       * Regulatory submission for AIN457 in moderate-to-severe plaque
         psoriasis in US and EU
       * Strong newsflow from Novartis Oncology: positive pivotal trial for
         LBH589 in multiple myeloma; LEE011 advanced to Phase III in breast
         cancer; continued positive data in CTL019 in leukemia
       * Sandoz initiated Phase III trial for adalimumab (Humira^®), advancing
         its biosimilars pipeline

  * Group performance driven by growth products[2] and Emerging Growth
    Markets[2] expansion

       * Growth products grew 15% to USD 18.1 billion or 31% of Group net
         sales in 2013
       * Emerging Growth Markets up 10% (cc) in 2013; up 12% (cc) in fourth
         quarter
       * Underlying business, which excludes USD 2.2 billion generics impact,
         saw net sales up 8% (cc) and core operating income up 15% (cc) in
         2013

  * Sharpened execution of strategy in 2013 and delivering shareholder returns

       * Divestment of blood transfusion diagnostics unit as part of ongoing
         portfolio management
       * Initiated USD 5.0 billion share buyback, reinforcing confidence in
         growth prospects

  * Outlook 2014:

       * Group net sales to grow low to mid-single digit (cc), core operating
         income to grow ahead of sales (cc). This assumes Diovan monotherapy
         US generic launch at the beginning of Q2 2014[3]
       * This is consistent with January 2013 outlook, adjusted for the delay
         in Diovan monotherapy generic launch in the US

Key figures      Q4 2013 Q4 2012[4] % change  FY 2013 FY 2012[4] % change
                   USD m      USD m  USD  cc    USD m      USD m  USD  cc
Net sales         15 078     14 828    2   4   57 920     56 673    2   4
Operating income   2 373      2 401   -1  10   10 910     11 193   -3   5
Net income         2 058      2 022    2  13    9 292      9 383   -1   7
EPS (USD)           0.83       0.82    1  13     3.76       3.83   -2   6
Free cash flow     3 319      3 513   -6        9 945     11 383  -13
Core
Operating income   3 395      3 594   -6   2   14 485     14 842   -2   3
Net income         2 955      3 042   -3   4   12 533     12 576    0   5
EPS (USD)           1.20       1.24   -3   4     5.09       5.15   -1   4

[1] Constant currencies (cc), core results, and free cash flow are non-IFRS
measures. An explanation of these non-IFRS measures and reconciliation tables
can be found beginning on page 46 of the 2013 Condensed Financial Report.
[2] Growth products are defined on page 2, and Emerging Growth Markets are
defined on page 7.
[3] Assumption for forecasting purposes only. Outlook excludes the blood
transfusion diagnostics unit in 2013 and 2014.
[4] Restated as explained in the the 2013 Condensed Financial Report on pages
36 and 72.
All product names appearing in italics are trademarks owned by or licensed to
Novartis Group Companies.

Basel, January 29, 2014 - Commenting on the results, Joseph Jimenez, CEO of
Novartis, said:
"Novartis delivered strong performance in 2013, growing both net sales and
core operating income in constant currencies while absorbing patent
expirations. We maintained good momentum in innovation, with 18 approvals and
3 FDA Breakthrough Therapy designations. Our growth products continued to
expand, rejuvenating our portfolio and reinforcing our growth prospects."

GROUP REVIEW

Fourth quarter

Group net sales grew on strong execution of growth products[1]
Group net  sales increased  2% (+4%  cc) to  USD 15.1  billion in  the  fourth 
quarter. Currency had a  negative impact of 2  percentage points, mainly  from 
the weakened  yen and  weakening  emerging market  currencies against  the  US 
dollar.

Excluding the impact of generic competition of approximately USD 0.4  billion, 
mainly due  to Zometa/Aclasta and  Diovan,  underlying net  sales grew  7%  in 
constant currencies. Growth  products contributed  USD 4.8 billion  or 32%  of 
Group net sales, up 15% over the prior-year quarter.

Group operating income decreased 1% (+10% cc) to USD 2.4 billion. The negative
impact of 11  percentage points  from currency  was greater  than in  previous 
quarters primarily  due to  a further  strengthening of  the Swiss  franc  and 
weakening of the  yen and emerging  market currencies in  the fourth  quarter. 
Operating income margin declined 0.5 percentage  points to 15.7% of net  sales 
mainly due to currency, with operating income margin improving 1.0  percentage 
points in constant currencies. The adjustments made to Group operating  income 
to arrive at core operating income amounted to USD 1.0 billion (2012: USD  1.2 
billion).

Core operating income was down 6% (+2% cc) to USD 3.4 billion. Core  operating 
income margin in constant currencies declined 0.5 percentage points;  currency 
had a negative impact of 1.2 percentage points, resulting in a net decline  of 
1.7 percentage points to 22.5% of net sales.

Excluding the impact of generic competition, underlying core operating  income 
grew 10% in constant currencies.

Group net income of USD 2.1 billion was up 2% in reported terms, and up 13% in
constant currencies, principally due to operating income performance and lower
income tax. EPS was up 1% (+13% cc) to USD 0.83, in line with net income.

Group core net income of USD 3.0 billion was down 3% in reported terms, but up
4% in constant currencies,  from core operating  income performance and  lower 
income tax. Core EPS declined 3% (+4% cc)  to USD 1.20, in line with core  net 
income.

Pharmaceuticals net sales, which  continued to benefit  from delayed entry  of 
generic competition for Diovan monotherapy in the US, reached USD 8.3  billion 
(+1%, +4%  cc) in  the fourth  quarter,  driven by  strong volume  growth  (+9 
percentage points), partly offset  by the impact  of generic competition  (USD 
0.4 billion,  -5 percentage  points), mainly  for Zometa/Aclasta  and  Diovan. 
Growth  products,  including Gilenya,  Afinitor,  Tasigna,  Galvus,  Lucentis, 
Xolair, the Q Family[2] and Jakavi, together generated USD 3.3 billion or  40% 
of division net sales, compared to 33% in the prior-year period.

Pharmaceuticals operating income was up 5%  (+14% cc) to USD 2.0 billion,  due 
to higher sales and higher exceptional charges in the prior-year quarter. Core
operating income  declined 6%  (+2% cc)  to USD  2.1 billion.  Core  operating 
income margin in  constant currencies declined  0.6 percentage points,  mainly 
due to increased royalties and generic erosion, partly offset by  productivity 
savings from  Marketing  &  Sales;  currency had  a  negative  impact  of  1.4 
percentage points, resulting  in a net  decrease of 2.0  percentage points  to 
25.6% of net sales.

[1] "Growth products" comprise products launched in 2008 or later, or products
with exclusivity until at  least 2017 in key  markets (EU, US, Japan)  (except 
Sandoz, which includes  only products  launched in  the last  24 months).  The 
definition of growth products is maintained in all comparisons to prior year.
[2]  The  Q   Family  includes Arcapta   Neohaler/Onbrez  Breezhaler,   Seebri 
Breezhaler and Ultibro Breezhaler.

Alcon net sales  amounted to  USD 2.7  billion  (+3%, +6%  cc) in  the  fourth 
quarter, driven by newly launched products. Surgical performance (+5%, +9% cc)
was driven by Alcon's new phacoemulsification platform, Centurion, as well  as 
demand for other equipment platforms,  including the LenSx femtosecond  laser. 
Ophthalmic Pharmaceuticals franchise performance (+2%,  +5% cc) was driven  by 
growth of combination  glaucoma and  dry-eye products. Vision  Care also  grew 
(+1%, +4% cc), with solid sales in contact lenses, including Dailies Total1.

Alcon operating income was USD 172 million (-47%, -30% cc), decreasing  mainly 
due to higher amortization of intangible assets, timing of integration-related
costs, and exceptional restructuring costs.  Core operating income of USD  851 
million was down 5% in reported terms, but up 1% in constant currencies.  Core 
operating income margin  in constant  currencies decreased  by 1.6  percentage 
points largely due to  product mix with the  growth of the surgical  equipment 
business and Marketing &  Sales investments to  support new product  launches; 
currency had a negative  impact of 1.2 percentage  points, resulting in a  net 
decrease of 2.8 percentage points to 32.1% of net sales.

Sandoz net sales of  USD 2.4 billion  (+1%, +1% cc)  showed a slight  increase 
over the prior-year quarter, which  included high US authorized generic  sales 
of valsartan  HCT  and  four months  of  Fougera  sales. Volume  growth  of  9 
percentage points  more than  compensated for  price erosion  of 8  percentage 
points. Western  Europe (excluding  Germany)  and emerging  markets  delivered 
strong sales growth,  offset by declines  in the US  and Germany. Sandoz  also 
continued to strengthen its global leadership position in biosimilars (USD 119
million, +26% cc) in the fourth quarter.

Sandoz operating income of USD 276 million was down 3% in reported terms,  but 
up 3%  in  constant  currencies,  primarily due  to  lower  exceptional  items 
compared to the prior year. Core operating income declined by 10% (-6% cc)  to 
USD 373 million. Core operating income margin in constant currencies decreased
by 1.2 percentage  points, mainly  driven by the  very high-margin  prior-year 
sales of valsartan HCT  in the US  as well as the  extra month of  high-margin 
Fougera sales  in the  2012 quarter.  Currency had  a negative  impact of  0.6 
percentage points, resulting  in a net  decrease of 1.8  percentage points  to 
15.5% of net sales.

Vaccines and Diagnostics net  sales were up  4% (+3% cc)  to USD 655  million, 
driven by seasonal influenza, pre-pandemic sales including H7N9 in the US  and 
Menveo growth, partially offset by lower  pediatric bulk sales due to  earlier 
supply phasing.  We also  commenced  the first  sales  of Bexsero  to  several 
European private markets. Operating income was USD 42 million compared to  USD 
41 million in the prior-year quarter. Core operating income was USD 93 million
compared to USD 99 million in 2012.

Consumer Health, which comprises OTC and Animal Health, saw net sales grow  8% 
(+10% cc) to USD 1.0  billion in the fourth  quarter, mainly driven by  strong 
performance of  key  brands  globally  and  product  re-launches  in  the  US. 
Operating income increased to  USD 48 million,  compared to a  loss of USD  12 
million in the prior-year quarter, as gross margin from incremental sales  was 
partially offset by commercial investment behind the growth of key brands  and 
product re-launches. Core operating income was USD 60 million. Core  operating 
income margin in constant currencies increased 4.4 percentage points; currency
had a negative impact of 1.0 percentage point, resulting in a net increase  of 
3.4 percentage points to 5.8% of net sales.

Full year

Strong net sales performance more than offset impact of generic competition
Group net sales increased to USD 57.9 billion in the full year, up 2% (+4% cc)
over 2012. Currency had a negative impact of 2 percentage points, mainly  from 
the weakening yen and emerging market currencies against the US dollar.

Excluding the  impact of  generic  competition, underlying  sales grew  8%  in 
constant currencies. Growth products  contributed USD 18.1  billion or 31%  of 
Group net sales, up from  28% in 2012. Loss  of exclusivity impacted sales  by 
approximately USD 2.2 billion, mainly due to Diovan and Zometa/Aclasta. 

Group operating  income was  USD  10.9 billion  (-3%,  +5% cc).  The  negative 
currency impact of 8 percentage points was greater than the currency impact on
sales, as the yen and emerging market currencies represent a larger proportion
of  operating  income  than  sales.  Operating  income  margin  declined   1.0 
percentage points to 18.8% of net sales, due to a negative currency impact  of 
1.1 percentage  points with  the  margin improving  0.1 percentage  points  in 
constant currencies.

Core operating  income was  USD 14.5  billion (-2%,  +3% cc).  Core  operating 
income margin  in  constant currencies  decreased  by 0.3  percentage  points, 
mainly from lower gross margins due  to higher royalties and generic  erosion, 
as well as R&D investment in  Pharmaceuticals; currency had a negative  impact 
of 0.9 percentage points, resulting in a net decrease of 1.2 percentage points
to 25.0%  of net  sales. The  adjustments made  to Group  operating income  to 
arrive at core  operating income amounted  to USD 3.6  billion (2012: USD  3.6 
billion).

Excluding the impact of generic competition, underlying core operating  income 
grew 15% in constant currencies.

Group net income of USD 9.3 billion was  down 1% in reported terms, but up  7% 
in constant currencies,  due to  operating income  performance, higher  income 
from associated companies  and lower net  financial expense. EPS  was down  2% 
(+6% cc), in line with net income, to USD 3.76.

Group core net income was USD 12.5 billion, flat in reported terms, but up  5% 
in constant currencies, ahead  of core operating income  mainly due to  higher 
income from associated companies  and lower net  financial expenses. Core  EPS 
was USD 5.09 (-1%, +4% cc), largely following core net income.

Pharmaceuticals delivered net sales of USD 32.2  billion (0%, +3% cc) for  the 
full year, driven by strong volume  growth (+9 percentage points) and  pricing 
(+1  percentage  point),  which  more  than  offset  the  impact  of   generic 
competition (USD 2.2 billion, -7 percentage points). Growth products grew  25% 
in constant currencies and contributed USD 12.3 billion or 38% of division net
sales in 2013, compared to 31% in 2012.

Pharmaceuticals operating  income was  USD  9.4 billion  (-2%, +3%  cc).  Core 
operating income  declined 7%  (-1% cc)  to USD  9.5 billion.  Core  operating 
income margin in constant currencies declined by 1.3 percentage points, mainly
due to increased  investments into  promising R&D  pipeline assets,  increased 
royalties and  generic erosion,  partly offset  by productivity  savings  from 
Marketing & Sales; currency  had a negative impact  of 0.9 percentage  points, 
resulting in a net decrease of 2.2 percentage points to 29.6% of net sales.

Alcon net sales were  USD 10.5 billion  (+3%, +5%  cc) in the  full year.  The 
Surgical franchise grew 4% (+7% cc), driven by procedure growth, market  share 
gains and demand for LenSx and Centurion equipment. Ophthalmic Pharmaceuticals
franchise growth (+2%, +5% cc) was due to broad market share gains across  key 
segments, but was impacted by generic competition in the US glaucoma  segment. 
Vision Care grew (+2%, +4% cc), as  sales growth in contact lenses was  partly 
offset by declines in the contact lens care market.

Alcon operating  income of  USD 1.2  billion (-16%,  -2% cc)  was impacted  by 
integration and restructuring  charges, partially offset  by sales growth  and 
productivity gains. Core operating income of USD 3.7 billion was in line  with 
prior year in reported terms, but up 6% in constant currencies. Core operating
income margin  in  constant currencies  increased  by 0.1  percentage  points; 
currency had a negative  impact of 1.1 percentage  points, resulting in a  net 
decrease of 1.0 percentage point to 35.2% of net sales.

Sandoz net sales  increased by  5% (+5%  cc)  to USD  9.2 billion,  driven  by 
double-digit retail generics and biosimilars sales increases in Western Europe
(excluding Germany), Japan and emerging markets. Biosimilars accounted for USD
420 million (+23% cc)  of net sales globally.  Volume increased 14  percentage 
points, including  3  percentage  points contributed  by  Fougera,  more  than 
offsetting price erosion of  9 percentage points,  driven primarily by  higher 
pricing for enoxaparin (generic Lovenox^®) in the first half of 2012.

Sandoz operating income  decreased by  6% (-3% cc)  to USD  1.0 billion.  Core 
operating income  grew by  3% (+4%  cc)  to USD  1.5 billion.  The  difference 
between reported  and  core  operating  income growth  was  driven  by  higher 
exceptional items, particularly USD 85 million for legal provisions,  compared 
to the  previous year.  Core operating  income margin  in constant  currencies 
decreased by 0.1  percentage points;  currency had  a negative  impact of  0.4 
percentage points, resulting  in a net  decrease of 0.5  percentage points  to 
16.8% of net sales.

Vaccines and Diagnostics net sales increased 7% (+6% cc) to USD 2.0 billion in
the full year, driven  by higher Menveo sales,  seasonal influenza demand  and 
pre-pandemic sales. Operating loss was USD 165 million, compared to a loss  of 
USD 250 million in 2012. Core operating income was USD 65 million, compared to
a loss of USD 75 million in 2012.

Consumer Health returned to growth in 2013 as net sales increased 9% (+10% cc)
to USD  4.1 billion,  driven by  both the  OTC and  Animal Health  businesses. 
Operating  income  of  USD  178  million  was  driven  by  gross  margin  from 
incremental sales and higher income  from minor divestments, partially  offset 
by commercial investment behind re-launches and restructuring expenses related
to the Lincoln, Nebraska, USA manufacturing site in the first quarter of 2013.
Core operating  income  increased 87%  (+95%  cc)  to USD  298  million.  Core 
operating income  margin  in  constant  currencies  increased  3.4  percentage 
points; currency had a negative impact of 0.4 percentage points, resulting  in 
a net increase of 3.0 percentage points to 7.3% of net sales.

Executing on innovation, growth and productivity

A consistent focus on three priorities - innovation, growth and productivity -
across our portfolio  guides every aspect  of our long-term  strategy. In  the 
fourth quarter, we  took significant steps  to sharpen the  execution of  that 
strategy, strengthening shareholder value.

Innovation: Strong  momentum  across the  portfolio  continued in  the  fourth 
quarter

The fourth quarter  saw continued pipeline  progress with positive  regulatory 
decisions and significant clinical trial  data released. Key developments  are 
included below.

New approvals and positive opinions

  * Europe and Australia approved Lucentis pre-filled syringe
    Novartis received regulatory approval for a pre-filled syringe for
    Lucentis (ranibizumab) in Europe and Australia. The syringe, specifically
    designed for intraocular injection, will contain a ready-to-use solution
    of Lucentis that is identical in composition to the solution in vials.

  * Alcon received positive recommendations in UK and Germany for Jetrea
    The National Institute for Health and Care Excellence (NICE) recommended
    Jetrea (ocriplasmin) to treat eligible patients suffering from symptomatic
    vitreomacular adhesion and vitreomacular traction when associated with
    macular hole. The German Federal Joint Committee (G-BA) has also concluded
    that Jetrea provides significant added benefit to VMT patients.

  * Sandoz received first European approval for AirFluSal Forspiro
    (LABA/ICS[3])
    Sandoz received marketing authorization in Denmark for AirFluSal Forspiro
    (salmeterol and fluticasone), a novel inhaler for patients with asthma
    and/or chronic obstructive pulmonary disease. AirFluSal Forspiro received
    additional European approvals including Germany and Sweden in January
    2014. The approvals follow the successful completion of EU decentralized
    procedures.

Regulatory submissions and filings

  * AIN457 in psoriasis submitted in US and EU
    A regulatory application for the use of AIN457 (secukinumab) to treat
    moderate-to-severe plaque psoriasis was submitted in the US and EU, after
    results from a Phase III study demonstrated that AIN457 is significantly
    superior to the standard of care in clearing skin.

  * US and EU submissions accepted for SigniforLAR
    Regulatory applications were submitted in the US and EU for Signifor
    LAR[4] (pasireotide) for the treatment of patients with acromegaly for
    whom medical therapy is appropriate.

  * Application submitted for LDK378 in US
    A regulatory application was submitted in the US for LDK378 (ceritinib), a
    potent and selective oral anaplastic lymphoma kinase (ALK) inhibitor, in
    ALK positive non-small cell lung cancer. LDK378 received Breakthrough
    Therapy designation from the FDA in 2013.

[3] AirFluSal Forspiro offers a combination of salmeterol (a long-acting
inhaled ß[2]-agonist, or LABA) and fluticasone (an inhaled corticosteroid, or
ICS) in an innovative new inhalation device.
[4] Long-acting release

Results from important clinical trials and other highlights

  * New data on CTL019 showcased at the American Society of Hematology (ASH)
    Data at ASH add to the scientific understanding of the investigational
    chimeric antigen receptor therapy, CTL019, and its potential role in the
    treatment of certain types of lymphocytic leukemia. Findings included that
    19 of 22 (86%) pediatric patients with acute lymphoblastic leukemia
    treated with the therapy experienced complete remissions, and 15 of 32
    (47%) adult patients with refractory chronic lymphocytic leukemia
    responded to the therapy, with seven experiencing complete remission.

  * Phase III Jakavi results showed improved overall survival in patients with
    myelofibrosis
    Data from two Phase III studies found that Jakavi (ruxolitinib) reduced
    the risk of death for myelofibrosis patients and maintained spleen
    reductions at three years compared to conventional therapies and placebo.
    Separate analysis showed Jakavi may increase the probability of 10-year
    survival of patients by more than 50%.

  * LBH589 significantly extended time without disease progression in multiple
    myeloma
    A study of LBH589 (panobinostat) in combination with bortezomib and
    dexamethasone met its primary endpoint of significantly extending
    progression-free survival in patients with relapsed or relapsed and
    refractory multiple myeloma when compared to bortezomib plus dexamethasone
    alone.

  * New data presented at ASH supported superiority of Tasigna over Glivec
    Findings from three large Phase III studies, including five-year data in
    newly diagnosed patients, demonstrated the superiority of Tasigna
    (nilotinib) over Glivec (imatinib) in achieving deeper molecular responses
    across various patient populations with Philadelphia chromosome-positive
    chronic myeloid leukemia.

  * Initiation of Phase III trial in breast cancer for LEE011
    Novartis initiated a Phase III trial in December for LEE011 in combination
    with letrozole, for the treatment of breast cancer.

  * Sandoz begins eighth Phase III biosimilars trial
    Sandoz initiated a Phase III trial for its biosimilar version of
    adalimumab (Humira^®), the leading treatment of several autoimmune
    conditions including rheumatoid arthritis, psoriasis and Crohn's disease.

  * Bexsero used in Princeton University vaccination program for MenB
    Following an outbreak of meningococcal serogroup B (MenB) disease, the FDA
    approved an Investigational New Drug application for Novartis vaccine
    Bexsero at Princeton University. In Europe, Bexsero launched in several
    private markets.

  * Positive results for H7N9 vaccine in clinical trial
    Clinical trial data for the H7N9 avian influenza vaccine showed that 85%
    of subjects achieved a protective immune response after two doses.

Growth: Strong commercial  execution and  global presence  continued to  drive 
growth

In the  fourth  quarter,  key  growth  drivers  -  including  growth  products 
like Gilenya,  Afinitor,  Tasigna,  Galvus, Lucentis and Xolair,  as  well  as 
biosimilars and  Emerging  Growth  Markets  -  continued  to  demonstrate  the 
strength of our portfolio across disease areas and geographies.

Growth products

  * Growth products continued to rejuvenate the portfolio, and contributed 32%
    of Group net sales in the fourth quarter, up 15% over 2012. For example,
    Galvus (USD 328 million in fourth quarter, +37% cc), our oral type 2
    diabetes treatment, reached blockbuster status with USD 1.2 billion in
    full year sales.

Emerging Growth Markets

  * Net sales in our Emerging Growth Markets - which comprise all markets
    except the US, Canada, Western Europe, Japan, Australia and New Zealand -
    grew 12% (cc) in the fourth quarter, contributing USD 4.0 billion or 26%
    to Group net sales. In the full year, Emerging Growth Markets were up 10%
    (cc) to USD 14.7 billion. Growth was led by double-digit growth in both
    China and Russia.

Productivity: Continued focus on efficiency to improve margins

Ongoing productivity initiatives relate to procurement and resource allocation
across the portfolio,  as well  as our manufacturing  network, offshoring  and 
service hubs and R&D. Improving  productivity and leveraging synergies  across 
divisions will help  us support the  bottom line, but  also create  additional 
potential for investment, driving growth and accelerating development.

  * In Procurement, our focus on leveraging our scale generated savings of
    approximately USD 470 million in the fourth quarter and USD 1.5 billion in
    the full year.

  * We continued to optimize our manufacturing footprint with the announced
    closure of our Alcon contact lens care manufacturing facility in
    Mississauga (Canada) in the fourth quarter, and our Pharmaceuticals
    manufacturing site in Suffern, NY (USA) in January 2014[5], bringing the
    total number of production sites that have been, or are in the process of
    being, restructured or divested to 20. Related to this initiative, we
    recorded exceptional charges of USD 115 million in 2013. This brings total
    exceptional charges to USD 515 million cumulatively since the program
    began in the fourth quarter of 2010. Furthermore, we also started to
    consolidate our global research function, and in the fourth quarter
    announced the closure of four sites, which resulted in exceptional charges
    of USD 118 million in the quarter.

  * Aside from our manufacturing and research functions, we regularly review
    our resource allocation to ensure that it supports our portfolio needs. In
    January 2014, we announced changes to the size and structure of the US
    Primary Care Business Unit in the Pharmaceuticals Division, as well as a
    shift of positions within Switzerland, mainly within Pharmaceuticals, to
    support new products launches and improve efficiency, with overall
    headcount in Switzerland and globally remaining relatively flat in 2014.

  * We also made productivity gains through global business service hubs, with
    a focus on knowledge services like clinical development and regulatory and
    medical affairs, and outsourcing, with a focus on transactional and
    commoditized processes in Finance and IT.

Quality: Continued focus on quality remediation

Novartis  continues  to  focus   on  optimizing  technical  capabilities   and 
instilling a  sustainable  culture  for  quality  and  compliance  across  the 
network. There were a total of  53 global health authority inspections  during 
the fourth quarter (262 in  the full year), 5 of  which were conducted by  the 
FDA (31 in  the full year).  All FDA  inspections in the  fourth quarter  were 
assessed as good or  satisfactory, including the  week-long inspection of  our 
Lincoln, Nebraska, USA manufacturing site, which concluded with zero Form  483 
observations. In addition, the FDA upgraded the compliance status of our  site 
in Boucherville, Canada in January  2014. These inspections, coupled with  our 
metrics and  quality indicators,  confirm that  our intense  focus on  quality 
systems upgrades continues to result in progress.

[5] Restructuring costs for Suffern will be incurred from the first quarter of
2014 onwards.

Free cash flow

Free cash flow  of USD 3.3  billion for the  fourth quarter was  6% below  the 
previous year,  mainly due  to lower  operating income,  higher investment  in 
property, plant  and equipment,  and the  phasing of  tax payments,  partially 
offset by improved cash collection and lower inventory.

For the full year, free cash flow of  USD 9.9 billion was 13% below the  prior 
year. Aside  from  the significant  currency  impact, major  reasons  for  the 
decline were increased accounts receivables and higher capital investments  in 
manufacturing and research facilities.

Strategy, capital structure and net debt

Strong cash flows and a sound capital structure have allowed Novartis to focus
on  driving  innovation,  growth  and  productivity  across  its   diversified 
healthcare portfolio, while  keeping its  double-A rating as  a reflection  of 
financial strength and  discipline. Within this  target rating, Novartis  will 
allocate  capital   to  a   growing   dividend  and   value-creating   bolt-on 
acquisitions, as well as  the USD 5.0 billion  share buyback announced in  the 
fourth quarter. Retaining a good balance between investment in the business, a
strong capital  structure and  attractive shareholder  returns will  remain  a 
priority in the future.

During 2013,  approximately 29  million treasury  shares were  delivered as  a 
result of options  exercised related  to employee  participation programs  and 
repurchases of employee shares. Novartis is mitigating the dilutive impact  of 
these programs on an ongoing basis and has re-purchased 33 million shares (USD
2.5 billion)  on  the  SIX Swiss  Exchange  first  trading line  in  2013.  In 
addition, on November  22, 2013,  Novartis announced  that it  would buy  back 
shares on the second trading  line up to an amount  of USD 5.0 billion  spread 
over two years. This repurchase is being done on the basis of a decision  made 
by the Annual General Meeting  in 2008 for a share  buy-back program of up  to 
CHF 10.0 billion, of which CHF 7.5  billion was still available at the end  of 
2013. As of year-end, we had repurchased 2.2 million shares (valued at USD 0.2
billion).

As of December 31, 2013,  net debt stood at USD  8.8 billion, compared to  USD 
11.6 billion at December 31, 2012. Free cash flow of USD 9.9 billion generated
in 2013 was  used for the  dividend payment of  USD 6.1 billion  in the  first 
quarter and year-to-date  net share  repurchases of  USD 1.2  billion and  the 
reduction of net debt.  A USD 2.0  billion bond issued in  2010 was repaid  at 
maturity during the second quarter.

Subsequent to the year end, on January 9, 2014, Novartis closed the divestment
of its blood transfusion diagnostics unit to Grifols S.A. for USD 1.7 billion,
further streamlining  its  portfolio  and enhancing  its  focus  on  strategic 
businesses. The  estimated  pre-tax  gain  on  this  transaction,  subject  to 
finalization of the accounting, will be approximately USD 0.9 billion.

The long-term credit rating for the company continues to be double-A  (Moody's 
Aa3; Standard & Poor's AA-; Fitch AA). Moody's downgraded Novartis from Aa2 to
Aa3 in February 2013.

2014 Group outlook

Barring unforeseen events
Group net sales in 2014 are expected to grow at a low to mid-single digit rate
(cc), after absorbing the impact of generic competition, which is expected  to 
be as  much as  USD 3.0  billion compared  to USD  2.2 billion  in 2013.  This 
assumes a Diovan monotherapy US generic launch occurs at the beginning of  the 
second quarter of  2014.[6] Group core  operating income is  expected to  grow 
ahead of sales (cc) in 2014.

Excluding the effect of the delay in the Diovan monotherapy generic launch  in 
the US, we  confirm our  January 2013  guidance for  2014 of  Group net  sales 
growing at least mid-single digit and  core operating income growing ahead  of 
sales (cc).

From a divisional perspective, we expect net sales performance (cc) in 2014 to
be as follows:

  * Pharmaceuticals: in line with 2013;
  * Alcon: grow mid to high-single digit;
  * Sandoz: grow mid to high-single digit.

Annual General Meeting

Dividend proposal
The Board proposes a dividend  payment of CHF 2.45 per  share for 2013, up  7% 
from CHF 2.30 per  share in 2012, representing  the 17th consecutive  dividend 
increase since the creation  of Novartis in  December 1996. Shareholders  will 
vote on this proposal at the  2013 Annual General Meeting (AGM) scheduled  for 
February 25, 2014. The payout ratio as a percentage of net income is  expected 
to increase from 66% to 74%.

Changes to strengthen and simplify Novartis governance
To further align Novartis corporate  governance with the highest standards  of 
ethical and transparent business  practices and corporate responsibility,  the 
Board of Directors has made a number of changes, effective January 1, 2014.

As part of these changes, operational responsibilities that previously  rested 
with the Chairman or the Chairman's Committee, such as approval authority  for 
management compensation, have  been transferred  to the CEO  or the  Executive 
Committee. The Chairman's Committee has been discontinued.

In addition, a new  Board Committee, the  Research and Development  Committee, 
has been established. This  committee will oversee  Novartis R&D strategy  and 
advise the  Board  and  the  Executive  Committee  on  scientific  trends  and 
activities critical to R&D  success. The Board  also expanded the  Governance, 
Nomination and  Corporate  Responsibility  Committee  to  cover  the  Novartis 
corporate responsibility agenda and public  issues of significance that  could 
affect investors and other Novartis stakeholders.

Re-elections to the Board of Directors, Election of the Chairman of the  Board 
of Directors
In accordance  with  the Swiss  Ordinance  against Excessive  Compensation  in 
Listed Stock Corporations, as from January 1, 2014, the Annual General Meeting
elects each member of the Board of Directors and the Chairman of the Board  of 
Directors individually each year.

William Brody, M.D., Ph.D.,  and Rolf M. Zinkernagel,  M.D., will retire  from 
the Board as they have reached the statutory age limit. In addition, Dr.  Ing. 
Wendelin Wiedeking has decided not to  seek another term of office. The  Board 
and management  team of  Novartis thank  Mr. Brody,  Mr. Zinkernagel  and  Mr. 
Wiedeking for their many years of distinguished services on the Novartis Board
of Directors.

The Board of Directors proposes  the election of Joerg Reinhardt, Ph.D.  (also 
as Chairman of the Board of Directors  in a single vote), Dimitri Azar,  M.D., 
MBA, Verena A. Briner, M.D., Srikant Datar, Ph.D., Ann Fudge, Pierre  Landolt, 
Ph.D., Ulrich Lehner, Ph.D.,  Andreas von Planta,  Ph.D., Charles L.  Sawyers, 
M.D., Enrico Vanni, Ph.D., and William T.  Winters as members of the Board  of 
Directors, each until the end of the next Annual General Meeting.

The Board of Directors proposes to hold advisory votes on the compensation  of 
the Board  of Directors  and the  Executive Committee  at the  Annual  General 
Meeting 2014. Amendments to the Articles of Incorporation of Novartis AG  will 
be proposed for the Annual General Meeting 2015 in line with the  requirements 
of  the  Swiss  Ordinance  against  Excessive  Compensation  in  Listed  Stock 
Corporations.

[6] This is an assumption for forecasting purposes. We do not know when
generic competition will enter in the US for Diovan monotherapy. Our outlook
excludes the blood transfusion diagnostics unit in 2013 and 2014.

Summary Financial Performance

Group

                      Q4 2013 Q4 2012 % change  FY 2013 FY 2012 % change
                        USD m   USD m  USD  cc    USD m   USD m  USD  cc
Net sales              15 078  14 828    2   4   57 920  56 673    2   4
Operating income        2 373   2 401   -1  10   10 910  11 193   -3   5
  As % of net sales      15.7    16.2              18.8    19.8
Core operating income   3 395   3 594   -6   2   14 485  14 842   -2   3
  As % of net sales      22.5    24.2              25.0    26.2

Pharmaceuticals

                      Q4 2013 Q4 2012 % change  FY 2013 FY 2012 % change
                        USD m   USD m  USD  cc    USD m   USD m  USD  cc
Net sales               8 323   8 276    1   4   32 214  32 153    0   3
Operating income        2 013   1 924    5  14    9 376   9 598   -2   3
  As % of net sales      24.2    23.2              29.1    29.9
Core operating income   2 133   2 281   -6   2    9 523  10 213   -7  -1
  As % of net sales      25.6    27.6              29.6    31.8

Alcon

                      Q4 2013 Q4 2012 % change  FY 2013 FY 2012 % change
                        USD m   USD m  USD  cc    USD m   USD m  USD  cc
Net sales               2 655   2 576    3   6   10 496  10 225    3   5
Operating income          172     323  -47 -30    1 232   1 465  -16  -2
  As % of net sales       6.5    12.5              11.7    14.3
Core operating income     851     899   -5   1    3 694   3 698    0   6
  As % of net sales      32.1    34.9              35.2    36.2

Sandoz

                      Q4 2013 Q4 2012 % change  FY 2013 FY 2012 % change
                        USD m   USD m  USD  cc    USD m   USD m  USD  cc
Net sales               2 411   2 387    1   1    9 159   8 702    5   5
Operating income          276     284   -3   3    1 028   1 091   -6  -3
  As % of net sales      11.4    11.9              11.2    12.5
Core operating income     373     414  -10  -6    1 541   1 503    3   4
  As % of net sales      15.5    17.3              16.8    17.3

Vaccines and Diagnostics

                        Q4 2013 Q4 2012 % change  FY 2013 FY 2012 % change
                          USD m   USD m  USD  cc    USD m   USD m  USD  cc
Net sales                   655     628    4   3    1 987   1 858    7   6
Operating income/loss        42      41    2   6     -165    -250   34  34
  As % of net sales         6.4     6.5              -8.3   -13.5
Core operating income/loss   93      99   -6  -6       65     -75   nm  nm
  As % of net sales        14.2    15.8               3.3    -4.0
nm - not meaningful

Consumer Health

                      Q4 2013 Q4 2012 % change  FY 2013 FY 2012 % change
                        USD m   USD m  USD  cc    USD m   USD m  USD  cc
Net sales               1 034     961    8  10    4 064   3 735    9  10
Operating income/loss      48     -12   nm  nm      178      48   nm  nm
  As % of net sales       4.6    -1.2               4.4     1.3
Core operating income      60      23   nm  nm      298     159   87  95
  As % of net sales       5.8     2.4               7.3     4.3
nm - not meaningful

Our 2013  Annual Report  as well  as  a condensed  financial report  with  the 
information listed  in  the  index  below  can be  found  on  our  website  at 
http://hugin.info/134323/R/1757594/594098.pdf.

Novartis Q4 and FY 2013 Condensed Financial Report - Supplementary Data

INDEX                                                                     Page
GROUP AND DIVISIONAL OPERATING PERFORMANCE Q4 AND FULL YEAR 2013
Group                                                                      2
Pharmaceuticals                                                            5
Alcon                                                                      11
Sandoz                                                                     14
Vaccines and Diagnostics                                                   16
Consumer Health                                                            17
CASH FLOW AND GROUP BALANCE SHEET                                          19
INNOVATION REVIEW                                                          21
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Condensed consolidated income statements                                   29
Condensed consolidated statements of comprehensive income                  31
Condensed consolidated balance sheets                                      32
Condensed consolidated changes in equity                                   33
Condensed consolidated cash flow statements                                34
Notes to condensed consolidated financial statements, including update on  36
legal proceedings
SUPPLEMENTARY INFORMATION                                                  46
CORE RESULTS
Reconciliation from IFRS to core results                                   48
Group                                                                      50
Pharmaceuticals                                                            52
Alcon                                                                      54
Sandoz                                                                     56
Vaccines and Diagnostics                                                   58
Consumer Health                                                            60
Corporate                                                                  62
ADDITIONAL INFORMATION
Condensed consolidated changes in net debt / Share information             63
Free cash flow                                                             64
Net sales of the top 20 Pharmaceuticals products in 2013                   65
Pharmaceuticals sales by business franchise                                67
Net sales by region                                                        69
Currency translation rates/Income from associated companies                71
Restatement information                                                    72
DISCLAIMER                                                                 74

Disclaimer
This press release contains forward-looking statements that can be  identified 
by words such as "prospects," "proposed," "momentum," "pipeline,"  "strategy," 
"ongoing,"  "confidence,"   "outlook,"  "to   grow,"  "promising,"   "positive 
recommendation," "recommended," "potential,"  "breakthrough therapy,"  "will," 
"in process," "priority," "proposal," "could," or similar terms, or by express
or  implied  discussions  regarding  potential  new  products,  potential  new 
indications for existing products, or regarding potential future revenues from
any such  products;  potential  shareholder returns  or  credit  ratings,  the 
potential outcome of the share buyback being initiated; or regarding potential
future sales or earnings of the Novartis Group or any of its divisions; or  by 
discussions of strategy,  plans, expectations  or intentions.  You should  not 
place undue reliance on these statements. Such forward-looking statements  are 
based on the current beliefs  and expectations of management regarding  future 
events,  and  are  subject  to   significant  known  and  unknown  risks   and 
uncertainties. Should one or more of these risks or uncertainties materialize,
or should  underlying assumptions  prove incorrect,  actual results  may  vary 
materially from those set forth  in the forward-looking statements. There  can 
be no guarantee that any new products will be approved for sale in any market,
or that any new indications will be approved for any existing products in  any 
market, or  that any  approvals which  are obtained  will be  obtained at  any 
particular time, or that any such products will achieve any particular revenue
levels. Nor can  there be  any guarantee  that shareholders  will achieve  any 
particular level of shareholder returns or regarding the potential outcome  of 
the share buyback being  initiated.  Neither can there  be any guarantee  that 
the Group, or  any of its  divisions, will be  commercially successful in  the 
future, or achieve any particular  credit rating. In particular,  management's 
expectations could be affected by,  among other things, unexpected  regulatory 
actions or delays or government  regulation generally; the potential that  the 
strategic benefits, synergies or opportunities expected from the divestment of
our former blood transfusion diagnostics unit may not be realized or may  take 
longer to  realize  than  expected; the  inherent  uncertainties  involved  in 
predicting shareholder returns or  credit ratings; the uncertainties  inherent 
in research and development, including  unexpected clinical trial results  and 
additional analysis of existing clinical data; the Company's ability to obtain
or  maintain  proprietary  intellectual  property  protection,  including  the 
ultimate extent of the impact on the Company of the loss of patent  protection 
and exclusivity  on key  products  which commenced  in  prior years  and  will 
continue this year; unexpected manufacturing and quality issues, including the
final resolution of the Warning Letters  previously issued to us with  respect 
to Sandoz and Consumer Health  manufacturing facilities; global trends  toward 
health  care   cost   containment,  including   ongoing   pricing   pressures; 
uncertainties regarding  actual  or potential  legal  proceedings,  including, 
among others, actual or potential product liability litigation, litigation and
investigations   regarding   sales   and   marketing   practices,   government 
investigations  and  intellectual  property  disputes;  general  economic  and 
industry conditions; uncertainties regarding  the effects of the  persistently 
weak global  economic  and  financial  environment,  including  the  financial 
troubles in certain Eurozone countries; uncertainties regarding future  global 
exchange rates;  uncertainties  regarding  future  demand  for  our  products; 
uncertainties involved  in the  development of  new healthcare  products;  and 
other risks and factors referred to in Novartis AG's current Form 20-F on file
with the  US Securities  and Exchange  Commission. 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 as  a  result  of  new 
information, future events or otherwise.

Humira^® and Lovenox^® are registered trademarks of their respective owners.

About Novartis
Novartis provides innovative healthcare solutions that address the evolving
needs of patients and societies. Headquartered in Basel, Switzerland, Novartis
offers a diversified portfolio to best meet these needs: innovative medicines,
eye care, cost-saving generic pharmaceuticals, preventive vaccines and
diagnostic tools, over-the-counter and animal health products. Novartis is the
only global company with leading positions in these areas. In 2013, the Group
achieved net sales of USD 57.9 billion, while R&D throughout the Group
amounted to approximately USD 9.9 billion (USD 9.6 billion excluding
impairment and amortization charges). Novartis Group companies employ
approximately 136,000 full-time-equivalent associates and operate in more than
140 countries around the world. For more information, please visit
http://www.novartis.com.

Novartis issued  its 2013  Annual Report  today, and  it is  available on  its 
website at www.novartis.com.  Novartis will  also today file  its 2013  Annual 
Report on Form 20-F with the  US Securities and Exchange Commission, and  will 
post this document  on www.novartis.com. Novartis  shareholders may receive  a 
hard copy of  either of these  documents, each of  which contain our  complete 
audited financial statements, free of charge, upon request.

Important dates
February 25, 2014 Annual General Meeting
April 24, 2014    First quarter results 2014
June 17-18, 2014  Novartis investor event in Switzerland
July 17, 2014     Second quarter results 2014
October 28, 2014  Third quarter results 2014

Please find full media release in English attached and on the following link:
http://hugin.info/134323/R/1757594/594143.pdf

Further language versions are available through the following links:

German version is available through the following link:
http://hugin.info/134323/R/1757596/594141.pdf

French version is available through the following link:
http://hugin.info/134323/R/1757595/594142.pdf

IFR (PDF)
Media release (PDF)

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This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf
of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for
the content, accuracy and originality of the information contained therein.
Source: Novartis International AG via Globenewswire
HUG#1757594

--- End of Message ---

Novartis International AG
P.O. Box Basel Switzerland

WKN: 904278;ISIN: CH0012005267;
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