Press Release: Novartis delivered high single-digit sales growth, achieved 40% core margin and further advanced the pipeline in 2025

Ad hoc announcement pursuant to Art. 53 LR

Full year

-- Net sales grew +8% (cc1, +8% USD) with core operating income1 up +14% (cc,

+12% USD)

-- Sales growth driven by continued strong performance from priority

brands including Kisqali (+57% cc), Kesimpta (+36% cc), Pluvicto

(+42% cc), Scemblix (+85% cc) and Cosentyx (+8% cc)

-- Core operating income margin1 was 40.1%, +210 basis points (cc)

-- Operating income grew +25% (cc, +21% USD); net income up +19% (cc, +17%

USD)

-- Core EPS1 grew +17% (cc, +15% USD) to USD 8.98

-- Free cash flow1 of USD 17.6 billion (+8% USD) driven by higher net cash

flows from operating activities

Fourth quarter

-- Net sales -1% (cc, +1% USD), impacted by US generic erosion and revenue

deduction adjustments; core operating income +1% (cc, +1% USD)

-- Priority brands continued their strong momentum including Kisqali

(+44% cc), Kesimpta (+27% cc), Pluvicto (+70% cc), Scemblix (+87%

cc) and Cosentyx (+11% cc)

-- Q4 selected innovation milestones:

-- Remibrutinib FDA submission for the most common subtype of CINDU

-- Pelabresib positive Phase III MANIFEST-2 96-week data; filing

planned in EU, US Phase III planned

-- Itvisma FDA approval as the only gene replacement therapy for a

broad SMA population

-- Scemblix EC approval for newly diagnosed patients with Ph+ CML in

chronic phase

-- Pluvicto FDA submission for PSMA+ metastatic hormone-sensitive

prostate cancer

Dividend, guidance

-- Dividend of CHF 3.70 per share, an increase of 5.7%, proposed for 2025

-- 2026 guidance2 -- Net sales expected to grow low single-digit and core

operating income expected to decline low single-digit

Basel, February 4, 2026 -- Commenting on Q4 2025 results, Vas Narasimhan, CEO of Novartis, said:

"Novartis delivered strong performance in 2025, with high single-digit sales growth and core margin expansion despite significant US generic entries. Growth drivers Kisqali, Kesimpta, Pluvicto, Scemblix and Cosentyx continued their strong trajectory. We advanced several potential multi-blockbusters in our pipeline, with FDA approvals and positive Phase III readouts across Rhapsido, Pluvicto, Itvisma and ianalumab. We also strengthened our pipeline through strategic deals, including the proposed acquisition of Avidity, which we expect to close in the first half. In 2026, we expect to grow through the largest patent expiry in Novartis history, underscoring the strength of our business, and remain well on track to deliver our mid-term guidance."

Key figures

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Q4 2025 Q4 2024 % change FY 2025 FY 2024 % change

USD m(3) USD m(3) USD cc USD m(3) USD m(3) USD cc

-------- -------- ---- ---- -------- -------- ----- ---

Net sales 13 336 13 153 1 -1 54 532 50 317 8 8

-------------- -------- -------- ---- ---- -------- -------- ----- ---

Operating

income 3 616 3 530 2 4 17 644 14 544 21 25

-------------- -------- -------- ---- ---- -------- -------- ----- ---

Net income 2 404 2 820 -15 -14 13 967 11 939 17 19

-------------- -------- -------- ---- ---- -------- -------- ----- ---

EPS (USD) 1.26 1.42 -11 -11 7.21 5.92 22 24

-------------- -------- -------- ---- ---- -------- -------- ----- ---

Free cash flow 1 655 3 635 -54 17 596 16 253 8

-------------- -------- -------- ---- ---- -------- -------- ----- ---

Core operating

income 4 929 4 859 1 1 21 889 19 494 12 14

-------------- -------- -------- ---- ---- -------- -------- ----- ---

Core net

income 3 889 3 933 -1 -2 17 411 15 755 11 12

-------------- -------- -------- ---- ---- -------- -------- ----- ---

Core EPS (USD) 2.03 1.98 3 2 8.98 7.81 15 17

-------------- -------- -------- ---- ---- -------- -------- ----- ---

1. Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 44 of the Condensed Financial Report. Unless otherwise noted, all growth rates in this Release refer to same period in prior year. 2. Please see detailed guidance assumptions on page 6. 3. USD millions unless indicated otherwise.

Strategy

Our focus

Novartis is a "pure-play" innovative medicines company. We have a clear focus on four core therapeutic areas (cardiovascular-renal-metabolic, immunology, neuroscience and oncology), with multiple significant in-market and pipeline assets in each of these areas, that address high disease burden and have substantial growth potential. In addition to two established technology platforms (chemistry and biotherapeutics), three emerging platforms (gene & cell therapy, radioligand therapy and xRNA) are being prioritized for continued investment into new R&D capabilities and manufacturing scale. Geographically, we are focused on growing in our priority geographies -- the US, China, Germany and Japan.

Our priorities

1. Accelerate growth: Renewed attention to deliver high-value medicines

(NMEs) and focus on launch excellence, with a rich pipeline across our

core therapeutic areas.

2. Deliver returns: Continuing to embed operational excellence and deliver

improved financials. Novartis remains disciplined and shareholder-focused

in our approach to capital allocation, with substantial cash generation

and a strong capital structure supporting continued flexibility.

3. Strengthen foundations: Unleashing the power of our people, scaling data

science and technology and continuing to build trust with society.

Financials

Fourth quarter

Net sales were USD 13.3 billion (+1%, -1% cc), with volume contributing 18 percentage points to growth. Generic competition had a negative impact of 15 percentage points, including a negative impact of 3 percentage points from revenue deduction adjustments in the US, mainly related to Entresto and Promacta. Pricing had a negative impact of 4 percentage points. Currency had a positive impact of 2 percentage points.

Operating income was USD 3.6 billion (+2%, +4% cc), benefiting from higher government grant income and lower SG&A expenses, partly offset by higher R&D expenses.

Net income was USD 2.4 billion (-15%, -14% cc), impacted by higher income taxes. EPS was USD 1.26 (-11%, -11% cc), benefiting from the lower weighted average number of shares outstanding.

Core operating income was USD 4.9 billion (+1%, +1% cc), benefiting from higher government grant income and lower SG&A expenses, partly offset by higher R&D expenses. Core operating income margin was 37.0% of net sales, increasing 0.1 percentage points (0.7 percentage points in cc).

Core net income was USD 3.9 billion (-1%, -2% cc), mainly due to lower other financial income. Core EPS was USD 2.03 (+3%, +2% cc), benefiting from the lower weighted average number of shares outstanding.

Free cash flow amounted to USD 1.7 billion (-54%), driven by lower net cash flows from operating activities.

Full year

Net sales were USD 54.5 billion (+8%, +8% cc), with volume contributing 15 percentage points to growth. Generic competition had a negative impact of 6 percentage points, pricing had a negative impact of 1 percentage point and currency had no impact.

Operating income was USD 17.6 billion (+21%, +25% cc), mainly driven by higher net sales and lower impairments, partly offset by higher investments behind priority brands and launches.

Net income was USD 14.0 billion (+17%, +19% cc), mainly driven by higher operating income. EPS was USD 7.21 (+22%, +24% cc), benefiting from the lower weighted average number of shares outstanding.

Core operating income was USD 21.9 billion (+12%, +14% cc), mainly driven by higher net sales, partly offset by higher investments behind priority brands and launches. Core operating income margin was 40.1% of net sales, increasing 1.4 percentage points (2.1 percentage points cc).

Core net income was USD 17.4 billion (+11%, +12% cc), mainly due to higher core operating income. Core EPS was USD 8.98 (+15%, +17% cc), benefiting from the lower weighted average number of shares outstanding.

Free cash flow amounted to USD 17.6 billion (+8%), driven by higher net cash flows from operating activities.

Q4 priority brands

Underpinning our financial results in the quarter is a continued focus on key growth drivers (ranked in order of contribution to Q4 growth) including:

Kisqali (USD 1 321 million, +44% cc) sales grew strongly across

all regions, with strong momentum from the early breast

cancer indication as well as continued share gains

in metastatic breast cancer. Strong volume growth

in the US was partially offset by revenue deduction

adjustments; underlying growth globally was +54% cc.

-------------- ----------------------------------------------------------------

Kesimpta (USD 1 228 million, +27% cc) sales grew across all

regions driven by increased demand and strong access.

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Pluvicto (USD 605 million, +70% cc) sales reflect continued

strong demand in the pre-taxane metastatic castration-resistant

prostate cancer (mCRPC) setting in the US, as well

as access expansion ex-US in the post-taxane mCRPC

setting.

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