Novartis AG (NVS) – Demonstrating strength in both product and earnings

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Novartis AG (NVS) (Q1FY23)

Highlights

Innovative Medicines (IM) and Sandoz, both divisions of Novartis, have shown strong performance. IM sales experienced a 7% growth, driven by robust sales of their growth
drivers. This increase in sales led to an impressive 18% rise in IM core operating income, with the core margin reaching 38.7%, representing a significant 360bps increase compared to the previous year.

Kisqali, used in the treatment of breast cancer, experienced a substantial increase in sales, skyrocketing by 81%. Based on the performance of this quarter, the company has raised its guidance for revenue and earnings.

Novartis is proceeding as planned with its spin-off, which is anticipated to take place in 2HFY23. The completion of this transaction is contingent upon various conditions, including the necessary consultations with works councils and employee representatives. Notably, the spin-off is expected to have a tax-neutral effect on Novartis.

NVS net sales were $13bn (+3%, +8% cc) in Q1FY23 driven by volume growth of 16ppts, price erosion of 4ppts and the negative impact from generic competition of 4ppts.

Valuation

– Enterprise Value
– CrispIdea Forecast
– CrispIdea Segment Forecast
– Economic Value Added Analysis
– Discounted Cash Flow Analysis
– P/E Analysis
– Peer Valuation
– CrispIdea Forecast Relative to Consensus
– Consensus History and Surprise
– Consensus Momentum

Actual & Historical Performance

– Income Statement
– Balance Sheet
– Cash Flow
– 10 Year Historical Performance
– Ratio Analysis
– Du Pont Analysis
– ROIC & ROCE Analysis
– Segment Performance
– Key Developments
– M&A Deals

Peer Performance

– Summary
– Profitability
– Growth
– Price Performance

Ownership

Stock Price Performance

Crispidea Coverage

No of Pages: 39

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