Shareholders approve all proposed resolutions of Novartis Board of Directors

Novartis shareholders today followed the Board of Directors’ recommendations for all proposed resolutions at the Group’s Annual General Meeting. Shareholders approved the fifteenth consecutive dividend increase of 2% to CHF 2.25 for 2011, marking a continued increase in the dividend per share since the creation of Novartis in 1996.

A total of 1,896 shareholders were present at the meeting held in Basel, representing approximately 1,45 billion shares or 52.8% of the almost 2,75 billion issued shares of Novartis.

“The 2011 business environment remained uncertain, impacted by governmental budget deficits, considerable currency turbulence and greater regulatory scrutiny. Building on an attractive business portfolio, Novartis remains nevertheless successful, focusing on innovation and geographic expansion. New and recently launched products continued to be key growth drivers in 2011 and hold more promise for the future,” said Dr. Daniel Vasella, Chairman of Novartis.

Shareholders approved a dividend payment of CHF 2.25 per share for 2011 compared to CHF 2.20 in 2010, representing a payout ratio of approximately 63% of net income from continuing operations. Payment for the 2011 dividend will be made with effect from March 1, 2012.

The Group confirmed expectations for 2012 to be a year of continued progress in delivering its strategic priorities continuing to drive innovation, growth and productivity across its businesses implementing its strategy to meet the growing needs of patients and aging societies worldwide through its healthcare portfolio. Barring unforeseen events Group constant currency net sales are expected to be in line with 2011. Products launched since 2007 are expected to continue to grow strongly and compensate for the negative impacts of generic competition, lower Tekturna/Rasilez sales (expected to be less than half of 2011 sales), anticipated price reductions and the expected reduction of enoxaparin sales. This expectation assumes a mid-year start of shipments out of the Lincoln plant. Group core operating income margin in constant currencies is expected to be slightly below 2011 core operating income margin. While productivity measures and margin improvements on products launched since 2007 are important contributions to improving profitability, they are not expected to fully offset the loss of margin from generic competition, price erosion, new investments necessary to sustain growth in new products and the impact of a delayed start-up of Lincoln.

During the Annual General Meeting, Novartis CEO Joseph Jimenez renewed the company’s commitment to ensure one single high quality standard across all Novartis divisions. “We’ve talked with customers as well as public officials who protect safety and are concerned and they have told us their expectations – to know that our products are safe, effective and manufactured properly. We want to ensure that all sites consistently meet Novartis quality standards. We need to continue to improve the quality standards at some of our manufacturing sites and we are demonstrating this commitment by making the necessary investments and changes to meet this goal,” Jimenez said.

In addition, shareholders elected Dimitri Azar M.D. to the Novartis Board of Directors for a three-year term. Dr. Azar, a US citizen, is Dean of the College of Medicine and Professor of Ophthalmology, Bioengineering, and Pharmacology of the University of Illinois at Chicago, USA. He holds a medical degree from the American University of Beirut, Lebanon, an Honorary MA from Harvard University and an Executive MBA from the University of Chicago, Booth School of Business. Dr. Azar is an internationally recognized ophthalmic surgeon and prolific researcher. He has been named one of The Best Doctors in America and one of the Castle Connolly Top Doctors in America annually since 1994. He holds multiple committee positions with the American Academy of Ophthalmology, is a member of the American Ophthalmological Association, and sits on the Board of Trustees of the Chicago Ophthalmological Society and the Association of Research in Vision and Ophthalmology. He has received multiple leadership awards, including the 2009 Lans Distinguished Award from the International Society of Refractive Surgery.

Shareholders also re-elected Srikant Datar Ph.D., Andreas von Planta Ph.D. and Dr. Ing. Wendelin Wiedeking for a three-year term each, and William Brody M.D. Ph.D. and Rolf M. Zinkernagel M.D. for a two-year term each (due to their reaching the age limit).