Novartis AG reported consolidated earnings results for the fourth quarter and year ended December 31, 2017. For the quarter, net sales were USD 12,915 million against USD 12,322 million a year ago. Operating income was USD 2,070 million against USD 1,455 million a year ago, mainly driven by growth drivers, productivity, lower impairments and a gain from achievement of a sales milestone related to the 2015 Vaccines divestment to GSK, which were partly offset by generic erosion. Net income was USD 1,976 million against USD 936 million a year ago, driven by the strong operating income growth and higher income from associated companies. EPS was USD 0.85 against USD 0.40 a year ago, driven by growth in net income and the benefit from the share buyback program. Free cash flow was USD 2,456 million against USD 2,976 million a year ago. The decrease of USD 0.5 billion was mainly driven by lower cash flows from operating activities and higher net investments. Core operating income was USD 3,223 million against USD 3,013 million a year ago. Core net income was USD 2,818 million against USD 2,658 million a year ago, driven by growth in core operating income. Core EPS was USD 1.21 against USD 1.12 a year ago.

For the year, net sales were USD 49,109 million against USD 48,518 million a year ago. Operating income was USD 8,629 million against USD 8,268 million a year ago. Net income was USD 7,703 million against USD 6,698 million a year ago, driven by higher operating income and income from associated companies. EPS was USD 3.28 against USD 2.82 a year ago, driven by net income growth and the benefit from the share buyback program. Free cash flow was USD 10,428 million against USD 9,455 million a year ago. The increase was mainly driven by favorable working capital changes and lower legal settlement payments out of provisions. Core operating income was USD 12,850 million against USD 12,987 million a year ago. Core net income was USD 11,391 million against USD 11,314 million a year ago. Core EPS was USD 4.86 against USD 4.75 a year ago, driven by growth in core net income and the benefit from the share buyback program.


Group net sales in 2018 are expected to grow low to mid-single digit (cc). Group core operating income in 2018 is expected to grow mid to high single digit (cc).