QuickLinks -- Click here to rapidly navigate through this document

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 or 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934

Report on Form 6-K dated July 22, 2003
(Commission File No. 1-15024)

Novartis AG
(Name of Registrant)


Lichtstrasse 35
4056 Basel
Switzerland


(Address of Principal Executive Offices)


Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F:   ý   Form 40-F:   o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes:   o   No:   ý

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes:   o   No:   ý

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes:   o   No:   ý

Enclosures:                        Novartis Half Year Sales & Results 2003

    Novartis International AG
Novartis Communications
CH-4002 Basel
Switzerland
GRAPHIC     
Tel + 41 61 324 2200
Fax + 41 61 324 3300
Internet Address:
http://www.novartis.com


MEDIA RELEASE    •    COMMUNIQUE AUX MEDIAS    •    MEDIENMITTEILUNG

Novartis delivers strong first-half performance and continues to gain market share

Key figures

First half

 
   H1 2003
   H1 2002
   % Change
 
   USD m
   % of sales
   USD m
   % of sales
   USD
   local
currencies
Sales   11 924       9 935       20   12
Operating income   2 814   23.6   2 418   24.3   16    
Net income   2 379   20.0   2 350   23.7   1    
Free cash flow   657       258       155    
   
 
 
 
 
 
Basic earnings per share/ADS   USD 0.96       USD 0.92       4    
   
 
 
 
 
 

Second quarter

 
   Q2 2003
   Q2 2002
   % Change
 
   USD m
   % of sales
   USD m
   % of sales
   USD
   local
currencies
Sales   6 203       5 193       19   11
Operating income   1 463   23.6   1 332   25.6   10    
Net income   1 316   21.2   1 286   24.8   2    
Free cash flow   723       549       32    
   
 
 
 
 
 

        Basel, 21 July 2003—Commenting on Novartis' first-half and second-quarter results published today, Dr. Daniel Vasella, Chairman and CEO of Novartis, said: "I am pleased with our strong performance as our consistent strategy continues to deliver double-digit sales growth and market share gains. For the remainder of the year, we forecast continued strong sales growth, with earnings supporting our strategy to bolster research and development and bring innovative medicines to patients."

All product names appearing in italics are registered trademarks of the Novartis Group

1

Sales by division and business unit

First half

 
    
    
   % change
 
   H1 2003
USD m
   H1 2002
USD m
   USD
   local
currencies
Pharmaceuticals   7 600   6 445   18   10
   
 
 
 
Sandoz (Generics)   1 463   784   87   71
OTC   830   712   17   6
Animal Health   339   313   8   2
Medical Nutrition   401   352   14   1
Infant & Baby   664   668   -1   2
CIBA Vision   627   550   14   5
   
 
 
 
Consumer Health (ongoing)   4 324   3 379   28   19
Divested Health & Functional Food activities       111        
   
 
 
 
Consumer Health   4 324   3 490   24   15
   
 
 
 
Total   11 924   9 935   20   12
   
 
 
 

Second quarter

 
    
    
   % change
 
   Q2 2003
USD m
   Q2 2002
USD m
   USD
   local
currencies
Pharmaceuticals   3 991   3 377   18   10
   
 
 
 
Sandoz (Generics)   702   399   76   59
OTC   429   372   15   9
Animal Health   182   163   12   5
Medical Nutrition   211   189   12   -1
Infant & Baby   357   345   3   5
CIBA Vision   331   295   12   3
   
 
 
 
Consumer Health (ongoing)   2 212   1 763   25   17
Divested Health & Functional Food activities       53        
   
 
 
 
Consumer Health   2 212   1 816   22   14
   
 
 
 
Total   6 203   5 193   19   11
   
 
 
 

2

Operating income by division and business unit

First half

 
   H1 2003
   H1 2002
    
 
   USD m
   % of sales
   USD m
   % of sales
   Change
in %
Pharmaceuticals   2 112   27.8   1 864   28.9   13
   
 
 
 
 
Sandoz (Generics)   257   17.6   113   14.4   127
OTC   134   16.1   77   10.8   74
Animal Health   40   11.8   54   17.3   -26
Medical Nutrition   36   9.0   16   4.5   125
Infant & Baby   118   17.8   120   18.0   -2
CIBA Vision   89   14.2   62   11.3   44
Divisional Management costs   -10                
   
 
 
 
 
Consumer Health (ongoing)   664   15.4   442   13.1   50
Divested Health & Functional Food activities           16        
   
 
 
 
 
Consumer Health   664   15.4   458   13.1   45
Corporate income/expense, net   38       96        
   
 
 
 
 
Total   2 814   23.6   2 418   24.3   16
   
 
 
 
 

Second quarter

 
   Q2 2003
   Q2 2002
    
 
   USD m
   % of sales
   USD m
   % of sales
   Change
in %
Pharmaceuticals   1 012   25.4   1 003   29.7   1
   
 
 
 
 
Sandoz (Generics)   145   20.7   58   14.5   150
OTC   82   19.1   45   12.1   82
Animal Health   17   9.3   29   17.8   -41
Medical Nutrition   16   7.6   10   5.3   60
Infant & Baby   73   20.4   61   17.7   20
CIBA Vision   60   18.1   39   13.2   54
Divisional Management costs   -6                
   
 
 
 
 
Consumer Health (ongoing)   387   17.5   242   13.7   60
Divested Health & Functional Food activities           8        
   
 
 
 
 
Consumer Health   387   17.5   250   13.8   55
   
 
 
 
 
Corporate income/expense, net   64       79        
   
 
 
 
 
Total   1 463   23.6   1 332   25.6   10
   
 
 
 
 

        Continuing strong performances in Pharmaceuticals (+18%) and Sandoz (+87%) lifted Group first-half sales by 20% in USD. In local currencies (l.c.), the increase was 12%, of which 8 percentage points were due to volume expansion. Acquired businesses, most notably Lek, added 2 percentage points, as did price increases. The impact of currency translations from local currencies into USD added 8 percentage points to sales growth.

3

        Continued productivity gains and product-mix improvements led to a 1.0 percentage point reduction in the cost of goods sold to 23.4% of sales. Research & Development investments were increased significantly by 37% to 15.0% of sales as attractive in-licensing opportunities were captured and investments in the new research facilities at Cambridge, Massachusetts, were continued. Marketing & Sales investments to drive key brands and new product roll-outs increased slightly slower than sales and consequently dropped 1.0 percentage point to 32.1% of sales. As a result, first-half operating income rose 16%, whilst the operating margin was sustained at the first-quarter level of 23.6%.

        Successful management of currencies and bond investments resulted in a net financial income of USD 299 million, achieved amid challenging financial market conditions and falling interest rates. As expected, this result was lower than in the previous first half, when the level of liquid funds was higher.

        First-half net income rose 1% to USD 2.4 billion as earnings growth was reduced in the second-quarter by one-time investments for in-licensing deals in Pharmaceuticals, and in the first-quarter by a one-time expense of USD 287 million related to the 2002 loss at the associated company Roche, reported in 2003. Excluding the Roche impact, first-half net income would have increased 13%.

        Despite indications that major markets may be slowing down, Novartis is maintaining its 2003 outlook for Group and Pharmaceuticals sales to grow in the high single to low double digit percent range in local currencies, based on the continuing dynamic performance of its flagship pharmaceutical brands and new product roll-outs.

        As Pharmaceuticals pursues its vigorous investment strategy to sustain high-level growth, Research & Development investments are projected to continue to increase over-proportionately to sales in 2003, underscoring the Group's commitment to bringing new therapies to patients.

        Net financial income is expected to be below the previous year's level, reflecting the lower level of liquidity and challenging economic conditions. However, thanks to the strong operational performance, both full-year operating and net income are expected to exceed the previous year's levels, barring any unforeseen events.

Pharmaceuticals Division

        With sales of USD 7.6 billion, Novartis' core Pharmaceuticals business delivered double-digit growth of 18% (10% in l.c.) in the first half and second quarter—in line with expectations—and continued to outpace the global market(1).

(1)
Based on IMS data January—May 2002/3, the global healthcare market grew approximately 7% compared with Novartis' 15%

        Driven by strong sales performances, Pharmaceuticals captured further market share in the key US market (sales: +14%) and in Japan (sales: +23%; +13% in l.c.), the second largest single market, as well as in Europe. Based on the latest available data (IMS, May), the company's overall share of the global healthcare market has risen to 4.3% from 3.9% a year previously.

4

        Strong brand management sustained momentum and further strengthened category leadership within the fast-growing cardiovascular (+39%; +32% in l.c.) and oncology franchises (+38%; +27% in l.c.) with their flagship brands Diovan, Lotrel, Lescol, Gleevec/Glivec and Zometa. Significant contributions also came from the Respiratory & Dermatology and Neurology businesses, where Elidel, Trileptal, Exelon and Comtan all delivered strong growth.

        With a number of new products now in their roll-out phase, Novartis enjoys a broad product portfolio, of which 83%(2) is patent protected beyond 2006. The proportion of sales generated by newer products launched within the past five years rose to 24.5% from 19.6% in the previous first half.

(2)
Based on IMS data

        Pharmaceuticals' first-half operating income reached USD 2.1 billion, expanding slower than sales—as expected—principally because of the high level investment committed to drug discovery and in-licensing initiatives. The build-up of the new Cambridge biomedical research headquarters advanced at high speed, with its staff now at almost 300. In addition, several attractive in-licensing and acquisition initiatives were completed, most notably the Idenix, Regeneron, Enablex and LucentisTM(3) transactions, which triggered one-time upfront expenses totaling USD 126 million. As a result, first-half Research & Development rose 35% to 19% of sales, which ranks Novartis at the top in the industry. Marketing & Sales were slightly increased to 34% of sales, as resources were committed to comprehensive launch efforts, principally the roll-out of Elidel in Europe, and the IBS educational and marketing campaigns behind Zelnorm. Meanwhile, continued productivity gains in production and product mix improvements shaved a further 1.1 percentage points off the cost of goods sold, which totaled 14.5% of sales. General & Administration expenses included a one-time gain of USD 178 million from the divestment of non-core product lines in January. Overall, the operating margin was 27.8% compared with 28.9% in the previous first half.

(3)
LucentisTM is a registered trademark of Genentech, Inc.

Highlights

        Diovan (+45%; +37% in l.c.; US: +35%) further extended its share of the antihypertensive category and the fast-growing angiotensin receptor blocker (ARB) segment, spurred by dynamic sales in the US, Japan and Europe, and the successful launch of Co-Diovan 160/12.5 in Germany and 160/25 in France. Diovan has now become the world's leading ARB and, with its excellent efficacy and increasing cardio-protective profile, the brand is positioned for continued strong growth.

        Lotrel (US: +33%), the leading combination treatment for hypertension, extended its share of new and total prescriptions. The brand steadily gained segment share as a result of: new guidelines recommending more aggressive treatment, a new marketing campaign focused on patients who are not controlled by ACE inhibitors and calcium channel blockers, and the successful launch of the Lotrel 10/20 dosage form, which adds efficacy and dosing flexibility.

        Lescol (+31%; +20% in l.c.; US: +16%; cholesterol reduction) continued to leverage sales through its proven benefits in high-risk patients. In May, the FDA approved Lescol for secondary prevention of coronary events in patients with coronary heart disease, based on the results of the 'LIPS' trial. Findings of the 'ALERT' study were presented at the American Transplantation Congress in June, further emphasizing the product's efficacy in renal transplant patients.

5


        Lamisil (+19%; +11% in l.c.; US: +17%; fungal infections): A new direct-to-consumer (DTC) and professional campaign launched in April has driven strong gains in the share of new and total prescriptions.

        Elidel (eczema), launched just over a year ago, extended its leadership as the number-one branded prescription treatment for eczema in the US. First-half global sales reached USD 106 million. Elidel recently gained approval in Switzerland and has now been introduced in more than 20 markets worldwide.

        Zelnorm/Zelmac (irritable bowel syndrome with constipation), now launched in 30 countries, generated first-half revenues of USD 58 million (US: USD 45 million) and made steady progress in the US, with over 80% of targeted specialists now prescribing the brand. Results from an educational disease awareness campaign were promising and plans for a national DTC roll-out are underway. Zelnorm attracted strong interest at the Digestive Disease Week (DDW) meeting, where key data were presented in over 20 scientific sessions.

        With first-half sales growing 38% in USD (+27% in l.c.), Novartis Oncology continued to expand its segment share.

        Gleevec/Glivec (+102%; +83% in l.c.; US: +43%), for chronic myeloid leukemia (CML) and gastro-intestinal stromal tumors (GIST), became Novartis' second biggest product and benefited from recent approvals in the EU and US for first-line treatment in CML and for gastrointestinal stromal tumors. Further progress was made on securing reimbursement, including the new first-line indication. As sales continued to exceed expectations, the number of patients on the Gleevec/Glivec Patient Assistance Program rose to 4300, providing many needy patients access to treatment at reduced or no cost.

        Zometa (+124%; +112% in l.c.; US: +85%), the most prescribed intravenous bisphosphonate for bone metastases, continued to post dynamic growth, with sales reaching USD 412 million. The combined Zometa/Aredia franchise grew 25%, thanks to the superior benefits of Zometa, which is successfully replacing Aredia.

        Sandostatin (acromegaly and carcinoid syndrome) sales gained momentum in the second quarter and rose 13% (+6% in l.c.; US: +11%) to USD 338 million in the first half, boosted by the continued growth of Sandostatin LAR (+21%; +11% in l.c.; US: +18%).

        Femara (first-line therapy for advanced breast cancer in postmenopausal women) achieved a 29% rise (+16% in l.c.; US: +8%) in first-half sales to USD 108 million. Sales growth will continue to moderate until adjuvant data become available.

        Ophthalmics posted a 14% rise (3% in l.c.) in first-half sales, driven by Visudyne, which offset slower sales of other Ophthalmics brands that were affected by adjustments of US wholesaler inventories and a weak allergy season.

        Visudyne (+22%; +14% in l.c.; US: +2%; treatment in macular degeneration) continued to post strong growth, benefiting from good market penetration and strong sales in the LatAm and Asia Pacific regions, as well as continued growth in Europe.

        In June, Novartis obtained an exclusive license from Genentech to develop and commercialize Lucentis™ outside North America. Lucentis is an anti-VEGF antibody fragment currently in Phase III clinical trials for the treatment of wet age-related macular degeneration.

6


        The Business Unit's sales decreased 8% (-16% in l.c.) as the Neoral franchise continued to defend its position against generic and branded competitor products.

        Neoral/Sandimmun (-7%; immunosuppression) sales were reduced in both quarters due to US wholesaler stocking in 2002, increased generic competition, and the use of lower Neoral dosing regimens. In the EU, compulsory price-cuts in Germany and Italy affected sales, whilst the impact of generics has been limited and confined to Germany and Austria. Momentum was sustained in Japan despite reduced reimbursement.

        Myfortic, the new enteric-coated formulation of mycophenolate sodium used to prevent organ rejection, has now gained approvals for use in kidney transplantation in 19 countries including Australia, Brazil, and Switzerland, where the product has been well received since its launch in April.

        The Mature Products Business Unit (-6%; -13% in l.c.) successfully managed to moderate the decline of patent-expired products. Voltaren (anti-inflammatory) declined by a relatively low 3% (-9% l.c.) and the Cibacen/Lotensin range (hypertension) also by 3% (-7% in l.c.), in line with expectations. In July, the FDA granted exclusivity for Cibacen/Lotensin in pediatric patients in the US, which will extend the patent protection by six months to February 2004.

Regulatory and clinical highlights

        Novartis received several important new drug approvals in the second quarter, which will bring new treatments to patients suffering from diseases such as severe asthma and Parkinson's disease.

        Gleevec/Glivec was approved in the US in May for treating chronic myeloid leukemia in children.

        Lescol and Lescol XL received approval for prevention of coronary events in several European markets during the first six months and in the US in May.

        Stalevo(4), the entacapone-levodopa-carbidopa combination treatment for Parkinson's disease, gained FDA approval in June and received a positive opinion from the CPMP in Europe.

(4)
Licensed from Orion Corporation..

        Xolair(5), the first humanized therapeutic antibody for asthma, also obtained FDA approval in June. Studies required for European registration are in progress and Novartis expects to re-file in the EU in the first half of 2004.

(5)
In development under an agreement between Novartis Pharma AG, Genentech, Inc. and Tanox, Inc.

Clinical update

        Lescol: the ALERT study presented at the American Transplant Congress showed a significant reduction with Lescol in the combined incidence of cardiac death or non-fatal myocardial infarction in renal transplant patients.

7

        Exelon: New findings from an analysis of 1500 patients with Alzheimer's disease suggest that Exelon significantly reduces decline in the performance of activities of daily living. The new data were presented at the 55th annual meeting of the American Academy of Neurology in April.

        Elidel: Results of a large study of patients aged 3-23 months with mild to very severe atopic dermatitis (eczema) reported relief of symptoms, such as itching and disturbed sleep, in the infants and improved quality of life for their parents as soon as 48 hours after the first application.

        Prexige: Data from key clinical Phase III studies presented for the first time at the European League Against Rheumatism annual congress in Lisbon, demonstrate that Prexige provides effective relief of the symptoms of osteoarthritis.

        Zelnorm/Zelmac: New data were presented at DDW in Orlando demonstrating that Zelnorm/Zelmac is effective, safe and well tolerated in the treatment of Irritable Bowel Syndrome. Other new data from a large US trial of more than 1300 patients indicated that the product was significantly more effective than placebo in providing rapid and sustained relief from chronic constipation.

        Femara:    Survival data published in June in the Journal of Clinical Oncology demonstrated superior time to disease progression, objective tumor response rate and an early survival advantage (1 and 2 years) versus tamoxifen.

        Gleevec/Glivec: New insights into the potential of Glivec in treating various cancers were the focus of more than 70 abstracts presented at ASCO. A health economics model of CML estimated that patients on Glivec would survive 5 years longer than patients on interferon-alpha therapy.

        PTK787 / ZK 22584(6) (oncology), potentially the first oral VEGF inhibitor with a unique mechanism of action, advanced to Phase III clinical trials in the first quarter. Data presented at ASCO validated the rationale for the compound's development in colorectal cancer.

(6)
Under development in collaboration with Schering AG

        Zometa: Data presented at ASCO and the American Urological Association reported long-term efficacy and safety in preventing bone complications in a broad range of solid tumor settings.

Consumer Health Division

        The generics business, now re-branded as Sandoz, continued to report dynamic sales expansion throughout, with first-half sales leaping 87% (71% in l.c.) to USD 1463 million, fuelled by the strong performance of the US pharmaceuticals business and the consolidation of Lek in January. The latter delivered an exceptional performance, which contributed 45 percentage points to the increase in first-half sales. Second-quarter revenues reflected the early end to the flu season and a seasonal reduction in demand for anti-infectives.

        The pharmaceuticals business franchise (+113%; 99% in l.c.) doubled sales, thanks principally to the success of the US launches of the anti-infective AmoxC (a generic version of Augmentin®(7)) and the allergy treatment loratadine (a generic version of Claritin®) as well as the integration of Lek. With

8


the exception of Germany, sales also grew dynamically in Europe, especially in France, the UK, Netherlands, Spain, Italy and the Nordic region.

(7)
Augmentin® and Claritin® are registered trademarks of GlaxoSmithKline and Schering Plough, respectively

        In the industrial products franchise, production operated at full capacity due to continued strong demand for cephalosporins and other antibiotics.

        In Biopharmaceuticals, Omnitrop (human growth hormone) received a positive opinion from the European Committee for Proprietary Medicinal Products and is currently under review for marketing authorization, which is expected later this year.

        A settlement was recently achieved with GlaxoSmithKline concerning US lawsuits related to GSK's claimed Augmentin trade secrets. Under the agreement, Novartis will pay single-digit percentage royalties on US sales of generic versions of Augmentin sold by its affiliate companies for the four-year period from July 2002 through June 2006.

        Driven by strong top-line growth, operating income soared 127%, growing faster than sales, thanks to productivity gains and a favorable product mix. Investments in Marketing & Sales rose as a result of the increase in the pharmaceuticals franchise, which involves higher marketing costs than the industrial business. Research & Development rose as a proportion of sales, owing to an increase in the number of development projects and the acquisition of Lek. The first-half operating margin increased to 17.6% from 14.4% in the comparative period of last year.

OTC

        OTC (over-the-counter medicines) sales grew 17% (6% in l.c.) to USD 830 million. The six-month exclusivity of private-label loratadine (an OTC generic version of Claritin®) in the US contributed significant impetus to growth, and largely compensated for the low demand for cough and cold remedies. Among OTC's five global brands Nicotinell/Habitrol (smoking cessation) sales grew dynamically in Europe, while sales of the topical antifungal Lamisil further accelerated in Europe and Latin America in the second quarter. Voltaren (anti-inflammatory) sales also benefited from a strong second quarter in Europe.

        Operating income rose 74% to USD 134 million, driven by volume growth and the exceptional contribution of loratadine. The focus on higher margin products and productivity gains favorably influenced the cost of goods sold. Research & Development investments were increased in line with sales to support new multi-year clinical trials, while a reduction in General & Administration costs as a percentage of sales was achieved through successful restructuring and cost containment. As a result, the operating margin increased 5.3 percentage points from the previous first-half level to 16.1%.

Animal Health

        Animal Health sales climbed 8% (+2% in l.c.) to USD 339 million. Sales accelerated in the second quarter following a soft start in the early part of the year, which was characterized by economic

9

uncertainty and unusual weather conditions in key regions. New products rolled out since the beginning of the year provided added momentum, contributing five percent of total sales.

        The companion animal franchise grew strongly, driven by new products which rapidly gained segment share—notably Atopica (atopic dermatitis in dogs), Deramaxx (osteoarthritis in dogs) and Milbemax (intestinal worm control in dogs and cats) complemented again by increasing sales of Fortekor (heart/kidney disease).

        Sales in the farm animal franchise were led by a strong performance of the cattle and sheep segment, particularly in the LatAm and Asia regions. This partly offset the continued impact of the drought on the Australian livestock industry and unfavorable market conditions in the European and US pig farming segment. Agita, a novel farm fly control product was rolled out, strengthening Novartis' segment leadership.

        Operating income decreased 26% to USD 40 million, leading to an operating margin of 11.8%. The first half of 2003 was characterized by a step-up of investments in Research & Development, to support essential development project studies, and in Marketing & Sales to power recently launched brands.

Medical Nutrition

        Medical Nutrition (including Nutrition & Santé) sales climbed 14% (+1% in l.c.) to USD 401 million, led by strong growth in Europe and a marked improvement in the US. The performance was driven by the Medical Food franchise (Resource), invigorated by its strategic marketing focus on the home-care channel, and the Enteral Nutrition (Isosource and Novasource) business.

        Continuing its strategy of focusing on disease specific segments, Medical Nutrition launched a new oncology platform in the second quarter, with the introduction in the US of Resource Support, a nutrition supplement designed to prevent weight-loss in cancer patients. This strategic initiative together with the acquisition—in June—of Semper Clinical Nutrition, a leader in the nursing-home, home-care and pharmacy channels in the Nordic region, will contribute to future sales growth.

        First-half operating income rose 125% to USD 36 million. The increase was achieved by reductions in the cost of goods sold thanks to productivity gains, lower raw material costs, and product-mix improvements resulting from the focus on disease specific segments. These improvements were only partially offset by higher rebates in the US. Overall, the operating margin jumped to 9.0% from 4.5% in the previous first half.

Infant & Baby

        Infant & Baby sales gathered momentum in the second quarter to post first-half sales of USD 664 million, 1% off the previous first half level in USD but up 2% in local currencies.

        Gerber continued to perform well in the US nutrition franchise, both in terms of sales and market share, driven by product innovations such as Lil' Entrees microwavable convenience meals for babies and toddlers. In addition, the successful changeover from glass to convenient plastic packaging for 20% of the jarred products was completed in the second quarter. The Baby Care franchise contended with

10


strong competition in the LatAm region, but this was mostly offset by good sales development in the US, driven by new product launches.

        Operating income dipped 2% to USD 118 million, owing to exceptional costs in the US for the conversion to plastic packaging of key jarred products. As a result, the first-half operating margin was 17.8%, 0.2 points off the previous first-half level.

CIBA Vision

        CIBA Vision sales increased 14% (5% in l.c.) to USD 627 million, benefiting from the continued strong performance of the innovative disposable and continuous-wear lens business and growing sales in the lens-care and surgical franchises.

        Focus DAILIES (daily disposables) and NIGHT & DAY (continuous wear up to 30 nights) contact lenses continued to perform dynamically, particularly in Europe and North America, where double-digit sales growth was achieved. FreshLook colored lenses retained category leadership, thanks to continuous product improvement and line extensions, including FreshLook Dimensions, a new color contact lens.

        The lens care franchise reported a pick-up in sales driven by growth in North America and the continuing success of FreshLook Care in Japan.

        The ophthalmic surgical business grew steadily ahead of the market, supported by increased sales from a number of recently launched new products.

        Operating income rose 44% to USD 89 million. Continued investment in product quality led to a small decrease in gross margin but functional costs grew proportionately less than sales. In addition, legal provisions booked in prior years were reversed into income as a result of the favorable resolution of litigation cases. As a result, the operating margin improved to 14.2% from 11.3% in the previous first half.

Corporate

        USD 38 million were generated in net corporate income, USD 58 million less than in the first half of 2002 owing to: increased investments of USD 22 million in corporate research & development, the negative currency translation effects on non-US dollar costs, and lower pension income.

        Novartis' stake in Chiron Corporation generated an income of USD 60 million, whereas the stake in Roche Holding AG yielded a first-half pre-tax loss of USD 310 million, USD 269 million of which was due to Novartis' share in the associated company's unexpected loss of CHF 4.0 billion in 2002, booked only in 2003. The remainder represents an estimate for the first half of the current year. In total, associated companies resulted in an overall expense of USD 237 million.

        In July 2002, Novartis started a third program to repurchase shares for up to a total of CHF 4.0 billion (approximately USD 2.6 billion) via a second trading line on the SWX Swiss Exchange. In

11

this program, 13 million shares were repurchased in the first half of 2003 for an approximate total of USD 0.5 billion. Apart from this, 10 million treasury shares were sold for USD 0.4 billion. As of June 2003 the Group held approximately 329 million shares in treasury.

        Following changes in US GAAP and expected changes in IAS accounting rules, Novartis decided in June to redeem, in advance, equity instruments (put and call options on Novartis shares) that were sold to Deutsche Bank in 2001. This resulted in an equity reduction of USD 3.5 billion.

        Overall, the Group's equity was reduced from USD 28.3 billion at 31 December 2002 to USD 26.4 billion at 30 June 2003. The Group's first-half net income of USD 2.4 billion and translation gains of USD 0.9 billion partly offset payments for dividends (USD 1.7 billion), repurchased shares (USD 0.1 billion) and equity instrument repayments (USD 3.5 billion). In the same period, total financial debts rose USD 1.4 billion, principally on account of the equity instrument repayments. As a result, the debt/equity ratio rose from 0.20:1 on 31 December 2002 to 0.26:1 on 30 June 2003.

        Novartis thus maintained the strength of its balance sheet at 30 June 2003 and continues to be rated AAA by Standard & Poor's and Moody's.

        The strong business expansion and good working capital management boosted cash flow from operating activities, which increased 52% to USD 2.9 billion.

        Cash outflow for investing activities was USD 38 million. Capital expenditure increased USD 155 million to USD 515 million, while USD 362 million was spent on the acquisition of subsidiaries, principally the 51% stake in Idenix, and intangible and financial assets. This was offset by a significant inflow of USD 839 million from the sale of marketable securities.

        Free cash flow was USD 657 million, significantly up from the prior year level of USD 258 million. The USD 994 million increase in cash flow from operations more than offset the dividend increase of USD 357 million and additional fixed asset investments of USD 155 million.

        Overall, liquidity (cash, cash equivalents and marketable securities including financial derivative assets) amounted to USD 11.1 billion at 30 June 2003. After deducting financial debt and derivative liabilities, net liquidity stood at USD 4.2 billion, USD 2.8 billion lower than at 31 December 2002, principally as a result of the redemption of the equity instruments.

        This release contains certain "forward-looking statements", relating to the Group's business, which can be identified by the use of forward-looking terminology such as "would have", "forecast", "Outlook", "projected", "will" or similar expressions, or express or implied discussions regarding potential future sales of existing products, potential new products or potential new indications for existing products, or by other discussions of strategy, plans or intentions. Such statements reflect the current views of the Group with respect to future events and are subject to certain risks, uncertainties and assumptions. There can be no guarantee that existing products will reach any particular sales levels, or that any new products will be approved for sale in any market, or that any new indications will be approved for existing products in any market. In particular, management's expectations could be affected by, among other things, new clinical data; unexpected clinical trial results; unexpected regulatory actions or delays or government regulation generally; the company's ability to obtain or maintain patent or other proprietary intellectual property protection; competition in general; government pricing pressures and other risks and factors referred to in the Company's current Form 20-F on file with the US Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected.

12

        Novartis AG (NYSE: NVS) is a world leader in pharmaceuticals and consumer health. In 2002, the Group's businesses achieved sales of USD 20.9 billion and a net income of USD 4.7 billion. The Group invested approximately USD 2.8 billion in R&D. Headquartered in Basel, Switzerland, Novartis Group companies employ about 78 200 people and operate in over 140 countries around the world. For further information please consult http://www.novartis.com.

20 October 2003   Nine-month and third-quarter results
19 November 2003   R&D day
Media:   Investors:
+ 41 61 324 2200 (Mark Hill)   + 41 61 324 8433 (Karen Huebscher)
US: + 1 212 830 2457 (Sheldon Jones)   US: + 1 212 830 2433 (Kamran Tavangar)

13

Consolidated income statements (unaudited)

First half

 
    
    
   Change
 
   H1 2003
USD m
   H1 2002
USD m
 
   USD m
   %
Total sales   11 924   9 935   1 989   20
Cost of goods sold   -2 786   -2 428   -358   15
   
 
 
 
Gross profit   9 138   7 507   1 631   22
Marketing & Sales   -3 828   -3 284   -544   17
Research & Development   -1 786   -1 303   -483   37
General & Administration   -710   -502   -208   41
   
 
 
 
Operating income   2 814   2 418   396   16
Result from associated companies   -237   6   -243    
Financial income, net   299   415   -116   -28
   
 
 
 
Income before taxes and minority interests   2 876   2 839   37   1
Taxes   -489   -483   -6   1
Minority interests   -8   -6   -2   33
   
 
 
 
Net income   2 379   2 350   29   1
   
 
 
 

Second quarter

 
    
    
   Change
 
   Q2 2003
USD m
   Q2 2002
USD m
 
   USD m
   %
Total sales   6 203   5 193   1 010   19
Cost of goods sold   -1 423   -1 229   -194   16
   
 
 
 
Gross profit   4 780   3 964   816   21
Marketing & Sales   -1 995   -1 755   -240   14
Research & Development   -943   -672   -271   40
General & Administration   -379   -205   -174   85
   
 
 
 
Operating income   1 463   1 332   131   10
Result from associated companies   9   15   -6    
Financial income, net   119   190   -71   -37
   
 
 
 
Income before taxes and minority interests   1 591   1 537   54   4
Taxes   -270   -246   -24   10
Minority interests   -5   -5   0    
   
 
 
 
Net income   1 316   1 286   30   2
   
 
 
 

14

Condensed consolidated balance sheets (unaudited)

 
   30 June 2003
USD m
   31 Dec 2002
USD m
   Change
USD m
   30 June 2002
USD m
Assets                
Total long-term assets   25 475   24 210   1 265   22 202
   
 
 
 
Current assets                
Inventories   3 269   2 963   306   2 771
Trade accounts receivable   4 259   3 697   562   3 592
Other current assets   1 497   1 613   -116   1 445
Cash, short-term deposits and marketable securities   11 137   12 542   -1 405   12 836
   
 
 
 
Total current assets   20 162   20 815   -653   20 644
   
 
 
 
Total assets   45 637   45 025   612   42 846
   
 
 
 
Equity and liabilities                
Total equity   26 419   28 269   -1 850   27 790
   
 
 
 
Long-term liabilities (including minority interests)                
Financial debts   3 022   2 729   293   1 586
Other long-term liabilities   6 376   5 755   621   5 398
  Total long-term liabilities   9 398   8 484   914   6 984
Short-term liabilities                
Trade accounts payable   1 433   1 266   167   1 021
Financial debts and derivatives   3 948   2 841   1 107   3 435
Other short-term liabilities   4 439   4 165   274   3 616
  Total short-term liabilities   9 820   8 272   1 548   8 072
   
 
 
 
Total liabilities   19 218   16 756   2 462   15 056
   
 
 
 
Total equity and liabilities   45 637   45 025   612   42 846
   
 
 
 

Condensed consolidated changes in equity (unaudited)

 
   First half
2003
USD m
   First half
2002
USD m
   Change
USD m
Consolidated equity at 1 January   28 269   25 161   3 108
Dividends   -1 724   -1 367   -357
Acquisition of treasury shares, net   -90   -358   268
Translation effects   861   2 505   -1 644
Net income for first six months   2 379   2 350   29
Redemption of equity instruments   -3 458       -3 458
Other equity movements   182   -501   683
   
 
 
Consolidated equity at 30 June   26 419   27 790   -1 371
   
 
 

15

Condensed consolidated cash flow statements (unaudited)

First half

 
   H1 2003
USD m
   H1 2002
USD m
   Change
USD m
Net income   2 379   2 350   29
Reversal of non-cash items            
  Taxes   489   483   6
  Depreciation, amortization and impairments   593   479   114
  Net financial income   -299   -415   116
  Other   -168   -137   -31
   
 
 
Net income adjusted for non-cash items   2 994   2 760   234
Interest and other financial receipts   411   180   231
Interest and other financial payments   -49   -57   8
Taxes paid   -534   -468   -66
   
 
 
Cash flow before working capital and provision changes   2 822   2 415   407
Restructuring payments and other cash payments out of provisions   -75   -77   2
Change in net current assets and other operating cash flow items   142   -443   585
   
 
 
Cash flow from operating activities   2 889   1 895   994
   
 
 
Investments in tangible fixed assets   -515   -360   -155
Decrease/increase in marketable securities, intangible and financial assets   477   -2 898   3 375
   
 
 
Cash flow used for investing activities   -38   -3 258   3 220
   
 
 
Cash flow used for financing activities   -4 297   -2 071   -2 226
   
 
 
Translation effect on cash and cash equivalents   202   416   -214
   
 
 
Change in cash and cash equivalents   -1 244   -3 018   1 774
Net cash and cash equivalents at 1 January   5 798   6 639   -841
   
 
 
Net cash and cash equivalents at 30 June   4 554   3 621   933
   
 
 

16

Second quarter

 
   Q2 2003
USD m
   Q2 2002
USD m
   Change
USD m
Net income   1 316   1 286   30
Reversal of non-cash items            
  Taxes   270   246   24
  Depreciation, amortization and impairments   289   260   29
  Net financial income   -119   -190   71
  Other   -222   -67   -155
   
 
 
Net income adjusted for non-cash items   1 534   1 535   -1
Interest and other financial receipts   294   87   207
Interest and other financial payments   -23   -26   3
Taxes paid   -333   -288   -45
   
 
 
Cash flow before working capital and provision changes   1 472   1 308   164
Restructuring payments and other cash payments out of provisions   -33   -44   11
Change in net current assets and other operating cash flow items   -309   -584   275
   
 
 
Cash flow from operating activities   1 130   680   450
   
 
 
Investments in tangible fixed assets   -296   -201   -95
Decrease/increase in marketable securities, intangible and financial assets   310   -2 509   2 819
   
 
 
Cash flow used for investing activities   14   -2 710   2 724
   
 
 
Cash flow used for financing activities   -2 590   -161   -2 429
   
 
 
Translation effect on cash and cash equivalents   26   420   -394
   
 
 
Change in cash and cash equivalents   -1 420   -1 771   351
Net cash and cash equivalents at 1 April   5 974   5 392   582
   
 
 
Net cash and cash equivalents at 30 June   4 554   3 621   933
   
 
 

17

Notes to the interim financial report for the first six months ended 30 June 2003 (unaudited)

1. Basis of preparation

        This unaudited interim financial report has been prepared in accordance with the accounting policies set out in the 2002 Annual Report and International Accounting Standard 34 on Interim Financial Reporting.

        The Novartis Group began presenting its results in US dollars with effect of 1 January 2003 and has restated its 2002 results in US dollars for comparison purposes.

        During the first quarter of 2003, the associated company Roche Holding AG announced an unexpected loss for 2002. This resulted in additional losses of USD 269 million before tax and USD 287 million after tax relating to 2002 being included in Novartis' first-half results.

        Apart from these matters and those discussed in Note 7 on subsequent events, there were no significant changes in accounting policies or estimates or in any other contingent liabilities from those disclosed in the 2002 Annual Report.

2. Changes in the scope of consolidation, and other significant transactions

        The following significant transactions were made during the six months to 30 June 2003 and in 2002:

2003

        On 11 February, Novartis announced the completed sale of the US rights to its Fioricet and Fiorinal lines (tension headache treatments) to Watson Pharmaceuticals, Inc. for USD 178 million.

        On 23 April, the urinary incontinence treatment Enablex (darifenacin) was acquired from Pfizer for a total of up to USD 225 million, part of which is still conditional on certain marketing approvals in the US and EU.

        On 9 May, 51% of the capital stock of Idenix Pharmaceuticals Inc., Cambridge, Massachusetts was acquired for an initial payment of USD 255 million in cash. This is included in the consolidated financial statements from this date. Goodwill of USD 293 million has been recorded on this transaction.

        Following changes in US GAAP and expected changes in IAS accounting rules, Novartis decided in June to redeem, in advance, equity instruments (put and call options on Novartis shares) that were sold to Deutsche Bank in 2001. This resulted in an equity reduction of USD 3.5 billion.

2002

        In January, the Business Unit completed the acquisition of two US farm animal vaccine companies, Grand Laboratories Inc., Iowa and ImmTech Biologies Inc., Kansas. The combined purchase price is a minimum of USD 98 million of which USD 78 million was settled in Novartis American Depositary Shares. The final purchase price may increase depending on whether certain future sales and other targets are met.

18

        The sale of the Food & Beverage portion of the Health & Functional Food businesses to Associated British Foods for approximately USD 287 million was completed in November 2002. The divested businesses' sales were USD 209 million in 2002.

        In November 2002, more than 99% of the shares of Lek, Slovenia's leading drug-maker, were acquired for approximately USD 0.9 billion. Only a provisional balance sheet has been included in the 31 December 2002 and 30 June 2003 consolidated financial statements. Lek sales and operating income have been consolidated from 1 January 2003.

        In the course of 2002, the Group increased its stake in Roche Holding AG voting shares by 11.4%, bringing its overall stake to 32.7%. In total at 31 December 2002 the Group owned 6.2% of Roche's total shares and equity securities.

3. Principal currency translation rates

 
   Average rates
H1 2003
USD
   Average rates
H1 2002
USD
   Period-end rates
30 June 2003
USD
   Period-end rates
31 Dec. 2002
USD
   Period-end rates
30 June 2002
USD
1 CHF   0.741   0.611   0.736   0.712   0.672
1 EUR   1.105   0.899   1.144   1.038   0.990
1 GBP   1.612   1.444   1.648   1.601   1.527
100 JPY   0.842   0.773   0.833   0.834   0.837
   
 
 
 
 

4. Share information

 
   First half
2003
   First half
2002
Average number of shares outstanding (million)   2 472.6   2 546.6
Basic earnings per share (USD)   0.96   0.92
Diluted earnings per share (USD)   0.94   0.90

 
 
Second quarter
2003
 
Second quarter
2002
Average number of shares outstanding (million)   2 471.9   2 547.5
Basic earnings per share (USD)   0.53   0.50
Diluted earnings per share (USD)   0.52   0.48

 
 
30 June 2003
 
30 June 2002
Number of shares outstanding (million)   2 472.3   2 539.7
Registered share price (CHF)   53.95   65.45
ADS price (USD)   39.81   43.83
Market capitalization (CHF billion)   133.4   166.2

19

5. Condensed consolidated change in liquidity

First half

 
   H1 2003
USD m
   H1 2002
USD m
   Change
USD m
Change in cash and cash equivalents   -1 244   -3 018   1 774
Change in marketable securities, financial debt and financial derivatives   -1 561   2 807   -4 368
   
 
 
Change in net liquidity   -2 805   -211   -2 594
Net liquidity at 1 January   6 972   8 026   -1 054
   
 
 
Net liquidity at 30 June   4 167   7 815   -3 648
   
 
 

Second quarter

 
   Q2 2003
USD m
   Q2 2002
USD m
   Change
USD m
Change in cash and cash equivalents   -1 420   -1 771   351
Change in marketable securities, financial debt and financial derivatives   -1 430   1 716   -3 146
   
 
 
Change in net liquidity   -2 850   -55   -2 795
Net liquidity at 1 April   7 017   7 870   -853
   
 
 
Net liquidity at 30 June   4 167   7 815   -3 648
   
 
 

6. Free cash flow

First half

 
   H1 2003
USD m
   H1 2002
USD m
   Change
USD m
Cash flow from operating activities   2 889   1 895   994
Purchase of tangible fixed assets   -515   -360   -155
Purchase of intangible and financial assets   -607   -354   -253
Sale of tangible, intangible and financial assets   614   444   170
Dividends   -1 724   -1 367   -357
   
 
 
Free cash flow (excl. acquisition of Roche)   657   258   399
   
 
 

Second quarter

 
   Q2 2003
USD m
   Q2 2002
USD m
   Change
USD m
Cash flow from operating activities   1 130   680   450
Purchase of tangible fixed assets   -296   -201   -95
Purchase of intangible and financial assets   -212   -140   -72
Sale of tangible, intangible and financial assets   101   210   -109
   
 
 
Free cash flow (excl. acquisition of Roche)   723   549   174
   
 
 

7. Subsequent events

        On 10 July 2003, Novartis announced that its affiliate companies had reached an agreement with GlaxoSmithKline (GSK) over lawsuits related to GSK's claimed Augmentin trade secrets. The lawsuits were filed with the US International Trade Commission (ITC) and state courts in Colorado and North Carolina. Under the terms of the agreement, GSK will receive single-digit percentage royalties on US sales of generic versions of Augmentin sold by Novartis or its affiliate companies for the four-year

20


period from July 2002 through June 2006. Further details of the settlement agreement remain confidential, however, do not have a material impact on the Group's consolidated financial statements. The termination of the ITC proceeding is subject to approval by the Administrative Law Judge and the ITC. The agreement does not affect GSK's appeal against Novartis' subsidiary Geneva Pharmaceuticals relating to Augmentin patents. The US Court of Appeals of the Federal Circuit heard the patent appeal case on 5 March 2003 and a decision is expected this year.

        Enteral Pump Investigation: The Department of Justice in the US is investigating marketing and pricing practices of the enteral pump industry in the US, including whether certain federal criminal statutes have been violated. One of Novartis' Medical Nutrition affiliates, Novartis Nutrition Corporation, is a subject of the investigation and is cooperating with the government.

8. Significant differences between IAS and United States Generally Accepted Accounting Principles

        The Group's consolidated financial statements have been prepared in accordance with IAS, which, as applied by the Group, differs in certain significant respects from US GAAP. The effects of the application of US GAAP to net income and equity are set out in the tables below.

        For further comments regarding the nature of these adjustments please consult Note 31 of the Novartis 2002 annual report.

 
   First half 2003
USD m
   First half 2002
USD m
Net income under IAS   2 379   2 350
US GAAP adjustments:        
Purchase accounting: Ciba-Geigy   -169   -96
Purchase accounting: other acquisitions   -62   0
Purchase accounting: IAS goodwill amortization   89   62
Available-for-sale securities and financial instruments   -98   -303
Pension provisions   6   -1
Share-based compensation   -118   -97
Consolidation of share-based compensation foundations   -4   -11
Deferred taxes   -185   -81
In-process Research & Development   -273   -7
Other   -56   -14
Deferred tax effect on US GAAP adjustments   -42   -11
   
 
Net income under US GAAP   1 467   1 791
   
 
Basic earnings per share under US GAAP (USD)   0.62   0.73
   
 
Diluted earnings per share under US GAAP (USD)   0.60   0.72
   
 

21

 
   30 June 2003
USD m
   30 June 2002
USD m
Equity under IAS   26 419   27 790
US GAAP adjustments:        
Purchase accounting: Ciba-Geigy   3 047   3 144
Purchase accounting: other acquisitions   2 946   3 193
Purchase accounting: IAS goodwill amortization   244   65
Pension provisions   1 115   961
Share-based compensation   -125   -127
Consolidation of share-based compensation foundations   -606   -472
Deferred taxes   -731   -501
In-process Research & Development   -1 280   -755
Other   -92   53
Deferred tax effect on US GAAP adjustments   -194   -218
   
 
Equity under US GAAP   30 743   33 133
   
 

22

Supplementary tables: First half 2003—Sales of top twenty pharmaceutical products (unaudited)

 
    
   US
   Rest of world
    
   % change
Brands
   Therapeutic area
   USD m
   % change
in local
currencies
   USD m
   % change
in local
currencies
   Total
USD m
   in USD
   in local
currencies
Diovan/Co-Diovan   Hypertension   552   35   590   38   1 142   45   37
Gleevec/Glivec   Chronic myeloid leukemia   145   43   370   110   515   102   83
Neoral/Sandimmun   Transplantation   111   -27   386   -12   497   -7   -16
Lamisil (group)   Fungal infections   187   17   229   6   416   19   11
Zometa   Cancer complications   269   85   143   211   412   124   112
Lotrel   Hypertension   394   33   0       394   33   33
Lescol   Cholesterol reduction   131   16   207   22   338   31   20
Sandostatin (group)   Acromegaly   153   11   185   1   338   13   6
Voltaren (group)   Inflammation/pain   6   -31   282   -8   288   -3   -9
Cibacen/Lotensin/Cibadrex   Hypertension   161   -5   61   -13   222   -3   -7
       
 
 
 
 
 
 
Top ten products total       2 109   25   2 453   20   4 562   31   22
Miacalcic   Osteoporosis   121   6   71   -18   192   1   -4
Trileptal   Epilepsy   136   58   42   28   178   53   51
Exelon   Alzheimer's disease   92   13   86   20   178   24   16
Tegretol (incl. CR/XR)   Epilepsy   54   -22   121   -6   175   -7   -12
Visudyne   Macular degeneration   87   2   84   32   171   22   14
Leponex/Clozaril   Schizophrenia   41   -34   106   0   147   -6   -13
Foradil   Asthma   5   -56   137   -1   142   10   -6
HRT range   Hormone replacement   56   -33   55   -24   111   -24   -29
Famvir*   Viral infections   69   -17   40   17   109   -4   -8
Femara   Breast cancer   32   8   76   19   108   29   16
       
 
 
 
 
 
 
Top twenty products total       2 802   17   3 271   15   6 073   24   16
Rest of portfolio       359   -1   1 168   -12   1 527   -1   -10
       
 
 
 
 
 
 
Total       3 161   14   4 439   7   7 600   18   10
       
 
 
 
 
 
 
*
2002 restated because of transfers to other Busines Units

23

Supplementary tables: Second quarter 2003—Sales of top twenty pharmaceutical products (unaudited)

 
    
   US
   Rest of world
    
   % change
Brands
   Therapeutic area
   USD m
   % change
in local
currencies
   USD m
   % change
in local
currencies
   Total
USD m
   in USD
   in local
currencies
Diovan/Co-Diovan   Hypertension   251   14   326   39   577   35   27
Gleevec/Glivec   Chronic myeloid leukemia   79   44   204   94   283   94   75
Neoral/Sandimmun   Transplantation   56   -21   200   -11   256   -4   -14
Lamisil (group)   Fungal infections   106   3   137   14   243   16   9
Zometa   Cancer complications   128   38   77   163   205   75   64
Lotrel   Hypertension   217   33   0       217   32   33
Lescol   Cholesterol reduction   55   10   112   22   167   28   17
Sandostatin (group)   Acromegaly   78   19   96   0   174   17   9
Voltaren (group)   Inflammation/pain   3   -31   153   -7   156   -1   -8
Cibacen/Lotensin/Cibadrex   Hypertension   83   1   32   -15   115   0   -3
       
 
 
 
 
 
 
Top ten products total       1 056   16   1 337   21   2 393   27   19
Miacalcic   Osteoporosis   63   0   37   -15   100   -2   -6
Trileptal   Epilepsy   78   54   24   26   102   52   47
Exelon   Alzheimer's disease   54   40   47   22   101   42   31
Tegretol (incl. CR/XR)   Epilepsy   29   -5   64   -5   93   0   -5
Visudyne   Macular degeneration   45   6   44   29   89   24   15
Leponex/Clozaril   Schizophrenia   16   -51   55   -1   71   -14   -22
Foradil   Asthma   3   -50   74   7   77   18   1
HRT range   Hormone replacement   26   -39   29   -26   55   -28   -33
Famvir*   Viral infections   34   -6   23   27   57   10   4
Femara   Breast cancer   13   -6   39   16   52   21   9
       
 
 
 
 
 
 
Top twenty products total       1 417   12   1 773   16   3 190   22   14
Rest of portfolio       197   21   604   -12   801   4   -5
       
 
 
 
 
 
 
Total       1 614   13   2 377   7   3 991   18   10
       
 
 
 
 
 
 
*
2002 restated because of transfers to other Business Units

24

Supplementary tables: Sales by region (unaudited)

First half

 
    
    
   % change
    
    
 
   H1 2003
USD m
   H1 2002
USD m
   USD
   local
currencies
   H1 2003
% of total
   H1 2002
% of total
Pharmaceuticals                        
  US   3 161   2 761   14   14   42   43
  Rest of world   4 439   3 684   20   7   58   57
   
 
 
 
 
 
TOTAL   7 600   6 445   18   10   100   100
   
 
 
 
 
 
Sandoz                        
  US   605   264   129   127   41   34
  Rest of world   858   520   65   42   59   66
   
 
 
 
 
 
Total   1 463   784   87   71   100   100
   
 
 
 
 
 
OTC                        
  US   245   218   12   13   30   31
  Rest of world   585   494   18   3   70   69
   
 
 
 
 
 
Total   830   712   17   6   100   100
   
 
 
 
 
 
Animal Health                        
  US   111   109   2   2   33   35
  Rest of world   228   204   12   3   67   65
   
 
 
 
 
 
Total   339   313   8   2   100   100
   
 
 
 
 
 
Medical Nutrition (incl. divested activities)                        
  US   124   122   2   0   31   26
  Rest of world   277   341   -19   -32   69   74
   
 
 
 
 
 
Total   401   463   -13   -24   100   100
   
 
 
 
 
 
Infant & Baby                        
  US   535   517   3   3   81   77
  Rest of world   129   151   -15   -5   19   23
   
 
 
 
 
 
Total   664   668   -1   2   100   100
   
 
 
 
 
 
CIBA Vision                        
  US   224   223   0   0   36   41
  Rest of world   403   327   23   8   64   59
   
 
 
 
 
 
Total   627   550   14   5   100   100
   
 
 
 
 
 
Consumer Health                        
  US   1 844   1 453   27   26   43   42
  Rest of world   2 480   2 037   22   7   57   58
   
 
 
 
 
 
TOTAL   4 324   3 490   24   15   100   100
   
 
 
 
 
 
Group                        
  US   5 005   4 214   19   19   42   42
  Rest of world   6 919   5 721   21   7   58   58
   
 
 
 
 
 
TOTAL   11 924   9 935   20   12   100   100
   
 
 
 
 
 

25

Second quarter

 
    
    
   % change
    
    
 
   Q2 2003
USD m
   Q2 2002
USD m
   USD
   local
currencies
   Q2 2003
% of total
   Q2 2002
% of total
Pharmaceuticals                        
  US   1 614   1 428   13   13   40   42
  Rest of world   2 377   1 949   22   7   60   58
   
 
 
 
 
 
TOTAL   3 991   3 377   18   10   100   100
   
 
 
 
 
 
Sandoz                        
  US   261   133   96   93   37   33
  Rest of world   441   266   66   42   63   67
   
 
 
 
 
 
Total   702   399   76   59   100   100
   
 
 
 
 
 
OTC                        
  US   122   113   8   9   28   30
  Rest of world   307   259   19   10   72   70
   
 
 
 
 
 
Total   429   372   15   9   100   100
   
 
 
 
 
 
Animal Health                        
  US   60   59   2   3   33   36
  Rest of world   122   104   17   6   67   64
   
 
 
 
 
 
Total   182   163   12   5   100   100
   
 
 
 
 
 
Medical Nutrition (incl. divested activities)                        
  US   63   62   2   1   30   26
  Rest of world   148   180   -18   -31   70   74
   
 
 
 
 
 
Total   211   242   -13   -23   100   100
   
 
 
 
 
 
Infant & Baby                        
  US   286   269   6   6   80   78
  Rest of world   71   76   -7   3   20   22
   
 
 
 
 
 
Total   357   345   3   5   100   100
   
 
 
 
 
 
CIBA Vision                        
  US   118   121   -2   -2   36   41
  Rest of world   213   174   22   6   64   59
   
 
 
 
 
 
Total   331   295   12   3   100   100
   
 
 
 
 
 
Consumer Health                        
  US   910   757   20   20   41   42
  Rest of world   1 302   1 059   23   9   59   58
   
 
 
 
 
 
TOTAL   2 212   1 816   22   14   100   100
   
 
 
 
 
 
Group                        
  US   2 524   2 185   16   15   41   42
  Rest of world   3 679   3 008   22   8   59   58
   
 
 
 
 
 
TOTAL   6 203   5 193   19   11   100   100
   
 
 
 
 
 

26

Quarterly analysis

Key figures by quarter

Group

 
    
    
   Change
 
   Q2 2003
USD m
   Q1 2003
USD m
 
   USD m
   %
Total sales   6 203   5 721   482   8
Operating income   1 463   1 351   112   8
Financial income, net   119   180   -61   -34
Taxes   -270   -219   -51   23
Net income   1 316   1 063   253   24
   
 
 
 

Sales by region

 
    
    
   Change
 
   Q2 2003
USD m
   Q1 2003
USD m
 
   USD m
   %
US   2 524   2 481   43   2
Europe   2 253   2 006   247   12
Rest of world   1 426   1 234   192   16
Total   6 203   5 721   482   8
   
 
 
 

Sales by business units

 
    
    
   Change
 
   Q2 2003
USD m
   Q1 2003
USD m
 
   USD m
   %
Pharmaceuticals   3 991   3 609   382   11
Sandoz   702   761   -59   -8
OTC   429   401   28   7
Animal Health   182   157   25   16
Medical Nutrition   211   190   21   11
Infant & Baby   357   307   50   16
CIBA Vision   331   296   35   12
Consumer Health   2 212   2 112   100   5
Total   6 203   5 721   482   8
   
 
 
 

Operating income by business unit

 
    
    
   Change
 
   Q2 2003
USD m
   Q1 2003
USD m
 
   USD m
   %
Pharmaceuticals   1 012   1 100   -88   -8
Sandoz   145   112   33   29
OTC   82   52   30   58
Animal Health   17   23   -6   -26
Medical Nutrition   16   20   -4   -20
Infant & Baby   73   45   28   62
CIBA Vision   60   29   31   107
Divisional Management costs   -6   -4   -2   50
Consumer Health   387   277   110   40
Corporate income/expense, net   64   -26   90    
Total   1 463   1 351   112   8
   
 
 
 

27


SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, Novartis AG has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

    NOVARTIS AG

Date: July 22, 2003
 
By:
 
/s/  MALCOLM CHEETHAM      
Name: Malcolm Cheetham
Title: Head Group Financial Reporting
          and Accounting


QuickLinks

MEDIA RELEASE • COMMUNIQUE AUX MEDIAS • MEDIENMITTEILUNG
SIGNATURES