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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 April 22, 2004
(Commission File No. 1-15024)

This Report on Form 6-K shall be incorporated by reference in our Registration Statements on Form F-3 as filed with the Commission on May 11, 2001 (File No. 333-60712) and on January 21, 2002 (File No. 333-81862) and our Registration Statement on Form S-8 as filed with the Commission on May 14, 2001 (File No. 333-13506), in each case to the extent not superseded by documents or reports subsequently filed by us under the Securities Act of 1933 or the Securities Exchange Act of 1934, in each case as amended

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

Enclosure:    Novartis 1rst Quarter 2004 Results Release, dated April 22, 2004

    Novartis International AG
Novartis Global Communications
CH-4002 Basel
Switzerland
GRAPHIC     
Internet Address:
http://www.novartis.com

 
 
Nehl Horton
Novartis Global Media Relations
Tel + 41 61 324 5749
or + 41 61 324 2200
nehl.horton@group.novartis.com
MEDIA RELEASE • COMMUNIQUE AUX MEDIAS • MEDIENMITTEILUNG

Novartis outpaces market with strong double digit sales growth and robust gains in operating and net income in first quarter

First quarter

 
   Q1 2004

   Q1 2003

   % Change
 
   USD m

   % of sales

   USD m

   % of sales

   USD

   lc1
Group sales   6 639       5 721       16   8
  Pharmaceuticals sales   4 310       3 609       19   11
  Consumer Health sales   2 329       2 112       10   2
Operating income   1 494   22.5   1 351   23.6   11    
Net income   1 293   19.5   1 063   18.6   22    

1    lc—Local currencies

2    OTC—Over the counter medicines

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

Unless otherwise stated, growth rates are in USD and comments refer to Q1 2004 figures

Basel, 22 April 2004—Commenting on the first quarter results published today, Dr. Daniel Vasella, Chairman and CEO of Novartis, said, "In the first quarter, we delivered a strong performance with highly competitive sales increases and double digit gains in both operating and net income. I am pleased that our team is continuing to strengthen our operational excellence, turning in good results driven by the dynamic growth of our novel medicines. Based on our excellent pipeline and broad, young product portfolio, we expect to outpace the market in sales growth and continue to gain market share. Barring unforeseen events, we anticipate delivering record full year operating and net income."

1


Sales

Group sales up 16% to USD 6.6 billion

First quarter sales climbed 16% (8% lc) driven by dynamic growth of the young pharmaceutical product portfolio. Volume expansion of 5% was the key driver of local currency sales growth, with price increases adding 2% and acquisitions 1%.

Pharmaceuticals sales up 19% to USD 4.3 billion

Sustaining its momentum, the core Pharmaceuticals business achieved above-market growth3 to post a 19% (11% lc) rise in first quarter 2004 sales.

3    Based on IMS data

The cardiovascular (22%; 16% lc) and oncology franchises (26%; 17% lc) were key growth drivers in the first quarter, led by Diovan, Lotrel, Gleevec/Glivec, Zometa and Femara. Newly launched products Elidel and Zelnorm/Zelmac also performed well.

Based on IMS data, Novartis increased global health care market share from 4.35% to 4.45% in the first quarter of 2004, with pharmaceutical sales up 12% in the US, 13% in Japan and 27% in Europe.

Consumer Health sales up 10% to USD 2.3 billion

First quarter sales increase of 10% (2% lc) for Consumer Health was driven by an exceptionally strong performance of OTC and solid growth of Medical Nutrition, Infant & Baby and CIBA Vision, all of which posted double-digit growth in USD.

Sandoz US sales were impacted by increased competition for AmoxC, while Omeprazole sales provided positive upside. Key international markets including the UK, France and Russia performed well.

OTC sales increased 24% (14% lc), driven mainly by the 31% growth of global strategic brands, including cough and cold products growth of 20% versus first quarter 2003. Nicotinell benefited from good underlying fundamentals and continued consumer preference for its coated gum offering. Lamisil grew primarily in the US and in Japan.

Animal Health benefited from increased share of sales for new products—particularly Milbemax, Atopica and Deramaxx—which rose from 6% in 2003 to 14% in the first quarter of 2004.

The Medical Nutrition acquisition of Mead Johnson was consolidated for the first time and contributed an additional USD 34 million of sales in the quarter. Excluding the positive acquisition impact, sales grew by 5% in local currency.

Infant & Baby sales grew 14% (13% lc) based on strong performance of food products in the US.

CIBA Vision sales increased 14% (5% lc) due to the strong performance of Focus Night & Day and Dailies.

2


Operating income

First quarter

 
     
Q1 2004
     
Q1 2003
    
 
   USD m

   % of sales

   USD m

   % of sales

   Change
in %
Pharmaceuticals   1 246   28.9   1 100   30.5   13
Consumer Health   335   14.4   277   13.1   21
Corporate income/expense, net   -87       -26        
Total   1 494   22.5   1 351   23.6   11

Group operating income rises 11% to USD 1.5 billion

Mainly driven by dynamic Pharmaceuticals sales, group operating income grew 11% in the first quarter of 2004. Continued improvement of product mix and productivity gains led to a further decline in COGS to 23.1% of sales. Aggressive investment continued in the build-up of the new Novartis Institutes for Biomedical Research (NIBR) facility in Boston, driving Research & Development costs up 12%. Marketing & Sales costs decreased by one percentage point to 31.0% of sales, but grew 12% in USD as investment in the marketed brand portfolio continued. On a comparable basis, General & Administrative costs increased to 9.1% of sales versus 8.9% in the first quarter of 2003 after adjusting for the benefit of a USD 178 million divestment gain in 2003.

Pharmaceuticals operating income climbs 13% to USD 1.2 billion

Strong sales drove double-digit pharmaceutical operating income expansion in the first quarter of 2004. Improvements in product mix and productivity gains resulted in a 0.9% reduction in COGS as a percentage of sales. As a result of relatively lower advertising outlays, Marketing & Sales costs decreased by 2.1 percentage points to 32.1% of sales. Research & Development reached 18.2% of sales, as investments in NIBR continued as planned.

Consumer Health operating income rises 21% to USD 0.3 billion

Dynamic operating income expansion of 21% was mainly driven by strong performances in OTC, CIBA Vision and Infant & Baby, which more than offset the AmoxC competitive pressures at Sandoz.

Group net income

Net income jumped 22%, reaching USD 1.3 billion as a result of strong operational business expansion and the improved performance of our Roche investment. Group tax rate remained at 17.0% for the quarter.

Group outlook (barring any unforeseen events)

Novartis expects to deliver strong top-line growth ahead of the market and in the high single-digit range in local currencies, driven by key pharmaceutical brands, seven of which are forecast to be blockbusters by 2008, and boosted by the launch and roll-out of attractive new products.

The rapid build-up phase of NIBR in Cambridge is scheduled for completion in 2004. At the same time, Development investments are expected to grow strongly, reflecting the rich late-stage pharmaceutical pipeline. The over proportionate investment in Research & Development is expected to ease in 2004, providing Novartis with the platform to fulfill its commitment to bringing innovative new therapies to patients.

Barring unforeseen events, both full-year operating and net income are expected to exceed 2003 levels.

3


Potential Transaction with Aventis

The Board of Directors of Novartis has decided to accept the offer of the Aventis Supervisory Board to negotiate conditions for a potential business combination. No assurances can be given that an agreement can be reached.

Pharmaceutical business and key product highlights

Primary Care

Diovan (+30%; +22% lc; US: +11%) strengthened its position as the world's leading angiotensin receptor blocker (ARB) and fastest growing top anti-hypertensive. Combination formulations continued to gain in the US, with double digit growth in several large European markets. Regulatory submissions for the post-myocardial infarction indication were filed in Sweden, the UK and Switzerland in the first quarter of 2004. A significant category management program is being launched in the US to strengthen Novartis leadership in the hypertension market.

Lotrel (US: +21%), the leading combination treatment for hypertension, posted dynamic growth in the first quarter.

Lamisil (+26%; +19% lc; US: +28%), the leading treatment with high cure rates of fungal nail infections, delivered significant sales growth in the US.

Elidel (+70%; +65% lc; US: +47%), the number one branded prescription treatment for eczema, delivered high double-digit growth founded on continued strong demand for this novel product. New launches in Spain, South Africa, South Korea and Saudi Arabia, marked the increasing global presence of the brand, which is now available in over 50 countries.

Zelnorm/Zelmac (+240%; +233% lc; US: +287%), a breakthrough therapy for constipation-prone irritable bowel syndrome, grew dynamically due to enhanced physician adoption. Phase III trials for the dyspepsia indication and proof of concept studies in GERD4 began in the first quarter.

4
Gastroesophageal Reflux Disease

Oncology

Gleevec/Glivec (+51%; +37% lc; US: +14%), for all stages of Philadelphia-Chromosome positive chronic myeloid leukemia (CML) and certain forms of gastro-intestinal stromal tumors (GIST), continued to grow dynamically, boosted by an increased penetration in reaching patients in the first line CML segment and enhanced use of new treatment regimens with higher average daily doses that improve patient outcomes. With better results possible for GIST patients5, there are more patients being diagnosed and treated, which has further boosted sales. The number of patients reached by the Gleevec/Glivec patient assistance programs rose to more than 8000 worldwide, providing treatment to many needy patients at reduced cost who otherwise would not have access.

5
Gastrointestinal Stromal Tumors—Diagnosis, Epidemiology, and Prognosis, Lars-Gunnar Kindblom.
Oral Presentation at the American Society of Clinical Oncology 2003.

Zometa (+21%; +15% lc; US: +4%), the most prescribed intravenous bisphosphonate for bone metastases, continued to post strong growth outside the US. In the US, market growth has been dampened by Medicare reform. In February, the FDA revised the labeling for Zometa to include longer-term data that confirm the safety profile established at the time of the initial approval of Zometa. Zometa now has been used in more than 600 000 patients worldwide, continuing to demonstrate its efficacy and long-term safety in patients with advanced cancer.

4


Femara (+39%; +30% lc; US: +53%), first-line therapy for advanced breast cancer in postmenopausal women, posted dynamic sales growth supported by its strong profile and the landmark results of the MA-17 extended adjuvant study published in the fourth quarter of 2003. These showed a 43% reduction in the risk of cancer recurrence, in addition to significantly improved disease-free survival in postmenopausal women with early breast cancer who had completed prior standard adjuvant tamoxifen therapy.

First quarter regulatory and clinical highlights

Novartis continues to pursue new treatments and cures for patients through industry-leading research and development activities. The current pipeline includes ten new medicines in late-stage development with combined potential peak sales projected at over USD 10 billion. Of the 79 development projects underway, 64 compounds are in Phase II/III or registration.

Three highly promising compounds—LAF237, a Dipeptidylpeptidase (DPP-4) inhibitor, for the treatment of Type-II diabetes; SPP100, a renin inhibitor, for the treatment of hypertension; and Zelmac/Zelnorm FD, for dyspepsia—moved into Phase III clinical trials in the first quarter of 2004.

Major approvals and launches

Diovan received its first approval for the post-myocardial infarction indication in Turkey based on VALIANT data. Filings for the post-myocardial infarction indication were submitted in Sweden, the UK and Switzerland in the first quarter. Co-Diovan 160/25 launched in Germany and Co-Diovan 160/12.5 launched in Ireland and the Netherlands in the first quarter.

Certican, which targets the primary causes of allograft dysfunction, including acute rejection, launched in Germany after receiving final national approvals in six European countries in the first quarter. Certican completed the Mutual Recognition Procedure in 15 EU countries for the prevention of rejection in kidney and heart transplantation in combination with low dose Neoral.

Elidel launched in Spain, South Africa, South Korea and Saudi Arabia in the first quarter. The leading non-steroidal treatment for eczema is now available in more than 50 markets.

Myfortic is an advanced, enteric-coated formulation of the sodium salt of mycophenolic acid (MPA), a key immunosuppressant used in combination therapy in renal transplant patients. Myfortic successfully completed the European Mutual Recognition Procedure and received US FDA approval in February. Myfortic is now registered in over 40 countries worldwide.

Corporate

Net corporate expense totaled USD 87 million, USD 61 million higher than in the first quarter of 2003, principally due to lower pension income.

Net financial income declined in the first quarter as a result of the low yield environment. The overall return on net liquidity was 2.6%.

Novartis' stake in Chiron Corporation generated income of USD 17 million. The improved performance of the Roche stake versus prior year resulted in income of USD 11 million, USD 288 million higher than last year. In total, associated companies resulted in overall income of USD 31 million.

5

In July 2002, Novartis started a third program to repurchase shares via a second trading line on the SWX Swiss Exchange. Since the program began, a total of 51.2 million shares have been repurchased for USD 2.1 billion. Of these, 4.3 million shares were repurchased in the first quarter of 2004 for approximately USD 188 million. Additional shares were purchased for USD 128 million on the first trading line.

Overall, the Group's equity decreased by USD 1.1 billion over the three months to USD 29.3 billion as of 31 March 2004. First quarter Group net income of USD 1.3 billion and positive fair value adjustments of USD 0.2 billion were more than offset by translation losses of USD 0.3 billion, treasury share purchases of USD 0.3 billion and dividend payments of USD 2.0 billion. The debt/equity ratio was 0.22:1 vs. 0.20:1 at the end of 2003.

Novartis thus maintained the strength of its balance sheet and continues to be rated Triple A by Standard & Poor's and Moody's, a rating it has held since its creation in 1996. Novartis is now one of just two European-based non-financial companies with this rating.

Free cash flow in the first quarter fell by USD 998 million, principally due to an increase in dividend payment of USD 244 million and a reduction in cash flow from operating activities of USD 597 million due to USD 705 million of withholding tax on the dividend being paid in the first quarter of 2004 compared with a corresponding payment occurring in the second quarter in 2003.

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 "forecast", "Outlook", "expects", "expected", "projected", "scheduled", "potential", "anticipated" 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. Novartis is providing the information in this press release as of this date and does not undertake any obligation to update any forward-looking statements contained in this press release as a result of new information, future events or otherwise.

Novartis AG (NYSE: NVS) is a world leader in pharmaceuticals and consumer health. In 2003, the Group's businesses achieved sales of USD 24.9 billion and a net income of USD 5.0 billion. The Group invested approximately USD 3.8 billion in R&D. Headquartered in Basel, Switzerland, Novartis Group companies employ about 78 500 people and operate in over 140 countries around the world. For further information please consult http://www.novartis.com.

6


Further Reporting Dates

20 July 2004   First half and second quarter results
21 October 2004   Nine-month and third quarter results
January 2005   2004 full-year results

Contacts

Media:   Investors:
+41 61 324 2200 (Nehl Horton—Basel)   +41 61 324 8433 (Karen Huebscher—Basel)
+1 212 830 2457 (Sheldon Jones—US)   +1 212 307 1122 (US Investor Relations)

7

Consolidated income statements (unaudited)

First quarter

 
   Q1 2004
USD m

   Q1 2003
USD m

   Change
 
   USD m

   %
Total sales   6 639   5 721   918   16
Cost of goods sold   -1 536   -1 363   -173   13
Gross profit   5 103   4 358   745   17
Marketing & Sales   -2 060   -1 833   -227   12
Research & Development   -947   -843   -104   12
General & Administration   -602   -331   -271   82
Operating income   1 494   1 351   143   11
Result from associated companies   31   -246   277    
Financial income, net   28   180   -152   -84
Income before taxes and minority interests   1 553   1 285   268   21
Taxes   -264   -219   -45   21
Minority interests   4   -3   7    
Net income   1 293   1 063   230   22

8

Condensed consolidated balance sheets

 
   31 March 2004
(unaudited)
USD m

   31 Dec 2003
USD m

   Change
USD m

   31 March 2003
(unaudited)
USD m
Assets                
Total long-term assets   27 059   27 044   15   24 782
Current assets                
Inventories   3 424   3 346   78   3 147
Trade accounts receivable   4 326   4 376   -50   3 928
Other current assets   1 352   1 292   60   1 909
Cash, short-term deposits and marketable securities   12 106   13 259   -1 153   12 896
Total current assets   21 208   22 273   -1 065   21 880
Total assets   48 267   49 317   -1 050   46 662

Equity and liabilities
 
 
 
 
 
 
 
 

Total equity
 
29 325
 
30 429
 
-1 104
 
28 013
Long-term liabilities (including minority interests)                
Financial debts   3 145   3 191   -46   2 898
Other long-term liabilities   6 376   6 377   -1   6 210
  Total long-term liabilities   9 521   9 568   -47   9 108
Short-term liabilities                
Trade accounts payable   1 597   1 665   -68   1 288
Financial debts and derivatives   3 399   2 779   620   2 981
Other short-term liabilities   4 425   4 876   -451   5 272
  Total short-term liabilities   9 421   9 320   101   9 541
Total liabilities   18 942   18 888   54   18 649
Total equity and liabilities   48 267   49 317   -1 050   46 662

9

Condensed consolidated changes in equity

First quarter (unaudited)

 
   Q1 2004
USD m

   Q1 2003
USD m

   Change
USD m
Consolidated equity at 1 January   30 429   28 269   2 160
Dividends   -1 968   -1 724   -244
Purchase of treasury shares, net   -316   -122   -194
Translation effects   -254   610   -864
Net income for first quarter   1 293   1 063   230
Other equity movements   141   -83   224
Consolidated equity at 31 March   29 325   28 013   1 312

10

Condensed consolidated cash flow statements

First quarter (unaudited)

 
   Q1 2004
USD m

   Q1 2003
USD m

   Change
USD m
Net income   1 293   1 063   230
Reversal of non-cash items            
  Taxes   264   219   45
  Depreciation, amortization and impairments   309   304   5
  Net financial income   -28   -180   152
  Other   -74   62   -136
Net income adjusted for non-cash items   1 764   1 468   296
Interest and other financial receipts   97   114   -17
Interest and other financial payments   -29   -26   -3
Taxes paid   -388   -201   -187
Cash flow before working capital and provision changes   1 444   1 355   89
Restructuring payments and other cash payments out of provisions   -41   -47   6
Change in net current assets and other operating cash flow items   -241   451   -692
Cash flow from operating activities   1 162   1 759   -597
Investments in tangible fixed assets   -259   -219   -40
Decrease/increase in marketable securities, intangible and financial assets   -1 030   167   -1 197
Cash flow used for investing activities   -1 289   -52   -1 237
Cash flow used for financing activities   -2 252   -1 707   -545
Translation effect on cash and cash equivalents   -19   176   -195
Change in cash and cash equivalents   -2 398   176   -2 574
Cash and cash equivalents at 1 January   5 646   5 798   -152
Cash and cash equivalents at 31 March   3 248   5 974   -2 726

11

Sales by Business Unit

First quarter (unaudited)

 
   Q1 2004
USD m

   Q1 2003
USD m

   % change
 
   USD

   lc
Pharmaceuticals   4 310   3 609   19   11
Sandoz   719   761   -6   -14
OTC   498   401   24   14
Animal Health   168   157   7   -2
Medical Nutrition   258   190   36   25
Infant & Baby   349   307   14   13
CIBA Vision   337   296   14   5
Consumer Health   2 329   2 112   10   2
Total   6 639   5 721   16   8

12

Operating income by Business Unit

First quarter (unaudited)

 
   Q1 2004
   Q1 2003
    
 
   USD m

   % of sales

   USD m

   % of sales

   Change in %
Pharmaceuticals   1 246   28.9   1 100   30.5   13
Sandoz   84   11.7   112   14.7   -25
OTC   105   21.1   52   13.0   102
Animal Health   19   11.3   23   14.6   -17
Medical Nutrition   20   7.8   20   10.5   0
Infant & Baby   60   17.2   45   14.7   33
CIBA Vision   51   15.1   29   9.8   76
Divisional Management costs   -4       -4       0
Consumer Health   335   14.4   277   13.1   21
Corporate income/expense, net   -87       -26       235
Total   1 494   22.5   1 351   23.6   11

13

Consolidated income statements (unaudited)

First quarter

 
   Pharmaceuticals Division

   Consumer Health Division

   Corporate

   Total
 
   Q1 2004
USD m

   Q1 2003
USD m

   Q1 2004
USD m

   Q1 2003
USD m

   Q1 2004
USD m

   Q1 2003
USD m

   Q1 2004
USD m

   Q1 2003
USD m
Sales to third parties   4 310   3 609   2 329   2 112           6 639   5 721
Sales to other Divisions/Business Units   36   27   17   30   -53   -57        
Sales of Divisions/Business Units   4 346   3 636   2 346   2 142   -53   -57   6 639   5 721
Cost of goods sold   -591   -527   -1 005   -893   60   57   -1 536   -1 363
Gross profit   3 755   3 109   1 341   1 249   7   0   5 103   4 358
Marketing & Sales   -1 384   -1 235   -676   -598           -2 060   -1 833
Research & Development   -784   -689   -127   -119   -36   -35   -947   -843
General & Administration   -341   -85   -203   -255   -58   9   -602   -331
Operating income   1 246   1 100   335   277   -87   -26   1 494   1 351
Result from associated companies                           31   -246
Financial income, net                           28   180
Income before taxes and minority interests                           1 553   1 285
Taxes                           -264   -219
Minority interests                           4   -3
Net income                           1 293   1 063

14

Notes to the interim financial report for the first three months ended 31 March 2004 (unaudited)

1. Basis of preparation

This unaudited interim financial report has been prepared in accordance with the accounting policies set out in the 2003 Annual Report and International Accounting Standard 34 on Interim Financial Reporting.

There were no significant changes in accounting policies or estimates or in any contingent liabilities from those disclosed in the 2003 Annual Report.

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

The following significant transactions were made during the three months to 31 March 2004 and in 2003:

2004

On 13 February, the business unit completed the acquisition of Mead Johnson & Company's global adult medical nutrition business for USD 385 million in cash. These activities are included in the consolidated financial statements from this date with USD 34 million of sales being recorded in the first quarter. Based on a preliminary estimate, goodwill of USD 135 million has been recorded on this transaction.

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 8 May, 51% of the capital stock of Idenix Pharmaceuticals Inc. was acquired for an initial payment of USD 255 million in cash. This company is included in the consolidated financial statements from this date. Goodwill of USD 297 million has been recorded on this transaction.

3. Principal currency translation rates

 
   Average rates Q1 2004
USD

   Average rates Q1 2003
USD

   Period-end rates 31 March 2004
USD

   Period-end rates 31 Dec. 2003
USD

   Period-end rates 31 March 2003
USD
1 CHF   0.797   0.732   0.785   0.800   0.734
1 EUR   1.250   1.073   1.226   1.247   1.083
1 GBP   1.838   1.602   1.837   1.774   1.576
100 JPY   0.931   0.841   0.960   0.935   0.839

15

4. Share information

 
   Q1 2004

   Q1 2003
Average number of shares outstanding (million)   2 464.6   2 472.9
Basic earnings per share (USD)   0.52   0.43
Diluted earnings per share (USD)   0.52   0.42
 
     
31 March 2004

   31 March 2003
Number of shares outstanding (million)   2 460.8   2 471.4
Registered share price (CHF)   53.80   50.05
ADS price (USD)   42.60   37.06
Market capitalization (USD billion)   104.0   90.8

5. Condensed consolidated change in liquidity

 
   Q1 2004
USD m

   Q1 2003
USD m

   Change
USD m
Change in cash and cash equivalents   -2 398   176   -2 574
Change in marketable securities, financial debt and financial derivatives   671   -131   802
Change in net liquidity   -1 727   45   -1 772
Net liquidity at 1 January   7 289   6 972   317
Net liquidity at 31 March   5 562   7 017   -1 455

6. Free cash flow

 
   Q1 2004
USD m

   Q1 2003
USD m

   Change
USD m
Cash flow from operating activities   1 162   1 759   -597
Purchase of tangible fixed assets   -259   -219   -40
Purchase of intangible assets and financial assets   -227   -395   168
Sale of tangible, intangible and financial assets   228   513   -285
Dividends   -1 968   -1 724   -244
Free cash flow   -1 064   -66   -998

7. Significant differences between IFRS and United States Generally Accepted Accounting Principles

The Group's consolidated financial statements have been prepared in accordance with IFRS, 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.

16


For further comments regarding the nature of these adjustments please consult Note 32 of the Novartis 2003 annual report.

 
   Q1 2004
USD m

   Q1 2003
USD m
Net income under IFRS   1 293   1 063
US GAAP adjustments:        
Purchase accounting: Ciba-Geigy   -91   -67
Purchase accounting: other acquisitions   42   -65
Purchase accounting: IFRS goodwill amortization   45   41
Available-for-sale securities and financial instruments   33   -39
Pension provisions   2   3
Share-based compensation   -15   -49
Consolidation of share-based compensation foundation   -4   -6
Deferred taxes   0   -144
In-process Research & Development arising on acquisitions   50   13
Other   19   -44
Deferred tax effect on US GAAP adjustments   -11   -1
Net income under US GAAP   1 363   705
Basic earnings per share under US GAAP (USD)   0.57   0.30
Diluted earnings per share under US GAAP (USD)   0.57   0.29
 
   31 March 2004
USD m

   31 March 2003
USD m
Equity under IFRS   29 325   28 013
US GAAP adjustments:        
Purchase accounting: Ciba-Geigy   2 984   3 140
Purchase accounting: other acquisitions   2 850   2 942
Purchase accounting: IFRS goodwill amortization   382   196
Pension provisions   1 211   1 109
Share-based compensation   -81   -199
Consolidation of share-based compensation foundation   -691   -611
Deferred taxes   -609   -706
In-process Research & Development arising on acquisitions   -1 272   -994
Other   -74   -80
Deferred tax effect on US GAAP adjustments   -173   -157
Equity under US GAAP   33 852   32 653

17

Supplementary tables: Q 1 2004 — Sales of top twenty pharmaceutical products (unaudited)

 
    
   US

   Rest of world

   Total

   % change
Brands

   Therapeutic area

   USD m

   % change
in local
currencies

   USD m

   % change
in local
currencies

   USD m

   in USD

   in local
currencies
Diovan/Co-Diovan   Hypertension   335   11   398   34   733   30   22
Gleevec/Glivec   Chronic myeloid leukemia   75   14   276   47   351   51   37
Zometa   Cancer complications   146   4   105   38   251   21   15
Neoral/Sandimmun   Transplantation   46   -16   205   -3   251   4   -6
Lamisil (group)   Fungal infections   104   28   114   11   218   26   19
Lotrel   Hypertension   215   21   0       215   21   21
Sandostatin (group)   Acromegaly   88   17   113   13   201   23   15
Lescol   Cholesterol reduction   62   -18   111   4   173   1   -6
Voltaren (group)   Inflammation/pain   2   -33   144   1   146   11   0
Trileptal   Epilepsy   96   66   29   38   125   64   59
Top ten products total       1 169   13   1 495   20   2 664   25   17
Exelon   Alzheimer's disease   49   29   57   27   106   38   29
Visudyne   Macular degeneration   45   7   56   21   101   23   14
Tegretol (incl. CR/XR)   Epilepsy   25   0   68   7   93   13   5
Cibacen/Lotensin/Cibadrex   Hypertension   55   -29   33   1   88   -18   -21
Miacalcic   Osteoporosis   51   -12   35   -7   86   -7   -10
Elidel   Eczema   63   47   17   226   80   70   65
Foradil   Asthma   2   0   77   6   79   22   7
Femara   Breast cancer   29   53   49   18   78   39   30
Leponex/Clozaril   Schizophrenia   15   -40   63   7   78   3   -9
Zelmac/Zelnorm   Irritable bowel syndrome   58   287   10   93   68   240   233
Top twenty products total       1 561   13   1 960   18   3 521   24   16
Rest of portfolio       172   2   617   -8   789   3   — 6
Total       1 733   12   2 577   11   4 310   19   11

18

Sales by region

First quarter (unaudited)

 
    
    
   % change
    
    
 
   Q1 2004
USD m

   Q1 2003
USD m

   USD

   local
currencies

   Q1 2004
% of total

   Q1 2003
% of total
Pharmaceuticals                        
  US   1 733   1 547   12   12   40   43
  Rest of world   2 577   2 062   25   11   60   57
TOTAL   4 310   3 609   19   11   100   100
Sandoz                        
  US   226   344   -34   -35   31   45
  Rest of world   493   417   18   4   69   55
Total   719   761   -6   -14   100   100
OTC                        
  US   129   123   5   5   26   31
  Rest of world   369   278   33   19   74   69
Total   498   401   24   14   100   100
Animal Health                        
  US   59   51   16   16   35   32
  Rest of world   109   106   3   -11   65   68
Total   168   157   7   -2   100   100
Medical Nutrition                        
  US   89   61   46   48   34   32
  Rest of world   169   129   31   13   66   68
Total   258   190   36   25   100   100
Infant & Baby                        
  US   289   249   16   16   83   81
  Rest of world   60   58   3   3   17   19
Total   349   307   14   13   100   100
CIBA Vision                        
  US   110   106   4   4   33   36
  Rest of world   227   190   19   5   67   64
Total   337   296   14   5   100   100
Consumer Health                        
  US   902   934   -3   -4   39   44
  Rest of world   1 427   1 178   21   7   61   56
TOTAL   2 329   2 112   10   2   100   100
Group                        
  US   2 635   2 481   6   6   40   43
  Rest of world   4 004   3 240   24   10   60   57
TOTAL   6 639   5 721   16   8   100   100

19


SIGNATURES

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

    Novartis AG

 
 
 
 
 
Date: April 22, 2004   By: /s/ MALCOLM CHEETHAM
    Name: Malcolm Cheetham
    Title: Head Group Financial Reporting and Accounting



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