Novartis maintained strong innovation momentum in second quarter, while reconfirming full year outlook

Net sales grew 2% in Q2, with core operating leverage across Q2 and H1 - Net sales of USD 14.6 billion grew 2% (+2% cc ) in Q2; USD 28.7 billion (+2%, +2% cc) in H1 Strong operating income growth in Q2 of 6% (+11% cc) and H1 of 14% (+21% cc), growing faster than sales Core operating income in Q2 up 3% (+6% cc) and H1 up 2% (+6% cc), growing faster than sales Core EPS up 4% (+7% cc) in Q2; up 2% (+7% cc) in H1 Free cash flow improved by 38% in Q2 to USD 2.4 billion; USD 3.2 billion (+6%) in H1 - Significant innovation milestones in Q2 reinforce pipeline strength and growth prospects - Zykadia received FDA approval in ALK+ non-small cell lung cancer LCZ696 granted FDA Fast Track designation and agreed to rolling submission in heart failure CART immunotherapy CTL019 granted FDA Breakthrough Therapy status, fifth for Novartis Ophthalmology pipeline strengthened with exclusive ex-US rights to Fovista and positive CHMP opinion for Simbrinza in glaucoma Novartis entered agreement to license Google "smart lens" technology Strong execution on growth products and emerging markets across divisions in Q2 - Growth products grew 18% (USD) to USD 4.7 billion, or 32% of Group net sales Strong performance in Emerging Growth Markets (+8% cc), led by Russia and China - Q2 core margin improvement (cc) mainly driven by productivity initiatives - 2.1 percentage points (cc) of core margin growth in Pharmaceuticals Group core margin improved (1.1 percentage points cc) mainly due to R&D (0.9 percentage points cc) and M&S (0.5 percentage points cc) - 2014 Group outlook reconfirm