Novartis shareholders approve ninth consecutive higher dividend payment at 2005 Annual General Meeting
* Dividend of CHF 1.15 per share a 10% increase over 2004 payout thanks to dynamic business performance
* Shareholders approve all proposals from Board of Directors
* Celebrating the 10th year of Novartis
Basel, February 28, 2006 - Novartis shareholders today approved all proposals of the Board of Directors, including the ninth consecutive annual dividend increase to CHF 1.15 per share as well as changes to the Articles of Incorporation and the election of some Board members.
A total of 2,407 shareholders were present at the Annual General Meeting held in Basel, representing 785,048,761 voting shares and 28.7% of the 2,739,171,000 shares issued.
Dividend payment increases 10%
In the light of strong 2005 business results, shareholders approved a dividend payment of CHF 1.15 per share for 2005, up 10% from CHF 1.05 in 2004. This higher dividend marks the ninth consecutive higher payout per share since the creation of Novartis in December 1996. The payment date is set for March 3, 2006.
The successful business performance in 2005 was marked by Group sales of USD 32.2 billion, with health care accounting for 96% of sales compared to 46% at the start of Novartis in 1996. The dynamic growth in sales during 2005 was accompanied by a strong expansion in profitability and free cash flow.
“Thanks to our strategy of continuing to intensify our focus on health care and innovation, we once again achieved record results in 2005. The key drivers are our investments in research and development as well as marketing. Our pipeline is rated as one of the best in the industry and will continue to sustain growth. We look forward in 2006 to submitting several new medicines for approval that offer significant new benefits to patients, particularly Rasilez� for hypertension and Galvus� for diabetes,” said Dr. Daniel Vasella, Chairman and CEO of Novartis, at the Annual General Meeting.
“These positive developments are due not only to our strategic direction but also to the competence and engagement of our employees, and I would again like to thank them for their extraordinary achievements,” Dr. Vasella said.
Board proposals approved
Shareholders also approved the elimination of the 12-year limitation on board membership, as outlined in Article 21 of the Articles of Incorporation. The elimination of this limitation, which emanated from the merger negotiations, will allow for greater continuity at theBoard of Directors, which is important in view of the complexities of a highly technical and global business.
Professor Dr. Helmut Sihler, who as Vice Chairman and independent Lead Director has played a crucial role in shaping the success of Novartis since its creation, retired from the Board of Directors at the meeting. Professor Dr. Ulrich Lehner is the new independent Lead Director and Vice Chairman. Professor Dr. Lehner will chair the Audit and Compliance Committee. The Compensation Committee will be chaired by Hans-Joerg Rudloff, who is also Vice Chairman of the Board of Directors.
Members of the Board of Directors who were re-elected at the meeting for three-year terms were Professor Srikant M. Datar, Ph.D., Professor William W. George, Dr.-Ing. Wendelin Wiedeking, and Professor Rolf M. Zinkernagel, M.D.
Andreas von Planta, J.D., was elected to the Board of Directors for a three-year term. Dr. von Planta, 50, is a partner with Lenz & Staehelin, an international law firm based in Zurich and Geneva. The Board of Directors will continue to consist of 12 members.
Celebrating 10 years of Novartis in 2006
Dr. Vasella underlined the commitment of Novartis to addressing the needs of patients worldwide, strengthening its medicine-based portfolio of innovation-based pharmaceuticals, low-cost generics and readily available OTC brands as well as expanding access-to-medicines programs.
Highlighting the successes since the creation of Novartis in 1996, Dr. Vasella said Novartis will continue to invest in innovation, particularly in its industry-leading pipeline with 76 compounds in development, of which 45 are new chemical entities (NCEs). At the same time, the use of generic medicines will continue to gain significance. Industry estimates calling for worldwide generics sales to grow about 11% annually between 2005 and 2010 compared to expectations for about 6% growth in patented pharmaceuticals.
Through these complementary activities in medicine, Novartis is taking a differentiated and leading position in the pharmaceuticals industry, one which anticipates how to respond to industry shaping trends such as demographic shifts and lifestyle changes, and efforts by countries around the world to manage overall healthcare costs.
The dynamic performance in 2005 provided funds to expand the access-to-medicines programs which in 2005 reached about USD 700 million , helping some 6.5 million patients worldwide. These programs grant assistance to patients who are uninsured or have insufficient financial resources. A program for Gleevec�/Glivec�, a leading targeted anti-cancer therapy for certain forms of leukemia and other tumors, has helped in 2005 more than 15,500 patients in 70 countries. In the developing world, Novartis is distributing its novel anti-malaria medicine Coartem� at cost as well as providing treatments for tuberculosis and free medicines to all patients to help eradicate leprosy.
This release contains certain forward-looking statements relating to the Company’s business, which can be identified by the use of forward-looking terminology such as “will advance”, “are likely to”, “could be”, “might be adapted to”, “our hope is that it will open”, “would be expected”, “may lead”, “may not be”, “potential”, “could cause”, “could provide”, “may be”, “are confident in”, “to help prepare for the possibility”, or similar expressions, or by express or implied discussions regarding the potential development and commercialization of new products or regarding potential future sales from any such products. Such statements reflect the current views of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions. Many factors could cause the actual results to be materially different from any future results, performances or achievements that may be expressed or implied by such forward-looking statements. There can be no guarantee that the aforementioned collaboration and research will lead to the development or commercial-ization of any new products in any market, or that any such products will reach any particular sales levels. Any such commercialization or sales can be affected by, among other things, uncertainties relating to product development and clinical trials, regulatory actions or delays or government regulation generally, the ability to obtain or maintain patent or other proprietary intellectual property protection and competition in general, as well as factors discussed in the Company’s Form 20-F filed with the 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. The Company is providing this information as of this date and does not undertake any obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise
Novartis AG (NYSE: NVS) is a world leader in offering medicines to protect health, cure disease and improve well-being. Our goal is to discover, develop and successfully market innovative products to treat patients, ease suffering and enhance the quality of life. Novartis is the only company with leadership positions in both patented and generic pharmaceuticals. We are strengthening our medicine-based portfolio, which is focused on strategic growth platforms in innovation-driven pharmaceuticals, high-quality, low-cost generics and leading self-medication OTC brands. In 2005, the Group’s businesses achieved net sales of USD 32.2 billion and net income of USD 6.1 billion. Approximately USD 4.8 billion was invested in R&D. Headquartered in Basel, Switzerland, Novartis Group companies employ approximately 91,000 people and operate in over 140 countries around the world. For more information, please visit http://www.novartis.com
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