Business Description

Novartis AG, a global provider of healthcare products, is Novartis AG. It develops, manufactures, and sells eye care products, pharmaceuticals medicines, and generic and biosimilar medicines. The company divides its business operations into two segments, Sandoz or Innovative Medicines. The company’s Innovative Medicines (IM), segment produces, develops, and sells patented prescription drugs. It operates under two business units. The Novartis oncology unit is responsible for the areas of cancer, hematology, and immunology.

The Novartis pharmaceuticals unit is responsible for the established medicines under Tasigna and Travatan Z. Novartis’ Sandoz segment offers healthcare professionals and patients generics, antiinfectives, and biosimilars. It includes units that include biopharmaceuticals and retail generics as well as anti-infectives from more than 150 countries. The company divides its operations geographically into four groups: Europe, America, Canada, Latin America, Asia, Africa, and Australasia.

Key Financials:

Revenue (US$ Mn)

• US$ 51,626 Mn was Novartis AG’s annual revenue in 2021, a 3.46% increase from 2020 figures
• Novartis AG indexed a 2.51% increase in annual revenues from 2019, amounting to US$ 49,900 Mn in 2020
• Novartis AG generated total revenue of US$ 48,680 Mn in 2019
• Annual revenue of US$ 53,170 Mn was indexed by Novartis AG in 2018

Operating Income(US$ Mn)

• US$ 11,689 Mn was the operating income generated by Novartis AG in 2021
• Novartis AG’s operating income for 2020 was US$ 10,150 Mn, an 11.66% increase from 2019
• From 2018’s operating incomes, Novartis AG registered an 11.26% increase in 2019, amounting to US$ 9,090 Mn
• An operating income of US$ 8,170 Mn was generated in 2018 by Novartis AG

Net Income(US$ Mn)

• Novartis AG’s net income for 2021 was US$ 24,018 Mn, a 197.62% increase from the 2020
• The net income generated by Novartis AG in 2020 was US$ 8,070 Mn
• At a -6.98% decrease, Novartis AG’s net income of US$ 11,730 Mn was indexed in 2019
• Novartis AG generated a net income of US$ 12,610 Mn in 2018

Operating Margin %

• 23% was Novartis AG’s operating margin in 2021, a 10.78% increase from 2020 figures
• Novartis AG indexed a 9.09% increase in operating margins from 2019, amounting to 20% in 2020
• Novartis AG generated an operating margin of 19% in 2019
• An operating margin of 15% was indexed by Novartis AG in 2018

Gross Margin %

• 47% was the gross margin generated by Novartis AG in 2021
• Novartis AG’s gross margin for 2020 was 70%, a -0.99% decrease from 2019
• From 2018’s gross margins, Novartis AG registered a 7.65% increase in 2019, amounting to 70%
• A gross margin of 65% was generated in 2018 by Novartis AG

SWOT Analysis

Strengths

Geographical presence mitigates various risks

Geographically diverse operations help Novartis mitigate the various risks associated with an overdependence on a particular market. It also enables to enhances its brand equity and provides new growth opportunities. Novartis sells its products in more than 150 countries. Geographically, the company classifies its operations into Four segments: Europe (Switzerland, Germany, France, and the UK), the US, Canada, and Latin America, and Asia, Africa, and Australasia. In FY2019, the US is accounting for 34.3%, followed by Europe (Switzerland, Germany, France, and the UK) (37.8%), Asia, Africa, Australasia (20.7%), and Canada and Latin America (7.2%).

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