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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 October 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Statement on Form S-8 as filed with the Commission on May 14, 2001 (File No. 333-13506), in each case to the extent not superseded by documents or reports subsequently filed by us under the Securities Act of 1933 or the Securities Exchange Act of 1934, in each case as amended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 3rd Quarter 2004 Results Release, dated October 21, 2004

Investor Relations

GRAPHIC   Novartis International AG
CH-4002 Basel
Switzerland
  
 Novartis Corporation
608 Fifth Avenue
New York, NY 10020
USA


—Investor Relations Release—

Novartis delivers strong double-digit growth and margin expansion in first nine months and third quarter of 2004

Key figures

First nine months

 
   Nine months 2004

   Nine months 2003

   % Change
 
   USD m

   % of sales

   USD m

   % of sales

   USD

   lc(1)
Sales   20 669       18 134       14   9
Pharmaceutical sales   13 528       11 641       16   11
Consumer Health sales   7 141       6 493       10   5
Operating income   5 005   24.2   4 283   23.6   17    
Net income   4 389   21.2   3 656   20.2   20    
Basic earnings per share/ADS   USD 1.79       USD 1.48       21    

Third quarter

 
   Q3 2004

   Q3 2003

   % Change
 
   USD m

   % of sales

   USD m

   % of sales

   USD

   lc
Sales   7 057       6 210       14   9
Pharmaceutical sales   4 646       4 041       15   11
Consumer Health sales   2 411       2 169       11   7
Operating income   1 717   24.3   1 469   23.7   17    
Net income   1 547   21.9   1 277   20.6   21    
Basic earnings per share/ADS   USD 0.63       USD 0.52       21    
(1)
lc—Local currencies

All product names appearing in italics are trademarks of Novartis Group Companies
Unless otherwise stated, growth rates are in USD and comments refer to nine-month 2004 figures

1

        Basel, October 21, 2004—Commenting on the nine-month results published today, Dr. Daniel Vasella, Chairman and CEO of Novartis, said, "I am pleased with our strong double-digit performance in the first nine months of 2004. The rapid growth pace was driven by Pharmaceuticals, which once more gained market share and improved operating profit margins. Novartis is on track to deliver new record results in 2004."

Sales

Group sales up 14% to USD 20.7 billion

        The 14% sales increase (+9% lc) in the first nine months of 2004 was due to strong results in both Pharmaceuticals as well as Consumer Health, where OTC and Medical Nutrition offset lower sales growth in the Sandoz generics business. Currency benefits added five percentage points in addition to seven percentage points from volumes, which was the main growth driver. Acquisitions and price increases each added one percentage point to sales growth.

Pharmaceuticals sales rise 16% to USD 13.5 billion

        Pharmaceuticals realized double-digit sales growth for the first three quarters (+16%, +11% lc), with strong performances from key brands in both the primary care and specialty medicines portfolios, leading to growth ahead of the market in all key regions, particularly the US. Volumes contributed 10 percentage points, while currency benefits added five percentage points and price increases one percentage point.

        Primary care product sales (including mature products) as a group were up 14% (+9% lc), due mainly to the expansion of the cardiovascular franchise (+21%, +17% lc), which was driven by the anti-hypertensive medicines Diovan and Lotrel. Other key growth contributors were Lamisil, Trileptal, Zelnorm/Zelmac, Exelon and Elidel.

        Specialty medicines sales—comprising our activities in Oncology, Transplantation & Immunology, and Ophthalmics—were up 22% (+16% lc) and accounted for 33% of Pharmaceuticals sales versus 31% in the 2003 period. The oncology franchise reported a 27% (+21% lc) increase for the first nine months. The key oncology drugs Gleevec/Glivec, Zometa and Femara delivered dynamic growth as new data from study of these medicines continued to uncover new benefits for patients, contributing to the sales rise. Sales of the ophthalmics product Visudyne advanced 24% in USD.

        Excellent sales growth in the US (+12%) was ahead of the country's prescription drugs market performance, while Japan (+18%, +9% lc) and Europe (+19%, +9%lc) achieved solid growth despite difficult market conditions. Novartis increased its share of the global healthcare market to 4.48% in the first eight months of the year, up from 4.40% in the year-ago period, according to IMS Health, which reported a 7% rise in worldwide pharmaceutical sales for the first eight months of 2004.

Consumer Health sales climb 10% to USD 7.1 billion

        Nine-month sales rose 10% (+5% lc), due in particular to double-digit USD sales growth in OTC and Medical Nutrition. Key products in OTC delivered solid performances, such as Lamisil Topical (antifungal), Maalox (antacid) and Gas-X (anti-gas), while Medical Nutrition was boosted by the Mead Johnson acquisition, which added 26 percentage points to the 38% growth of Medical Nutrition. Sandoz suffered from comparative base effects after strong growth in 2003 due to the launch of the antibiotic AmoxC as well as from competitive pricing pressures, which resulted in growth of 2% in USD

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and a decline of 3% in local currencies. An overall increase in Consumer Health volumes contributed two percentage points, currencies added five percentage points while prices added one percentage point and acquisitions two percentage points to sales growth.

Management Changes

        Andreas Rummelt, currently head of Global Technical Operations in Pharmaceuticals and a member of the Pharma Executive Committee, has been named the new head of Sandoz, reporting to Dr. Vasella effective November 1, 2004. Dr. Rummelt, who has been with Novartis since 1985, has successfully held several management positions in R&D. As worldwide head of technical operations for Pharmaceuticals he enhanced the focus on quality, productivity improvement and inventory management. He will be replaced by Thomas van Laar, currently head of US Pharmaceutical Operations.

Operating income

Nine months

 
   Nine months 2004

   Nine months 2003

    
 
   USD m

   % of sales

   USD m

   % of sales

   Change
in %
Pharmaceuticals   4 002   29.6   3 249   27.9   23
Consumer Health   997   14.0   990   15.2   1
Corporate income/expense, net   6       44        
Total   5 005   24.2   4 283   23.6   17

Third quarter

 
   Q3 2004

   Q3 2003

    
 
   USD m

   % of sales

   USD m

   % of sales

   Change
in %
Pharmaceuticals   1 387   29.9   1 137   28.1   22
Consumer Health   278   11.5   326   15.0   -15
Corporate income/expense, net   52       6        
Total   1 717   24.3   1 469   23.7   17

Group operating income up 17% to USD 5.0 billion, rising faster than sales

        Operating income growth for the first nine months exceeded sales growth and resulted in a margin improvement of 0.6 percentage points from 23.6% in the year-ago period to 24.2%. This expansion was based on improvements in Costs of Goods Sold (COGS), which only expanded 11%. In addition, Marketing & Sales investments came down 0.5 percentage points, mainly owing to improvements in Pharmaceuticals. Research & Development costs increased 12%, but declined as a percentage of sales to 14.4% from 14.7% in 2003 as fewer milestone payments were triggered in pharmaceutical development. General & Administrative expenses also increased at a lower pace than sales, rising 11% and making up 5.3% of sales. Charges contained in Other Income & Expenses increased by USD 242 million, mainly due to lower divestment and hedging gains, a goodwill impairment charge of USD 73 million in Sandoz and an inventory write-down of USD 18 million in Animal Health.

3


Pharmaceuticals operating income climbs 23% to USD 4.0 billion

        In Pharmaceuticals, operating income expanded significantly faster than sales, rising 23% in USD and resulting in a margin expansion of 1.7 percentage points to 29.6%. This was based on an improvement of 0.9 percentage points in COGS from 14.5% of sales to 13.6% due to productivity gains and improved product mix. Marketing & Sales costs fell 0.7 percentage points to 32.1% of sales due to increased field-force productivity. R&D expenses rose 13%, mainly due to investments in the Novartis Institutes for BioMedical Research, but declined in the 2004 period as a percentage of sales to 18.3% from 18.8% as fewer upfront development costs and milestone payments were triggered compared to the same period in 2003. Charges contained in Other Income & Expenses increased over the nine-month period by 39% as a result of lower hedging gains and lower income from divestments versus 2003 where the sale of the Fiorinal product range resulted in an income of USD 178 million, while General & Administrative costs expanded slower than sales. Operating expenses are expected to be significantly higher in the fourth quarter compared to the same period in 2003, particularly in Marketing & Sales and Research & Development, in part due to the start of major phase III clinical trials.

Consumer Health operating income up 1% to USD 997 million

        Operating income rose 1% as strong business expansion in OTC and CIBA Vision were offset by impairments at Sandoz of USD 73 million related to the generic pharmaceuticals business in Germany as well as a one-time inventory write-down of USD 18 million in Animal Health and one-time costs of USD 13 million associated with the Mead Johnson acquisition in Medical Nutrition. Taking into account the current competitive environment in the generics market, numerous improvement measures are being evaluated and will be reported in the fourth quarter, and additional impairments cannot be excluded.

Group net income up 20% to USD 4.4 billion

        Net income for the first nine months rose 20% to USD 4.4 billion due to the strong organic business expansion and sharply higher income from associated companies.

Group outlook (barring any unforeseen events)

        Novartis remains on track to deliver excellent sales and earnings growth for 2004, exceeding its initial expectations due to the strong overall business performance. The Group expects for the full year to deliver high-single-digit sales growth and in Pharmaceuticals high-single-digit to low-double-digit sales growth in local currencies.

        Barring any unforeseen events, Novartis Group operating and net income are predicted for the full year 2004 to be markedly higher than last year.

Pharmaceutical business and key product highlights
(Note: All sales percentage figures refer to nine-month results)

Primary Care

        Diovan (+30%; +24% lc; +20% US) continued strong sales growth ahead of market in the US and worldwide. US market share gains led to an all-time market share high of 9% of the US anti-hypertension market and a market-leading 38.3% share of the fast-growing angiotensin receptor blocker (ARB) therapeutic category (as of September 2004). This therapeutic category has grown 18% to date in 2004 and is expected to be one of the dynamic pharmaceutical categories during the coming years. Sales growth has been driven by outcomes data from new mega-trials, the global rollout of higher dosages and the recent launch of the ongoing Novartis hypertension awareness program in the US.

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        Lotrel (+11% US), the leading US fixed combination treatment for hypertension, sustained double-digit sales growth well ahead of market (+6% YTD). Higher sales have been driven by an increased focus on lower blood pressure goals set by national guidelines and the large number (up to 70%) of people being treated for hypertension that have not reached their goal and require more effective therapies. Lotrel, which is only sold in the US, is also benefiting from the recent launch of the hypertension awareness program in the US.

        Lamisil (+21%; +16% lc; +27% US), the leading treatment for fungal nail infections, extended its US market leadership position to a high of 66.3% (September 2004). Significant sales growth, particularly in the US, was driven by refreshed direct-to-consumer campaigns and increased educational programs raising disease awareness.

        Elidel (+55%; +53% lc; US: +40%), the No. 1 branded prescription agent for eczema, outperformed the market in sales and market share growth (+58% Elidel vs. 8.6% IMS top 16 countries as of August 2004).

        Zelnorm/Zelmac (+118%; +117% lc; US: +137%), a breakthrough therapy for irritable bowel syndrome (IBS) with constipation, has surpassed 3.5 million prescriptions worldwide, including 2.5 million in the US, since its launch in July 2002. Results of the ZENSAA study with 2,660 patients, the largest IBS trial ever conducted, showed the treatment to be highly effective as a repeat treatment for women and additionally demonstrated significant improvements in important quality-of-life measures.

Specialty Medicines

Oncology

        Gleevec/Glivec (+47%; +38% lc; US: +24%), for all stages of Philadelphia-Chromosome positive chronic myeloid leukemia (CML) and certain forms of gastro-intestinal stromal tumors (GIST), increased its growth rates in the third quarter, particularly due to further penetration in the European CML market and an increase in the average daily dose. Results of the largest trial ever conducted in GIST, which were recently published in The Lancet, showed significantly longer progression-free survival for patients taking 800 mg daily compared to patients on the standard 400 mg daily dose. The Glivec International Patient Assistance Program is now open in 67 countries providing treatment to more than 9,500 patients worldwide who otherwise would not have access to this innovative therapy.

        Zometa (+21%; +17% lc; US: +9%), the top intravenous bisphosphonate for bone metastases, maintained its market share and remains on track to become a blockbuster despite challenges related to US Medicare reimbursement policy and high penetration rates in breast cancer and myeloma. Zometa is making progress on increasing the use of intravenous (IV) bisphosphonates in the treatment of prostate and lung cancer patients, and it was submitted for regulatory approval in Japan for bone metastases in the third quarter.

        Femara (+65%; +58% lc; US: +121%), a leading first-line therapy for advanced breast cancer in postmenopausal women, kept up its robust growth rate as more patients benefit from the use of this anti-cancer agent in the treatment of post-menopausal women in the "extended adjuvant setting," meaning that they have undergone breast cancer surgery and have completed standard adjuvant tamoxifen treatment. Results from the final analysis of MA-17 were presented at the annual meeting of the American Society for Clinical Oncology (ASCO) in June 2004. The data showed that extended adjuvant treatment with Femara, following the standard use of tamoxifen, cut the risk of relapse by 42%.

5


Ophthalmics

        Nine-month sales rose 29% (+23% lc) due mainly to continued penetration of Visudyne (+24%; +19% lc; US: +15%) as the leading treatment for "wet" AMD (age-related macular degeneration) in the US as well as Europe. Improved Medicare reimbursement for additional lesion types drove US sales growth. Sales in Europe remained strong despite cost-containment measures in key markets.

Transplantation

        Sales for the transplantation business unit for the first three quarters of 2004 rose 2% (-5% lc), despite flat sales from the Neoral and Sandimmun franchise (USD 742 million; +0%; -6% lc). Novartis celebrated its 20 years of experience in transplantation at the International Society of Transplantation meeting in Vienna. The recently launched treatment myfortic is now registered in over 40 countries, including the US. Sales of myfortic were driven by market share gains in Germany and Switzerland as well as prescription growth in the US. Launch activities for Certican, a novel proliferation signal inhibitor, continue in select countries worldwide. Simulect, which reported a 20% increase in nine-month sales (+14% lc), received a positive recommendation from the UK National Institute for Clinical Excellence (NICE) in September.

Selected regulatory and clinical highlights

        Novartis is on target with the build-up of the Group's new research headquarters in Cambridge, Massachusetts. An additional 766 research associates have already been recruited, and the new research center is officially opened.

        Novartis expects to achieve its 2004 objectives for key development projects and regulatory milestones. Among the third-quarter developments:

6

        During the fourth quarter, Novartis expects to receive the first phase III data for the renin inhibitor aliskiren (SPP100/hypertension) evaluating the blood pressure lowering effects of the combination of this new compound with valsartan, the active ingredient in Diovan.

        In addition, data from the BIG 1-98 trial on the aromatase inhibitor Femara (breast cancer) comparing five years of Femara with five years of tamoxifen for use in the early adjuvant setting is expected to be presented in January 2005.

        Also in Oncology, phase III clinical data for the iron chelator ICL670 (iron overload) is expected to become available by the end of 2004.

        To release pipeline information closely linked to news flow, Novartis will replace the R&D Day event scheduled for November 30, 2004, with several R&D updates beginning on January 20, 2005, coinciding with the reporting of full-year results.

Corporate

Corporate income/expense, net

        Net corporate income totaled USD 6 million in the first nine months of 2004 compared to an income of USD 44 million in the year-ago period.

Financial income, net

        Net financial income was USD 161 million in the first nine months of 2004, significantly less than USD 395 million in the year-ago period, due primarily to the current low-yield environment. The overall return on net liquidity was 3.3%, in part due to gains made on the sale of shares and options, compared to 8.0% in the year-ago period.

7


Result from associated companies

        Income from associated companies overall increased sharply to USD 137 million. As a consequence of Chiron's announcement of lower earnings due to flu vaccine production issues, the Novartis investment in Chiron contributed USD 36 million compared to USD 107 million in the year-ago period. We are anticipating that the Chiron investment will not provide any additional income in the fourth quarter of 2004. The investment in Roche resulted in income of USD 88 million for the first nine months of the year compared to an expense of USD 332 million a year ago.

Strong balance sheet

        In August 2004, Novartis announced the completion of the third share-repurchase program and the start of a fourth program to repurchase shares via a second trading line on the SWX Swiss Exchange. In 2004, a total of 22.8 million shares were repurchased for USD 1 billion to complete the third repurchase program. Since the start of the fourth program, a total of 10.6 million shares have been repurchased for USD 0.5 billion. Overall in 2004, a total of 36.4 million shares have been repurchased for USD 1.7 billion, which includes shares bought through the repurchase programs and additional shares bought on the first trading line. It is anticipated that shareholders will be requested at the next General Meeting to approve the retirement of the shares bought through the repurchase programs.

        Group equity amounted to USD 31.0 billion at September 30, 2004, an increase of USD 0.6 billion compared to the beginning of 2004 as Group net income of USD 4.4 billion and positive fair value adjustments of USD 0.3 billion more than offset a reduction of treasury share purchases of USD 1.7 billion, dividend payments of USD 2.0 billion and cumulative translation adjustments of USD 0.4 billion. The debt/equity ratio improved to 0.18:1 as of September 30, 2004, compared to 0.20:1 as of December 31, 2003.

        Novartis has maintained the strength of its balance sheet and continues to be one of the few non-financial European companies to have the highest Triple-A rating by Standard & Poor's and Moody's, a rating that has been retained since the creation of Novartis in 1996.

Cash flow

        The strong business expansion and proactive management of working capital led to higher cash flow from operating activities, which increased to USD 5.0 billion for the first nine months of 2004 compared to USD 4.8 billion in the year-ago period.

Novartis again named to the Dow Jones Sustainability Index

        Novartis has again been named as a member of the Dow Jones Sustainability Index, a recognition awarded to the Group annually since the global benchmark index for socially responsible investing was first launched in September 1999. Novartis is a member of both the Dow Jones Sustainability World Index (DJSI World) and the more selective Dow Jones STOXX Sustainability Index (DJSI STOXX), reflecting the company's commitment to being measured for its economic, environmental and social performance.

Disclaimer

        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 "is on track", "remains on track", "expected", "is planned", "If approved. will be", "expects", "will", "are anticipating", "outlook", "are predicted", "is on target", 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

8


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 Group's ability to obtain or maintain patent or other proprietary intellectual property protection; competition in general; government, industry, and general public pricing pressures and other risks and factors referred to in the Group'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.

About Novartis

        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 81,000 people and operate in over 140 countries around the world. For further information please consult http://www.novartis.com.

Further Important Dates

January 20, 2005   2004 full-year results and R&D update
Our next R&D update will take place at the Annual Results meeting

March 1, 2005
 
Annual General Meeting
April 21, 2005   First quarter results
July 14, 2005   First half and second quarter results
October 18, 2005   Nine-month and third quarter results

# # #

Novartis Global Investor Relations        

Karen J. Huebscher, Ph.D. +41 61 324 84 33
 
 
 
 

International office
 
North American office

Katharina Ambühl
 
+41 61 324 53 16
 
Ronen Tamir
 
+1 212 830 24 33

Nafida Bendali
 
+41 61 324 35 14
 
John Menditto
 
+1 212 830 24 44

Richard Jarvis
 
+41 61 324 43 53
 
Sabine Moravi
 
+1 212 830 24 56

Silke Zentner
 
+41 61 324 86 12
 
Jill Pozarek
 
+1 212 830 24 45

e-mail: investor.relations@group.novartis.com
 
e-mail: investor.relations@group.novartis.com

Fax: +41 61 324 84 44
 
Fax: +1 212 830 24 05
www.novartis.com   www.novartis.com

9

Consolidated income statements (unaudited)

Nine months

 
   Nine months
2004
USD m

   Nine months
2003
USD m

    
    
 
   Change
 
   USD m

   %
Total sales   20 669   18 134   2 535   14
Cost of goods sold   -4 743   -4 286   -457   11
Gross profit   15 926   13 848   2 078   15
Marketing & Sales   -6 373   -5 678   -695   12
Research & Development   -2 973   -2 664   -309   12
General & Administration   -1 088   -978   -110   11
Other income/expenses   -487   -245   -242   99
Operating income   5 005   4 283   722   17
Result from associated companies   137   -212   349    
Financial income, net   161   395   -234   -59
Income before taxes and minority interests   5 303   4 466   837   19
Taxes   -902   -760   -142   19
Minority interests   -12   -50   38   -76
Net income   4 389   3 656   733   20
Average number of shares outstanding (million)   2 453.9   2 474.8        
Basic earnings per share (USD)   1.79   1.48       21
Diluted earnings per share (USD)   1.78   1.45       23

Third quarter

 
    
    
   Change
 
   Q3 2004
USD m

   Q3 2003
USD m

   USD m

   %
Total sales   7 057   6 210   847   14
Cost of goods sold   -1 613   -1 500   -113   8
Gross profit   5 444   4 710   734   16
Marketing & Sales   -2 109   -1 850   -259   14
Research & Development   -1 062   -878   -184   21
General & Administration   -361   -338   -23   7
Other income/expenses   -195   -175   -20   11
Operating income   1 717   1 469   248   17
Result from associated companies   111   25   86   344
Financial income, net   35   96   -61   -64
Income before taxes and minority interests   1 863   1 590   273   17
Taxes   -317   -271   -46   17
Minority interests   1   -42   43    
Net income   1 547   1 277   270   21
Average number of shares outstanding (million)   2 440.7   2 478.0        
Basic earnings per share (USD)   0.63   0.52       21
Diluted earnings per share (USD)   0.63   0.51       24

10

Condensed consolidated balance sheets

 
   Sept 30,
2004
(unaudited)
USD m

   Dec 31,
2003
USD m

   Change
USD m

   Sept 30,
2003
(unaudited)
USD m
Assets                
Total long-term assets   27 982   27 044   938   25 814
Current assets                
Inventories   3 440   3 346   94   3 231
Trade accounts receivable   4 492   4 376   116   4 253
Other current assets   1 439   1 292   147   1 180
Cash, short-term deposits and marketable securities   12 185   13 259   -1 074   11 851
Total current assets   21 556   22 273   -717   20 515
Total assets   49 538   49 317   221   46 329

Equity, minority interests and liabilities
 
 
 
 
 
 
 
 

Total equity
 
30 992
 
30 429
 
563
 
28 442
Minority interests   136   90   46   96
Long-term liabilities                
Financial debts   2 915   3 191   -276   3 042
Other long-term liabilities   6 511   6 287   224   6 404
  Total long-term liabilities   9 426   9 478   -52   9 446

Short-term liabilities
 
 
 
 
 
 
 
 
Trade accounts payable   1 568   1 665   -97   1 308
Financial debts and derivatives   2 616   2 779   -163   2 582
Other short-term liabilities   4 800   4 876   -76   4 455
  Total short-term liabilities   8 984   9 320   -336   8 345
Total liabilities   18 410   18 798   -388   17 791
Total equity, minority interests and liabilities   49 538   49 317   221   46 329

Condensed consolidated changes in equity (unaudited)

 
   Nine months
2004
USD m

   Nine months
2003
USD m

   Change
USD m
Consolidated equity at January 1   30 429   28 269   2 160
Dividends   -1 968   -1 724   -244
Purchase of treasury shares, net   -1 655   269   -1 924
Reduction of cumulative translation differences on partial repayment of capital of a subsidiary   -301       -301
Other translation effects   -151   1 310   -1 461
Net income for first nine months   4 389   3 656   733
Redemption of equity instruments       -3 458   3 458
Other equity movements   249   120   129
Consolidated equity at September 30   30 992   28 442   2 550

11

Condensed consolidated cash flow statements (unaudited)

First nine months

 
   Nine months
2004
USD m

   Nine months
2003
USD m

   Change
USD m
Net income   4 389   3 656   733
Reversal of non-cash items            
  Taxes   902   760   142
  Depreciation, amortization and impairments   1 028   954   74
  Net financial income   -161   -395   234
  Other   -268   35   -303
Net income adjusted for non-cash items   5 890   5 010   880
Interest and other financial receipts   352   470   -118
Interest and other financial payments   -106   -98   -8
Taxes paid   -886   -690   -196
Cash flow before working capital and provision changes   5 250   4 692   558
Restructuring payments and other cash payments out of provisions   -162   -143   -19
Change in net current assets and other operating cash flow items   -124   218   -342
Cash flow from operating activities   4 964   4 767   197
Investments in tangible fixed assets   -882   -826   -56
Increase in marketable securities, intangible and financial assets   -2 597   -137   -2 460
Cash flow used for investing activities   -3 479   -963   -2 516
Cash flow used for financing activities   -3 944   -5 176   1 232
Translation effect on cash and cash equivalents   -7   258   -265
Change in cash and cash equivalents   -2 466   -1 114   -1 352
Cash and cash equivalents at January 1   5 646   5 798   -152
Cash and cash equivalents at September 30   3 180   4 684   -1 504

12

Condensed consolidated cash flow statements (unaudited)

Third quarter

 
   Q3 2004
USD m

   Q3 2003
USD m

   Change
USD m
Net income   1 547   1 277   270
Reversal of non-cash items            
  Taxes   317   271   46
  Depreciation, amortization and impairments   403   361   42
  Net financial income   -35   -96   61
  Other   -123   -5   -118
Net income adjusted for non-cash items   2 109   1 808   301
Interest and other financial receipts   119   59   60
Interest and other financial payments   -49   -49   —
Taxes paid   -158   -156   -2
Cash flow before working capital and provision changes   2 021   1 662   359
Restructuring payments and other cash payments out of provisions   -56   -68   12
Change in net current assets and other operating cash flow items   171   284   -113
Cash flow from operating activities   2 136   1 878   258
Investments in tangible fixed assets   -297   -311   14
Increase in marketable securities, intangible and financial assets   -1 273   -614   -659
Cash flow used for investing activities   -1 570   -925   -645
Cash flow used for financing activities   -952   -879   -73
Translation effect on cash and cash equivalents   -4   56   -60
Change in cash and cash equivalents   -390   130   -520
Cash and cash equivalents at July 1   3 570   4 554   -984
Cash and cash equivalents at September 30   3 180   4 684   -1 504

13

Sales by Division/Business Unit (unaudited)

First nine months

 
   Nine months
2004
USD m

   Nine months
2003
USD m

    
    
 
   % change
 
   USD

   lc
Pharmaceuticals   13 528   11 641   16   11
Sandoz   2 178   2 138   2   -3
OTC   1 443   1 273   13   7
Animal Health   547   502   9   3
Medical Nutrition   836   607   38   31
Infant & Baby   1 087   1 013   7   8
CIBA Vision   1 050   960   9   3
Consumer Health   7 141   6 493   10   5
Total   20 669   18 134   14   9

Third quarter

 
   Q3 2004
USD m

   Q3 2003
USD m

   % change
 
   USD

   lc
Pharmaceuticals   4 646   4 041   15   11
Sandoz   722   675   7   2
OTC   478   443   8   3
Animal Health   194   163   19   15
Medical Nutrition   289   206   40   35
Infant & Baby   371   349   6   7
CIBA Vision   357   333   7   2
Consumer Health   2 411   2 169   11   7
Total   7 057   6 210   14   9

14

Operating income by Division/Business Unit (unaudited)

First nine months

 
   Nine months 2004

   Nine months 2003

    
 
   USD m

   % of sales

   USD m

   % of sales

   Change in %
Pharmaceuticals   4 002   29.6   3 249   27.9   23
Sandoz   213   9.8   351   16.4   -39
OTC   293   20.3   216   17.0   36
Animal Health   42   7.7   61   12.2   -31
Medical Nutrition   71   8.5   54   8.9   31
Infant & Baby   206   19.0   188   18.6   10
CIBA Vision   185   17.6   137   14.3   35
Divisional Management costs   -13       -17        
Consumer Health   997   14.0   990   15.2   1
Corporate income/expense, net   6       44        
Total   5 005   24.2   4 283   23.6   17

Third quarter

 
   Q3 2004

   Q3 2003

    
 
   USD m

   % of sales

   USD m

   % of sales

   Change in %
Pharmaceuticals   1 387   29.9   1 137   28.1   22
Sandoz   4   0.6   94   13.9   -96
OTC   105   22.0   82   18.5   28
Animal Health   1   0.5   21   12.9   -95
Medical Nutrition   30   10.4   18   8.7   67
Infant & Baby   76   20.5   70   20.1   9
CIBA Vision   67   18.8   48   14.4   40
Divisional Management costs   -5       -7        
Consumer Health   278   11.5   326   15.0   -15
Corporate income/expense, net   52       6        
Total   1 717   24.3   1 469   23.7   17

15

Consolidated income statements (unaudited)

First nine months

 
   Pharmaceuticals
Division

   Consumer Health
Division

   Corporate

   Total
 
   Nine months
2004
USD m

   Nine months
2003
USD m

   Nine months
2004
USD m

   Nine months
2003
USD m

   Nine months
2004
USD m

   Nine months
2003
USD m

   Nine months
2004
USD m

   Nine months
2003
USD m
Sales to third parties   13 528   11 641   7 141   6 493           20 669   18 134
Sales to other Divisions/Business Units   108   86   60   65   -168   -151        
Sales of Divisions/Business Units   13 636   11 727   7 201   6 558   -168   -151   20 669   18 134
Cost of goods sold   -1 837   -1 689   -3 093   -2 745   187   148   -4 743   -4 286
Gross profit   11 799   10 038   4 108   3 813   19   -3   15 926   13 848
Marketing & Sales   -4 340   -3 814   -2 033   -1 864           -6 373   -5 678
Research & Development   -2 469   -2 183   -392   -379   -112   -102   -2 973   -2 664
General & Administration   -454   -407   -402   -351   -232   -220   -1 088   -978
Other income/expenses   -534   -385   -284   -229   331   369   -487   -245
Operating income   4 002   3 249   997   990   6   44   5 005   4 283
Result from associated companies                           137   -212
Financial income, net                           161   395
Income before taxes and minority interests                           5 303   4 466
Taxes                           -902   -760
Minority interests                           -12   -50
Net income                           4 389   3 656

16

Consolidated income statements (unaudited)

Third quarter

 
   Pharmaceuticals
Division

   Consumer Health
Division

   Corporate

   Total
 
   Q3 2004
USD m

   Q3 2003
USD m

   Q3 2004
USD m

   Q3 2003
USD m

   Q3 2004
USD m

   Q3 2003
USD m

   Q3 2004
USD m

   Q3 2003
USD m
Sales to third parties   4 646   4 041   2 411   2 169           7 057   6 210
Sales to other Divisions/Business Units   38   33   23   19   -61   -52        
Sales of Divisions/Business Units   4 684   4 074   2 434   2 188   -61   -52   7 057   6 210
Cost of goods sold   -623   -587   -1 060   -962   70   49   -1 613   -1 500
Gross profit   4 061   3 487   1 374   1 226   9   -3   5 444   4 710
Marketing & Sales   -1 452   -1 257   -657   -593           -2 109   -1 850
Research & Development   -885   -717   -138   -127   -39   -34   -1 062   -878
General & Administration   -157   -140   -128   -121   -76   -77   -361   -338
Other income/expenses   -180   -236   -173   -59   158   120   -195   -175
Operating income   1 387   1 137   278   326   52   6   1 717   1 469
Result from associated companies                           111   25
Financial income, net                           35   96
Income before taxes and minority interests                           1 863   1 590
Taxes                           -317   -271
Minority interests                           1   -42
Net income                           1 547   1 277

17

Notes to the interim financial report for the first nine months ended September 30, 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, except that the Group has amended its accounting estimate on recognizing impairments on available-for-sale equity securities. Impairments are now recorded when the fair value is less than cost at the interim reporting balance sheet date (previously when the fair value was 50% of cost for a sustained period of six months).

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

        The following significant transactions were made during the nine months to September 30, 2004, and in 2003:

2004

Pharmaceuticals

        On July 21, Idenix completed an Initial Public Offering (IPO) of its shares. Novartis retained its existing stake at 57%. As a result, Group liquidity increased by USD 60 million.

Sandoz

        On June 30, Novartis acquired the Danish generics company Durascan A/S from AstraZeneca plc. Based on a preliminary estimate, goodwill of USD 61 million has been recorded on this transaction.

        On August 13, Novartis completed the acquisition of Sabex Holdings Ltd., a Canadian generic manufacturer with a leading position in generic injectables, for USD 565 million. Based on the preliminary estimate, goodwill of USD 262 million has been recorded on this transaction.

        A total of USD 13 million of sales were recorded since the closure of these two transactions in the first nine months of 2004.

Medical Nutrition

        On February 13, Novartis 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 that date with USD 159 million of sales being recorded in the first nine months of 2004. Based on a preliminary estimate, goodwill of USD 185 million has been recorded on this transaction.

Corporate

        During the first three quarters of 2004, Group financial income, net, has benefited from an exceptional recycled translation gain of USD 301 million from the partial repayment of capital of a subsidiary offset by USD 180 million of realized losses on marketable securities and the additional impairment charge of USD 90 million from the change in accounting estimate on available-for-sale securities.

18


2003

Pharmaceuticals

        On February 11, 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 April 23, 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 May 8, a total of 51% of the fully diluted 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 that date. Goodwill of USD 297 million has been recorded on this transaction.

3.     Principal currency translation rates

 
   Average rates
Nine months
2004
USD

   Average rates
Nine months
2003
USD

   Period-end rates
Sept 30,
2004
USD

   Period-end rates
Dec 31,
2003
USD

   Period-end rates
Sept 30,
2003
USD
1 CHF   0.791   0.737   0.794   0.800   0.756
1 EUR   1.225   1.112   1.233   1.247   1.163
1 GBP   1.820   1.611   1.798   1.774   1.670
100 JPY   0.917   0.845   0.903   0.935   0.903

4.     Condensed consolidated change in liquidity

First nine months

 
   Nine months
2004
USD m

   Nine months
2003
USD m

   Change
USD m
Change in cash and cash equivalents   -2 466   -1 114   -1 352
Change in marketable securities, financial debt and financial derivatives   1 831   369   1 462
Change in net liquidity   -635   -745   110
Net liquidity at January 1   7 289   6 972   317
Net liquidity at September 30   6 654   6 227   427

Third quarter

 
   Q3 2004
USD m

   Q3 2003
USD m

   Change
USD m
Change in cash and cash equivalents   -390   130   -520
Change in marketable securities, financial debt and financial derivatives   731   1 930   -1 199
Change in net liquidity   341   2 060   -1 719
Net liquidity at July 1   6 313   4 167   2 146
Net liquidity at September 30   6 654   6 227   427

19

5.     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.

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

 
   Nine months
2004
USD m

   Nine months
2003
USD m
Net income under IFRS   4 389   3 656
US GAAP adjustments:        
Purchase accounting: Ciba-Geigy   -270   -252
Purchase accounting: other acquisitions   16   -58
Purchase accounting: IFRS goodwill amortization   131   128
Available-for-sale securities and financial instruments   18   -134
Pension provisions   132   9
Share-based compensation   -234   -162
Consolidation of employee share-based compensation foundation   -5   -5
Deferred taxes   151   -49
In-process Research & Development arising on acquisitions   34   -296
Reversal of currency translation recycling gain   -301    
Other   20   -26
Deferred tax effect on US GAAP adjustments   -48   -96
Net income under US GAAP   4 033   2 715
Basic earnings per share under US GAAP (USD)   1.71   1.14
Diluted earnings per share under US GAAP (USD)   1.70   1.12
 
   Sept 30, 2004
USD m

   Sept 30, 2003
USD m
Equity under IFRS   30 992   28 442
US GAAP adjustments:        
Purchase accounting: Ciba-Geigy   2 837   3 045
Purchase accounting: other acquisitions   2 826   2 945
Purchase accounting: IFRS goodwill amortization   486   283
Pension provisions   1 341   1 148
Share-based compensation   -106   -171
Consolidation of employee share-based compensation foundation   -731   -645
Deferred taxes   -458   -596
In-process Research & Development arising on acquisitions   -1 297   -1 334
Other   -68   -61
Deferred tax effect on US GAAP adjustments   -210   -255
Equity under US GAAP   35 612   32 801

20

Supplementary information (unaudited)

Free cash flow

First nine months

 
   Nine months
2004
USD m

   Nine months
2003
USD m

   Change
USD m
Cash flow from operating activities   4 964   4 767   197
Purchase of tangible fixed assets   -882   -826   -56
Purchase of intangible and financial assets   -674   -869   195
Sale of tangible, intangible and financial assets   618   836   -218
Dividends   -1 968   -1 724   -244
Free cash flow   2 058   2 184   -126

Third quarter

 
   Q3 2004
USD m

   Q3 2003
USD m

   Change
USD m
Cash flow from operating activities   2 136   1 878   258
Purchase of tangible fixed assets   -297   -311   14
Purchase of intangible and financial assets   -283   -262   -21
Sale of tangible, intangible and financial assets   155   222   -67
Free cash flow   1 711   1 527   184

Share information

 
   Sept 30, 2004

   Sept 30, 2003
Number of shares outstanding (million)   2 431.4   2 481.2
Registered share price (CHF)   58.20   51.10
ADS price (USD)   46.20   38.84
Market capitalization (USD billion)   112.4   96.4
Market capitalization (CHF billion)   141.5   126.8

21

Supplementary tables: First nine months 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   1 009   20   1 268   27   2 277   30   24
Gleevec/Glivec   Chronic myeloid leukemia   268   24   900   43   1 168   47   38
Lamisil (group)   Fungal infections   403   27   458   8   861   21   16
Zometa   Cancer complications   463   9   325   31   788   21   17
Neoral/Sandimmun   Transplantation   135   -16   607   -4   742   0   -6
Lotrel   Hypertension   661   11   0   0   661   11   11
Sandostatin (group)   Acromegaly   267   15   335   11   602   18   13
Lescol   Cholesterol reduction   207   -3   345   3   552   6   0
Voltaren (group)   Inflammation/pain   7   -13   451   -1   458   5   -1
Trileptal   Epilepsy   285   31   91   30   376   32   31
Top ten products total   3 705   15   4 780   17   8 485   21   16
Visudyne   Macular degeneration   154   15   170   22   324   24   19
Exelon   Alzheimer's disease   135   -2   178   23   313   15   10
Miacalcic   Osteoporosis   182   -2   103   -12   285   -3   -6
Tegretol (incl. CR/XR)   Epilepsy   75   -11   208   4   283   4   -1
Femara   Breast cancer   115   121   156   28   271   65   58
Elidel   Eczema   205   40   51   160   256   55   53
Foradil   Asthma   9   29   225   2   234   11   3
Leponex/Clozaril   Schizophrenia   54   -16   180   1   234   4   -4
Zelmac/Zelnorm   Irritable bowel syndrome   192   137   35   49   227   118   117
Famvir   Antiviral   121   9   70   3   191   10   7
Top twenty products total   4 947   17   6 156   16   11 103   21   16
Rest of portfolio       527   -18   1 898   -5   2 425   -3   -8
Total   5 474   12   8 054   10   13 528   16   11

22

Supplementary tables: Q3 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   351   22   437   25   788   28   24
Gleevec/Glivec   Chronic myeloid leukemia   93   29   318   42   411   47   39
Lamisil (group)   Fungal infections   158   22   186   6   344   17   13
Zometa   Cancer complications   151   -4   111   25   262   9   6
Neoral/Sandimmun   Transplantation   41   -18   199   -5   240   -3   -8
Lotrel   Hypertension   212   7   0   0   212   7   7
Sandostatin (group)   Acromegaly   95   20   112   10   207   20   15
Lescol   Cholesterol reduction   77   -7   118   8   195   6   1
Voltaren (group)   Inflammation/pain   2   0   157   2   159   7   2
Trileptal   Epilepsy   105   28   32   28   137   29   28
Top ten products total   1 285   13   1 670   16   2 955   19   15
Visudyne   Macular degeneration   56   19   58   23   114   27   22
Exelon   Alzheimer's disease   46   0   61   21   107   15   10
Miacalcic   Osteoporosis   63   -3   33   -17   96   -7   -8
Tegretol (incl. CR/XR)   Epilepsy   26   -13   72   5   98   2   -2
Femara   Breast cancer   46   130   55   43   101   80   74
Elidel   Eczema   68   31   16   119   84   42   40
Foradil   Asthma   3   50   76   7   79   16   8
Leponex/Clozaril   Schizophrenia   19   -17   59   -3   78   -1   -7
Zelmac/Zelnorm   Irritable bowel syndrome   71   97   12   17   83   80   78
Famvir   Antiviral   43   2   23   -1   66   3   2
Top twenty products total   1 726   15   2 135   15   3 861   19   15
Rest of portfolio       169   -19   616   -3   785   -2   -7
Total   1 895   11   2 751   10   4 646   15   11

23

Sales by region (unaudited)

First nine months

 
   Nine months
2004
USD m

   Nine months
2003
USD m

   % change

   Nine months
2004
% of total

   Nine months
2003
% of total
 
   USD

   local
currencies
Pharmaceuticals                        
  US   5 474   4 873   12   12   40   42
  Rest of world   8 054   6 768   19   10   60   58
TOTAL   13 528   11 641   16   11   100   100

Sandoz
 
 
 
 
 
 
 
 
 
 
 
 
  US   709   826   -14   -15   33   39
  Rest of world   1 469   1 312   12   4   67   61
Total   2 178   2 138   2   -3   100   100

OTC
 
 
 
 
 
 
 
 
 
 
 
 
  US   378   378   0   0   26   30
  Rest of world   1 065   895   19   10   74   70
Total   1 443   1 273   13   7   100   100

Animal Health
 
 
 
 
 
 
 
 
 
 
 
 
  US   217   179   21   21   40   36
  Rest of world   330   323   2   -7   60   64
Total   547   502   9   3   100   100

Medical Nutrition
 
 
 
 
 
 
 
 
 
 
 
 
  US   310   188   65   65   37   31
  Rest of world   526   419   26   15   63   69
Total   836   607   38   31   100   100

Infant & Baby
 
 
 
 
 
 
 
 
 
 
 
 
  US   894   816   10   10   82   81
  Rest of world   193   197   -2   1   18   19
Total   1 087   1 013   7   8   100   100

CIBA Vision
 
 
 
 
 
 
 
 
 
 
 
 
  US   361   344   5   5   34   36
  Rest of world   689   616   12   3   66   64
Total   1 050   960   9   3   100   100

Consumer Health
 
 
 
 
 
 
 
 
 
 
 
 
  US   2 869   2 731   5   5   40   42
  Rest of world   4 272   3 762   14   5   60   58
TOTAL   7 141   6 493   10   5   100   100

Group
 
 
 
 
 
 
 
 
 
 
 
 
  US   8 343   7 604   10   10   40   42
  Rest of world   12 326   10 530   17   8   60   58
TOTAL   20 669   18 134   14   9   100   100

24

Sales by region (unaudited)

Third quarter

 
    
    
   % change

    
    
 
   Q3 2004
USD m

   Q3 2003
USD m

   USD

   local
currencies

   Q3 2004
% of total

   Q3 2003
% of total
Pharmaceuticals                        
  US   1 895   1 712   11   11   41   42
  Rest of world   2 751   2 329   18   10   59   58
TOTAL   4 646   4 041   15   11   100   100

Sandoz
 
 
 
 
 
 
 
 
 
 
 
 
  US   219   221   -1   -2   30   33
  Rest of world   503   454   11   4   70   67
Total   722   675   7   2   100   100

OTC
 
 
 
 
 
 
 
 
 
 
 
 
  US   129   133   -3   -3   27   30
  Rest of world   349   310   13   5   73   70
Total   478   443   8   3   100   100

Animal Health
 
 
 
 
 
 
 
 
 
 
 
 
  US   89   68   31   31   46   42
  Rest of world   105   95   11   2   54   58
Total   194   163   19   15   100   100

Medical Nutrition
 
 
 
 
 
 
 
 
 
 
 
 
  US   117   64   83   83   40   31
  Rest of world   172   142   21   13   60   69
Total   289   206   40   35   100   100

Infant & Baby
 
 
 
 
 
 
 
 
 
 
 
 
  US   305   281   9   9   82   81
  Rest of world   66   68   -3   1   18   19
Total   371   349   6   7   100   100

CIBA Vision
 
 
 
 
 
 
 
 
 
 
 
 
  US   127   120   6   6   36   36
  Rest of world   230   213   8   0   64   64
Total   357   333   7   2   100   100

Consumer Health
 
 
 
 
 
 
 
 
 
 
 
 
  US   986   887   11   11   41   41
  Rest of world   1 425   1 282   11   4   59   59
TOTAL   2 411   2 169   11   7   100   100

Group
 
 
 
 
 
 
 
 
 
 
 
 
  US   2 881   2 599   11   11   41   42
  Rest of world   4 176   3 611   16   8   59   58
TOTAL   7 057   6 210   14   9   100   100

25

Quarterly analysis

Key figures by quarter

 
    
    
   Change
 
   Q3 2004
USD m

   Q2 2004
USD m

   USD m

   %
Total sales   7 057   6 973   84   1
Operating income   1 717   1 794   -77   -4
Financial income, net   35   98   -63   -64
Taxes   -317   -321   4   -1
Net income   1 547   1 549   -2   0

Sales by region

 
    
    
   Change
 
   Q3 2004
USD m

   Q2 2004
USD m

   USD m

   %
US   2 881   2 827   54   2
Europe   2 506   2 522   -16   -1
Rest of world   1 670   1 624   46   3
Total   7 057   6 973   84   1

Sales by division/business unit

 
    
    
   Change
 
   Q3 2004
USD m

   Q2 2004
USD m

   USD m

   %
Pharmaceuticals   4 646   4 572   74   2
Sandoz   722   737   -15   -2
OTC   478   467   11   2
Animal Health   194   185   9   5
Medical Nutrition   289   289   0   0
Infant & Baby   371   367   4   1
CIBA Vision   357   356   1   0
Consumer Health   2 411   2 401   10   0
Total   7 057   6 973   84   1

26

Operating income by division/business unit

 
   Q3 2004
USD m

   Q2 2004
USD m

   Change
 
   USD m

   %
Pharmaceuticals   1 387   1 369   18   1
Sandoz   4   125   -121   -97
OTC   105   83   22   27
Animal Health   1   22   -21   -95
Medical Nutrition   30   21   9   43
Infant & Baby   76   70   6   9
CIBA Vision   67   67   0   0
Divisional Management costs   -5   -4   -1   25
Consumer Health   278   384   -106   -28
Corporate income/expense, net   52   41   11   27
Total   1 717   1 794   -77   -4

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



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—Investor Relations Release—
SIGNATURES