Novartis issues summary financial information for the Alcon eye care business ahead of shareholder vote on proposed spin-off

Basel, February 25, 2019 - Novartis today published certain key financial information for the Alcon eye care business covering the full year 2018 ahead of a vote on the proposed 100% spin-off of Alcon at the Novartis Annual General Meeting of Shareholders (AGM) on February 28, 2019.

The issuance of the short form financial information follows the distribution of a brochure for Novartis shareholders that provides further details on the proposed Alcon spin-off. The brochure can be accessed here: www.novartis.com/sit­es/www.novartis.com/files/2019-novartis-agm-alcon-en.pdf

Certain key core Alcon financial information FY 2018

Alcon core to IFRS reconciliation FY 2018

Carve out financial statements for 2018 will be included in the next update to the Alcon Form 20-F registration statement filed with the US Securities and Exchange Commission (SEC).

Notes

Alcon core results, which include core operating income, core gross profit and related margin calculations, fully exclude all amortization and impairment charges of intangible assets, with the exception of software, and certain acquisition related items. The following items that exceed a threshold of USD 10 million are also excluded: integration and divestment related income and expenses, divestment gains and losses, restructuring charges/releases, legal related items, impairments of property, plant and equipment and financial assets, as well as income and expense items that management deems exceptional and that are or are expected to accumulate within the year to be over a USD 10 million threshold.  Changes in the relative values of non-U.S. currencies to the U.S. dollar can affect the financial results and financial position of Alcon. To provide additional information that may be useful to investors, including changes in sales volume, information about Alcon net sales is presented adjusted for such foreign currency effects. Alcon constant currency measures are calculated by translating the current year’s foreign currency values for sales into U.S. dollars, using the average exchange rates from the prior year and comparing them to the prior year values in U.S. dollars. These constant  currency measures are used in evaluating Alcon performance, since they may assist in evaluating the ongoing performance of Alcon from year to year. However, in performing the evaluation, management also considers equivalent measures of performance that are not affected by changes in the relative value of currencies.

The business of Alcon did not form a separate legal group of companies in any of the periods presented. As a result, the Alcon financial figures were prepared on a standalone basis and are derived (carved-out) from Novartis consolidated financial statements and accounting records. These figures are meant to depict the Alcon business from the perspective of how it is expected to be constituted as a standalone company following the spin-off, if approved. The figures are not directly comparable to the financial statements of Alcon as a division of Novartis reported in the consolidated financial statements of the Novartis Annual Report. These Alcon financial figures include charges and allocation of expenses related to certain Novartis business support functions and allocations for Novartis corporate general and administration functions. The preparation of carve-out financial statements required management to make certain estimates and assumptions. Management believes that the allocation methodology and the estimates and assumptions used were reasonable and all allocations have been performed on a basis that reasonably reflects the services received by and the costs incurred on behalf of Alcon.