The Group defines EBITDA as operating income before depreciation of property, plant & equipment and amortization of intangible assets, including goodwill, and any related impairment charges.

The segmentation of the Group EBITDA into the Divisions is as follows:

Enterprise value represents the total amount that shareholders and debt holders have invested in Novartis, less the Group’s liquidity. This is the base used by investors in Novartis to measure their EBITDA return.

A total of 49% of the revenue from net sales was used to purchase goods and services from our suppliers. Of the Net Value Added of USD 15.7 billion, 51% was paid either directly or indirectly to the employees, 26% was retained in the business for future expansion and 10% was paid to public authorities and financial institutions. Dividends paid to shareholders represented 13% of the Net Value Added.

Novartis transacts its business in many currencies other than the US dollar, its reporting currency. As a result of the Group’s foreign currency exposure, exchange rate fluctuations have a significant impact in the form of both translation risk and transaction risk on its income statement. Translation risk is the risk that the Group’s consolidated financial statements for a particular period or as of a certain date may be affected by changes in the prevailing rates of the various currencies of the reporting subsidiaries against the US dollar. Transaction risk is the risk that the value of transactions executed in currencies other than the subsidiary’s measurement currency may vary according to currency fluctuations.