It gives me particular pleasure in our
tenth business year to report another set of record results.
Let me summarize the key 2005 figures:
•
Group net sales
increased 14% (+13% in local currencies) to USD 32.2 billion
•
Pharmaceuticals
sales grew by 10% (+9% in local currencies)
•
Sandoz secured
a 54% increase in sales (+54% in local currencies)
•
Consumer Health
sales gained 8% (+8% in local currencies)
•
Group operating
income advanced to USD 6.9 billion (+10%)
•
Net income
rose by 10% to USD 6.1 billion
•
Earnings per
share amounted to USD 2.63 (+11%)
•
Free cash flow
reached USD 4.7 billion (+42%)
This
good performance reflects our clear and consistent strategy, which is based on
innovation and achieving a leading position in the healthcare sector. Ultimately,
however, the key factors in our success are the skills and commitment of our associates,
and I would like to thank them for their contribution.
Pharmaceuticals
remains our biggest and most profitable business. Particularly
strong
growth
was posted by the Cardiovascular and Oncology franchises, thanks to the class-leading
products Diovan (used to control hypertension) and Gleevec/Glivec (for the treatment
of chronic myeloid leukemia). Overall, the division once again successfully increased
its market share last year. With a total of 76 projects in clinical development,
we have a full, innovative and promising pipeline. But in spite of – or precisely
because of – our current success, we need to keep a sharp eye on the market evolution.
Three
fundamental trendsare boosting demand for healthcare services and
medicines:
1.
The
aging of the world’s population, as the incidence and
the prevalence of disease rise with increasing age;
2.
Ongoing
technological discoveries and developments, which lay
the foundation for innovative pharmaceutical products;
and
3.
Rapid
economic growth in countries such as China, India and
Russia, leading to improvements in the provision of public
healthcare.
In line with changes in the population’s standard of
living and lifestyles, these countries are also experiencing increasing incidence
of chronic cardiovascular disease, diabetes, cancer and respiratory illness. In
