Sandoz (SDZ) investor relations material

Executive summary

• H1 2026 net sales rose 5% at constant currencies to $5.8 billion, driven by 20% biosimilars growth and successful launches, with biosimilars now 33% of net sales and strong gains in North America and Europe.

• Generics returned to growth in Q2 after Q1 headwinds, though H1 generics sales declined 1% at constant currencies.

• Expanded biosimilars pipeline to 36 assets, including four new in-house assets and a strategic partnership with Samsung Bioepis.

• Opened a new $99 million biosimilar development center in Ljubljana, Slovenia, enhancing R&D and manufacturing integration.

• Confirmed full-year 2026 guidance and expressed high confidence in outlook for 2027 and 2028, citing a robust pipeline and strong business fundamentals.

Financial highlights

• Net sales reached $5.8 billion in H1 2026, up 5% at constant currencies and 10% in USD year-over-year.

• Core EBITDA grew 15% in USD to $1.2 billion, with margin expanding 90 basis points to 20.9%.

• Core diluted EPS increased 17% in USD to $1.71; core net income rose 18% to $750 million.

• Management free cash flow stable at $503 million despite higher CapEx; free cash flow increased to $337 million.

• Gross profit margin improved by 50 bps to 49.7%.

Outlook and guidance

• Full-year 2026 guidance confirmed: net sales expected to grow mid- to high-single digits at constant currencies, with core EBITDA margin expansion of around 100 basis points.

• Overall pricing expected to decline by mid-single-digit percentage, mainly due to Germany and North America.

• Currency tailwind to net sales now expected at 2 percentage points.

• Guidance excludes unforeseen events or new US tariffs; no material impact from potential generic semaglutide launch in 2026.

• Strong confidence in growth for 2027 and 2028, with new launches and GLP-1 rollout.