Sandoz (SDZ) Q4 2025 earnings summary

Executive summary

• FY 2025 net sales reached $11.1 billion, up 5% at constant currencies and 7% in USD, with biosimilars now 30% of total sales and 17 consecutive quarters of growth.

• Core EBITDA margin expanded to 21.7%, with core EBITDA up 16% to $2.4 billion, and return on invested capital rising to 14.5%.

• Core diluted EPS increased 34% to $3.64, reflecting higher operating profit, lower financial expenses, and a reduced tax rate.

• Multiple successful biosimilar launches, including Pyzchiva, Afqlir, Wyost, Jubbonti, and Tyruko, with strong uptake in key markets.

• Expanded biosimilar capabilities through acquisition of Just-Evotec Biologics EU SAS and new facilities in Slovenia.

Financial highlights

• Net sales surpassed $11 billion for the first time, driven by 13% biosimilar growth at constant exchange rates and 15% in USD.

• Core EBITDA increased by 14% to $2.4 billion, with margin up to 21.7%.

• Free cash flow rose by $435 million to $1.5 billion, with management free cash flow up 39%.

• Core diluted EPS grew by 33% to $3.64.

• Net debt ended at $3.6 billion, with an improved net debt to core EBITDA ratio of 1.5x.

Outlook and guidance

• 2026 net sales expected to grow mid to high single digits at constant currencies, with core EBITDA margin targeted to increase by around 100 basis points.

• Price erosion anticipated at low to mid single digits; adverse penicillin B2B dynamics and US tariffs expected to persist in H1 2026.

• CapEx for 2026 projected at $1.1 billion, focused on biosimilar capabilities.

• Midterm outlook for 2028 unchanged, with strong momentum from recent launches and margin expansion drivers.

• Guidance excludes potential generic semaglutide launch and new US tariffs.