Sandoz Group AG

Sandoz said H1 net sales increased 5% at constant currencies, or 10% in U.S. dollars, from USD 5.2 billion to USD 5.8 billion. Core EBITDA increased 15% and the core EBITDA margin expanded 90 basis points to 20.9%; core gross profit margin rose 50 basis points to 49.7%; and core diluted EPS increased 17% to USD 1.71. Biosimilars grew 20% in H1, with North America biosimilar sales up 47%; management free cash flow was around USD 500 million (reported as USD 503 million). For 2026, Sandoz continues to expect net sales growth in the mid- to high-single-digit percentage range at constant currencies, core EBITDA margin expansion of around 100 basis points, and a full-year pricing decline of mid-single digits (versus prior expectation of low- to mid-single digits). The company also now expects a 2 percentage point FX tailwind to net sales this year, versus a prior assumption of 4 points, while still not expecting a material FX impact on core EBITDA margin.

Richard Saynor emphasized that Sandoz is strengthening its role as the global leader in affordable medicines and said the company’s growth is being driven by execution across biosimilars, generics, and pipeline development. He highlighted the 36-asset biosimilar pipeline, the new Ljubljana development center, and the first GLP-1 approval in Brazil as evidence of long-term optionality. His tone was upbeat and confident, especially on the outlook for 2027 and 2028 and on the company’s position entering what he called Sandoz’s “golden decade” for biosimilars.

Remco Steenbergen focused on the quality of the H1 financial performance: 5% constant-currency sales growth, 15% core EBITDA growth, 90 bps margin expansion to 20.9%, and core EPS of USD 1.71. He said the stronger mix from biosimilars, plus operating efficiencies and leverage, supported the margin improvement, while management free cash flow of USD 503 million remained strong despite CapEx rising to around USD 500 million in H1 and expected to peak at around USD 1.1 billion for the year. He also noted liquidity of USD 2.3 billion, gross debt of USD 5.9 billion, net debt of USD 3.5 billion, and net debt/core EBITDA of 1.4x, while reiterating that one-off costs should be around USD 0.3 billion for 2026.

Analysts pressed management on Afqlir uptake, Wyost & Jubbonti market share in Europe, U.S. tariff risk, semaglutide in Brazil and Canada, denosumab pricing, Germany pricing/tenders, and whether H2 growth could be strong enough to exceed guidance. Management said Afqlir is seeing strong broad-based uptake, Wyost & Jubbonti has a strong European lead, and the U.S. administration discussions are constructive but too early for specifics on manufacturing or CapEx commitments. On pricing, management attributed more erosion mainly to North America launch dynamics and Germany’s tender/substitution changes, but said they do not expect the current German pressure to persist into 2027. They also said H2 should be stronger than H1, with Q4 higher than Q3, but declined to give a precise exit rate.