Half Year 2026 Sandoz Group AG Earnings Call Transcript
Key Points
- Strong financial performance with net sales up 5% in H1 and 7% in Q2, driven by 20% biosimilar growth.
- Core EBITDA margin expanded by 90 basis points to 20.9%, with core diluted EPS up 17% to $1.71.
- Biosimilar pipeline strengthened to 36 assets, including four new in-house additions, and achieved EU approvals for insulin biosimilars.
- Successful launches of Wyost and Givanti in the US, achieving 54% and 64% biosimilar market share respectively, and strong European rollout.
- First GLP-1 approval in Brazil for semaglutide, marking entry into a significant growth market and supporting long-term strategy.
- Management free cash flow remained robust at $503 million despite increased CapEx, and net debt-to-core EBITDA improved to 1.4x.
- Resolved legacy US antitrust litigation with settlements, removing overhang and demonstrating commitment to integrity.
- Overall pricing expected to decline by mid-single-digit percentage in 2026, up from previous low-to-mid single-digit expectation, due to Germany and North America dynamics.
- Generics sales declined in H1 due to temporary headwinds in Q1, including adverse anti-infectives B2B dynamics, though Q2 returned to growth.
- Short-term market dynamics in Germany created headwinds for Pisceva and biosimilar pricing, impacting overall price erosion.
- Currency tailwind reduced to 2 percentage points from prior 4 percentage points, potentially impacting net sales growth.
- One-off costs of $142 million in H1, including litigation and IT expenditures, with full-year expectation of around $0.3 billion.
- Higher interest expense in H1 due to coupon payments on recently issued bonds, impacting cash flow.
- CapEx expected to peak at $1.1 billion this year, reflecting significant investment in future growth, which may pressure near-term cash flow.
Good morning, ladies and gentlemen, and welcome to the Sandoz call today. I will now pass on to Craig Marks, Head of Investor Relations, for his opening remarks.
Thank you and welcome to the Sandoz H1 2026 results call. Earlier today, we published a media release and an accompanying presentation on our website, which will follow on today's call.
You can find these documents at sandoz.com/investors.
Joining me on today's call are Richard Senor, Chief Executive Officer and Remco Steenbergen, Chief Financial Officer.
Please turn to Slide 2.
Our results announcement, presentation and discussion include forward-looking statements. Please see our disclaimer here.
Please turn to Slide 3.
Richard will begin today's presentation with the highlights of the company's performance in the first half of the year, followed by an update on the business.
Remco will give more detail on the financial performance. As well as a recap on guidance for 2026.
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