Sandoz Group (SDZ) Q2 2025 earnings summary

Executive summary

• Net sales reached $5.2 billion in H1 2025, up 4% at constant currencies and 6% at comparable growth, driven by strong biosimilars performance and new product launches.

• Core EBITDA margin improved to 20%, up 2.5 percentage points year-over-year, reflecting operational efficiencies and transformation program benefits.

• Biosimilars accounted for 29–30% of net sales in Q2, with major launches including Pyzchiva, Wyost, and Jubbonti in the US and Pyzchiva Autoinjector in Europe.

• Management free cash flow more than doubled to $503 million, driven by increased net cash from operations and working capital improvements.

• Continued investment in manufacturing capabilities, including expansion in Slovenia and the proposed $300 million acquisition of Just-Evotec Biologics' Toulouse site.

Financial highlights

• Net sales: $5.2 billion (+4% at constant currencies, +6% comparable growth year-over-year).

• Core EBITDA: $1,046 million (+20% at constant currencies); margin: 20% (up from 17.5%).

• Core diluted EPS: $1.46, up 33% at constant currency.

• Management free cash flow: $503 million, more than doubled year-over-year.

• Core gross profit margin: 49.2%, down 1 percentage point year-over-year.

Outlook and guidance

• Full-year 2025 guidance confirmed: mid-single-digit net sales growth at constant currencies and core EBITDA margin around 21%.

• Sequential core EBITDA margin expansion expected in H2, driven by mix and operating leverage.

• Additional product launches anticipated in H2, including Wyost and Jubbonti in Europe and Afqlir.

• Assumes normalized price erosion (low to mid-single-digit %) and $25 million impact from US tariffs on EU generics and biosimilars.

• If current FX rates persist, a 2% tailwind to net sales is expected for the year.