Sandoz delivers strong H1 2025 results, with accelerated sales growth in the second quarter

Ad hoc announcement pursuant to art. 53 SIX Swiss Exchange Listing Rules

MEDIA RELEASE

Basel, August 7, 2025 Sandoz (SIX: SDZ; OTCQX: SDZNY), the global leader in generic and biosimilar medicines, today presents its financial results for the first half of 2025. Growth in this document is shown at constant currencies (CC)[1] unless stated otherwise.

FINANCIAL RESULTS

	H1 2025	H1 2024	change
	USD m	USD m	USD %	CC %	CGR %[2]
Net sales	5,232	5,047	4%	4%	6%
Generics	3,736	3,704	1%	1%	2%
Biosimilars	1,496	1,343	11%	12%	17%
Core EBITDA	1,046	885	18%	20%
Core EBITDA margin (%)	20.0%	17.5%
Core diluted earnings per share (USD)	1.46	1.12	30%	33%
Management free cash flow	503	237	nm[3]

Richard Saynor, Chief Executive Officer of Sandoz, said: The first half of the year marked another phase of good progress for Sandoz. Strong underlying sales growth was underpinned by the double-digit performance from our biosimilars which, in the second quarter, represented 30% of net sales for the first time, marking a true milestone for the company. Europe and International also performed particularly well, while we launched more important medicines for patients in North America.

Reflecting this years launch program, weighted to the second half, we anticipate an even stronger sales performance in the second half, particularly in North America. Further investments in our biosimilars future, in Slovenia and via the proposed acquisition of Just-Evotec Biologics EU SAS, reflect the latest step in our strategic plan to capitalize on the unprecedented patent-expiries opportunity over the next ten years. This will only be enhanced by the effects of regulatory streamlining. It is the combination of the growing platform of opportunities, consistently strong financial results and our unrelenting focus on patients that offers such attractive long-term value for our stakeholders.

FINANCIAL HIGHLIGHTS

• H1 2025 net sales of USD 5,232 million:
  • Up by 4% at CC and USD, with volume growth of 7%; on a CGR basis, H1 net sales grew by 6%
  • In the second quarter, accelerated growth of 5% at CC and 8% in USD; growth of 7% at CGR
  • Biosimilars H1 sales up by 12% at CC and 17% at CGR
  • H1 generics growth of 1% at CC and 2% at CGR
  • The 10 largest-selling medicines grew by a combined 10% at CC and represented 33% of net sales

• A core EBITDA margin in H1 of 20.0%, representing a 2.5 percentage-point year-on-year improvement, primarily driven by operating leverage and the mix of sales
• Management free cash flow in H1 of USD 503 million (H1 2024: USD 237 million). Free cash flow of USD 207 million (H1 2024: USD 21 million)
• Core diluted earnings per share of USD 1.46 in H1 represented growth of 33% at CC and 30% in USD
• Full-year 2025 guidance confirmed: mid-single-digit net-sales growth at CC and a core EBITDA margin of around 21%

BUSINESS HIGHLIGHTS

There were a number of business highlights since the publication of the Q1 2025 sales update.

Biosimilars

• The company recently signed a non-binding term sheet with Evotec SE to acquire its Just-Evotec Biologics in-house development and manufacturing capabilities in Toulouse, France. The proposed transaction would seamlessly align with the strategic objective of capitalizing on the projected USD 300 billion biosimilar-market opportunity over the next 10 years[4]
• Sandoz recently announced the start of construction for a new, state-of-the-art biosimilars production center for sterile product manufacturing in Brnik, Slovenia. This complements ongoing investments in Slovenia, namely a new biosimilar drug-substance production center in Lendava and a biosimilar development center in Ljubljana
• Following feedback from major regulatory authorities, Sandoz has decided to streamline the clinical-development programs for its proposed nivolumab and ocrelizumab biosimilars, respectively. The company is winding down the Phase III NivoReach trial for its proposed biosimilar nivolumab. Sandoz is also modifying its Strive-MS integrated Phase I/III trial to become a comparative pharmacokinetic trial for its proposed ocrelizumab biosimilar. The development programs, including comprehensive analytical and clinical pharmacokinetic data, have been designed to align with updated regulatory guidance and confirm biosimilarity to their respective reference medicines, while maintaining the highest scientific and regulatory standards
• The aforementioned streamlining reflects ongoing encouraging and favorable regulatory developments for biosimilars and follows Sandozs decision earlier in the year to minimize its Phase III trial for its proposed pembrolizumab biosimilar

Launches

• Sandoz recently launched Wyost® and Jubbonti® in the US, the first and only interchangeable denosumab biosimilars. Pyzchiva® (ustekinumab) was also launched in the US, including in private label. Finally, a Pyzchiva autoinjector was also rolled out to become the first commercially available ustekinumab biosimilar in a pre-filled pen in Europe
• Anticipated biosimilar launches in the second half of the year include Wyost & Jubbonti and Afqlir® (aflibercept) in Europe, while the company retains its ambition to launch Tyruko® (natalizumab) in the US before the end of the year[5]

FULL-YEAR 2025 GUIDANCE

The company expects further major biosimilar launches this year, while price erosion is expected to return to normalized levels of a low to mid-single-digit percentage. Sandoz continues to anticipate core EBITDA-margin expansion this year to reflect the mix of sales, simplification of the external network and the ongoing transformation program. As a result, the company confirms its expectations for 2025:

• Net sales to grow at CC by a mid-single-digit percentage
• A core EBITDA margin in FY 2025 of around 21%

This guidance excludes any impacts of unforeseen events or unconfirmed developments, such as significant further potential trade tariffs emanating from the US government.

H1 AND Q2 2025 NET SALES

Net sales by business

H1

	H1 2025	% of net sales	H1 2024	change
	USD m		USD m	USD %	CC %	CGR %
Generics	3,736	71	3,704	1%	1%	2%
Biosimilars	1,496	29	1,343	11%	12%	17%
Net sales	5,232	100	5,047	4%	4%	6%

Net sales for the first half of 2025 were USD 5,232 million, up by 4% at CC and by 6% at CGR. Volumes grew by 7%, partly offset by price erosion of 3%; the erosion was in line with a full-year assumption of a low to mid-single-digit decline. Net-sales growth was primarily driven by the performance of biosimilars, which continues to benefit from an extensive pipeline and launch program.

Generics overview
Net sales of generics in H1 were USD 3,736 million, reflecting growth of 1% at CC and 2% at CGR. Generics represented 71% of net sales (H1 2024: 73%, Q2 2025: 70%).

Europe net sales of generics grew by 2% at CC in the first half, reflecting the impact of launches in 2024. International net sales of generics declined by 1% at CC; after adjusting for the 2024 divestment of the Sandoz business in China, International net sales of generics grew by 3% at CGR. In North America, generics net-sales growth of 2% at CC benefited from the successful launch of paclitaxel in 2024.

Biosimilars overview
Net sales of biosimilars in H1 of USD 1,496 million reflected growth of 12% at CC and 17% at CGR. Biosimilars represented 29% of total net sales (H1 2024: 27%, Q2 2025: 30%).

Strong Europe biosimilars net-sales growth of 17% at CC benefited from a number of good performances, including recently launched Pyzchiva and Tyruko, while strong International biosimilar net-sales growth of 30% at CC partly reflected the strong contribution from Omnitrope® (somatropin). Major biosimilar launches in International in 2025 will all occur in the second half of the year.

North America biosimilar net sales declined by 9% at CC in the half, reflecting the withdrawal of Cimerli in Q1 2025 and the effect of private-label adalimumab pricing; excluding the impact of the 2024 acquisition of Cimerli, North America biosimilar net sales grew by 9%.

Q2

	Q2 2025	% of net sales	Q2 2024	change
	USD m		USD m	USD %	CC %	CGR %
Generics	1,927	70	1,835	5%	2%	3%
Biosimilars	825	30	720	15%	12%	20%
Net sales	2,752	100	2,555	8%	5%	7%

Net sales for the second quarter were USD 2,752 million, up by 5% at CC and by 7% at CGR. Volumes grew by 8%, partly offset by price erosion of 3%.

Net sales by region

H1

	H1 2025	% of net sales	H1 2024	change
	USD m		USD m	USD %	CC %	CGR %
Europe	2,832	54	2,634	8%	6%	6%
International	1,284	25	1,269	1%	5%	8%
North America	1,116	21	1,144	-2%	-1%	4%
Net sales	5,232	100	5,047	4%	4%	6%

Europe overview
Net sales in Europe in H1 were USD 2,832 million, reflecting growth of 6% at CC and CGR. Europe net sales of generics grew by 2% at CC in the first half, with growth in biosimilars of 17% at CC primarily a result of commercial execution and recent launches, including Pyzchiva and Tyruko.

International overview
Net sales in International in H1 were USD 1,284 million, with growth of 5% at CC and 8% at CGR. In the second quarter, International net sales grew by 11% at CC and by 13% at CGR, despite major biosimilar launches this year all coming in H2. Pricing increased in generics during the first half of 2025, with strong International biosimilar net-sales growth of 30% at CC partly a result of the continued good performance from Omnitrope.

North America overview
Net sales in North America in H1 were USD 1,116 million, reflecting a decline of 1% at CC. Growth at CGR however, namely excluding the impact of the acquisition of Cimerli, amounted to 4%. A good performance from generics was driven by the successful recent launch of paclitaxel, as well as continued strong growth in Canada. Biosimilar net-sales growth would have been positive when excluding the aforementioned impact of the Cimerli acquisition. Price erosion was driven by reduced Cimerli sales, private-label adalimumab pricing and Omnitrope.

Q2

	Q2 2025	% of net sales	Q2 2024	change
	USD m		USD m	USD %	CC %	CGR %
Europe	1,460	53	1,308	12%	6%	6%
International	694	25	627	11%	11%	13%
North America	598	22	620	-4%	-3%	5%
Net sales	2,752	100	2,555	8%	5%	7%

H1 2025 KEY OPERATING AND NON-OPERATING RESULTS

	H1 2025	H1 2024	change
	USD m	USD m	USD %	CC %
Net sales	5,232	5,047	4%	4%
Gross profit	2,411	2,380	1%	2%
Operating income	602	332	81%	90%
EBITDA	870	576	51%	55%
Net income	377	151	nm	nm
Core results
Core gross profit	2,575	2,544	1%	2%
Core gross profit margin (%)	49.2%	50.4%
Core operating income	901	763	18%	20%
Core operating income margin (%)	17.2%	15.1%
Core EBITDA	1,046	885	18%	20%
Core EBITDA margin (%)	20.0%	17.5%
Core net income	635	484	31%	34%
Core diluted earnings per share (USD)	1.46	1.12	30%	33%

Core gross profit amounted to USD 2,575 million (H1 2024: USD 2,544 million), resulting in a core gross profit margin of 49.2% (H1 2024: 50.4%). The favorable product mix from double-digit biosimilars growth, as well as operational improvements, was more than offset by price erosion and inflation on cost of goods sold.

Core EBITDA was USD 1,046 million (H1 2024: USD 885 million), resulting in a core EBITDA margin of 20.0% (H1 2024: 17.5%). The strong increase was primarily driven by leveraging expenses from a growing top line and savings from the transformation program. EBITDA was USD 870 million (H1 2024: USD 576 million). Core adjustments for EBITDA in the first half of 2025 were USD 176 million (H1 2024: USD 309 million). These were mainly driven by separation costs of USD 156 million, costs of rationalization of internal manufacturing sites of USD 54 million and favorable impacts from adjustments for legal costs of USD 28 million.

Core net income was USD 635 million (H1 2024: USD 484 million), mainly driven by higher core operating income and a lower core net financial result, partly offset by higher core income taxes, while the effective tax rate remained broadly unchanged. Core diluted earnings per share were USD 1.46 (H1 2024: USD 1.12). The weighted average number of shares diluted was 435.8 million as of June 30, 2025, versus 432.2 million in the prior-year period.

NET CASH FLOW, NET WORKING CAPITAL AND NET DEBT

	H1 2025	H1 2024	change
	USD m	USD m	USD m
Net cash flows from operating activities	523	229	294
Cash flows used for net capex	(310)	(205)	(105)
Free cash flow	207	21	186
Management free cash flow	503	237	266

Sandoz generated net cash flows from operating activities of USD 523 million in the first half of the year (H1 2024: USD 229 million). This was mainly driven by working-capital enhancements through improvements in receivables; inventory levels were stable versus December 2024.

Cash flows used for capital expenditures were USD 310 million (H1 2024: USD 205 million). This included the companys ongoing investm