Sandoz (SDZ) Q2 2026 earnings summary

Executive summary

• H1 2026 net sales rose 5% at constant currencies to $5.8 billion, driven by 20% biosimilars growth and successful launches, with biosimilars now 33% of net sales and strong gains in North America.

• Generics stabilized after Q1 headwinds, with Q2 returning to 1% growth at constant currencies; generics sales were $3.9 billion, down 1% at constant currencies.

• Expanded biosimilars pipeline to 36 assets, including four new in-house assets and a strategic partnership with Samsung Bioepis.

• Opened a new $99 million biosimilar development center in Ljubljana, Slovenia, enhancing R&D and manufacturing integration.

• Confirmed full-year 2026 guidance for mid- to high-single-digit net sales growth and ~100 basis points core EBITDA margin expansion, with high confidence in 2027-2028 outlook.

Financial highlights

• Net sales reached $5.8 billion in H1 2026, up 5% at constant currencies and 10% in USD year-over-year.

• Core EBITDA was $1.2 billion, up 15% year-over-year, with margin expanding to 20.9%.

• Core diluted EPS increased 17% to $1.71; core net income rose 18% to $750 million.

• Management free cash flow stable at $503 million despite higher CapEx; free cash flow increased to $337 million.

• Core gross profit margin improved to 49.7%.

Outlook and guidance

• Full-year 2026 guidance confirmed: net sales expected to grow mid- to high-single-digit % at constant currencies, with core EBITDA margin expansion of ~100 basis points.

• Price erosion expected in the mid-single-digit percentage range, mainly due to biosimilar growth and tender dynamics.

• Currency tailwind to net sales expected at 2 percentage points for 2026.

• Guidance excludes unforeseen events or new US tariffs; no material impact from potential generic semaglutide launch in 2026.

• Strong confidence in continued growth for 2027 and 2028, with new launches and GLP-1 rollout.