Sandoz (SDZ) Q4 2024 earnings summary

Executive summary

• Achieved over $10 billion in net sales for the first time in 2024, driven by strong biosimilar performance and contributions from all regions, especially North America.

• Biosimilar sales grew 30% year-over-year, now representing 28% of total net sales, with 13 consecutive quarters of growth.

• Core ROIC increased by 2.5 percentage points to 12.3%; proposed dividend up to CHF 0.60 per share.

• Expanded biosimilar pipeline to 28 assets/products, with three regulatory approvals and three launches in 2024.

• Transformation and sustainability initiatives advanced, including network optimization, 12% greenhouse gas reduction, and 900 million patient treatments delivered globally.

Financial highlights

• Net sales grew 9% year-over-year to $10.4 billion, with biosimilars up 30% and generics up 2% for the full year.

• Core EBITDA grew 24% at constant currencies, reaching $2,080 million, with margin up 2.0 percentage points to 20.1%.

• Core gross profit margin held at 50.7%, with positive mix offsetting inflationary pressures.

• Management free cash flow rose to $1.1 billion, a significant increase from $100 million in 2023.

• Net debt to core EBITDA ratio improved to 1.6x from 1.8x, maintaining a robust balance sheet.

Outlook and guidance

• 2025 net sales expected to grow mid-single digits in constant currencies; core EBITDA margin targeted at ~21%.

• Price erosion anticipated to return to low- to mid-single digits.

• Midterm outlook to 2028: annual mid-single-digit net sales growth and core EBITDA margin expansion to 24%-26%.

• At least 30% of sales expected from biosimilars by 2028.

• CapEx investment planned at nearly $3.5 billion (USD 2.2 billion) between 2025-2028, mainly for manufacturing and IT upgrades.