Sandoz Group Ag S/Adr

Good morning, ladies and gentlemen, and welcome to the Sandoz call today. I will now hand over to Craig Marks, head of investor relations, for his opening remarks.

Thank you and welcome to the Sandoz full year results call for 2025. Earlier today, we published a press release and an accompanying presentation on our website, which will follow on today's call. You can find these documents at Sandoz.com stroke investors. Joining me on today's call are Richard Seynod, Chief Executive Officer, and Remco Steenbergen, Chief Financial Officer. Please turn to slide two. Our results announcement, presentation, and discussion include forward-looking statements. Please see our disclaimer here. Please turn to slide three. Richard will begin today's presentation with the highlights of 2025, followed by an update on the business. Remco will cover the financial performance, as well as the guidance for 2026. Following the wrap-up of the presentation, we'll be happy to take your questions. And with that, I will now hand over to Richard. Please turn to slide four. Thank you, Craig.

And hello, everyone. It is a pleasure to welcome you all on the call today. Our second full year as an independent company was a very successful one, and I'm proud to share our achievements. 2026 is a significant year for us as we celebrate some very special anniversaries that reflect our legacy and our future. 20 years ago, Sandoz pioneered the world's first biosimilar, opening the door to advanced treatments for more patients and setting new standards for access and affordability. 80 years ago, we transformed a brewery into a penicillin factory, making antibiotics more accessible and saving millions of lives. Kundal remains Europe's last major end-to-end producer of penicillins, a legacy of reliability and innovation. And I'm delighted that we're also celebrating 140 years of Sandoz. These milestones are more than history. They are a source of pride and inspiration as we build our future. The reminders of the impact that we have made and the responsibility we carry to continue expanding access for patients everywhere. Please turn to slide five. I am proud of the progress that we made last year when we cemented the fundamentals of our long-term growth potential. Let me take you through the four key areas where we made meaningful steps forward. We advanced our deep, diversified, and industry-leading pipeline last year. Crucially, this pipeline already includes 27 biosimilars, 2025 was also a year of successful launches. We rolled out a number of important medicines like Pistiva in the US, Afclir in Europe and Australia, and Wyest and Gibonte in the US, Europe, Brazil, and Australia. And as the last of our Capital Market Day commitments, I was delighted that we launched Tyruco in the US. On the development and supply side, we completed the acquisition of Just Evotech Biologics Europe at the end of the year. which strengthens our technology base and accelerates our ability to scale next generation biosimilar development and manufacturing. The construction of our biosimilar hub in Slovenia is also progressing very well. And finally, it was a year of strong results across the P&L, cash flow and balance sheet. Net sales grew by 5% to constant currencies to $11.1 billion. Our core EBITDA margin expanded by 160 basis points to 21.7, driven by improving mix of sales, cost control and operating leverage. The return on our invested capital increased to 14.5%, reflecting growth of two percentage points. And finally, we're proposing to increase the dividend per share by one third to 80 cents a share in Swiss francs. Now, let's move to more details of the growth in net sales, starting with slide six. Looking firstly at the full year, net sales surpassed $11 billion for the first time, supported by biosimilar growth of 13% at constant exchange rates. Whilst generics provided a strong foundation for our business, the overall performance reflected the increasing contribution from biosimilars and strong execution across our organizations. Biosimilars now represent 30% of total net sales, marking a significant milestone for our business and one we are proudly achieved earlier than expected. I am proud to say that quarter four represented our 17th quarter of consecutive growth, underlying sales up by 7% and biosimilars representing 31% of the total. Please turn to slide seven. Generics remain a core growth engine for Sandos. Here you can see some examples of the many launches last year, such as iron sucrose, river oxyban and an exoparin sodium. We have more than 400 generic assets in development, targeting an originator market worth around $220 billion. Moreover, we're focused on a significant number of LOE opportunities, particularly in oral solids and injectables. Lastly, our global generic footprint includes four development centers and 15 in-house manufacturing sites, ensuring agility and reliability in supply. It is worth noting that the adverse impact last year on penicillin B2B business, Asian suppliers engaged in significant price dumping for key penicillin APIs, including some that we sell to other businesses. This impacted the sales value of this part of our business in the second half and We expect it to continue impacting our generic performance in the first half of 2026. Furthermore, the recently announced introduction of minimum import prices in India for some penicillin APIs may well divert low-priced supply towards Europe, which continues to depend on Asia for key intermediates. Europe's growing dependency on a handful of global suppliers underpins our call for a fundamental shift in how Europe thinks about antibiotics, the backbone of modern medicine, especially given that they're a key part of the continent's security infrastructure. Please turn to slide eight. Now turning to biosimilars. 2025 was a great year for this key part of our future. We delivered multiple successful launches that reinforced our leadership and execution capabilities. There were two major launches for Peacechiva. Firstly, we launched in the U.S. earlier in the year, which included private label options. Secondly, we introduced the first commercially available auto-injector for ustekinumab in Europe, a major step forward in patient convenience. Next, Tyruco saw strong uptake in Europe and was rolled out across the U.S. in November. We also achieved a significant milestone with Weiss & Giovanti, the first denosumab biosimilars in the U.S., followed by the launch in Europe in quarter four. And finally, AFCLIR entered the European market at the end of 2025 with the U.S. launch anticipated by quarter four this year. And you probably saw the great news last week that the FDA has approved an expanded label for Envisu to include multiple retinal indications. I fully expect these launches to perform strongly and contribute meaningful growth for Sandoz. Please turn to slide nine. Let me now walk you through the continued performance of Peacejiva and Hyramoz across our key markets. Starting on the left, Peacejiva in Europe, we see very solid trajectory. What's particularly encouraging is the sustained increase in biosimilar participation, which continues to expand quarter after quarter. This reflects not only strong underlying market growth, but also the faster uptake of ustekinumab biosimilars compared to what we saw with adalunumab. Alongside the autoinjector rollout last year, we're getting ready for more Beesgiva launches in Europe and international in 2026. Hyramaz continues to demonstrate strong global growth. Our market share remains stable, and we continue to see strong increases in biosimilar participations. we're very well positioned to benefit from this trend. Please turn to slide 10. Now, let me turn to Tyruco and Omnitrope. Starting with Tyruco, we're very pleased with the continued rates of adoption in Europe. Since launch, our market share has grown steadily, reflecting the strong clinical and economic value proposition of Tyruco as the only biosimilar approved in Europe for relapsing remitting multiple sclerosis. Alongside the recent launch in the US in quarter four and additional launches planned across other markets, we expect uptake to further expand as awareness and familiarity grow. Omnitrope continues to demonstrate exceptional stability and resilience in a highly competitive category. We've maintained the leading global market share and we're delighted with the performance, especially in the international region. Overall, Both medicines showcase the strength and diversity of our portfolio. Tyruco as a high-potential launch with accelerating adoption, and Omnitrope as a reliable, long-standing leader in the class. Please turn to slide 11. Let me now highlight the strong progress that we're making with Weist and Javonte. Firstly, in the U.S., our launch execution has been highly effective. we were able to rapidly leverage our commercial footprint that covers more than 80% of the Denosumab market volume to ensure broad visibility and accessibility from day one. We also successfully established average selling pricing, a critical milestone for provider confidence and reimbursement stability. And I want to call out the performance of Wyest and Gibonte in Canada, where we've taken extremely high levels of share across the Denosumab biosimilars. Turning to Europe, the launch of Quarter 4 has been progressing well. Our leadership across both hospital and retail channels has helped us execute with speed and precision. This strong, on-the-ground presence is enabling us to secure access, build awareness, and support physicians as they integrate Weiss and Gibonte into clinical practice. Overall, being first to market with these medicines has given us a powerful head start, and the early update confirms that our strategy is working. We're well positioned to continue building momentum as access, adoption and payer coverage expand across the regions. Please turn to slide 12. Our pipeline is where the next wave of growth begins and is designed for high impact. We're advancing targeted development in key biologics and therapies with a clear focus on areas that matter most to patients and healthcare systems. In the nearer term, we have several assets already in regulatory review. Looking further ahead, our clinical development portfolio includes major immunology and oncology assets, such as Opidivo, Keytruda, Akrivas, and T-Centric, biosimilars to some of the most widely used biologics today. Finally, we have a significant number of assets in early development. This pipeline positions Sandoz to lead in biosimilars for years to come, delivering scale, innovation, and access to patients. Please turn to slide 13. I am delighted by our sustainability progress in the year. In 2025, we serve over 1 billion patients across more than 100 countries, a scale that underscores our global responsibility. Through our portfolio and partnerships, we've delivered $26 billion in savings to healthcare systems. This is a meaningful relief at a time when affordability pressures continue to rise. We've delivered measurable reductions across our emissions footprint, down 18% in Scope 1, 15% in Scope 2, and 1% in Scope 3. We've also submitted our SBTI targets for validation, covering all emissions scopes, reinforcing our commitment to transparent climate action. Finally, on governance and integrity, we strengthened oversight and risk-based controls to ensure swift information decision-making without compromising compliance. And we continue to lead in transparency with open, compliant transfer of value disclosures across more than 36 markets, aligned with global codes and standards. Altogether, these achievements reflect who we are as a company driven by purpose, committed to access, anchored in strong values, and focused on delivering long-term impact for patients, partners, and our people, as well as society. Please turn to slide 14. To secure long-term leadership in biosimilars, we're expanding our pipeline and commercial presence has been accompanied by a significant investment in strategic integration and the expansion of in-house capabilities. I'm excited to say that this year we'll begin to complete the building of our end-to-end European Biosimilars Hub in Slovenia that includes a state-of-the-art technical development centre in Ljubljana, a high-tech drug substance production site in Lendeva and an aseptic production centre in Brinik. These facilities will give us full control over development and manufacturing, ensuring quality and scalability. Secondly, our acquisition of Just Evotech Biologics in Europe at the end of 2025 marked a major step forward. This brought us more capacity for growth, as well as proprietary platforms for integrated development and indefinite license to use Just Evotech's continuous manufacturing technology. Finally, Our overall European buy similar manufacturing network will position us as a unique leader in in-house development and production, strengthening supply security, enabling us to respond quickly to market needs. Together, these investments will allow us to capitalize on the overwhelming buy similar market opportunities that lie ahead. And with that, I hand over to Remco on slide 15.