Sandoz Group Ag S/Adr

Good morning ladies and gentlemen and welcome to the Sandoz call today. I will now pass on to Craig Marks, Head of Investor Relations for his opening remarks.

Thank you and welcome to the Sandoz H1 2026 results call. Earlier today we published a media 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 Saynor, 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 the company's performance in the first half of the year, followed by an update on the business. Remco will give more detail on the financial performance. as well as a recap on guidance for 2026. Following a 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, everybody. It's a pleasure to welcome you all on the call today. Before we turn to our H1 performance, I'd like to take a moment to reflect on the growth of Sandoz. Over recent months, we've continued to strengthen our position as the global leader in affordable medicines and as an increasingly important voice in healthcare policy and medicine security. Alongside the three anniversaries shown on the slide, we're also approaching another important milestone. We are delighted that Sandoz will join the Blue Chip Swiss Market Index in September, less than three years after becoming an independent company. This is a strong recognition of our execution, our colleagues, and our growing relevance in capital markets and investor confidence in our long-term growth prospects. Please turn to slide five. Now, let's look at our performance in the first half. We delivered a strong set of results with excellent progress in our pipeline, business, and financials. We further strengthened our industry-leading biosimilar pipeline through the addition of four in-house assets, bringing our total biosimilar pipeline to up to 36 assets. We also achieved important regulatory milestones, including EU approvals for our insulin biosimilars and US regulatory submission acceptance for our in-house generic tithapotide. In addition, we received regulatory approval for a new semi-glutide treatment option in Brazil, paving the way to expand patient access in this important market. From a business perspective, we continued to leverage our scale and competitive advantages. We moved up to become the number two biosimilar and generic company in North America. We opened our new state-of-the-art biosimilar development center in Ljubljana, and our climate targets were validated by the Science-Based Targets Initiative. These achievements were matched by a strong financial performance that was in line with our commitments. In the first half, net sales increased by 5%, including 7% growth in Q2. Buy-similars reached a record 33% of net sales in the half, while our core EBITDA margin expanded by 90 basis points to 20.9. Management-free cash flow remained strong at around $500 million, despite a significant uplift in capex. Based on our performance in the first half and our confidence in the outlook for the remainder of the year, we are confirming our 2026 guidance today. Taken together, this outlook and these achievements reflect the strength of our business model and our ability to translate execution into sustainable growth and value creation. Now, let's look at the sales performance in more detail, starting with slide six. H1 was another period of strong growth for Sandoz, with top-line momentum led by an outstanding biosimilars performance. Indeed, biosimilars grew by 20% in the first half, increasing to 22% in Q2. We continue to benefit from successful launches and excellent commercial execution across every region. Generics also gained momentum from Q1 into Q2. The modest decline in the first half was largely a result of temporary headwinds in the first quarter, including adverse dynamics in the anti-infectious B2B business. In Q2, low single-digit growth for generics was more in line with the long-term trend. Please turn to slide 7. While biosimilars are the key growth engine for our business, generics are a strong and essential foundation for sustainable growth. Providing stability, access scale, and reliable cash generation to support our long-term strategy. For the period 27 to 36, we have over 300 assets in the generics pipeline, targeting two-thirds of the loss of exclusivity opportunities by value. Our portfolio strategy remains highly disciplined. We focus on the most attractive LOE opportunities, particularly in oral solids and injectables, where our scale, Development capabilities and commercial footprint provide meaningful competitive advantages. At the same time, we continue to convert our generics pipeline into commercial launches. Recent examples for Europe and the US are shown on this slide. We are also making important progress in GLP-1s. In Brazil, Anvisa recently approved Sandoz's first GLP-1 medicine. with the launch of semaglutide planned for later this year. This represents a historic milestone for us, establishing our presence in the GLP-1 market and providing access to one of the world's largest semaglutide markets. Together with our multi-source strategy, this strengthens our ability to participate in what we believe will be one of the most significant growth opportunities in healthcare over the coming years. Now, let's turn to Bioslimmers on slide eight. Starting with Hyramoz, we continue to hold leading positions. Alongside an expansion of biosimilar adoption, we have grown our global market share, and I was pleased to see Hyramoz delivering double-digit net sales growth in the first hour. Turning to Peacejiva, we have quickly established a leadership position in the European Oosterkinnemat market. Today, Peacejiva is the number one biosimilar across major European markets, with a 35% market share. It also grew double digit in the first half. While short-term market dynamics in Germany have created some headwinds for Peace Jiva and Biosimilar pricing more broadly, the underlying performance of our Biosimilars clearly remains very strong. Please turn to slide nine. Let me now turn to Tyruco and Omnitrope We continue to make encouraging progress with Tyruco in the European Nataluzumab market, with market share increasing from 7% at launch to 17% today. Importantly, that share has remained stable over the last few quarters. Looking ahead, we see potential upside from further adoption in Europe, a longer-term ramp-up in the US, and additional launches across Europe and international markets. 2026 marks the 20th anniversary of our first regulatory approval of Omnitro as the world's first biosimilar. Today, it remains the class leader, with a consistently strong market share of more than one third. Please turn to slide 10. Now, let's move on to our most recent growth drivers, starting with Wyest and Jubonti, where the launches have exceeded expectations. In the US, both medicines have quickly established leadership positions after the launch in Q2 last year, with Gibonte achieving a 64% by a similar market share and Waiost 54%. These results reflect broad provider access, strong commercial execution and early wins with key players. The European launch has also been progressing exceptionally well, with rollouts completed across 27 countries on day one, whilst international launches in markets such as Brazil and Australia are also gaining momentum. Turning to Afclare, our Aflibisep biosimilar were equally encouraged. Launch execution across Europe has been strong, and the medicine is now available in 19 markets. With limited competition today, AFCLIR is well positioned to drive broader patient access while supporting more sustainable healthcare systems. Looking ahead, AFCLIR represents another meaningful growth opportunity in 2027 and 2028, supported by US launches in the coming months. Please turn to slide 11. This slide highlights the depth, quality, and scale of our industry-leading biosimilar pipeline. I'm very proud of the progress that we're making. Our biosimilar pipeline now stands at 36 assets. This breadth is unmatched in the industry and provides multiple future growth opportunities across a wide range of therapy areas. Importantly, this is not just about the size of the pipeline. What differentiates Sandoz is our ability to continue to expand our pipeline and convert assets into successful commercial launches. This is creating an increasingly attractive portfolio of market-leading biosimilars. Today, we have five assets either in regulatory review or are yet to launch, six assets in clinical development, and 10 in technical development, with a further 15 in early development. The shape and expansion of this biosimilar pipeline underpin our increasing confidence in the Sandals roadmap. We have multiple assets entering late-stage development A growing number of regulatory milestones ahead and a broad set of future launch opportunities that support our ambitions for the Sandoz Golden Decade. Beyond the medicines we have in the market today, we are investing to ensure we are the leader of the next wave of biosimilar growth. One of the key milestones in the first half was the opening of our new state-of-the-art Biosimilar Development Center in Ljubljana, Slovenia. More than simply a new facility, it is a strategic investment in scientific and technical capabilities that all support our industry-leading pipeline and long-term growth ambitions. It is a huge step up in our development capabilities, and we look forward to showcasing the center to many of you in November. As our biosimilar pipeline becomes larger and more complex, speed, efficiency, and execution become critical competitive differentiators. This center strengthens all three Alongside our growing commercial scale, the benefits of this investment give us greater confidence in our ability to deliver a leading program of launches and capture significant growth opportunities over the coming years. And with that, I will hand over to Remco on slide 13.