European champion committed to further extending global leadership in attractive and growing generics and biosimilars market, via purpose-driven strategy with focus on access and sustainability
Sandoz is a Novartis division. (Credit: Silesia711 from Wikimedia Commons)
Sandoz today hosts the first of two Capital Markets Days (CMDs) for investors, in New York City, to set out its plans for growth and success as a standalone company, following the proposed 100% spin-off from Novartis.
Sandoz reported sales of USD 9.1 bn in 2022, with a record of six consecutive quarters of single-digit growth. At the CMD today, the company will forecast mid-single digit net sales growth for 2023 as well as for the mid term (2024 to 2028). The core EBITDA margin is expected to expand to 24–26% in the mid term, from a forecast 18-19% in 2023, with the initial decrease from 21.2% in 2022 driven by ongoing inflation and investments required to stand up Sandoz as a separate company.
Free cash flow is expected to more than double by 2028, from a reported USD 0.8 bn in 2022. This should enable Sandoz, with a targeted investment grade credit profile and a prudent capital structure, to pay shareholders a full-year dividend of 20-30% of FY 2023 core net income, increasing to 30-40% in the mid term.
“I am honored to have the opportunity to lead Sandoz into its exciting new future and believe this company will have the Board, Executive team and key capabilities it needs to succeed as a standalone company”, said Gilbert Ghostine, Chairman-designate of the proposed new company, who will open the event later today. “Sandoz is an established European champion and global leader in generics and biosimilars with an impressive scientific heritage, a powerful purpose-driven strategy and one of the strongest brands in the industry. I am confident that our new company represents a compelling opportunity for both equity and debt investors.”
Sandoz CEO Richard Saynor said: “In recent years, we have reshaped our business for the future, driven by a strong leadership team with clear alignment on our vision. We are focused on sales execution, while significantly expanding our pipeline, investing in targeted build-up of capabilities and developing strategic partnerships. Looking forward, six strategic levers will drive long-term investor value: attractive market fundamentals, leadership and scale, multiple growth drivers, margin improvement, accelerated cash generation, and a compelling sustainability story. The proposed spin-off would enable us to deliver our full potential, with an attractive and sustainable financial outlook including an expected shareholder dividend.”
The expanding Sandoz product pipeline is expected to contribute an additional USD 3 billion in potential net sales over the next five years, with the mix shifting increasingly towards high-value biosimilars and complex generics. The biosimilar pipeline has trebled in size over recent years, now with 24 products, on top of a core generic pipeline of more than 400 products.
Concluding, Saynor said: “We actively pioneer access for patients by shaping the global healthcare environment, strengthening healthcare systems worldwide by delivering over USD 17 billion in annual savings in Europe and the US alone, reaching 500 million patients a year in over 100 countries, and generating a total social impact estimated in the hundreds of billions of dollars”.
Source: Company Press Release