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At Capital Markets Day, Sandoz makes an appealing investment case as a standalone firm

Capital Markets Day

Sandoz, a pharmaceutical company that is proposed to be spun off from Novartis, hosted its first Capital Markets Day (CMD) in New York City to present its growth plans as a standalone company. The company reported sales of USD 9.1 billion in 2022, with six consecutive quarters of single-digit growth. During the CMD, Sandoz forecasted mid-single-digit net sales growth for 2023 and the mid-term (2024 to 2028). The company expects the core EBITDA margin to expand to 24-26% in the mid-term, up from a projected 18-19% in 2023.

Sandoz anticipates that free cash flow will more than double by 2028 from the reported USD 0.8 billion in 2022. With a targeted investment grade credit profile and a prudent capital structure, Sandoz plans to pay shareholders a full-year dividend of 20-30% of FY 2023 core net income, increasing to 30-40% in the mid-term.

Gilbert Ghostine, Chairman-designate of the proposed new company, expressed confidence in Sandoz’s future as a standalone entity and highlighted the company’s strong position in the generics and biosimilars market. Sandoz CEO Richard Saynor emphasized the company’s strategic focus on sales execution, pipeline expansion, capability building, and strategic partnerships. Saynor outlined six strategic levers for long-term investor value, including market fundamentals, leadership and scale, multiple growth drivers, margin improvement, accelerated cash generation, and a compelling sustainability story.

Sandoz expects its expanding product pipeline to contribute approximately USD 3 billion in potential net sales over the next five years, with a greater emphasis on high-value biosimilars and complex generics. The company’s biosimilar pipeline has tripled in size in recent years, now comprising 24 products, in addition to a core generic pipeline of over 400 products.

Sandoz will host a second CMD in London on June 12, providing another opportunity for investors and analysts to engage with the company’s leadership.

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