Sandoz Group Ltd · SIX:SDZ
Sandoz — Investor Day (June 2023)
142 slides from Sandoz's investor day presentation, June 2023
Slide 1: Capital Markets Day
June 2023 Capital Markets Day
Slide 2: Disclaimer (1/2)
Disclaimer (1/2) This Presentation has been prepared and issued by and is the sole responsibility of Sandoz Group AG ("Sandoz") been no change in the affairs of Sandoz since the date hereof or that the information contained herein is correct as of any and is being furnished to each party to whom it
Slide 3: Disclaimer (2/2)
Disclaimer (2/2) Neither this Presentation, the listing, the separation, nor the spin-off constitutes or forms part of any offer or invitation to This Presentation contains various forward-looking statements that reflect management's current views with respect to purchase, otherwise acquire, subscri
Slide 4: Agenda
Agenda Morning Afternoon 8.30 - 9.00am Registration, breakfast Session 3 End-to-end capabilities creating long-term value 9.00 - 9.10am Welcome Samir Shah, 12.40 - 1.30pm Driving growth with our Pierre Bourdage, Novartis Global Head attractive pipeline Chief Commercial Officer Investor Relations Del
Slide 5: Today's objectives
Today’s objectives Meet Sandoz management Introduce our company, strategy and growth drivers Explain the benefits of Sandoz as a standalone company Discuss Sandoz financial framework and guidance Answer your questions 5 Capital Markets Day
Slide 6: Meet the presenters
Meet the presenters Gilbert Ghostine Richard Saynor Colin Bond Chairman-Designate Chief Executive Officer Chief Financial Officer Rebecca Guntern Keren Haruvi Francisco Ballester President Europe President North America President International Glenn Gerecke Pierre Bourdage Claire D’Abreu-Hayling Chi
Slide 7: Sandoz business, strategy and investment proposition
1 Sandoz business, strategy and investment proposition Capital Markets Day 7
Slide 8: Building on our heritage to succeed as a standalone company
Building on our heritage to succeed as a standalone company Gilbert Ghostine Chairman-Designate 8 Capital Markets Day
Slide 9: A powerful global brand in the off-patent medicines industry
A powerful global brand in the off-patent medicines industry Trust Innovation Integrity Leadership Swiss Access Global Quality Patient heritage impact focus 9 Capital Markets Day
Slide 10: Long-standing heritage and a pioneer in Generics and Biosimilars
Long-standing heritage and a pioneer in Generics and Biosimilars 1886 2003 2022 Creation of Sandoz is established as the Novartis announced Sandoz in Basel umbrella brand for the Novartis intention to spin off Generics business Sandoz Building the foundation Establish global leadership Investment in
Slide 11: A compelling spin-off rationale
A compelling spin-off rationale Enhanced Greater Improved Value Generics focus agility accountability creation culture Simplification Greater freedom Ambitious Clear path for Strengthen and optimization to operate and targets and profitable growth entrepreneurial of resource adapt to evolving cleare
Slide 12: A highly experienced and diverse Board of Directors
A highly experienced and diverse Board of Directors Gilbert Dr. Karen J. François- Urs Dr. Shamiram Ghostine Huebscher Xavier Roger Riedener R. Feinglass Chairman- Vice Chair- Member- Member- Member- Designate Designate Designate Designate Designate Aarti Yannis Remco Dr. Maria Pending Shah Skoufalo
Slide 13: A proven CEO with a true Generics mindset
A proven CEO with a true Generics mindset 20+ years’ experience in the Generic and Biosimilar medicines industry Chair of the International Generic and Biosimilar Medicines Association’s CEO advisory committee Leader of the year, Global Generics and Biosimilars Awards 2022 Richard Saynor Chief Execu
Slide 14: A European champion and a global leader in Generics and Biosimilars
A European champion and a global leader in Generics and Biosimilars Richard Saynor Chief Executive Officer 14 Capital Markets Day
Slide 15: Who we are / Reshaped for sustainable growth / An attractive investment proposition
Who Reshaped for An attractive we are sustainable investment growth proposition 15 Capital Markets Day
Slide 16: Who we are
Who we are 16 Capital Markets Day
Slide 17: Our purpose, vision and impact
We have a clear purpose to pioneer access for patients to become the world’s leading and most valued Generics and Biosimilars company Purpose Pioneering access for patients Becoming the world’s leading and most valued Vision Generics and Biosimilars company Impact ~500 million1 >USD 180 billion2 pat
Slide 18: Sandoz at a glance
Sandoz at a glance USD 208bn USD 9.1bn A European Market size1 FY 2022 net sales3,4 champion Growing at 8%1,2 with USD 1.9bn FY 2022 And a global leader in increasing share of Biosimilars core EBITDA4 Generics and Biosimilars Strong pipeline 100+ markets Strong served management team >400 Generics B
Slide 19: A broad portfolio generating USD 9.1bn in sales
A broad portfolio generating USD 9.1bn in sales Net sales by business One of the broadest FY 2022, in USD Generics portfolios in Generics Biosimilars the industry 7.1bn 21% 1.9bn +9%1 8 in-market +3%1 Biosimilar products 9.1bn Increasing contribution +4%1 from Biosimilars 79% Note: Net sales to thir
Slide 20: Global scale and a European champion
Global scale and a European champion Net sales by region Market leadership and FY 2022, in USD strong growth in Europe Europe International 4.5bn 2.5bn Capturing high-growth / 27% +6%1 high-return opportunities +7%1 in International markets 50% 9.1bn North America stabilizing +4%1 North America 23%
Slide 21: Reshaped for sustainable growth
Reshaped for sustainable growth 21 Capital Markets Day
Slide 22: Reshaped Sandoz for long-term sustainable growth
Reshaped Sandoz for long-term sustainable growth Built a strong Aligned on Focused Expanded Invested in Forged leadership our long-term on sales pipeline capabilities attractive team vision execution investments partnerships 22 Capital Markets Day
Slide 23: Highly experienced and diverse Corporate Officers
Strong leadership team Aligned on our vision Sales execution Pipeline investments Capability investments Build partnerships Highly experienced and diverse Corporate Officers1 Richard Saynor Chief Executive Officer Colin Bond Ingrid Sollerer Tripti Jha Chief Financial Officer Group General Counsel Ch
Slide 24: We are proud to be Generics! Our vision
Strong leadership team Aligned on our vision Sales execution Pipeline investments Capability investments Build partnerships We are proud to be Generics! Shift culture to Attract and retain Empower Promote agility, true Generics talent with our entrepreneurial accountability mindset strong employer b
Slide 25: Focused on sales execution
Strong leadership team Aligned on our vision Sales execution Pipeline investments Capability investments Build partnerships Focused on sales execution What we did What we achieved Prioritized growth by expanding share and bringing new products to market Six continuous quarters of growth1 Invested in
Slide 26: Invested in the pipeline and doubled down on Biosimilars
Strong leadership team Aligned on our vision Sales execution Pipeline investments Capability investments Build partnerships Invested in the pipeline and doubled down on Biosimilars 2x >400 4 expected overall launch contribution Generics Key Biosimilars launches upcoming to net sales in the next five
Slide 27: Strategic investments in our Biosimilars capabilities
Strong leadership team Aligned on our vision Sales execution Pipeline investments Capability investments Build partnerships Strategic investments in our Biosimilars capabilities Recent announcement March 09, 2023 Recent announcement May 09, 2023 New Biosimilars production Expansion of Biosimilars pl
Slide 28: Leveraging Biosimilars partnerships to drive long-term growth
Strong leadership team Aligned on our vision Sales execution Pipeline investments Capability investments Build partnerships Leveraging Biosimilars partnerships to drive long-term growth Key partners Accessing best-in-class Biosimilars technical and manufacturing capabilities Securing long-term Biosi
Slide 29: An attractive investment proposition
An attractive investment proposition 29 Capital Markets Day
Slide 30: Six strategic levers to drive long-term shareholder value
Six strategic levers to drive long-term shareholder value 01 02 03 04 05 06 Attractive Leadership Multiple Margin Strong Compelling market and scale growth improvement cash flow sustainability fundamentals drivers generation story 30 Capital Markets Day
Slide 31: Attractive and growing market with increasing share in Biosimilars
Attractive market fundamentals Leadership and scale Multiple growth drivers Margin improvement Cash flow generation Compelling sustainability story Attractive and growing market with increasing share in Biosimilars Off-patent market1 Market dynamics Gross sales, in USD bn CAGR 420 ’22-’31 Supportive
Slide 32: The only company positioned at scale in Generics and Biosimilars
Attractive market fundamentals Leadership and scale Multiple growth drivers Margin improvement Cash flow generation Compelling sustainability story The only company positioned at scale in Generics and Biosimilars Gross sales in global Generics and Biosimilars1 %, vs. key competitors Illustrative Pha
Slide 33: Global leadership and scale; #1 in Europe
Attractive market fundamentals Leadership and scale Multiple growth drivers Margin improvement Cash flow generation Compelling sustainability story Global leadership and scale; #1 in Europe, Sandoz biggest market Breakdown of global Generics and Biosimilars players by region1 Gross sales, in USD bn
Slide 34: Leading in Biosimilars in the majority of biggest markets
Attractive market fundamentals Leadership and scale Multiple growth drivers Margin improvement Cash flow generation Compelling sustainability story Leading in Biosimilars in the majority of biggest markets; sustained increase in share globally Sandoz Biosimilars ranking1 in the top 10 markets Case s
Slide 35: Multiple drivers to deliver mid-single digit top-line growth
Attractive market fundamentals Leadership and scale Multiple growth drivers Margin improvement Cash flow generation Compelling sustainability story Multiple drivers to deliver mid-single digit top-line growth1 in the mid-term Additional Expanding M&A activity Leveraging breadth Improving strategic a
Slide 36: Improving core EBITDA margin to ~24-26% by 2028
Attractive market fundamentals Leadership and scale Multiple growth drivers Margin improvement Cash flow generation Compelling sustainability story Rigorously focused on improving core EBITDA margin to ~24-26% by 2028 Operational improvements Organizational Procurement efficiency Operational optimiz
Slide 37: Core EBITDA margin expansion driving strong free cash flow uptake
Attractive market fundamentals Leadership and scale Multiple growth drivers Margin improvement Cash flow generation Compelling sustainability story Core EBITDA margin expansion driving strong free cash flow uptake Free cash flow Attractive cash flow profile in USD bn (illustrative) Sustained core EB
Slide 38: Maintaining optionality with strong balance sheet
Attractive market fundamentals Leadership and scale Multiple growth drivers Margin improvement Cash flow generation Compelling sustainability story Maintaining optionality with strong balance sheet Prudent capital Net debt to core Targeting investment structure at spin-off EBITDA ratio in the grade
Slide 39: 2023 and mid-term guidance
Attractive market fundamentals Leadership and scale Multiple growth drivers Margin improvement Cash flow generation Compelling sustainability story 2023 and mid-term guidance 2023 guidance Mid-term guidance (2028E) Sales growth1 % Mid-single digit Mid-single digit Core EBITDA ~18-19% ~24-26% % margi
Slide 40: Sustainability strategy aligned with our purpose and growth
Attractive market fundamentals Leadership and scale Multiple growth drivers Margin improvement Cash flow generation Compelling sustainability story Sustainability strategy aligned with our purpose and growth We incorporate environmental responsibility, driving down our carbon footprint and preservin
Slide 41: Well-positioned to deliver sustainable growth and long-term shareholder value
Well-positioned to deliver sustainable growth and drive long-term shareholder value 01 02 03 04 05 06 Attractive Leadership Multiple Margin Strong Compelling market and scale growth improvement cash flow sustainability fundamentals drivers generation story 41 Capital Markets Day
Slide 42: Q&A Session 1
Q&A Session 1 42 Capital Markets Day
Slide 43: Break
Break
Slide 44: Leadership and scale in an attractive market
2 Leadership and scale in an attractive market
Slide 45: Market affinity at scale is our competitive advantage
Market affinity at scale is our competitive advantage Europe North America International Building on our Stabilizing and Capturing high-growth / leadership position returning to growth high-return opportunities 50% 23% 27% of total Sandoz net sales of total Sandoz net sales of total Sandoz net sales
Slide 46: Building on our leadership position in Europe
Building on our leadership position in Europe Rebecca Guntern President Europe 46 Capital Markets Day
Slide 47: Region Europe at a glance
Region Europe at a glance USD 65bn #1 in Generics USD 4.5bn FY 2022 market size1 and Biosimilars2 FY 2022 net sales Large, attractive and growing #1 in 3 out of top 5 European markets3 market opportunity and expanding leadership1 Strong top-line growth Powerful commercial Leading go-to-market Multip
Slide 48: Europe represents a large, attractive and growing market
Large and growing market Market leadership Strong sales growth Powerful commercial platform Leading go-to-market capabilities Drivers of top-line growth Europe represents a large, attractive and growing market European off-patent market1 Market dynamics Gross sales, in USD bn CAGR 128 Generics accou
Slide 49: We are the clear leader in Generics and Biosimilars in Region Europe
Large and growing market Market leadership Strong sales growth Powerful commercial platform Leading go-to-market capabilities Drivers of top-line growth We are the clear leader in Generics and Biosimilars in Region Europe European market1 ranking by top #1 in Europe and in 3 out of Generics and Bios
Slide 50: Continuing to expand our leadership in Biosimilars
Large and growing market Market leadership Strong sales growth Powerful commercial platform Leading go-to-market capabilities Drivers of top-line growth Continuing to expand our leadership in Biosimilars Sandoz Biosimilars share evolution (2019 - 2022)1 Sandoz is leader in 5 of its 8 launched Biosim
Slide 51: Delivering strong sales growth in Region Europe
Large and growing market Market leadership Strong sales growth Powerful commercial platform Leading go-to-market capabilities Drivers of top-line growth Delivering strong sales growth in Region Europe Net sales Key drivers of FY 2022, in USD recent performance Biosimilars Generics Growing European m
Slide 52: Our strong commercial platform delivers affinity at scale
Large and growing market Market leadership Strong sales growth Powerful commercial platform Leading go-to-market capabilities Drivers of top-line growth Our strong commercial platform delivers affinity at scale across all market archetypes and makes us a partner of choice Unparalleled commercial foo
Slide 53: Complete product portfolio and go-to-market capabilities across Europe
Large and growing market Market leadership Strong sales growth Powerful commercial platform Leading go-to-market capabilities Drivers of top-line growth Complete product portfolio and go-to-market capabilities make Sandoz the clear commercial partner across Europe • Frontrunner in driving market acc
Slide 54: Multiple drivers of sustainable growth in Region Europe
Large and growing market Market leadership Strong sales growth Powerful commercial platform Leading go-to-market capabilities Drivers of top-line growth Multiple drivers of sustainable growth in Region Europe Sales Maximizing Improving Leveraging strategic Expanding breadth execution upcoming launch
Slide 55: Stabilizing and returning to growth in North America
Stabilizing and returning to growth in North America Keren Haruvi President North America 55 Capital Markets Day
Slide 56: Region North America at a glance
Region North America at a glance USD 75bn Regaining leadership USD 2.1bn FY 2022 North America market1 positions FY 2022 net sales Rapid Biosimilars market growth expected #4 in the US and #2 in Canada2 Stabilizing ahead of key launches Renewed commercial Four upcoming Multiple drivers strategy Bios
Slide 57: Biosimilars expected to drive significant growth opportunity in North America
Significant growth opportunity Regaining leadership positions Returning to growth Renewed commercial strategy Upcoming Biosimilars launches Drivers of top-line growth Biosimilars expected to drive significant growth opportunity in North America North America off-patent market1 Market dynamics Gross
Slide 58: #4 in the US and #2 in Canada
Significant growth opportunity Regaining leadership positions Returning to growth Renewed commercial strategy Upcoming Biosimilars launches Drivers of top-line growth #4 in the US and #2 in Canada United States Canada US market ranking 1 Total share 1 Canadian market ranking1 Total share1 3Y 1Y 3Y 1
Slide 59: North American business stabilizing ahead of key launches
Significant growth opportunity Regaining leadership positions Returning to growth Renewed commercial strategy Upcoming Biosimilars launches Drivers of top-line growth North American business stabilizing ahead of key launches Net sales Headwinds through to 2021 FY 2022, in USD Lack of portfolio inves
Slide 60: New strategy proving successful with early achievements
Significant growth opportunity Regaining leadership positions Returning to growth Renewed commercial strategy Upcoming Biosimilars launches Drivers of top-line growth New strategy proving successful with early achievements Focused product Rebuilding Strengthening approach and customer pipeline launc
Slide 61: Four upcoming Biosimilars launches supported by strong commercial capabilities
Significant growth opportunity Regaining leadership positions Returning to growth Renewed commercial strategy Upcoming Biosimilars launches Drivers of top-line growth Four upcoming Biosimilars launches supported by strong commercial capabilities Eylea® Key commercial capabilities Prolia® / Xgeva® af
Slide 62: Multiple drivers of sustainable growth in North America
Significant growth opportunity Regaining leadership positions Returning to growth Renewed commercial strategy Upcoming Biosimilars launches Drivers of top-line growth Multiple drivers of sustainable growth in North America Sales Maximizing Improving Leveraging strategic Expanding breadth execution u
Slide 63: Capturing high-growth / high-return opportunities in International markets
Capturing high-growth / high-return opportunities in International markets Francisco Ballester President International 63 Capital Markets Day
Slide 64: Region International at a glance
Region International at a glance USD 68bn Targeting most USD 2.5bn FY 2022 market size1 attractive markets FY 2022 net sales Highly attractive dynamics 26 markets with direct presence2 Consistent high-single digit growth Leveraging our Tactical M&A Multiple drivers portfolio globally and BD&L of sus
Slide 65: Long-term international growth supported by attractive market dynamics
Highly attractive dynamics Targeting most attractive markets Consistent growth Leveraging portfolio globally Tactical M&A and BD&L Drivers of top-line growth Long-term international growth supported by attractive market dynamics International off-patent markets1 Market dynamics Gross sales, in USD b
Slide 66: 26 most attractive markets served directly
Highly attractive dynamics Targeting most attractive markets Consistent growth Leveraging portfolio globally Tactical M&A and BD&L Drivers of top-line growth 26 most attractive markets served directly Market archetype Examples of markets we serve directly Selection criteria for direct presence1 in 2
Slide 67: Our international strategy has delivered strong growth
Highly attractive dynamics Targeting most attractive markets Consistent growth Leveraging portfolio globally Tactical M&A and BD&L Drivers of top-line growth Our international strategy has delivered strong growth Net sales Key drivers of recent FY 2022, in USD performance Biosimilars 12% Generics Fo
Slide 68: Leverage and maximize the value of our portfolio globally
Highly attractive dynamics Targeting most attractive markets Consistent growth Leveraging portfolio globally Tactical M&A and BD&L Drivers of top-line growth Leverage and maximize the value of our portfolio globally Selected examples Sandoz portfolio Australia Brazil Maximized global portfolio with
Slide 69: Recent acquisitions have enhanced our presence in Japan and global Antibiotics
Highly attractive dynamics Targeting most attractive markets Consistent growth Leveraging portfolio globally Tactical M&A and BD&L Drivers of top-line growth Recent acquisitions have enhanced our presence in Japan and global Antibiotics Key examples Aspen’s Japanese operations in 2020 GSK’s cephalos
Slide 70: Multiple drivers of sustainable growth in Region International
Highly attractive dynamics Targeting most attractive markets Consistent growth Leveraging portfolio globally Tactical M&A and BD&L Drivers of top-line growth Multiple drivers of sustainable growth in Region International Sales Maximizing Improving Leveraging strategic Expanding breadth execution upc
Slide 71: Q&A Session 2
Q&A Session 2 SANDOZ
Slide 72: End-to-end capabilities creating long-term value
3 End-to-end capabilities creating long-term value
Slide 73: End-to-end capabilities creating long-term value
End-to-end capabilities creating long-term value Driving growth Delivering pipeline Expanding margin Highly attractive pipeline Leading capabilities Operational improvements USD 3bn of launch End-to-end development Network design sales in the next five years Regulatory, legal and IP Focused vertical
Slide 74: Driving growth with our attractive pipeline
Driving growth with our attractive pipeline Pierre Bourdage Chief Commercial Officer 74 Capital Markets Day
Slide 75: Strategic framework and operating process to maximize pipeline value
We have built a strategic framework and operating process to maximize pipeline value Operating review Strategic aim Governance framework Biosimilars leadership KPIs and stage-gates Strength and discipline in Generics Technical lens Selection frame Development LoE timing and competition Manufacturing
Slide 76: Broad and deep pipeline with ~70% contribution from complex Generics and Biosimilars
Broad and deep pipeline with ~70% contribution from complex Generics and Biosimilars Generics Biosimilars Standard and complex products Standard and complex products Products in development >400 24 Key Disciplined approach to rebuild the US pipeline; deliberate choices on standard Generics LoE cover
Slide 77: Increasing shift to complex Generics, covering USD 44bn in LoE value
Increasing shift to complex Generics, covering USD 44bn in LoE value across multiple technology platforms >400 Generics1 ~USD 145bn Originator sales targeted2 1% Standard Generics ~101bn Oral Solids 2/3 Deliberate focus on high-value assets Others3 and LoE coverage 99% 8% Complex Oral Solids4 Comple
Slide 78: High-value Biosimilars pipeline nearly tripled to 24 molecules since 2018
High-value Biosimilars pipeline nearly tripled to 24 molecules since 2018 Biosimilars pipeline strategy Extensive 16 8 Targeting major upcoming LoEs Biosimilars in early stage in clinical and pipeline of development regulatory stage Prioritizing first-to-market or exclusive2 opportunities Focusing o
Slide 79: Four key upcoming Biosimilars launches, covering >USD 40bn in LoE value
Four key upcoming Biosimilars launches, covering >USD 40bn in LoE value Targeted Therapeutic Originator net Key Current brand areas sales targeted1 highlights status Humira® Immunology ~USD 21bn High Concentration Formulation (HCF), EMA and adalimumab2 proven supply reliability and strong cost FDA a
Slide 80: Next five-year pipeline potential is nearly double the last five years
Next five-year pipeline potential is nearly double the last five years, with mix-shift towards Biosimilars and complex Generics Peak contribution to net sales from launches in USD Last five years Next five years Launch of four key high-value Biosimilars Launch of three 35% 31% additional Biosimilars
Slide 81: Delivering our pipeline
Delivering our pipeline Claire D’Abreu-Hayling Chief Scientific Officer 81 Capital Markets Day
Slide 82: Sandoz Global Development & Regulatory at a glance
Sandoz Global Development & Regulatory at a glance ~1,700 FTEs 6 development Strong development centers track record 100% success rate in bringing Biosimilars molecules from clinical Across development and regulatory Cost-efficient footprint trial to market in Europe Synergistic Shaping the High-qua
Slide 83: Development and regulatory organization has a proven track record in Generics
Sandoz development and regulatory organization has a proven track record in Generics… Europe North America International Consistently high level of ~120 Doubled first-to-file submissions Over 130 unique product unique product submissions1,2 in US (vs. 2021) submissions1 in 2022, holding per year a c
Slide 84: ...including leading capabilities and success in complex Generics...
...including leading capabilities and success in complex Generics... Selected recent launches Ferumoxytol Fulvestrant Injectable Pre-filled syringe • Complex API and • Drug-device combination FDF characterization • Complex product • Developed fully in-house launched globally Buprenorphine Albuterol
Slide 85: ...and significant success bringing Biosimilars to market
...and significant success bringing Biosimilars to market 2006 – 2009 2015 2016 – 2022 2023 – 2028 First approval of a Opened US market Launch of five Planned approval of four Biosimilar in Europe and with first Biosimilar Biosimilars molecules additional Biosimilars first marketing authorization ap
Slide 86: Leading capabilities across four key technology platforms
Leading capabilities to deliver our pipeline across four key technology platforms 4 key technology platforms Biosimilars Oral Solids Injectables Respiratory End-to-end development Regulatory, legal and IP Generics and Biosimilars analytical Global and local teams with expertise development expertise
Slide 87: Six Sandoz development centers with leading capabilities
Six Sandoz development centers with leading capabilities Development centers and capabilities Biosimilars, Oral Solids, Complex Injectables, Ljubljana (SI) Nasals, Ophthalmics Hyderabad (IN) Oral Solids Cambridge (UK) Device Technology Development Five Centers of Excellence support Kundl (AT) Biosim
Slide 88: A highly capable regulatory team shaping the regulatory landscape
A highly capable regulatory team shaping the regulatory landscape through advocacy and scientific discussions A large and Scientific guidance on complex products capable global team... In-silico clinical development for biostudy waivers Guidelines on analytical similarity and efficacy studies ~700 G
Slide 89: Internal capabilities supported by high-quality external partners
Internal capabilities supported by high-quality external partners Partnership rationale Pipeline expansion through partnership to People and expertise develop and manufacture multiple Biosimilars Accessing disruptive technology Technology • AI-driven technology platform • Advanced continuous manufac
Slide 90: Strong basis to continue delivering our pipeline
Strong basis to continue delivering our pipeline Breadth of Strong track Flexible network capabilities to record to pioneer new cover full range technologies of technologies 90 Capital Markets Day
Slide 91: Expanding margin through operational improvements
Expanding margin through operational improvements Glenn Gerecke Chief Manufacturing and Supply Officer 91 Capital Markets Day
Slide 92: Sandoz Technical Operations at a glance
Sandoz Technical Operations at a glance USD 4.9bn 18 ~700 FY 2022 cost of goods sold1 Manufacturing sites External supply sites2 ~60% of total Sandoz cost base1 High internal capacity and reliability Flexibility, efficiency and market coverage 1.7bn ~160 ~90% Packs distributed in 2022 Health authori
Slide 93: Opportunity to drive operational improvements as a standalone company
Substantial opportunity to drive operational improvements as a standalone Generics and Biosimilars company Operational improvements Organizational Procurement efficiency Operational optimization Efficiencies through a Focused excellence leaner operating model Focus on long-term Network vertical part
Slide 94: High-quality in-house global manufacturing network
Network design Focused vertical integration Operational excellence Procurement optimization High-quality in-house global manufacturing network Optimization achieved over last 5 years 18 internal manufacturing sites 25 18 3x Germany 2x Poland Legacy footprint Current footprint 2017 2023 2x Spain 4x S
Slide 95: Significant opportunity to further rationalize the network
Network design Focused vertical integration Operational excellence Procurement optimization Significant opportunity to further rationalize the network Planned network efficiencies Internal manufacturing sites External manufacturing sites2 18 15 ~700 ~350 Current Future Current Future 2023 20251 2023
Slide 96: Novartis will remain a strategic partner in Biosimilars
Network design Focused vertical integration Operational excellence Procurement optimization Novartis will remain a strategic partner in Biosimilars Long-term partnership and high performance Track record of high reliability of supply Outstanding quality Agreements in place to secure upcoming Biosimi
Slide 97: Building end-to-end internal capabilities in Biosimilars
Network design Focused vertical integration Operational excellence Procurement optimization Building end-to-end internal capabilities in Biosimilars Lendava (Slovenia) >USD 400m Late 2026 Planned investment Planned launch of site Production capabilities Laboratory capabilities Cell bank management,
Slide 98: Investing in sustainable access to Antibiotics
Network design Focused vertical integration Operational excellence Procurement optimization Investing in sustainable access to Antibiotics Kundl (Austria) & Palafolls (Spain) >EUR 250m 2024/25 Total planned investment1 New production lines operational Sandoz as Last vertically Large-scale Support a
Slide 99: Rigorously focused on driving operational excellence
Network design Focused vertical integration Operational excellence Procurement optimization Rigorously focused on driving operational excellence Multiple operational excellence opportunities Strong foundation Maximize • Increase equipment uptime • Remove bottlenecks asset utilization ~90% • Harmoniz
Slide 100: Procurement optimization expected to contribute to operational improvements
Network design Focused vertical integration Operational excellence Procurement optimization Procurement optimization expected to contribute substantially to operational improvements in the mid-term Multiple procurement initiatives for standalone Sandoz Current scale and complexity Leverage • Contrac
Slide 101: Substantial opportunity to drive operational improvements
Substantial opportunity to drive operational improvements as a standalone Generics and Biosimilars company High quality Multiple levers Internal and global supply to drive optimization external capabilities network over the near- to to support mid-term our long-term ambitions 101 Capital Markets Day
Slide 102: Q&A Session 3
Q&A Session 3 SANDOZ
Slide 103: An attractive financial outlook and compelling sustainability story
4 An attractive financial outlook and compelling sustainability story
Slide 104: An attractive financial outlook
An attractive financial outlook Colin Bond Chief Financial Officer 104 Capital Markets Day
Slide 105: Sandoz is set to achieve its full potential as a standalone business
After recent headwinds, Sandoz is set to achieve its full potential as a standalone business Future Present Accelerating Past profitable growth Creating an independent Sandoz 2024 – 2028 A stabilized business through macro volatility 2023 Achieving our 2021 – 2022 full potential Separating the busin
Slide 106: Where have we come from? A stabilized business through macro volatility
Where have we come from? A stabilized business through macro volatility Future Present Accelerating Past profitable growth Creating an independent Sandoz 2024 – 2028 A stabilized business through macro volatility 2023 2021 – 2022 • COVID and macro volatility in 2021 • Recovery and momentum in 2022 •
Slide 107: Strong top-line growth in 2022, core EBITDA impacted by inflation
Strong top-line growth in 2022, core EBITDA impacted by inflation and investment through the cycle In USD bn FY 2021 FY 2022 Net sales Net sales1 9.4 9.1 Return to pre-COVID demand levels and Biosimilars expansion across all regions in 2022 vs. PY (in USD) 0% -4% vs. PY (in cc2) -2% +4% Core EBITDA
Slide 108: Strong volume growth in both Generics and Biosimilars
Strong volume growth in both Generics and Biosimilars with stabilizing price erosion Net sales FX impact of -8% In USD bn primarily from depreciation of the EUR +4% 0.9 9.4 +10%pts volume growth Generics benefiting from 9.1 momentum in Europe and 8.7 -0.6 International; Biosimilars -0.8 volume expan
Slide 109: Strong growth driven by Biosimilars
Strong growth driven by Biosimilars Net sales by business Strong recovery of FY 2022, in USD Generics business, with +8%pts volume growth Generics Biosimilars 7.1bn 21% 1.9bn Biosimilars continue strong +3%1 +9%1 growth trajectory with 9.1bn +19%pts volume growth +4%1 Stabilizing price erosion of -5
Slide 110: Strong performance in Europe and International
Strong performance in Europe and International Net sales by region Strong performance in Europe FY 2022, in USD across Generics and Biosimilars Europe International 4.5bn 2.5bn North America stabilizing, 27% previous annual declines +6%1 +7%1 significantly reduced 9.1bn 50% +4%1 Consistent high-sing
Slide 111: Strong operational performance in 2022 offset by inflation and investments
Strong operational performance in 2022 offset by inflation and investments in growth Core EBITDA margin FX: Positive impact due to USD % of net sales1 appreciation against short position in CHF Strong volume growth (+10%pts) 80bps including a return to normal demand 20bps 20bps post-COVID with price
Slide 112: Where are we today? Creating an independent Sandoz
Where are we today? Creating an independent Sandoz Future Present Accelerating Past profitable growth Creating an independent Sandoz 2024 – 2028 A stabilized business through macro volatility 2023 2021 – 2022 • Continued growth and US stabilizing • Two Biosimilars launches expected • Multiple Generi
Slide 113: Top-line growth momentum continuing into 2023
Top-line growth momentum continuing into 2023 Net sales growth Q1 2023 highlights2 In % vs. PY in constant currencies +8% Strong momentum in Europe with +16% growth Biosimilars growing +4% significantly, +17% growth Stable price erosion of -6%pts in Generics and -10%pts in Biosimilars FY 20221 Q1 20
Slide 114: Expected 2023 core EBITDA margin impacted by inflation and standalone costs
Expected 2023 core EBITDA margin impacted by inflation and standalone costs Core EBITDA margin Volume and price increase % of net sales1 driven by launch uptake across all three regions 21.2% FX reflecting slightly strengthened ~18 to 19% CHF against the dollar Standalone costs include expenses to o
Slide 115: Where are we going? Accelerating profitable growth
Where are we going? Accelerating profitable growth Future Present Accelerating Past profitable growth Creating an independent Sandoz 2024 – 2028 A stabilized business through macro volatility 2023 • Mid-single digit sales growth • Broad Generics and 2021 – 2022 Biosimilars pipeline • Core EBITDA mar
Slide 116: Financial framework to generate capital and deliver attractive returns
Financial framework to generate capital and deliver attractive returns to Sandoz shareholders Sales Margin FCF growth expansion growth Attractive market, scale Product mix, operational Growing FCF driven and leadership, multiple improvements, and by EBITDA expansion top-line drivers organizational e
Slide 117: Growth driven by broad Generics pipeline and Biosimilars launches
Growth driven by broad Generics pipeline and high-value Biosimilars launches Net sales by business Broad growth in Generics 2023 – 2028 (illustrative) Attractive pipeline of >400 products targeting ~USD 145bn Mid-single digit growth1 of Originator sales2 ~30% Well-positioned to leverage ~20% strong
Slide 118: Growth driven by launches in the US and strong Europe and International
Growth driven by launches in the US and strong performance in Europe and International Net sales by region Europe consistently 2023 – 2028 (illustrative) performing above the market • ~25% growth contribution • Leverage footprint with Mid-single digit growth1 new launches North America with US retur
Slide 119: Multiple levers to drive margin expansion
Multiple levers to drive margin expansion Core EBITDA Margin Strong volume growth 2023 – 2028 (illustrative), % of net sales across regions and businesses, price erosion in line with ~150bps ~24 to 26% historical averages ~350bps ~100bps ~18 to 19% ~100bps Growing share of higher margin products, es
Slide 120: Capex plan focused on Biosimilars capacity and capabilities
Capex plan focused on Biosimilars capacity and capabilities Total planned capex investments Replacement and capacity Cumulative 2023 – 2028, in USD expansion capex in line with 2020 - 2022 average of ~2% of net sales1 Biosimilars investment Generics capacity expansion ~0.6bn capex to deliver 30% vol
Slide 121: FCF expected to more than double by 2028 vs. 2022
FCF expected to more than double by 2028 vs. 2022, mainly driven by core EBITDA expansion Free cash flow 2022 decline to ~0.8bn due to retail 2021 – 2028 (illustrative), in USD bn inventory build-up post-COVID ~2.5x 2023 – 2025 impact of separation • Costs to operate as a standalone company • One-ti
Slide 122: Maintaining optionality with strong balance sheet
Maintaining optionality with strong balance sheet Financing Majority of bank Net debt to core Targeting at spin-off loans expected EBITDA ratio investment through bank to be refinanced in the range grade credit loans in the capital of 2.0-2.5x profile markets For additional information regarding the
Slide 123: Capital allocation priorities aligned with Sandoz strategy
Capital allocation priorities aligned with Sandoz strategy Investments in organic business Capacity Standalone Development 1 expansion capabilities & Regulatory 2 Returning capital to shareholders Progressive dividend policy 3 Bolt-on M&A Investment in external growth opportunities and BD&L 123 Capi
Slide 124: 2023 and mid-term guidance
2023 and mid-term guidance 2023 guidance Mid-term guidance (2028E) Sales growth1 % Mid-single digit Mid-single digit Core EBITDA ~18-19% ~24-26% % margin Dividend policy 20-30% % of core net income Full year dividend based on 30-40% FY 2023 core net income Note: Unless the context requires otherwise
Slide 125: A compelling sustainability story
A compelling sustainability story Richard Saynor Chief Executive Officer 125 Capital Markets Day
Slide 126: Sustainability strategy aligned with our purpose and growth
Sustainability strategy aligned with our purpose and growth We incorporate environmental responsibility, driving down our carbon footprint and preserving natural resources We deliver access We champion to medicines and democratize biologics diversity, equity and worldwide inclusion Underpinned by st
Slide 127: Pioneering access to medicines
Access Environment People Governance Pioneering access to medicines Strengthening healthcare >17bn ~500m >180bn systems through Savings delivered to US and Patients currently reached Social impact3 delivered globally affordable medicines EU healthcare systems1 by Sandoz products2 by our key products
Slide 128: Engaging with key stakeholders to improve access to medicines
Access Environment People Governance Engaging with key stakeholders to improve access to medicines Strengthening healthcare systems through affordable medicines Democratizing Clear roadmap to improve accessibility, acceptability Biologics and affordability of Biosimilars Responsible Strong partnersh
Slide 129: We incorporate environmental responsibility in the way we operate
Access Environment People Governance We incorporate environmental responsibility in the way we operate, driving down our carbon footprint and preserving natural resources In the last five years1, we decreased... We focus and assess our impact on the below areas Water & waste Sustainable Greenhouse g
Slide 130: We champion diversity, equity and inclusion
Access Environment People Governance We champion diversity, equity and inclusion >22,000 employees1 in 100+ markets make Sandoz what it is today Building a diverse workforce Enhancing inclusion and Retaining and and promoting equal opportunity organizational belonging upskilling talent 47% Engagemen
Slide 131: We are building a strong corporate governance
Access Environment People Governance We are building a strong corporate governance Independent, experienced Gilbert Ghostine 10 fully independent 40% female and diverse Board announced as members selected representation of Directors Chairman-Designate Strong cultural foundation Robust Code of Ethics
Slide 132: Transaction overview and concluding remarks
Transaction overview and concluding remarks Richard Saynor Chief Executive Officer 132 Capital Markets Day
Slide 133: Transaction overview
Transaction overview 100% spin-off SIX Swiss Switzerland Exchange listing New Sandoz shares distributed to Complemented by a Level 1 American Incorporated and existing Novartis shareholders Depository Receipt (ADR) program in the US headquartered Investment grade 18 July 2023 H2 2023 credit rating N
Slide 134: Well-positioned to deliver sustainable growth and superior value creation
Well-positioned to deliver sustainable growth and superior value creation for our shareholders 01 02 03 04 05 06 Attractive Leadership Multiple Margin Strong Compelling market and scale growth improvement cash flow sustainability fundamentals drivers generation story 134 Capital Markets Day
Slide 135: Final Q&A
Final Q&A SANDOZ
Slide 136: Appendix
Appendix
Slide 137: Glossary
Glossary Abbreviation Definition AGM Annual general meeting AI Artificial intelligence AMR Antimicrobial resistance API Active pharmaceutical ingredient ATC Anatomical therapeutic chemical BD&L Business development and licensing CAGR Compound annual growth rate CAPEX Capital expenditure EMA European
Slide 138: Segment to carve-out sales, breakdown by business and region
Segment to carve-out sales, breakdown by business and region In USD bn FY 2020 FY 2021 FY 2022 Segment sales 9.6 9.6 9.2 Adjustments1 -0.2 -0.2 -0.2 Carve-out sales 9.5 9.4 9.1 vs. PY (in USD) - -0% -4% 2 vs. PY (in cc ) - -2% 4% Carve-out sales 9.5 9.4 9.1 Generics 7.7 7.5 7.1 Biosimilars 1.8 1.9 1
Slide 139: Segment operating income to carve-out EBITDA bridge
Segment operating income to carve-out EBITDA bridge In USD bn FY 2020 FY 2021 FY 2022 Segment operating income 1.0 1.6 1.4 Adjustments1 -0.2 -0.2 -0.2 Carve-out operating income 0.8 1.4 1.2 Depreciation of property, plant and 0.3 0.2 0.2 equipment Depreciation of the right-of-use-assets 0.0 0.0 0.0
Slide 140: Segment core operating income to carve-out core EBITDA bridge
Segment core operating income to carve-out core EBITDA bridge In USD bn FY 2020 FY 2021 FY 2022 Segment core operating income 2.3 2.1 1.9 Adjustments1 -0.2 -0.2 -0.2 Carve-out core operating income 2.1 1.9 1.7 Depreciation of property, plant and 0.2 0.2 0.2 equipment Depreciation of the right-of-use
Slide 141: Non-IFRS financial definitions included in this presentation
Non-IFRS financial definitions included in this presentation Core results from year to year. However, in performing its evaluation, Sandoz also considers equivalent measures of performance that are not affected by changes in the relative value of currencies. Sandoz core results, core operating incom
Slide 142: IQVIA data included in this presentation
IQVIA data included in this presentation Data and methodology Sandoz utilizes IQVIA’s “Multinational Integrated Data Analysis Service” (MIDAS) market measurement product to calculate its market share, ranking, growth, sales benchmarking and other market-related analysis. The MIDAS has wide coverage