19th CLSA Investors Forum 2012Fabrice Baschiera, General Manager, Sanofi China                  September 11th, 2012
Forward Looking StatementsThis presentation contains forward-looking statements as defined in the Private Securities Litig...
2008-2011Repositioning Sanofi for Sustainable Growth            2005-2008                 2009-2011                  2012 ...
Sanofi Grew Sales in 2011 due to Genzyme Acquisitionand Growth Platforms                                                  ...
H1 2012 Performance Was In-Line With Our Expectations           Total Sales (€m)                                          ...
Limited Patent Cliff(1) Exposure on Salesafter Eloxatin® Loss of Exclusivity in the U.S. in Aug 2012  Key Genericized Prod...
Growth Platforms Accounted for 64.9% of Group Salesand Grew by +7.6% in Q2 2012                                           ...
A Strong Leadership Position in Emerging Markets                                                                          ...
Emerging Markets - Record Sales and Strong Growthin Q2 2012 Confirm our Leadership  ● Q2 2012 Emerging Markets sales of €2...
Non-BRIC Accounted for 65% of Emerging Markets Salesin Q2 2012 Highlighting our Broad Geographic Scope    ● Q2 2012 BRIC s...
Agenda Sanofi – A Leading Presence in China Outlook on the Healthcare Market in China Focusing on Diabetes Conclusion     ...
Greater China: Growing Contributor to Sanofi’sLeadership Position in Emerging Markets                   Sanofi Sales in Em...
Sanofi achieved Annual Sales in China of ~€1bn in 2011                       Total Sanofi Sales in China(1) (in EUR)      ...
Sanofi Is Progressively Developing its Key GrowthPlatforms in China                             Breakdown of Sales in Chin...
Sanofi Has Grown Faster than its Peers in China             2007(1)                                            2009(2)    ...
Sanofi: Well Established in Greater China         with a Fully Integrated Presence                                        ...
A Large Portfolio of Flagship Brands Across our GrowthPlatforms that Fits the Local Needs in China                        ...
A Broad Healthcare Offering in China’s CountiesReaching out to China’s ~2,000 counties                                    ...
Agenda Sanofi – A Leading Presence in China Outlook on the Healthcare Market in China Focusing on Diabetes Conclusion     ...
China: Main Macro Economic Indicators Point TowardContinued and Superior Growth    Population in 2011(1)                  ...
China Healthcare Reform           Opportunities                                                       Challenges ● Better ...
The 2009 - 2011 Healthcare Reform Has Ledto a Significant Increase in Healthcare Investment           Health Care Expendit...
China Expected to Become a ~150bn USD PharmaMarket by 2016                                         nd China expected to be...
Agenda Sanofi – A Leading Presence in China Outlook on the Healthcare Market in China Focusing on Diabetes Conclusion     ...
Diabetes Remains One of the Largest Opportunitiesin the Healthcare Space   Adults with diabetes worldwide(1)              ...
Lantus® #1 Insulin Brand Worldwide – A Growth Story                                               €3.916bn                ...
Diabetes is a Fast Growing Disease in China   Adults with diabetes in China(1)                              >90m   Patient...
Sanofi’s Share in the Diabetes Market in ChinaAlmost Tripled over the Last 4 Years       China Diabetes Market Share by Di...
Insulins Are the Fastest Growing Diabetes Segment in China -Representing Already Half of the Diabetes MarketSales Value of...
Sanofi Has Reached the #3 Position in the ChineseDiabetes Market                                                          ...
Lantus® Has Reached 16.5% of Total Insulin Market inChina in June 2012(1)                                                 ...
Amaryl® is Gaining Market Share in Value and Volumeagainst Generics in the Oral Anti-Diabetics Market       A     Value Sh...
“China Initiative for Diabetes Excellence” -A Major Public-Private Partnership in Diabetes            5                 Tr...
Continuous Commitment to Fighting Diabetes in China● Local Manufacturing of Lantus® SoloSTAR®  Pen in Beijing Facility ina...
Delivering the Full Value of Other Portfolio Assets in theChinese Diabetes Market                                         ...
Agenda Sanofi – A Leading Presence in China Outlook on the Healthcare Market in China Focusing on Diabetes Conclusion     ...
Sanofi Is Poised to Sustain Significant Growthin China● Solid historical presence and fully-integrated structure● Strong s...
Continued Execution of Strategy Expected to DeliverSustainable Growth Over 2012-2015   Expected 2012-2015 Sales CAGR      ...
The Dividend Remains a Key Element of ShareholderValue Creation                                              Evolution of ...
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2012 - 19th CLSA Investors Forum

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2012 - 19th CLSA Investors Forum

  1. 1. 19th CLSA Investors Forum 2012Fabrice Baschiera, General Manager, Sanofi China September 11th, 2012
  2. 2. Forward Looking StatementsThis presentation contains forward-looking statements as defined in the Private Securities Litigation Reform Actof 1995, as amended. Forward-looking statements are statements that are not historical facts. These statementsinclude projections and estimates and their underlying assumptions, statements regarding plans, objectives,intentions and expectations with respect to future financial results, events, operations, services, productdevelopment and potential, and statements regarding future performance. Forward-looking statements aregenerally identified by the words "expects", "anticipates", "believes", "intends", "estimates", "plans" and similarexpressions. Although Sanofis management believes that the expectations reflected in such forward-lookingstatements are reasonable, investors are cautioned that forward-looking information and statements are subjectto various risks and uncertainties, many of which are difficult to predict and generally beyond the control ofSanofi, that could cause actual results and developments to differ materially from those expressed in, or impliedor projected by, the forward-looking information and statements. These risks and uncertainties include amongother things, the uncertainties inherent in research and development, future clinical data and analysis, includingpost marketing, decisions by regulatory authorities, such as the FDA or the EMA, regarding whether and whento approve any drug, device or biological application that may be filed for any such product candidates as wellas their decisions regarding labeling and other matters that could affect the availability or commercial potential ofsuch product candidates, the absence of guarantee that the product candidates if approved will be commerciallysuccessful, the future approval and commercial success of therapeutic alternatives, the Groups ability to benefitfrom external growth opportunities, trends in exchange rates and prevailing interest rates, the impact of costcontainment policies and subsequent changes thereto, the average number of shares outstanding as well asthose discussed or identified in the public filings with the SEC and the AMF made by Sanofi, including thoselisted under "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements" in Sanofisannual report on Form 20-F for the year ended December 31, 2011. Other than as required by applicable law,Sanofi does not undertake any obligation to update or revise any forward-looking information or statements. 2
  3. 3. 2008-2011Repositioning Sanofi for Sustainable Growth 2005-2008 2009-2011 2012 onwards Focusing on Generating Rx Blockbusters Transforming Sustainable Growth • Blockbuster drugs • Investing in growth platforms • Growing recurring sales • Patents challenged • Increasing diversification • Improving risk profile • R&D setbacks • Managing patent cliff 3
  4. 4. Sanofi Grew Sales in 2011 due to Genzyme Acquisitionand Growth Platforms Sales €33,389m €32,367m €29,306m €27,568m +5.3% at CER (1) (1) (2) 2008 2009 2010 2011 CER : Constant Exchange Rates (1) In 2008 and 2009, Merial Joint Venture sales were not consolidated by Sanofi (2) In 2010, excluding non-consolidated sales from Merial, Sanofi reported sales of €30,384m 4
  5. 5. H1 2012 Performance Was In-Line With Our Expectations Total Sales (€m) Business EPS (€) €3.30 €3.32 €17,381m €16,128m +3.6% -5.2% at CER(1) at CER(1) H1 2011 H1 2012 H1 2011 H2 2012 (1) On a reported basis, total sales were up +7.8% and business EPS was up +0.6% in H1 2012 5
  6. 6. Limited Patent Cliff(1) Exposure on Salesafter Eloxatin® Loss of Exclusivity in the U.S. in Aug 2012 Key Genericized Products Sales Growth Platforms Sales (2) (€m and % of Total Sales) (€m and % of Total Sales) €5,753m 4.9% €3,341m when excluding €314m of 64.9% Eloxatin® U.S. €2,207m 44.9% 29.7% €752m 8.5% Q2 2009 Q2 2010 Q2 2011 Q2 2012 Q2 2009 Q2 2010 Q2 2011 Q2 2012 (1) The patent cliff is the effect of the loss of exclusivity of key genericized products. (2) Key genericized products include Lovenox® U.S., Plavix® Western EU, Taxotere® Western EU & U.S., Eloxatin® U.S., Ambien® family U.S., Allegra® U.S., Aprovel® Western EU, Xyzal® U.S., Xatral® U.S., 6 Nasacort® U.S. and BMS Alliance (active ingredients of Plavix® and Avapro® sold to BMS)
  7. 7. Growth Platforms Accounted for 64.9% of Group Salesand Grew by +7.6% in Q2 2012 Growth at CER Emerging Markets €2,823m +9.8% Diabetes Solutions €1,436m +13.7% Vaccines €783m +3.0% Consumer Health Care €738m +11.3% Animal Health €576m +9.1% New Genzyme(1) €434m +9.1% Innovative Products(2) €152m +4.5% (1) New Genzyme perimeter includes Rare Diseases and Multiple Sclerosis franchises (2) Multaq®, Jevtana® and Mozobil® 7
  8. 8. A Strong Leadership Position in Emerging Markets Emerging Markets Sales In 2011, +16% €10.1bn Emerging Markets Sales(1) €10.1bn +9% +10.1% (2) €5.0bn 30.3% of Group Sales 2005 2006 2007 2008 2009 2010 2011 (1) World less North America (USA, Canada), Western Europe (France, Germany, UK, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Holland, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark), Japan, Australia and New Zealand 8 (2) CER (Constant Exchange Rate)
  9. 9. Emerging Markets - Record Sales and Strong Growthin Q2 2012 Confirm our Leadership ● Q2 2012 Emerging Markets sales of €2,823m, up +9.8% at CER Q2 2012 Geographic Sales Split 24.1% 12.6% 31.5% 31.8% (1) (1) World excluding North America (USA, Canada), Western Europe (France, Germany, UK, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Holland, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark), Japan, Australia and New Zealand 9
  10. 10. Non-BRIC Accounted for 65% of Emerging Markets Salesin Q2 2012 Highlighting our Broad Geographic Scope ● Q2 2012 BRIC sales of €995m, up +15.2% at CER (1) ● Q2 2012 Other Emerging Markets sales of €1,828m, up +7.1% at CER Emerging Markets Q2 2012 Sales Split BRIC Q2 2012 Sales (Growth at CER) (Growth at CER) Brazil: €405m +14.0% Russia: €203m +9.0% India: €66m +20.2% China: €320m +20.9%Growth +12.7% +12.7% -0.1% +16.5% +9.8% (1) BRIC: Brazil, Russia, India and China 10
  11. 11. Agenda Sanofi – A Leading Presence in China Outlook on the Healthcare Market in China Focusing on Diabetes Conclusion 11
  12. 12. Greater China: Growing Contributor to Sanofi’sLeadership Position in Emerging Markets Sanofi Sales in Emerging Markets (in EUR) 10.133m Other Emerging Countries Greater China(1) CAGR 9.075m 13% 7.356m 6.540m 6.280m 7% 8% 9% 10% 12% 2007 2008 2009 2010 2011 (1) Greater China: Mainland China, Hong Kong, Taiwan 12
  13. 13. Sanofi achieved Annual Sales in China of ~€1bn in 2011 Total Sanofi Sales in China(1) (in EUR) 981m CAGR 38% 699m 512m 374m 273m 2007 2008 2009 2010 2011 (1) Mainland China 13
  14. 14. Sanofi Is Progressively Developing its Key GrowthPlatforms in China Breakdown of Sales in China(1) by Business 2007 2011 Vaccines 12% Animal Health 4% Vaccines 12% Diabetes 22% 6% Diabetes 72% 9%Pharmaceuticals 63% CHC Pharmaceuticals Total Sales EUR 273m Total Sales EUR 981m (1) Mainland China 14
  15. 15. Sanofi Has Grown Faster than its Peers in China 2007(1) 2009(2) June 2012(3)1 ASTRAZENECA 1 PFIZER 1 PFIZER2 BAYER 2 ASTRAZENECA 23 PFIZER 3 BAYER 3 BAYER4 JS.YANGZIJIANG FTY 4 4 ASTRAZENECA5 ROCHE 5 JS. YANGZIJIANG FTY 5 SHANDONG QILU FTY6 6 ROCHE 6 KE LUN7 SINO-SWED 7 KE LUN 7 JS. YANGZIJIANG FTY8 JS.L.Y.G.HENGRUI 8 SHANDONG QILU FTY 8 ROCHE9 HLJ.HAERBIN PHARM. 9 JS.L.Y.G. HENGRUI 9 JS.L.Y.G. HENGRUI10 NOVARTIS 10 HLJ. HAERBIN PHARM. 10 MSD Source data: Ranked by sales value in LC RMB. (1) IMS CHPA Dec 2007 . (2) IMS CHPA Dec 2009 (3) IMS MTH June 2012 15
  16. 16. Sanofi: Well Established in Greater China with a Fully Integrated Presence Sanofi’s Presence in China● Present since 1982● 11 regional offices with ~7,000 employees in Greater China Wulumuqi Shenyang Tangshan ● Of which >4,000 sales force Beijing Tianjin Jinan● Network of 6 manufacturing sites Nanjing Wuhan Shanghai HQ● Newly established CHC platform Chengdu Hangzhou Nanchang● Vaccines with local production Guangzhou Taipei● Animal Health with local production Greater China offices Shenzhen Hong Kong● Integration of Genzyme Regional offices Manufacturing site Pharmaceuticals● Regional R&D platform Manufacturing site Consumer Healthcare Manufacturing site Vaccines Sales of EUR 606m in H1 2012 Manufacturing site Animal Health (Merial) 16
  17. 17. A Large Portfolio of Flagship Brands Across our GrowthPlatforms that Fits the Local Needs in China Diabetes Human Solutions VaccinesThe #1 Rx Pharmaceuticalproduct in China(1) Addressing disease Portfolio to immunize burden of 90m people pediatric and adult with diabetes population in ChinaThe #1 brand in the ARB class Consumer Animalin China(2) Health Care Health A leading MNC(2) player inBranded oncology portfolio the OTC market throughcovers top cancer types in strategic acquisitions & Strong position in theChina Joint Venture Avian Biologics market (1) IMS CHPA MAT June 2012, value (2) IMS CHPA June 2012 , volume; ARB – Angiotensin Receptor Blockers 17 (3) MNC = Multi National Company
  18. 18. A Broad Healthcare Offering in China’s CountiesReaching out to China’s ~2,000 counties Strategy China with 31 provinces Ex.: Zhejiang province  Primary Care Business Unit implemented in 2011  A successful business model supported by a dedicated sales force  Portfolio approach to fully leverage our broad product offering  Cover key Provinces with 283 Cities(1) 1,950 Counties(2) several hundred Counties Population ~900m  Addressing the medical 1. Huge base needs of a huge population 2. Lower affordability, higher Characteristics  Diversify geographic out-of-pocket spend concentration 3. Geographically broad (1) Defined as prefectural level cities (PLCs). (2) Defined as county-level cities (CLCs) or counties 18
  19. 19. Agenda Sanofi – A Leading Presence in China Outlook on the Healthcare Market in China Focusing on Diabetes Conclusion 19
  20. 20. China: Main Macro Economic Indicators Point TowardContinued and Superior Growth Population in 2011(1) 1.34bn Estimated Real GDP Growth 2012-2017(2) 7-8% 7-8% Healthcare Expenditures as % of GDP(3) 4.5-5% 5% Middle-class and Affluent Population in 2015(4) 52% 52% Pharma Market Growth 2011-2016 (CAGR)(5) 5.7 16.1% (1) China 2010 population census (2) IMF World Economic Outlook,April 2012; internal analysis (CAGR) (3) WHO 2011, Global Health Expenditure Database; country data 2009 (4) Annual house hold income > US$10,000; BCG and internal analysis (5) IMS Market Prognosis China 2012-2016 (2012) 20
  21. 21. China Healthcare Reform Opportunities Challenges ● Better and broader basic medical insurance coverage ● Implementation of payment reform by the government, ● Improving medical services and patient care by CHCs(1) and such as global budget and rural health centers pay by disease Key ● Increasing government funding Healthcare ● Cost containment with price cuts for chronic diseases and Reform ● Essential Drug Lists (EDL) vaccination Activities policies to favor usage of local cheap generics in CHCs(1) and ● Improving quality of medical services township hospitals (1) CHC – Community Healthcare Centers 21
  22. 22. The 2009 - 2011 Healthcare Reform Has Ledto a Significant Increase in Healthcare Investment Health Care Expenditure(1, 2, 3) Significant Incremental Healthcare Investment(3) RMB bn HC expenditure as % of GDP2,000 2009-2011: 16 15.8% 1,720 14 Original plan 850 RMB bn1,500 12 10 10.5% Updated report 1,134 RMB bn1,000 8 8.4% 866 503 5.1% 6 4.6% 4.7% 4.1% 5.1% 500 4 320 Investment into county healthcare 2 system, both infrastructure and 0 insurance 0 1997 2001 2005 2009 (1) Health care expenditure reflects the total expenditure on medical and health care services, which includes government expenditure, social expenditure and individual cash expenditure. – (2) WHO 2011: ‘Total expenditure on health as % of Gross National Product’ (GDP): U.S. = 15.8%; Germany = 10.5%; Brazil = 8.4%; China = 5.1% (3) Source: China National Bureau of Statistics, Ministry of Finance, 2011 22
  23. 23. China Expected to Become a ~150bn USD PharmaMarket by 2016 nd China expected to be the 2 largest Projected China Market Growth(2) Pharmaceutical market by 2015(1) RMB bn Growth (%) ● Market growth driven by increasing 18.0 1,200 demand in Cities and Counties 16.2% 16.4% 16.1% 16.0% 16.1% 15.9% ● Market growth also driven by 1,000 910 increasing “middle class” and aging 785 800 population 676 583 10.0 ● Impact from healthcare policies to 600 502 reduce drug prices expected to 431 continue 400 ● China is projected to generate 27% 200 of the world’s pharmaceutical market 0 0.0 growth over 2011-2015 2011 2012 2013 2014 2015 2016 (1) IMS consulting, China 2015 study (September 2011) (2) IMS Market Prognosis China 2012-2016 (2012) 23
  24. 24. Agenda Sanofi – A Leading Presence in China Outlook on the Healthcare Market in China Focusing on Diabetes Conclusion 24
  25. 25. Diabetes Remains One of the Largest Opportunitiesin the Healthcare Space Adults with diabetes worldwide(1) 350m % of patients not achieving glycemic control target values in the U.S. and EU(2) >50% Patients remaining undiagnosed in BRIC countries(3) ~2/3 Expected CAGR growth of global diabetes market between 2011 and 2015(4) 4-7% Expected size of global diabetes market in 2015(4) $43-48bn (1) G. Danaei, Lancet 2011; 378: 31-40 (2) Adelphi Disease Specific Program (DSP) III and VII (sample of over 10,000 diabetic patient records) (3) Internal estimates based on multiple sources 25 (4) The Global Use of Medicines: Outlook through 2015, IMS Institute for Healthcare Informatics, May 2011
  26. 26. Lantus® #1 Insulin Brand Worldwide – A Growth Story €3.916bn €3.510bn €3.080bn 2007-2011 €2.450bn CAGR +17.8% €2.031bn 2007 2008 2009 2010 2011 26
  27. 27. Diabetes is a Fast Growing Disease in China Adults with diabetes in China(1) >90m Patients not diagnosed(2) ~2/3 Insulinized patients in China in 2010(3) 4.6m Expected growth of China diabetes market between 2012 and 2017 (CAGR)(4) 14.4% Expected size of Chinese diabetes market in 2020(4) $3.2bn (1) Yang et al., 2010 (2) Internal estimates based on multiple sources (3) IMS data and internal patient model (4) IMS Therapy Prognosis 2011-2020 China Diabetes 27
  28. 28. Sanofi’s Share in the Diabetes Market in ChinaAlmost Tripled over the Last 4 Years China Diabetes Market Share by Diabetes Player (Value) Market Share (%) 2007(1) MAT Q2 2012(2) +85.3% Lilly Novo Bayer Others (1) IMS CHPA MAT Dec 2007 . (2) IMS CHPA MAT June 2012 28
  29. 29. Insulins Are the Fastest Growing Diabetes Segment in China -Representing Already Half of the Diabetes MarketSales Value of Diabetes Therapy SegmentsRMB million 10,554 9,882 8,326 Insulins: 49% CAGR 2007-2011 at + 32% 48% MAT June 2012, Growth +20.8%RMB ‘mil 6,768 46% 5,231 45% 3,752 44% Oral Anti-Diabetics (OADs): 41% CAGR 2007-2011 at + 23% 52% 51% 54% MAT June 2012 Growth, +11.3% 55% 56% 59% GLP-1 share 0.43% 2007 2008 2009 2010 2011 MAT 2012 Source data : IMS CHPA MAT June 2012 29
  30. 30. Sanofi Has Reached the #3 Position in the ChineseDiabetes Market Companies in the Chinese Diabetes● Disease burden increasing Market Ranked by Market Share(3) dramatically ● Diabetes patient population up 2007 June 2012 4-fold from 2001 to 2008(1) RK CORP MS% RK CORP MS% ● Healthcare expenditures on diabetes are estimated to have NOVO NOVO 1 NORDISK 34.1% 1 NORDISK 35.4% reached $6.9bn in 2010(2) 2 Bayer HC 16.8% 2 Bayer HC 14.1%● Sanofi Diabetes BU created in 3 ELI LILLY 5.7% 3 9.9% 2009 in China 4 SERVIER 4.2% 4 ELI LILLY 6.5% ● Sanofi now #3 in the Diabetes market in China(3) 5 BMS 3.9% 5 BMS 4.1% ● Sanofi’s diabetes franchise 6 GSK 3.7% 6 HUADONG 3.1% outpacing market growth 7 3.5% 7 SERVIER 2.5% (1) New England Journal of Medicine 2010;362:1090-101 (2) IDF press statement, March 2010 (3) IMS CHPA 2007; MAT 06/2012 30
  31. 31. Lantus® Has Reached 16.5% of Total Insulin Market inChina in June 2012(1) ® Lantus Qtr. Value Market Share(2) in Insulin (%) Enter NRDL Launch 15.8% ● Lantus® launched in China in 2004 16 SoloStar® 14.7% 15.7% ● SoloStar® launched in 2009 14 15.4% 14.9% 13.1% 12.4% ● Recent improved market access in 12 Chinas two largest insulin markets 10.5% ● Shanghai (December 2010) 10 8.5% ● Beijing (July 2011) 8 7.1% 6.6% ● Leading insulin in several big cities(3) Enter ~70% 6 provincial RDL ahead of Novo Nordisk 4 3.5% ● Only available in disposable pens 2.7% 2 1.4% ● Low average daily dosing per patient 0.3% 0.7% 0 04- 05- 05- 06- 06- 07- 07- 08- 08- 09- 09- 10- 10- 11- 11- 12- Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 (1) IMS CHPA June 2012 (2) MS CHPA Q2-2012 (3) IMS CHPA MAT 06/12; Cities where Lantus is the #1 insulin include Guangzhou, Suxi, Nanjing, Chengdu, Xi’an, Dalian, Shenzhen, Ningbo, Shijiazhuang 31
  32. 32. Amaryl® is Gaining Market Share in Value and Volumeagainst Generics in the Oral Anti-Diabetics Market A Value Share in Glimepiride100% 90% 80% 70% 60% ● Despite generic Generic 50% competition, Amaryl® 40% Amaryl 30% 65% 69% is a growth driver for 50% 51% 57% 20% the OAD market in 10% China 0% MAT ~ 05/2008 MAT ~ 05/2009 MAT ~ 05/2010 MAT ~ 05/2011 MAT ~ 05/2012 ● In June, Amaryl® Am Volume Share in Glimepiride reached 6.5% market100% share of the total OAD market in China, 80% growing at 11.2%(1) 60% 40% Generic ● Amaryl® expected to Amaryl remain an important 20% 37% 41% 25% 27% 30% driver in our diabetes 0% portfolio in China MAT ~ 05/2008 MAT ~ 05/2009 MAT ~ 05/2010 MAT ~ 05/2011 MAT ~ 05/2012 1)IMS CHPA June 2012 32
  33. 33. “China Initiative for Diabetes Excellence” -A Major Public-Private Partnership in Diabetes 5 Train 500 Cascade to 10,000 Educate millions years program emerging KOLs country doctors of patients● First public-private partnership to develop a patient-centric, integrated diabetes management program in China● Landmark program for the prevention and control of diabetes announced in May 2011 ● 5-years initiative led by the Bureau of Disease Prevention and Control of the Ministry of Health ● Collaboration with the Chinese Diabetes Society● Train 500 emerging experts, followed by 10,000 community and county doctors● Enhancing patients’ self-management capabilities through education and organized peer support groups 33
  34. 34. Continuous Commitment to Fighting Diabetes in China● Local Manufacturing of Lantus® SoloSTAR® Pen in Beijing Facility inaugurated in May 2012● A strategic decision to manufacture Lantus® SoloSTAR® locally in China ● Capacity of 48m units● Second phase of the US$90m project to install a high-tech cartridge aseptic production line announced 34
  35. 35. Delivering the Full Value of Other Portfolio Assets in theChinese Diabetes Market Established Insulins● From Lantus® to Lantus® -based solutions● Further expand basal insulin treatment paradigm Optimized Devices● Expand leadership position with Amaryl®● Grab untapped opportunities with Apidra®, Insuman® and Blood Glucose Monitoring devices Innovative Blood Glucose Monitoring● Local clinical development ongoing for Lyxumia® 35
  36. 36. Agenda Sanofi – A Leading Presence in China Outlook on the Healthcare Market in China Focusing on Diabetes Conclusion 36
  37. 37. Sanofi Is Poised to Sustain Significant Growthin China● Solid historical presence and fully-integrated structure● Strong socio-economic drivers underpinning growth● Well-suited portfolio for China’s medical needs (Rx, CHC, Vaccines, Diabetes, Animal Health, Genzyme)● Growing position in Diabetes by maximizing the value of the entire portfolio● Increasing access to new market segments at the county level● Significant investments in local production facilities serving all Growth Platforms and accelerated investment in R&D● Industry lead in talent attraction, development and retention 37
  38. 38. Continued Execution of Strategy Expected to DeliverSustainable Growth Over 2012-2015 Expected 2012-2015 Sales CAGR At least 5% Diversified sources of growth and scale in businesses with significant barriers to entry  Low small molecule patent exposure in mature markets(1) ~6% Large Emerging Markets presence(2) 38-40% Potential new product launches(3) 18 Operating margin evolution Rebounding 2012-2015 Business EPS CAGR > Sales CAGR Increased dividend payout ratio(4) 50% of 2013 results Corporate Social Responsibility  (1) 2012 sales from chemical products exposed to patent expiry in the U.S., Japan and Western Europe over 2012/2015 (2) Based on 2015 internal estimates (3) Over 2012-2015 (4) Dividend to be paid in 2014 38
  39. 39. The Dividend Remains a Key Element of ShareholderValue Creation Evolution of Dividend Dividend Payout ● Dividend of €2.65 Payout 40% 35% per share for 2011 €2.65 ● Progressive increase of €2.40 €2.50 +6% payout target to 50% for 2013 €2.20 Business Net Income(1) 2008 2009 2010 2011 (1) Dividend to be paid in 2014 39
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