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Q3 2013 Results

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Q3 2013 Results

Q3 2013 Results

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  • 1. Q3 2013 RESULTS October 30, 2013
  • 2. Forward Looking Statements This presentation contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are statements that are not historical facts. These statements include projections and estimates and their underlying assumptions, statements regarding plans, objectives, intentions and expectations with respect to future financial results, events, operations, services, product development and potential, and statements regarding future performance. Forward-looking statements are generally identified by the words "expects", "anticipates", "believes", "intends", "estimates", "plans" and similar expressions. Although Sanofi's management believes that the expectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of Sanofi, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include among other things, the uncertainties inherent in research and development, future clinical data and analysis, including post marketing, decisions by regulatory authorities, such as the FDA or the EMA, regarding whether and when to approve any drug, device or biological application that may be filed for any such product candidates as well as their decisions regarding labeling and other matters that could affect the availability or commercial potential of such product candidates, the absence of guarantee that the product candidates if approved will be commercially successful, the future approval and commercial success of therapeutic alternatives, the Group's ability to benefit from external growth opportunities, trends in exchange rates and prevailing interest rates, the impact of cost containment policies and subsequent changes thereto, the average number of shares outstanding, as well as those discussed or identified in the public filings with the SEC and the AMF made by Sanofi, including those listed under "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements" in Sanofi's annual report on Form 20-F for the year ended December 31, 2012. 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. Agenda Key Highlights ● Christopher A. Viehbacher, Chief Executive Officer Financial Performance ● Jérôme Contamine, Executive Vice President, Chief Financial Officer Q&A 3
  • 4. KEY HIGHLIGHTS 4
  • 5. No Further Sales Erosion at CER in Q3 2013 for the First Time in Five Quarters Quarterly Sales Growth(1) Q3 2012 Q4 2012 Q1 2013 Q2 2013 +0.6% (2) Q3 2013 -1.7% -3.1% -2.8% -6.3% Sales growth of +6.1% in September 2013(3) (1) Growth at Constant Exchange Rates (2) On a reported basis, Q3 2013 sales were €8,432m down -6.7% (3) At constant exchange rates and constant structure basis 5
  • 6. Residual Effect from the Cliff Was Further Reduced to €191m in Q3 2013 Key Genericized Products (1) - Quarterly Sales (€m) €813m €752m €72m from Eloxatin® (2) in the U.S. - €553m €65m from Aprovel® (3) and Co-Aprovel® in EU - €481m at CER at CER €399m - €191m at CER €267m €259m €257m €207m ILLUSTRATIVE 2012 2013 Q1 2012 2013 Q2 2012 2013 Q3 2012 2013 Q4 (1) 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., Nasacort® U.S. and BMS Alliance (active ingredients of Plavix® and Avapro® sold to BMS) (2) Loss of exclusivity for Eloxatin® in the U.S. was August 9, 2012 (3) Aprovel® compound patent expired in August 15, 2012 in most EU countries. Co-Aprovel® compound patent expired in October 15, 2013 in EU. In France, Co-Aprovel® has been facing generic competition since September 2012. Sanofi continues to defend its rights to have the validity and 6 infringement of the patent recognized.
  • 7. Sales Trends Improved in the U.S. and Western EU in Q3 2013 Western EU Sales Growth(1,2) U.S. Sales Growth(1) +5.2% -3.6% -4.8% -7.9% -8.5% -9.7% -10.0% -10.0% -11.6% -13.2% Q3 Q4 Q1 Q2 2013 2012 (1) (2) Q3 Q3 Q4 2012 Q1 Q2 Q3 2013 Growth at Constant Exchange Rates Western Europe: France, Germany, UK, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Holland, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark 7
  • 8. Growth Platforms Grew by +5.5% Reaching 74.7% of Sales in Q3 2013 Q3 2013 9M 2013 Growth at CER Growth at CER Emerging Markets €2,652m +2.8% +2.2% Diabetes Solutions €1,670m +20.1% +18.6% Vaccines €1,300m -7.2% -0.2% Consumer Healthcare €742m +9.8% +4.8% Genzyme(1) €529m +21.1% +23.9% Animal Health €458m -6.4% -5.0% Other Innovative Products(2) €191m +31.2% +20.0% (1) Genzyme perimeter includes Rare Diseases and Multiple Sclerosis franchises (2) Includes products launched since 2009 which do not belong to the Growth Platforms listed above: Multaq®, Jevtana®, Auvi-Q™, Mozobil® and Zaltrap® 8
  • 9. Emerging Markets Sales Continue to Grow Albeit at a Lower Pace Q3 2013 Sales (€m) -7.0% 10.3% -4.8% 22.9% (1) 31.5% +2.8% 35.4% +5.2% Growth at CER +3.6% +2.2% +4.0% +2.2% (1) World excluding U.S., 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. Q3 2013 Vaccines Performance Affected by Flu Vaccine Phasing and Pentacel®/Adacel® Shortage Q3 2013 sales Q3 2013 change at CER 9M 2013 change at CER Flu Vaccines (incl. Vaxigrip® and Fluzone®) 559 -3.9% -2.4% Polio/Pertussis/Hib Vaccines (incl. Pentacel®, Pentaxim® and Imovax®) 244 -17.2% +2.1% Meningitis/Pneumonia Vaccines (incl. Menactra®) 211 -3.5% -0.7% Travel and Other Endemics Vaccines 101 +31.3% +9.6% Adult Booster Vaccines (incl. Adacel®) 84 -36.4% -19.3% 101 +6.0% +22.9% 1,300 -7.2% -0.2% € million Other Vaccines Total Vaccines Sales (1) 9M 2013 sales were €2,757m, down -0.2% at CER 10
  • 11. Significant Achievements in Q3 2013 Diabetes Genzyme CHC Flu Vaccines Alirocumab ● Double-digit growth for eleven consecutive quarters ● U300 EDITION III & IV data imminent; U.S. & EU filings expected in H1 2014 ● Aubagio® & Lemtrada™ granted EU approval; Lemtrada™ FDA Ad Com in Nov ● Cerdelga™ (eliglustat) regulatory file accepted for review by EMA ● Relaunch of Rolaids® in the U.S. and gradual recovery in China ● FDA approval of Nasacort® Rx-to-OTC switch ● Positive results from large study with Fluzone® High Dose ● Expected record flu sales in Northern Hemisphere in H2 2013 ● Positive top-line results from first Phase III study with an anti-PCSK9 mAb 11
  • 12. Alirocumab: First in Class Fully-Human PCSK9 mAb ● ODYSSEY MONO: first Phase III study with alirocumab to report data ● Reduced mean LDL-C three times more than ezetimibe ● Most patients remained on the initial low dose (75mg) in this treat-to-goal study Mean LDL-C change (at week 24) -15.6% ezetimibe ● Injection-site reactions in less than 2% of patients in both groups ● 1mL SC auto-injector for both Q2W doses, 75mg and 150mg -47.2% alirocumab p<0.0001 Alirocumab (SAR236553 / REGN727) is developed in collaboration with Regeneron ODYSSEY MONO is the first study to report data from the 12 Phase 3 trials initiated so far as part of the >23,000 patient ODYSSEY clinical trial program PCSK9: proprotein convertase subtilisin/kexin type 9, an enzyme that can contribute to elevated LDL-C levels through degradation of LDL-C receptors LDL-C : Low Density Lipoprotein-Cholesterol 12
  • 13. Select Areas of Focus to Fully Get Back on Track ● Extended shortage of Pentacel®, Adacel® and Daptacel® through mid-Oct(1) Vaccines ● Progressive U.S. supply improvement delayed to Q4 2013 Animal Health ● Frontline® competition from Rx-only products and fipronil branded generics ● Expected launch of NexGard® for next flea and tick season Pharma in China ● Slowdown in pharmaceutical market Brazil Generics ● Excess stock in the channel cleaned up, trade inventory back to normal ● Promotional activities and sales progressively coming back to normal ● Re-order point reached in mid-August, sales gradually improving (1) Pertussis‐containing vaccines manufactured in Toronto 13
  • 14. Q3 2013 Performance Affected by the Strength of the Euro vs. Other Currencies Quarterly Currency Impact (in €m) Sales(1) Business EPS +6.4% +5.8% €561m +8.4% +8.0% €486m €0.15 €0.13 +2.4% €187m +3.6% +1.9% €166m +2.6% €0.06 €0.04 -€212m -2.5% -€305m -3.5% -€0.08 -€0.08 -4.4% -5.5% -€662m -7.3% Q1 Q2 Q3 2012 Q4 Q1 Q2 2013 -€0.17 -10.2% Q3 Q1 Q2 Q3 2012 Q4 Q1 Q2 Q3 2013 (1) Main currency impact on sales in Q3 2013: Japanese Yen (-€180m); U.S. Dollar (-€176m); Brazilian Real (-€50m); Venezuelan Bolivar (-€48m); Australian Dollar (-€30m) 14
  • 15. Business EPS Less Impacted by Patent Cliff in Q3 2013 Quarterly Business EPS Growth(1) Q3 2012 (2) Q4 2012 (2) Q1 2013 Q2 2013 (3) Q3 2013 -9.0% -14.9% -18.5% -27.2% -29.0% (1) Growth at Constant Exchange Rates (2) With the retroactive application of IAS19R (3) On a reported basis, Q3 2013 Business EPS was €1.35 down -19.2% 15
  • 16. Outlook for 2013 Guidance Taking into account the expected return to growth in Q4 and including the impact of extended vaccines shortage in Q3, the outlook for 2013 is now expected to be at the lower end of previous guidance range 2013 business EPS is therefore expected to be around 10% lower than 2012 at CER(1), barring major unforeseen adverse events (1) FY 2012 Business EPS of €6.14 with the retroactive application of IAS19R 16
  • 17. FINANCIAL PERFORMANCE Jérôme Contamine Executive Vice President, Chief Financial Officer 17
  • 18. Q3 2013 Sales Grew Slightly at CER but Were Significantly Affected by Currency Headwinds Q3 2013 Sales €9,040m -€191m +€411m -€110m (1) -€662m -€56m JPY: -€180m USD: -€176m BRL: -€50m VEF: -€48m AUD: -€30m €8,432m +0.6% at CER(3) Q3 2012 Key Genericized Products Others(1) Brazil generics (2) Growth Platforms FX Impact Q3 2013 excluding Brazil generics (1) “Others” includes - €50m from EU tail products (Other Rx Drugs), - €36m on three genericized brands in Japan (Allegra®, Myslee® and Amaryl®) (2) Reported sales of Brazil generics were €76m in Q3 2012 and €17m in Q3 2013 (3) On a reported basis, sales in Q3 2013 were down -6.7% 18
  • 19. Q3 2013 Was the Last Quarter Impacted by the Residual Effect of the Patent Cliff % Change % Change (reported €) (CER) 9,040 -6.7% +0.6% 86 200 -57.0% -55.0% (2,873) (2,877) -0.1% +6.0% 5,645 6,363 -11.3% -3.6% R&D (1,183) (1,144) +3.4% +7.4% SG&A (2,016) (2,176) -7.4% -0.8% Other current operating income & expenses 28 76 - - Share of Profit/Loss of associates 38 6 - - (36) (39) - - Business operating income 2,476 3,086 -19.8% -10.4% Business operating margin 29.4% 34.1% - - €m Q3 2013 8,432 Net sales Other revenues Cost of sales Gross profit Minority interests Q3 2012 (1) CER: Constant Exchange Rates (1) With the retroactive application of IAS19R 19
  • 20. Mix Factors and FX Impacted Q3 2013 CoS Ratio Cost of Sales (%) ● Cost of Sales (CoS) in Q3 2013 of €2,873m, up +6.0% at CER 34.1% 31.8% ● CoS ratio of 34.1% in Q3 2013 vs. 31.8% in Q3 2012 reflecting: ● Mix effects from lower sales of high margin vaccines and companion animal brands(1) ● Unfavourable currency impact ● Loss of sales from Key Genericized Products (1) ● Lower sales of generics in Brazil 2012 (1) Frontline® and Heartgard® (1) 2013 20
  • 21. Spending More on Late Stage Programs While Reducing Fixed R&D Costs R&D Expenses (€m) ● Q3 2013 R&D expenses of €1,183m ● Large Phase III / IIb development programs (e.g. Dengue, C. Diff, alirocumab, sarilumab, U300, dupilumab) €1,144m €1,183m (1) ● Q3 2013 R&D up +2.3% at CER (1) when correcting for: ● Reclassification of expenses from Vaccines R&D JV(2) ● Hexyon® payment by the SPMSD JV in Q3 2012(3) 2012 (1) Q3 R&D expenses were up +7.4% at CER (2) Reclassification in Q3 2013 increased R&D expenses by €14m and share of profit of associates by the same amount (3) Reimbursement of €44m by the SPMSD JV related to Hexyon®, a 6-in-1 paediatric vaccine 2013 21
  • 22. Good Control of SG&A Expenses in Q3 2013 SG&A Expenses (€m) ● Q3 2013 SG&A expenses of €2,016m, down -0.8% at CER reflecting: €2,176m €2,016m ● Sales & Marketing investment in Genzyme’s MS franchise e.g. Aubagio® and Lemtrada™ ● Sustained investment in Diabetes ● SG&A ratio of 23.9% in Q3 2013 2012 2013 22
  • 23. Q3 2013 Business EPS Reflecting €0.17 Negative FX Impact % Change % Change (reported €) (CER) 3,086 -19.8% -10.4% (123) (135) - - (564) (750) - - -24.0% -25.1% - - Business net income 1,789 2,201 -18.7% -8.9% Net margin 21.2% 24.3% - - Business EPS €1.35 €1.67 -19.2% -9.0% Average number of shares outstanding (m) 1,323.5 1,318.4 €m Q3 2013 Q3 2012 Business operating income 2,476 Net financial expenses Income tax expense Effective tax rate (1) - - CER: Constant Exchange Rates (1) With the retroactive application of IAS19R 23
  • 24. Free Cash Flow Stability and €1.4bn Net Debt Reduction in Q3 2013 9M 2013 (€m) +796 -1,391 +4,527 -3,638 -7,719 -8,788 -865 -164 -334 Net Debt (1) Dec 31, 2012 Net Cash from Operating Activities(2) Proceeds from Issuance of Shares Share Repurchase Dividend Payment CapEx Acquisitions, Licensing & Disposals (1) Including derivatives related to the financial debt +€431m at Dec. 31, 2012 and +€331m at Sep 30, 2013 (2) Excluding Restructuring costs (3) Other including Restructuring costs Other(3) Net Debt (1) Sep 30, 2013 24
  • 25. Sanofi’s Growth Profile Expected to Emerge in Q4 2013 1● Q3 2013 marks an inflection point as the impact of the patent cliff is now behind us and we returned to growth in September(1) 2● Growth Platforms accounted for 74.7% of sales and were up +5.5% in Q3 2013 demonstrating the value of Sanofi’s integrated business model 3● Several high potential R&D projects progressed in Q3 2013 ● EMA approvals for Aubagio® and Lemtrada™ in MS ● FDA approval of NexGard® for fleas and ticks for dogs ● Positive first Phase III results for alirocumab in hypercholesterolemia ● Cerdelga™ (eliglustat) file accepted for review by EMA for Gaucher disease ● FDA approval of Nasacort® Allergy 24HR for OTC use (1) Sales growth of +6.1% in September 2013 at constant exchange rates and constant structure basis 25
  • 26. APPENDICES R&D Pipeline 26
  • 27. Late Stage Pipeline – Pharma & Vaccines Registration Phase III U300 N Insulin glargine Type 1+2 diabetes Lyxumia® (lixisenatide) N Lemtrada™ (alemtuzumab) Anti-CD52 mAb Multiple sclerosis, U.S. N Clostridium difficile Toxoid vaccine Cerdelga™ (eliglustat tartrate) Jevtana® (cabazitaxel) Kynamro® (mipomersen) Apolipoprotein B-100 antisense Severe HeFH, U.S. DTP-HepB-Polio-Hib (PR5I) Metastatic prostate cancer (1L) Pediatric hexavalent vaccine SYNVISC-ONE® Fluzone® QIV ID N MACI® Quadracel® Cell-based treatment Femoral chondyle cartilage defects, U.S. Anti-IL-6R mAb Rheumatoid arthritis VaxiGrip® QIV IM Quadrivalent inactivated influenza vaccine Quadrivalent inactivated influenza vaccine intradermal Medical device Pain in hip OA N N Glucosylceramide synthetase inhibitor Gaucher disease, EU N Anti-PCSK-9 mAb Hypercholesterolemia sarilumab fedratinib Dengue Mild-to-severe dengue fever vaccine JAK2 inhibitor Myelofibrosis (1L) GLP-1 agonist Type 2 diabetes, U.S. alirocumab Cerdelga™ (eliglustat tartrate) Glucosylceramide synthetase inhibitor Gaucher disease, U.S. Diphtheria, tetanus, pertussis & polio vaccine; 4-6 y of age New Molecular Entity Oncology Diabetes Solutions Rare Diseases Biosurgery Immune Mediated Diseases Infectious Diseases Cardiovascular / Renal Diseases Vaccines Ophthalmology Age Related Degenerative Diseases 27
  • 28. Early Stage Pipeline – Pharma & Vaccines Phase II N SAR3419 Maytansin-loaded anti-CD19 mAb B-cell malignancies refractory/relapsed (NHL, ALL) LixiLan lixisenatide+ insulin glargine Fixed-Ratio / Type 2 diabetes N dupilumab Anti-IL4Rα mAb Asthma; Atopic dermatitis; Nasal polyposis SAR339658 N Anti-VLA 2 mAb Inflammatory bowel disease GENZ438027 (ALN-TTR02) fresolimumab anti-ErbB3 mAb Breast cancer (2L, 3L) SAR279356 (F598) Ovarian cancer N LPA-1 receptor antagonist Systemic sclerosis N ferroquine N sarilumab SAR292833 (GRC15300) Rotavirus Live attenuated tetravalent Rotavirus oral vaccine N Antimalarial Malaria Anti-IL-6R mAb Uveitis N SAR100842 fedratinib JAK-2 inhibitor Ruxolitinib resistant/intolerant MF IL4/IL13 Bi-specific mAb Idiopathic pulmonary fibrosis Rabies VRVg Purified vero rabies vaccine Anti-PNAG mAb Serious infections Oral dual inhibitor of PI3K & mTOR / pimasertib SAR156597 N TGFβ antagonist Focal segmental glomerulosclerosis N Combination SAR245409 (XL765) / MSC1936369B Meningitis ACYW conj. 2nd generation meningococcal conjugate infant vaccine mRNA inhibitor Familial amyloid polyneuropathy N SAR256212 (MM121) N TRPV3 antagonist Chronic disabling pain New Molecular Entity Oncology Diabetes Solutions Rare Diseases Biosurgery N Immune Mediated Diseases Infectious Diseases Cardiovascular / Renal Diseases Vaccines Ophthalmology Age Related Degenerative Diseases 28
  • 29. Early Stage Pipeline – Pharma & Vaccines Phase I N SAR153192 GZ404477 N (AAV-hAADC) Gene therapy Parkinson's disease Anti-DLL4 mAb Solid tumors N SAR405838 (MI-773) RetinoStat® N SAR650984 Anti-CD38 naked mAb Hematological malignancies N SAR391786 StarGen® N SAR228810 GZ402663 (sFLT-01) N UshStat® SAR438151 N SAR125844 C-MET kinase inhibitor N SAR252067 Anti-LIGHT mAb Crohn’s disease Solid tumors N SAR307746 Anti-ANG2 mAb Solid tumors GZ402665 N SAR113244 N Insulin Biosimilar Program PI3K β selective inhibitor PTEN – Deficient tumors Diabetes N SAR245408 (XL147) Oral PI3K inhibitor Solid tumors N Tuberculosis Recombinant subunit vaccine N Herpes Simplex Virus Type 2 HSV-2 vaccine N (rhASM) Niemann-Pick type B Anti-CXCRS mAb Systemic lupus erythematosus SAR260301 Pseudomonas aeruginosa Antibody fragment product Gene therapy Usher syndrome 1B Undisclosed target Meningitis & pneumonia vaccine Prevention of ventilator-associated pneumonia Gene therapy Age-related macular degeneration (AMD) N Maytansin-loaded anti-CA6 mAb Solid tumors N Gene therapy Stargardt disease Anti-protofibrillar AB mAb Alzheimer’s disease SAR566658 Streptococcus pneumonia Wet age-related macular degeneration (AMD) GDF8 mAb Sarcopenia HDM2 / p53 antagonist Solid tumors N Gene therapy GZ402671 N Oral GCS Inhibitor Fabry Disease GZ402666 N neo GAA Pompe Disease Combination SAR245409 / MSC1936369B Solid tumors N New Molecular Entity Oncology Diabetes Solutions Rare Diseases Biosurgery Immune Mediated Diseases Infectious Diseases Cardiovascular / Renal Diseases Vaccines Ophthalmology Age Related Degenerative Diseases 29
  • 30. R&D Pipeline Summary Table(1) Phase I Phase II Phase III Registration TOTAL Oncology 8 3 1 0 12 Diabetes Solutions 0 0 2 0 2 Cardiovascular / Renal Diseases 0 1 1 0 2 Immune Mediated Diseases 2 4 1 0 7 Infectious Diseases 0 2 0 0 2 Ophthalmology 4 0 0 0 4 Rare Diseases 3 1 0 1 5 Age Related Degenerative Diseases 3 1 0 0 4 Vaccines 4 3 5 1 13 25(2) 15 10 2 TOTAL 39(2) 52 40 (1) Excluding life cycle management programs (2) Includes one Phase I project addressing an undisclosed target 12 NMEs & Vaccines 30
  • 31. Expected R&D Milestones Product Event Investigational new insulin U300 Expected EDITION III & IV Phase III results in Diabetes Q4 2013 Cerdelga™ (eliglustat) Expected U.S. regulatory submission in Gaucher disease Q4 2013 Fedratinib (JAK2 inhibitor) Expected U.S. and EU regulatory submissions in Myelofibrosis Q4 2013 Lemtrada™ (alemtuzumab) Expected FDA decision in RMS in the U.S.(1) Q4 2013 Sarilumab Expected 1st Phase III headline results in Rheumatoid Arthritis (SARIL-RA Mobility) Q4 2013 MACI® Expected U.S. regulatory submission in Cartilage Defects Q4 2013 Vaxigrip® QIV Expected license in EU Q1 2014 Fluzone® QIV ID Expected U.S. regulatory submission Q1 2014 Investigational new insulin U300 Expected U.S. and EU regulatory submissions in Diabetes H1 2014 LixiLan (lixisenatide + insulin glargine) Expected start of Phase III program in Diabetes H1 2014 (1) An FDA Advisory Committee meeting is scheduled on Nov 13, 2013 Timing 31
  • 32. APPENDICES FINANCE 32
  • 33. Q3 2013 Business Net Income Statement Third quarter 2013 Group Total Pharmaceuticals (1) change Q3 2013 (6.7%) (57.0%) (0.1%) Vaccines (1) change Q3 2013 6,674 69 (2,136) (32.0%) 4,607 69.0% 7,040 184 (2,130) (30.3%) 5,094 72.4% (5.2%) (62.5%) 0.3% (1,012) (1,011) 0.1% (15.2%) (14.4%) (1,708) (1,867) Animal health (1) change Q3 2013 1,300 9 (580) (44.6%) 729 56.1% 1,481 7 (577) (39.0%) 911 61.5% (12.2%) 28.6% 0.5% (133) (97) 37.1% (10.2%) (6.5%) (156) (153) (12.0%) (10.3%) Other (1) change 458 8 (157) (34.2%) 309 67.5% 519 9 (170) (32.7%) 358 69.0% (11.8%) (11.1%) (7.6%) (38) (36) 5.6% (8.3%) (6.9%) (152) (156) (33.2%) (30.1%) (1) 7 € million Q3 2013 Net sales Other revenues Cost of sales 8,432 86 (2,873) (34.1%) 5,645 66.9% 9,040 200 (2,877) (31.8%) 6,363 70.4% (1,183) (1,144) (14.0%) (12.7%) (2,016) (2,176) (23.9%) (24.1%) (25.6%) (26.5%) 28 76 32 64 38 6 3 10 36 (4) (1) (36) (39) (37) (39) 1 - - - 2,476 3,086 1,885 2,251 477 657 117 173 29.4% 34.1% 28.2% 32.0% 36.7% 44.4% 25.5% 33.3% (123) Q3 2012 (1) - (135) As % of net sales Gross profit As % of net sales Research and development expenses As % of net sales Selling and general expenses As % of net sales Other current operating income/expenses Share of profit/loss of associates * Net income attributable to non-controlling interests Business operating income As % of net sales Financial income and expenses Income tax expense Tax rate** Business net income As % of net sales Business earnings per share *** (in euros) Q3 2012 (564) 3.4% (7.4%) (19.8%) (9.6%) (8.5%) (16.3%) Q3 2012 (20.0%) 2.0% (27.4%) Q3 2012 Q3 2013 (13.7%) (2.6%) (3) (32.4%) 5 (3) 5 (750) 24.0% (11.3%) Q3 2012 25.1% 1,789 2,201 21.2% 1.35 1.67 (18.7%) 24.3% (19.2%) * Net of tax ** Determined on the basis of Business income before tax, associates, and non-controlling interests *** Based on an average number of shares outstanding of 1,323.5 million in the third quarter of 2013 and 1,318.4 million in the third quarter of 2012 (1) Including impact of transition to IAS19R 33
  • 34. 9M 2013 Business Net Income Statement Nine months 2013 Group Total Pharmaceuticals (1) change 9M 2013 Vaccines (1) change 20,196 224 (6,303) (31.2%) 14,117 69.9% 21,867 829 (6,554) (30.0%) 16,142 73.8% (7.6%) (73.0%) (3.8%) (3,019) (3,055) (14.9%) (14.0%) (5,504) (5,622) Animal health (1) change 2,757 21 (1,275) (46.3%) 1,503 54.5% 2,881 17 (1,140) (39.6%) 1,758 61.0% (4.3%) 23.5% 11.8% (382) (380) (13.9%) (13.2%) (455) (440) Other (1) change 1,541 22 (503) (32.6%) 1,060 68.8% 1,673 27 (516) (30.8%) 1,184 70.8% (7.9%) (18.5%) (2.5%) (123) (116) (8.0%) (6.9%) (495) (514) € million 9M 2013 Net sales Other revenues Cost of sales 24,494 267 (8,081) (33.0%) 16,680 68.1% 26,421 873 (8,210) (31.1%) 19,084 72.2% (7.3%) (69.4%) (1.6%) (3,524) (3,551) (0.8%) (14.4%) (13.4%) (6,454) (6,577) (26.3%) (24.9%) (27.3%) (25.7%) (16.5%) (15.3%) (32.1%) 198 92 163 63 7 (2) (3) 8 59 425 30 435 32 (10) (3) - (122) (143) (123) (143) 1 - - - 6,837 9,330 5,664 7,820 706 926 436 562 27.9% 35.3% 28.0% 35.8% 25.6% 32.1% 28.3% 33.6% (400) (460) Income tax expense (1,560) (2,319) Tax rate** 24.0% 9M 2012 (1) (30.7%) 27.0% As % of net sales Gross profit As % of net sales Research and development expenses As % of net sales Selling and general expenses As % of net sales Other current operating income/expenses Share of profit/loss of associates * Net income attributable to non-controlling interests Business operating income As % of net sales Financial income and expenses Business net income As % of net sales Business earnings per share *** (in euros) 9M 2012 4,877 6,551 19.9% 4.97 (1.9%) (26.7%) (12.5%) (1.2%) (2.1%) (27.6%) 9M 2013 9M 2012 (14.5%) 0.5% 3.4% (23.8%) 9M 2013 9M 2012 9M 2013 (10.5%) 6.0% (22.4%) - (1) 31 (3.7%) 23 31 22 (25.6%) 24.8% 3.68 (12.6%) 9M 2012 (26.0%) * Net of tax ** Determined on the basis of Business income before tax, associates, and non-controlling interests *** Based on an average number of shares outstanding of 1,323.8 million in the first nine months of 2013 and 1,319 million in the first nine months of 2012 (1) Including impact of transition to IAS19R 34
  • 35. Q3 2013 Reconciliation of Business Net Income to Consolidated Net Income Attributable to Equity Holders of Sanofi Q3 2013 Q3 2012(3) change 1,789 2,201 (18.7%) (689) (816) Impairment of intangible assets (28) 12 Fair value remeasurement of contingent consideration liabilities (68) (86) Expenses arising from the impact of acquisitions on inventories (1) (3) Restructuring costs (71) (57) Tax effect of: 289 294 233 9 23 24 277 (4) 3 1 17 € million Business net income Amortization of intangible assets (1) amortization of intangib le assets impairment of intangib le assets fair value remeasurement of contingent consideration liab ilities expenses arising from the impact of acquisitions on inventories restructuring costs Other tax items - Share of items listed above attributable to non-controlling interests 1 1 (9) (7) 1,213 1,539 0.92 1.17 Restructuring costs of associates and joint ventures, and expenses arising from the impact of acquisitions on associates and joint ventures Net income attributable to equity holders of Sanofi Consolidated earnings per share(2) (in euros) (1) - (21.2%) Of w hich related to amortization expense generated by the remeasurement of intangible assets as part of business combinations: €658 million in the third quarter of 2013 and €787 million in the third quarter of 2012. (2) Based on an average number of shares outstanding of 1,323.5 million in the third quarter of 2013 and 1,318.4 in the third quarter of 2012. (3) Including impact of transition to IAS19R. 35
  • 36. 9M 2013 Reconciliation of Business Net Income to Consolidated Net Income Attributable to Equity Holders of Sanofi 9M 2013 9M 2012(4) change 4,877 6,551 (25.6%) (2,232) (2,491) Impairment of intangible assets (468) (28) Fair value remeasurement of contingent consideration liabilities (185) (192) Expenses arising from the impact of acquisitions on inventories (7) (20) Restructuring costs (230) (307) Tax effect of: 1,038 1,008 723 189 43 2 81 892 10 6 6 94 (109) - 3 2 (26) (22) 2,661 4,501 2.01 3.41 € million Business net income Amortization of intangible assets (1) amortization of intangib le assets impairment of intangib le assets fair value remeasurement of contingent consideration liab ilities expenses arising from the impact of acquisitions on inventories restructuring costs Other tax items (2) Share of items listed above attributable to non-controlling interests Restructuring costs of associates and joint ventures, and expenses arising from the impact of acquisitions on associates and joint ventures Net income attributable to equity holders of Sanofi Consolidated earnings per share(3) (in euros) (40.9%) (1) Of w hich related to amortization expense generated by the remeasurement of intangible assets as part of business combinations: (2) Tax on dividends paid to shareholders of Sanofi. (3) Based on an average number of shares outstanding of 1,323.8 million in the first nine months of 2013 and 1,319 million in the first nine months of 2012. (4) Including impact of transition to IAS19R. €2,147 million in the first nine months of 2013 and €2,389 million in the first nine months of 2012. 36
  • 37. Q3 2013 & 9M 2013 Consolidated Income Statements € million Q3 2013 Q3 2012(1) 9M 2013 9M 2012(1) 8,432 9,040 24,494 26,421 86 200 267 873 Cost of sales (2,874) (2,880) (8,088) (8,230) Gross profit 5,644 6,360 16,673 19,064 Research and development expenses (1,183) (1,144) (3,524) (3,551) Selling and general expenses (2,016) (2,176) (6,454) (6,577) 56 117 403 436 (28) (41) (205) (344) Net sales Other revenues Other operating income Other operating expenses Amortization of intangible assets (689) (816) (2,232) (2,491) Impairment of intangible assets (28) 12 (468) (28) Fair value remeasurement of contingent consideration liabilities (68) (86) (185) (192) Restructuring costs (71) (57) (230) (307) - - - - Operating income 1,617 2,169 3,778 6,010 Financial expense (147) (186) (458) (556) 24 51 58 96 1,494 2,034 3,378 5,550 (275) (456) (631) (1,311) 29 (1) 33 403 1,248 1,577 2,780 4,642 35 38 119 141 1,213 1,539 2,661 4,501 1,323.5 1,318.4 1,323.8 1,319.0 0.92 1.17 2.01 3.41 Other gains and losses, and litigation Financial income Income before tax and associates and joint ventures Income tax expense (2) Share of profit / loss of associates and joint ventures Net income Net income attributable to non-controlling interests Net income attributable to equity holders of Sanofi Average number of shares outstanding (million) Consolidated earnings per share (in euros) (1) Including impact of transition to IAS19R (2) In 2013, including a tax on dividends paid to shareholders of Sanofi: (109) M€ 37

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