Q2 2012 Results

1,727 views
1,669 views

Published on

Q2 2012 Results

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,727
On SlideShare
0
From Embeds
0
Number of Embeds
1,018
Actions
Shares
0
Downloads
2
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Q2 2012 Results

  1. 1. Q2 2012 RESULTS July 26th, 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. Agenda Key Highlights ● Christopher A. Viehbacher, Chief Executive Officer Business Performance ● Hanspeter Spek, President, Global Operations ● Olivier Charmeil, Senior Vice President, Vaccines Financial Performance ● Jérôme Contamine, Executive Vice President, Chief Financial Officer Q&A 3
  4. 4. KEY HIGHLIGHTSChristopher A. ViehbacherChief Executive Officer 4
  5. 5. Q2 2012 Performance Was In-Line With Our Expectations Total Sales (€m) Business EPS (€) €8,870m €8,349m €1.64 €1.48 +0.4% at CER(1,2) -17.7% at CER(1) Q2 2011 Q2 2012 Q2 2011 Q2 2012 (1) On a reported basis, total sales w ere up +6.2% and business EPS w as down -9.8% in Q2 2012 (2) When excluding changes in structure (primarily the complete transfer of Copaxone® to Teva in Q1 2012 and the disposal of Dermik in Q4 2011), sales grow th at constant exchange rates and constant structure 5 basis w as +2.5% in Q2 2012
  6. 6. Patent Cliff(1) Exposure on Sales Will Be Limitedafter 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% €2,207m Eloxatin® U.S. 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. As Expected, Loss of Exclusivity of Plavix® and Avapro®in the U.S. Impacted Business Net Income in Q2 2012 Loss of Exclusivity of Plavix® and Avapro® in the U.S.(1) Evolution of Evolution of "Other Revenues" “Income from Associates" €422m -45.7% at CER Impact on €278m Q2 2012 €247m Business Net -60.1% at CER Income: €122m €331m Q2 2011 2011 Q2 2012 2012 Q2 2011 2011 Q2 2012 (1) Avapro® on March 30, 2012 and Plavix ® on May 17, 2012 8
  9. 9. Genzyme - Recovery of Fabrazyme® confirmed in Q2 2012and Entry into Multiple Sclerosis Underway ● Q2 2012 rare diseases sales Quarterly Sales (€m) reached €434m, up +9.1% at CER 150 141 ● Strong recovery of Fabrazyme® 113 following Framingham plant approval 101 ● Significant progress made towards 74 building leading franchise in MS ● Solid TOWER Phase 3 results with 32 Aubagio ® (teriflunomide) ● Lemtrada™ (alemtuzumab) filed in the Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011 2011 2012 2012 2011 2011 2012 2012 2011 2011 2012 2012 U.S. and EU in June 2012 ● U.S. sales team being hired & 9
  10. 10. Key Regulatory Milestones Expected in H2 2012 Products Targeted Indications Expected Milestones ® Metastatic PDUFA Date: Aug 4th 2012 Colorectal Cancer CHMP Opinion: Q4 2012 ® Relapsing Forms of PDUFA Date: Sep 12th 2012 Multiple Sclerosis CHMP Opinion: Q1 2013 hoFH/severe heFH in EU CHMP Opinion: Q4 2012 and hoFH in the U.S PDUFA Date: Jan 29th 2013 ® CHMP Opinion: Q4 2012 Type 2 Diabetes FDA Submission: Dec 2012 TM Relapsing Forms of PDUFA Date: Q2 2013 Multiple Sclerosis CHMP Opinion: Q2 2013 Zaltrap®, Kynamro™, Aubagio®, Lyxumia® and Lemtrada™ are registered trade names submitted to health authorities for investigational agents Zaltrap® is developed in collaboration w ith Regeneron, Kynamro™ w ith Isis Pharmaceuticals and Lyxumia® is in-licensed from Zealand Pharma hoFH: Homozygous Familial Hypercholesterolemia PDUFA: Prescription Drug User Fee Act heFH: Heterozygous Familial Hypercholesterolemia CHMP: Committee for Medicinal Products for Human Use 10
  11. 11. Sanofi Recently Started the First Ever Phase 3 Program for an Anti-PCSK9 mAb● First-in-class fully-human antibody Target Population targeting PCSK9(1) ● Injected subcutaneously as one single 21m patients globally injection every two weeks estimated not at goal for LDL-C(2) (mainly at high cardiovascular risk)● ODYSSEY: a large global Phase 3 clinical program evaluating the Primary safety and efficacy of SAR236553 Secondary Prevention Prevention ● 22,000 patients, including those with elevated cardiovascular risk, intolerant to statins or patients with FH heFH (3)● Creation of a PCSK9 Development Statin & Launch Unit Intolerant SAR236553 / REGN727 is developed in collaboration w ith Regeneron (1) PCSK9: proprotein convertase subtilisin/kexin type 9), an enzyme that can contribute to elevated low -density lipoprotein cholesterol (LDL-C) levels through degradation of LDL-C receptors (2) Adapted from Decision Resources 2008, Decision Resources 2010 and CVReg 2011 (3) heFH: Heterozygous Familial Hypercholesterolemia 11
  12. 12. BUSINESS PERFORMANCEHanspeter SpekPresident, Global OperationsOlivier CharmeilSenior Vice President, Vaccines 12
  13. 13. Growth Platforms and FX Drove Sales Growth in Q2 2012 Q2 2012 sales (€m) +6.2% + €486m - €163m + €386m (2) - €187m (2) ® (1) (1) Sales impact from end of Copaxone® agreement and Dermik disposal: -€148m (2) JPY: Japanese Yen; CNY: Chinese Yuan 13
  14. 14. 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) Worl d excluding North America (USA, Ca nada), Western Europe (France, Germa ny, UK, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portuga l, Holland, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark), Japan, Australia a nd New Zealand 14
  15. 15. 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: Bra zil, Russia, India and China 15
  16. 16. Diabetes Continued its Impressive Double Digit Growthin Q2 2012 ● Q2 2012 Diabetes sales of €1,436m, Quarterly Sales (€m) up +13.7% at CER ● Great performance of Lantus®, 1,228 up +16.5% at CER 969 ● Strong growth in the U.S. and 926 Emerging Markets of +19.4% and +20.6% at CER, respectively ● Broad presence at ADA: ● Results of ORIGIN and retrospective cohort studies reinforce Lantus® as the most-studied basal insulin ● New supportive data on Lyxumia® Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 on top of basal insulins 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 16
  17. 17. Oncology Delivered Another Good Quarter in Q2 2012prior to Losing Eloxatin® and Launching Zaltrap® in the U.S. ● Q2 2012 Oncology sales of €751m, Quarterly Sales (€m) up +7.0% at CER 751 ● Sales of Jevtana® reached €65m, up +27.1% at CER 41.8% ● Taxotere® sales of €159m stabilized versus Q1 2012 ● Eloxatin® U.S. market exclusivity ● As expected through August 9, 2012 58.2% ● Zaltrap® (aflibercept) in 2L-mCRC ● PDUFA date: August 4, 2012 given Priority Review Q3 2011 Q4 2011 Q1 2012 Q2 2012 Oncology Others Eloxatin® U.S. Zaltrap® is the registered trade name submitted to health authorities for aflibercept in cancer 2L-mCRC: Second Line Metastatic Colorectal Cancer 17
  18. 18. Strong Consumer Health Care Sales Growth in Q2 2012 ● Solid Q2 2012 sales of €738m, up Quarterly Sales (€m) +11.3% at CER 738 ● Double digit growth of Doliprane®, Maalox® and MagneB6® in Western 644 Europe resulting from greater 578 promotional focus ● Lower U.S. sales of Allegra® OTC reflecting inventory build in Q2 2011 to 321 ensure proper supply during launch ● Strong performance in Emerging Markets, up +26.9% at CER ● Double digit growth of Haowawa®, Lactacyd®, Enterogermina® and Q2 2009 Q2 2010 Q2 2011 Q2 2012 NoSpa® 18
  19. 19. Merial Sales Growth Showed Strong Rebound in Q2 2012 ● Strong Q2 2012 sales of €576m, Quarterly Sales (€m) up +9.1% at CER 576 ● Companion Animals segment sales 524 of €385m, up +10.1% at CER 496 ● Good Frontline® sales performance ● Velcera recently enjoined from selling their generic combination (fipronil + methoprene) in the U.S.(1) ● Production Animals segment sales of €191m, up +6.9% at CER ● Swine presence enlarged by recent acquisition of Newport Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 (1) Merial w as granted a preliminary injunction motion on June 29, 2012 against Velcera. This decision is under appeal by Velcera. The patent infringement trial is now scheduled for November 2012. 19
  20. 20. Sanofi Pasteur Growth in Q2 2012 Benefited fromSeasonal Flu Campaign in Emerging Markets ● Q2 2012 sales of €783m, up +3.0% Quarterly Sales (€m) at CER 783 ● Strong sales in Emerging Markets, 706 Emerging up +22.9% at CER Markets ● Another record flu season in H1 2012 307 in the Southern Hemisphere +22.9% at CER ● Mixed performance in Mature Markets Mature ● Strong Adacel® sales (+30.7% at CER) Markets and good resilience of Menactra® 476 ● Temporary order limitations for -7.5% at CER Pentacel® in the U.S. ● Imovax® Polio (IPV) added to Japan Q2 2011 Q2 2012 immunization policy on Sep 1st, 2012 20
  21. 21. FINANCIAL PERFORMANCEJérôme ContamineExecutive Vice President, Chief Financial Officer 21
  22. 22. BOI Decline in Q2 2012 Reflects Loss of Exclusivityof Plavix® and Avapro® in the U.S.€m Q2 2012 Q2 2011 % Change % Change (reported €) (CER)Net sales 8,870 8,349 +6.2% +0.4%Other revenues 247 422 -41.5% -45.7%Cost of sales (2,730) (2,588) +5.5% +2.4%Gross profit 6,387 6,183 +3.3% -3.5%R&D (1,239) (1,197) +3.5% -1.2%SG&A (2,289) (2,268) +0.9% -4.3%Other current operating income & expenses (152) 7 - -Share of Profit/Loss of associates 122 278 -56.1% -60.1%Non controlling interests (50) (58) - -Business operating income 2,779 2,945 -5.6% -13.6%Business operating margin 31.3% 35.3% - - CER: Constant Exchange Rates 22
  23. 23. Sales and BOI Benefited from a Very Favorable CurrencyTailwind in Q2 2012 Quarterly Currency Impact (in % points) Sales Business Operating Income +8.0% €235m +5.8% €486m +4.0% >90%(1) €120m +2.4% from USD, JPY & CNY €187m Q1 2012 Q2 2012 Q1 2012 Q2 2012 (1) Currency impact on sales in Q2 2012: USD / US dollar (+€316m); JPY / Japanese Yen (+€96m); CNY / Chinese Yuan (+€42m) 23
  24. 24. Cost of Sales Ratio Virtually Flat in Q2 2012 Cost of Sales (%) ● Q2 2012 Cost of Sales (CoS) of €2,730m, up +2.4% at CER 31.0% 31.5% 32.0% 30.8% ● Stable CoS ratio in H1 2012 vs. 30.4% 30.7% H1 2011 (30.8% vs. 30.7%) reflecting: ● Productivity enhancement (LEAN and standardization initiatives) compensating for product mix evolution ● Favourable currency impact ● CoS ratio in-line with guidance of Q1 Q2 Q3 Q4 Q1 Q2 around 31.5% for FY 2012 2011 2011 2011 2011 2012 2012 24
  25. 25. Stable R&D Expenses in Q2 2012 ● Q2 2012 R&D expenses of R&D/Sales Ratio (%) €1,239m, down -1.2% at CER 15.2% 14.3% ● R&D/Sales ratio down 0.3 points 14.1% 13.9% 13.8% 14.0% vs. Q2 2011 reflecting: ● Good internal cost management ● Ongoing transforming initiatives ● Significant investment in late-stage R&D pipeline Q1 Q2 Q3 Q4 Q1 Q2 2011 2011 2011 2011 2012 2012 25
  26. 26. Significant Improvement in SG&A to Sales Ratioin Q2 2012 SG&A/Sales Ratio (%) ● Q2 2012 SG&A expenses of €2,289m, down -4.3% at CER 27.2% ● SG&A/Sales ratio down 1.4 points 24.8% 24.2% 26.1% 24.9% 25.8% vs. Q2 2011 reflecting: ● Continued investment in Growth Platforms ● Genzyme integration synergies ● Tight control of G&A expenses Q1 Q2 Q3 Q4 Q1 Q2 2011 2011 2011 2011 2012 2012 26
  27. 27. Business Net Income Down 17.6% in Q2 2012€m Q2 2012 Q2 2011 % Change % Change (reported €) (CER)Business operating income 2,779 2,945 -5.6% -13.6%Net financial expenses (108) (100) - -Income tax expense (727) (695) - -Effective tax rate -28.0% -26.5% - -Business net income 1,944 2,150 -9.6% -17.6%Net margin 21.9% 25.8% - -Business EPS € 1.48 € 1.64 -9.8% -17.7%Average number of shares outstanding (in million) 1,317.4 1,311.6 - - CER: Constant Exchange Rates 27
  28. 28. Solid Free Cash Flow Generated in H1 2012 In €m H1 2012 ● Free Cash Flow of €3,938m, up +9.6% in H1 2012 ● Dividend of €3,487m paid in Q2 2012 ● €454m of opportunistic -10,859 -11,347 - 711 share repurchases in H1 -254 2012(1) ● Net debt increased by +4,649 FCF €488m in H1 2012 +3,938 -3,941 -231 Net Debt(2) Net Cash from CapEx Acquisitions Dividend & Restructuring Net Debt(2) Dec 31, 2011 Operating & Licensing Share Costs & Jun 30, 2012 Activities (3) Repurchase Others (1) Represents 8,014,849 shares at an average price of €56.63 (2) Including derivatives related to the financial debt: €503m at March 31, 2012, and €528m at June 30, 2012 (3) Excluding Restructuring costs 28
  29. 29. Underlying Performance in H1 2012 Underpins our Confidencein our Ability to Deliver Sustainable Growth in a Post-Cliff Era 1 Solid sales growth excluding Key Genericized Products 2 Industry-leading performance in Emerging Markets 3 Continued focus on managing our cost base 4 BNI impact of Plavix® and Avapro® loss of exclusivity in the U.S. as expected 5 Confident in delivering on guidance despite challenging global environment 29
  30. 30. APPENDICESR&D Pipeline 30
  31. 31. Late Stage Pipeline – Pharma & Vaccines Phase III Registration eliglustat tartrate N otamixaban N Quadracel® Hexaxim® Glucosylceramide synthetase inhibitor Direct Xa inhibitor Diphtheria, tetanus, pertussis DTP-HepB-Polio-Hib vaccine Gaucher disease ACS & polio vaccine; 4-6 y of age iniparib N lixisenatide (AVE0010) Fluzone® QIV IM Plavix® (BSI-201) GLP-1 agonist Quadrivalent inactivated clopidogrel bisulfate squamous NSCLC (1L) Type 2 diabetes, U.S. influenza vaccines PAD, STEMI, Japan ombrabulin (AVE8062) N New formulation VaxiGrip® QIV IM teriflunomide N Vascular disrupting agent Insulin glargine Quadrivalent inactivated Relapsing forms of multiple sclerosis Soft tissue sarcoma (2L/3L) Type 1+2 diabetes influenza vaccines (RMS) – monotherapy, U.S. / EU SAR302503 (TG101348) N mipomersen alemtuzumab N JAK-2 inhibitor Apolipoprotein B-100 antisense Anti-CD52 mAb Myelofibrosis (1L) Severe HeFH, U.S. Multiple sclerosis, U.S. / EU Jevtana® SAR236553 N Allegra® Cabazitaxel Anti-PCSK-9 mAb fexofenadine Metastatic prostate cancer (1L) Hypercholesterolemia Dry syrup, Japan N mipomersen N SYNVISC-ONE™ sarilumab (SAR153191) Apolipoprotein B-100 antisense Medical device Anti-IL-6R mAb HoFH and severe HeFH in EU; Pain in hip OA RA HoFH in U.S. MACI® Dengue lixisenatide (AVE0010) N Cell-based treatment Mild-to-severe GLP-1 agonist Articular cartilage defects dengue fever vaccine Type 2 diabetes, EU / Japan teriflunomide aflibercept N DTP-HepB-Polio-Hib Multiple sclerosis VEGF-Trap Pediatric hexavalent vaccine (adjunct therapy & CIS) 2nd line mCRC, U.S. / EU N New Molecular Entity Oncology Thrombosis Vaccines Metabolic Disorders Central Nervous System Internal Medicine Ophthalmology Genetic diseases Biosurgery Aging 31
  32. 32. Early Stage Pipeline – Pharma & Vaccines Phase II iniparib FOV1101 N SAR231893 N (BSI-201) FDC prednisolone/cyclosporine Anti-IL4 mAb Ovarian cancer (2L) Allergic conjunctivitis Asthma; Atopic dermatitis SAR3419 N N N safotibant (FOV2304) ferroquine Maytansin-loaded anti-CD19 mAb Bradykinin B1 antagonist Antimalarial B-cell malignancies refractory/relapsed Diabetic macular edema Malaria (DLBCL, ALL) SAR256212 (MM121) N SAR110894 N fresolimumab N anti-ErbB3 mAb H3 antagonist TGFβ antagonist Breast cancer (2L, 3L) Alzheimers disease Fibrosis SAR245408 (XL147) N SAR113945 N SAR97276 N Oral PI3K inhibitor IKK-β inhibitor Antimalarial Endometrial cancer (1L) Osteoarthritis Malaria SAR245409 (XL765) N SAR292833 (GRC15300) N SAR279356 (F598) N Oral dual inhibitor of PI3K & mTOR TRPV3 antagonist Anti-PNAG mAb Breast cancer (1L) Neuropathic pain, osteoarthritic pain Serious infections ombrabulin (AVE8062) ACAM-Cdiff Vascular disrupting agent Clostridium difficile Ovarian cancer (2L) Toxoid vaccine SAR302503 (TG101348) JAK-2 inhibitor Rabies VRVg Polycythemia vera (2L) Purified vero rabies vaccine Incyte (ruxolitinib) resistant/intolerant MF Jevtana® Meninge ACYW conj. Cabazitaxel, Microtubule inhibitor 2nd generation meningococcal Small cell lung cancer (2L) Conjugate infant vaccine N New Molecular Entity Oncology Thrombosis Vaccines Metabolic Disorders Central Nervous System Internal Medicine Ophthalmology Genetic diseases Biosurgery Aging 32
  33. 33. Early Stage Pipeline – Pharma & Vaccines Phase I SAR153192 N SAR405838 (MI-773) N SAR252067 N Rotavirus Anti-DLL4 mAb MDM2 / p53 antagonist Anti-LIGHT mAb Live Attenuated Tetravalent Solid tumors Solid tumors and hematological malignancies Crohn’s disease & Ulcerative colitis Rotavirus oral vaccine GZ402674 N SAR127963 N SAR339658 N Streptococcus pneumonia Non-camptothecin topo1 inhibitor P75 receptor antagonist VLA 2 antagonist Meningitis & pneumonia vaccine Solid tumors Trauma brain injury Inflammatory Bowel disease N GZ404477 N N SAR650984 SAR100842 Pseudomonas aeruginosa (AAV-hAADC) Anti-CD38 naked mAb LPA-1/LPA-3 Antibody fragment product Gene therapy Hematological malignancies Skin manifestation of scleroderma Prevention of ventilator-associated pneumonia Parkinsons disease SAR566658 N N SAR156597 N SAR391786 Tuberculosis Maytansin-loaded anti-DS6 mAb IL4/IL13 Bi-specific mAb Rehabilitation post orthopedic surgery Recombinant subunit vaccine DS6 positive solid tumors Idiopathic Pulmonary Fibrosis SAR307746 N SAR228810 N SAR407899 N RetinoStat® N Anti-Ang2 mAb Anti-protofibrillar AB mAb Rho kinase inhibitor Gene therapy Solid tumors Alzheimer’s disease Diabetic nephropathy Wet age-related macular degeneration (AMD) SAR125844 N SAR399063 N lixisenatide + Lantus® StarGen® N C-Met kinase inhibitor DHA-GLP + vit D GLP-1 agonist + insulin glargine Gene therapy Solid tumors Pre-sarcopenia Fix-Flex / Type 2 diabetes Stargardt disease Combinations N SAR164653 N GZ402663 (sFLT-01) N SAR404460 SAR245409 / MSC1936369B Cathepsin A inhibitor Gene therapy DHA-GPL + Vit D SAR245408/SAR256212 (MM121) CV-related complications & deaths in Age related Macular Degeneration Pre-sarcopenia Solid tumors diabetic patients (AMD) SAR393590 (Oral clofaribine) GZ402665 N SAR126119 N UshStat® N DNA synthesis inhibitor (rhASM) TAFIa inhibitor Gene therapy Hematological malignancies Niemann-Pick type B Acute ischemic stroke Usher syndrome 1B Jevtana® Cabazitaxel, Microtubule inhibitor Gastric cancer (2L) N New Molecular Entity Oncology Thrombosis Vaccines Metabolic Disorders Central Nervous System Internal Medicine 33 Ophthalmology Genetic diseases Biosurgery Aging
  34. 34. R&D Pipeline Summary TableNew Molecular Entities (NMEs) and Vaccines Phase I Phase II Phase III Registration TOTALOncology 7 4 3 1 15Metabolic Disorders 2 0 1 2 5Thrombosis 1 0 1 0 2Central Nervous System 2 0 0 2 4 51Internal Medicine 4 5 1 0 10Ophthalmology 4 2 0 0 6Genetic Diseases 1 0 1 0 2Aging 4 3 0 0 7Vaccines 4 3 5 1 13TOTAL 29 17 12 6 64 46 18 NMEs & Vaccines 34
  35. 35. Expected R&D Milestones – Pharmaceuticals Product Event Timing Zaltrap® (aflibercept) Expected regulatory decision in 2nd line mCRC in the U.S. Q3 2012 AubagioTM (teriflunomide) Expected regulatory decision in RMS in the U.S. Q3 2012 Lyxumia® (lixisenatide) Expected regulatory decision in type 2 diabetes in EU Q4 2012 Zaltrap® (aflibercept) Expected regulatory decision in 2nd line mCRC in EU Q4 2012 KynamroTM (mipomersen) Expected regulatory decision in hoFH and severe heFH in EU Q4 2012 Lyxumia® (lixisenatide) Regulatory FDA submission in type 2 diabetes in U.S. Q4 2012 ombrabulin Phase III headline results in sarcoma Q4 2012 AubagioTM (teriflunomide) Expected regulatory decision in RMS in EU Q1 2013 KynamroTM (mipomersen) Expected regulatory decision in hoFH in the U.S. Q1 2013 LemtradaTM (alemtuzumab) Expected regulatory decisions in RMS in EU and the U.S. Q2 2013 iniparib Phase III headline results in 1st line squamous NSCLC Q2 2013 otamixaban Phase III headline results in ACS Q2 2013 JAK2 inhibitor Phase III headline results in myelofibrosis Q2 2013 35
  36. 36. Expected R&D Milestones – Vaccines Product Event Timing Shan5® Start of Phase III study Q3 2012 Fluzone® QIV IM Submission of regulatory file in the U.S. Q3 2012 HexaximTM Submission of regulatory file in EU Q3 2012 Fluzone® QIV ID Start of Phase III study Q4 2012 Vaxigrip® QIV IM Submission of regulatory file in EU Q1 2013 Fluzone® QIV IM Expected licensure in the U.S. Q2 2013 HexaximTM Expected licensure in EU and international countries Q2 2013 36
  37. 37. APPENDICESFINANCE 37
  38. 38. Business Net Income StatementSecond quarter 2012 Pharmaceuticals Vaccines Animal Health Other Group TotalMillions of euros Q2 2012 Q2 2011 % change Q2 2012 Q2 2011 % change Q2 2012 Q2 2011 % change Q2 2012 Q2 2011 Q2 2012 Q2 2011 % changeNet sales 7,511 7,147 5.1% 783 706 10.9% 576 496 16.1% 8,870 8,349 6.2%Other revenues 233 412 (43.4%) 5 5 - 9 5 80.0% 247 422 (41.5%)Cost of sales (2,249) (2,146) 4.8% (303) (282) 7.4% (178) (160) 11.3% (2,730) (2,588) 5.5%As % of net sales (29.9%) (30.0%) (38.7%) (39.9%) (30.9%) (32.3%) (30.8%) (31.0%)Gross profit 5,495 5,413 1.5% 485 429 13.1% 407 341 19.4% 6,387 6,183 3.3%As % of net sales 73.2% 75.7% 61.9% 60.8% 70.7% 68.8% 72.0% 74.1%Research and development (1,057) (1,023) 3.3% (143) (139) 2.9% (39) (35) 11.4% (1,239) (1,197) 3.5%expensesAs % of net sales (14.1%) (14.3%) (18.3%) (19.7%) (6.8%) (7.1%) (14.0%) (14.3%)Selling and general (1,939) (1,969) (1.5%) (158) (137) 15.3% (191) (161) 18.6% (1) (1) (2,289) (2,268) 0.9%expensesAs % of net sales (25.8%) (27.6%) (20.1%) (19.4%) (33.1%) (32.5%) (25.8%) (27.2%)Other current operating (165) (20) (2) 10 13 19 (152) 7income/expensesShare of profit/loss ofassociates and joint 123 276 (1) 2 122 278ventures*Net income attributable to (49) (58) (1) (50) (58)non-controlling interestsBusiness operating 2,408 2,619 (8.1%) 183 153 19.6% 176 155 13.5% 12 18 2,779 2,945 (5.6%)incomeAs % of net sales 32.1% 36.6% 23.4% 21.7% 30.6% 31.3% 31.3% 35.3%Financial income and (108) (100)expensesIncome tax expense (727) (695)Tax rate** 28.0% 26.5%Business net income 1,944 2,150 (9.6%)As % of net sales 21.9% 25.8%Business earnings pershare*** (in euros) 1.48 1.64 (9.8%) * Net of ta x ** Determined on the basis of Business i ncome before tax, a ssociates, and non-controlling interests *** Ba sed on an average number of s hares outstanding of 1,317.4 mi llion i n the second quarter of 2012 a nd 1,311.6 mi llion i n the second quarter of 2011
  39. 39. Business Net Income StatementFirst-half 2012 Pharmaceuticals Vaccines Animal Health Other Group TotalMillions of euros H1 2012 H1 2011 % change H1 2012 H1 2011 % change H1 2012 H1 2011 % change H1 2012 H1 2011 H1 2012 H1 2011 % changeNet sales 14,827 13,730 8.0% 1,400 1,308 7.0% 1,154 1,090 5.9% 17,381 16,128 7.8%Other revenues 645 816 (21.0%) 10 10 - 18 9 100.0% 673 835 (19.4%)Cost of sales (4,431) (4,073) 8.8% (566) (550) 2.9% (346) (327) 5.8% (5,343) (4,950) 7.9%As % of net sales (29.9%) (29.7%) (40.4%) (42.1%) (30.0%) (30.0%) (30.8%) (30.7%)Gross profit 11,041 10,473 5.4% 844 768 9.9% 826 772 7.0% 12,711 12,013 5.8%As % of net sales 74.5% 76.3% 60.3% 58.7% 71.6% 70.8% 73.1% 74.5%Research and development (2,051) (1,963) 4.5% (284) (264) 7.6% (80) (70) 14.3% (2,415) (2,297) 5.1%expensesAs % of net sales (13.8%) (14.3%) (20.3%) (20.2%) (6.9%) (6.4%) (13.9%) (14.2%)Selling and general (3,763) (3,614) 4.1% (288) (264) 9.1% (358) (322) 11.2% (1) (1) (4,410) (4,201) 5.0%expensesAs % of net sales (25.4%) (26.3%) (20.6%) (20.2%) (31.1%) (29.6%) (25.4%) (26.0%)Other current operating (21) 42 (1) (1) 1 (7) 16 (11) (5) 23income/expensesShare of profit/loss ofassociates and joint 425 559 (6) (2) 13 419 570ventures*Net income attributable to (104) (136) (104) (136)non-controlling interestsBusiness operating 5,527 5,361 3.1% 265 237 11.8% 389 373 4.3% 15 1 6,196 5,972 3.8%incomeAs % of net sales 37.3% 39.0% 18.9% 18.1% 33.7% 34.2% 35.6% 37.0%Financial income and (227) (178)expensesIncome tax expense (1,583) (1,474)Tax rate** 28.0% 27.5%Business net income 4,386 4,320 1.5%As % of net sales 25.2% 26.8%Business earnings pershare*** (in euros) 3.32 3.30 0.6% * Net of ta x ** Determined on the basis of Business i ncome before tax, a ssociates, and non-controlling interests *** Ba sed on an average number of s hares outstanding of 1,319.3 mi llion i n the first semester of 2012 a nd 1,308.6 mi llion i n the first semester of 2011
  40. 40. Reconciliation of Business Net Income to ConsolidatedNet Income Attributable to Equity Holders of Sanofi Millions of euros Q2 2012 Q2 2011 % change Business net income 1,944 2,150 (9.6%) Amortization of intangible assets (842) (965) Impairment of intangible assets (39) (37) Fair value remeasurement of contingent consideration liabilities (73) (20) Expenses arising from the impact of acquisitions on inventories (3) (262) Restructuring costs (163) (345) Other gains and losses, and litigation Tax effect of: 354 492 amortization of intangible assets 283 296 impairment of intangible assets 14 10 fair value remeasurement of contingent consideration liabilities 1 5 expenses arising on the workdown of acquired inventories 1 78 restructuring costs 55 108 other gains and losses, and litigation (5) Share of items listed above attributable to non-controlling interests Restructuring costs of associates and joint ventures, and expenses arising from the (7) (7) impact of acquisitions on associates and joint ventures Net income attributable to equity holders of sanofi 1,171 1,006 16.4% Consolidated earnings per share (in euros) 0.89 0.77 15.6% 40
  41. 41. Reconciliation of Business Net Income to ConsolidatedNet Income Attributable to Equity Holders of Sanofi Millions of euros H1 2012 H1 2011 % change Business net income 4,386 4,320 1.5% Amortization of intangible assets (1,675) (1,701) Impairment of intangible assets (40) (69) Fair value remeasurement of contingent consideration liabilities (106) (66) Expenses arising from the impact of acquisitions on inventories (17) (264) Restructuring costs (250) (467) Other gains and losses, and litigation (517) Tax effect of: 714 1,002 amortization of intangible assets 615 559 impairment of intangible assets 14 20 fair value remeasurement of contingent consideration liabilities 3 5 expenses arising on the workdown of acquired inventories 5 78 restructuring costs 77 150 other gains and losses, and litigation 190 Share of items listed above attributable to non-controlling interests 1 Restructuring costs of associates and joint ventures, and expenses arising from the (15) (14) impact of acquisitions on associates and joint ventures Net income attributable to equity holders of sanofi 2,998 2,224 34.8% Consolidated earnings per share (in euros) 2.27 1.70 33.5% 41
  42. 42. Consolidated Income Statements € million Q2 2012 Q2 2011 H1 2012 H1 2011 Net sales 8,870 8,349 17,381 16,128 Other revenues 247 422 673 835 Cost of sales (2,733) (2,850) (5,360) (5,214) Gross profit 6,384 5,921 12,694 11,749 Research and development expenses (1,239) (1,197) (2,415) (2,297) Selling and general expenses (2,289) (2,268) (4,410) (4,201) Other operating income 113 73 319 191 Other operating expenses (265) (66) (324) (168) Amortization of intangible assets (842) (965) (1,675) (1,701) Impairment of intangible assets (39) (37) (40) (69) Fair value remeasurement of contingent consideration liabilities (73) (20) (106) (66) Restructuring costs (163) (345) (250) (467) Other gains and losses, and litigation (517) Operating income 1,587 1,096 3,793 2,454
  43. 43. Consolidated Income Statements € million Q2 2012 Q2 2011 H1 2012 H1 2011 Operating income 1,587 1,096 3,793 2,454 Financial expenses (133) (133) (272) (234) Financial income 25 33 45 56 Income before tax and associates and joint ventures 1,479 996 3,566 2,276 Income tax expense (373) (203) (869) (472) Share of profit / loss of associates and joint ventures 115 271 404 556 Net income 1,221 1,064 3,101 2,360 Net income attributable to non-controlling interests 50 58 103 136 Net income attributable to equity holders of sanofi 1,171 1,006 2,998 2,224 Average number of shares outstanding (million) 1,317.4 1,311.6 1,319.3 1,308.6 Consolidated earnings per share (in euros) 0.89 0.77 2.27 1.70
  44. 44. Change in Net Debt H1 H1 (€ million) 2012 2011 Business net income 4,386 4,320 Depreciation, amortization and impairment of property, plant and equipment and 627 555 intangible assets Gains and losses on disposals of non-current assets, net of tax (40) (35) Other non cash items 360 276 (1) Operating cash flow before changes in working capital 5,333 5,116 Changes in working capital (1) (684) (754) Acquisitions of property, plant and equipment and software (711) (768) Free cash flow (1) 3,938 3,594 Acquisitions of intangible assets excluding software (75) (64) Acquisitions of investments in consolidated undertakings including assumed debt (2) (179) (13,935) Restructuring costs (504) (353) Proceeds from disposals of property, plant and equipment, intangible assets and other 71 71 non-current assets, net of tax Issuance of Sanofi shares 74 28 Dividends paid to shareholders of Sanofi (3,487) (1,372) Acquisition of treasury shares (454) (113) Disposals of treasury shares 1 (3) Other items 128 489 Change in net debt (488) (11,654) (1) Excl uding restructuring costs. (2) In 2011: (13,528)M€ rel ated to Genzyme acquisition (3) In 2012 : of whi ch foreign exchange effect on net debt (68M€). 44
  45. 45. Simplified Consolidated Balance Sheets ASSETS 06/30/2012 12/31/2011* LIABILITIES & EQUITY 06/30/2012 12/31/2011* € million € million Property, plant and equipment 10,723 10,750 Equity attributable to equity holders of sanofi 56,208 56,203 Intangible assets (including goodwill) 61,462 62,221 Equity attributable to non-controlling interests 146 170 Non-current financial assets & investments in associates and deferred 7,859 6,839 Total equity 56,354 56,373 tax assets Non-current assets 80,044 79,810 Long-term debt 10,270 12,499 Inventories, accounts receivable and Non-current liabilities related to business 17,141 16,667 1,449 1,336 other current assets combinations and to non-controlling interests Cash and cash equivalents 4,307 4,124 Provisions and other non-current liabilities 11,175 10,346 Current assets 21,448 20,791 Deferred tax liabilities 6,398 6,530 Non-current liabilities 29,292 30,711 Accounts payable & Other current liabilities 10,008 10,404 Current liabilities related to business 154 220 combinations and to non-controlling interests Short-term debt and current portion of long- 5,912 2,940 term debt Current liabilities 16,074 13,564 Liabilities related to assets held for sale Assets held for sale or exchange 251 67 23 20 or exchange TOTAL ASSETS 101,743 100,668 TOTAL LIABILITIES & EQUITY 101,743 100,668 * In accordance with IFRS 3, sanofi has revised during the measurement period certain provisional amounts recognized in 2011. 45

×