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Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
Q2 2013 Results
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Q2 2013 Results

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Q2 2013 Results

Q2 2013 Results

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  • 1. Q2 2013 RESULTS August 1, 2013
  • 2. 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.
  • 3. 33 Agenda Business Performance ● ChristopherA. Viehbacher, ChiefExecutive Officer ● Peter Guenter, ExecutiveVicePresident,GlobalCommercial Operations ● Pascale Witz, ExecutiveVicePresident,GlobalDivisions& StrategicCommercialDevelopment ● Olivier Charmeil, Executive Vice President,Vaccines Financial Performance ● Jérôme Contamine,ExecutiveVice President,ChiefFinancialOfficer Conclusion ● ChristopherA. Viehbacher, ChiefExecutive Officer Q&A
  • 4. BUSINESS PERFORMANCE 4
  • 5. Q2 2013 Was a Difficult Quarter Tough comparison to last year due to the residual impact of the patent cliff Charge related to Brazil Commercial underperformancein certain business areas Continue to expect to return to growth in H2 2013(1) Strong progress made in R&D 1 2 3 5 4 5 (1) At constant exchange rates
  • 6. Q2 2013FX Impact - €223m Key Genericized Products - €305m Growth Platforms + €354m Brazil generics - €212m Others - €481m Q2 2012 €8,870m Q2 2013 Sales Were Adversely Affected by Patent Losses, Brazil and Currency 6 (1) “Others” includes - €97m fromEU tail products (Other Rx Drugs), - €58m on three genericized brands in Japan (Allegra®, Myslee® and Amaryl®) (2) Reported sales of Brazil generics w ere €75min Q2 2012 and -€123m in Q2 2013 (of w hich -€122mw asan adjustment) (3) Currency impact on sales in Q2 2013: Japanese Yen (-€145.6m); US Dollar (-€51.7m); Venezuelan Bolivar (-€35.6m); South African Rand (-€13.4m) (4) On a reported basis, sales in Q2 2013 w ere down -9.8% Q2 2013 Sales (€m) (2) €8,003m excluding Brazil generics -6.3% at CER(4) (1) (3)
  • 7. Q2 2013 Was the Final Quarter with Significant Negative Sales Impact Expected from the Patent Cliff 20132012201320122013201220132012 7 Key Genericized Products (1) - Quarterly Sales (€m) (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) -€553m at CER -€481m at CER ILLUSTRATIVE ILLUSTRATIVE €813m €259m €752m €267m €399m €257m Q1 Q2 Q3 Q4
  • 8. 8 "Other Revenues" "Income from Associates" (1) Avapro® on March 30, 2012 and Plavix® on May 17, 2012 (2) At constant exchange rates. Impact on Business Net Income fromthe loss of U.S. exclusivity of Plavix® and Avapro® w as€562min Q1 2013 and €233m in Q2 2013 Loss of Exclusivity of Plavix® & Avapro® in the U.S.(1) Impact on H1 2013 Business Net Income: €795m (2) Q2 2013 Also Marked the End of Significant EPS Impact from the Loss of U.S. Exclusivity of Plavix® and Avapro® 20132012201320122013201220132012 €426m €98m €247m €83m €297m €122m Q1 Q2 Q1 Q2 €18m €3m
  • 9. A Charge Relating to Brazil Was Taken in Q2 2013 9 ● Trade channel inventory of generic products at June 30, 2013 was significantly and inappropriately in excess of volumes needed to satisfy sell out demand ● Q2 2013 results reflect the following: (1) When including the net sales adjustment of €122m booked in Q2 2013, Brazilgenerics had negative sales of - €123m  An adjustment reducing quarterly net sales by €122m(1) for product returns, customer discounts and rebates  An additional provision of €79m mainly for inventory write-offs Brazil
  • 10. Vaccines Growth Platforms Grew by +6.2% Reaching 71.9% of Sales in Q2 2013(1) 10 (1) Excluding Brazil generics. When including Brazil generics , Grow th Platforms grew by +2.5% at CER and reached 71.4% of sales in Q2 2013 (2) Excluding Brazil generics . When including Brazil generics , Emerging Markets sales w ere down -2.3% at CER in Q2 2013 and up +1.9% in H1 2013 (3) Genzyme perimeter includes Rare Diseases and Multiple Sclerosis franchises (4) Includes new product launches which do not belong to the other Grow th Platforms listed above: Multaq®, Jevtana®, Mozobil®, Zaltrap® and Auvi-Q™ +16.2% +0.4% +1.8% -5.7% +25.6% Other Innovative Products(4) €171m +14.5% +5.3%(2) Consumer Healthcare €760m Diabetes Solutions €1,621m €729m Animal Health €529m Emerging Markets €2,669m Genzyme(3) €525m Q2 2013 Growth at CER H1 2013 Growth at CER +17.8% +7.2% +2.5% -4.4% +25.5% +14.1% +6.6%(2)
  • 11. (1) World excluding U.S., Canada, Western Europe (France, Germany, UK, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Holland, Austria, Sw itzerland, Sweden, Ireland, Finland, Norw ay, Iceland, Denmark), Japan, Australia and New Zealand (2) When including Brazil generics, Emerging Markets sales w ere down -2.3% at CER (3) Reported Group sales In Latin America w ere €642min Q2 2013. When including Brazil generics, Latin America sales w ere down -22.1% at CER Emerging Markets Sales Highlight Various Dynamics ● Q2 2013 Emerging Markets sales of €2,669m(1) ● Up +5.3% at CER when excluding Brazil generics(2) ● Double-digitgrowth in Diabetes,Vaccines,Genzyme and Animal Health ● Weakersales of Generics and lower sales of Oncologyproducts 33.3% 30.8% 24.5% 11.4% 11 (1) +9.6% +2.0% +1.3% +9.6%Growth at CER Q2 2013 Sales (€m) excluding Brazil generics (3)
  • 12. 12 USA: €903m +20.9% Emerging Markets: €230m +20.2% Western EU: €203m +5.2% RoW: €73m +10.5% Growth at CER ● Q2 2013 Diabetes sales of €1,621m, up +16.2% at CER ● Double-digitgrowth for ten consecutive quarters ● Strong performance of Lantus®, up +17.7% at CER ● SoloSTAR® accounted for56.4% of U.S. sales (vs. 51.9% in Q2 2012) ● Recovery of Apidra® continues, up +25.0% at CER Quarterly Sales (€m) €969m €1,228m Q2 2013 Was Another Strong Quarter for Diabetes €1,409m
  • 13. (1) Source: Insight Health, Weekly Data in Units, MS w ithin GLP-1 market 13 ● First sales recorded in Germany and the UK ● >10% share in 18 weeks in Germany(1) ● EU launch rollout to continue throughout 2013 ● Regulatory approval granted in Japan in late June 2013 ● Regulatory reviews continue worldwide ● FDA review ongoing including interim ELIXA data ● ELIXACV outcome trial expected to complete enrolmentby end 2013 Encouraging Lyxumia® Launch in Germany and the UK 0% 10% 20% 30% 40% 50% 60% 70% Byetta Victoza Bydureon Lyxumia ® ® ® ® 10.3% GLP-1 Weekly Market Share (Volume %)
  • 14. 14 Consumer Healthcare Sales Driven by Top 4 Brands in Q2 2013 Q2 2013 Sales (€m) ● Q2 2013 sales of €729m, up +1.8% at CER ● Solid growth of 4 largest brands: Doliprane® ,Allegra® , Essentiale® and Enterogermina® ● Favorable sequential trend in China following Q1 2013 changes implemented indistribution network and reduced inventory levels ● Launch of Rolaids® in the U.S. expected in Q3 2013 ● Positive FDA AdCom Rx-to-OTC switch of Nasacort® AQ in the U.S. on July 31, 2013 Emerging Markets €352m USA €151m Western EU €162m RoW €64m
  • 15. (1) H1 2013 sales w ere €1,457m, up +7.2% at CER (2) PPH: Polio Pertussis Hib Q2 2013 Vaccines Growth Mostly Affected by Phasing of Flu Vaccines and Menactra® 1515 ● Q2 2013 sales of €760m, up +0.4% at CER (1) ● PPH(2) sales of €293m, +12.5% at CER driven by Pentaxim® in Emerging Markets ● Progressive U.S. supply recoveryof Pentacel® foreseenstarting in Q3 2013 ● Menactra® sales of €100m, -6.3% at CER reflecting U.S. public orders phasing ● A new record flu season in H1 2013 in the Southern Hemisphere (+3.0% at CER) ● Lower flu vaccine sales of €53m in Q2 2013 following solid Q1 2013 sales ● Early shipments of Fluzone® in the U.S. occurred in July 2013 Differentiated Vaccines Allow for the “Right Dose, Right Patient” Approach
  • 16. 16 Merial Performance Reflects Continuous Pressure on Frontline® in the U.S. and Europe in Q2 2013 Quarterly Sales (€m)● Q2 2013 sales of €529m, down -5.7% at CER ● Companion Animals sales of €323m, down -14.0% at CER impacted by lower demand for Frontline® ● Weakseason forfleas and ticks given unfavorable weather conditions ● Competitionfrom Rx-only products in veterinary channels ● High promotional spend from fipronil branded generics ● Production Animals sales of €206m, up +11.1% at CER €529m 2011 2012 2013
  • 17. €74m €113m €150m €91m €126m €171m 17 Genzyme Rare Diseases Products Delivered Double-Digit Growth in Q2 2013 & Q2 2013 Q2 2012 Q2 2013 Q2 2012 Q2 2013 Q2 2012 ● Q2 2013 Rare Disease sales of €492m, up +17.7% at CER ● Cerezyme® grew +18.0% at CER driven by restored supply and new patients ● Solid sales in Emerging Markets ● Myozyme® up +15.0% at CER driven by new patient accruals in EU ● Fabrazyme® sales were up +28.4% at CER driven by new patients accruals and Replagal® switches(1) ● Strong performancein WesternEU and the U.S. Quarterly Sales (€m) (1) Replagal® (agalsidase alfa) is a product of Shire
  • 18. 1818 (1) NAS: New Active Substance (2) IMS Weekly Total Prescriptions (3) RRMS: Relapsing Remitting Multiple Sclerosis Lemtrada™ is developed in collaboration w ith Bayer HealthCare Genzyme Is Well Positioned to Enter the €10bn Global MS Market with a Franchise Approach ● U.S. sales of €33m in Q2 2013 ● Positive CHMP opinion granted in March 2013 ● NAS(1) status granted in June 2013 ● EU launch rollout to start in Q4 2013 ● CHMP recommendation for approval obtained in June 2013 ● Broad approved indication by CHMP: treatment of adult patients with RRMS(3) with active disease definedby clinical or imaging features ● EU launch rollout to start in Q4 2013 and FDA action expected in late 2013 U.S. Weekly TRx(2) , , , , , , ,
  • 19. Multiple Regulatory Approvals and Positive Phase III Readouts Achieved in the Last 3 Months 5 2 Key Achievements in Last 3 Months Regulatory Approvals Positive Phase III Readouts ● Fedratinib (JAK2) - JAKARTA Phase III in Myelofibrosis ● U300 - EDITION I & II Phase III in Type 2 Diabetes(4) ● Aubagio® - NAS(1) status in EU ● Lemtrada™ - positive CHMP opinion in EU(2) ● Fluzone® Quadrivalent IM - FDA approval ● Lyxumia® - approval in Japan(3) ● Nasacort® Rx-to-OTC switch - positive FDA AdCom 19 (1) NAS: New Active Substance (2) Lemtrada™ is developed in collaboration w ith Bayer HealthCare (3) Lyxumia® is in-licensed fromZealand Pharma (4) U300 is an investigational new formulation of insulin glargine
  • 20. Investigational New Insulin U300: Striving to Further Enhance the Value of Current Gold Standard Basal Insulin 20 Product Characteristics 1 U300 PK/PD Profile(1)2 Clinical Benefits(2)3 Flatter PK Profile Serum Insulin Glargine Concentration More Prolonged PD Profile Glucose Infusion Rate EDITIONI EDITIONII • Equivalent glycemic control • Fewer nocturnal hypoglycemic events • Topline results confirm EDITION I - 21% U300Lantus® ● Topline results of EDITIONIII & IV expectedin H2 2013 ● Expected regulatory submissionin H1 2014 in U.S. and EU Next Steps (1) Dahmen R et al, ADA 2013, abstract no. 113-OR. Euglycemic clamp study in T1D in steady state (2) Riddle MC et al, ADA 2013, Late Breaking Poster 43-LB - Primary endpoint: Change in A1c frombaseline to Month 6. First main secondary endpoint: Number (%) percentage of patients reporting at least one severe or confirmed (plasma glucose ≤70 mg/dL) nocturnal [00:00 – 05:59 hrs] hypoglycemic event from month 3 to 6 (RR: Relative risk) Slower Insulin Glargine Release After Subcutaneous Injection U300 Lantus® U300 Lantus®
  • 21. Steady Flow of Clinical and Regulatory Milestones Expected before Year End 21 2013 RegulatoryMilestones Q3 Q4 ● Aubagio® final EC decisionin Multiple Sclerosisin EU  ● Lemtrada™ finalEC decisionin Multiple Sclerosisin EU  ● Eliglustat regulatory submissionin the U.S. and EU in Gaucher disease  ● Fedratinib (JAK2)regulatory submissionin the U.S. and EU in Myelofibrosis  ● Lemtrada™ FDAdecisionin Multiple Sclerosisin the U.S.  Headline Phase IIIData Releases Q3 Q4 ● U300 in Diabetes (EDITIONIII & IV) ● Alirocumab (Anti-PCSK9)in Hypercholesterolemia(ODYSSEYMono)  Start of Late ClinicalDevelopmentStage Q3 Q4 ● Dupilumab(Anti-IL-4Rα)Phase IIb start in Asthma and in Atopic Dermatitis  ● C. Difficile Toxoid VaccinePhase III start 
  • 22. FINANCIAL PERFORMANCE Jérôme Contamine Executive Vice President, Chief Financial Officer 22
  • 23. Q2Q1Q4Q3Q2Q1 23 Q2 2013 Performance Impacted by Unfavorable FX, Notably the Continued Yen Depreciation Currency impact on sales in Q2 2013: Japanese Yen (-€145.6m); US Dollar (-€51.7m); Venezuelan Bolivar (-€35.6m); South African Rand (-€13.4m) Quarterly Currency Impact (in €m) Q2Q1Q4Q3Q2Q1 +2.4% +5.8% +4.0% +8.0% €486m €187m €235m €120m +6.4% €561m +8.2% €277m Sales Business Operating Income +1.9% €166m +2.1% €61m -2.5% -€212m -4.5% -€154m -3.5% -€305m 2012 2013 -€125m -5.9% 2012 2013
  • 24. (1) With the retroactive application of IAS19R (2) Business operating income w as down -12.2% at CER in Q2 2013 excluding Brazil generics 24 Q2 2013 Was a Challenging Quarter €m Q2 2013 Q2 2012 % Change (reported €) % Change (CER) Net sales 8,003 8,870 -9.8% -6.3% Other revenues 83 247 -66.4% -66.0% Cost of sales (2,672) (2,725) -1.9% +0.7% Gross profit 5,414 6,392 -15.3% -11.7% R&D (1,186) (1,235) -4.0% -2.4% SG&A (2,309) (2,285) +1.1% +4.3% Other current operating income & expenses 140 (141) - - Share of Profit/Loss of associates 3 122 - - Minority interests (45) (50) - - Business operating income(2) 2,017 2,803 -28.0% -23.6% Business operatingmargin 25.2% 31.6% - - CER: Constant Exchange Rates (1)
  • 25. Q2 2013 -€0.17 Q2 2012 €1.46 Q1 2013 €1.22 Q1 2012 €1.83 Q2 2013 Business EPS Was Down, Primarily due to the Patent Cliff, FX and Brazil Business EPS 25 -18.5% at CER(2) (1) (1) €1.11 (4,5) (3) (3) Brazil generics (1) With the retroactive application of IAS19R (2) On a reported basis, Q2 2013 EPS w as down -24.0% (3) Average number of shares outstanding w as 1,325.7 million in Q2 2013 versus 1,317.4 million in Q2 2012 (4) This reflects the total negative impact of Brazil generics on Q2 2013 Business EPS, reflecting a negative sales variation of €212m (including an adjustment reducing quarterly sales by €122m) as w ellas additional provisions of €79m (5) At CER, Brazilgenerics impacted business EPS by €0.19 in Q2 2013
  • 26. Multiple Factors Adversely Impacted Q2 2013 CoS Ratio ● Stable Cost of Sales (CoS) in Q2 2013: €2,672m, up +0.7% at CER ● CoS ratio of 33.4% in Q2 2013 vs. Q2 2012 reflecting: ● Improvementin CoS for Lantus® and Genzyme ● Loss of sales from Key Genericized Products with relatively high margin ● Unfavourable currency impact ● Sales adjustment in Brazil ● Mix effects from higher vaccines sales in EM and from VaxServe(2) and lower Frontline® sales 26 Cost of Sales (%) 2012 2013 30.7% (1) Including Brazil generics, cost of sales ratio w as 33.4% in Q2 2013 (2) VaxServe, a SanofiPasteur company, is a U.S. healthcare supplier serving primary care physician offices, community immunization providers, immunizing pharmacies, travelclinics and corporations excluding Brazil generics (1) 32.1%
  • 27. Investing in Late Stage Programs While Keeping a Tight Control of R&D Expenses 27 ● Q2 2013 R&D expenses of €1,186m, down -2.4% at CER reflecting: ● Ongoing multiple Phase IIb/IIItrials (e.g. alirocumab, U300, sarilumab, dupilumab) ● Continued reduction of internal fixed costs ● Quarterly R&D spend in line with guidance 27 R&D Expenses (€m) €1,186m€1,235m 2012 2013
  • 28. As Expected, SG&A Increased in Q2 2013 Driven by Launch Costs and Investment in Growth Platforms 28 ● Q2 2013 SG&A expenses of €2,309m, up +4.3% at CER reflecting: ● Costsavings reallocated to Sales & Marketing investment in launch and pre-marketing activities e.g. Aubagio® , Lemtrada™, Lyxumia® , Auvi-Q™(1) , Zaltrap®(2) ● Continued investment in Growth Platforms,in particular in Diabetes ● Flat G&A expenses 28 SG&A Expenses (€m) €2,309m€2,285m 2012 2013 (1) SanofiU.S. licensed the North American commercialization rights to Auvi-Q™ fromIntelliject Inc. (2) Collaboration w ith Regeneron
  • 29. Net Debt Jun 30, 2013 Other -312 Acquisitions, Licensing & Disposals -149 CapEx - 586 Dividend Payment -3,638 Share Repurchase -890 Proceeds from Issuance of Shares +741 Net Cash from Operating Activities Net Debt Dec 31, 2012 Cash Flow Reflects Dividend Payment of €3.6bn and Share Repurchase of €890m in H1 2013 29 (1) (2) -7,719 -10,172 +2,381 (1) H1 2013 (€m) (1) Including derivatives related to the financialdebt +€431m at Dec. 31, 2012 and +€307m at June 30, 2013 (2) Excluding Restructuring costs (3) Other including Restructuring costs (3)
  • 30. Q3 2013 Will See a Significantly Reduced Impact from the Cliff Q3 2013 Patent Cliff Impact 30 ● Eloxatin® in the U.S.(1) ● Sales of €72m in Q3 2012 ● Aprovel® and Co-Aprovel® in EU(2,3) ● Sales of €155m in Q3 2012 ● One-time payment by BMS following alliance restructuring ● $80m in Q3 2012 (1) Loss of exclusivity for Eloxatin® in the U.S. w as August 9, 2012 (2) Aprovel® compound patent expired in August 15, 2012 in most EU countries (3) Co-Aprovel® compound patent w illexpire in October 15, 2013 in EU. In France, Co-Aprovel® has been facing generic competition since September 2012
  • 31. Guidance for FY 2013 Outlook for 2013 Adjusted 31 (1) FY 2012 Business EPS of €6.14 w ith the retroactive application of IAS19R 31 ● Given the impact of Brazil and the year-to-date performance, 2013 business EPS is expected to be 7% to 10% lower than 2012 at CER(1) , barring major unforeseen adverse events
  • 32. CONCLUSION Christopher A. Viehbacher Chief Executive Officer 32
  • 33. The Executive Leadership Team Has Been Strengthened 33 Roberto Pucci Executive VP Human Resources Pascale Witz Executive VP Global Divisions & Strategic Commercial Development Carsten Hellman Executive VP Merial David-Alexandre Gros Executive VP Chief Strategy Officer Elias Zerhouni President Global R&D Jérôme Contamine Executive VP Chief Financial Officer Olivier Charmeil Executive VP Sanofi Pasteur Karen Linehan Executive VP Legal Affairs & General Counsel Philippe Luscan Executive VP Global Industrial Affairs Peter Guenter Executive VP Global Commercial Operations Christopher A. Viehbacher Chief Executive Officer David Meeker Executive VP Genzyme Composition of the Executive Committee as of September 1st, 2013
  • 34. Sanofi’s Growth Profile Poised to Emerge despite Operational Challenges in Q2 2013 Q2 2013 was the final quarter with significant negative impact from the patent cliff and was also impacted by Brazil and commercial underperformance in certain business areas H1 2013 sales growth of +7.7% from Growth Platforms(1) (71.4% of sales) continues to demonstrate the value of Sanofi’s integrated business model Sanofi expects to return to growth in H2 2013 Sanofi continues to make strong progress in delivering a growing portfolio of high potential R&D assets The executive leadership team has been strengthened and new management has been appointed in areas of underperformance 1 2 3 4 34 5 (1) Excluding Brazil generics. When including Brazil generics, Grow th Platforms grew +5.4% and represented 71.2% of sales in H1 2013
  • 35. APPENDICES R&D Pipeline 35
  • 36. 36 Late Stage Pipeline – Pharma & Vaccines eliglustat tartrate Glucosylceramide synthetase inhibitor Gaucher disease U300 Insulin glargine Type 1+2 diabetes Quadracel® Diphtheria, tetanus, pertussis & polio vaccine; 4-6 y of age Aubagio® (teriflunomide) Relapsing forms of Multiple sclerosis (RMS) – Monotherapy, EU fedratinib JAK2 inhibitor Myelofibrosis (1L) Kynamro™ (mipomersen) Apolipoprotein B-100 antisense Severe HeFH, U.S. Dengue Mild-to-severe dengue fever vaccine Lemtrada™ (alemtuzumab) Anti-CD52 mAb Multiple sclerosis, EU, U.S. Jevtana® (cabazitaxel) Metastatic prostate cancer (1L) alirocumab Anti-PCSK-9 mAb Hypercholesterolemia DTP-HepB-Polio-Hib (PR5I) Pediatric hexavalent vaccine Lyxumia® (lixisenatide) GLP-1 agonist Type 2 diabetes, U.S. SYNVISC-ONE® Medical device Pain in hip OA sarilumab Anti-IL-6R mAb Rheumatoid arthritis Fluzone® QIV ID Quadrivalent inactivated influenza vaccine intradermal VaxiGrip® QIV IM Quadrivalent inactivated influenza vaccine MACI® Cell-based treatment Femoral chondyle cartilage defects, U.S. SAR399063 DHA-GLP + vit D Pre-sarcopenia Clostridium difficile Toxoid vaccine RegistrationPhase III N 36 N N N New Molecular Entity Immune Mediated Diseases Rare Diseases Oncology Diabetes Solutions Vaccines Infectious Diseases Cardiovascular Diseases Age Related Degenerative Diseases Ophthalmology Biosurgery N N N N
  • 37. Early Stage Pipeline – Pharma & Vaccines LixiLan lixisenatide+ insulin glargine Fixed-Ratio / Type 2 diabetes FOV1101 FDC prednisolone/cyclosporine Allergic conjunctivitis SAR279356 (F598) Anti-PNAG mAb Serious infections SAR3419 Maytansin-loaded anti-CD19 mAb B-cell malignancies refractory/relapsed (NHL, ALL) sarilumab Anti-IL-6R mAb Uveitis ferroquine Antimalarial Malaria SAR256212 (MM121) anti-ErbB3 mAb Breast cancer (2L, 3L) SAR292833 (GRC15300) TRPV3 antagonist Chronic disabling pain SAR97276 Antimalarial Malaria SAR245409 (XL765) Oral dual inhibitor of PI3K & mTOR Non-Hodgkin lymphoma SAR110894 H3 antagonist Alzheimer's disease fresolimumab TGFβ antagonist Focal segmental glomerulosclerosis fedratinib JAK-2 inhibitor Polycythemia vera (2L) Ruxolitinib resistant/intolerant MF SAR113945 IKK-β inhibitor Osteoarthritis dupilumab Anti-IL4Rα mAb Asthma; Atopic dermatitis Jevtana® (cabazitaxel) Small cell lung cancer (2L) Meninge ACYW conj. 2nd generation meningococcal conjugate infant vaccine SAR339658 VLA 2 antagonist Inflammatory bow eldisease GENZ438027 (ALN-TTR02) mRNA inhibitor Familial amyloid polyneuropathy Rabies VRVg Purified vero rabies vaccine SAR156597 IL4/IL13 Bi-specific mAb Idiopathic pulmonary fibrosis Rotavirus Live attenuated tetravalent Rotavirus oral vaccine SAR100842 LPA-1/LPA-3 Systemic sclerosis Phase II N N N N N NN N N N 37 N N N 37 N New Molecular Entity Immune Mediated Diseases Rare Diseases Oncology Diabetes Solutions Vaccines Infectious Diseases Cardiovascular Diseases Age Related Degenerative Diseases Ophthalmology Biosurgery N N N
  • 38. Early Stage Pipeline – Pharma & Vaccines SAR153192 Anti-DLL4 mAb Solid tumors SAR260301 PI3K β selective PTEN – Deficient tumors SAR252067 Anti-LIGHT mAb Crohn’s disease Streptococcus pneumonia Meningitis & pneumonia vaccine SAR405838 (MI-773) HDM2 / p53 antagonist Solid tumors SAR245408 (XL147) Oral PI3K inhibitor Solid tumors SAR113244 Anti-CXCRS mAb Systemic lupus erythematosus Pseudomonas aeruginosa Antibody fragment product Prev ention of v entilator-associated pneumonia SAR650984 Anti-CD38 naked mAb Hematological malignancies GZ404477 (AAV-hAADC) Gene therapy Parkinson's disease SAR127963 P75 receptor antagonist Trauma brain injury Tuberculosis Recombinant subunit vaccine SAR566658 Maytansin-loaded anti-CA6 mAb Solid tumors SAR391786 GDF8 mAb Sarcopenia SAR126119 TAFIa inhibitor Acute ischemic stroke RetinoStat® Gene therapy Wet age-related macular degeneration (AMD) SAR307746 Anti-ANG2 mAb Solid tumors SAR228810 Anti-protofibrillar AB mAb Alzheimer’s disease SAR407899 Rho kinase inhibitor Pulmonary hypertension StarGen® Gene therapy Stargardt disease SAR125844 C-MET kinase inhibitor Solid tumors SAR404460 DHA-GPL + Vit D Sarcopenia GZ402665 (rhASM) Niemann-Pick type B GZ402663 (sFLT-01) Gene therapy Age-related macular degeneration (AMD) Combination SAR245409 / MSC1936369B Solid tumors Insulin Biosimilar Program Diabetes GZ402671 GCS Inhibitor Fabry Disease UshStat® Gene therapy Usher syndrome 1B SAR438151 undisclosed target Phase I N N N N N N N N N N NN N N N N N N N N N 3838 N New Molecular Entity Immune Mediated Diseases Rare Diseases Oncology Diabetes Solutions Vaccines Infectious Diseases Cardiovascular Diseases Age Related Degenerative Diseases Ophthalmology Biosurgery N N N
  • 39. 39 Phase I Phase II Phase III Registration TOTAL Oncology 8 3 1 0 12 Diabetes Solutions 0 0 1 1 2 Cardiovascular Diseases 3 1 1 0 5 Immune Mediated Diseases 2 4 1 1 8 Infectious Diseases 0 3 0 0 3 Ophthalmology 4 1 0 0 5 Rare Diseases 2 1 1 0 4 Age Related Degenerative Diseases 4 3 1 0 8 Vaccines 3 3 5 1 12 TOTAL 27(2) 19 11 3 R&D Pipeline Summary Table(1) 46 14 NMEs & Vaccines 60 39 48(2) (1) Excluding life cycle management programs (2) Includes one Phase I project addressing an undisclosed target
  • 40. 40 Expected R&D Milestones 40 Product Event Timing Dupilumab (anti IL-4Rα mAb) Start of Phase IIb studies in Asthma and Atopic Dermatitis Mid-year C. difficile Toxoid Vaccine First Patients in Phase III Program Expected Q3 2013 Aubagio® (teriflunomide) Expected EC decision in RMS in EU Q3 2013 Lemtrada™(alemtuzumab) Expected EC decision in RMS in EU Q3 2013 Alirocumab (anti PCSK9 mAb) First Phase III headline results in Hypercholesterolemia Q3 2013 Eliglustat Expected U.S. and EU regulatory submissions 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. Q4 2013 MACI® Expected U.S. regulatory submission in Cartilage Defects Q4 2013 Investigational new insulin U300 Expected EDITION III & IV Phase III results in Diabetes H2 2013 Lyxumia® (lixisenatide) Expected FDA decision in Type 2 Diabetes in the U.S. Q4 2013/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
  • 41. APPENDICES FINANCE 41
  • 42. 42 Business Net Income Statement Second quarter 2013 Group Total Pharmaceuticals Vaccines Animal Health Others € million Q2 2013 Q2 2012(1) Change Q2 2013 Q2 2012(1) Change Q2 2013 Q2 2012(1) Change Q2 2013 Q2 2012(1) Change Q2 2013 Q2 2012(1) Net sales 8,003 8,870 (9.8%) 6,714 7,511 (10.6%) 760 783 (2.9%) 529 576 (8.2%) Other revenues 83 247 (66.4%) 72 233 (69.1%) 5 5 6 9 (33.3%) Cost of sales (2,672) (2,725) (1.9%) (2,142) (2,246) (4.6%) (350) (301) 16.3% (180) (178) 1.1% As % of net sales (33.4%) (30.7%) (31.9%) (29.9%) (46.1%) (38.4%) (34.0%) (30.9%) Gross profit 5,414 6,392 (15.3%) 4,644 5,498 (15.5%) 415 487 (14.8%) 355 407 (12.8%) As % of net sales 67.6% 72.1% 69.2% 73.2% 54.6% 62.2% 67.1% 70.7% Research and development expenses (1,186) (1,235) (4.0%) (1,019) (1,054) (3.3%) (121) (142) (14.8%) (46) (39) 17.9% As % of net sales (14.8%) (13.9%) (15.2%) (14.0%) (15.9%) (18.1%) (8.7%) (6.8%) Selling and general expenses (2,309) (2,285) 1.1% (1,968) (1,936) 1.7% (160) (157) 1.9% (181) (191) (5.2%) (1) As % of net sales (28.9%) (25.8%) (29.3%) (25.8%) (21.1%) (20.1%) (34.2%) (33.1%) Other current operating income/expenses 140 (141) 100 (153) 5 (2) (1) 36 14 Share of profit/loss of associates(2) and joint ventures 3 122 8 123 (3) (1) (2) Net income attributable to non-controlling interests (45) (50) (45) (49) (1) Business operating income 2,017 2,803 (28.0%) 1,720 2,429 (29.2%) 136 185 (26.5%) 125 176 (29.0%) 36 13 As % of net sales 25.2% 31.6% 25.6% 32.3% 17.9% 23.6% 23.6% 30.6% Financial income and expenses (137) (156) Income tax expense (405) (721) Tax rate(3) 21.1% 28.0% Business net income 1,475 1,926 (23.4%) As % of net sales 18.4% 21.7% Business earnings per share(4) (in euros) 1.11 1.46 (24.0%) (1) Including impact of transition to IAS19R (2) Net of tax (3) Determined on the basis of Business income before tax, associates, and non-controlling interests (4) Based on an average number of shares outstanding of 1,325.7 million in the second quarter of 2013 and 1,317.4 million in the second quarter of 2012
  • 43. Business Net Income Statement 43 (1) Including impact of transition to IAS19R (2) Net of tax (3) Determined on the basis of Business income before tax, associates, and non-controlling interests (4) Based on an average number of shares outstanding of 1,323.9 million in the first semester of 2013 and 1,319.3 million in the first semester of 2012 First-half 2013 Group Total Pharmaceuticals Vaccines Animal Health Others € million H1 2013 H1 2012(1) Change H1 2013 H1 2012(1) Change H1 2013 H1 2012(1) Change H1 2013 H1 2012(1) Change H1 2013 H1 2012(1) Net sales 16,062 17,381 (7.6%) 13,522 14,827 (8.8%) 1,457 1,400 4.1% 1,083 1,154 (6.2%) Other revenues 181 673 (73.1%) 155 645 (76.0%) 12 10 20.0% 14 18 (22.2%) Cost of sales (5,208) (5,333) (2.3%) (4,167) (4,424) (5.8%) (695) (563) 23.4% (346) (346) As % of net sales (32.4%) (30.7%) (30.8%) (29.8%) (47.7%) (40.2%) (32.0%) (30.0%) Gross profit 11,035 12,721 (13.3%) 9,510 11,048 (13.9%) 774 847 (8.6%) 751 826 (9.1%) As % of net sales 68.7% 73.2% 70.3% 74.5% 53.1% 60.5% 69.3% 71.6% Research and development expenses (2,341) (2,407) (2.7%) (2,007) (2,044) (1.8%) (249) (283) (12.0%) (85) (80) 6.3% As % of net sales (14.6%) (13.8%) (14.8%) (13.8%) (17.1%) (20.2%) (7.8%) (6.9%) Selling and general expenses (4,438) (4,401) 0.8% (3,796) (3,755) 1.1% (299) (287) 4.2% (343) (358) (4.2%) (1) As % of net sales (27.6%) (25.3%) (28.1%) (25.3%) (20.5%) (20.5%) (31.7%) (31.1%) Other current operating income/expenses 170 16 131 (1) 7 (2) (2) 1 34 18 Share of profit/loss of associates(2) and joint ventures 21 419 27 425 (4) (6) (2) Net income attributable to non-controlling interests (86) (104) (86) (104) Business operating income 4,361 6,244 (30.2%) 3,779 5,569 (32.1%) 229 269 (14.9%) 319 389 (18.0%) 34 17 As % of net sales 27.2% 35.9% 27.9% 37.6% 15.7% 19.2% 29.5% 33.7% Financial income and expenses (277) (325) Income tax expense (996) (1,569) Tax rate(3) 24.0% 28.0% Business net income 3,088 4,350 (29.0%) As % of net sales 19.2% 25.0% Business earnings per share(4) (in euros) 2.33 3.30 (29.4%)
  • 44. Reconciliation of Business Net Income to Consolidated Net Income Attributable to Equity Holders of Sanofi 44 Second-Quarter € million Q2 2013 Q2 2012 (4) Change Business net income 1,475 1,926 (23.4%) Amortization of intangible assets (1) (768) (842) Impairment of intangible assets (430) (39) Fair value remeasurement of contingent consideration liabilities (76) (73) Expenses arising from the impact of acquisitions on inventories (3) (3) Restructuring costs (105) (163) Other gains and losses, and litigation Tax effect of items listed above: 469 354 Amortization of intangible assets 231 283 Impairment of intangible assets 180 14 Fair value remeasurement of contingent consideration liabilities 16 1 Expenses arising from the impact of acquisitions on inventories 1 1 Restructuring costs 41 55 Other tax items (2) (109) Share of items listed above attributable to non-controlling interests 1 Restructuring costs of associates and joint ventures, and expenses arising from the impact of acquisitions on associates and joint ventures (10) (7) Net income attributable to equity holders of Sanofi 444 1,153 (61.5%) Consolidated earnings per share (3) (in euros) 0.33 0.88 (1) Of which related to amortization expense generated by the remeasurement of intangible assets as part of business combinations: €740 million in the second quarter of 2013 and €814 million in the second quarter of 2012. (2) Tax (3%) on dividends paid to shareholders of Sanofi. (3) Based on an average number of shares outstanding of 1,325.7 million in the second quarter of 2013 and 1,317.4 in the second quarter of 2012. (4) Impact of transition to IAS19R.
  • 45. Reconciliation of Business Net Income to Consolidated Net Income Attributable to Equity Holders of Sanofi 45 First-Half € million H1 2013 H1 2012 (4) Change Business net income 3,088 4,350 (29.0%) Amortization of intangible assets (1) (1,543) (1,675) Impairment of intangible assets (440) (40) Fair value remeasurement of contingent consideration liabilities (117) (106) Expenses arising from the impact of acquisitions on inventories (6) (17) Restructuring costs (159) (250) Other gains and losses, and litigation Tax effect of items listed above: 749 714 Amortization of intangible assets 490 615 Impairment of intangible assets 180 14 Fair value remeasurement of contingent consideration liabilities 20 3 Expenses arising from the impact of acquisitions on inventories 2 5 Restructuring costs 57 77 Other tax items (2) (109) Share of items listed above attributable to non-controlling interests 2 1 Restructuring costs of associates and joint ventures, and expenses arising from the impact of acquisitions on associates and joint ventures (17) (15) Net income attributable to equity holders of Sanofi 1,448 2,962 (51.1%) Consolidated earnings per share (3) (in euros) 1.09 2.25 (1) Of which related to amortization expense generated by the remeasurement of intangible assets as part of business combinations: €1,489 million in the first semester of 2013 and €1,602 million in the first semester of 2012. (2) Tax (3%) on dividends paid to shareholders of Sanofi. (3) Based on an average number of shares outstanding of 1,323.9 million in the first semester of 2013 and 1,319.3 in the first semester of 2012. (4) Including impact of transition to IAS19R.
  • 46. Consolidated Income Statement 46 € million Q2 2013 Q2 2012 (1) H1 2013 H1 2012 (1) Net sales 8,003 8,870 16,062 17,381 Other revenues 83 247 181 673 Cost of sales (2,675) (2,728) (5,214) (5,350) Gross profit 5,411 6,389 11,029 12,704 Research and development expenses (1,186) (1,235) (2,341) (2,407) Selling and general expenses (2,309) (2,285) (4,438) (4,401) Other operating income 276 113 347 319 Other operating expenses (136) (254) (177) (303) Amortization of intangible assets (768) (842) (1,543) (1,675) Impairment of intangible assets (430) (39) (440) (40) Fair value remeasurement of contingent consideration liabilities (76) (73) (117) (106) Restructuring costs (105) (163) (159) (250) Other gains and losses, and litigation Operating income 677 1,611 2,161 3,841 Financial expense (154) (181) (311) (370) Financial income 17 25 34 45 Income before tax and associates and joint ventures 540 1,455 1,884 3,516 Income tax expense (2) (45) (367) (356) (855) Share of profit/loss of associates and joint ventures (7) 115 4 404 Net income 488 1,203 1,532 3,065 Net income attributable to non-controlling interests 44 50 84 103 Net income attributable to equity holders of Sanofi 444 1,153 1,448 2,962 Average number of shares outstanding (million) 1,325.7 1,317.4 1,323.9 1,319.3 Consolidated earnings per share (in euros) 0.33 0.88 1.09 2.25 (1) Including impact of transition to IAS19R. (2) In 2013, including a tax on dividends paid to shareholders of Sanofi: €109 million.
  • 47. Cash Flow Statement 47 € million H1 2013 H1 2012 (1) Business net income 3,088 4,350 Depreciation, amortization and impairment of property, plant and equipment and software 594 627 Net gains and losses on disposals of non-current assets, net of tax (154) (40) Other non cash items (277) 396 Operating cash flow before changes in working capital (2) 3,251 5,333 Changes in working capital (2) (870) (684) Acquisitions of property, plant and equipment and software (586) (711) Free cash flow (2) 1,795 3,938 Acquisitions of intangibles, excluding software (142) (75) Acquisitions of investments, including assumed debt (2) (273) (179) Restructuring costs paid (325) (504) Proceeds from disposals of property, plant and equipment, intangibles, and other non-current assets, net of tax 266 71 Issuance of Sanofi shares 741 74 Dividends paid to shareholders of Sanofi (3,638) (3,487) Acquisition of treasury shares (890) (454) Disposals of treasury shares, net of tax 2 Other items (3) 11 128 Change in net debt (2,453) (488) (1) Including impact of transition to IAS19R. (2) Excluding restructuring costs. (3) Of which foreign exchange effect on net debt €17 million in 2013 and -€68 million in 2012.
  • 48. Balance Sheet 48 ASSETS € million June 30, 2013 Dec 31, 2012 (1) LIABILITIES & EQUITY € million June 30, 2013 Dec 31, 2012 (1) Property, plant and equipment 10,409 10,578 Equity attributable to equity-holders of Sanofi 56,066 57,332 Intangible assets (including goodwill) 56,410 58,265 Equity attributable to non-controlling interests 129 134 Non-current financial assets, investments in associates, and deferred tax assets 9,309 8,665 Total equity 56,195 57,466 Long-term debt 10,689 10,719 Non-current liabilities related to business combinations and to non-controlling interests 1,347 1,350 Non-current assets 76,128 77,508 Provisions and other non-current liabilities 9,565 11,043 Deferred tax liabilities 5,547 5,932 Inventories, accounts receivable and other current assets 16,626 16,419 Non-current liabilities 27,148 29,044 Cash and cash equivalents 4,181 6,381 Accounts payable and other current liabilities 9,549 9,948 Current liabilities related to business combinations and to non-controlling interests 109 100 Short-term debt and current portion of long-term debt 3,971 3,812 Current assets 20,807 22,800 Current liabilities 13,629 13,860 Assets held for sale or exchange 52 101 Liabilities related to assets held for sale or exchange 15 39 Total ASSETS 96,987 100,409 Total LIABILITIES & EQUITY 96,987 100,409 (1) Including impact of transition to IAS19R.

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