Q2 2014 Results by Sanofi
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Q2 2014 Results by Sanofi

Q2 2014 Results by Sanofi

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Q2 2014 Results by Sanofi Presentation Transcript

  • 1. Q2 2014 RESULTS July 31, 2014
  • 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, 2013. 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 Key Highlights ● Christopher A. Viehbacher, Chief Executive Officer Financial Performance ● Jérôme Contamine, Executive Vice President, Chief Financial Officer Conclusion ● Christopher A. Viehbacher, Chief Executive Officer Q&A
  • 4. KEY HIGHLIGHTS 4 Christopher A. Viehbacher Chief Executive Officer
  • 5. ● Net sales up +6.4% at CER and Business EPS up +13.4% at CER ● Free Cash Flow up +33% in H1 2014 ● €3.7bn dividend payment and €1.1bn share buyback ● 76.3% of Group sales ● Solid execution in Emerging Markets ● Merial back to growth ● 3 significant regulatory reviews ongoing ● 4 major projects with Phase IIb/III readouts ● 2 new important collaborations Sanofi Delivered Solid Results in Q2 2014 5 3 2 1 Solid financial performance Strong performance of Growth Platforms Significant progress in late stage pipeline FCF: Free Cash Flow (1) Excluding Generics in Brazil, Q2 2014 sales were up +3.9% at CER (2) Dividend payment of €3,676m on full-year 2013 results made in Q2 2014 (3) As of July 15th 2014, Sanofi bought back shares for €1,100m in YTD 2014 (1) (3)(2)
  • 6. Q2 2014 -€0.10 FX ImpactIncremental EPS at CER Q2 2013 +€0.15 Net Sales(1) Business EPS(1) Solid Q2 2014 Financial Performance Reflects Consistent Execution of our Growth Strategy 6 (1) On a reported basis, Q2 2014 sales were up +0.9% and Business EPS was up +4.5% (2) With retroactive application of IFRIC21 +13.4% at CER(1) Incremental Sales at CER Q2 2014Q2 2013 FX Impact +€515m -€443m +6.4% at CER(1) €8,003m €8,075m €1.12 €1.17 (2) 1 (2)
  • 7. 2014 Business EPS Guidance Adjusted Slightly Upwards 7 (1) FY 2013 Business EPS of €5.05 with retroactive application of IFRIC21 7 Given our financial performance in H1 2014 and despite increasing U.S. competitive pressure at the payor level, 2014 business EPS is expected to be between 6% to 8% higher than 2013 at CER(1) , barring major unforeseen adverse events 1 FY 2014 Guidance
  • 8. Evolution of Share Buyback(1,2) 8 SBB: Share Buyback (1) As of July 15th 2014, YTD 2014 share buyback of €1,100m and YTD 2014 proceeds from share issuance of €252m (2) Number of shares outstanding in million on Dec 31st 2012, Dec 31st 2013 and June 30th 2014 €646m €1,100m €252m €823m €1,641m €1,004m 2012 Sanofi Increased Buyback Activity in H1 2014 2013 YTD 2014 €177m Net SBB €637m Net SBB €848m Net SBB Share count (m) 1,323.2 1,320.7 1,312.1 1 Issuance Issuance IssuanceBuyback Buyback Buyback
  • 9. Quarterly Sales Growth from Growth Platforms(1) +6.2% Q1 2013 +8.6% Q4 2012 +11.5% Q3 2012 +6.4% Q2 2012 +7.6% Q1 2012 +5.7% Q4 2013 +10.0% Q3 2013Q2 2013 +5.5% +7.9% Q1 2014 Q2 2014 +10.7% (1) Growth at CER. Q1 2012 growth restated for Genzyme Q1 2011 (€396m) (2) Growth at CER including Generics in Brazil was +2.5% in Q2 2013 and +14.5% in Q2 2014 9 Growth Platforms Show Consistent Strong Performance Demonstrating the Value of our Business Model (2) (2) +5% at CER +10% at CER 2 % of Group sales 63.2% 76.3%
  • 10. +9.2%Consumer Healthcare(3) €816m Vaccines -4.2%€718m Genzyme(4) Growth Platforms Grew +14.5%(1) in Q2 2014 Reaching 76.3% of Sales 10 (1) Excluding Generics in Brazil, Growth Platforms grew +10.7% in Q2 2014 and +9.0% in H1 2014 at CER (2) Excluding Generics in Brazil, Emerging Markets grew +8.6% in Q2 2014 and +6.5% in H1 2014 at CER (3) Some products recorded in prescription pharmaceuticals in 2013 were transferred as Consumer Healthcare products and totaled €73m in Q2 2013 Including this category change, sales of Consumer Healthcare grew +20.2% in Q2 2014 and +19.4% in H1 2014 at CER (4) Genzyme perimeter includes Rare Diseases and Multiple Sclerosis franchises (5) Includes products launched since 2009 which do not belong to the Growth Platforms listed above: Multaq®, Jevtana®, Auvi-Q™, Mozobil® and Zaltrap® +16.2% -0.4% +29.1% +6.2% Other Innovative Products(5) €189m +13.3% +16.5% Diabetes Solutions €1,788m Animal Health €643m Emerging Markets(2) €2,855m €537m Q2 2014 Growth at CER 2 -4.2% H1 2014 Growth at CER +9.3% +14.7% -2.2% +25.4% +2.2% +17.8% +11.0%
  • 11. H1 2014 Geographic Sales Mix (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 (2) Pharmaceuticals sales growth at CER was +2.2% in Africa & Middle East, +4.3% in Eastern Europe, Russia & Turkey, +10.6% in Asia and +18.2% in Latin America excluding Generics in Brazil in H1 2014 Solid Sales Performance in Emerging Markets in H1 2014 as Operational Issues from 2013 Have Been Addressed Emerging Markets €5,445m U.S. €4,984m Western EU €3,906m RoW €1,582m 34.2% 31.3% 24.5% 10.0% 11 (1) €1,006m €1,239m €1,519m €1,618m Africa & Middle East Eastern Europe, Russia & Turkey Asia Latin America +8.5% +4.7% +5.4% +14.6%Growth at CER -1.5% -7.4% -0.7% +11.0% 2 Emerging Markets Total Sales by Region excluding Brazil Generics (2)
  • 12. Merial Returned to Growth in Q2 2014 12 ● Successful launch of NexGard® ● First soft, beef-flavored chew treating fleas and ticks for dogs in the U.S. ● €58m sales in H1 2014 ● Frontline® family sales stabilized in Q2 2014 ● Start of flea and tick season not disrupted by weather conditions except in Northern U.S. ● Effective investment in ad campaign reinforcing strong Frontline® brand 2 Q2Q1 Q4Q3 -3.1% -5.7% -6.3% 2013 Merial Sales Growth at CER -6.4% -1.6% +6.2% Q2Q1 2014
  • 13. ● Filed in the U.S. and EU in Q2 2014 and recently in Japan ● Regulatory decisions for marketing authorization in the U.S. and EU anticipated in H1 2015 Three New Medicines Under Regulatory Review with the Potential to Meaningfully Improve Patient Lives 13 ● U.S. and EU regulatory reviews ongoing ● Regulatory decisions expected in Q3 and Q4 2014, respectively ● NDA submitted in Japan in June, 2014 ● sBLA resubmission accepted for review by FDA in May 2014 ● FDA action expected in Q4 2014 ● New dedicated salesforce being recruited 3 Three major new drug approvals expected over the next 12 months
  • 14. 14 ● Primary efficacy endpoint met in all 9 trials(1) ● LDL reduction consistent with previous trials ● Generally well tolerated in the 9 ODYSSEY trials (2) ● Lower rate of adjudicated major CV events(3, 4) observed in a post-hoc analysis of ODYSSEY LONG TERM (p-value <0.05) ● Potential to demonstrate CV benefit being prospectively assessed in an 18,000-patient ODYSSEY OUTCOMES trial ● U.S. and EU regulatory submissions expected by end of 2014 Alirocumab is developed in collaboration with Regeneron (1) The nine trials included ODYSSEY LONG TERM, FH I, FH II, HIGH FH, COMBO I, COMBO II, OPTIONS I, OPTIONS II and ALTERNATIVE (2) The most common adverse events were nasopharyngitis and upper respiratory tract infections, which were generally balanced between treatment groups. Injection site reactions occurred more often in the alirocumab group compared to placebo. Serious adverse events and deaths were generally balanced between treatment groups as were other key adverse events including musculoskeletal, neurocognitive and liver-related events. (3) Major CV events included cardiac death, myocardial infarction, stroke, and unstable angina requiring hospitalization (4) Based on a pre-specified interim safety analysis performed when all patients reached one year and approximately 25% of patients reached 18 months of treatment in the ongoing ODYSSEY LONG TERM trial with 2,341 patients at high or very high cardiovascular (CV) risk Positive Top-Line Results across 9 Phase III Trials of Alirocumab in People with Hypercholesterolemia 3
  • 15. 15 Sarilumab and dupilumab are developed in collaboration with Regeneron NEJM: New England Journal of Medicine (1) The measured efficacy of the vaccine is consistent across countries and appears to vary by dengue serotype (between 34.7% and 72.4%) and by age (2) Mean % change in EASI score from baseline to Week 16 / Clearing or near-clearing of skin lesions, measured by an investigator's global assessment (IGA) score of 0 or 1 / Mean reduction in itching measured by the pruritus numerical-rating scale (NRS) score (3) Improvement in signs and symptoms of RA / Improvement in physical function / Inhibition of progression of structural damage Strong Late Stage Pipeline of Biologics Demonstrates the Shift of our Portfolio towards Innovative Products 3 ● First Phase III published in The Lancet ● 56.5% reduction in symptomatic dengue(1) ● 88.5% reduction of haemorrhagic fever ● 67.2% reduction in hospitalization DengueVaccine ● Detailed data from positive Phase III MOBILITY trial presented at EULAR ● Statistically significant improvements in all three co-primary endpoints(3) Sarilumab Rheumatoid Arthritis ● Strong Phase IIa data published in the NEJM ● Positive Phase IIb top-line results ● Statistically significant and dose-dependent improvements in all key efficacy measures(2) Atopic Dermatitis
  • 16. Two New Collaborations Signed in Q2 2014 Strengthening our CHC and Diabetes Growth Platforms 16 ● Licensing agreement with Lilly ● Opportunity to switch Cialis® from Rx to OTC in the U.S., Europe, Canada and Australia(1) ● Ambition to transform how this important medicine for erectile dysfunction (ED) is offered to millions of men in the world ● Global strategic alliance(2) in diabetes structured as open-innovation model ● Initial focus on novel drug-device combinations and care management ● Objective to improve adherence, simplify insulin treatment and help patients better manage their condition 3 (1) Subject to Sanofi's receipt of all necessary regulatory approvals (2) Implementation of the alliance is subject to the negotiation and execution of a definitive agreement between the companies
  • 17. Strong Innovation Momentum Expected to Be Maintained in H2 2014 17 2014 Expected Regulatory Decisions Q3 Q4 ● Cerdelga™ (eliglustat) in Gaucher disease (U.S.)  ● Lemtrada™ (alemtuzumab) in Multiple Sclerosis (U.S.)  ● Cerdelga™ (eliglustat) in Gaucher disease (EU)  ● Fluzone® QIV Intradermal (U.S.)  Expected Regulatory Submissions Q3 Q4 ● PR5i 6-in-1 pediatric vaccine (U.S.)  ● Alirocumab in Hypercholesterolemia (U.S. & EU)  Expected Headline Phase III Data Releases Q3 Q4 ● Alirocumab in Hypercholesterolemia (9 ODYSSEY trials) ● Dengue vaccine 2nd Phase III trial in Latin America  Expected Phase III Starts Q3 Q4 ● Dupilumab in Atopic Dermatitis ● Rotavirus vaccine  ● Insulin lispro in Diabetes  3
  • 18. Sanofi to Organize an IR Thematic Seminar on New Medicines and Vaccines 18 3 ● Discussing the market opportunity for key pipeline projects ● Emphasizing the shift of our portfolio to biologics ● Presenting further progress of our innovative R&D assets IR Thematic Seminar on New Medicines Thursday November 20th, 2014 in Genzyme HQ - Cambridge, MA
  • 19. FINANCIAL PERFORMANCE Jérôme Contamine Executive Vice President, Chief Financial Officer 19
  • 20. Net Sales(1) Business EPS 20 FX Impact in Q2 2014 Was Comparable to Q1 2014 and In Line with our Expectations (1) Main currency impact on sales in Q2 2014: U.S. Dollar (-€129m); Brazilian Real (-€48m); Japanese Yen (-€39m); Russian Ruble (-€33m); Argentine Peso (-€32m); Turkish Lira (-€23m), Canadian Dollar (-€15m) and Australian Dollar (-€14m) (2) Difference between variation on reported basis and variation at constant exchange rates Quarterly Currency Impact -2.5% -€212m -4.4% -€0.08 -3.5% -€305m 2013 -€0.08 -5.5% -7.3% -€662m -€0.17 -10.2% Q4Q3Q2Q1 -7.3% -€627m 2014 Q1 -€0.16 -13.7% -6.2% -€497m -9.1% -€0.11 Assuming June exchange rates remain stable in H2 2014, negative FX impact on full-year Business EPS would be ~5%(2) Q2 -5.5% -€443m 2013 Q4Q3Q2Q1 2014 Q1 Q2 -8.9% -€0.10
  • 21. (1) With the retroactive application of IAS19R (2) Includes a payment of €62m before tax resulting from the return of U.S. rights for Eligard® to TOLMAR Pharmaceuticals (3) Includes a payment of €165m before tax associated to the sale of U.S. tail products to Covis Pharmaceuticals 21 BOI Increased Faster than Sales in Q2 2014 €m Q2 2014 Q2 2013 % Change (reported €) % Change (CER) Net sales 8,075 8,003 +0.9% +6.4% Other revenues 71 83 -14.5% -12.0% Cost of sales (2,608) (2,670) -2.3% +2.2% Gross profit 5,538 5,416 +2.3% +8.2% R&D (1,188) (1,185) +0.3% +3.2% SG&A (2,255) (2,306) -2.2% +2.6% Other current operating income & expenses 54 141 - - Share of Profit/Loss of associates 26 3 - - Minority interests (30) (45) - - Business operating income 2,145 2,024 +6.0% +15.0% Business operating margin 26.6% 25.3% - - CER: Constant Exchange Rates (1) (2) (3)
  • 22. Improvement in Gross Margin in Q2 2014 vs. Q2 2013 ● Cost of Sales (CoS) in Q2 2014: €2,608m, up +2.2% at CER ● CoS ratio down 1 percentage point in Q2 2014 vs. Q2 2013 ● Reflecting recovery of Generics in Brazil and higher margin from Genzyme ● Slight negative mix impact from Vaccines and Animal Health ● Unfavorable currency variations 22 Gross Margin (%) Q1 Q2 Q3 Q4 Q1 Q2 2013 2014 69.0%69.6% 67.7% 67.0% 66.8% 68.6%
  • 23. Q1 Q2 Q3 Q4 Q1 Q2 R&D Expenses Slightly Increased in Q2 2014 Despite Significant Investment in Phase III Trials 23 ● Q2 2014 R&D expenses of €1,188m, up +3.2% at CER ● Slight increase in R&D spend in line with guidance ● Higher spend in three large development programs for mAbs (alirocumab, sarilumab, dupilumab) ● More than offsetting internal costs savings 23 R&D Expenses (€m) €1,188m€1,185m (1) With retroactive application of IFRIC21 (1) 2013 2014
  • 24. Lower SG&A to Sales Ratio in Q2 2014 vs. Q2 2013 24 ● Q2 2014 SG&A expenses of €2,255m, up +2.6% at CER ● Lower increase in SG&A than Sales ● Modest SG&A increase driven by investment in product launches ● NexGard™, Nasacort® OTC and Genzyme MS franchise 24 SG&A Expenses (€m) Q1 Q2 Q3 Q4 Q1 Q2 €2,255m€2,306m (1) (1) With retroactive application of IFRIC21 2013 2014
  • 25. CER: Constant Exchange Rates 25 €m Q2 2014 Q2 2013 % Change (reported €) % Change (CER) Business operating income 2,145 2,024 +6.0% +15.0% Net financial expenses (94) (137) - - Income tax expense (514) (408) - - Effective tax rate -25.0% -21.2% - - Business net income 1,537 1,479 +3.9% +13.0% Net margin 19.0% 18.5% - - Business EPS €1.17 €1.12 +4.5% +13.4% Average number of shares outstanding (m) 1,314.5 1,325.7 - - Strong Business EPS Growth of +10% in H1 2014 25 (1) With the retroactive application of IFRIC21 (2) Included a capital gain of €31m before tax resulting from the sale of several financial investments (1) (2)
  • 26. -€0.06 -5.4% Disposals & Capital Gains -€0.05 -4.5% Brazil Generics €0.16 +14.3% Business EPS Q2 2013 Reported €1.12 €1.27 Business EPS Q2 2014 Reported Fx €1.17 Organic Growth -€0.10 -8.9% €0.10 +8.9% Tax Rate Business EPS Q2 2014 @ CER 26 Business EPS (in €) Business EPS Organic Growth Larger than Sales Growth in Q2 2014
  • 27. Net Debt (in €m) Dividend €487m Other Net Debt Jun 30, 2014 €3,676m Acquisitions, Licensing, Net of Disposals €1,608m Share Repurchase €1,010m Proceeds from Issuance of Shares €240m CapEx €529m Net Cash from Operating Activities Net Debt Dec 31, 2013 Free Cash Flow (FCF) Increased by 33% in H1 2014 27 (1) (2) €6,043m €10,194m €2,919m (4) (1) FCF €2,390m FCF: Free Cash Flow (1) Including derivatives related to the financial debt +€290m at December 31st 2013 and +€296m at June 30th 2014 (2) Excluding Restructuring costs (3) Including €1,050m in Regeneron and €530m in Alnylam (4) Other including Restructuring costs (3)
  • 28. CONCLUSION 28 Christopher A. Viehbacher Chief Executive Officer
  • 29. Solid H1 Performance Reflects Consistent Execution of our Growth Strategy Over 75% of sales now being generated by Growth Platforms Business EPS guidance for 2014 adjusted slightly upwards Late stage pipeline moving to launch execution Expected new medicine launches to further redefine Sanofi as a biopharmaceutical leader 29
  • 30. APPENDICES R&D Pipeline 30
  • 31. 31 Late Stage Pipeline – Pharma & Vaccines LixiLan lixisenatide + insulin glargine Fixed-Ratio / Type 2 diabetes alirocumab Anti-PCSK-9 mAb Hypercholesterolemia Toujeo® (U300) Insulin glargine Type 1+2 diabetes, U.S., EU Lyxumia® (lixisenatide) GLP-1 agonist Type 2 diabetes, U.S. Kynamro® (mipomersen) Apolipoprotein B-100 antisense Severe HeFH, U.S. Lemtrada™ (alemtuzumab) Anti-CD52 mAb Multiple sclerosis, U.S. sarilumab Anti-IL-6R mAb Rheumatoid arthritis Dengue Mild-to-severe dengue fever vaccine Cerdelga™ (eliglustat tartrate) Glucosylceramide synthetase inhibitor Gaucher disease, U.S., EU patisiran SAR438037 mRNA inhibitor Familial amyloid polyneuropathy Clostridium difficile Toxoid vaccine Quadracel® Diphtheria, tetanus, pertussis & polio vaccine; 4-6 y of age Jevtana® (cabazitaxel) Metastatic prostate cancer (1L) PR5i DTP-HepB-Polio-Hib Pediatric hexavalent vaccine Fluzone® QIV ID Quadrivalent inactivated influenza vaccine intradermal SYNVISC-ONE® Medical device Pain in hip OA VaxiGrip® QIV IM Quadrivalent inactivated influenza vaccine N 31 N N N N New Molecular Entity Immune Mediated Diseases Rare Diseases Oncology Diabetes Solutions Vaccines Infectious Diseases Cardiovascular / Renal Diseases Age Related Degenerative Diseases Ophthalmology Biosurgery N Phase III Registration N
  • 32. Early Stage Pipeline – Pharma & Vaccines dupilumab Anti-IL4Rα mAb Atopic dermatitis; Asthma; Nasal polyposis SAR391786 GDF8 mAb Sarcopenia Rotavirus Live attenuated tetravalent Rotavirus oral vaccine SAR339658 Anti-VLA 2 mAb Multiple sclerosis SAR650984 Anti-CD38 naked mAb Multiple myeloma Rabies VRVg Purified vero rabies vaccine SAR156597 IL4/IL13 Bi-specific mAb Idiopathic pulmonary fibrosis SAR3419 Maytansin-loaded anti-CD19 mAb B-cell refractory/relapsed malignancies Meningitis ACYW conj. 2nd generation meningococcal conjugate infant vaccine SAR438714 (ALN-TTRsc) RNAi Familial amyloid cardiomyopathy Combination SAR245409 (XL765) / MSC1936369B Oral dual inhibitor of PI3K & mTOR / pimasertib Ovarian cancer Tuberculosis Recombinant subunit vaccine sarilumab Anti-IL-6R mAb Uveitis Combination ferroquine / OZ439 Antimalarial Malaria fresolimumab TGFβ antagonist Focal segmental glomerulosclerosis SAR279356 (F598) Anti-PNAG mAb Serious infections Phase II N N N N NN 32 N 32 N N New Molecular Entity Immune Mediated Diseases Rare Diseases Oncology Diabetes Solutions Vaccines Infectious Diseases Cardiovascular / Renal Diseases Age Related Degenerative Diseases Ophthalmology Biosurgery N N N
  • 33. Early Stage Pipeline – Pharma & Vaccines SAR405838 (MI-773) HDM2 / p53 antagonist Solid tumors SAR113244 Anti-CXCR5 mAb Systemic lupus erythematosus GZ402663 (sFLT-01) Gene therapy Age-related macular degeneration (AMD) Streptococcus pneumonia Meningitis & pneumonia vaccine SAR566658 Maytansin-loaded anti-CA6 mAb Solid tumors SAR252067 Anti-LIGHT mAb Crohn’s disease StarGen® Gene therapy Stargardt disease Herpes Simplex Virus Type 2 HSV-2 vaccine SAR125844 C-MET kinase inhibitor Solid tumors SAR228810 Anti-protofibrillar AB mAb Alzheimer’s disease UshStat® Gene therapy Usher syndrome 1B SAR260301 PI3K β selective inhibitor PTEN – Deficient tumors SAR425899 GLP-1 / GCGR agonist Diabetes GZ402665 (rhASM) Niemann-Pick type B SAR307746 Anti-ANG2 mAb Solid tumors SAR342434 Insulin Lispro Diabetes GZ402671 Oral GCS Inhibitor Fabry Disease SAR245408 (XL147) Oral PI3K inhibitor Solid tumors SAR438584 Undisclosed target GZ402666 neo GAA Pompe Disease Combination SAR405838 / MSC1936369B Solid tumors Phase I N N N N N N N N N N N N 3333 N N N New Molecular Entity Immune Mediated Diseases Rare Diseases Oncology Diabetes Solutions Vaccines Infectious Diseases Cardiovascular / Renal Diseases Age Related Degenerative Diseases Ophthalmology Biosurgery N N N
  • 34. 34 Phase I Phase II Phase III Registration TOTAL Oncology 6 3 0 0 9 Diabetes Solutions 1 0 1 1 3 Cardiovascular / Renal Diseases 0 1 1 0 2 Immune Mediated Diseases 2 3 1 0 6 Infectious Diseases 0 2 0 0 2 Ophthalmology 3 0 0 0 3 Rare Diseases 3 1 1 1 6 Age Related Degenerative Diseases 1 1 0 0 2 Vaccines 2 4 4 2 12 TOTAL 19(2) 15 8 4 R&D Pipeline Summary Table(1) 34 12 NMEs & Vaccines 46 34 34(2) (1) Excluding life cycle management programs (2) Includes 1 Phase I project addressing an undisclosed target
  • 35. 35 Expected R&D Milestones in H2 2014 / H1 2015 35 Product Event Timing Cerdelga™ (eliglustat tartrate) Expected U.S. regulatory decision in Gaucher disease Q3 2014 Dengue vaccine Expected 2nd Phase III results (Latin America) Q3 2014 PR5i (DTP-HepB-Polio-Hib) Expected U.S. regulatory submission Q3 2014 Dupilumab (anti-IL4Rα mAb) Expected start of Phase III trial in Atopic Dermatitis H2 2014 New Insulin Lispro (SAR342434) Expected start of Phase III trial in Diabetes H2 2014 Lemtrada™ (alemtuzumab) Expected U.S. regulatory decision in Multiple Sclerosis Q4 2014 Cerdelga™ (eliglustat tartrate) Expected EU regulatory decision in Gaucher disease Q4 2014 Alirocumab (anti-PCSK9 mAb) Expected U.S. and EU regulatory submissions in Hypercholesterolemia Q4 2014 Fluzone® QIV ID Expected U.S. regulatory decision Q4 2014 Rotavirus vaccine Expected start of Phase III trial Q4 2014 Fluzone® High Dose Expected U.S. label upgrade Q4 2014 Dengue vaccine Expected regulatory submission in priority countries Q1 2015 Dupilumab (anti-IL4Rα mAb) Expected Phase IIb top-line results in Asthma Q1 2015 Lyxumia® (lixisenatide) Expected ELIXA CV outcome trial top-line results H1 2015 Toujeo® (U300) Expected U.S. and EU regulatory decisions in Diabetes H1 2015
  • 36. APPENDICES FINANCE 36
  • 37. 37 Business Net Income Statement Second quarter 2014 Net sales 8,075 8,003 0.9% 6,820 6,714 1.6% 718 760 (5.5%) 537 529 1.5% Other revenues 71 83 (14.5%) 58 72 (19.4%) 7 5 40.0% 6 6 - - - Cost of sales (2,608) (2,670) (2.3%) (2,058) (2,140) (3.8%) (350) (350) - (200) (180) 11.1% - - As % of net sales (32.3%) (33.4%) (30.2%) (31.9%) (48.8%) (46.1%) (37,2%) (34.0%) Gross profit 5,538 5,416 2.3% 4,820 4,646 3.7% 375 415 (9.6%) 343 355 (3.4%) As % of net sales 68.6% 67.7% 70.7% 69.2% 52.2% 54.6% 63.9% 67.1% Research and development expenses (1,188) (1,185) 0.3% (1,030) (1,018) 1.2% (123) (121) 1.7% (35) (46) (23.9%) - - As % of net sales (14.7%) (14.8%) (15.1%) (15.2%) (17.1%) (15.9%) (6.5%) (8.7%) Selling and general expenses (2,255) (2,306) (2.2%) (1,930) (1,965) (1.8%) (142) (160) (11.3%) (183) (181) 1.1% - - As % of net sales (27.9%) (28.8%) (28.3%) (29.3%) (19.8%) (21.1%) (34.1%) (34.2%) Other current operating income/expenses 54 141 42 100 3 5 11 - (2) 36 Share of profit/loss of associates* 26 3 25 8 1 (3) - (2) - - Net income attributable to non-controlling interests (30) (45) (30) (45) - - - - - - Business operating income 2,145 2,024 6.0% 1,897 1,726 9.9% 114 136 (16.2%) 136 126 7.9% (2) 36 As % of net sales 26.6% 25.3% 27.8% 25.7% 15.9% 17.9% 25.3% 23.8% Financial income and expenses (94) (137) Income tax expense (514) (408) Tax rate** 25.0% 21.2% Business net income 1,537 1,479 3.9% As % of net sales 19.0% 18.5% Business earnings per share*** (in euros) 1.17 1.12 4.5% (1) Including impact of transition to IFRIC 21. * 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 1,314.5 million in the second quarter of 2014 and 1,325.7 million in the second quarter of 2013. Q2 2013 (1) € million Q2 2014 Q2 2013 (1) change Q2 2014 change Q2 2014 Q2 2013 (1) change Q2 2014 Q2 2013 (1) change Q2 2014 Q2 2013 (1) OtherGroup Total Pharmaceuticals Vaccines Animal health * 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 1,314.5 million in the second quarter of 2014 and 1,325.7 million in the second quarter of 2013 (1) Including impact of transition to IFRIC 21
  • 38. Business Net Income Statement 38 First-half 2014 Net sales 15,917 16,062 (0.9%) 13,517 13,522 - 1,346 1,457 (7.6%) 1,054 1,083 (2.7%) Other revenues 154 181 (14.9%) 126 155 (18.7%) 14 12 16.7% 14 14 - Cost of sales (5,124) (5,215) (1.7%) (4,046) (4,174) (3.1%) (700) (695) 0.7% (378) (346) 9.2% As % of net sales (32.2%) (32.5%) (29.9%) (30.9%) (52.0%) (47.7%) (35.8%) (32.0%) Gross profit 10,947 11,028 (0.7%) 9,597 9,503 1.0% 660 774 (14.7%) 690 751 (8.1%) As % of net sales 68.8% 68.7% 71.0% 70.3% 49.0% 53.1% 65.5% 69.3% Research and development expenses (2,327) (2,342) (0.6%) (2,025) (2,008) 0.8% (230) (249) (7.6%) (72) (85) (15.3%) As % of net sales (14.6%) (14.6%) (15.0%) (14.8%) (17.1%) (17.1%) (6.8%) (7.8%) Selling and general expenses (4,333) (4,446) (2.5%) (3,721) (3,801) (2.1%) (271) (301) (10.0%) (341) (344) (0.9%) As % of net sales (27.2%) (27.7%) (27.5%) (28.1%) (20.1%) (20.7%) (32.4%) (31.8%) Other current operating income/expenses 29 170 19 130 1 7 17 (1) (8) 34 Share of profit/loss of associates* 39 21 33 27 6 (4) - (2) Net income attributable to non-controlling interests (65) (86) (65) (86) Business operating income 4,290 4,345 (1.3%) 3,838 3,765 1.9% 166 227 (26.9%) 294 319 (7.8%) (8) 34 As % of net sales 27.0% 27.1% 28.4% 27.8% 12.3% 15.6% 27.9% 29.5% Financial income and expenses (170) (277) Income tax expense (1,036) (991) Tax rate** 25.0% 24.0% Business net income 3,084 3,077 0.2% As % of net sales 19.4% 19.2% Business earnings per share*** (in euros) 2.34 2.32 0.9% (1) Including impact of transition to IFRIC 21. * 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 1,317.2 million in the first semester of 2014 and 1,323.9 million in the first semester of 2013. 6M 2013 (1) 6M 2014 6M 2013 (1) Other 6M 2013 (1) change 6M 2014 6M 2013 (1) 6M 2014change change Group Total Pharmaceuticals Vaccines Animal health € million 6M 2014 6M 2013 (1) change 6M 2014 * 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 1,317.2 million in the first semester of 2014 and 1,323.9 million in the semester of 2013 (1) Including impact of transition to IFRIC 21
  • 39. 3939 Reconciliation of Business Net Income to Consolidated Net Income Attributable to Equity Holders of Sanofi (1) Of which related to amortization expense generated by the remeasurement of intangible assets as part of business combinations: €601 million in the second quarter of 2014 and €740 million in the second quarter of 2013 (2) Tax on dividends paid to shareholders of Sanofi (3) Based on an average number of shares outstanding of 1,314.5 million in the second quarter of 2014 and 1,325.7 in the second quarter of 2013 (4) Impact of transition to IFRIC 21 € million Q2 2014 Q2 2013 (4) Change Business net income 1,537 1,479 3.9% Amortization of intangible assets (1) (624) (768) Impairment of intangible assets (71) (430) Fair value remeasurement of contingent consideration liabilities (124) (76) Expenses arising from the impact of acquisitions on inventories - (3) Restructuring costs (84) (105) Tax effect of items listed above: 274 469 Amortization of intangible assets 207 231 Impairment of intangible assets 25 180 Fair value remeasurement of contingent consideration liabilities 13 16 Expenses arising from the impact of acquisitions on inventories - 1 Other gains and losses, and litigation - - Restructuring costs 29 41 Other tax items (2) (110) (109) Share of items listed above attributable to non-controlling interests 3 1 Restructuring costs of associates and joint ventures, and expenses arising from the impact of acquisitions on associates and joint ventures (24) (10) Net income attributable to equity holders of Sanofi 777 448 73.4% Consolidated earnings per share (3) (in euros) 0.59 0.34
  • 40. 4040 Reconciliation of Business Net Income to Consolidated Net Income Attributable to Equity Holders of Sanofi (1) Of which related to amortization expense generated by the remeasurement of intangible assets as part of business combinations: €1,258 million in the first semester of 2014 and €1,489 million in the first semester of 2013 (2) Tax on dividends paid to shareholders of Sanofi (3) Based on an average number of shares outstanding of 1,317.2 million in the first semester of 2014 and 1,323.9 million in the first semester of 2013 (4) Impact of transition to IFRIC 21 € million H1 2014 H1 2013 (4) Change Business net income 3,084 3,077 0.2% Amortization of intangible assets (1) (1,301) (1,543) Impairment of intangible assets (74) (440) Fair value remeasurement of contingent consideration liabilities (132) (117) Expenses arising from the impact of acquisitions on inventories - (6) Restructuring costs (135) (159) Other gains and losses, and litigation 35 - Tax effect of items listed above: 522 749 Amortization of intangible assets 451 490 Impairment of intangible assets 26 180 Fair value remeasurement of contingent consideration liabilities 14 20 Expenses arising from the impact of acquisitions on inventories - 2 Other gains and losses, and litigation (13) - Restructuring costs 44 57 Other tax items (2) (110) (109) Share of items listed above attributable to non-controlling interests 4 2 Restructuring costs of associates and joint ventures. and expenses arising from the impact of acquisitions on associates and joint ventures (32) (17) Net income attributable to equity holders of Sanofi 1,861 1,437 29.5% Consolidated earnings per share (3) (in euros) 1.41 1.09
  • 41. 4141 Consolidated Income Statements (1) Including impact of transition to IFRIC 21 (2) In 2014, including a tax on dividends paid to shareholders of Sanofi: (110) M€ compared to (109) M€ in 2013 € million Q2 2014 Q2 2013 (1) H1 2014 H1 2013 (1) Net sales 8,075 8,003 15,917 16,062 Other revenues 71 83 154 181 Cost of sales (2,608) (2,673) (5,124) (5,221) Gross profit 5,538 5,413 10,947 11,022 Research and development expenses (1,188) (1,185) (2,327) (2,342) Selling and general expenses (2,255) (2,306) (4,333) (4,446) Other operating income 106 276 116 347 Other operating expenses (52) (135) (87) (177) Amortization of intangible assets (624) (768) (1,301) (1,543) Impairment of intangible assets (71) (430) (74) (440) Fair value remeasurement of contingent consideration liabilities (124) (76) (132) (117) Restructuring costs (84) (105) (135) (159) Operating income 1,246 684 2,674 2,145 Financial expense (145) (154) (292) (311) Financial income 51 17 157 34 Income before tax and associates and joint ventures 1,152 547 2,539 1,868 Income tax expense (2) (350) (48) (624) (351) Share of profit/loss of associates and joint ventures 2 (7) 7 4 Net income 804 492 1,922 1,521 Net income attributable to non-controlling interests 27 44 61 84 Net income attributable to equity holders of Sanofi 777 448 1,861 1,437 Average number of shares outstanding (million) 1,314.5 1,325.7 1,317.2 1,323.9 Earnings per share (in euros) 0.59 0.34 1.41 1.09
  • 42. 4242 Cash Flow Statements (1) Including impact of transition to IFRIC 21 (2) Excluding restructuring costs € million H1 2014 H1 2013 (1) Business net income 3,084 3,077 Depreciation amortization and impairment of property. plant and equipment and software 582 594 Net gains and losses on disposals of non-current assets, net of tax (97) (154) Other non-cash items (98) (277) Operating cash flow before changes in working capital (2) 3,471 3,240 Changes in working capital (2) (552) (859) Acquisitions of property, plant and equipment and software (529) (586) Free cash flow (2) 2,390 1,795 Acquisitions of intangibles, excluding software (108) (142) Acquisitions of investments, including assumed debt (2) (1,679) (273) Restructuring costs paid (382) (325) Proceeds from disposals of property, plant and equipment, intangibles, and other non-current assets. net of tax 179 266 Issuance of Sanofi shares 240 741 Dividends paid to shareholders of Sanofi (3,676) (3,638) Acquisition of treasury shares (1,010) (890) Disposals of treasury shares, net of tax - 2 Transactions with non-controlling interests including dividends (6) (10) Foreign exchange impact (37) 17 Other items (62) 4 Change in net debt (4,151) (2,453)
  • 43. 4343 Balance Sheets (1) Including impact of transition to IFRIC 21 ASSETS € million 06/30/14 12/31/13 (1) LIABILITIES € million 06/30/14 12/31/13 (1) Property, plant and equipment 10,090 10,182 Equity attributable to equity-holders of sanofi 51,637 56,904 Intangible assets (including goodwill) 51,675 52,529 Equity attributable to non-controlling interests 130 129 Non-current financial assets, investments in associates, and deferred tax assets 8,568 9,418 Total equity 51,767 57,033 Long-term debt 10,113 10,414 Non-current liabilities related to business combinations and to non-controlling interests 974 884 Non-current assets 70,333 72,129 Provisions and other non-current liabilities 9,066 8,735 Deferred tax liabilities 4,600 5,060 Inventories, accounts receivable and other current assets 16,063 15,655 Non-current liabilities 24,753 25,093 Cash and cash equivalents 4,306 8,257 Accounts payable and other current liabilities 9,408 9,728 Current liabilities related to business combinations and to non-controlling interests 109 24 Short-term debt and current portion of long-term debt 4,683 4,176 Current assets 20,369 23,912 Current liabilities 14,200 13,928 Assets held for sale or exchange 18 14 Liabilities related to assets held for sale or exchange - 1 Total ASSETS 90,720 96,055 Total LIABILITIES & EQUITY 90,720 96,055
  • 44. Business EPS Currency Sensitivity € 25.0% US $ 32.6% Japanese Yen 5.6% £ 2.2% Australian $ 1.5% Canadian $ 1.5% Brazilian Real 4.5% Chinese Yuan 4.3% Russian Ruble 2.5% Others 19% Mexican Peso 1.7% Currency Exposure on Q2 2014 Sales Currency Average Rates 2014 Currency Sensitivity 44 ● 1% variation in €/$ corresponds to an impact of 0.5% on 2014 Business EPS ● 1% variation in €/Yen corresponds to an impact of 0.1% on 2014 Business EPS Q2’13 Q2’14 % change €/$ 1.31 1.37 4.6% €/Yen 129.02 140.03 8.5% €/Real 2.70 3.06 13.3% €/Ruble 41.38 47.96 15.9%