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2016/06 – IR – Business swap with Boehringer Ingelheim

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2016/06 – IR – Business swap with Boehringer Ingelheim

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2016/06 – IR – Business swap with Boehringer Ingelheim

  1. 1. Building Global Leadership in Consumer Healthcare June 27, 2016
  2. 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 initiatives 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, 2015. Other than as required by applicable law, Sanofi does not undertake any obligation to update or revise any forward-looking information or statements.
  3. 3. 3 Agenda 3 Building Global Leadership in Consumer Healthcare ● Jérôme Contamine - Executive Vice President, Chief Financial Officer ● Vincent Warnery - Senior Vice President, Global Consumer Healthcare Business Unit Q&A Session
  4. 4. RESHAPING THE PORTFOLIO Jérôme Contamine Executive Vice President, Chief Financial Officer 4
  5. 5. Asset Swap of Sanofi Animal Health Business and Boehringer Ingelheim (BI) Consumer Healthcare Business 5 BI Consumer Healthcare €6.7bn plus gross cash payment €4.7bn Sanofi Animal Health €11.4bn (1) Following consultations with the relevant social bodies and subject to appropriate regulatory approvals (2) integration would start after closing. and will be dependent on market authorization transfers in each country Enterprise Value June 27, 2016 Signing of deal announced Year-end 2016 Expected close of the transaction(1) Progressive integration Country-by-country basis(2)
  6. 6. Deal is Consistent with our Strategic Priority of Reshaping the Portfolio Focused on Human Health 6 (1) Managed by Sanofi Genzyme Global Business Unit (2) Managed by the General Medicines and Emerging Markets Global Business Unit ● Animal Health ● Generics(2) in Europe ● Diabetes/ Cardiovascular ● Vaccines ● Rare Diseases(1) ● Emerging Markets(2) Explore strategic options Sustain leadership Build competitive positions A B C ● Animal Health ● Consumer Healthcare(2) ● Multiple Sclerosis(1) ● Oncology(1) ● Immunology(1)
  7. 7. Global Consumer Healthcare Market Offers Sustainable Mid-Single Digit Growth 7 ● Large global CHC market has delivered consistent mid-single digit growth in recent years ● Market growth of 5.5% in 2015 ● Market growth expected to be 4.5% (2015-2020 CAGR)(1) ● Consumer healthcare market driven by GDP growth and demographics ● Increased health awareness and growing propensity to self-medicate ● Brand equity offers more sustainable and less volatile revenue streams 2015 €109bn ~4.5% CAGR (1) Nicholas Hall & Company, FY 2015 2010
  8. 8. BUILDING GLOBAL LEADERSHIP IN CONSUMER HEALTHCARE Vincent Warnery Senior Vice President, Global Consumer Healthcare Business Unit 8
  9. 9. 1 2 3 Asset Swap is a Major Step Toward our Vision for CHC 9 Maximize Potential of Existing Brands Shape New Categories Pursue External Growth Opportunities ● Consumer-driven innovations ● Unique business model ● Geographic expansion ● Global & regional OTC switch opportunities ● Leverage consumer trends & preferences ● Reach critical scale in key countries ● Optimize portfolio in priority categories CHC Vision 2020 9
  10. 10. 12% 9% 6% 4% 3% 3% 3% 3% 3% 2% 52% 10 Sanofi has a Leading Portfolio of Consumer Healthcare Brands 10 NO-SPA 2015 Global CHC Sales by Brand Total: €3.35bn(1) (1) Value of CHC sales in Venezuela have been reduced to nearly zero due to revision of foreign exchange rates (2) Vitamins, Minerals and Supplements (3) Nicholas Hall & Company, FY 2015 Other  Top-5 position in VMS(2), Digestive Health, Pain Care, Allergy Solutions, Feminine Care(3) ● Cough & Cold: strategic interest to balance seasonal allergy category  Global footprint ● 46.5% of CHC sales were generated in Emerging Markets in 2015(1) ● #1 in France and Australia(3)  10 key Sanofi brands ● ~50% of Sanofi CHC sales in 2015
  11. 11. 14% 14% 11% 9% 7% 4% 41% 11 Gaining Category and Regional Leadership with Iconic Boehringer Ingelheim Brands 11  6 key BI brands ● ~60% of sales in 2015  Strengths in Digestive Health and Cough & Cold categories ● #6 in Digestive Health(2) ● #7 in Cough & Cold(2)  Largest countries by net sales: Japan (€299m), U.S. (€186m) and Germany (€162m) (1) Transaction perimeter excludes CHC in China; value of CHC sales in Venezuela have been reduced to nearly zero due to revision of foreign exchange rates (2) Nicholas Hall & Company, FY 2015 Other 2015 Global CHC Sales by Brand Total: €1.53bn(1)
  12. 12. 4.5% 4.4% 4.3% 4.2% 3.5% 2.5% 2.0% 1.4% 1.0% A Strong Strategic Rationale for Our Ambitions in Consumer Healthcare 12 Other Taisho Reckitt Benckiser Pfizer J&J GSK Takeda P&G Bayer + (1) Nicholas Hall & Company, FY 2015 (2) Excludes BI CHC in China ● Market share of 4.3% in 2015(1,2) ● Leverage scale in a fragmented market ● Opportunity for strategic consolidation ● Expand global footprint ● Brand equity offers more sustainable revenue streams ● No patent cliff ● ‘Ever-lasting’ brands Sanofi to Become a Leading Player in the €109bn OTC Market(1)
  13. 13. Combined Sanofi and BI OTC Businesses Have Outgrown the Market in Recent Years 13 A top combined growth profile among leading players Combined 2010-2015 OTC Sales (1) (€m) 2010 2015 +5.8% 70% 30% 67% 33% 2010-2015 CAGR (1) P&G J&J Taisho Bayer Takeda Pfizer Reckitt Benckiser 5.7% OTC Market Growth: 4.4% 5.8% 5.3% 4.5% 3.8% 3.1% 0.3% -2.1% 1.9%GSK + (1) Nicholas Hall & Company, FY 2015; Organic growth at CER; Excludes BI CHC in China
  14. 14. BI Brands Complementary in Four Priority Categories 14 Segment Size(1) in €bn 32.1 #5 #3 18.9 #11 #6 15.5 #5 #1 14.6 #4 #2 3.7 #3 #3 0.9 #1 #1 + Sanofi Global Categories Market Rank(1,2) (1) Nicholas Hall & Company, FY 2015 (2) Excludes BI CHC in China
  15. 15. €1bn €1.4bn €0.9bn €0.6bn €0.7bn EUROPE #4#1 ASIA-JPAC #8#2 ROW(2) #2LATAM #1 N. AMERICA (1) Nicholas Hall & Company, FY 2015; Excludes BI CHC in China (2) CIS, Middle-East Africa and South Asia (3) Including Digestive Health and Cough & Cold categories Asset Swap Expands Sanofi’s CHC Scale in Europe and JPAC Regions(1) 15 Germany will be a key center of Sanofi’s CHC business(3) #7#6
  16. 16. CLOSING REMARKS Jérôme Contamine Executive Vice President, Chief Financial Officer 16
  17. 17. A Value Creating Transaction Based on Strong Financials Expected Transaction Benefits ● Increased scale in Consumer Healthcare business ● Combined CHC global sales of approximately €4.9bn in 2015(1) ● Value creation ● Synergies in advertising and promotional activities (e.g. Sanofi medical sales force to support BI brands, pipeline, etc.) ● Stronger global commercial platform for potential OTC launches and Rx switches ● Financial implications ● BOI margin contribution of the CHC business expected to be around 30% in 2018 ● Continue to expect transaction to be business EPS neutral in 2017 and accretive in subsequent years (1) Excludes Boehringer Ingelheim CHC in China; value of CHC sales in Venezuela have been reduced to nearly zero due to revision of foreign exchange rates by both companies 17
  18. 18. 18 Asset Swap Achieves Key Strategic Goal of Becoming a Leader in Consumer Healthcare ● Global CHC market offers sustainable mid-single digit growth(1) ● Complementary portfolio increases market position in priority categories and scale in some major countries ● Global integration to begin upon the expected completion of the transaction by year-end 2016 ● New CHC Global Business Unit will be formed ● Supports vision of a diversified global healthcare company focused on human health 1 2 4 3 (1) Nicholas Hall & Company, FY 2015
  19. 19. 19 Q&A SESSION
  20. 20. 20 APPENDIX
  21. 21. Combined Sales in Key Categories in 2015 (in €m) Combined Sales in Key Geographies in 2015 (in €m) €787m €845m €550m €432m €730m €454m €364m €411m €241m €61m €551m €848m €196m €223m €427m €134m €927m €466m €476m €628m Other(2) €791m€673m BI Brands Add Significantly to Sanofi’s Presence in Key CHC Categories & Geographies(1) €961m€1,209m €762m MEA/CIS/ South Asia €902m Asia Pacific €690m Latin America €1,123m North America €1,399m Europe MEA: Middle East Africa CIS: Commonwealth of Independent States (1) Sanofi CHC published and Boehringer Ingelheim 2015 sales at published rates; Excludes Boehringer Ingelheim CHC in China; value of CHC sales in Venezuela have been reduced to nearly zero due to revision of foreign exchange rates by both companies (2) Others: Feminine Care, Lifestyle OTS’s, etc. 21 €1,241m

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