General Meeting 2013


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General Meeting 2013

  1. 1. 2Forward Looking StatementsThis presentation contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, as amended. Forward-lookingstatements are statements that are not historical facts. These statements include projections and estimates and their underlying assumptions, statementsregarding plans, objectives, intentions and expectations with respect to future financial results, events, operations, services, product development andpotential, and statements regarding future performance. Forward-looking statements are generally identified by the words "expects", "anticipates", "believes","intends", "estimates", "plans" and similar expressions. Although Sanofis management believes that the expectations reflected in such forward-lookingstatements are reasonable, investors are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many ofwhich are difficult to predict and generally beyond the control of Sanofi, that could cause actual results and developments to differ materially from thoseexpressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include among other things, theuncertainties inherent in research and development, future clinical data and analysis, including post marketing, decisions by regulatory authorities, such asthe 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 aswell as their decisions regarding labeling and other matters that could affect the availability or commercial potential of such product candidates, the absenceof guarantee that the product candidates if approved will be commercially successful, the future approval and commercial success of therapeutic alternatives,the Groups ability to benefit from external growth opportunities, trends in exchange rates and prevailing interest rates, the impact of cost containment policiesand subsequent changes thereto, the average number of shares outstanding as well as those discussed or identified in the public filings with the SEC and theAMF made by Sanofi, including those listed under "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements" in Sanofis annualreport on Form 20-F for the year ended December 31, 2012.Other than as required by applicable law, Sanofi does not undertake any obligation to update or revise any forward-looking information or statements.
  2. 2. AgendaIntroduction & GovernanceSerge Weinberg, Chairman of the Board of DirectorsCompensation PolicyGérard Van Kemmel, Director, Compensation Committee2012 Achievements & OutlookChristopher A. Viehbacher, Chief Executive OfficerFinancial PerformanceJérôme Contamine, Executive Vice President, Chief Financial OfficerQuestions & AnswersVote on the Resolutions3
  3. 3. INTRODUCTION & GOVERNANCESerge WeinbergChairman of the Board of Directors4
  4. 4. An Independent and Diversified BoardComposition today Our Proposal16 Directors● No renewal of Directors in 2013● Nomination of a new Director:● Ms. Fabienne Lecorvaisier● A majority of independents(10 out of 16)● 4 women, i.e. 25%15 Directors● A majority of independents(9 out of 15)● 3 women, i.e. 20%● 6 Directors of a nationality other thanFrench, i.e. 40%● No over-boarding5
  5. 5. An Active and Engaged Board● 8 meetings in 2012● The Board in 2012 benefited frompresentations of the heads of the Group’smain activities● The Chairman of each specialist committeeinforms the Board of its preparatory work andits recommendationsTaux de présence élevé desadministrateurs : plus de95%6High BoardParticipation Rate:over 95%
  6. 6. Separation of the Office of Chairman and Chief Executive Officer7The Chairman liaisesbetween the Board ofDirectors and the GeneralManagement, and with theCompany’s shareholdersThe Chairman organizesand directs theBoard of DirectorsOrganizational modechosen by theBoard of Directors
  7. 7. Four Specialist CommitteesAudit Committee Compensation Committee● Addition of Christian Mulliez● 4 financial experts● 4 out of 5 members areindependent● 8 meetings in 2012● Regular review of the principal risks withaccounting effects● En 2012, specific reviews of risksmanagement, pharmacovigilance andcompliance● 3 out of 5 members are independent● 3 meetings in 2012● The Committee’s activitieswill be developed byMr. Van Kemmel inhis presentationParticipationRate94%ParticipationRate100%8
  8. 8. Four Specialist Committees (cont’d)● 4 out of 6 members are independent● 2 meetings in 2012● Main activities (in 2012)● Evolution of the Board andCommittees’ composition● Independence of Directors● Selection of a new Director● Evaluation of the workings of the Board● 3 out of 7 members are independent● 6 meetings in 2012● 4 closed sessions● 2 expanded sessions● Main activities (in 2012)● Development of the strategic plan● Research & Development● Acquisition projectsAppointments andGovernance CommitteeStrategy CommitteeParticipationRate100%ParticipationRate100%9
  9. 9. Oversight of Risk is a Critical Board Function10The Boardoversees:● The existence of reliable procedures for the supervision of the internal controls framework● The identification, evaluation and management of risk by the Executive Committee● The accounting treatment of risks having a potential financial incidence● The shareholder information, through the Annual reports on Form 20-F andDocument de référence and the Chairman’s report on internal controlsTheExecutiveCommitteedefines:● The orientations for internal controls and risk management through :● Risk Committee● Executive Compliance Committee● Specialized services
  10. 10. 2030405060708090Share Performance vs. CAC 40 since September 200811Source: vw dgroup data (09/01/2008 - 04/29/2013 )€83.45+71.4%CAC3868.68-13.5%
  11. 11. Share Performance vs. Pharmaceutical PeersShare Performance since September 1, 200812Source: Bloomberg (08/29/2008 - 04/29/2013)26%25%20%22%12%87%72%59%47%34%34%30%
  12. 12. 2008 2012€2.65€2.40€2.202010€2.772011€2.502009Sanofi Continues to Offer a Solid Dividend Yield● Proposed dividend(1) of €2.77 per share for2012 results● Dividend CAGR of 5.9% over the2008-2012 period● Target payout ratio of 50% for 2013 results(2)Payout45%13Evolution of Dividend(1) To be submitted for approvalby the Shareholders’Annual General Meeting on May 3, 2013(2) Dividend to be paid in 2014
  13. 13. Sanofi Pursued Share Repurchase Program in 2012 to Absorb Dilution14Share Buyback in 2012 13,573,643 shares repurchased forcancellation Weighted average share price of€60,59 per share Total amount of €823 millionNumber of Shares Repurchasedfrom 2010 to 2012 (in million)201213.6m201121.7m20106mNumber ofissued sharesas of December 311,311m 1,341m(1)1,326m(1) In 2011, 38,139,730 new shares have been issued as a result of the dividend payment in shares
  14. 14. Shareholder Structure as of December 31, 2012(1)15(1) Source: Thomson ReutersU.S.FranceInstitutionalInvestors78.3%UKOther EU countriesAsiaGermanySwitzerlandCanadaRestof the world 1.0%L’OréalIndividual ShareholdersEmployees1,326,342,959shares0.2% TreasuryOthers
  15. 15. 16COMPENSATION POLICYGérard Van KemmelDirectorCompensation Committee
  16. 16. Composition of the Compensation Committee17● Thierry Desmarest● Jean-René Fourtou● Claudie Haigneré● Christian Mulliez● Gérard Van Kemmel, ChairmanIn compliance with theAFEP-MEDEF Code,more than half the members areindependent(3 out of 5)The Compensation Committee is composed of:
  17. 17. Mission of the Compensation Committee18Develops recommendations and proposals for the Board on the followingsubjects:CompensationCommitteeProvides an opinion on the top management compensation policyAll aspects of compensation of the CEO and the ChairmanThe equity compensation policy (frequency, category of beneficiaries, performanceconditions)Allocation of director attendance feesThe employee share ownership policy
  18. 18. Compensation of the Chairman of the Board of Directors(in euros) 2010(1) 2011 2012 2013Base compensation 439,748 700,000 700,000 700,000Variable compensation 0 0 0 0Attendance fees 35,625 0 0 0Benefits in kind 4,785 9,463 8,115 *Total 480,158 709,463 708,115 *Options 0 0 0 0Performance shares 0 0 0 019(1) Coopted in December 2009 and appointed Chairman in May 2010* To be determined as ofDecember 31,2013
  19. 19. ● Target 200% + of base (unchanged)● Criteria 2013:● Financial objectives● R&D results● Organizational structure of the Group andsuccessionplanning for key posts in theGroup● Corporate social responsibilityCompensation of the Chief Executive Officer● 2008: initial amount set at €1,200,000● 2008 – 2012: unchanged base compensation● 2012: increase of 5% (€1,260,000 on a full year basis)Base Compensation● Set at €2,268,000 - 180% of base salary● Criteria 2012:● Financial objectives● R&D results● Developmentof 2015-2020strategic plan● Organization of the Group● Workforce motivation and Group image20Variable Compensation 2012 Variable Compensation 2013
  20. 20. Compensation of the Chief Executive Officer(in euros) 2010 2011 2012 2013Base compensation 1,200,000 1,200,000 1,250,000(2) 1,260,000Variable compensation 2,400,000 2,280,000 2,268,000 Target 200% +Attendance fees 0 0 0 0Benefits in kind 5,729 8,287 4,051 *Total 3,605,729 3,488,287 3,522,051 *Options(1) 275,000 300,000 240,000 240,000Performance shares(1) 0 30,000 42,000 45,00021(1) Subject to performance conditions,a condition ofcontinued employment,and a lock-up requirement(2) The annual base compensation was setat €1,260,000 as from March 5, 2012,i.e. a total base compensation for the year 2012 of €1,250,000.It represents a 5% increase compared to the initial compensation setin 2008.* To be defined as of Decembre 31,2013
  21. 21. Equity Compensation: Performance Shares22Fundamentally revamped in 2011with these objectives:Evolution in 2012● Limit the dilution of shareholders● Use of performanceshare grants, exceptfor alimited number of executives who also receiveoptions● All awards are subject to demandingperformance conditions● The nature of grants (shares vs options) isdifferentiated according to the positioning ofthe beneficiary● Performance period increased to 3 years● Decreasing weighting of stock optionscompared to performance shares● Limited to the CEO(50% of the award)● And to members ofthe Global Leadership Team(30% of the award)
  22. 22. Performance Conditions23All awards of performanceshares and options are subjectto two internal performancecriteria● Business Net Income● Return on Assets (ROA)Awards to the CEO are alsosubject to a third externalperformance criterion● Total Shareholder Return(TSR)No grantbelow the median(modified in 2013) Level of achievement of theBusiness Net Income:106% Level of achievement of theROA:+1.7 pt above the target Level of the TSR:Sanofi ranked 5th among apanel of 12In 2011-2012
  23. 23. Equity Compensation: Options to Subscribe for Shares● Essential for motivation, retention and recruitment● Renewal of the authorization voted in May 2011● Requested authorization: 0.7% for 38 months● Requested authorization in 2011: 1% for 26 months● Sub-ceiling applicable to the CEO: 15% maximum of the authorization requested● Demanding performance conditions over 3 consecutive fiscal years● Board commitment to publish the level of achievement of the performance conditionsimplemented in its 2012 annual report24Options to Subscribe for SharesResolution 13
  24. 24. Strengthen Employee Share Ownership25Sanofi wants to strengthenemployee share ownership● Offering an annual plan● The plan will be adapted to countries’tax rules● The 2013 employee shareownership plan will be launched inH2 2013●1.3%(1)of Sanofishares areheld byemployees(1) At December 31, 2012Average employee share ownership in CAC 40 companies is 3.75%3 share ownership planssince 2005●« Action 2005 »● 23,632 employees participated● 2,037,887 shares subscribed●« Action 2007 »● 16,779 employees participated● 1,531,951 shares subscribed●« Share 2010 » : globalshare plan awarding20 restricted shares to each Group employee● 105,067 beneficiary employees● 2,101,340 rights to receive shares granted
  25. 25. Resolutions in Favor of Employee Share Ownership● Legal obligation● Group’s will● Requested authorization: 1%26Capital increase reserved for members of savings plansResolution 11Possibility to use performance shares in full or partial substitution for thediscount in certain countriesResolution 12● Requested authorization: 0.2%● Offer reserved for countries where the 20% discount is taxable as from the subscription of shares● Not offered either to the CEO or to any member of the Executive Committee
  26. 26. 27● Proportional to activity (Board and Committee sessions)● Differentiated rates (Committee Chairs; foreign members)● Not distributed to Chairman of the Board or to the CEO● Rates unchanged● Slight growth of the amount actually distributed● Rates unchangedDirector Attendance FeesCompensation provided to DirectorsPrinciples20122013
  27. 27. 282012 ACHIEVEMENTS & OUTLOOKChristopher A. ViehbacherChief Executive Officer
  28. 28. Building a Company with Sustainable Growth292009-2012 2013+2005-2008Transforming whilemanaging the cliff● Investing in growth platforms● Increasing diversification● Disciplined cost managementGeneratingsustainable growth● Growing recurring sales● Launching innovative drugs● Optimizing capital allocationFocusing onRx blockbusters● Blockbuster drugs● Patents challenged● R&D setbacks
  29. 29. 20122011201020092008% oftotal42.7% 67.4%Our Growth Platforms Have Doubled Over Four YearsWhile the Patent Cliff Enters the Rear-view Mirror30% oftotal27.4% 6.4%€23,548m€11,783m€2,222m€7,565m20122011201020092008Sales ofGrowth Platforms(1)Sales ofKey Genericized Products(2)(1) 2010 include sales of Merial. In 2008 and 2009, Merial Joint Venture sales w ere not consolidated by Sanofi(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., Nasacort® U.S. and BMS Alliance (active ingredients of Plavix® and Avapro® sold to BMS)
  30. 30. Sanofi Has Delivered Sales Growth for the Last Four Years Despite theLoss of Several Mega Blockbusters312010€32,367m2009€29,306m2012€33,389m2011€34,947m€27,568m2008Sales+0.5%at CER(1)(2) (2) (3)(1) On a reported basis, FY 2012 sales w ere up +4.7%(2) In 2008 and 2009, Merial Joint Venture sales w ere not consolidated by Sanofi(3) In 2010, excluding non-consolidated sales fromMerial, Sanofi reported sales of €30,384m
  31. 31. €6.612009€7.0620102008€5.59€6.20€6.65201220112012 EPS Was Slightly Better than Originally Anticipated32Business EPS-12.8%at CER(1)(1) On a reported basis, 2012 EPS w as down -6.8%
  32. 32. Growth Platforms Grew by +9.9%(1)in 2012and Constitute Long Life Assets to Drive Future Growth33+16.7%+5.7%+9.9%+3.1%+16.9%+10.5%+8.3%(1) Sales of Grow th Platforms w ere up +7.8% in 2012 w ith Genzyme pro forma. Genzyme products w ere not consolidated in Q1 2011(2) Emerging Markets sales w ere up +7.2% in 2012 w ith Genzyme pro forma. Genzyme products w ere not consolidated in Q1 2011(3) New Genzyme perimeter includes Rare Diseases and Multiple Sclerosis franchises(4) Grow th is at constant exchange rates and at comparable perimeter - Genzyme sales w ere not consolidated in Q1 2011(5) Includes new product launches which do not belong to the other Grow th Platforms listed above: Multaq®, Jevtana®, Mozobil® and Zaltrap®Other Innovative Products(4,5)VaccinesDiabetes SolutionsConsumer HealthcareAnimal HealthEmerging Markets(2)Genzyme(3,4)€611m€3,897m€5,782m€3,008m€2,179m€11,145m€1,785m2012 growth at CER
  33. 33. (1)Rest of the w orld: Japan, Australia, New Zealand, Canada(2)Grow th at constant exchange rates©DenisFelix+11.3%(2) +10.1%(2) +2.1%(2) +10.2%(2)€3,435m€2,841m €2,721m€2,019mLatin America Asia Eastern Europe,Russia & TurkeyAfrica &Middle EastSanofi Benefited from its Broad Geographic Presencein Emerging Markets in 201234Emerging Markets Sales Split31.9%31.1%23.9%13.1%Emerging Markets€11,145mWestern Europe€8,335mRest of the World(1)€4,594mUnited States€10,873m
  34. 34. Providing Global Solutions to Diabetes Patients(1) Grow th at constant exchange ratesinsulin brandworldwide+19.3 %(1)Lantus® Salesin 2012€5,0bn#1More solutions…®35
  35. 35. Lyxumia® now Approved in Europe for the Treatmentof Type 2 Diabetes36● Pronounced post-prandial glucose loweringeffect of Lyxumia®● Clinical development supports use on top ofbasal insulin● New Drug Application accepted for review byFDA● European launch roll-out started in Q1 2013®The proprietary name for lixisenatide in the U.S. is under consideration.
  36. 36. Human Vaccines: 2012 Was a Solid Year for Sanofi Pasteur2012 Consolidated Sales€3.9bn, +5.7%(1)● Dengue vaccine● Clostridium difficile vaccineTomorrow8%9%Others30%Influenza vaccines23%13%17%37Polio/Pertussis/HibAdult boostersTravel & otherendemicMeningitis/Pneumo(1) Grow th at constant exchange rates
  37. 37. Sanofi Is a Top 3 Player in Consumer Healthcare Globally(1)(1) Nicholas Hall & Company - MAT September 2012(2) Grow th at constant exchange rates€3,008m381. J&J2. BAYER3.4. NOVARTIS5. PFIZER6. GSK4.5%3.3%3.2%3.0%2.8%2.8%Top 6 OTC in MarketShare(1)+9.9%(2)Annual Sales
  38. 38. Animal Health: Merial Showed Steady Performance in 201239Range of Products● Parasiticides● Anti-infectious drugs● Anti-inflammatory agents● Anti-ulcerous agents● Vaccines€2.2bnup +3.1%(1)2012 Sales(1) Grow th at constant exchange rates
  39. 39. Genzyme, the Global Leader in Rare Diseases,Delivered Strong Performance in 2012(1) Grow th is at constant exchange rates and at comparable perimeter - Genzyme sales w ere not consolidated in Q1 2011up +16.9%(1)€1.8bn2012 Sales©ChrisKirzeder,KirzederPhotography:Maryze,MaladiedePompe,Pays-Bas40Genetic DiseasesA SANOFI COMPANYEliglustatin Phase III● Fabry disease● Gaucher disease● Pompe disease
  40. 40. Genzyme: New Solutions for Patients with Multiple SclerosisCHMP: Committee for Medicinal Products for Human Use of the European Medicines AgencyLemtrada™ is the registered trade name for alemtuzumab submitted to health authorities©GeorgeP.DeTorres/MultiVu:Teresa,multiplesclerosis,U.S.Multiple Sclerosis● An innovative oral treatment● Promising launch in the U.S. andpositive CHMP opinion in Europe41● Ground-breaking efficacy● Submitted in Europe and the U.S.A SANOFI COMPANY● > 2 million people suffer from MS wolrdwide● 2012 global market sales: > €10bn
  41. 41. Key Regulatory Achievements since Early 201210 6Regulatory ApprovalsNew Drugs / VaccinesSubmitted● Aubagio®(EU)● Lyxumia®(U.S.)(2)● Lemtrada™ (U.S. and EU)● Vaxigrip®/Fluzone®Quadrivalent (EU and U.S.)● Zaltrap®(U.S. and EU)(1)● Aubagio®(U.S.)● Lyxumia®(EU)(2)● AUVI-Q™ (U.S.)● Kynamro™ (U.S.)(3)● IMOVAX® POLIO (JP)● Hexyon™/Hexacima®(EU)(4)● Lantus® pediatric use (EU)● Plavix® for PAD & STEMI (JP)42(1) Zaltrap® w as approved in EU on Feb 1, 2013(2) Lyxumia® w as approved in EU on Feb 1, 2013 and FDA file acceptance is expected in Q1 2013(3) Kynamro™ w as approved in the U.S. on Jan 29, 2013(4) Hexyon™/Hexacima® w as approved in EU on April22, 2013Zaltrap® is developed in collaboration w ith Regeneron - Lyxumia® is in-licensed from Zealand Pharma / Sanofi U.S. licensed the North American commercialization rights to AUVI-Q™ from Intelliject Inc. /Lemtrada™ is the registered trade name for alemtuzumab submitted to health authorities
  42. 42. Profound Changes in Research Globally43Evolution of scientific knowledgeand emergence of new technologiesProliferation of skills necessary for innovationRegulatory and economic environmentincreasingly challengingDeployment ofa new model isessential for allResearchstakeholders
  43. 43. Sanofi Adapts its Research Model, as Does the Whole Industry44Open Innovation●Concentrate activities and expertise, fragmented across alarge number of sites, within the heart of the most fertileecosystems●Take advantage of the scientific, academic and technicalenvironments (biotechs)Translational Medicine● Strengthening cooperation between laboratoryresearchers and clinical researchers to make scienceavailable to those who need it● Accelerate the translation of research efforts intotherapeutic applicationsModel deployed in the United States, Germany and Asia since 2011
  44. 44. Adapt Sanofi’s Research Model in FrancePharmaVitry sur SeineAlfortvilleChilly-MazarinLongjumeauMontpellierToulousePharmaVaccinesAnimal HealthMarcy l’EtoileLyon-GerlandSaint-VulbasStrasbourg1stprivate investor ininnovation in France1stprivate sectorpartner foracademic researchin lifesciences (AVIESAN)50%of globalR&D headcountin France40%of globalR&D investmentin France● Increase innovation in France1● Create a Hub France around Paris, Lyon andStrasbourg2● Allow production within the 26 industrial sitesin the country345
  45. 45. Up to Eighteen Potential New Launches over 2012-201527Kynamro™(mipomersen)54Lemtrada™(alemtuzumab)Aubagio™(teriflunomide)Lyxumia®(lixisenatide)Zaltrap®(aflibercept)AUVI-Q™(epinephrin)Hexyon™/Hexacima®Dengue vaccineotamixabaneliglustatSAR302503(JAK-2 inhibitor)DTP-HepB-Polio-Hibalirocumab(anti-PCSK9 mAb)iniparib2012 2013 2014 2015Fluzone® QIV IMQuadracel®46New glargineformulationLeGoo®(biopolymer gel)Cumulative Number of Projects(Pharmaceuticals and Vaccines)18Rare DiseasesDiabetesOncologyOther PharmaVaccinesMultiple SclerosisNote: Only first launches in a given market are mentioned.
  46. 46. Deliver sustainablelong-term growth32147447Executing a Successful StrategySeize value-enhancing growth opportunitiesBring innovative products to marketGrow a global healthcare leader with synergisticplatformsAdapt structure for future challenges andopportunities
  47. 47. Our Gratitude to Hanspeter SPEK48PresidentGlobal Operations
  48. 48. 49FINANCIAL PERFORMANCEJérôme ContamineExecutive Vice President, Chief Financial Officer
  49. 49. 2012FX Impact€1,400mGrowthplatforms€1,640mGenzymeQ1€733mOthers-€310mCopaxone& Dermik-€559mKeygenericizedproducts-€1,345m2011€33,389mGrowth Platforms Overcome Loss of Blockbusters, End of Copaxone®Agreement and Divestiture of Dermik in 20122012 Sales(1)(2)€34,947m(3)®50(1) Key genericized products include Lovenox® U.S., Plavix® Western EU, Taxotere® Western EU & U.S., Eloxatin® U.S., Ambien® family U.S., Allegra® U.S., Aprovel® Western EU, Xyzal® U.S., Xatral® U.S.,Nasacort® U.S. and BMS Alliance (active ingredients of Plavix® and Avapro® sold to BMS)(2) Genzyme products w ere not consolidated in Q1 2011(3) Emerging Markets, Diabetes Solutions, Vaccines, Consumer Healthcare, Animal Health, Genzyme & Innovative Products
  50. 50. FY 2012 Reflected a Slightly Better BOI Margin than Anticipated51€m FY 2012 FY 2011 % Change(reported €)% Change(CER)Net sales 34,947 33,389 +4.7% +0.5%Other revenues 1,010 1,669 -39.5% -42.4%Cost of sales (11,095) (10,426) +6.4% +3.9%Gross profit 24,862 24,632 +0.9% -3.9%R&D (4,922) (4,811) +2.3% -1.0%SG&A (8,947) (8,536) +4.8% +0.9%Other current operating income & expenses 108 4 - -Share of Profit/Loss of associates 424 1,102 - -Minority interests (172) (247) - -Business operating income 11,353 12,144 -6.5% -12.2%Business operatingmargin 32.5% 36.4% - -CER: Constant Exchange Rates BOI: Business Operating Income
  51. 51. 20122011 2011522012€1,669m €1,102mImpact on2012Business NetIncome:€1.3bn(3,4))€1,010m(2)€424mResidual impact(4)on BNI of Plavix® & Avapro® U.S. LoE expected to bearound €800m in H1 2013The Loss of U.S. Exclusivity of Plavix® and Avapro® Impacted our BNIby €1.3bn in 2012"Other Revenues" "Income from Associates"Loss of Exclusivity of Plavix® & Avapro® in the U.S.(1)(1) Avapro® on March 30, 2012 and Plavix® on May 17, 2012(2) Including a positive impact froma one-time payment of $80m by BMS. When excluding this payment, “Other Revenues” w ould have been €45m low er.(3) BNI impact calculated including a one-time payment of $80m by BMS(4) At constant exchange rates
  52. 52. Controling Costs While Investing in the Future532012201120122011 20122011Cost of Sales (€m) R&D Expenses (€m) SG&A Expenses (€m)31.8%of sales14.1%of sales25.6%of sales€8,947m€4,922m€11,095m€10,426m€4,811m€8,536m
  53. 53. Patent Cliff Impact on BNI Mitigated to ~€600m in 201254€m FY 2012 FY 2011 % Change(reported €)% Change(CER)Business operating income 11,353 12,144 -6.5% -12.2%Net financial expenses (460) (412) - -Income tax expense (2,714) (2,937) - -Effective tax rate -25.5% -27.0% - -Business net income 8,179 8,795 -7.0% -12.9%Net margin 23.4% 26.3% - -Business EPS(1) €6.20 €6.65 -6.8% -12.8%Average numberof shares outstanding(m) 1,319.5 1,321.7 - -CER: Constant Exchange Rates BNI: Business Net Income(1) Business EPS w as up +2.6% at CER in 2012 excluding Plavix® and Avapro® Loss of Exclusivity in the U.S. - Avapro® on March 30, 2012 and Plavix® on May 17, 2012
  54. 54. From Business Net Income to Consolidated Net Income55€m FY 2012 FY 2011 % Change(reported €)Business net income 8,179 8,795 (7.0%)Amortization of intangible assets (3,291) (3,314)Impairmentof intangible assets (117) (142)Fair value remeasurementof contingent considerationliabilities (192) 15Expenses arising on the workdown of acquired inventories (23) (476)Restructuring costs (1,141) (1,314)Gains and losses on disposals,and litigation (327)Tax effecton the items listed above & other tax items 1,580 2,482Share of items listed above attributable to non-controlling interests 3 6Restructuring costs and expensesarising from the impact of acquisitionson associates and Merial(31) (32)Net income attributable to equity holders of Sanofi 4,967 5,693 (12.8%)
  55. 55. Solid Free Cash Flow Generated in 2012Despite the Loss of Exclusivity of Plavix® in the U.S.56● Free Cash Flow of €7,375m, down-11.8% in 2012(1)● 2011 dividend of €3,487m paid inQ2 2012● Share repurchases of €823min 2012● Net debt decreased by €3,140min 2012Dividend &SharerepurchaseNet debtDec 31, 2012Restructuringcosts & Other+613-4,310Acquisitions &licensing-538CapEx- 1,402Net Cash fromoperatingactivitiesNet debtDec 31, 2011(2)(3)-10,859-7,719FCF+7,375+8,777(2)2012 (€m)(1) Free Cash Flow of €8,358m in 2011(2) Including derivatives related to the financialdebt: €456m at December 31, 2011, and €431m at December 31, 2012(3) Excluding Restructuring Costs
  56. 56. 2012201120102009Sustained Investments in 201257CapEx EvolutionMajor Investments in 2012€1,460m€1,261m€1,644m€1,402m● UCI: investment in 4 industrial sites in France forthe production of hydrocortisone by an innovativebiosynthetic process● Biolaunch: conversion of the Vitry-sur-Seine sitein France into the Groups leading biotechplatform● Genzyme: major investments in production sitesin Belgium (Myozyme®) and the U.S.● Dengue Vaccine: construction of a newproduction site in Neuville-sur-Saône, France
  57. 57. Very Solid Credit RatingsAgencies Short-term rating Long-term rating OutlookMoody’sP-1on 12/24/2004A1on 03/27/2013Stableon 03/27/2013Standard & PoorsA-1+on 03/22/2005AAon 05/03/2013Stableon 05/03/201358
  58. 58. A Strong Balance SheetDecember 31, 2012ASSETSLIABILITIES &EQUITYNet Debt (A-B) 7.7In €bnChange vs.December 31, 2011- 3.9+ 0.3+ 2.3+ 1.1+ 0.1+ 0.9- 3.258.319.26.06.457.518.314.1Intangible assetsOther non-current assetsWCRNet cash (B)Equity attributableProvisions and othernon-current liabilitiesFinancial debt (A)(1)59(1) Including interest rate and currency derivatives used to hedge debt
  59. 59. ● New Shareholder Handbook● 4 Letter to Shareholders / year● Next issue: June 2013● A rich and useful Website● With a dedicated section for individual● Videos on Sanofi Information for our Shareholders60
  60. 60. ©FredericCirou/PhotoAlto/GraphicObsessionOrganizing Regular Meetings● 6 shareholder meetings in France in 2013● April 8: Bordeaux● May 22: Marseille● June 18: Lyon● September 24: Caen● November 18: Lille● December 9: Nantes● Presence at Actionaria shareholder exhibition, Paris● November 22-23: Palais des Congrès● Individual Shareholders Committee● 12 members meeting 4 times/year● Next renewal: end 201361company in France, in the European healthcaresectorand accross all sectors in Europefor InvestorRelations#1Pan-European EXTELSurvey 2012
  61. 61. 62GENERAL MEETING 2013Questions & Answers
  62. 62. 63GENERAL MEETING 2013Vote on the Resolutions