Sanofi Sa · EURONEXT:SAN
Sanofi Sa — FY2014 Earnings Presentation
60 slides from Sanofi Sa's earnings presentation, Feb 5, 2015
Slide 1: FY 2014 Results
February 5! 2015 - Annual RESUITS
Slide 2: Forward Looking Statements
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 under
Slide 3: Agenda
Agenda Key Highlights ● Serge Weinberg, Chairman of the Board of Directors – CEO Financial Performance ● Jérôme Contamine, Executive Vice President, Chief Financial Officer Business Review ● Peter Guenter - Executive Vice President, Global Commercial Operations ● Pascale Witz - Executive Vice Presid
Slide 4: Key Highlights
KEY HIGHLIGHTS Serge Weinberg Chairman of the Board of Directors – CEO 4
Slide 5: In 2014, Sanofi Focused on Delivering Growth and Strengthening Innovation
In 2014, Sanofi Focused on Delivering Growth and Strengthening Innovation Returning ● Mid single digit sales growth(1) 1 to top line ● Solid performance across Growth platforms(2) growth Delivering ● Business EPS up +7.3% at CER in line with expectations 2 strong financial ● Free Cash Flow up +12.3%
Slide 6: Very Solid Top and Bottom Line Growth Achieved in 2014
Very Solid Top and Bottom Line Growth Achieved in 2014 Net Sales Business EPS -€792m -€0.22 +€1,611m +€0.37 €33,770m €5.20 (2) €5.05 €32,951m +4.9% at CER(1) +7.3% at CER(1) (2) FY 2013 Incremental FX Impact FY 2014 FY 2013 Incremental FX Impact FY 2014 Sales at CER EPS at CER (1) On a reported basi
Slide 7: Strong Performance across Growth Platforms
Strong Performance across Growth Platforms(1) Q4 2014 FY 2014 Sales & Growth at CER Sales & Growth at CER Emerging Markets(2) €3,126m +7.9% €11,347m +9.3% Diabetes Solutions €2,024m +11.0% €7,273m +12.1% Vaccines €1,177m +16.2% €3,974m +7.2% Consumer Healthcare(3) €817m +14.0% -4.2% €3,337m +16.5% G
Slide 8: Growth Platforms Collectively Provide a Sustainable Base
Growth Platforms Collectively Provide a Sustainable Base Quarterly Sales Growth from Growth Platforms(1) +11.5% (2) 10.7% +10.0% 10.0% 10.3% +10% at CER +8.6% +7.6% +7.9% +6.4% +6.2% (2) +5.7% +5.5% +5% at CER Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4
Slide 9: Three New Products Granted Regulatory Approvals over Last 6 Months
Three New Products Granted Regulatory Approvals over Last 6 Months Key Regulatory Approvals 1 2 3 Oral Therapy for Gaucher Relapsing forms of multiple Protection against four Disease Type 1 sclerosis strains of influenza virus U.S. (Aug 2014) U.S. (Nov 2014) U.S. (Dec 2014) EU (Jan 2015) 9
Slide 10: Regulatory Filings for Four Major New Medicines or Vaccines
Regulatory Filings for Four Major New Medicines or Vaccines Accomplished over the Last Year Key Regulatory Filings Diabetes Hypercholesterolemia U.S. EU Praluent alirocumab ™ U.S. EU R&D Pediatric hexavalent vaccine Dengue PR5i 6-in-1 U.S. Dengue vaccine Endemic markets(1) Praluent™ (alirocumab) is
Slide 11: A Successful Model for Productive R&D Collaborations
A Successful Model for Productive R&D Collaborations ● Global strategic collaboration ● World-class RNAi technology ● Access to highly productive ● Focus on genetically defined therapeutic human antibody diseases with a clear translational platform model for RNA interference ● Market value of 22.3%
Slide 12: Strong Commitment to Shareholder Return
Strong Commitment to Shareholder Return Evolution of Dividend (1) €2.77 €2.80 €2.85 €2.65 ● Proposed dividend of €2.85 per share €2.50 for 2014 financial year(1) €2.40 €2.20 ● Increase of 5 cents per share ● 21st consecutive year of dividend increase ● Payout of 54.8% 2008 2009 2010 2011 2012 2013 2
Slide 13: Outlook for 2015 - Investing in Future Growth Drivers
Outlook for 2015 - Investing in Future Growth Drivers FY 2015 Guidance • Taking into account the outlook for U.S. Diabetes as well as new product launches and late stage pipeline development, 2015 business EPS is expected to be stable to slightly growing vs. 2014 at constant average exchange rates(1
Slide 14: Financial Performance
FINANCIAL PERFORMANCE Jérôme Contamine Executive Vice President, Chief Financial Officer 14
Slide 15: FX Impact on Top and Bottom Line Turned Positive in Q4
FX Impact on Top and Bottom Line Turned Positive in Q4 as the U.S. Dollar Strengthened Quarterly Currency Impact Net Sales(1) Business EPS -€792m -€0.22 or -2.4% or -4.3% in 2014 +2.7% in 2014 +€229m +1.5% Q1 Q2 Q3 Q1 Q2 Q3 +€0.02 -€81m Q4 Q4 -1.0% -€0.03 -2.2% -€443m -€0.10 -€497m -5.5% -€0.11 -8.9
Slide 16: BOI Reflects Launch Costs and Lower Other Current Operating Income in Q4 2014
BOI Reflects Launch Costs and Lower Other Current Operating Income in Q4 2014 (1) % Change % Change €m Q4 2014 Q4 2013 (reported €) (CER) Net sales 9,072 8,457 +7.3% +4.6% Other revenues 98 88 +11.4% +5.7% Cost of sales (3,041) (2,898) +4.9% +2.8% Gross profit 6,129 5,647 +8.5% +5.5% R&D (1,351) (1,
Slide 17: Stable Business EPS in Q4 2014
Stable Business EPS in Q4 2014 (1) % Change % Change €m Q4 2014 Q4 2013 (reported €) (CER) Business operating income 2,443 2,494 -2.0% -3.3% (2) Net financial expenses (138) (103) - - Income tax expense (477) (577) - - Effective tax rate 21.0% 24.0% - - Business net income 1,828 1,814 0.8% -0.3% Net
Slide 18: Slight Gross Margin Improvement in 2014
Slight Gross Margin Improvement in 2014 Gross Margin (%) (1) 67.7% 68.3% ● Cost of Sales (CoS) of €11,029m 67.6% in 2014, slightly up (+2.4% at CER) 66.8% (1) ● Gross margin improved by 0.7 percentage point at CER in 2014 ● Reflecting higher margin from Genzyme, recovery of Generics in Brazil and im
Slide 19: Moderate Increase in R&D Spend in 2014 In Line with Guidance
Moderate Increase in R&D Spend in 2014 In Line with Guidance R&D Expenses (€m) (1) €4,770m / 14.5% €4,824m / 14.3% ● 2014 R&D expenses of €4,824m (1) €1,351m €1,246m (14.3% of sales), up 1.9% at CER ● Higher spend in mAbs development programs and Phase IV studies in Rare Diseases and MS ● Partially
Slide 20: SG&A Increase Driven by Launch Costs in 2014
SG&A Increase Driven by Launch Costs in 2014 SG&A Expenses (€m) (1) €8,603m / 26.1% €8,991m / 26.6% ● 2014 SG&A expenses of €8,991m (26.6% of sales), up +6.6% at CER €2,465m (1) €2,145m ● SG&A increase mainly driven by: ● Genzyme launch investments in MS and Rare Diseases ● Sales & Marketing investm
Slide 21: FY 2014 Business EPS Growth of +7.3% In Line with Financial Guidance
FY 2014 Business EPS Growth of +7.3% In Line with Financial Guidance (1) % Change % Change €m FY 2014 FY 2013 (reported €) (CER) Net sales 33,770 32,951 2.5% 4.9% Other revenues 339 355 -4.5% -5.1% Gross profit 23,080 22,323 3.4% 5.9% R&D (4,824) (4,770) +1.1% +1.9% SG&A (8,991) (8,603) +4.5% +6.6%
Slide 22: Significant Increase in Share Buyback Program in 2014
Significant Increase in Share Buyback Program in 2014 Evolution of Share Buyback €1,801m €1,641m €1,121m €1,004m Net SBB €823m €645m €680m €637m €178m Net SBB Net SBB Issuance Buyback Issuance Buyback Issuance Buyback 2012 2013 2014 Share count (m) (1) 1,323.2 1,320.7 1,309.9 Net share buyback activ
Slide 23: Free Cash Flow Increased by 12.3% in 2014
Free Cash Flow (FCF) Increased by 12.3% in 2014 Net Debt (in €m) -€1,205m -€3,676m €7,171m €6,043m FCF €8,471m €7,248m -€2,374m -€1,801m €680m -€1,223m (1) (4) (1) Net Debt Net Cash from CapEx Proceeds Share Acquisitions, Dividend Other Net Debt Dec 31, 2013 Operating from Issuance Repurchase Licens
Slide 24: Business Review
BUSINESS REVIEW Peter Guenter Executive Vice President, Global Commercial Operations Pascale Witz Executive Vice President, Global Divisions & Strategic Development Olivier Charmeil Executive Vice President, Vaccines David P. Meeker Executive Vice President & Chief Executive Officer, Genzyme Carsten
Slide 25: Well-Balanced Geographical Sales Split in 2014
Well-Balanced Geographical Sales Split in 2014 with Solid Growth in Emerging Markets and the U.S. Geographical Sales Mix in 2014 RoW (2) Emerging Markets Total Sales by Region Western EU €3,219m €7,865m -7.2% at CER €3,363m €3,205m +0.0% at CER 9.5% 23.3% €2,541m Emerging €2,095m Markets (1) 33.6% €
Slide 26: Solid Diabetes Performance Across Regions while Oncology Sales Show Relative Stability
Solid Diabetes Performance Across Regions in 2014 while Oncology Sales Show Relative Stability Diabetes Oncology ● FY 2014 sales of €7,273m, ● FY 2014 sales of €1,401m, +12.1% at CER -2.5% at CER ● Solid performance across main ● Mid-single digit sales erosion in geographies the U.S. and EM compensa
Slide 27: CHC and Generics Showed Strong Performance in EM
CHC and Generics Showed Strong Performance in EM Consumer Healthcare Generics ● FY 2014 sales of €3,337m, ● FY 2014 sales of €1,805m, +16.5% at CER(1) +16.2% at CER boosted by ● Strong EM sales representing recovery in Brazil(2) 52.6% of CHC sales 9.5% RoW U.S. ● Allegra® and Nasacort® now respectiv
Slide 28: Diabetes Team Focused on Successful Execution of Two Launches
Our Diabetes Team Is Focused on Ensuring Successful Execution of Two Launches New Diabetes Launches in 2015 A rapid-acting inhaled insulin Smoother PK/PD profile than Lantus® An innovative and patient friendly Similar HbA1c lowering with lower device hypoglycemia than Lantus® Addressing resistance t
Slide 29: Additional Milestones Expected in 2015 to Expand Diabetes Franchise
Additional Milestones Expected in 2015 to Further Expand our Diabetes Franchise Key Milestones for Lixisenatide in 2015 1 2 3 (1) ® (2) study Completion of U.S. regulatory submission Completion of two Phase III CV outcome trial expected in Q3 2015 trials expected in Q3 2015 evaluating lixisenatide i
Slide 30: Praluent Has the Potential to Transform Management of Hypercholesterolemic Patients
Praluent™ Has the Potential to Transform Management of Hypercholesterolemic Patients with High CV Risk 1● Regulatory applications accepted in the U.S. and EU ● 6-month FDA priority review granted(1) Praluent alirocumab ™ 2● Positive results from ODYSSEY CHOICE I & II ● Evaluation of monthly dosing 3
Slide 31: Sanofi Pasteur Delivered Robust Growth in 2014
Sanofi Pasteur Delivered Robust Growth in 2014 Despite Capacity Constraints in a Context of Strong Demand FY 2014 Sales (in €m) ● Strong Flu sales of €1,178m, +25.2% at CER driven by the U.S. and Mexico €3,974m €3,716m ● U.S. market leadership with 64m doses sold in 2014 +7.2% ● FDA approval of upda
Slide 32: New Record Flu Vaccines Campaign in the U.S.
New Record Flu Vaccines Campaign in the U.S. Successful Flu Vaccines Differentiation Strategy in the U.S. Flu Vaccines Sales (in €m) 41% 88% 2014 €694m 2013 +25.7% at CER €533m 32
Slide 33: On Track to Make Dengue the Next Vaccine-Preventable Disease
On Track to Make Dengue the Next Vaccine-Preventable Disease A Breakthrough Innovation to Help Reduce the Burden of Dengue(1) ● Rolling submission for Dengue vaccine initiated in several endemic countries in Asia ● First completed submission expected in H1 2015 ● First commercial batches produced an
Slide 34: Genzyme Rare Disease Products Delivered Double-Digit Growth Again in 2014
Genzyme Rare Disease Products Delivered Double-Digit Growth Again in 2014 Top 3 Rare Disease Products Sales ● FY 2014 Rare Disease sales €715m of €2,137m, up +11.2% at CER +8.3% at CER ● Sustained leadership positions(1) €542m for Cerezyme®, Fabrazyme® and €460m +9.8% at CER Myozyme® +23.0% at CER ●
Slide 35: Expanding Genzyme's Gaucher Franchise with Cerdelga
Expanding Genzyme’s Gaucher Franchise with Cerdelga® Source of Patients (1) ● Oral therapy eliminating infusion challenges New treatment Other therapies starts 19% 4% ● Launched in the U.S. in Sep 2014 ● Reimbursement progressing well with coverage by 88% of plans 37% Cerezyme® ● EU approval granted
Slide 36: Robust Growth and Steady Market Share Gains Achieved by Aubagio
Robust Growth and Steady Market Share Gains Achieved by Genzyme’s Aubagio® in 2014 ● FY 2014 sales of €433m vs. €166m Quarterly Sales (€m) last year €146m ● Results from 2 Phase III studies added to U.S. label ● Only oral treatment to significantly reduce the risk of sustained accumulation of disabi
Slide 37: Lemtrada Acceleration Expected with FDA Approval
Lemtrada® Acceleration Expected with FDA Approval 1● FY 2014 sales of €34 million 2● FDA approval received in Nov 2014 ● Infrastructure to support REMS program fully operational ● First patients infused within 2 weeks of approval 3● New dedicated field teams in place in U.S.(1) ● Ensuring appropriat
Slide 38: Merial Returned to Growth in 2014
Merial Returned to Growth in 2014 ● FY 2014 sales of €2,076m up +6.7% Merial Sales Growth at CER at CER(1) ● High single digit growth in Companion +12.7% Animal (61.7% of sales) +11.5% ● Production animal sales growth in-line with market growth +6.2% ● Successful launch of NexGard™ ● New soft, beef-
Slide 39: R&D Update
R&D UPDATE Elias Zerhouni President, Global R&D 39
Slide 40: Significant Phase III Advances Achieved in the Last Year
Significant Phase III Advances Achieved in the Last Year sarilumab Significant progress in dupilumab Start of Phase III program Phase III program in RA in Atopic Dermatitis and U.S. submission in Q4 2015 breakthrough designation LixiLan Two Phase III studies insulin lispro Start of two Phase III (Li
Slide 41: Returns from R&D Are Expected to Substantially Improve
Returns from R&D Are Expected to Substantially Improve 2007 - 2013 10 launches achieved Potential cumulative first 5 years sales ~€7.5bn(1,2) 2014 - 2020 Up to 18 launches expected Praluent™ Potential cumulative alirocumab first 5 years sales Dengue Vaccine >€30bn(1,2) (1) At CER, 5 years for ea
Slide 42: Sanofi Has Additional Potentially Transformative Drugs
Sanofi Has Additional Potentially Transformative Drugs R&D Assets to Watch(1) 1 Vatelizumab(2) 6 Neo GAA Multiple Sclerosis Pompe Disease 2 IL4/IL13 bi-specific mAb 7 C-MET kinase inhibitor Idiopathic Pulmonary Fibrosis Solid Tumors 3 Anti-GDF8 mAb 8 Anti-CXCR5 mAb Sarcopenia Systemic Lupus Erythema
Slide 43: Innovation Momentum Set to Continue in 2015
Innovation Momentum Set to Continue in 2015 2015 Expected Regulatory Decisions Q1 Q2 Q3 Q4 ● Toujeo® in Diabetes in U.S. & EU ● Praluent™ (alirocumab) in Hypercholesterolemia (U.S.) ● PR5i 6-in-1 pediatric vaccine (U.S.) ● Dengue vaccine in Endemic Countries Expected Regulatory Submissions
Slide 44: Conclusion
CONCLUSION Serge Weinberg Chairman of the Board of Directors – CEO 44
Slide 45: Our Focus Continues to Be on Excellence in Execution of Sanofi's Strategy
Our Focus Continues to Be on Excellence in Execution of Sanofi’s Strategy Strategy 2015 Focus Grow a global healthcare leader 1 with synergistic platforms Sustain leadership positions Bring innovative products 2 to market Ensure successful launches Adapt structure for future Focus company resources
Slide 46: Appendices: R&D Pipeline
APPENDICES R&D Pipeline SANOFI \%
Slide 47: Late Stage Pipeline – Pharma & Vaccines
Late Stage Pipeline – Pharma & Vaccines Phase III Registration N N LixiLan patisiran (ALN-TTR02) Toujeo® (U300) Clostridium difficile lixisenatide + insulin glargine siRNA inhibitor targeting TTR insulin glargine Toxoid vaccine Fixed-Ratio / Type 2 diabetes Familial amyloid polyneuropathy Type 1+2 d
Slide 48: Early Stage Pipeline – Pharma & Vaccines (Phase II)
Early Stage Pipeline – Pharma & Vaccines Phase II dupilumab N N SAR391786 GZ402671 Anti-IL4Rα mAb Anti-GDF8 mAb Oral GCS Inhibitor Asthma; Nasal polyposis; Sarcopenia Fabry Disease Eosinophilic oesophagitis N N vatelizumab SAR650984 Rabies VRVg Anti-VLA 2 mAb Anti-CD38 naked mAb Purified vero rabies
Slide 49: Early Stage Pipeline – Pharma & Vaccines (Phase I)
Early Stage Pipeline – Pharma & Vaccines Phase I SAR405838 (MI-773) N GZ402668 N GZ402663 (sFLT-01) N Streptococcus pneumonia HDM2 / p53 antagonist GLD52 (anti-CD52 mAb) Gene therapy Meningitis & pneumonia vaccine Solid tumors Relapsing multiple sclerosis Age-related macular degeneration (AMD) N N N
Slide 50: R&D Pipeline Summary Table
R&D Pipeline Summary Table(1) Phase I Phase II Phase III Registration TOTAL Oncology 5 3 0 0 8 Diabetes Solutions 1 0 2 1 4 Cardiovascular / Renal 0 1 0 1 2 Diseases Immune Mediated 3 2 2 0 7 Diseases 32 Infectious Diseases 0 1 0 0 1 Ophthalmology 3 0 0 0 3 Rare Diseases 2 1 2 0 5 Age Related 1 1 0
Slide 51: Expected R&D Milestones
Expected R&D Milestones Product Event Timing Dengue vaccine Expected regulatory submission in endemic countries H1 2015 Quadracel® Expected U.S. regulatory decision Q1 2015 Toujeo® (U300) Expected U.S. regulatory decision in Diabetes Q1 2015 Toujeo® (U300) Expected EU regulatory decision in Diabetes
Slide 52: Appendices: Finance
APPENDICES FINANCE SANOFI \%
Slide 53: 2015 Currency Sensitivity
2015 Currency Sensitivity Business EPS Currency Sensitivity Currency Variation € / Currency Business EPS Sensitivity USD -0.05 +0.10 JPY +5 -0.03 RUB +10 -0.06 Currency Exposure on 2014 Sales Currency Average Rates Russian Chinese Mexican Peso Ruble Brazilian Yuan 2.3% 1.9% 2013 2014 % change Real 4
Slide 54: Business Net Income Statement Q4 2014
Business Net Income Statement Fourth quarter 2014 Group Total Pharmaceuticals Vaccines Animal Health Others € million Q4 2014 Q4 2013(1) Change Q4 2014 Q4 2013(1) Change Q4 2014 Q4 2013(1) Change Q4 2014 Q4 2013(1) Change Q4 2014 Q4 2013(1) Net sales 9,072 8,457 7.3% 7,388 7,054 4.7% 1,177 959 22.7%
Slide 55: Business Net Income Statement Full Year 2014
Business Net Income Statement Full year 2014 Group Total Pharmaceuticals Vaccines Animal Health Others € million 2014 2013(1) Change 2014 2013(1) Change 2014 2013(1) Change 2014 2013(1) Change 2014 2013(1) Net sales 33,770 32,951 2.5% 27,720 27,250 1.7% 3,974 3,716 6.9% 2,076 1,985 4.6% - - Other re
Slide 56: Reconciliation of Business Net Income to Consolidated Net Income (Q4)
Reconciliation of Business Net Income to Consolidated Net Income Attributable to Equity Holders of Sanofi € million Q4 2014 Q4 2013(1) Change Business net income 1,828 1,814 0.8% Amortization of intangible assets(2) (620) (682) Impairment of intangible assets 135 (919) Fair value remeasurement of co
Slide 57: Reconciliation of Business Net Income to Consolidated Net Income (FY)
Reconciliation of Business Net Income to Consolidated Net Income Attributable to Equity Holders of Sanofi € million 2014 2013(1) Change Business net income 6,847 6,686 2.4% Amortization of intangible assets(2) (2,482) (2,914) Impairment of intangible assets 26 (1,387) Fair value remeasurement of con
Slide 58: Consolidated Income Statements
Consolidated Income Statements € million Q4 2014 Q4 2013(1) 2014 2013(1) Net sales 9,072 8,457 33,770 32,951 Other revenues 98 88 339 355 Cost of sales (3,041) (2,899) (11,029) (10,991) Gross profit 6,129 5,646 23,080 22,315 Research and development expenses (1,351) (1,246) (4,824) (4,770) Selling a
Slide 59: Cash Flow Statements
Cash Flow Statements € million 2014 2013(1) Business net income 6,847 6,686 Depreciation amortization and impairment of property. plant and equipment and software 1,230 1,211 Net gains and losses on disposals of non-current assets, net of tax (205) (261) Other non-cash items (389) (106) Operating ca
Slide 60: Balance Sheets
Balance Sheets ASSETS LIABILITIES 12/31/14 12/31/13(1) 12/31/14 12/31/13(1) € million € million Property, plant and equipment 10,396 10,182 Equity attributable to equity-holders of Sanofi 56,120 56,904 Equity attributable to non-controlling Intangible assets (including goodwill) 53,740 52,529 148 12