Sanofi Sa · EURONEXT:SAN
Sanofi Sa — Q3 2014 Earnings Presentation
38 slides from Sanofi Sa's earnings presentation, Oct 28, 2014
Slide 1: Q3 2014 Results
Q3 2014 RESULTS October 28, 2014
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 ● 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 3
Slide 4: Key Highlights
KEY HIGHLIGHTS Christopher A. Viehbacher Chief Executive Officer 4
Slide 5: Sanofi Delivered Another Solid Quarter
Sanofi Delivered Another Solid Quarter in Q3 2014 ● Net sales up +5.1% at CER(1) Solid financial ● 1 performance Business EPS up +10.3% at CER(1) ● Free Cash Flow up +15.8% in 9M 2014 Strong ● 78.1% of Group sales and up +10.0% at CER performance despite more challenging U.S. diabetes market dynamic
Slide 6: Successful Growth Strategy Continues to Deliver Solid Top and Bottom Line Growth
Successful Growth Strategy Continues to Deliver Solid Top and Bottom Line Growth in Q3 2014 Net Sales Business EPS -€81m -€0.03 +€0.14 +€430m €1.47 €8,781m (2) €1.36 €8,432m +5.1% at CER(1) +10.3% at CER(1) (2) Q3 2013 Incremental FX Impact Q3 2014 Q3 2013 Incremental FX Impact Q3 2014 Sales at CER
Slide 7: Consistent Strong Sales Performance of Growth Platforms
Consistent Strong Sales Performance of Growth Platforms Demonstrates the Sustainability of our Business Model Quarterly Sales Growth from Growth Platforms(1) +11.5% (2) 10.7% +10% +10.0% 10.0% at CER +8.6% +7.6% +7.9% (2) +6.4% +6.2% +5.7% +5.5% +5% at CER Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2
Slide 8: Growth Platforms Grew +10.0% Now Representing 78.1% of Sales
Growth Platforms Grew +10.0%(1) in Q3 2014 Now Representing As Much As 78.1% of Sales Q3 2014 9M 2014 Sales & Growth at CER Sales & Growth at CER Emerging Markets(2) €2,776m +7.6% €8,221m +9.9% Diabetes Solutions €1,799m +8.3% €5,249m +12.5% Vaccines €1,451m +11.2% €2,797m +4.1% Consumer Healthcare(
Slide 9: Strong U.S. Formulary Access Secured
Strong U.S. Formulary Access Secured in Q3 2014 in an Increasingly Competitive Pricing Environment ● Lantus® sales up +8.1% at CER ● Up +9.5% in Western Europe and +19.7% Quarterly Sales (€m) in Emerging Markets at CER €1,567m ● U.S. growth of +5.8% at CER reflecting increasing competitive pressure
Slide 10: Strong Performance of Sanofi Pasteur in Line with Expectations
Strong Performance of Sanofi Pasteur in Q3 2014 in Line with Expectations ● Strong Flu vaccines sales up +15.0% at CER driven by successful Sales differentiation strategy in the U.S. €1,451m €5m ● Other vaccines sales up +8.4% at CER €62m given recovery in Pentacel® sales due to improved supply €84m
Slide 11: Genzyme's Aubagio Continues to See Expanded Use
Genzyme’s Aubagio® Continues to See Expanded Use ● Continued solid sales ramp up of once-daily Aubagio® Quarterly Sales (€m) ● Results from 2 Phase III studies added €112m to U.S. label of Aubagio® ● Only oral treatment to significantly slow progression of disability in 2 Phase III in RMS (TEMSO and
Slide 12: Merial Delivers Strong Growth
Merial Delivers Strong Growth in Q3 2014 ● Strong sales up +12.7% at CER Merial Sales Growth at CER ● Double digit growth in Companion as well as Production Animals +12.7% ● Successful launch of NexGard™ +6.2% ● New soft, beef-flavored chew treating fleas and ticks for dogs with sales of €85m in 9M
Slide 13: Significant Progress in Advancing New Medicines and Vaccines Closer to Launch
Significant Progress in Q3 2014 in Advancing New Medicines and Vaccines Closer to Launch - Hypercholesterolemia Dengue Vaccine ● 9 positive Phase III top-line readouts ● Positive 2nd Phase III results in LatAm announced in Q3 2014 released in September 2014 ● Priority review voucher in the U.S. ● Re
Slide 14: Global Licensing Agreement with Mannkind for Afrezza
Global Licensing Agreement with Mannkind for Afrezza® in Q3 2014 Expands Diabetes Portfolio ● Afrezza® has the potential to address resistance to insulin initiation and insulin intensification, a major problem in the suboptimal treatment of diabetes ● PK profile of Afrezza®, a rapid-acting inhaled i
Slide 15: Innovation Momentum Set to Continue in Q4 2014
Innovation Momentum Set to Continue in Q4 2014 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 Regulato
Slide 16: Financial Performance
FINANCIAL PERFORMANCE Jérôme Contamine Executive Vice President, Chief Financial Officer 16
Slide 17: Limited FX Impact Given Strengthening of U.S. Dollar
Limited FX Impact in Q3 2014 Given Strengthening of U.S. Dollar Quarterly Currency Impact Net Sales(1) Business EPS -€81m -€0.03 -1.0% -€212m -2.2% -2.5% -€305m -€0.08 -€0.08 -3.5% -4.4% -5.5% -€0.10 -€0.11 -€443m -8.9% -€497m -5.5% -9.1% -6.2% -€627m -€0.16 -€662m -€0.17 -7.3% -13.7% -7.3% -10.2% Q
Slide 18: BOI Increased Faster than Sales Again
BOI Increased Faster than Sales Again in Q3 2014 Q3 2013 % (reported Change % Change (1) €m Q3 2014 €) (CER) Net sales 8,781 8,432 +4.1% +5.1% Other revenues 87 86 +1.2% - Cost of sales (2,864) (2,870) -0.2% +0.7% Gross profit 6,004 5,648 +6.3% +7.3% R&D (1 146) (1,182) -3.0% -2.6% SG&A (2,193) (2,0
Slide 19: Improvement in Gross Margin vs. Q3 2013
Improvement in Gross Margin in Q3 2014 vs. Q3 2013 Gross Margin (%) ● Stable Cost of Sales (CoS) of €2,864m in Q3 2014 (+0.7% at (1) 67.0% 68.4% CER) ● Gross margin up 1.4 percentage point in Q3 2014 vs. Q3 2013 ● Recovery from Sanofi Pasteur manufacturing issues in Toronto ● Improved industrial per
Slide 20: R&D Expenses Slightly Decreased
R&D Expenses Slightly Decreased in Q3 2014 R&D Expenses (€m) ● Q3 2014 R&D expenses of €1,146m, down -2.6% at CER (1) €1,182m €1,146m reflecting: ● Lower expenses in Oncology ● Completion of EDITION program with Toujeo® in Diabetes ● More than offsetting higher spend on dupilumab clinical developmen
Slide 21: Higher SG&A to Sales Ratio vs. Q3 2013
Higher SG&A to Sales Ratio in Q3 2014 vs. Q3 2013 SG&A Expenses (€m) ● Q3 2014 SG&A expenses of €2,193m, up +10.0% at CER €2,193m ● SG&A increase driven by: €2,012m (1) ● Rebound from a low base for commercial activities in China ● Higher A&P spend in the U.S. on NexGard™ and Frontline® ● Genzyme la
Slide 22: Strong Business EPS Growth of +10.3%
Strong Business EPS Growth of +10.3% in Q3 2014 €m Q3 2014 Q3 2013 (1) % Change % Change (reported €) (CER) Business operating income 2,716 2,484 +9.3% +11.0% Net financial expenses (139) (123) +13.0% +15.4% Income tax expense (642) (566) +13.4% +15.0% Effective tax rate -25.0% -24.0% - - Business n
Slide 23: Free Cash Flow Increased by 15.8% in 9M 2014
Free Cash Flow (FCF) Increased by 15.8% in 9M 2014 Net Debt (in €m) -€1,061m -€3,676m €9,228m FCF €5,041m €4,239m -€2,220m €6,043m €635m -€1,102m -€802m Net Debt (1) Net Cash from CapEx Proceeds Share Acquisitions, Dividend Other (4) Net Debt (1) Dec 31, 2013 Operating from Issuance Repurchase Licen
Slide 24: Conclusion
CONCLUSION Christopher A. Viehbacher Chief Executive Officer 24
Slide 25: Solid Performance in 9M 2014 Reflects Consistent Execution of our Growth Strategy
Solid Performance in 9M 2014 Reflects Consistent Execution of our Growth Strategy Solid sales and business EPS growth in Q3 2014 Growth platforms up +10.0% at CER and accounting for 78.1% of sales despite tougher U.S. diabetes market dynamics Business EPS guidance for 2014 reconfirmed given solid pe
Slide 26: Appendices: R&D Pipeline
APPENDICES R&D Pipeline SANOFI \%
Slide 27: Late Stage Pipeline – Pharma & Vaccines
Late Stage Pipeline – Pharma & Vaccines Phase III Registration N N LixiLan alirocumab Dengue Toujeo® (U300) lixisenatide + insulin glargine Anti-PCSK-9 mAb Mild-to-severe Insulin glargine Fixed-Ratio / Type 2 diabetes Hypercholesterolemia dengue fever vaccine Type 1+2 diabetes, U.S., EU N Lyxumia® (
Slide 28: Early Stage Pipeline – Pharma & Vaccines (Phase II)
Early Stage Pipeline – Pharma & Vaccines Phase II N dupilumab SAR391786 Rabies VRVg Anti-IL4Rα mAb Anti-GDF8 mAb Purified vero rabies vaccine Asthma; Nasal polyposis Sarcopenia N N valetizumab SAR650984 Meningitis ACYW conj. Anti-VLA 2 mAb Anti-CD38 naked mAb 2nd generation meningococcal Multiple sc
Slide 29: Early Stage Pipeline – Pharma & Vaccines (Phase I)
Early Stage Pipeline – Pharma & Vaccines Phase I SAR405838 (MI-773) N SAR408701 N N GZ402663 (sFLT-01) Streptococcus pneumonia HDM2 / p53 antagonist Anti-CEACAM5 ADC Gene therapy Meningitis & pneumonia vaccine Solid tumors Solid tumors Age-related macular degeneration (AMD) SAR566658 N SAR113244 N S
Slide 30: R&D Pipeline Summary Table
R&D Pipeline Summary Table(1) Phase I Phase II Phase III Registration TOTAL Oncology 7 3 0 0 10 Diabetes Solutions 1 0 1 1 3 Cardiovascular / Renal Diseases 0 1 1 0 2 Immune Mediated Diseases 2 2 2 0 6 34 Infectious Diseases 1 1 0 0 2 Ophthalmology 3 0 0 0 3 Rare Diseases 3 1 1 1 6 Age Related Degen
Slide 31: Expected R&D Milestones in Q4 2014 / H1 2015
Expected R&D Milestones in Q4 2014 / H1 2015 Product Event Timing Dupilumab (anti-IL4Rα mAb) Start of Phase III trial in Atopic Dermatitis Q3 2014 Rotavirus vaccine Start of Phase III trial Q4 2014 New Insulin Lispro (SAR342434) Expected start of Phase III trial in Diabetes Q4 2014 Lemtrada™ (alemtu
Slide 32: Appendices: Finance
APPENDICES FINANCE SANOFI \%
Slide 33: Business Net Income Statement – Q3 2014
Business Net Income Statement Third quarter 2014 Group Total Pharmaceuticals Vaccines Animal Health Others € million Q3 2014 Q3 2013(1) Change Q3 2014 Q3 2013(1) Change Q3 2014 Q3 2013(1) Change Q3 2014 Q3 2013(1) Change Q3 2014 Q3 2013(1) Net sales 8,781 8,432 4.1% 6,815 6,674 2.1% 1,451 1,300 11.6
Slide 34: Business Net Income Statement – 9M 2014
Business Net Income Statement Nine months 2014 Group Total Pharmaceuticals Vaccines Animal Health Others € million 9M 2014 9M 2013(1) Change 9M 2014 9M 2013(1) Change 9M 2014 9M 2013(1) Change 9M 2014 9M 2013(1) Change 9M 2014 9M 2013(1) Net sales 24,698 24,494 0.8% 20,332 20,196 0.7% 2,797 2,757 1.
Slide 35: Reconciliation of Business Net Income to Consolidated Net Income (Q3)
Reconciliation of Business Net Income to Consolidated Net Income Attributable to Equity Holders of Sanofi € million Q3 2014 Q3 2013(1) Change Business net income 1,935 1,795 7.8% Amortization of intangible assets(2) (561) (689) Impairment of intangible assets (35) (28) Fair value remeasurement of co
Slide 36: Reconciliation of Business Net Income to Consolidated Net Income (9M)
Reconciliation of Business Net Income to Consolidated Net Income Attributable to Equity Holders of Sanofi € million 9M 2014 9M 2013(1) Change Business net income 5,019 4,872 3.0% Amortization of intangible assets(2) (1,862) (2,232) Impairment of intangible assets (109) (468) Fair value remeasurement
Slide 37: Consolidated Income Statements
Consolidated Income Statements € million Q3 2014 Q3 2013(1) 9M 2014 9M 2013(1) Net sales 8,781 8,432 24,698 24,494 Other revenues 87 86 241 267 Cost of sales (2,864) (2,871) (7,988) (8,092) Gross profit 6,004 5,647 16,951 16,669 Research and development expenses (1,146) (1,182) (3,473) (3,524) Selli
Slide 38: 2014 Currency Sensitivity
2014 Currency Sensitivity Business EPS Currency Sensitivity ● 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 Currency Exposure on Q3 2014 Sales Currency Average Rates Russian Chinese Yuan Ruble M