Slide 1: Q4 and Full Year 2018 Results
Q4 and Full Year 2018 Results February 7, 2019
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 Olivier Brandicourt Chief Executive Officer Financial Results Jean-Baptiste de Chatillon Executive Vice President, Chief Financial Officer R&D Update John Reed Executive Vice President, Global Head of R&D Olivier Charmeil Executive Vice President, China & Emerging Markets Karen
Slide 4: Key highlights
Key highlights Olivier Brandicourt Chief Executive Officer
Slide 5: Sanofi delivered Q4 2018 sales and EPS growth in the mid-single digits
Sanofi delivered Q4 2018 sales and EPS growth in the mid-single digits Company sales Business EPS €8,692m €8,997m €1.06 €1.10 +3.9% +4.7% at CER(1) at CER Q4 2017 Q4 2018 Q4 2017 Q4 2018 CER: Constant Exchange Rates 5 (1) Q4 2018 sales increased +2.6% at CER/CS; Constant Structure adjusting for Biov
Slide 6: Sales growth continued despite impact from disposal of EU Generics in Q4
Sales growth continued despite impact from disposal of EU Generics in Q4 Q4 2018 company sales €9,030m +2.5% at CER +€286m €8,692m -€164m €8,528m +€494m -€278m Q4 2017 EU Generics Adjusted for U.S. Lantus®, Pharma, (1) Rare Blood Q4 2018 Disposal EU Gx Disposal U.S. sevelamer Vaccines & CHC Disorder
Slide 7: Accelerated growth rate for Sanofi Genzyme and Vaccines while DCV and GEM declined
Accelerated growth rate for Sanofi Genzyme and Vaccines while DCV and GEM declined as expected in Q4 Q4 2018 sales by Global Business Unit Growth at CER/CS(1) Company Sales €8,997m +2.6% (3) Sanofi Genzyme (Specialty Care) (2) €2,054m +16.1% Sanofi Pasteur (Vaccines) €1,527m +9.7% Diabetes & Cardiov
Slide 8: Strong performance of Specialty Care in all geographies; Vaccines driven by Influenza
Strong performance of Specialty Care in all geographies; Vaccines driven by Influenza franchise in Mature Markets Q4 2018 sales by franchise (4) Mature markets Emerging markets Growth at Growth at Growth at Sales (1) Sales (1) Sales (1) CER/CS CER/CS CER/CS (2) (2) (2) Specialty Care €2,328m +16.9%
Slide 9: Refocus of GBU structure expected to support growth and unlock organizational efficiencies
Refocus of GBU structure expected to support growth and unlock organizational efficiencies FY 2018 sales of €34,463m up 2.5%(2) at CER by Global Business Unit(1) Specialty Care Primary Care China & Vaccines Consumer (in Mature Markets) (in Mature Markets) Emerging Markets Healthcare €7,226m €10,406m
Slide 10: Another quarter of double-digit growth in Specialty Care
Another quarter of double-digit growth in Specialty Care reflects sales momentum across all franchises Q4 2018 Sales by franchise (% growth at CER/CS) Rare Diseases €311m Double digit growth in Pompe (+11%), Gaucher (+13%) and Fabry (+14%) Multiple Sclerosis €794m Strong Aubagio® sales demonstrated
Slide 11: Three important launches in Specialty Care in Q4 2018
Three important launches in Specialty Care in Q4 2018 Significant progress in key therapeutic areas (1) • Strong initial U.S. prescription trends in asthma • Up to 900k patients with moderate-to-severe asthma suitable for biologics Immunology • Regulatory decisions on asthma in EU and Japan expected
Slide 12: Dupixent uptake in Q4 accelerated by DTC campaign and asthma launch
Dupixent® uptake in Q4 accelerated by DTC campaign and asthma launch Expanding reach in AD and launching in Asthma • Strong Q4 U.S. performance metrics for Dupixent® • 25% sequential increase in TRx(1) Weekly NBRx in U.S. market • 39% sequential increase in NBRx U.S. launch in asthma • Favorable U.S
Slide 13: Sanofi Pasteur performance in Q4 driven by Influenza Vaccines and Menactra
Sanofi Pasteur performance in Q4 driven by strong Influenza Vaccines and Menactra® sales Q4 2018 Vaccines sales evolution • Vaccines sales of €1,527m, up 9.7% €86m €-2m €1,519m • Influenza vaccines sales grew 17% to €596m • U.S. sales: €411m, +24% due to differentiation strategy including successful
Slide 14: Moderating Q4 DCV decline due to strong Praluent growth
Moderating Q4 DCV decline due to strong Praluent® growth and diminishing exposure to U.S. Lantus® LoE Global Diabetes Sales Q4 2018 (% Global Diabetes Sales) • Global Diabetes sales €1,375m down 10.5% U.S. Lantus® • Non-U.S. sales +3.9%, driven by Emerging Markets +7.7% • U.S. sales down 26% to €555
Slide 15: Consumer Healthcare performance supported by U.S. and Emerging Markets
Consumer Healthcare performance supported by U.S. and Emerging Markets Q4 2018 CHC sales by geography • CHC sales increased 1.9% to €1,194m €147m -2.7% • Strong U.S. sales driven by Digestive category and €405m Gold Bond franchise +6.4% €274m • Emerging Markets sales up 6.4% to €405m +6.0% Emerging
Slide 16: Emerging Markets growth of +6.0% driven by Asia in Q4
Emerging Markets(1) growth of +6.0% driven by Asia in Q4 Geographic breakdown of Q4 2018 sales €3,195m €2,342m U.S. EUROPE €288m €869m EURASIA(4) ROW(3) +8.7% -4.8% +3.3% +6.7% €601m of which €710m AME(5) €941m LATAM ASIA(2) €566m +5.2% CHINA +8.4% +2.6% +8.3% EM sales of €10,112m, up 7.5% at CER in
Slide 17: Financial results
Financial results Jean-Baptiste de Chatillon Executive Vice President, Chief Financial Officer
Slide 18: Currency impact on sales and EPS significantly diminished
Currency impact on sales and EPS significantly diminished mainly due to the U.S. dollar evolution Currency impact Company sales(1) Business EPS -€33m -€0.01 -0.4% -0.9% -€0.08 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2017 2018 2017 2018 (1) Main currency impact on Company Sales in Q4 2018: US Dollar (+€99m), B
Slide 19: Business EPS in Q4 driven by increased sales and favorable comparison
Business EPS in Q4 driven by increased sales and favorable comparison partly offset by higher tax rate (1) €m Q4 2018 Q4 2017 % Change % Change (reported €) (CER) Net Sales 8,997 8,692 +3.5% +3.9% Gross Profit 6,188 5,883 +5.2% +5.2% Gross Profit margin % 68.8% 67.7% - - Business Operating Income 1,
Slide 20: Improved BOI in Q4 despite higher R&D expenditure
Improved BOI in Q4 despite higher R&D expenditure as a result of Bioverativ and Ablynx acquisitions €m Q4 2018 Q4 2017 (1) % Change (CER) Net Sales 8,997 8,692 +3.9% Other revenues 329 290 +10.3% Gross Profit 6,188 5,883 +5.2% Gross margin % 68.8% 67.7% R&D (1,678) (1,464) +13.5% SG&A (2,721) (2,699
Slide 21: Higher Q4 gross margin due to improved product mix
Higher Q4 gross margin due to improved product mix and low comparison base while R&D investments accelerated Gross margin ratio(1) Operating expenses €4,399m 67.7% 68.8%(2) €4,163m +5.4% at CER(4) €1,464m €1,678m 71.7% +13.5% at CER R&D €2,699m €2,721m +1.1% at CER SG&A Q4 2017(3) Q4 2018 Q4 2017(3)
Slide 22: Proposal for 25th consecutive increase in annual dividend
Proposal for 25th consecutive increase in annual dividend Evolution of dividend(1) • Proposed dividend of €3.07 represents a €3.07 €0.04 per share increase over 2017 • Implies a dividend yield of 4.1%(2) and payout ratio of 56%(3) • Returned €4.7bn to shareholders in 2018(4) €0.21 1993 2018 Progress
Slide 23: Net debt evolution in 2018
Net debt evolution in 2018(1) €691m €927m €894m €3,773m €2,120m €17,628m €13,363m €5,161m €5,061m Net Debt Free Acquisitions Restructuring Net Share Proceeds Dividend Other Net Debt (2) December cash flow & Licences costs & repurchase from disposal December 31, 2017(3) similar items & share of asset
Slide 24: Sanofi Meets 2018 Financial Performance Objectives
Sanofi Meets 2018 Financial Performance Objectives Latest Objectives FY 2018 Results Gross Margin 70-71% at CER 70.7% OpEx Growth Rate at CER 4%-5% +4.6% Tax Rate ~22% 21.6% Business EPS Evolution at CER 4%-5% +5.1% 4 cent Dividend growth Progressive increase 24
Slide 25: FY 2019 financial guidance confirms return to growth
FY 2019 financial guidance confirms return to growth FY 2019 Business EPS +3% to +5% at CER(1,2) Approximately +1% to +2%(3) FX impact on Business EPS based on January 2019 average exchange rates (1) Compared to FY2018 and barring major unforeseen adverse events (2) FY 2018 Business EPS was €5.47 25
Slide 26: R&D update
R&D update John Reed Executive Vice President, Global Head of R&D
Slide 27: Next chapter in the evolution of Sanofi R&D
Next chapter in the evolution of Sanofi R&D Vision Strategy Long-term objectives(1) • An industry innovation leader • Allocate resources to priority • 80% first or best in class bringing transformative therapeutic areas • 70% biologics solutions to patients • Leverage multiple therapeutic • 70% inte
Slide 28: Prioritizing R&D investments to maintain competitiveness
Prioritizing R&D investments to maintain competitiveness and drive sustainable future growth Evolution of pipeline projects • Shift in focus to Specialty Care Research(1) Development(2) and Vaccines 132 81 • Significant potential to advance SoC 70 7 109 27 • Higher confidence in biology 13 • Favorab
Slide 29: Rigorous pipeline prioritization leading to discontinuations and more focus
Rigorous pipeline prioritization leading to discontinuations and more focus Discontinued 13 projects in development in 2019 Therapy area Project Mechanism of Action Indication Phase SAR421869(2)(3) Myosin 7A gene therapy Usher Syndrome 1 Neurology SAR228810(3) Anti-protofibrillar amyloid mAb Alzheim
Slide 30: Accelerating investment behind prioritized projects
Accelerating investment behind prioritized projects Pre-Proof of Concept Post-Proof of Concept isatuximab Solid Tumors and Lymphoma anti-CD3-CD123 Leukemia isatuximab Relapse Refractory Multiple Myeloma SERD Metastatic Breast Cancer anti-CEACAM5-ADC Lung Cancer Oncology anti-MUC16xCD3(1) Ovarian Can
Slide 31: Breadth of therapeutic platforms enables science driven approach
Breadth of therapeutic platforms enables science driven approach for selecting the right tool for the right target Antibody Peptides Enzymes Fusion Conjugates Proteins Multispecific Gene Small Molecules Nanobodies Therapy Antibodies VHH VHH (bi- & tri-specific) CH2 CH3 Gene siRNA Editing(2) mRNA(3)
Slide 32: Leveraging digital across R&D to accelerate development and reduce costs
Leveraging digital across R&D to accelerate development and reduce costs Sanofi: applying data science, machine learning and AI • Integrating wearables to measure additional Accelerated clinical parameters (e.g. sleep, activity, etc.) submissions • Accelerated regulatory filings through automated Re
Slide 33: Sanofi continues to advance its innovative oncology programs
Sanofi continues to advance its innovative oncology programs across multiple tumor types Commercial R&D TGF-β Dermatology Cytokine mRNA mono and combo(2) Novel assets in Isatuximab CD123xCD3 BCMAxCD3(1) CD38xTCE immuno-oncology Hematology Multi-specific TCE(4) Isatuximab and cemiplimab Next Gen Anti
Slide 34: Isatuximab met primary endpoint of prolonging PFS in ICARIA study
Isatuximab, a fully owned anti-CD38 mAb, met primary endpoint of prolonging PFS in Pivotal ICARIA study Competitive development program with 4 Phase 3 trials • First Phase 3 trial to evaluate adding a mAb to pomalidomide/dexamethasone treatment regimen Treated symptomatic Myeloma patients • Phase 3
Slide 35: Anti-CEACAM5 achieved positive PoC
Anti-CEACAM5 achieved positive PoC; broad development program expected to start by the end of 2019 Lung cancer is the leading cause • High CEACAM5 expressers, represent ~20% of lung cancer of cancer-related mortality CEACAM5-positive tumor landscape • Antibody drug conjugate comprised of cytotoxic H
Slide 36: BIVV001 potential best in class rFVIII replacement therapy for Hemophilia A
BIVV001 potential best in class rFVIII replacement therapy for Hemophilia A; proof of concept achieved Factor replacement therapy is • Opportunity to reduce frequency of administration of factor fundamental to hemophilia care replacement therapy while maintaining overall protection(1) BIVV001: rFVII
Slide 37: Sutimlimab potential to address multiple diseases of the complement pathway
Sutimlimab potential to address multiple diseases of the complement pathway 1st molecule designed to directly target • Potential to address diverse diseases across hematology, classical complement pathway (C1s) dermatology and antibody-mediated rejection Sutimlimab in hematology • Cold agglutinin di
Slide 38: Venglustat has potential to address multiple diseases
Venglustat has potential to address multiple diseases Oral substrate reduction therapy that • By inhibiting GCS, venglustat has the potential for broad penetrates blood brain barrier(4) therapeutic applicability across multiple indications(1) ADPKD: Gaucher Disease type 3: PD with GBA mutation: Phas
Slide 39: Anti-RSV mAb opportunity to be the first preventative medicine for all infants
Anti-RSV mAb(1) opportunity to be the first preventative medicine for all infants against RSV RSV is most common cause of infant • ~30 million children globally affected per year lower respiratory tract infections • No vaccine or prophylactic drug available for all infants Anti-RSV mAb: SP0232(1) is
Slide 40: Potential to expand Dupixent use in multiple co-morbid diseases
Potential to expand Dupixent® use in multiple type 2 co-morbid diseases due to its unique mechanism of action Launches and planned Approved in diseases with Commercial potential based growth opportunities high unmet medical need on addressable population COPD Planned Allergies EoE CRSwNP • Affects ~
Slide 41: 9 NMEs and 25 additional indications potentially submitted between 2019-2022
9 NMEs and 25 additional indications potentially submitted between 2019-2022 NMEs Additional indications sarilumab(**) Dupixent®(**) Anti-IL6R mAb dupilumab Polyarticular Juvenile Idiopathic AD 6 months - 5 years old Arthritis Dupixent®(**) avalglucosidase alfa dupilumab(**) venglustat dupilumab Neo
Slide 42: Key Messages
Key Messages Investment increasingly shifting towards Specialty Care and Vaccines Portfolio prioritization leading to multiple project discontinuations and accelerated investment behind key assets Continuing transformation of Sanofi R&D activities with wholly-owned projects rapidly advancing Leverag
Slide 43: Key highlights
Key highlights Olivier Brandicourt Chief Executive Officer
Slide 44: Strategic transformation started to deliver in 2018
Strategic transformation started to deliver in 2018 • Continued business momentum in Q4 supported by launches • All full-year financial objectives met • Important steps on reshaping through transactions in 2018(1) • Significant advances in R&D (1) Transactions in 2018 include the acquisitions o
Slide 45: Finance appendices
SANOFI % Finance appendices Avy
Slide 46: 2019 currency sensitivity and Q4 2018 currency exposure
2019 currency sensitivity and Q4 2018 currency exposure 2019 Business EPS Currency Sensitivity Currency Variation Business EPS Sensitivity U.S. Dollar + 0.05 USD/EUR - EUR 0.10 Japanese Yen + 5 JPY/EUR - EUR 0.02 Chinese Yuan + 0.2 CNY/EUR - EUR 0.02 Brazilian Real + 0.4 BRL/EUR - EUR 0.01 Russian R
Slide 47: Business Net Income Statement – Q4 2018
Business Net Income Statement – Q4 2018 Fourth Quarter 2018 Pharmaceuticals Consumer Healthcare Vaccines Others (2) Total Group € million Q4 2018 Q4 2017 (1) Change Q4 2018 Q4 2017 (1) Change Q4 2018 Q4 2017 (1) Change Q4 2018 Q4 2017 (1) Change Q4 2018 Q4 2017 (1) Change Net sales 6,276 6,119 2.6%
Slide 48: Business Net Income Statement – FY 2018
Business Net Income Statement – FY 2018 2018 Pharmaceuticals Consumer Healthcare Vaccines Others (2) Total Group € million 2018 2017 (1) Change 2018 2017 (1) Change 2018 2017 (1) Change 2018 2017 (1) Change 2018 2017 (1) Change Net sales 24,685 25,173 (1.9%) 4,660 4,798 (2.9%) 5,118 5,101 0.3% - - -
Slide 49: Consolidated Income Statements
Consolidated Income Statements € million Q4 2018 Q4 2017 (1) 2018 2017 (1) Net sales 8,997 8,692 34,463 35,072 Other revenues 329 290 1,214 1,149 Cost of sales (3,138) (3,089) (11,435) (11,613) Gross profit 6,188 5,893 24,242 24,608 Research and development expenses (1,678) (1,464) (5,894) (5,472) S
Slide 50: Reconciliation to Business Net Income – Q4 2018
Reconciliation of Consolidated Net Income Attributable to Equity Holders of Sanofi to Business Net Income – Q4 2018 € million Q4 2018 Q4 2017 (1) Change Net income attributable to equity holders of Sanofi 254 126 101.6% Amortization of intangible assets (2) 634 442 Impairment of intangible assets 42
Slide 51: Reconciliation to Business Net Income – FY 2018
Reconciliation of Consolidated Net Income Attributable to Equity Holders of Sanofi to Business Net Income – FY 2018 € million 2018 2017 (1) Change Net income attributable to equity holders of Sanofi 4,306 8,416 (48.8%) Amortization of intangible assets (2) 2,170 1,866 Impairment of intangible assets
Slide 52: Change in net debt
Change in net debt € million 2018 2017(1) Business net income 6,819 6,943 Depreciation, amortization and impairment of property, plant and equipment and software 1,208 1,349 Gains and losses on disposals of non-current assets, net of tax (284) (127) Other non cash items 91 728 Operating cash flow be
Slide 53: Simplified consolidated Balance Sheet – FY 2018
Simplified consolidated Balance Sheet – FY 2018 ASSETS Dec 31, Dec 31, LIABILITIES & EQUITY Dec 31, Dec 31, € million 2018 2017(1) € million 2018 2017(1) Equity attributable to equity holders of Sanofi 58,876 58,070 Equity attributable to non-controlling interests 159 169 Total equity 59,035 58,239
Slide 54: Research & Development appendices
Research & Development appendices
Slide 55: R&D Pipeline – New Molecular Entities
R&D Pipeline – New Molecular Entities(*) Phase 1 Phase 2 Phase 3 Registration (Total:17) (Total:7) (Total:7) (Total:2) SAR441344 BIVV001(4) SAR440340(**) SAR422459(**)(12) isatuximab cemiplimab(**) Anti-CD40L mAb rFVIIIFc – vWF – XTEN(5) Anti-IL33 mAb ABCA4 gene therapy Anti-CD38 mAb PD-1 inhibitor
Slide 56: Additional Indications
Additional Indications(*) Phase 1 Phase 2 Phase 3 Registration (Total:5) (Total:17) (Total:23) (Total:3) O cemiplimab(**) + REGN4018(1) dupilumab(**) isatuximab + cemiplimab(**) dupilumab(**) isatuximab dupilumab(**) PD-1 inhibitor mAb + Anti-MUC16-CD3 bispecific Anti-IL4Rα mAb Anti-CD38 mAb + PD-1
Slide 57: Expected Submission Timeline
Expected Submission Timeline(1) isatuximab fitusiran avalglucosidase alfa venglustat SAR156597 SAR422459(**) RNAi therapeutic targeting anti- NMEs anti-CD38 mAb Neo GAA Oral GCS inhibitor IL4/IL13 bi-specific mAb ABCA4 gene therapy thrombin 3L RRMM (ICARIA) Pompe Disease ADPKD(6) Systemic Scleroderm
Slide 58: Pipeline Movements Since Q3 2018 – Additions
Pipeline Movements Since Q3 2018 • Additions Registration Shan 6 DTP-HepB-Polio-Hib Pediatric hexavalent vaccine Phase 3 SAR440340(**) isatuximab + cemiplimab(**) isatuximab + atezolizumab(**) Anti-IL33 mAb Anti-CD38 mAb + PD-1 inhibitor mAb Anti-CD38 mAb + PD-L1 inhibitor mAb Atopic Dermatitis Lymp
Slide 59: Pipeline Movements Since Q3 2018 – Removals
Pipeline Movements Since Q3 2018 Removals Registration Phase 3 cemiplimab(**) + ipilimumab PD-1 inhibitor mAb + CTLA4 mAb mavacamten(**) Myosin inhibitor 1L NSCLC ≥ 50% PDL1+ Obstructive Hypertrophic Cardiomyopathy GZ389988 Combination ALX0171 SAR425899 TRKA antagonist ferroquine / OZ439(**) Anti RS
Slide 60: R&D Pipeline Summary – Total Projects
R&D Pipeline Summary – Total Projects(1) Phase 1 Phase 2 Phase 3 Registration TOTAL Immuno-inflammation 1 8 7 2 18 Oncology 11 6 7 1 25 Rare Diseases 0 4 3 0 7 Rare Blood Disorders 4 0 2 0 6 Multiple Sclerosis and 3 2 2 0 7 Neurology Diabetes 0 0 4 1 5 Cardiovascular Disease 0 0 1 1 2 Vaccines 3 4 4
Slide 61: Expected R&D Milestones
Expected R&D Milestones Products Expected milestones Timing Dupixent® U.S. regulatory decision in Atopic Dermatitis in Adolescent patients Q1 2019 ZynquistaTM (sotagliflozin) U.S. regulatory decision expected in Type 1 Diabetes Q1 2019 dupilumab U.S. sBLA filing in Nasal Polyposis Q1 2019 Dupixent®