Sanofi SA · EURONEXT:SAN
Sanofi SA — Sanofi-aventis — Q2 2009 Earnings Presentation
65 slides from Sanofi SA's earnings presentation, Jul 29, 2009
Slide 1: Q2 2009 Results
Q2 2009 Results July 29, 2009 1
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 financial and product development project
Slide 3: Agenda
Agenda Q2 2009 Results Christopher A. Viehbacher, Chief Executive Officer Hanspeter Spek, Executive VP, Pharmaceutical Operations Jérôme Contamine, Executive VP, Chief Financial Officer Update on Transforming Christopher A. Viehbacher, Chief Executive Officer Jérôme Contamine, Executive VP, Chief Fi
Slide 4: Q2 2009 Results
jecause health matters Q2 2009 Results
Slide 5: Q2 2009 Highlights
Q2 2009 Highlights Christopher A. Viehbacher Chief Executive Officer 5
Slide 6: Delivering Another Strong Quarter in Q2 2009
Delivering Another Strong Quarter in Q2 2009 Strong sales performance driven Reported sales (€m) by outperformance of key brands 8 000 and boosted by recent acquisitions 7 500 7 000 7,438 +6.5% at constant exchange 6 500 6 000 6,689 rates (CER) 5 500 5 000 +11.2% on a reported basis 4 500 Continued
Slide 7: Raising Guidance for FY 2009
Raising Guidance for FY 2009 Given the strong performance Adjusted EPS excluding delivered in H1 2009, selected items (€) sanofi-aventis now expects growth of adjusted EPS excluding 6,25 selected items(1) of 6,00 Around around 10% 5,75 5,50 +10% at constant exchange rates(2), 5,25 for the full year
Slide 8: Launching in the U.S.
Launching in the U.S. FDA approval received on July 1, 2009 NOW Broader product label than expected by AVAILABLE most financial analysts Indication for reduction of the risk of cardiovascular hospitalisation Atrial fibrillation or atrial flutter ATHENA mortality data included in the PI (though not a
Slide 9: Current Evidence Firmly Supports the Safety of Lantus
Current Evidence Firmly Supports the Safety of Review of sanofi-aventis clinical trials (over 70,000 patients) and post-marketing 1 surveillance data (24 million patient-years): 5 No evidence of an association between Lantus® and risk of cancer Review of long-term 5-year retinopathy randomized study
Slide 10: Taking the High Scientific Road on Lantus
Taking the High Scientific Road on Following an in-depth review of the Diabetologia studies and their outcomes, the CHMP concluded on July 23, 2009 that: 1. The available data does not provide a cause for concern 2. Changes to the prescribing advice for Lantus® are therefore not necessary Sanofi-ave
Slide 11: Q2 2009 Market Performance
Q2 2009 Market Performance Hanspeter Spek Executive VP, Pharmaceutical Operations 11
Slide 12: Good Q2 2009 Performance across Business Segments
Good Q2 2009 Performance across Business Segments Pharma sales of €6,726m, +7.3% (1) boosted by recent acquisitions (Zentiva, Medley, Kendrick…) Worldwide presence(2) and strong performance of key Rx brands €1,783m, +9.6% Vaccines sales growth of +18.4%(3) (ex-H5N1 contracts) Expansion of OTC and Ge
Slide 13: Good Q2 2009 Performance across All Regions
Good Q2 2009 Performance across All Regions Solid growth in the U.S.: Q2 2009 Sales Split by Regions €2,438m, +5.4% or +11.3% Asia excluding H5N1 contracts Others Pacific Latin Japan 6.6% 7.3% America Good performance in Europe: 5.9% 6.0% €3,079m, +4.6%, boosted by Eastern Eastern Europe integrating
Slide 14: Further Acceleration of Sales in Emerging Markets through External Growth
Further Acceleration of Sales in Emerging Markets through External Growth Strong Q2 2009 sales in Emerging Broader Diversification in Emerging Markets Markets: €1,855m, +20.1%(1) Vaccines Growth contribution of newly acquired businesses of +14% (3) Wholesalers still tightly managing inventories in s
Slide 15: Our Diabetes Franchise Remains an Engine for Growth
Our Diabetes Franchise Remains an Engine for Growth Q2 2009 sales: €792m, +26.0%(1) U.S. Insulin Daily NRx Share(5) 40% Q2 2009 sales: €35m, +54.5%(1) 35% No scientific base for a change in the positive benefit-risk for Lantus®, 30% the only-true 24-hour basal insulin Daily NRx Share (%) 25% Strong
Slide 16: Cardio-Thrombosis Franchise Performs Strongly in Q2 2009
Cardio-Thrombosis Franchise Performs Strongly in Q2 2009 Q2 2009 worldwide presence: €1,783m, Q2 2009 sales: €780m, +13.3%(3) +9.6%(1) back to double digit growth Limited competition from clopidogrel Product supply aligned with demand besylate in Germany 85 Japan: strong market penetration(2) +31.8%
Slide 17: Multaq: Strong Potential in the U.S.
- Strong Potential in the U.S. ® Significant market opportunity ® 2.5m AF patients in the U.S.(1) 60% paroxysmal or persistent AF(1) is indicated to reduce the risk of CV hospitalization in patients First and only AAD(2) indicated to reduce with paroxysmal or persistent the risk of CV hospitalizatio
Slide 18: Multaq: Now Available to AF Patients in the U.S.
- Now Available to AF Patients in the U.S. ® Product available since July 28, 2009 Awareness among U.S. cardiologists 100% - Appropriate REMS (Risk Evaluation and Mitigation Strategy) in place 80% Supporting optimal penetration in 72% the targeted patient population 60% Aware of ATHENA 87% clinical
Slide 19: Vaccines - Strong Underlying Performance in Q2 2009
Vaccines - Strong Underlying Performance in Q2 2009 Q2 2009 sales: €712m, +18.4%(1) Vaccines Reported Consolidated Sales (€m) ex-H5N1 sales 750 - Driving pediatric vaccines Q2 2009 sales to 500 €259m, +28.9% - Solid seasonal influenza performance in H1 2009 250 in the Southern Hemisphere with sales
Slide 20: Supporting Public Health Efforts against Seasonal and Pandemic Influenza
- Supporting Public Health Efforts against Seasonal and Pandemic Influenza Call for common action to fight the A/H1N1 influenza pandemic Major global public health issue Several orders received (e.g. U.S. Department of Health & Human Services and French Ministry of Health) On-going discussions with
Slide 21: Q2 2009 - A Very Solid Performance
Q2 2009 - A Very Solid Performance Strong overall sales performance driven by flagship products and boosted by recent acquisitions Emerging markets contributed 25% of consolidated sales and over 70% of sales growth including acquisitions Launch of Multaq® (dronedarone) in the U.S. Impressive mobiliz
Slide 22: Q2 2009 Financial Performance
Q2 2009 Financial Performance Jérôme Contamine Executive VP, Chief Financial Officer 22
Slide 23: Q2 2009 Sales Growth
Q2 2009 Sales Growth Reported net sales of €7,438m In €m (+11.2% in reported sales 7 500 +4.7% +11.2% or +6.5% at CER) 315 Change in Group structure +2.8% Primarily reflecting the 7 000 +3.7% 178 consolidation of Zentiva and Medley 256 USD : +358 YEN : +81 7,438 GBP : -32 Positive FX movements 7123
Slide 24: Cost Management Continued in Q2 2009
Cost Management Continued in Q2 2009(1,2) €m Q2 2009 Q2 2008 % Change (reported €) % Change (CER) Net sales 7,438 6,689 +11.2% +6.5% Other revenues 359 286 +25.5% +9.4% Cost of sales (1,833) (1,726) +6.2% +5.5% Gross profit 5,964 5,249 +13.6% +7.0% R&D (1,108) (1,091) +1.6% -2.5% SG&A (1,895) (1,789
Slide 25: Strong EPS Growth in Q2 2009
Strong EPS Growth in Q2 2009(1,2) €m Q2 2009 Q2 2008 % Change (reported €) % Change (CER) Adj. operating income current 3,046 2,402 +26.8% +16.0% Net financial expenses (70) (71) - - Income tax expense (863) (690) - - Effective tax rate 29.0% 29.6% - - Share of profit/loss of associates 266 217 +22.
Slide 26: Q2 2009 Margins in-line with Q1 2009 Level
Q2 2009 Margins in-line with Q1 2009 Level(1) COS/Sales Ratio (%) Operating Margin (%) 30,0 43,0 29,0 42,0 28,0 41,0 27,0 40,0 40.8 41.0 26,0 39,0 25,0 38,0 24,0 24.8 24.6 37,0 23,0 36,0 22,0 35,0 21,0 34,0 20,0 33,0 Q1 09 Q2 09 Q1 09 Q2 09 SG&A/Sales Ratio (%) Net Income/Sales Ratio (%) 30,0 33,0 2
Slide 27: Strong Cash Flow Generation in H1 2009
Strong Cash Flow Generation in H1 2009 Net Cash from Net Debt Operating Net Debt Jan 1, 2009 Activities CapEx Acquisitions Dividends Jun 30, 2009 4 000 3 500 3 000 2 500 2 000 - 849 1 500 1 000 500 + 4,378 - 2,582 €m 0 -500 -1 000 - 1,780 -1 500 -2 000 - 3,705 Change in -2 500 - 2,872 Net Debt -3 00
Slide 28: Q2 2009 - A Very Strong Quarter
Q2 2009 - A Very Strong Quarter Solid Q2 2009 sales performance Continued cost management in Q2 2009 Strong Q2 2009 EPS(1) growth above sales growth FY 2009 EPS(1) guidance upgraded Significant cash flow generation in H1 2009 (1) Adjusted EPS before excluding selected items 28
Slide 29: Update on transforming sanofi-aventis
Update on transforming sanofi-aventis
Slide 30: Implementing our Strategy
Implementing our Strategy Christopher A. Viehbacher Chief Executive Officer 30
Slide 31: Maximizing Growth Opportunities and Transforming the Company while Addressing Patent Expiries
Maximizing Growth Opportunities and Transforming the Company while Addressing Patent Expiries through 2013 Key Organic Transforming Loss of Exclusivity(1) Growth Drivers Program Ambien CR® (U.S.) Vaccines Increasing innovation Eloxatin® (U.S.) Diabetes products in R&D Taxotere® Emerging markets Purs
Slide 32: Our Aim is to Achieve at least the Same Level of Sales in 2013
Our Aim is to Achieve at least the Same Level of Sales in 2013 vs. 2008 before any Significant External Growth Opportunities Sales Split (%) 100% Top Genericized Products New Launches 75% Emerging Markets 50% Diabetes Key Growth Drivers OTC 25% Vaccines Tail Products in Mature Markets 0% 2008 2013 Â
Slide 33: Continuing to Roll-out our Three-Pronged Strategy
Continuing to Roll-out our Three-Pronged Strategy Adapt Increase Pursue our company innovation external growth to future in R&D opportunities challenges to ensure sustainable, profitable growth and improved risk profile 33
Slide 34: R&D Portfolio Review: a First Step towards Transformation
R&D Portfolio Review: a First Step towards Transformation Rigorous and thorough portfolio review presented on April 29, 2009 Moving high priority projects forward Freeing up resources for external R&D Portfolio objectively evaluated across 4 key dimensions: Extent of Technical & Overall value Degree
Slide 35: Working towards a New R&D Approach To Boost Innovation
Working towards a New R&D Approach To Boost Innovation A new approach to R&D driving creativity and innovation: Reduce the complexity of the R&D organization Governance Introduce new operating principles Create customer-focused teams addressing specific unmet patient needs Energy Open up towards ext
Slide 36: Leveraging External R&D to Expand our Portfolio with Innovative Compounds
Leveraging External R&D to Expand our Portfolio with Innovative Compounds Strong Phase II data Global alliance for Collaboration and of BSI-201 recently novel targeted licensing agreement presented at ASCO oncology therapies on an anti-LIGHT fully human mAb Significant increase License of 2 Phase I
Slide 37: Strengthening our Growth Platforms through Multiple Bolt-on Acquisitions
Strengthening our Growth Platforms through Multiple Bolt-on Acquisitions Vaccines (1) OTC/OTx Generics (1) Proposed acquisition of control pending 37
Slide 38: Reinforcing Sanofi Pasteur Leadership in Vaccines in Emerging Markets
Reinforcing Sanofi Pasteur Leadership in Vaccines in Emerging Markets through External Growth (1) Portfolio of affordable vaccines for the Indian public market, International Funded Public Markets (IFPM) and international markets 4 WHO pre-qualified vaccines (Shan5®, Shantetra®, ShanTT® and Shanvac-
Slide 39: Adapting Structures
Adapting Structures Jérôme Contamine Executive VP, Chief Financial Officer 39
Slide 40: Anticipated Net Cost Savings of €2.0bn by 2013
Anticipated Net Cost Savings of €2.0bn by 2013 Planned initiatives will lead to Projected Annual Cost Savings (€m) annual cost savings of €2.0bn(1) 100% for 2013 vs. 2008 at CER 2 000 €2.0bn 1 800 Restructuring charges amount 1 600 to €899m in Q2 2009 1 400 1 200 Cost savings will involve all 1 000
Slide 41: Enhanced Efficiency: Industrial Affairs
Enhanced Efficiency Results from a Broad Range of Actions Industrial Affairs Continued volume growth over the next 5 years Recent acquisitions lead to regional production mix shift and volume increase in Emerging Markets Anticipate continuing growth dynamics of insulins Evolution of our industrial a
Slide 42: Enhanced Efficiency: R&D - Project
Enhanced Efficiency Results from a Broad Range of Actions R&D - Project Streamline the R&D organization Regroupment of discovery research centers in France Divestment / conversion of several research centers in France, Spain, the UK, the U.S. and Japan being considered Plan for voluntary departures
Slide 43: Enhanced Efficiency: Commercial Operations and Support Functions
Enhanced Efficiency Results from a Broad Range of Actions Commercial Operations Support Functions (IS, HR, Finance, Purchasing, Legal, Communication) Provide greater decision-making Reevaluate resources needed for autonomy to regions central functions Redesign EU organizational platform Leverage sca
Slide 44: Efficiency Savings and Business Growth Aim to Offset Impact of Genericization
Efficiency Savings and Business Growth Aim to Offset Impact of Genericization on Adjusted Net Income in 2013 Impact on Adjusted Net Income in 2013 vs. 2008 ILLUSTRATIVE 2008 2013 Contribution from any significant acquisitions Contribution from key growth drivers Loss of profit from Cost savings from
Slide 45: Concluding Remarks
Concluding Remarks Christopher A. Viehbacher Chief Executive Officer 45
Slide 46: Key Achievements in Q2 2009 & Next Milestones
Key Achievements in Q2 2009 & Next Milestones Strong Q2 2009 Results - FY 2009 guidance upgrade : FDA approval of Multaq® : Long-term growth potential for Lantus® confirmed : New bolt-on acquisitions (e.g. Shanta Biotechnics) : New external R&D partnerships (e.g. Exelixis) : Cost savings from new ef
Slide 47: Core Objectives through 2013
Transforming sanofi-aventis into a Leading Diversified Global Healthcare Company Core Objectives through 2013 Maximize internal Continue to seek Accelerate the R&D growth opportunities external sources transformation to through investments of growth and create a more robust in existing growth divers
Slide 48: Q&A Session
Q&A Session Christopher A. Viehbacher, Chief Executive Officer Hanspeter Spek, Executive VP, Pharmaceutical Operations Jérôme Contamine, Executive VP, Chief Financial Officer 48
Slide 49: Appendices: R&D
‘sanofi aventis. Because health matters Appendices ®@ R&D 49
Slide 50: Anticipated R&D Newsflow until June 2010 - Pharmaceuticals
Anticipated R&D Newsflow until June 2010 Key Milestones - Pharmaceuticals Timing Expected U.S. regulatory decision on Lantus® retinopathy labeling Q3 2009 Expected U.S. regulatory decision on Sculptra® Q3 2009 Otamixaban in ACS - Phase II data presentation Q3 2009 Plavix® CURRENT/OASIS-7 data presen
Slide 51: Anticipated R&D Newsflow until June 2010 - Vaccines
Anticipated R&D Newsflow until June 2010 Key Milestones - Vaccines Timing U.S. regulatory submission of Menactra® Infant/Toddler 9-12 months H2 2009 U.S. / EU regulatory submissions of Flu H1N1 Pandemia Q4 2009 EU regulatory submission of Pediacel® Q4 2009 Expected U.S. / EU regulatory decisions on
Slide 52: Late Stage Pipeline – Pharma & Vaccines
Late Stage Pipeline – Pharma & Vaccines Phase III Registration Lantus® Taxotere® HIV Lantus® insulin glargine docetaxel Prophylaxis insulin glargine Reduction in CV Pediatric Proof of concept in Thailand Retinopathy labeling change, U.S. morbidity & mortality AVE0010 N aflibercept (VEGF-Trap) N Adac
Slide 53: Early Stage Pipeline – Pharma & Vaccines
Early Stage Pipeline – Pharma & Vaccines Phase I Phase II AVE0897 N XL147 N celivarone N otamixaban N Balanced PPAR α/γ agonist Oral PI3K inhibitor Antiarrhythmic agent Direct Xa inhibitor Type 2 diabetes Cancer Ventricular Arrhythmia ACS SAR351034 N XL765 N SAR407899 N ferroquine N PPAR δ agonist O
Slide 54: R&D Pipeline Summary Table
R&D Pipeline Summary Table on July 29 New Molecular Entities and Vaccines Development portfolio balanced across phases and therapeutic areas* n tio I II III tr a A L ase ase ase gi s T Ph Ph Ph Re TO Metabolic Disorders 3 0 1 0 4 Cardiovascular 0 2 1 1 4 Central Nervous System 4 3 1 1 9 34 Oncology
Slide 55: Appendices: Finance
‘sanofi aventis. Because health matters Appendices ® Finance 55
Slide 56: Q2 / H1 2009: Adjusted Consolidated Income Statement (I)
Q2 / H1 2009: Adjusted Consolidated Income Statement excluding selected items* (I) As % of As % of As % of As % of Q2 2009 Q2 2008 % change € million H1 2009 H1 2008 % change net sales net sales net sales net sales 7,438 100.0% 6,689 100.0% +11.2% Net Sales 14,545 100.0% 13,626 100.0% +6.7% 359 4.8%
Slide 57: Q2 / H1 2009: Adjusted Consolidated Income Statement (II)
Q2 / H1 2009: Adjusted Consolidated Income Statement excluding selected items*(II) As % of As % of As % of As % of Q2 2009 Q2 2008 % change € million H1 2009 H1 2008 % change net sales net sales net sales net sales 3,046 41.0% 2,402 35.9% +26.8% Operating Income 5,944 40.9% 4,924 36.1% +20.7% Net fi
Slide 58: Q2 2009 Reconciliation of Adjusted Consolidated Income Statement
Q2 2009 Reconciliation of Adjusted Consolidated Income Statement Excluding Selected Items to Consolidated Income Statement Q2 2009 Adjusted excl. Selected items Adjusted Adjustments Consolidated € million selected items Net Sales 7,438 - 7,438 - 7,438 Other revenues 359 - 359 - 359 Cost of sales (1,
Slide 59: H1 2009 Reconciliation of Adjusted Consolidated Income Statement
H1 2009 Reconciliation of Adjusted Consolidated Income Statement Excluding Selected Items to Consolidated Income Statement H1 2009 Adjusted excl. Selected items Adjusted Adjustments Consolidated € million selected items Net Sales 14,545 - 14,545 - 14,545 Other revenues 703 - 703 - 703 Cost of sales
Slide 60: Q2 2008 Reconciliation of Adjusted Consolidated Income Statement
Q2 2008 Reconciliation of Adjusted Consolidated Income Statement Excluding Selected Items to Consolidated Income Statement Q2 2008 Adjusted excl. Selected items Adjusted Adjustments Consolidated € million selected items Net Sales 6,689 - 6,689 - 6,689 Other revenues 286 - 286 - 286 Cost of sales (1,
Slide 61: H1 2008 Reconciliation of Adjusted Consolidated Income Statement
H1 2008 Reconciliation of Adjusted Consolidated Income Statement Excluding Selected Items to Consolidated Income Statement H1 2008 Adjusted excl. Selected items Adjusted Adjustments Consolidated € million selected items Net Sales 13,626 - 13,626 - 13,626 Other revenues 570 - 570 - 570 Cost of sales
Slide 62: Simplified Consolidated Balance Sheet
Simplified Consolidated Balance Sheet In € million 06/30/09 12/31/08 In € million 06/30/09 12/31/08 ASSETS LIABILITIES & EQUITY Equity attributable to equity-holders Property, plant and equipment 7 559 6 961 44 621 44 866 of the parent Minority interests 163 205 Intangible assets (including 44 601 4
Slide 63: H1 2009 Simplified Consolidated Statement of Cash Flows
H1 2009 Simplified Consolidated Statement of Cash Flows € million H1 2009 H1 2008 Adjusted net income 3 838 3 468 Depreciation, amortization and impairment of property, plant & equipment and intangibles 555 592 Gains and losses on disposals of non-current assets, net of tax (13) (33) Unrealized gain
Slide 64: Vaccines Adjusted Consolidated Income Statement (I)
Q2 2009 / Full-Year 2009: Vaccines Adjusted Consolidated Income Statement* (I) As % of As % of As % of As % of % % Q2 2009 Q2 2008 € million H1 2009 net H1 2008 net net sales net sales change change sales sales 712 100.0% 657 100.0% +8.4% NET SALES 1,339 100.0% 1,205 100.0% +11.1% 7 1.0% 10 1.5% -30
Slide 65: Vaccines Adjusted Consolidated Income Statement (II)
Q2 2009 / Full-Year 2009: Vaccines Adjusted Consolidated Income Statement* (II) As % of As % of As % of As % of % % Q2 2009 Q2 2008 € million H1 2009 net H1 2008 net net sales net sales change change sales sales OPERATING 198 27.8% 195 29.7% +1.5% INCOME 358 26.7% 329 27.3% +8.8% Net financial (1) (