Sanofi Sa · EURONEXT:SAN
Sanofi Sa — Shareholder Meeting (May 2016)
72 slides from Sanofi Sa's shareholder meeting presentation, May 4, 2016
Slide 1: General Meeting 2016
May 4, 2016 GENERAL MEETING 2016 Non-official translation for information purposes only
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 Introduction & Governance Serge Weinberg, Chairman of the Board of Directors Compensation Policy Patrick Kron, Chairman of the Compensation Committee 2015 Financial Performance Jérôme Contamine, Executive Vice President, Chief Financial Officer Perspectives Olivier Brandicourt, Chief Executiv
Slide 4: Introduction & Governance
Introduction & Governance Serge Weinberg Chairman of the Board of Directors
Slide 5: An Independent, Diversified and Renewed Board
An Independent, Diversified and Renewed Board Current Board Composition Proposed Board Composition 14 Directors 13 Directors ● A majority of independent Directors ● A gradual and controlled renewal (11 out of 14) ● International ● 5 non-French Directors (31%) ● Widely independent (10 out of 13) ● No
Slide 6: An Active and Engaged Board
An Active and Engaged Board In 2015: ● Increased activity: 11 meetings ● Strategic review High attendance rate from ● Presentations by key Group managers on their Directors Business Units ● Review of proposed acquisitions, disposals >91% and collaborations ● Transitional period for the office of Chi
Slide 7: Four Specialist Committees
Four Specialist Committees Audit ● Chairman: Robert Castaigne ● Regular reviews: main risks which may have Committee ● 3 financial experts an impact on financial statements ● 3 independent members out of 4 ● Specific reviews: notably progress reports on Attendance rate acquisitions, R&D agreements a
Slide 8: Four Specialist Committees (cont'd)
Four Specialist Committees (cont’d) ● Appointment of the new Chief Executive Officer Appointments and Governance ● Setting of a framework for the review ● 4 independent members out of 4 Committee of the succession plan ● 6 meetings in 2015 ● Evaluation of the work of the Board and Attendance rate it
Slide 9: Sanofi Share Performance vs. CAC 40 and Pharmaceutical Sector
Sanofi Share Performance vs. CAC 40 and Pharmaceutical Sector from January 2015 €105 €100 €95 US Pharma €90 + 5.7% €85 €80 CAC 40 + 4.0% €75 €70 EU Pharma - 4.2% €65 €60 €55 - 4.8% €50 Source : Bloomberg (31/12/2014 - 02/05/2016) EU Pharma = 7 pharmaceutical companies; US Pharma = 6 pharmaceutical c
Slide 10: Sanofi Share Performance vs. Pharma Company Peers
Sanofi Share Performance vs. Pharma Company Peers from January 2015 -4.8% Source: Bloomberg (12/31/2014 - 05/02/2016) 10
Slide 11: The Dividend Is a Core Part of our Value Proposition to Shareholders
The Dividend Is a Core Part of our Value Proposition to Shareholders Evolution of Dividend €2.93(1) €2.85 €2.77 €2.80 €2.65 2011 2012 2013 2014 2015 ● Proposed dividend of €2.93 per share for 2015 financial year(1) ● 22nd consecutive year of dividend increase (1) Submitted for approval by shareholde
Slide 12: An International and Diversified Shareholder Base
An International and Diversified Shareholder Base(1) Rest of the world Asia L’Oréal 1.8% Other EU countires 3.7% 9.1% Individual Shareholders Switzerland 7.1% Employees 7.2% 2.5% 5.9% Germany 3.5% 1.3% 0.3% Treasury Institutional investors 7.8% UK Miscellaneous 75.6% 12.6% 1,305,696,759 shares Franc
Slide 13: Strengthen Employee Share Ownership
Strengthen Employee Share Ownership 4 plans since 2005 Action Sanofi Wants to Strengthen ● >2 million shares subscribed 2005 Employee Share Ownership (1) ● 21st resolution adopted by Action 2007 ● >1.5 million shares subscribed 1.3% Shareholders at the General of Sanofi Meeting of May 4, 2015 Share
Slide 14: Compensation Policy
Compensation Policy Patrick Kron Chairman of the Compensation Committee* Chairman of the Committee since March 3, 2016, succeeding Jean-René Fourtou
Slide 15: Composition of the Compensation Committee
Composition of the Compensation Committee The Compensation Committee is composed of: ● Patrick Kron, Chairman of the Committee since March 3, 2016 In accordance with the ● Claudie Haigneré AFEP-MEDEF Code, more than half ● Christian Mulliez the members are independent (3 out of 4) ● Jean-René Fourto
Slide 16: Compensation Policy for the Chairman of the Board
Compensation Policy for the Chairman of the Board ● No Directors’ attendance fee ● Annual fixed compensation (gross amount) ● No annual variable compensation ● No adjustment in spite of the ● No equity compensation temporary combining of the ● No compensation payable upon offices of Chairman of the
Slide 17: Elements of Compensation of Serge Weinberg in 2015
Elements of Compensation of Serge Weinberg in 2015 Amounts due Comments Fixed compensation unchanged Fixed compensation €700,000 since his appointment as Chairman of the Board on May 17, 2010 €8,218 Company car Total €708,218 17
Slide 18: Compensation Policy for the Chief Executive Officer
Compensation Policy for the Chief Executive Officer ● No Directors’ attendance fee ● Annual fixed compensation (gross amount) ● Annual variable compensation (gross amount) ● Compensation payable upon ● Equity compensation termination of office ● Options to subscribe for shares ● Severance benefit ●
Slide 19: Elements of Compensation of Olivier Brandicourt in 2015
Elements of Compensation of Olivier Brandicourt in 2015 Amounts due Comments €1,200,000 pro rated with his presence Fixed compensation €895,455 within the Group Between 0% and 250% of his fixed compensation Variable compensation €1,491,300 Target: 150% of his fixed compensation Vesting: 165.7% of hi
Slide 20: Equity Compensation of Olivier Brandicourt in 2015
Equity Compensation of Olivier Brandicourt in 2015 2015 Plan Conditions 2015 Grant ● Performance conditions measured over 3 years ● 220,000 options to ● 3 performance criteria subscribe for shares ● Business net income (50%) ● 45,000 performance ● Return on assets (30%) shares ● Total shareholder re
Slide 21: Indemnification of Elements Lost by Olivier Brandicourt
Indemnification of Elements Lost by Olivier Brandicourt Amounts due Comments Exceptional €2,000,000 Upon his taking up office compensation 2015 Exceptional In January 2016 and subject to a condition of €2,000,000 compensation 2016 continued employment Performance shares granted in 2015 with a Perfor
Slide 22: 2015 Financial Performance
2015 Financial Performance Jérôme Contamine Executive Vice President, Chief Financial Officer
Slide 23: 2015 Business EPS Up 8.5% on a Reported Basis and Stable at CER
2015 Business EPS Up 8.5% on a Reported Basis and Stable at CER Aggregate Group Sales(1) Business EPS +€2,549m €37,057m €5.64 +€0.44 9 378 M€ +2.2% Stable +€738m at CER(2) €5.20 at CER(2) €33,770m 5,20 € 8 075 M€ FY 2014 Incremental FX Impact FY 2015 FY 2014 FX Impact FY 2015 Sales at CER (1) Includ
Slide 24: Genzyme, Vaccines and Animal Health Drove Sales Growth in 2015
Genzyme, Vaccines and Animal Health Drove Sales Growth in 2015 % of Sales Growth at CER 80.4% Pharmaceuticals(1) €29,799m +0.8% 20.5% Diabetes €7,580m -6.8% 9.9% Genzyme €3,664m +29.5% 4.1% Oncology €1,504m -1.9% 9.4% Consumer Healthcare €3,492m +2.8% 31.3% Established Products €11,633m -2.3% 5.2% G
Slide 25: Balanced Geographical Sales Split in 2015
Balanced Geographical Sales Split in 2015 with Leadership Position in Emerging Markets Emerging Markets Total Sales by Region RoW(2) Western EU €3,611m €3,732m €8,026m -2.5% at CER +0.9% at CER €3,305m 9.7% Emerging €2,429m 21.7% Markets(1) €2,319m €12,014m +7.8% 32.4% at CER Asia Latin America East
Slide 26: Solid Financial Performance in 2015
Solid Financial Performance in 2015 % Change % Change €m FY 2015(1) FY 2014(1) (reported €) (CER) Aggregate Group sales 37,057 33,770 +9.7% +2.2% Aggregate Other revenues 360 339 +6.2% -4.7% Aggregate Gross profit 25,613 23,080 +11.0% +2.0% Aggregate R&D (5,259) (4,824) +9.0% +1.8% Aggregate SG&A (1
Slide 27: Increasing Investments in R&D and New Product Launches
Increasing Investments in R&D and New Product Launches Aggregate Gross Margin R&D Expenses SG&A Expenses (%) (€m) (€m) 69.1% +6.0% at CER(2) 68.3% €10,247m +1.8% at CER(1) €8,991m €5,259m €4,824m 26.6% 27.7% of sales of sales 14.3% 14.2% of sales of sales 2014 2015 2014 2015 2014 2015 CER: Constant
Slide 28: Consolidated Net Income
Consolidated Net Income(1) €m 2015(2) 2014(2) % change (reported €) Business net income 7,371 6,847 7.7% Amortization of intangible assets (2,137) (2,081) Impairment of intangible assets (767) 31 Fair value remeasurement of contingent consideration liabilities 53 (303) Restructuring costs (795) (404
Slide 29: Strong Free Cash Flow and Low Debt
Strong Free Cash Flow and Low Debt Free Cash Flow(1) Net Debt €8.1bn +12.2% €7.4bn €7.2bn €6.5bn €7.7bn €7.2bn €7.3bn €6.0bn 2012 2013 2014 2015 2012 2013 2014 2015 ● Strong long-term credit ratings (Moody’s A1; S&P AA) ● Average cost of borrowings(2): 1.6% (1) Free Cash Flow after change in working
Slide 30: Capital Investments Grew by 19.7% in 2015
Capital Investments Grew by 19.7% in 2015 Reflecting Expansion in Biologic Products Capital Expenditure Evolution and Breakdown in 2015 Pharmaceutical Operations Industrial €1.5bn Affairs 7% R&D 7% €1.2bn 12% Support Functions Genzyme, 65% 9% Vaccines & Animal Health(1) 2014 2015 In 2016, capital ex
Slide 31: Strong Balance Sheet
Strong Balance Sheet In €bn December 31, 2015 Change vs. December 31, 2014 ASSETS 51.6 -2.1 Intangible assets Other non-current assets 20.1 -0.1 WCR 2.2 -2.2 Assets held for sale +5.8 5.8 or exchange Net cash (B) 9.1 +1.8 LIABILITIES & EQUITY Equity attributable 58.2 +1.9 Provisions and other non-cu
Slide 32: Sanofi Delivered on its 2015 Financial Objectives
Sanofi Delivered on its 2015 Financial Objectives Objectives Results Gross Margin Around 69% 69.1% OpEx Growth Rate at CER Mid-single digit +4.5% Business EPS Guidance at CER Stable to slightly growing Stable Dividend Growth Progressive €0.08 increase(1) (1) Proposed dividend of €2.93 per sh
Slide 33: Regular Information for our Shareholders
Regular Information for our Shareholders ● SANOFI IR: Mobile application dedicated to Sanofi’s financial news ● New section dedicated to individual shareholders ● Available in the App Store and on Google Play ● Publications for individual shareholders ● Shareholder Handbook ● Letter to Shareholders
Slide 34: Meetings with Shareholders Around France
Meetings with Shareholders Around France Meetings with Shareholders Individual Shareholder Committee ● 8 meetings in France in 2016 ● March 14: Lyon ● March 21: Nantes ● May 24: Aix en Provence ● June 27: Biarritz ● September 12: Bordeaux ● September 29: Nice ● November 28: Tours Biarritz ● December
Slide 35: Perspectives
Perspectives Olivier Brandicourt Chief Executive Officer
Slide 36: Challenges for the Pharmaceutical Industry, Opportunities for Sanofi
Challenges for the Pharmaceutical Industry, Opportunities for Sanofi Participate in the evolution of medicine Contribute to advancing healthcare throughout the world ● In the context of growing population with increasing life expectancy Anticipate the transformation of the pharmaceutical industry 36
Slide 37: 2015 - A Year of Transformation with Significant Achievements
2015 - A Year of Transformation with Significant Achievements 3 launches of major products – Toujeo®, Praluent® and Dengvaxia® 3 submissions for regulatory review(1) Significant R&D alliances in Oncology and Diabetes(2) Key first transaction announced in Consumer Healthcare(3) New organizational mod
Slide 38: Four Strategic Priorities
Four Strategic Priorities 1 Reshape the portfolio 4 2 New Deliver organization for outstanding greater efficiency launches 3 Strengthen innovation in R&D 38
Slide 39: Reshape the Portfolio Focused on Human Health
1 Reshape the Portfolio Focused on Human Health A B C Sustain Build competitive Explore strategic leadership positions options ● Diabetes/ ● Multiple Sclerosis(1) ● Animal Health Cardiovascular ● Oncology(1) ● Generics(2) ● Vaccines in Europe ● Immunology(1) ● Rare Diseases(1) ● Consumer ● Emerging
Slide 40: Planned Swap of Sanofi Animal Health and BI Consumer Healthcare
1 Planned Swap of Sanofi Animal Health Business and Boehringer Ingelheim (BI) Consumer Healthcare Business(1) BI Consumer Healthcare Sanofi Animal Health Objective: Close of potential transaction by year-end(2) (1) Excluding CHC in China (2) Exclusive negotiations announced on December 15, 2015; fol
Slide 41: Sanofi Would Become Global Leader in Consumer Healthcare
1 Sanofi Would Become Global Leader in Consumer Healthcare 10 key brands of Sanofi: 7 key brands of Boehringer ~50% of sales in 2015 Ingelheim: >60% of sales in 2015 Strengthening in priority categories(1) • Digestive Health: #1 • Feminine Care: #1 • Pain Care: #2 • Allergy Solutions: #3 • VMS(2): #
Slide 42: Deliver outstanding launches
Four Strategic Priorities 1 Reshape the portfolio 2 4 New Deliver organization outstanding for greater efficiency launches 3 Strengthen innovation in R&D 42
Slide 43: Six Major Launches of Key Products
2 Six Major Launches of Key Products (1) LixiLan, dupilumab and sarilumab have not yet been commercialized (1) LixiLan is a project name and is not the intended brand name for the combination of insulin glargine and lixisenatide 43
Slide 44: Launch of New Insulin Toujeo Is on Track
2 Launch of New Insulin Toujeo® Is on Track 2015 Global Toujeo® Sales of ● Global Toujeo® sales progressing €164m ● Rapid market access obtained €98m in the U.S.(1) Ex U.S. ● Launched globally U.S. in over 20 countries €46m €13m €7m Q1 2015 Q2 2015 Q3 2015 Q4 2015 (1) As of January 1, 2016, 86% of c
Slide 45: Praluent, Available on the U.S. Market since July 2015
2 Praluent®, Available for Hypercholesterolemic Patients on the U.S. Market since July 2015 ● More than 170 million patients covered for a potential treatment with Praluent® in the United States(1) ● Reimbursement discussions initiated in Europe ● Cardiovascular outcomes study ongoing ● 2nd interim
Slide 46: Sanofi Pasteur Launches First Ever Vaccine for the Prevention of Dengue
2 Sanofi Pasteur Launches First Ever Vaccine for the Prevention of Dengue ● Submission of regulatory file in 20 endemic countries of Asia and Latin America ● 4 approvals granted(1): Mexico, the Philippines, Brazil and El Salvador ● First doses shipped and launch of public dengue immunization program
Slide 47: Important Launches in the Next 12 Months
2 Important Launches in the Next 12 Months ● Fixed ratio combination ● Potential new treatment ● Potential new option for of two active components to for patients suffering from patients with rheumatoid improve care of people with moderate to severe atopic arthritis type 2 diabetes dermatitis Immuno
Slide 48: Strengthen innovation in R&D
Four Strategic Priorities 1 Reshape the portfolio 4 2 New Deliver organization for outstanding greater efficiency launches 3 Strengthen innovation in R&D 48
Slide 49: Innovation in R&D to Ensure Future Growth
3 Innovation in R&D to Ensure Future Growth Translational Medicine Ambition to increase annual R&D investments up to €6bn by 2020 Open Innovation Concentration of resources on most promising projects 49
Slide 50: New Major Partnerships Signed in R&D
3 New Major Partnerships Signed in R&D Diabetes Immuno-Oncology Rare Diseases 50
Slide 51: New organization for greater efficiency
Four Strategic Priorities 1 Reshape the portfolio 4 2 New Deliver organization for outstanding greater efficiency launches 3 Strengthen innovation in R&D 51
Slide 52: New Organization for Greater Efficiency
4 New Organization for Greater Efficiency 5 Global Business Units(1) Sanofi Genzyme Sanofi General Medicines & (Specialty Care) Pasteur Emerging Markets (Vaccines) Diabetes & Merial Cardiovascular (Animal Health) Finance Industrial Human Affairs Resources Globalized Functions Business Research & = D
Slide 53: Targeting Cost Savings of €1.5bn by 2018
4 Targeting Cost Savings of €1.5bn by 2018 Largely Reinvested to Support Growth(1) ● Significant investments required to launch biologics and to support growing businesses ● Sanofi aims to generate cost savings of €1.5bn by 2018 to: ● Balance the need for increased resources ● Partly offset reduced
Slide 54: A Strong Presence in France
A Strong Presence in France Paris Neuville sur Saône Strasbourg Strong activity in Headquarters ~25% of global research and ~40% of global in Paris headcount production on more R&D budget than 40 sites 54
Slide 55: Our Social, Environmental and Community Responsibilities
Our Social, Environmental and Community Responsibilities ● Expanding access to healthcare 300 programs over 15 years 190 million beneficiaries Sanofi Espoir Foundation Partnerships: Bill & Melinda Gates Foundation Samu Social in France ● Fighting against counterfeiting and providing qualit
Slide 56: Encouraging First Quarter 2016 Sales Given High Base for Comparison
Encouraging First Quarter 2016 Sales Given High Base for Comparison Aggregate Group Sales Business EPS +€61m -€0.05 -€228m +€0.07 €8,710m €1.34 €8,543m €1.32 +0.7% +5.3% at CER(2) at CER(2) (1) Q1 2015 Incremental FX Impact Q1 2016 Q1 2015 Incremental FX Impact Q1 2016 Sales at CER EPS at CER Aggreg
Slide 57: Outlook for 2016
Outlook for 2016 FY 2016 Business EPS Broadly stable at CER(1,2) Growth Estimated FX Impact on Around -3%(3) Business EPS based on March 2016 average exchange rates (1) Barring major unforeseen adverse events (2) FY 2015 Business EPS of €5.64 (3) Difference between variation on a reported basis and
Slide 58: Objectives for 2015-2020
Objectives for 2015-2020(1) 2015 2020 Expected sales CAGR of +3% to +4% beginning in 2018 Business EPS expected to grow faster than sales (1) Based on current group structure and at CER 58
Slide 59: Progress in Research & Development
Progress in Research & Development Elias Zerhouni President, Global R&D
Slide 60: Significant R&D Turnaround since 2012
Significant R&D Turnaround since 2012 2012 2015 Quality over Quantity(1) 79 projects 44 projects Prioritization Unprioritized Tiering system Biologics(2) 58% 85% R&D Budget ~14% of sales ~14% of sales Launches 3 launches since 2008(3) 9 launches since 2012(4) (1) From first in human to approval (2)
Slide 61: Major Progress Achieved in 2015
Major Progress Achieved in 2015 Expected Regulatory Decisions Q1 Q2 Q3 Q4 ● Toujeo® in Diabetes (U.S. & EU) ● Praluent® in Hypercholesterolemia (U.S. & EU) ● Dengvaxia® in endemic countries Expected Regulatory Submissions Q1 Q2 Q3 Q4 ● Lixisenatide in Diabetes (U.S.) ● LixiLan in Diabetes (U.S. & E.
Slide 62: Many Milestones Ahead in 2016
Many Milestones Ahead in 2016 Expected Regulatory Decisions Q1 Q2 Q3 Q4 ● Dengvaxia® in endemic countries ● Lixisenatide in Diabetes (U.S.) ● LixiLan in Diabetes (U.S.) ● Sarilumab in Rheumatoid Arthritis (U.S.) Expected Regulatory Submissions Q1 Q2 Q3 Q4 ● LixiLan in Diabetes (E.U.) ● Dupilum
Slide 63: Dupilumab: Positive Phase III Results in Atopic Dermatitis
Dupilumab: New Innovative Investigational Agent with Positive Phase III Results in Atopic Dermatitis ● Atopic dermatitis – severe form of eczema, is a type of inflammation of the skin, resulting in itchy, red, swollen, and cracked skin ● Results of Phase III studies SOLO 1 and 2(2) ● 36% to 38% of t
Slide 64: Sarilumab: Evaluated for Moderate to Severe Rheumatoid Arthritis
Sarilumab: New Investigational Product Being Evaluated for Patients with Moderate to Severe Rheumatoid Arthritis ● Rheumatoid Arthritis: autoimmune disease causing inflammation in joints that can cause physical disabilities ● Sarilumab: inhibitor of IL6 receptor being evaluated for subcutaneous admi
Slide 65: Three Filings Are Being Evaluated
Three Filings Are Being Evaluated Type 2 Diabetes Type 2 Diabetes Rheumatoid Arthritis lixisenatide Regulatory decision Regulatory decision Regulatory decision in the United States in the United States in the United States expected in expected in expected in July 2016(1) August 2016(2) fourth
Slide 66: Seven New Products Expected to Enter Phase III in 2016
Seven New Products Expected to Enter Phase III in 2016 Expected Phase III Starts Q2 Q3 Q4 ● Olipudase alfa(1) Niemann Pick type B Disease ● NeoGAA Pompe Disease ● PD-1 Inhibitor(1) Cutaneous Squamous Cell Carcinoma ● Fitusiran Hemophilia ● Efpeglenatide Diabetes ● Sotagliflozin Diabetes
Slide 67: Olipudase Alfa: Investigational Treatment for Niemann-Pick Disease Type B
Olipudase Alfa: An Investigational Treatment for Niemann-Pick Disease Type B Niemann-Pick disease Olipudase alfa R&D Milestones type B ● Serious and ● Investigational ● Granted life-threatening disorder enzyme replacement “Breakthrough characterized by fat therapy Therapy” designation deposits in sp
Slide 68: Neo GAA: Investigational Second Generation Therapy for Pompe Disease
Neo GAA: Investigational Second Generation Therapy for Pompe Disease Pompe Disease Neo GAA R&D Milestones ● Progressive, debilitating ● Investigational novel ● Encouraging results and often fatal enzyme replacement of Phase I/II clinical neuromuscular disease therapy study ● Genetic deficiency or ●
Slide 69: Alnylam Collaboration Provides Access to Rare Genetic Disease Therapies
Alnylam Collaboration Provides Access to Unique Rare Genetic Disease Therapies, Notably Fitusiran(1) fitusiran Phase III trials in severe hemophilia RNAi therapeutic targeting A and B patients planned to start in antithrombin (AT) third quarter 2016 patisiran Phase III ongoing in TTR Amyloidosis - F
Slide 70: Strengthening our R&D Portfolio in Diabetes with Two In-Licensing Agreements
Strengthening our R&D Portfolio in Diabetes with Two In-Licensing Agreements Sotagliflozin In Phase III in type 1 Dual SGLT1 and SGLT2 inhibitor(1) diabetes ● Limiting meal time glucose absorption and increasing renal glucose excretion Start of Phase III in type 2 diabetes expected in ● Favorable sa
Slide 71: New Strategic Alliance with Regeneron in Immuno-Oncology
New Strategic Alliance with Regeneron to Develop Cancer Treatments in Emerging Field of Immuno-Oncology ● Establish Sanofi’s presence in cancer immunotherapy, a rapidly growing and attractive segment of oncology ● Expand oncology pipeline, developing potentially best-in-class new antibodies and nove
Slide 72: Further Expanding the R&D Pipeline Is a Key Strategic Priority
Further Expanding the R&D Pipeline Is a Key Strategic Priority Phase I Phase II Phase III Registration GZ402668 N GZ402666 N dupilumab N N N olipudase alfa SAR342434 lixisenatide Anti-IL4Rα mAb GLD52 (anti-CD52 mAb) neoGAA Nasal polyposis; rhASM insulin lispro GLP-1 agonist Relapsing multiple sclero