Sanofi Sa · EURONEXT:SAN
Sanofi Sa — Q2 2015 Earnings Presentation
43 slides from Sanofi Sa's earnings presentation, Jul 30, 2015
Slide 1: Q2 2015 Results
Q2 2015 RESULTS July 30, 2015
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: Key Highlights
KEY HIGHLIGHTS Olivier Brandicourt Chief Executive Officer 3
Slide 4: Q2 2015 - A Solid Quarterly Performance
Q2 2015 - A Solid Quarterly Performance 1 Delivering ● Sales up +4.9% at CER(1) mid-single digit sales ● Sales growth across all geographies and businesses growth except Diabetes 2 Posting ● Higher OpEx driven by investment in new launches solid financial results ● Business EPS up +5.1% at CER(2) 3
Slide 5: Solid Sales and Business EPS Delivered in Q2 2015
Solid Sales and Business EPS Delivered in Q2 2015 Net Sales Business EPS €9,378m €1.41 +€910m +€0.18 +€393m +€0.06 +4.9% +5.1% at CER(1) at CER(1) €8,075m €1.17 Q2 2014 Incremental FX Impact Q2 2015 Q2 2014 Incremental FX Impact Q2 2015 Sales at CER EPS at CER (1) On a reported basis, Q2 2015 sales
Slide 6: Sales Growth Delivered Across All Businesses Except Diabetes
Sales Growth Delivered Across All Businesses in Q2 2015 Except for Diabetes(1) % of Sales Q2 2015 Sales by Business Areas Growth at CER 83.1% Pharmaceuticals €7,800m +3.7% 21.2% Diabetes €1,988m -3.8% 9.7% Genzyme €907m +26.6% 9.5% Consumer Healthcare €890m +1.3% 5.5% Generics €520m +9.2% 4.2% Oncol
Slide 7: Q2 2015 Diabetes Sales Consistent with Previous Quarter
Q2 2015 Diabetes Sales Consistent with Previous Quarter Q2 2015 Diabetes Sales by Geographies (in €m) Total Group Sales Sales Growth Q1 Q2 excluding Diabetes €1,134m at CER 2015 2015 €7,390m -14.0% at CER +7.3% at CER 57% €854m U.S. -12.0% -14.0% +11.2% at CER Western EU +4.7% +6.5% 43% Diabetes Sal
Slide 8: Encouraging U.S. Launch Metrics and Global Launch Ongoing
Encouraging U.S. Launch Metrics and Global Launch Ongoing (1) (3) Basal Market NRx Shares Toujeo® TRx & NRx Volume Toujeo® Market Access week of April 3 - week of July 17, 2015 week of April 3 - week of July 17, 2015 as of August 1, 2015 Share (%) Rx (absolute) % Lives Covered 80 (2) 7 000 Total gla
Slide 9: Rare Disease Franchise Sustained Growth Momentum
Rare Disease Franchise Sustained Growth Momentum and Strengthened Leadership(1) in Q2 2015 Genzyme Rare Disease Sales (€m) €647m +9.1% at CER €121m €540m Others Others €146m Fabrazyme €165m Myozyme & (2) Cerdelga €199m Cerezyme Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 (1) Cerezyme® + Cerdelga® value
Slide 10: Multiple Sclerosis Franchise Sales Now Annualizing Over €1bn
Multiple Sclerosis Franchise Sales Now Annualizing(1) Over €1bn Genzyme Multiple Sclerosis Sales (€m) New Global Campaign €260m +118.4% at CER €56m €103m €204m * AUBAGIO® (teriflunomide) is effective across key measures of disease activity: sustained disability progression (14 mg only), annualized Q
Slide 11: Vaccines Showed Broad Sales Momentum in Q2 2015
Vaccines Showed Broad Sales Momentum in Q2 2015 Sanofi Pasteur Sales (€m) A Breakthrough Innovation to Help Reduce the Burden of Dengue(2) €887m €718m +8.6% at CER ● Regulatory submissions in key Influenza Vaccines endemic countries in Asia and Latin Polio/Pertussis/Hib America completed in June 201
Slide 12: Animal Health Continued its Strong Recovery in Q2 2015
Animal Health Continued its Strong Recovery in Q2 2015 Merial Sales Growth (at CER) NexGard® U.S. Campaign (1) +13.5% +14.2% +12.7% +11.5% +6.2% -1.6% -5.7% -6.3% -6.4% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2013 2013 2013 2014 2014 2014 2014 2015 2015 Five consecutive quarters of strong sales growth (1) Merial
Slide 13: Sales Growth Delivered Across All Geographies in Q2 2015
Sales Growth Delivered Across All Geographies in Q2 2015 Q2 2015 Sales by Geographies (in €m) (2) RoW Emerging Markets Sales by Region Western EU €948m €1,998m +8.2% at CER +3.4% at CER 10.1% €982m €934m 21.3% Emerging Markets (1) €602m €616m 33.9% €3,182m +7.5% at CER U.S. 34.7% €3,250m Africa & Mi
Slide 14: New Strategic Alliance with Regeneron in Immuno-Oncology
New Strategic Alliance with Regeneron to Develop Cancer Treatments in Emerging Field of Immuno-Oncology 1● Establish Sanofi’s presence in immuno-oncology, a rapidly growing and promising approach to treat cancer Significant unmet needs remain despite advances shown with checkpoint inhibitors Commi
Slide 15: Ready to Launch Praluent in the U.S. and EU
Ready to Launch Praluent® (alirocumab) in the U.S. and EU FDA approval granted on July 24, 2015 Indicated as adjunct to diet and maximally tolerated statin therapy for the treatment of adults with heterozygous familial hypercholesterolemia or 75 mg clinical atherosclerotic cardiovascular disease,
Slide 16: Additional Clinical Milestones and Regulatory Filings Expected in H2 2015
Additional Clinical Milestones and Regulatory Filings Expected in H2 2015 Key Milestones in H2 2015 lixisenatide sarilumab (2) Type 2 Diabetes Type 2 Diabetes Rheumatoid Arthritis Positive ELIXA study Positive LixiLan-O top-line 3 Phase III trials recently results supported U.S. results demonstrated
Slide 17: New Organizational Model with Five Global Business Units
A New Organizational Model with Five Global Business Units Is a Necessary Step to Drive Focus and Simplification Diabetes General Sanofi Sanofi Merial & Cardio- Medicines Genzyme Pasteur (Animal Health) vascular & Emerging (Specialty Care) (Vaccines) Markets P. Witz P. Guenter D. Meeker O. Charmeil
Slide 18: Sanofi to Host an IR Seminar in Q4 2015
Sanofi to Host an IR Seminar in Q4 2015 ● Outlining a roadmap towards 2020 Meet ● Sharing the outcome of the ongoing business review ● Presenting further progress of our R&D pipeline Management ● Offering opportunities to interact with management Friday November 6th, 2015 from 8:30 to 16:00 in Sanof
Slide 19: Financial Results
FINANCIAL RESULTS Jérôme Contamine Executive Vice President, Chief Financial Officer 19
Slide 20: Sustained U.S. Dollar Strength Led to Strong FX Tailwind
Sustained U.S. Dollar Strength Led to Strong FX Tailwind on Top and Bottom Line Again in Q2 2015 Quarterly Currency Impact Net Sales(1) Business EPS +15.4% +11.2% +€0.18 +9.9% +€910m +€782m +10.2% +€0.12 +2.7% +€229m +1.5% Q1 2014 Q2 2014 Q3 2014 Q1 2014 Q2 2014 Q3 2014 +€0.02 -€81m Q4 2014 Q1 2015
Slide 21: Business Operating Income Up +4.7% at CER
Business Operating Income Up +4.7% at CER Despite OpEx Increase of +3.7% at CER in Q2 2015 % Change % Change €m Q2 2015 Q2 2014 (reported €) (CER) Net sales 9,378 8,075 +16.1% +4.9% Other revenues 83 71 +16.9% +0.0% Cost of sales (2,938) (2,608) +12.7% +4.8% Gross profit 6,523 5,538 +17.8% +4.8% R&D
Slide 22: Mid-Single Digit Business EPS Growth at CER in Q2 2015
Mid-Single Digit Business EPS Growth at CER in Q2 2015 % Change % Change €m Q2 2015 Q2 2014 (reported €) (CER) Business operating income 2,566 2,145 +19.6% +4.7% Net financial expenses (112) (94) - - Income tax expense (614) (514) - - Effective tax rate -25.0% -25.0% - - Business net income 1,840 1,
Slide 23: Gross Margin Consistent with FY 2015 Expectations
Gross Margin Consistent with FY 2015 Expectations Gross Margin (%) ● Cost of Sales (CoS) of €2,938m 69.6% 68.6% in Q2 2015, up +4.8% at CER ● Gross margin of 69.6% in Q2 2015 reflecting 1.0 pt increase over Q2 2014: ● Driven by favorable FX impact ● Positive impact from Genzyme and Renagel® offsetti
Slide 24: OpEx Grew +14.4% Reported and +3.7% at CER
OpEx Grew +14.4% in Reported and +3.7% at CER in Q2 2015 Operating Expenses (€m) €3,938m ● Q2 2015 OpEx of €3,938m, €3,443m up +3.7% at CER €1,290m €1,188m R&D ● R&D expenses of €1,290m (13.8% of sales), up +8.6% or stable at CER €2,648m SG&A €2,255m ● SG&A expenses of €2,648m (28.2% of sales), up +
Slide 25: Regeneron Agreement Terms Provide Critical Investment Mass
Regeneron Agreement Terms Provide Critical Investment Mass for IO Target Discovery and Antibody Development Key IO Collaboration Terms Key Terms for PD-1 inhibitor (REGN2810) ● $265m upfront payment for access to ● $375m upfront payment Regeneron’s research capabilities and ● Sanofi and Regeneron wi
Slide 26: Free Cash Flow Increased 29.0% in H1 2015
Free Cash Flow Increased 29.0% in H1 2015 Net Debt (in €m) €801m €3,694m FCF €3,084m €363m €9,726m €3,751m €462m €1,243m €7,171m €667m Net Debt (1) Net Cash from CapEx Proceeds Share Acquisitions, Dividend Other (3) Net Debt (1) Dec 31, 2014 Operating from Issuance Repurchase Licensing, Net Jun 30,
Slide 27: Exclusivity Losses and Higher OpEx Expected in H2 2015
Exclusivity Losses and Higher OpEx Expected in H2 2015 H2 2015 ● Slower sales growth of Venezuela and Merial ● Expected launch of insulin glargine biosimilar in Europe(1) and Japan ● Generic competition to Plavix® in Japan and Renagel® in Europe and possibly the U.S. ● Accelerating OpEx growth given
Slide 28: Outlook for 2015 - Investing in Future Growth Drivers
Outlook for 2015 - Investing in Future Growth Drivers FY 2015 Business EPS Growth Stable to slightly growing at CER(1,2) FX impact on Business EPS Approximately +10%(3) (1) Barring major unforeseen adverse events (2) FY 2014 Business EPS of €5.20 (3) Difference between variation on a reported basis
Slide 29: Appendices: R&D Pipeline
APPENDICES R&D Pipeline SANOFI \%
Slide 30: Late Stage Pipeline – Pharma & Vaccines
Late Stage Pipeline – Pharma & Vaccines Phase III Registration N N LixiLan patisiran (ALN-TTR02) Praluent® (alirocumab) Clostridium difficile lixisenatide + insulin glargine siRNA inhibitor targeting TTR Anti-PCSK9 mAb Toxoid vaccine Fixed-Ratio / Type 2 diabetes Familial amyloid polyneuropathy Hype
Slide 31: Early Stage Pipeline – Pharma & Vaccines (Phase II)
Early Stage Pipeline – Pharma & Vaccines Phase II dupilumab N isatuximab Anti-IL4Rα mAb Rabies VRVg Anti-CD38 naked mAb Nasal polyposis; Purified vero rabies vaccine Multiple myeloma Eosinophilic oesophagitis N N vatelizumab SAR125844 Meningitis ACYW conj. Anti-VLA 2 mAb C-MET kinase inhibitor 2nd g
Slide 32: Early Stage Pipeline – Pharma & Vaccines (Phase I)
Early Stage Pipeline – Pharma & Vaccines Phase I N N N GZ402668 SAR566658 GZ402666 Streptococcus pneumonia GLD52 (anti-CD52 mAb) Maytansin-loaded anti-CA6 mAb neo GAA Meningitis & pneumonia vaccine Relapsing multiple sclerosis Solid tumors Pompe Disease N N N SAR113244 SAR408701 GZ389988 Herpes Simp
Slide 33: R&D Pipeline Summary Table
R&D Pipeline Summary Table(1) Phase I Phase II Phase III Registration TOTAL Oncology 3 2 0 0 5 Diabetes Solutions 1 0 1 1 3 Cardiovascular / Renal Diseases 1 0 0 1 2 Immune Mediated Diseases 2 2 2 0 6 26 Infectious Diseases 0 1 0 0 1 Ophthalmology 2 0 0 0 2 Rare Diseases 2 2 2 0 6 Age Related Degene
Slide 34: Expected R&D Milestones
Expected R&D Milestones Product Event Timing Praluent® (alirocumab) Expected EC regulatory decision in Hypercholesterolemia Q3 2015 LixiLan Expected Phase III top line results in Diabetes Q3 2015 Vaxigrip® QIV IM (3+ years) Expected EU regulatory submission Q4 2015 Dengue vaccine Expected regulatory
Slide 35: Appendices: Finance
APPENDICES FINANCE SANOFI \%
Slide 36: 2015 Currency Sensitivity
2015 Currency Sensitivity 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 0.03 Russian Ruble +10 RUB/EUR -EUR 0.06 Currency Exposure on Q2 2015 Sales Currency Average Rates Russian Ruble Mexican Peso Chine
Slide 37: Business Net Income Statement Q2 2015
Business Net Income Statement Second quarter 2015 Group Total Pharmaceuticals Vaccines Animal health Other € million Q2 2015 Q2 2014 change Q2 2015 Q2 2014 change Q2 2015 Q2 2014 change Q2 2015 Q2 2014 change Q2 2015 Q2 2014 Net sales 9,378 8,075 16.1% 7,800 6,820 14.4% 887 718 23.5% 691 537 28.7% -
Slide 38: Business Net Income Statement H1 2015
Business Net Income Statement First Half 2015 Group Total Pharmaceuticals Vaccines Animal health Other € million H1 2015 H1 2014 change H1 2015 H1 2014 change H1 2015 H1 2014 change H1 2015 H1 2014 change H1 2015 H1 2014 Net sales 18,188 15,917 14.3% 15,255 13,517 12.9% 1,584 1,346 17.7% 1,349 1,054
Slide 39: Reconciliation of Business Net Income to Consolidated Net Income (Q2)
Reconciliation of Business Net Income to Consolidated Net Income Attributable to Equity Holders of Sanofi € million Q2 2015 Q2 2014 Change Business net income 1,840 1,537 19.7% Amortization of intangible assets (1) (611) (624) Impairment of intangible assets (1) (71) Fair value remeasurement of cont
Slide 40: Reconciliation of Business Net Income to Consolidated Net Income (H1)
Reconciliation of Business Net Income to Consolidated Net Income Attributable to Equity Holders of Sanofi € million H1 2015 H1 2014 Change Business net income 3,566 3,084 15.6% Amortization of intangible assets (1) (1,229) (1,301) Impairment of intangible assets (28) (74) Fair value remeasurement of
Slide 41: Consolidated Income Statements
Consolidated Income Statements € million Q2 2015 Q2 2014 H1 2015 H1 2014 Net sales 9,378 8,075 18,188 15,917 Other revenues 83 71 163 154 Cost of sales (2,938) (2,608) (5,724) (5,124) Gross profit 6,523 5,538 12,627 10,947 Research and development expenses (1,290) (1,188) (2,489) (2,327) Selling and
Slide 42: Cash Flow Statements
Cash Flow Statements € million H1 2015 H1 2014 Business net income 3,566 3,084 Depreciation, amortization and impairment of property, plant and equipment and software 628 582 Gains and losses on disposals of non-current assets, net of tax (44) (97) Other non cash items (218) (98) (1) Operating cash
Slide 43: Balance Sheets
Balance Sheets ASSETS LIABILITIES & EQUITY June 30, 2015 Dec 31, 2014 June 30, 2015 Dec 31, 2014 € million € million Property, plant and equipment 10,540 10,396 Equity attributable to equity holders of Sanofi 56,618 56,120 Intangible assets (including goodwill) 55,062 53,740 Equity attributable to n