Sanofi Sa · EURONEXT:SAN
Sanofi Sa — Shareholder Meeting (May 2017)
68 slides from Sanofi Sa's shareholder meeting presentation, May 10, 2017
Slide 1: 2017 General Meeting
10 Maymai 10,2017 2017 GENERAL MEETING
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 Perspectives Serge Weinberg, Chairman of the Board of Directors Olivier Brandicourt, Chief Executive Officer Compensation Policy Progress in Research & Development Patrick Kron, Chairman of the Compensation Committee Elias Zerhouni, President, Global R&D 2016 Financi
Slide 4: Governance
Governance Serge Weinberg Chairman of the Board of Directors
Slide 5: An Independent, Diversified and Renewed Board
An Independent, Diversified and Renewed Board Proposed Board Composition Current Board Composition 14 Directors ● A gradual and controlled renewal 12 Directors ● International ● A majority of independent Directors (9 out of 12) ● Widely independent (11 out of 14) ● 4 non-French Directors (33%) ● Gen
Slide 6: An Active and Engaged Board
An Active and Engaged Board In 2016: ● Sustained activity: 10 meetings ● Presentations by key Group managers on their Business Units High attendance ● Review of strategic outlook, significant investments, rate from and proposed partnerships Directors ● Evaluation of the work of the Board and its Com
Slide 7: Four Specialist Committees
Four Specialist Committees 1 Audit Committee 2 Compensation Committee Attendance Attendance rate rate ● Chairman: Robert Castaigne 93% ● Chairman: Patrick Kron 92% ● 3 financial experts (since May 4, 2016) ● 3 independent members out of 4 ● 3 independent members out of 4 ● 7 meetings in 2016 ● 3 mee
Slide 8: Four Specialist Committees (cont'd)
Four Specialist Committees (cont’d) Appointments and 3 4 Strategy Committee Governance Committee Attendance Attendance rate rate 100% 94% ● 3 independent members out of 3 ● 2 independent members out of 4 ● 5 meetings in 2016 ● 14 meetings in 2016 ● Succession plan ● Strategic review and prospects ●
Slide 9: Sanofi Share Performance vs. CAC 40 and Pharmaceutical Sector since January 2016
Sanofi Share Performance vs. CAC 40 and Pharmaceutical Sector since January 2016 €95 CAC 40 + 16.1% €90 €85 + 13.7% €80 U.S. Pharma €75 + 5.4% €70 EU Pharma - 0.7% €65 €60 Source: Bloomberg (12/31/2015 - 05/08/2017) in local currencies EU Pharma = 7 pharma companies; U.S. Pharma = 6 pharma companies
Slide 10: Sanofi Share Performance vs. Pharma Company Peers since January 2016
Sanofi Share Performance vs. Pharma Company Peers since January 2016 20.0% 21.2% 17.5% 13.7% 11.8% 3.6% 3.8% -1.1% -0.2% -4.3% -8.9% -20.1% -29.6% Source: Bloomberg (12/31/2015 - 05/08/2017) – in local currencies 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 €2.96 €2.77 €2.80 €2.85 €2.65 €2.50 €2.40 €2.20 2008 2009 2010 2011 2012 2013 2014 2015 2016 ● Proposed dividend of €2.96 per share for 2016 financial year(1) ● 23rd consecutive year of dividend increase
Slide 12: An International and Diversified Shareholder Base
An International and Diversified Shareholder Base(1) Rest of the world 1.8% Asia 3.7% 9.2% L’Oréal Other EU countries 7.2% Switzerland 2.5% 6.0% Individual Shareholders Germany 3.3% 7.4% 1.4% Employees Institutional UK 13.2% 1.6% Treasury Investors 4.0% Miscellaneous 1,292,022,324 77.8% shares Franc
Slide 13: Strengthen Employee Share Ownership
Strengthen Employee Share Ownership 2 initiatives since 2013 1.4%(1) ● Action 2013 > 1.6 million shares subscribed of Sanofi share capital is held ● Action 2016 > 1.7 million shares subscribed by employees Sanofi wants to strengthen its employee share ownership ● 21st resolution adopted by sharehold
Slide 14: Compensation Policy
Compensation Policy Patrick Kron Chairman of the Compensation Committee
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 May 4, 2016 In accordance with the ● Claudie Haigneré AFEP-MEDEF Code, more than half the members are independent ● Christian Mulliez (3 out of 4) ● Diane Souza since
Slide 16: Compensation Policy for the Chairman of the Board
Compensation Policy for the Chairman of the Board ● No Directors’ attendance fee ● No annual variable compensation ● No equity compensation ● Annual fixed compensation ● No compensation payable upon termination of office ● No pension entitlement 16
Slide 17: Elements of Compensation of Serge Weinberg in 2016
Elements of Compensation of Serge Weinberg in 2016 Amounts due Comments Fixed compensation unchanged since Fixed compensation €700,000 his appointment on May 17, 2010 €8,353 Company car Total €708,353 17
Slide 18: Compensation Policy for the Chief Executive Officer
Compensation Policy for the Chief Executive Officer ● No Directors’ attendance fee ● Annual fixed compensation ● Annual variable compensation ● Compensation payable ● Equity compensation upon termination of office ● Options to subscribe for shares ● Severance benefit ● Performance shares ● Top-up pe
Slide 19: Elements of Compensation of Olivier Brandicourt in 2016
Elements of Compensation of Olivier Brandicourt in 2016 Amounts due Comments Same compensation since his appointment Fixed compensation €1,200,000 in 2015 Between 0% and 250% of his fixed compensation Variable compensation €1,954,800 Target: 150% of his fixed compensation Vesting: 162.9% of his fixe
Slide 20: Variable Compensation of Olivier Brandicourt in 2016
Variable Compensation of Olivier Brandicourt in 2016 ● 40% based on financial indicators ● 60% based on specific individual objectives Attainment ● New product launches (10%) 162.9% ● Research and development (15%) compared to a target ● Ongoing transformation of Sanofi (25%) of 150%, ● Organization
Slide 21: Equity Compensation of Olivier Brandicourt in 2016
Equity Compensation of Olivier Brandicourt in 2016 2016 Plan Conditions ● Performance conditions measured over 3 years 2016 Grant ● 220,000 options to ● 3 performance criteria subscribe for shares ● Business Net Income (50%) ● 50,000 performance ● Return on Assets or ROA (30%) shares ● Total Shareho
Slide 22: 2016 Financial Performance
2016 Financial Performance Jérôme Contamine Executive Vice President, Chief Financial Officer
Slide 23: 2016 Business EPS Up 4.1% at CER and Stable on a Reported Basis
2016 Business EPS Up 4.1% at CER and Stable on a Reported Basis Sales(1) Business EPS(2) €34,060m €33,821m(3) €5.68 €5.64 +1.2% +4.1% at CER(4) at CER(4) 2015 2016 2015 2016 CER: Constant Exchange Rates (1) FY 2015 Company Sales restated to exclude Animal Health Business (2) FY 2015 and FY 2016 Busi
Slide 24: Speciality Care and Vaccines Drove Sales Growth in 2016
Speciality Care and Vaccines Drove Sales Growth in 2016 % of Sales Growth at CER 86.5% Pharmaceuticals €29,244m +0.2%(1) 23.1% Diabetes & Cardiovascular €7,799m -0.4%(2) 17.6% Speciality Care €5,950m +17.2%(3) 9.8% Consumer Healthcare €3,330m -1.6%(4) 30.5% Established Rx Products €10,311m -6.8%(5)
Slide 25: Solid Financial Performance in 2016
Solid Financial Performance in 2016 €m 2016 2015 % Change % Change (reported €) (CER) Sales(1) 33,821 34,060 -0.7% +1.2% Other revenues(1) 887 801 +10.7% +11.0% Gross profit(1) 24,006 23,942 +0.3% +2.1% R&D expenses(1) (5,172) (5,082) +1.8% +2.0% SG&A expenses(1) (9,486) (9,382) +1.1% +2.7% Business
Slide 26: Continued Investments in R&D and New Product Launches
Continued Investments in R&D and New Product Launches Gross Margin R&D Expenses SG&A Expenses +2.7% at CER(2) 71.0% +2.0% at CER(1) 70.3% €9,486m €9,382m €5,172m €5,082m 27.5% 28% of sales of sales 14.9% 15.3% of sales of sales 2015 2016 2015 2016 2015 2016 CER: Constant Exchange Rates (1) + 1.8% on
Slide 27: Consolidated Net Income
Consolidated Net Income(1) €m 2016(2) 2015(2) % Change (reported €) Business net income 7,308 7,371 0.9% Amortization of intangible assets (1,692) (2,137) Impairment of intangible assets (192) (767) Fair value remeasurement of contingent consideration liabilities (135) 53 Restructuring costs and sim
Slide 28: Maintaining Strong Free Cash Flow and Low Debt
Maintaining Strong Free Cash Flow and Low Debt Free Cash Flow(1) Net Debt €8.2bn(3) €7.8bn €8.1bn -4.1% €7.2bn €7.2bn €6.5bn €7.3bn €6.0bn €3.7bn 2013 2014 2015 2016 March 2013 2014 2015 2016 2017 ● Strong long-term credit ratings ● €3.7bn debt as of March 31, 2017 ● Moody’s A1; S&P AA ● Average cos
Slide 29: €1.6bn Capital Investments in 2016
€1.6bn Capital Investments in 2016: Reflecting Continued Expansion in Biologics Production Capacity Capital Expenditure Evolution and Breakdown in 2016 Industrial General Medicines & €1.6bn Affairs Emerging Markets, €1.5bn Diabetes & Cardiovascular €1.2bn 7% R&D In 2017, capital 8% 55% expenditure i
Slide 30: Strong Balance Sheet
Strong Balance Sheet December 31, 2016 Change vs. (€bn) December 31, 2015 Intangible assets 51.2 -0.4 Other non-current assets 20.4 +0.3 ASSETS WCR(1) 1.6 -0.6 Assets held for sale or exchange 6.4 +0.6 Net cash (B) 10.3 +1.2 Equity attributable 57.7 -0.5 LIABILITIES Provisions and other non-current
Slide 31: Sanofi Exceeded its Key 2016 Financial Objectives
Sanofi Exceeded its Key 2016 Financial Objectives Objectives Results(1) Gross margin 68-69% 70.7% OpEx growth rate at CER ~ +4.5% +2.7% Business EPS guidance at CER Broadly stable +4.1% Dividend growth Progressive 3 cent increase(2) CER: Constant Exchange Rates (1) Including Animal Health (2
Slide 32: Growth of Sales and Business EPS in First Quarter 2017
Growth of Sales and Business EPS in First Quarter 2017 Sales Business EPS €194m €8,648m €287m €1.42 €1.34 €384m +3.5% +3.0% at CER at CER(4) /CS(3) €7,783m Q1 2016 BI CHC / Sales(2) Fx Q1 2017 Q1 2016 Q1 2017 (1) SPMSD CER: Constant Exchange Rates (1) Primarily includes SPMSD (€49m) and BI CHC (€368
Slide 33: An Active Communication with our Individual Shareholders
An Active Communication with our Individual Shareholders Your publications SlideShare ● Shareholder Handbook ● Letter to Shareholders ● Fact Sheet YouTube Your online information LinkedIn ● www.sanofi.com/shareholders ● Sanofi IR mobile app ● Social Media Twitter 33
Slide 34: Meetings with Shareholders in France
Meetings with Shareholders in France Meetings planned in 2017 A renewed Shareholders Committee ● 7 shareholder meetings ● March 15: Lille ● June 7: Nice ● June 13: Versailles ● June 26: Bordeaux ● September 19: Strasbourg ● October 2: Lyon ● December 14: Rouen ● 5 meetings planned with wealth manage
Slide 35: Reports by Statutory Auditors at the Combined General Meeting
Reports by Statutory Auditors at the Combined General Meeting PricewaterhouseCoopers Audit ERNST & YOUNG et Autres
Slide 36: Reports and Statements Prepared by the Statutory Auditors
Reports and Statements Prepared by the Statutory Auditors and Made Available to Shareholders ● Financial statements ● Profit forecasts ● Statutory Auditors’ report on the statutory financial ● Statutory Auditors’ report on forecasted business net income statements (1st resolution) per share ● Statut
Slide 37: Perspectives
Perspectives Olivier Brandicourt Chief Executive Officer
Slide 38: A Changing Operating Environment: Trends in the Pharmaceutical Industry
A Changing Operating Environment Trends in the Pharmaceutical Industry Growing and aging Major population scientific innovations Huge unmet Urbanization therapeutic needs Pressure on Digitalization drug prices Growing concern Evolution of about better access to healthcare systems healthcare for all
Slide 39: Sanofi Has a Mission: Supporting People Throughout their Health Journey
Sanofi Has a Mission: Supporting People Throughout their Health Journey 39
Slide 40: 2015: Definition of Four Strategic Priorities
2015: Definition of Four Strategic Priorities Refocus the Deliver portfolio on outstanding human launches of healthcare new products Simplify the Sustain organization innovation in for greater Research & efficiency Development 41
Slide 41: Since 2016: Progressing on the Execution of our Strategic Roadmap
Since 2016: Progressing on the Execution of our Strategic Roadmap New product launches: Praluent®, Toujeo®, Dengvaxia®, Soliqua™, Kevzara®, Dupixent® Key progress in R&D: 5 new molecules advanced into registrational studies, 46 products(1) in the R&D pipeline Sanofi becomes a global leader in Consum
Slide 42: A Renewed Executive Committee
A Renewed Executive Committee Olivier Brandicourt Elias Zerhouni Jérôme Contamine Karen Linehan Philippe Luscan Chief Executive Officer Global R&D Chief Financial Officer Legal Affairs & General Counsel Global Industrial Affairs(1) Muzammil Mansuri Ameet Nathwani Roberto Pucci Kathleen Tregoning Str
Slide 43: An Organization Based on Five Global Business Units
An Organization Based on Five Global Business Units Sanofi Pasteur Vaccines Consumer Sanofi Genzyme Healthcare Specialty Care 5 GLOBAL BUSINESS UNITS General Medicines & Diabetes & Emerging Markets Cardiovascular 44 44
Slide 44: Sanofi Pasteur – Vaccines: Good Performance of Influenza and Pediatric Combination Franchises
Sanofi Pasteur – Vaccines: Good Performance of Influenza and Pediatric Combination Franchises Global Vaccines Franchise Sales Leading vaccines in 5 areas: €4,577m ● Influenza Pediatric combinations ● Pediatric combinations Influenza vaccines ● Meningitis Adult boosters ● Adult boosters +8.8% Meningi
Slide 45: Sanofi Genzyme – Specialty Care: Performance Driven by Rare Diseases and Multiple Sclerosis
Sanofi Genzyme – Specialty Care: Performance Driven by Rare Diseases and Multiple Sclerosis Global Specialty Care Rare Diseases Franchise Sales Leadership sustained by new patient accruals €5,950m Multiple Sclerosis Fast growing franchise Rare Diseases Oncology +17.2% Rebuilding an innovative portfo
Slide 46: Kevzara - A New Treatment for Patients with Rheumatoid Arthritis
Kevzara® - A New Treatment for Patients with Rheumatoid Arthritis ● A major market with very important unmet needs ● Approved in Canada under the brand name Kevzara® ● Biologics License Application resubmitted to the U.S. Food and Drug Administration (FDA) in March 2017 ● FDA decision expected on Ma
Slide 47: Dupixent - A Breakthrough Treatment for Moderate-to-Severe Atopic Dermatitis
Dupixent® - A Breakthrough Treatment for Moderate-to-Severe Atopic Dermatitis IGA 4 IGA 1 ● Moderate-to-severe atopic dermatitis ● Chronic, inflammatory skin disease, characterized by rashes often covering much of the body ● Dupixent®, approved in the United States in March 2017 ● Other opportunitie
Slide 48: Diabetes and Cardiovascular Disease: Affecting Hundreds of Millions of People Worldwide
Diabetes and Cardiovascular Disease: Affecting Hundreds of Millions of People Worldwide Global Diabetes & Cardiovascular Franchise Sales in 2016 Diabetes franchise Europe €1,381m +0.9% at CER Global sales down 1.8% at CER in 2016 United States Emerging ● U.S. diabetes sales decline €4,511m €7,799m M
Slide 49: Launching New Products in Diabetes & Cardiovascular Disease
Launching New Products in Diabetes & Cardiovascular Disease ● Success of global rollout ● Sales of €649m in 2016 January 2017 ● Launch of Soliqua™ 100/33 in the United States ● Approval of Suliqua™ in the European Union ● A new therapeutic option for hypercholesterolemia 50
Slide 50: General Medicines & Emerging Markets: Leading Position in Emerging Countries
General Medicines & Emerging Markets: Leading Position in Emerging Countries Due to an Adapted Product Portfolio Global Business Unit Sales in 2016: €14,498m Emerging Markets(1) Sanofi ranks #1 Established Products Accounting for nearly one third of company sales (1) World excluding U.S., Canada, Eu
Slide 51: Sanofi Is One of the Top Players in Consumer Healthcare
Sanofi Is One of the Top 3 Players in Consumer Healthcare(1) Sanofi Consumer Healthcare A broad 2016 sales of €3.3bn geographical footprint ~ €4.8bn Strategic product Boehringer Ingelheim categories Consumer Healthcare 2016 sales of ~ €1.5bn(2) (1) Combined global sales; source: Nicholas Hall & Comp
Slide 52: Sanofi: A Global Company with a Strong Presence in France
Sanofi: A Global Company with a Strong Presence in France 25% of global headcount, i.e. 25,400 employees R&D, 7 tertiary sites: production headquarters and distribution in Paris activities #1 on 28 sites 6% of global private sales, i.e. R&D investor €2.2bn #5 exporter in France 45% of global company
Slide 53: Innovation in R&D to Respond to Patients' Needs and Ensure Long-term Growth
Innovation in R&D to Respond to Patients’ Needs and Ensure Long-term Growth 2016 R&D budget Objective of increasing annual €5,172m R&D investments up to €6bn 15.3% of company sales by 2020 An innovative R&D pipeline ● 46 projects, of which 13 in phase 3 or submitted to regulatory authorities(1) ● Pr
Slide 54: Major Partnerships in R&D
Major Partnerships in R&D Diabetes (1) Oncology Rare Diseases Vaccines (1) Partnership signed in 2015 in the immuno-oncology field. Sanofi and Regeneron signed their first partnership on research, development and commercialization of monoclonal antibodies in 2007 55
Slide 55: Digital – Offering Multiple Opportunities
Digital – Offering Multiple Opportunities Digital clinical trial operations: faster and less hurdles for patients Digital factory Real world evidence DIGITAL Multi-channel engagement: health professionals and patients Drugs+ solutions: better disease management Diabetes solutions business 56
Slide 56: Improving Access to Healthcare for Those Most in Need
Improving Access to Healthcare for Those Most in Need Sanofi is a responsible company contributing to better access to healthcare Strengthening of Prevention programs, healthcare systems Vaccines screening, treatment and training of Neglected Diseases and disease management healthcare professionals
Slide 57: Sanofi's Commitment to Eliminate Poliomyelitis and Sleeping Sickness
Sanofi’s Commitment to Eliminate Poliomyelitis and Sleeping Sickness The elimination of polio is in sight ● Polio cases have decreased by 99.99% since 1988(1) ● Sanofi Pasteur is a leading provider of polio vaccines: oral and injectable ● 2017 could be the year of polio elimination Remarkable progre
Slide 58: A Mission Serving Hundreds of Millions of Patients Worldwide
A Mission Serving Hundreds of Millions of Patients Worldwide 59
Slide 59: Sanofi: A Unique Profile for Future Growth
Sanofi: A Unique Profile for Future Growth Strong financial profile Broad product portfolio Innovative Research & Development Balanced geographical presence Diversified activities in human health 60
Slide 60: Progress in Research & Development
Progress in Research & Development Elias Zerhouni President, Global R&D
Slide 61: Major Progress since January 2016
Major Progress since January 2016 Regulatory Approvals Positive Phase 3 Results ● Dupixent® – Atopic Dermatitis (U.S.) ● Dupixent® – Atopic Dermatitis (SOLO 1&2 / CHRONOS / CAFÉ) ● Soliqua™ 100/33 – Diabetes (U.S.) ● Kevzara® – Rheumatoid Arthritis (MONARCH) ● Suliqua™ – Diabetes (EU) ● Insulin lisp
Slide 62: Dupilumab: A Pipeline in a Product
Dupilumab: A Pipeline in a Product – Clinical Studies in Multiple Indications Underway Atopic Dermatitis EU decision expected by end 2017 Pediatric expansion: Phase 3 to start in 2017(1,2) Asthma Phase 3 ongoing, U.S. submission expected in Q4 2017 Pediatric expansion: Phase 3 started in Q2
Slide 63: Promising Results of Dupilumab in Moderate-to-Severe Asthma
Promising Results of Dupilumab in Moderate-to-Severe Asthma Moderate-to-severe Asthma ● Chronic inflammatory disease leading to narrowing of the airway ● Negatively impacts the lives of patients Phase 2b results with dupilumab ● 64-75% reduction in annualized rate of severe exacerbations vs. placebo
Slide 64: Re-Building our Oncology Portfolio
Re-Building our Oncology Portfolio Isatuximab ● Product profile potentially differentiated ● Phase 3 study in multiple myeloma initiated in 2016 ● Potential indications beyond multiple myeloma being explored, in particular, Acute Lymphoblastic Leukemia PD-1 inhibitor Oncology ● Registrational phase
Slide 65: Rare Diseases: Two Products Started Registrational Studies
Rare Diseases: Two Products Started Registrational Studies Olipudase alfa NeoGAA ● Treatment of Niemann-Pick ● 2nd generation disease type B(1) enzymatic replacement Rare ● Breakthrough designation therapy for Pompe Diseases granted by U.S. FDA(2) and disease Japanese regulatory agency ● Pivotal pha
Slide 66: Diabetes: Sotagliflozin Evaluated in Phase 3 in Type 1 & 2 Diabetes
Diabetes: Sotagliflozin Evaluated in Phase 3 in Type 1 & 2 Diabetes Sotagliflozin ● Dual oral SGLT1 and SGLT2 inhibitor Diabetes ● Type 1 diabetes: Positive phase 3 results ● Type 2 diabetes: Phase 3 study initiated in 2016 67
Slide 67: Multiple Key Studies Ongoing or Expected to be Initiated in 2017
Multiple Key Studies Ongoing or Expected to be Initiated in 2017 for Promising Pipeline Projects Proof of Concept Studies Phase 3 / Registrational Studies isatuximab SAR566658 SAR439684 isatuximab Anti-CD38 Maytansin-anti-CA6 PD-1 Inhibitor Anti-CD38 Phase 2 – Multiple indications Phase 2 – Multiple
Slide 68: General Meeting
10 Maymai 10,2017 2017 GENERAL MEETING