Sanofi Sa · EURONEXT:SAN
Sanofi Sa — FY2013 Earnings Presentation
63 slides from Sanofi Sa's earnings presentation, Feb 6, 2014
Slide 1: Annual & Q4 Results 2013
February 6 2014 Annual & iXesults \2013 g Se)
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 ● Christopher A. Viehbacher, Chief Executive Officer Financial Performance ● Jérôme Contamine, Executive Vice President, Chief Financial Officer Business Review ● Peter Guenter - Executive Vice President, Global Commercial Operations ● Pascale Witz - Executive Vice President, G
Slide 4: Key Highlights
KEY HIGHLIGHTS Christopher A. Viehbacher Chief Executive Officer 4
Slide 5: 2013 Year in Review
2013 Year in Review 1 From Sep to Dec 2013, the underlying growth profile of the new Sanofi emerged 2 Throughout 2013, we left the patent cliff further behind us and took decisive action to resolve temporary operational challenges 3 Growth platforms now account for 73% of sales(1) compared to 43% in
Slide 6: New Period of Growth with Solid Q4 2013 Sales and Business EPS Growth
Sanofi Started a New Period of Growth with Solid Q4 2013 Sales and Business EPS Growth Quarterly Sales Growth(1) Quarterly Business EPS Growth(1) (2) +6.5% +30.8% (2) +0.6% Q1 2013 Q2 2013 Q1 2013 Q2 2013 Q3 2013 Q3 2013 Q4 2013 Q4 2013 -9.0% -2.8% -18.5% -29.0% -6.3% (1) Growth at Constant Exchange
Slide 7: Stable FY 2013 Sales and Business EPS 10% Lower
Sanofi Delivered Stable FY 2013 Sales and FY 2013 Business EPS 10% Lower than FY 2012(1) Sales Business EPS (2) €34,947m €6.14 €32,951m €5.05 -0.5% -9.8% at CER(3) at CER(3) FY 2012 FY 2013 FY 2012 FY 2013 (1) Evolution at Constant Exchange Rates (CER) (2) FY 2012 Business EPS of €6.14 with the retr
Slide 8: Growth Platforms Grew by +10.0% in Q4 2013
Growth Platforms Grew by +10.0% in Q4 2013 Reaching 72.9% of Sales(1) Q4 2013 FY 2013 Sales & Growth at CER Sales & Growth at CER Emerging Markets(2) €2,917m +10.4% €10,957m +4.4% +7.1% ex Brazil generics Diabetes Solutions €1,735m +19.0% €6,568m +18.7% Vaccines €959m +0.1% €3,716m -0.1% Consumer He
Slide 9: Sanofi Maintains High Total Shareholder Return
Sanofi Maintains High Total Shareholder Return Evolution of Dividend ● Proposed dividend of €2.80 per share for 2013 results (1) €2.77 €2.80 ● Dividend increase for €2.65 €2.50 the 20th consecutive year €2.40 €2.20 ● Payout of ~55% ● Dividend CAGR of ~5% over the 2008-2013 period(2) ● >€1.6bn share
Slide 10: Financial Performance
FINANCIAL PERFORMANCE Jérôme Contamine Executive Vice President, Chief Financial Officer 10
Slide 11: 2013 Sales & EPS Affected by Strength of the Euro
2013 Sales & EPS Were Significantly Affected by the Strength of the Euro, Erasing 2012 FX Gains Quarterly Currency Impact Sales(1) Business EPS +6.4% +8.4% +5.8% €561m +8.0% €0.15 €486m €0.13 +2.4% +3.6% +1.9% +2.6% €1,806m €0.06 €0.49 €187m €166m €0.04 €1,400m -€212m €0.38 -2.5% -€305m -€0.08 -€0.0
Slide 12: Sanofi Returned to Growth in Q4 2013
Sanofi Returned to Growth in Q4 2013 Q4 2012 % (reported Change % Change (1) €m Q4 2013 €) (CER) Net sales 8,457 8,526 -0.8% +6.5% Other revenues 88 137 -35.8% -33.6% Cost of sales (2,901) (2,865) +1.3% +7.2% Gross profit 5,644 5,798 -2.7% +5.3% R&D (1,246) (1,354) -8.0% -4.8% SG&A (2,148) (2,352) -
Slide 13: Solid Business EPS Growth in Q4 2013 despite Negative FX
Solid Business EPS Growth in Q4 2013 despite Negative FX Impact of €0.16 and Low Tax Rate in Prior Year Q4 2012 % (reported Change % Change (1) €m Q4 2013 €) (CER) Business operating income 2,487 2,118 17.4% 30.6% (2) Net financial expenses (103) (198) - - Income tax expense (574) (370) - - Effectiv
Slide 14: FY 2013 Reflects Patent Cliff and Return to Growth
FY 2013 Reflects Patent Cliff and Operational Issues in First 8 Months and Return to Growth in Last 4 Months €m FY 2013 FY 2012 % Change % Change (reported €) (CER) Net sales 32,951 34,947 -5.7% -0.5% Other revenues 355 1,010 -64.9% -63.9% Gross profit 22,324 24,882 -10.3% -4.8% Business operating i
Slide 15: Cost of Sales Negatively Impacted by Vaccines and FX
Cost of Sales Negatively Impacted by Vaccines and FX in 2013 Cost of Sales (%) €11,075m / 31.7% €10,982m / 33.4% ● FY 2013 Cost of Sales increased 33.6% 34.3% +3.3% at CER(1) ● CoS for Vaccines negatively impacted by Toronto manufacturing issues(2) ● Unfavourable currency impact 2012 2013 (1) FY 201
Slide 16: Flat R&D Expenses in 2013
Maintaining Flat R&D Expenses in 2013 While Advancing our Most Valuable R&D Assets R&D Expenses (€m) €4,905m / 14.0% €4,770m / 14.5% ● FY 2013 R&D expenses flat at CER(1) €1,354m ● Significant reduction in internal fixed €1,246m costs ● Higher investments supporting late-stage R&D pipeline projects
Slide 17: Stable SG&A Expenses in 2013
Delivering Stable SG&A Expenses in 2013 Despite Significant New Product Launch Costs SG&A Expenses (€m) €8,929m / 25.6% €8,602m / 26.1% ● FY 2013 SG&A expenses stable €2,352m at CER(1) €2,148m ● Continued tight control over sales and marketing costs ● Flat G&A expenses ● Investment in new MS franchi
Slide 18: Ongoing Cost Savings Program of €2bn
Ongoing Cost Savings Program of €2bn Is Expected to Be Completed by 2014 2012 + 2013 ● 85% of the €2bn cost reduction program(1) has been achieved in the last two years ● Over half of the savings have been reinvested in growth platforms, in product launches and late-stage clinical trials 2014 ● 2014
Slide 19: Net Debt Reduced by €1.7bn to €6.0bn in 2013
Net Debt Was Reduced by €1.7bn to €6.0bn in 2013 Tight Control over WCR and CapEx Net Debt (in €m) €355m €151m FCF €6,457m €7,719m €7,655m €3,638m €6,043m €1,641m €1,198m €1,004m Net Debt (1) Net Cash from CapEx Proceeds Share Dividend Acquisitions, Other (3) Net Debt (1) Dec 31, 2012 Operating from
Slide 20: Business Review
BUSINESS REVIEW Peter Guenter Executive Vice President, Global Commercial Operations Pascale Witz Executive Vice President, Global Divisions & Strategic Development Olivier Charmeil Executive Vice President, Vaccines David P. Meeker Executive Vice President & Chief Executive Officer, Genzyme Carsten
Slide 21: Double Digit Sales Growth in Emerging Markets in Q4 2013
Double Digit Sales Growth in Emerging Markets in Q4 2013 Q4 2013 Geographic Sales Mix -5.6% 11.1% +1.2% 23.0% (1) 34.5% +10.4% 31.4% +12.3% Growth at CER +11.3% +5.2% +15.4% +10.1% (1) World excluding U.S., Canada, Western Europe (France, Germany, UK, Italy, Spain, Greece, Cyprus, Malta, Belgium, Lu
Slide 22: Poised to Capture Growth in Fast Growing Markets
Sanofi Is Poised to Capture Growth in Fast Growing Markets Sanofi’s Scorecard in Emerging Markets Number one A top position An historical One of the A wide A commercial company in in most of the presence biggest sales network of presence in a Emerging fast growing and diversified forces in industria
Slide 23: Sales Trends Improved in the U.S. and Western EU
Sales Trends Consistently Improved in the U.S. and Western EU Throughout 2013 U.S. Sales Growth(1) Western EU Sales Growth(1,2) +1.2% +12.3% +5.2% -4.8% -7.9% -10.0% -9.7% -10.0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 2013 (1) Growth at Constant Exchange Rates (2) Western Europe: France, Germany, UK, Italy, S
Slide 24: Lantus Is First Choice for Insulin Therapy
Lantus® Is First Choice for Insulin Therapy ● Over 8m Lantus® patients worldwide Lantus® Sales (€m) ● >10 years of broad clinical experience €5,715m ● ORIGIN results on Lantus® CV safety recently integrated into product label ● Q4 2013 sales of €1,512m, up +19.9% at CER ● Double-digit growth for 12
Slide 25: Lyxumia Is an Add-On Therapy for Patients on Basal Insulin
Lyxumia® Is an Add-On Therapy for Patients on Basal Insulin Easy-to-Use Once-Daily Prandial GLP-1 ● Key benefits of Lyxumia® complement basal insulin ● Pronounced PPG lowering effect First 2 weeks of therapy ● Limited risk of hypoglycemia Lyxumia® 10 µg OD SC ● Indicated in EU for combination use wi
Slide 26: World's Third Largest CHC Player
Sanofi Is the World’s Third Largest CHC Player Top 10 OTC in Market Share(1) ● Q4 2013 sales of €722m, up +6.1% at CER 1. J&J 4.2% ● FY 2013 sales of €3,004m, up +5.2% at CER with 7 major brands accounting 2. BAYER 3.4% for 40% of sales 3. 3.1% ● Launch of Nasacort® 4. PFIZER 3.0% Allergy 24HR for 5
Slide 27: Vaccines Dealt with Supply Constraints
Vaccines Have Effectively Dealt with Supply Constraints Delivering Stable Sales in 2013 Mature Markets Annual Sales Emerging Markets €3,716m ● Volumes of Pertussis- ● Continued strong containing vaccines(1) Pentaxim® penetration recovering as resolution of Toronto production issues Emerging ● Start
Slide 28: Record Seasonal Flu Vaccines Sales in 2013
New Record Seasonal Flu Vaccines Sales in 2013 ● Record flu vaccines sales of €929m, U.S. Flu Vaccines Sales Split up +9.3% at CER 41% of sales from differentiated vaccines ● Undisputed leadership position with 215m doses sold (66m in the U.S.) ● ~50% market share(1) in the U.S. ● Doses split 75% No
Slide 29: Genzyme Rare Disease Products Grew Double Digits
Genzyme Rare Disease Products Grew Double Digits in 2013 Top 3 Rare Disease Products Sales ● Q4 2013 Rare Disease sales of €524m, up +17.7% at CER €688m ● FY 2013 sales of €1,974m, up +16.6% +14% at CER at CER €500m ● Leadership position regained €383m +12% at CER ● Cerezyme®: #1 therapy for Gaucher
Slide 30: Cerdelga: Novel Oral Therapy for Gaucher
Cerdelga™ (eliglustat) - A Novel Investigational Oral Therapy to Expand Genzyme’s Gaucher Franchise ENGAGE - Change in Spleen Volume ● Oral therapy eliminating infusion challenges % Change at 9 Months ● Largest ever clinical program in +2% Gaucher: ~400 adults in 29 countries Eliglustat ● Phase III
Slide 31: Genzyme Positioned to Enter Global MS Market
Genzyme Is Well Positioned to Enter the $15bn Global MS Market with a Franchise Approach Aubagio® Quarterly Sales €69m ● FY 2013 sales of €166m €44m ● EMA approval granted in Aug 2013 (1) €33m ● EU launch rollout started in Q4 2013 €20m ● Strong launch in Germany and other €7m EU launch countries Q4
Slide 32: Merial Gearing Up to Launch Next Generation Flea and Tick Control
Merial Gearing Up to Launch the Next Generation of Flea and Tick Control for Pets ● FY 2013 sales of €1,985m, Quarterly Sales down -5.3% at CER ● Companion Animals (60% of sales) €2,030m €2,179m €1,985m impacted by weak flea and tick season and increased Frontline® generics €506m €470m €444m ● Produ
Slide 33: R&D Update
R&D UPDATE Elias Zerhouni President, Global R&D 33
Slide 34: Extensive Clinical Trial Data in 2013
Extensive Clinical Trial Data in 2013 Allowed Significant R&D Pipeline Progress Key Data Milestones in 2013 Positive top-line results U300 Successful completion alirocumab from first Phase III of EDITION Phase III study of ODYSSEY program program Cerdelga™ Three co-primary Positive data from sarilum
Slide 35: Solid Year for New Approvals and Regulatory Submissions
2013 Was a Solid Year for New Approvals and Regulatory Submissions Seven Approvals in 2013 Two Projects in Registration Aubagio® in Multiple Sclerosis (EU) Cerdelga™ in Gaucher disease (EU & U.S.) Lemtrada™ in Multiple Sclerosis (EU) Lemtrada™ in Multiple Sclerosis (U.S.)(1) Lyxumia® in Diabetes (EU
Slide 36: 9 Late-Stage Projects Potentially Filed over Next 4 Years
9 Late-Stage Projects Potentially Filed over Next 4 Years 9 Potential Filings in 2014-2018 ● U300 in Diabetes ● Sarilumab in Rheumatoid Arthritis ● 6-in-1 vaccine PR5I (U.S.) ● LixiLan in Diabetes ● Alirocumab in Hypercholesterolemia ● Dupilumab in Atopic Dermatitis and Asthma ● Dengue vaccine ● C.
Slide 37: U300: Next Generation Basal Insulin
U300: Developing the Next Generation Basal Insulin for a Broad Diabetes Population Flatter PK Profile More Prolonged PD Profile Serum Insulin Glargine Concentration Glucose Infusion Rate 30 5 -1 -1 DOSE 0.4 U.kg U100 0.4 U.kg U300 -1 25 U300 0.4 U.kg U100 LOESS 0.15 4 Lantus® 20 -1 -1 GIR - mg.kg .m
Slide 38: Combining Insulin Glargine with Lixisenatide
Combining Insulin Glargine with Lixisenatide in a Single Daily Injection ● Fixed-Ratio solution administered LixiLan Phase III Project via a disposable pen device ● Phase III program started in Q1 2014 ● LixiLan-O study in patients insufficiently controlled on OADs (1,125 patients) ● LixiLan-L study
Slide 39: Alirocumab: Targeting Hypercholesterolemic Patients
Alirocumab: Targeting Hypercholesterolemic Patients at High CV Risk with Unmet Needs ~21m Patients Estimated at High CV Risk and Not at Goal for LDL-C(1) 2016 Projected Patient Flow - US & EU5 (million patients)(2) 62.1 35.7 Statin Intolerant CHD/CHD Risk 21.6 Equivalent SI High Risk Diabetes + 2 ri
Slide 40: Alirocumab: Key Phase III Results Expected in 2014
Alirocumab: Key Phase III Results Expected in 2014 ODYSSEY MONO(2) - Mean LDL-C Change ● Fully-human PCSK9 mAb administered every 2 or 4 weeks subcutaneously % Change at Week 24 using a single 1mL auto-injector ● Global Phase III ODYSSEY program - 15.6% ongoing with 14 clinical studies ezetimibe ens
Slide 41: Sarilumab in Rheumatoid Arthritis Biologic Market
Sarilumab: Growing Opportunity for IL-6R Class in $18bn Rheumatoid Arthritis Biologic Market SARIL-RA-MOBILITY - Signs & Symptoms ● Fully human, high affinity, IL-6R mAb administered subcutaneously every ACR Response at Week 24 (% of Patients) 2 weeks ACR20** 66.0* ● Head-to-head study in RA of toci
Slide 42: Dupilumab: Clinical Advance of the Year 2013
Dupilumab: Named “Clinical Advance of the Year 2013” by Scrip Intelligence Atopic Dermatitis ● Fully human monoclonal antibody binding to IL-4Rα ● Targeting the common IL-4Rα subunit ● Dual IL-4/IL-13 cytokine antagonism with a single agent ● Untapped market of atopic dermatitis ● >12m people US+EU5
Slide 43: First-in-Class Dengue Vaccine
A First-in-Class Dengue Vaccine to Address a Growing Global Threat Significant Disease Burden(1) Ambitious Development Program ● 2.5bn people at risk ● Phase IIb results in ~4,000 children(3) ● Efficacy observed against DENV 1, 3 ● 100m symptomatic dengue cases and 4 (in the range of 60% to 90%), wo
Slide 44: C. Diff Toxoid Vaccine
C. Diff Toxoid Vaccine: Preventing Primary Symptomatic Clostridium Difficile Infections (CDI) CDI – A Growing Healthcare Problem ● Candidate vaccine shown to be safe and immunogenic in Phase I(1) and ● Most common cause of healthcare Phase II trials associated infections in developed countries(2) ●
Slide 45: Regulatory and Phase III Milestones Expected in 2014
Multiple Regulatory and Phase III Development Milestones Are Expected in 2014 2014 Expected Regulatory Decisions Q1 Q2 Q3 Q4 ● Cerdelga™ in Gaucher disease (U.S. & EU) Expected Regulatory Submissions Q1 Q2 Q3 Q4 ● Fluzone® QIV Intradermal (U.S.) ● Investigational new insulin U300 in Diabetes (U.S.
Slide 46: Conclusion
CONCLUSION Christopher A. Viehbacher Chief Executive Officer 46
Slide 47: Solid Outlook for 2014
Sanofi Expects a Solid Outlook for 2014 FY 2014 Guidance 2014 business EPS is expected to be between 4% to 7% higher than 2013 at CER(1), barring major unforeseen adverse events (1) FY 2013 Business EPS of €5.05 47
Slide 48: Sanofi's Growth Profile Expected to Emerge in 2014
Sanofi’s Growth Profile Expected to Emerge in 2014 1● In 2014, Sanofi is expected to continue to demonstrate strong performance of growth platforms, launch new products and reinforce pre-launch efforts for late-stage projects 2● Growth Platforms now account for 73% of sales and Sanofi has returned t
Slide 49: Appendices: R&D Pipeline
APPENDICES R&D Pipeline SANOFI %
Slide 50: Late Stage Pipeline – Pharma & Vaccines
Late Stage Pipeline – Pharma & Vaccines Phase III Registration N N U300 alirocumab Dengue Lemtrada™ (alemtuzumab) Insulin glargine Anti-PCSK-9 mAb Mild-to-severe Anti-CD52 mAb Type 1+2 diabetes Hypercholesterolemia dengue fever vaccine Multiple sclerosis, U.S. N N Lyxumia® (lixisenatide) Kynamro® (m
Slide 51: Early Stage Pipeline – Phase II
Early Stage Pipeline – Pharma & Vaccines Phase II N N dupilumab SAR391786 Rotavirus Anti-IL4Rα mAb GDF8 mAb Live attenuated tetravalent Atopic dermatitis; Asthma; Nasal polyposis Sarcopenia Rotavirus oral vaccine N SAR3419 N SAR339658 Maytansin-loaded anti-CD19 mAb Rabies VRVg Anti-VLA 2 mAb B-cell
Slide 52: Early Stage Pipeline – Phase I
Early Stage Pipeline – Pharma & Vaccines Phase I SAR650984 N SAR245408 (XL147) N N GZ402663 (sFLT-01) Streptococcus pneumonia Anti-CD38 naked mAb Oral PI3K inhibitor Gene therapy Meningitis & pneumonia vaccine Hematological malignancies Solid tumors Age-related macular degeneration (AMD) SAR405838 (
Slide 53: R&D Pipeline Summary Table
R&D Pipeline Summary Table(1) Phase I Phase II Phase III Registration TOTAL Oncology 8 3 0 0 11 Diabetes Solutions 0 0 2 0 2 Cardiovascular / Renal Diseases 0 1 1 0 2 Immune Mediated Diseases 2 4 1 0 7 36(2) Infectious Diseases 0 2 0 0 2 Ophthalmology 4 0 0 0 4 Rare Diseases 3 0 1 1 5 Age Related De
Slide 54: Expected R&D Milestones
Expected R&D Milestones Product Event Timing LixiLan (lixisenatide + insulin glargine) Expected start of Phase III program in Diabetes Q1 2014 Fluzone® QIV ID Expected U.S. regulatory submission Q1 2014 Investigational new insulin U300 Expected U.S. and EU regulatory submissions in Diabetes Q2 2014
Slide 55: Appendices: Finance
APPENDICES FINANCE SANOFI %
Slide 56: Business Net Income Statement Q4 2013
Business Net Income Statement Fourth quarter 2013 Group Total Pharmaceuticals Vaccines Animal Health Others € million Q4 2013 Q4 2012(1) Change Q4 2013 Q4 2012(1) Change Q4 2013 Q4 2012(1) Change Q4 2013 Q4 2012(1) Change Q4 2013 Q4 2012(1) Net sales 8,457 8,526 (0.8%) 7,054 7,004 0.7% 959 1,016 (5.
Slide 57: Business Net Income Statement Full Year 2013
Business Net Income Statement Full year 2013 Group Total Pharmaceuticals Vaccines Animal Health Others € million 2013 2012(1) Change 2013 2012(1) Change 2013 2012(1) Change 2013 2012(1) Change 2013 2012(1) Net sales 32,951 34,947 (5.7%) 27,250 28,871 (5.6%) 3,716 3,897 (4.6%) 1,985 2,179 (8.9%) Othe
Slide 58: Reconciliation of Business Net Income – Q4 2013
Reconciliation of Business Net Income to Consolidated Net Income Attributable to Equity Holders of Sanofi Fourth Quarter 2013 (3) € million Q4 2013 Q4 2012 Change Business net income 1,810 1,550 16.8% (1) Amortization of intangible assets (682) (800) Impairment of intangible assets (919) (89) Fair v
Slide 59: Reconciliation of Business Net Income – Full Year 2013
Reconciliation of Business Net Income to Consolidated Net Income Attributable to Equity Holders of Sanofi Full Year 2013 (4) € million 2013 2012 Change Business net income 6,687 8,101 (17.5%) (1) Amortization of intangible assets (2,914) (3,291) Impairment of intangible assets (1,387) (117) Fair val
Slide 60: Consolidated Income Statement
Consolidated Income Statement (1) (1) € million Q4 2013 Q4 2012 2013 2012 Net sales 8,457 8,526 32,951 34,947 Other revenues 88 137 355 1,010 Cost of sales (2,902) (2,868) (10,990) (11,098) Gross profit 5,643 5,795 22,316 24,859 Research and development expenses (1,246) (1,354) (4,770) (4,905) Selli
Slide 61: Change in Net Debt
Change in Net Debt (1) € million 2013 2012 Business net income 6,687 8,101 Depreciation amortization and impairment of property plant and equipment and software 1,211 1,278 Net gains and losses on disposals of non-current assets, net of tax (261) (86) Other non-cash items (106) 20 (2) Operating cash
Slide 62: Simplified Consolidated Balance Sheets
Simplified Consolidated Balance Sheets ASSETS (1) LIABILITIES (1) 31/12/13 31/12/12 31/12/13 31/12/12 € million € million Property, plant and equipment 10,182 10,578 Equity attributable to equity holders of Sanofi 56,885 57,332 Intangible assets (including goodwill) 52,529 58,265 Equity attributable
Slide 63: 2014 Currency Sensitivity
2014 Currency Sensitivity Business EPS Currency Sensitivity ● 1% variation in €/$ corresponds to an impact of 0.5% on 2014 Business EPS ● 1% variation in €/Yen corresponds to an impact of 0.1% on 2014 Business EPS Currency Exposure on 2013 Sales Currency Average Rate 2013 Dec 2013 % change €/$ 1.33