Slide 1: Q4 and Full Year 2019 Results
Q4 and Full Year 2019 Results Play to Win February 6, 2020
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 Business update Paul Hudson Chief Executive Officer R&D update John Reed EVP, Global Head of R&D Financial update Jean-Baptiste de Chatillon EVP, Chief Financial Officer Conclusion Paul Hudson Chief Executive Officer Q&A session 3
Slide 4: Business update
Business update Paul Hudson Chief Executive Officer
Slide 5: Play to win – 2019 key achievements
Play to win – 2019 key achievements Focus Lead with Accelerate Reinvent how on growth innovation efficiency we work ✓ FY sales of €36bn, ✓ Priority pipeline ✓ OPEX -0.8% at CER ✓ New GBU +2.8% at CER assets identified organization ✓ BOI margin +120bps ✓ FY EPS of €5.99, ✓ Rich R&D news flow ✓ Cultur
Slide 6: A simplified Executive Committee
A simplified Executive Committee CEO Executive Committee GBU GBU GBU Global Business 2019 Specialty Primary China & GBU GBU Finance Industrial R&D Strategy External Trans- Human CMO/ Legal Vaccines CHC Affairs Resources CDO Affairs Care Care EM Affairs formation CEO Finance Legal R&D HR Aligned with
Slide 7: New Global Business Unit organization
New Global Business Unit organization(1) FY 2019 sales of €36.1bn up 2.8% at CER Specialty Care(2) General Medicines(2) Vaccines Consumer Healthcare Immunology Diabetes Influenza vaccines Allergy, Cough & Cold RD / RBD Cardiovascular PPH, Boosters Pain Neurology, MS Established Products Meningitis,
Slide 8: Our key growth drivers
Our key growth drivers Dupixent® Vaccines Pipeline Progressing towards >€10bn On track for mid-to-high Driving momentum in peak sales ambition single digit CAGR(1) R&D productivity • 4Q19 sales €679m, +135% • 4Q19 sales €1.9bn, +22% • BTKi(2) met primary endpoint in proof of concept trial • FY2019 s
Slide 9: Dupixent – annualizing at >€2.7bn
Dupixent® – annualizing at >€2.7bn Global Dupixent® quarterly sales (€m) • Strong demand in AD and new indications Ex-U.S. €2.1bn • Launched in 34 countries U.S. • 89 planned launches across indications in 2020 679 570 134 • FDA priority review for AD in children 6-11 years(1) 496 115 €0.8bn • PDUFA
Slide 10: Dupixent – biologic leadership across specialties
Dupixent® – biologic leadership across specialties Ambition to become leading Best uptake in asthma biologics Leading biologic biologic with dermatologists U.S. cumulative NBRx in Asthma among allergists U.S. monthly NBRx at dermatologists(1)(2) (monthly, all channels)(1) U.S. monthly NBRx at allerg
Slide 11: Dupixent – data that matters to patients and prescribers
Dupixent® – data that matters to patients and prescribers Rapid efficacy across multiple measures Sustained efficacy and safety(1) Proportion of patients achieving EASI-50 or peak pruritis NRS ≥ 3 Long-term extension study point improvement or DLQI ≥ 4-point improvement with Dupixent® in CHRONOS stu
Slide 12: Vaccines – high single-digit growth in 2019
Vaccines – high single-digit growth in 2019 Vaccines sales growth, FY 2019 • Strong performance across all franchises • FY sales up 9.3% to €5.7bn PPH 9.8% • PPH up 9.8% to €1.9bn Influenza 7.3% • Global Hexaxim® expansion Meningitis 8.4% • Recovery and increased demand for Pentaxim® in China Booste
Slide 13: Flu Vaccines – successful differentiation strategy
Flu Vaccines – successful differentiation strategy Flu Vaccines sales 2015-2019 • 2019 influenza sales of €1.9bn, up 7.3% • U.S. differentiation strategy (Fluzone® HD and Flublok®) +10% €1,891m • Volume growth ex-U.S. due to broader coverage and QIV CAGR penetration €1,322m • Executing on differenti
Slide 14: Diabetes – impact moderating
Diabetes – impact moderating Global diabetes sales(1), FY 2019 • Global Diabetes decline of 8.2%; moderation from 2018 (evolution at CER) • Mature Markets continued to be impacted by pricing pressure €5,472m -10.4% €5,113m • Emerging Markets sales grew double-digits -8.2% • 2020 business dynamics €1
Slide 15: China – VBP national roll-out reduced Q4 sales
China – VBP national roll-out reduced Q4 sales Sanofi China Q4 sales breakdown • Lower sales of Plavix® and Aprovel® family Aprovel® • Price compensation and inventory adjustment €40m family • Efficiencies through new Sanofi go-to-market model -41% €55m Vaccines Plavix® - 69% • Plavix® / Aprovel® ~5
Slide 16: CHC – standalone business unit project underway
CHC – standalone business unit project underway Q4 2019 CHC sales by geography • CHC Q4 sales down 5.2% to €1,152m • U.S. and Canada Zantac® OTC voluntary recall in October €156m • Divestments and changing regulatory requirements +2.7% RoW Emerging €425m • Emerging Markets growth supported by Allerg
Slide 17: R&D Update
R&D Update John Reed Global Head of R&D
Slide 18: R&D – important advances since CMD
R&D – important advances since CMD BTKi (‘168) Dupixent® THOR-707 Phase 3 trials initiated Positive PoC data Enters Phase 1 Pipeline(1) Prurigo Nodularis, Relapsing Multiple Sclerosis Differentiated non-alpha IL-2 CSU, Bullous Pemphigoid BTKi (‘168), THOR-707 are under investigation and not approved
Slide 19: BTKi ('168) positive PoC in relapsing multiple sclerosis
BTKi (‘168) positive PoC in relapsing multiple sclerosis Competitive target profile(1) Accelerated development plan BTKi (‘168) Anti-CD20’s evobrutinib CNS • Phase 1 ✔ inflammation • Rapid and durable target occupancy Efficacy • Confirmed CNS exposure Microglia ✔ (innate immunity) • Phase 2b – PoC a
Slide 20: BTKi ('168) potential best-in-class across MS
BTKi (‘168) potential best-in-class across MS Phase 3 program planned across the full multiple sclerosis spectrum Relapsing-Remitting Primary Progressive Secondary Progressive (RMS) vs Aubagio® (PPMS) vs placebo (SPMS) vs placebo • ~900K diagnosed(1) • ~120K diagnosed(1) • ~172K diagnosed(1) Opportu
Slide 21: Dupixent – Phase 3 pivotal trials initiated
Dupixent®(1) – Phase 3 pivotal trials initiated ✔ ✔ Chronic ✔ Prurigo Bullous Phase 3 PRIME Phase 3 CUPID Spontaneous Phase 3 Nodularis LIBERTY Pemphigoid 1&2 trials program initiated Urticaria study initiated initiated Dermatology Biologic eligible Biologic eligible Biologic eligible 74k (U.S.)(2)
Slide 22: Synthorx acquisition - THOR-707 enters phase 1 pipeline
Synthorx acquisition - THOR-707 enters phase 1 pipeline Differentiated MoA of THOR-707 has the potential THOR-707, differentiated to address multiple opportunities in solid tumors “not alpha” IL-2 Single PEG chain conjugated at a single specified site that results in binding of THOR-707 only to • St
Slide 23: Pipeline momentum over next 12 months
Pipeline momentum over next 12 months 2020 Q1 Q2 Q3 Q4 Sarclisa® in 3L RRMM (ICARIA) (U.S. and EU) Dupixent®(2) in Atopic Dermatitis for 6-11 year-old age group (U.S.)(3) MenQuadfi™ for ≥ 2 year old age group (U.S.) Potential Fluzone® QIV HD for ≥ 65 year old age group (EU) approvals(1) Sutimlimab i
Slide 24: Financial update
Financial update Jean-Baptiste de Chatillon EVP, Chief Financial Officer
Slide 25: Double-digit BOI growth driven by sales and efficiencies
Double-digit BOI growth driven by sales and efficiencies €m Q4 2019 Q4 2018 % Change (CER) Net Sales 9,608 8,997 +4.7% Other revenues 409 329 +20.4% Gross Profit 6,562 6,188 +3.8% Gross margin % 68.3% 68.8% R&D (1,687) (1,678) -0.7% SG&A (2,724) (2,721) -1.4% Other current operating income & expense
Slide 26: 2019 BOI margin up 120bps, trending towards 2022 target
2019 BOI margin up 120bps, trending towards 2022 target Sanofi expected BOI margin evolution >32% Expected margin drivers to 2022 • Sales growth 30% • Improved mix + • Smart spending 27.0% • Resource reallocation 26.6% 25.8% • Operational excellence • Launch costs … - • Accelerate pipeline 2017 2018
Slide 27: Proposal for 26th consecutive increase in annual dividend
Proposal for 26th consecutive increase in annual dividend Evolution of dividend(1) • Proposed dividend of €3.15 represents a €3.15 €0.08 per share increase over 2018 • Implies a dividend yield of 3.5%(2) and pay-out ratio of 52.6%(3) 1993 2019 Progressive dividend growth is a core part of our value
Slide 28: Well on track to reach ~50% increase in FCF by 2022
Well on track to reach ~50% increase in FCF by 2022 • Fx impact ~€500m • Flu vaccine early collections • Later supplier payments €6,026m €343m €17,628m €3,834m €15,107m €672m Net Debt Free Cash Flow (1) Proceeds from Dividend Other (3) Net Debt (4) December 31, 2018 disposal of assets(2) December 31
Slide 29: Sanofi met 2019 financial performance objectives
Sanofi met 2019 financial performance objectives Latest objectives FY 2019 results Gross Margin 70-71% at CER 70.8% ✓ OpEx growth rate at CER <1% -0.8% ✓ Tax rate ~22% 22.0% ✓ Business EPS evolution at CER ~+5% +6.8% ✓ 8 cent Dividend growth Progressive increase ✓ 29
Slide 30: FY 2020 business EPS guidance
FY 2020 business EPS guidance Business EPS Around +5% at CER(1,2) FX impact Around +1%(3) on business EPS based on January 2020 average exchange rates (1) Compared to FY2019 and barring major unforeseen adverse events (2) Base for FY 2019 Business EPS growth is €5.97 reflecting 2 cents of impact fro
Slide 31: Conclusion
Conclusion Paul Hudson Chief Executive Officer
Slide 32: Outlook
Outlook Strong momentum for our growth drivers Making progress in transforming R&D Simplified structure to support growth Continue to drive efficiencies towards margin targets R&D Day June 23rd in London 32
Slide 33: Q&A session
Q&A session Paul Hudson Jean-Baptiste de Chatillon Chief Executive Officer EVP, Chief Financial Officer Olivier Charmeil Karen Linehan EVP, China & EM EVP, Legal Affairs and General Counsel David Loew Alan Main EVP, Vaccines – Sanofi Pasteur EVP, Consumer Healthcare John Reed Bill Sibold EVP, Global
Slide 34: Financial appendices
Financial appendices Q4 and Full Year 2019 Results February 6, 2020
Slide 35: Q4 sales and EPS benefited from stronger U.S. dollar
Q4 sales and EPS benefited from stronger U.S. dollar Currency impact Company sales(1) Business EPS +€184m +€0.05 +2.1% +4.5% Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2018 2019 2018 2019 (1) Main currency impact on Company Sales in Q4 2019: US Dollar (+€116m), Argentine Peso (-€15m), Japanese Yen (+€30m), Chine
Slide 36: 2020 currency sensitivity and Q4 2019 currency exposure
2020 currency sensitivity and Q4 2019 currency exposure 2020 Business EPS Currency Sensitivity Currency Variation Business EPS Sensitivity U.S. Dollar + 0.05 USD/EUR - EUR 0.13 Japanese Yen + 5 JPY/EUR - EUR 0.02 Chinese Yuan + 0.2 CNY/EUR - EUR 0.02 Brazilian Real + 0.4 BRL/EUR - EUR 0.01 Russian R
Slide 37: Business net income statement – Q4 2019
Business net income statement – Q4 2019 Fourth Quarter 2019 Pharmaceuticals Consumer Healthcare Vaccines Others (1) Total Group € million Q4 2019 Q4 2018 Change Q4 2019 Q4 2018 Change Q4 2019 Q4 2018 Change Q4 2019 Q4 2018 Change Q4 2019 Q4 2018 Change Net sales 6,548 6,276 4.3% 1,152 1,194 (3.5%) 1
Slide 38: Business net income statement – FY 2019
Business net income statement – FY 2019 2019 Pharmaceuticals Consumer Healthcare Vaccines Others (1) Total Group € million 2019 2018 Change 2019 2018 Change 2019 2018 Change 2019 2018 Change 2019 2018 Change Net sales 25,708 24,685 4.1% 4,687 4,660 0.6% 5,731 5,118 12.0% - - - 36,126 34,463 4.8% Oth
Slide 39: Consolidated income statements
Consolidated income statements € million Q4 2019 Q4 2018 2019 2018 Net sales 9,608 8,997 36,126 34,463 Other revenues 409 329 1,505 1,214 Cost of sales (3,457) (3,138) (11,976) (11,435) Gross profit 6,560 6,188 25,655 24,242 Research and development expenses (1,686) (1,678) (6,018) (5,894) Selling a
Slide 40: Reconciliation of net income to business net income – Q4 2019
Reconciliation of consolidated net income attributable to equity holders of Sanofi to business net income – Q4 2019 € million Q4 2019 Q4 2018 Change Net income attributable to equity holders of Sanofi (10) 254 (103.9%) Amortization of intangible assets (1) 510 634 (2) Impairment of intangible assets
Slide 41: Reconciliation of net income to business net income – FY 2019
Reconciliation of consolidated net income attributable to equity holders of Sanofi to business net income – FY 2019 € million 2019 2018 Change Net income attributable to equity holders of Sanofi 2,806 4,306 (34.8%) (1) Amortization of intangible assets 2,146 2,170 Impairment of intangible assets (2)
Slide 42: Change in net debt
Change in net debt € million 2019 2018 Business net income 7,489 6,819 Depreciation, amortization and impairment of property, plant and equipment and software 1,316 1,208 Other non cash items 434 (193) Operating cash flow before change in working capital 9,239 7,834 Changes in Working Capital (580)
Slide 43: Simplified consolidated balance sheet – FY 2019
Simplified consolidated balance sheet – FY 2019 ASSETS Dec 31, Dec 31, LIABILITIES & EQUITY Dec 31, Dec 31, € million 2019 2018 € million 2019 2018 Equity attributable to equity holders of Sanofi 58,934 58,876 Equity attributable to non-controlling interests 174 159 Total equity 59,108 59,035 Long-t
Slide 44: R&D appendices
R&D appendices Q4 and Full Year 2019 Results February 6, 2020
Slide 45: R&D Pipeline – New Molecular Entities
R&D Pipeline – New Molecular Entities(*) Phase 1 Phase 2 Phase 3 Registration (Total : 21) (Total : 7) (Total : 8) (Total : 2) SAR441344(**)(1) ST400(**)(5) SAR440340(**)(11) SAR422459(**)(13) avalglucosidase alfa Sarclisa® Anti-CD40L mAb Ex Vivo ZFN Gene-Edited Cell Anti-IL33 mAb ABCA4 gene therapy
Slide 46: Additional Indications
Additional Indications(*) Phase 1 Phase 2 Phase 3 Registration (Total : 7) (Total : 17) (Total : 26) (Total : 3) SAR439459 + cemiplimab(**)(1) dupilumab(**)(1) isatuximab + cemiplimab(**)(1) Dupixent®(**)(1) isatuximab Fluzone® QIV HD Advanced Solid Tumors Grass pollen allergy Relapsed Refractory MM
Slide 47: Expected submission timeline
Expected submission timeline(1) SAR442168(**)(7) Multiple Sclerosis SAR439859 BIVV001(**)(5) romilkimab (SAR156597) SAR339375 NMEs mBC 2/3L Hemophilia A Systemic Scleroderma Alport Syndrome sutimlimab avalglucosidase alfa fitusiran olipudase alfa venglustat SAR408701 SAR440340(**)(3) nirsevimab(**)(
Slide 48: Pipeline movements since Q3 2019
Pipeline movements since Q3 2019 Additions / Moves Removals from Sanofi pipeline Dupixent®(**)(1 Registration AD 6 – 11 years old (U.S., EU) BIVV001(**)(2) rFVIIIFc – vWF – XTEN(3) Hemophilia A SAR408701 dupilumab(**)(1) Phase 3 Maytansin-loaded anti-CEACAM5 mAb, NSCLC 2/3L Chronic spontaneous urtic
Slide 49: R&D pipeline summary – Total projects
R&D pipeline summary – Total projects(1) Phase 1 Phase 2 Phase 3 Registration TOTAL Immuno-inflammation 3 8 9 1 21 Oncology 14 8 8 1 31 Rare Diseases 0 4 3 0 7 Rare Blood Disorders 4 0 4 0 8 Multiple Sclerosis and Neurology 3 3 2 0 8 Diabetes 0 0 1 1 2 Cardiovascular Disease 0 0 2 0 2 Vaccines 4 1 5
Slide 50: Expected R&D milestones
Expected R&D milestones Products Expected milestones Timing cemiplimab(1)(**) Pivotal trial read-out in 2L Basal Cell Carcinoma H1 2020 Sarclisa® U.S. and EU regulatory decisions in 3L Relapsed-Refractory Multiple Myeloma Q2 2020 Dupixent®(1)(**) U.S. regulatory decision in Atopic Dermatitis for 6-1