Sanofi Sa · EURONEXT:SAN
Sanofi Sa — Shareholder Meeting (April 2019)
81 slides from Sanofi Sa's shareholder meeting presentation, Apr 30, 2019
Slide 1: Annual General Meeting April 30, 2019
MEETING 20 9 April 30, 2019 SANOFI vy
Slide 2: Introduction
Introduction Serge Weinberg Chairman of the Board of Directors
Slide 3: 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 4: Agenda
Agenda Introduction & Governance 2018 Financial Performance Serge Weinberg, Chairman of the Board of Directors Jean-Baptiste de Chatillon, Executive Vice-President, Chief Financial Officer Compensation Policy Patrick Kron, Chairman of the Compensation Committee Reports by Statutory Auditors at the C
Slide 5: Governance
Governance Serge Weinberg Chairman of the Board of Directors
Slide 6: Current membership of the Board of Directors
Current membership of the Board of Directors Serge Olivier Laurent Emmanuel Christophe Bernard Claudie Patrick Weinberg Brandicourt Attal Babeau Babule Charlès Haigneré Kron Chairman of CEO, Director Independent Director Independent Independent Independent the Board, Director Director Director Direc
Slide 7: An independent, experienced and diversified Board of Directors
An independent, experienced and diversified Board of Directors • 16 directors • Widely independant (11 out of 14(1)) and gender sensitive (43%(2)) • International (6 non-French directors, i.e. 38%) • 2 directors representing employees • Further implementation of its roadmap with a controlled and pro
Slide 8: Film C. Babule
Film C. Babule
Slide 9: A dedicated and active Board of Directors
A dedicated and active Board of Directors • A sustained level of activity in 2018: • 11 meetings • 2 executive sessions Average attendance rate • 2 strategic seminars Board of Directors & Committees: 96% • Activities related to: • Strategic opportunities • Acquisitions of Ablynx and Bioverativ Board
Slide 10: Five specialized committees (year 2018)
Five specialized committees (year 2018) 1 Audit Committee 2 Compensation Committee • Chaired by Fabienne Lecorvaisier • Chaired by Patrick Kron • 4 financial experts • 3 independant members out of 4 • 3 independant members out of 4 • 4 meetings in 2018 • 6 meetings in 2018 • Review of the annual, qu
Slide 11: Five specialized committees (year 2018) (cont'd)
Five specialized committees (year 2018) (cont’d) 3 Appointments, Governance and 4 Strategic Committee CSR Committee • Chaired by Serge Weinberg • Chaired by Serge Weinberg • 2 independent members out of 4 • 3 independent members out of 3 • 4 meetings in 2018 • 3 meetings in 2018 • Succession plannin
Slide 12: Five specialized committees (year 2018) (cont'd)
Five specialized committees (year 2018) (cont’d) 5 Scientific Committee (created in 2 strategic seminars in 2018 2018) • Boston in March 2018 (Innovation Tour) • Chaired by Thomas Südhof • Paris in October 2018 • 3 independant members out of 4 • 1 meeting in 2018 • Review of Sanofi’s Vaccines activi
Slide 13: Sanofi share performance vs. CAC 40 and Pharmaceutical Sector since May 2018
Sanofi share performance vs. CAC 40 and Pharmaceutical Sector since May 2018 Evolution of the share on a basis of 100 130 125 +17.7% 120 115 Pharma US 110 +13.7% 105 Pharma Europe 100 +5.0% 95 CAC 40 90 0.9% 85 80 Source : Bloomberg (May 2, 2018 – Apr 29, 2019) in local currencies Pharma Europe = 7
Slide 14: Sanofi share performance vs. Pharmaceutical Company Peers since May 2018
Sanofi share performance vs. Pharmaceutical Company Peers since May 2018 Performance on capital markets in local currencies Median 51.7% Average 10.0% 13.2% 34.0% 22.3% 17.7% 19.2% 12.3% 13.2% 13.5% 7.5% 8.1% -10.1% -20.0% -39.4% Source : Bloomberg, May 2 2018 – Apr 29 2019 In local currencies = € f
Slide 15: Dividend – A crucial element of the return to shareholders
Dividend – A crucial element of the return to shareholders Evolution of dividend €2.85 €2.93 €2.96 €3.03 €3.07 €2.65 €2.77 €2.80 2011 2012 2013 2014 2015 2016 2017 2018 • 2018 dividend proposed by the Board of Directors : €3.07 per share(1) (1) Submitted to the vote of this general shareholders’ mee
Slide 16: An international and diversified share ownership
An international and diversified share ownership Rest of the world 1.2% Asia 3.4% 9.5% L’Oréal Other EU countries 7.1% 5.3% Individual Shareholders Switzerland 2.2% 1.7% Employees 7% Germany 4% Institutional UK 15.2% 6.9% Miscellaneous investors 1,247,395,472 76.6% shares France 15.1% Canada 1.8% Un
Slide 17: Strengthen employee share ownership
Strenghten employee share ownership Sanofi wants to Action 2016 Action 2017 Action 2018 strenghten its employee share ownership >1.7 million >1.5 million >2.3 million of shares of shares of shares • 22nd resolution subscribed subscribed subscribed proposed to the approval of this general shareholder
Slide 18: Compensation policy
Compensation policy Patrick Kron Chairman of the Compensation Committee
Slide 19: Compensation policy for the Chairman of the Board
Compensation policy for the Chairman of the Board • Stable annual fixed gross • No attendance fees compensation • No annual variable compensation • No equity compensation • No compensation payable upon termination of office • No pension entitlement • No exceptional compensation 19
Slide 20: Compensation elements of Serge Weinberg in 2018
Compensation elements of Serge Weinberg in 2018 Amounts Comments Fixed compensation unchanged Fixed compensation €700,000 since his appointment on May 17, 2010 €8,362 Company car Total €708,362 20
Slide 21: Compensation policy of the Chief Executive Officer
Compensation policy of the Chief Executive Officer • Gross annual fixed compensation • No Director’s attendance fees • No exceptional compensation • Gross annual variable compensation • Equity compensation • Options to subscribe for shares • Compensation on leaving office • Performance shares • Term
Slide 22: Variable compensation of Olivier Brandicourt in 2018
Variable compensation of Olivier Brandicourt in 2018 • 40% based on financial indicators Achievement rate: 99.2% of the target • 60% based on specific individual objectives • Operational transformation (20%) Attainment • Portfolio of products (12%) • Organization and staff relations (12%) 103.1% com
Slide 23: Compensation elements of Olivier Brandicourt in 2018
Compensation elements of Olivier Brandicourt in 2018 Amounts Comments Compensation unchanged since his Fixed compensation €1,200,000 appointment in 2015 From 0% to 250% of the fixed compensation Target at 150% of the fixed compensation Variable compensation €1,855,800(1) Achieved rate : 154.65% of t
Slide 24: Equity compensation of Olivier Brandicourt in 2018
Equity compensation of Olivier Brandicourt in 2018 2019 Grant(1) Plan conditions • 220,000 options to subscribe for shares(2) • 3 performance criteria • Business Net Income (50%) • 50,000 performance shares(2) • Free Cash Flow or FCF (30%) • Total Shareholder Return or TSR (20%) (1) Subject to the a
Slide 25: Strategic Outlook
Strategic Outlook Olivier Brandicourt Chief Executive Officer
Slide 26: Pursuing the 2015-2020 strategic roadmap
Pursuing the 2015-2020 strategic roadmap Sustain Deliver innovation in outstanding Research & launches Development Reshape the Simplify the portfolio organization 26
Slide 27: 2018: returning to growth after three years of transformation
2018: returning to growth after three years of transformation 1 2018 marked by the return to growth 2 Pursuing transformation Sanofi: an economic and societal 3 healthcare contributor 27
Slide 28: Establishment of a leading Rare Blood Disorder franchise
Establishment of a leading Rare Blood Disorder franchise 2018 franchise sales €897M Advanced R&D pipeline • Fitusiran and BIVV001(1) in hemophilia • Sutimlimab in Cold Agglutinin Disease (1) Phase 3 expected to start in H2 2019 after proof of concept positive results 28
Slide 29: Three important launches in Specialty Care in Q4 2018
Three important launches in Specialty Care in Q4 2018 Rare Blood Disorders Oncology Immunology aTTP(1) - autoimmune- Moderate-to-severe Skin cancer(2) based blood clotting asthma disorder Dupixent® and Libtayo® : collaboration with Regeneron (1) Acquired Thrombotic Thrombocytopenic Purpura 29 (2) Cu
Slide 30: Success of Dupixent launch
Success of Dupixent® launch Food allergies Other COPD indications EoE Asthma (6-12 yo) Asthma/ Nasal polyps Nasal Polyps Asthma adult/adolescent €788M Pediatric (6 months) 2018 sales Infant (6-11 yo) Atopic Dermatitis Adolescent (12-18 yo) Adult 2017 2019 2021 2023 2025 Dupixent® : collaboration wit
Slide 31: 2018: returning to growth after three years of transformation
2018: returning to growth after three years of transformation 1 2018 marked by the return to growth 2 Pursuing transformation Sanofi: an economic and societal 3 healthcare contributor 31
Slide 32: A refocused global business units organization
A refocused global business units organization to sustain the return to growth China & Primary Care Specialty Care Consumer Emerging Markets (mature markets) (mature markets) Vaccines Healthcare 32
Slide 33: China and Emerging Markets
Focusing our efforts on the unique characteristics of China and of the Emerging Markets Emerging Markets • Recognized global leader 2018 GBU sales China: 2nd global pharmaceutical market €7,053m • 2nd market for Sanofi • 3rd international pharmaceutical company €2,464m 2018 Sales +9.3% (+12.7% at CE
Slide 34: New Primary Care GBU dedicated to mature markets
New Primary Care GBU dedicated to mature markets Diabetes • €3,918m sales (-17.5% at CER) 2018 • Continued pressure of prices in the U.S. GBU sales • Resilient sales in Europe €10,406m Cardiovascular • €593m sales (+22.6% at CER) • Praluent® : submission of ODYSSEY OUTCOMES results Established produ
Slide 35: Sanofi Genzyme: a strong contributor to growth
Sanofi Genzyme: a strong contributor to growth Specialty Care Immunology 2018 • Dupixent® pillar of the franchise GBU sales Multiple Sclerosis €7,226m • Continued growth of Aubagio® Rare Disease • Strengthening leadership +30.8% Rare Blood Disorder at CER(1) • Establishment of the franchise Oncology
Slide 36: Sanofi Pasteur: a global leader in the vaccines market
Sanofi Pasteur: a global leader in the dynamic vaccines market Leading vaccines in 5 areas: • Influenza 2018 • Pediatric combinations GBU sales • Meningitis • Adult and adolescent boosters €5,118m • Travelers and other vaccines for endemic countries Strong growth of influenza vaccines • Success of o
Slide 37: Consumer Healthcare: a growing activity with strong cash flow
Consumer Healthcare: a growing activity with strong cash flow Four strategic categories with strong local brands 2018 • Allergies, Cough & Cold GBU sales • Pain • Digestive €4,660m • Nutritionals Increasing R&D efforts to sustain future growth +3.0% at CER Investments in digital 13.5% of company sal
Slide 38: A favorable evolution of R&D since early 2018
A favorable evolution of R&D since early 2018 84 31 Potential submissions until 2022 Projects in development of which 8 new medicines 5 28 Approvals of new drugs and On-going Phase 3 studies vaccines 38
Slide 39: New long-term objectives for our R&D
New long-term objectives for our R&D First or best in class 80% Biologics 70% From internal research 70% 39
Slide 40: Accelerating investment behind prioritized projects
Accelerating investment behind 18 prioritized projects Rigorous pipeline prioritization Refocus on Specialty Care and Vaccines 2 2 Neurology Rare diseases 8 2 Vaccines Oncology 3 Rare blood disorders 1 Immunology 40
Slide 41: A wide range of scientific platforms
A wide range of scientific platforms strengthened by recent acquisitions Antibody Peptides Enzymes Fusion Conjugates Proteins Multispecific Gene Small Molecules Nanobodies Therapy Antibodies VHH VHH (bi- & tri-specific) CH2 CH3 Gene siRNA Editing(2) mRNA(3) Conjugates(4) Established capability Expl
Slide 42: Potential submission of 8 new medicines and 23 additional indications by 2022
Potential submission of 8 new medicines and 23 additional indications by 2022 10 11 Dupixent®(**) sarilumab(**) fitusiran 6 dupilumab(**) sarilumab(**) sutimlimab avalglucosidase alfa isatuximab venglustat sarilumab(**) sarilumab(**) olipudase alfa cemiplimab(**) SP0173 Cerdelga® Dupixent®(**) Aubag
Slide 43: Innovative projects in rare diseases and rare blood disorders
Innovative projects in rare diseases and rare blood disorders Rare blood disorders Pre-Proof of Concept Post-Proof of Concept sutimlimab • Immune rFVIIIFc-vWF-XTEN • Hemophilia A Thrombocytopenic Purpura sutimlimab • Cold Agglutinin Disease Rare diseases Pre-Proof of Concept Post-Proof of Concept ve
Slide 44: A promising oncology pipeline
A promising oncology pipeline Pre-proof of concept Post-proof of concept isatuximab • Solid Tumors isatuximab • Relapse Refractory • Lymphoma Multiple Myeloma anti-CD3-CD123 anti-CEACAM5-ADC • Leukemia • Lung Cancer SERD • Metastatic Breast Cancer anti-MUC16xCD3(1) • Ovarian Cancer anti-BCMAxCD3(1)
Slide 45: Vidéo R&D
Vidéo R&D
Slide 46: Leveraging digital across R&D
Leveraging digital across R&D to accelerate development and reduce costs Reduced Cloud Virtual Higher clinical quality data costs technology trials Automation of Data Digital regulatory Science biomarkers dossiers(1) Hub Real World Evidence Accelerated submissions 46
Slide 47: A double digital ambition
A double digital ambition Integrate digital throughout the value chain Design new business models 47
Slide 48: A renewed Executive Committee
A renewed Executive Committee Olivier Brandicourt Dominique Carouge Jean-Baptiste de Chatillon Karen Linehan Philippe Luscan Chief Executive Officer Business Transformation Chief Financial Officer Legal Affairs & General Counsel Global Industrial Affairs Caroline Luscombe Muzammil Mansuri Ameet Nath
Slide 49: 2018: returning to growth after three years of transformation
2018: returning to growth after three years of transformation 1 2018 marked by the return to growth 2 Pursuing transformation Sanofi: an economic and societal 3 healthcare contributor 49
Slide 50: Sanofi plays a key role for public health
Sanofi plays a key role for public health Committed to fight infectious diseases and tropical neglected diseases A key milestone achieved in 2018 to eliminate sleeping sickness • Approval of fexinidazole • First all-oral treatment • Developed in partnership with DNDi • On track to eliminate sleeping
Slide 51: Actions for vulnerable populations
Actions for vulnerable populations • Programs in partnership with • Maison des femmes de Saint Denis • Samu social • Croix-Rouge française • First actions of Sanofi Espoir Foundation for migrants in 2018 • Almost 15,000 migrants have received medical and social support 51
Slide 52: A strong footprint and social commitment in France
A strong footprint and social commitment in France 52
Slide 53: Vidéo Grands événements
Vidéo Grands événements
Slide 54: Industrial Affairs
Industrial Affairs Philippe Luscan Executive Vice President, Global Industrial Affairs
Slide 55: Industrial Affairs: an essential link between R&D and patients
Industrial Affairs: an essential link between R&D and patients Industrial Affairs Our Industrial development fundamentals Customer Service Active ingredient production Chemistry, biologics Quality R&D Environment Pharmaceutical production, devices and packaging Health Tablets, capsules, syrups, inje
Slide 56: A global industrial network
A global industrial network Almost 74 plants 38,000 employees 32 countries 4.9bn €5bn pharmaceuticals and invested vaccines boxes in our industrial tool manufactured and distributed over the last 5 years per year Data as of February 2019 56
Slide 57: Our French industrial network supports all global business units
Our French industrial network supports all global business units • Ambarès • Vertolaye • Ploërmel • Amilly • Aramon • Le Trait • Marcy l’Etoile • Lyon Gerland • Lisieux • Tours • Sisteron • Maisons- • Neuville-sur-Saône • Saint-Aubin • Mourenx Alfort • Vitry-sur-Seine • Compiègne • Val de Reuil lès-
Slide 58: An exceptional footprint in France serving the global market
An exceptional footprint in France serving the global market About 22 sites 12,000 18 plants employees 4 distribution platforms 40% 88% of global production of production exported €12.2bn exports €1.5bn €7.5bn invested in our industrial positive contribution to tool over the last 5 years the balance
Slide 59: A strong social commitment
A strong social commitment An economic player A social player connected to the French supporting young people ecosystem • More than 800 new contracts for • 570 mentoring programs for young apprentices and trainees people from priority city neighborhoods on our industrial sites • Presentation of our
Slide 60: The Industrial Affairs transformation journey
The Industrial Affairs transformation journey supports the strategic roadmap Three major areas of industrial transformation 1 Biologics 2 Industrial performance 3 Digitalization 60
Slide 61: Successful ramp-up of biologics due to major investments
1 Successful ramp-up of biologics due to major investments over the last 5 years Biologics active ingredients Biolaunch Vitry (€260m) Lyon Gerland (€25m) Geel (€340m) Sanofi advances from top 100 to top 10 in 6 years excuding CMOs (2014-2020) Framingham (€290m) Allston (€120m) Frankfurt (€190m) Join
Slide 62: Sanofi is the leader of injectable biologics drug manufacturing
Sanofi is the leader of injectable biologics drug manufacturing Filling capacity in 2018 Syringes, cartridges, lyophilized vials Sanofi Sanofi is Le Trait (€120m) Maisons-Alfort (€30m) #1 across technologies Other manufacturers 0 500 1000 Filling capacity Frankfurt (€310m) Waterford (€200m) (in mill
Slide 63: Major investments in vaccine production
Major investments over the last 5 years in vaccine production Neuville sur Saône (€40m) Marcy l’Étoile (€260m) Val de Reuil (€300m) Swiftwater (€450m) Toronto (€300m) Investments over the last 5 years (2014-2018) 63
Slide 64: A culture of industrial excellence
2 A culture of industrial excellence Sanofi Manufacturing System (SMS) A sustainable manufacturing system based on three pillars Our • Unique management standards operating for all technologies and countries OUR system INDUSTRIAL CULTURE Our • SMS trainings for employees: industrial SMS Academy PERF
Slide 65: Innovative and user-friendly digital solutions
3 Innovative and user-friendly digital solutions leveraging data for our employees 6 lighthouse sites 1 2 Integrated Connected industrialization plant 5 3 Connected Real-time teams 4 supply chain Smart quality 65
Slide 66: Our employees' commitment ensures the success of our industrial evolution
Our employees’ commitment ensures the success of our industrial evolution Develop Attract today’s employees tomorrow’s employees • Training in biotechnology, • Recruiting new Sanofi Manufacturing expertise System and digital Global Biotechnology network • Promoting an innovative industry to a wide •
Slide 67: 2018 Financial Performance
2018 Financial Performance Jean-Baptiste de Chatillon Executive Vice-President, Chief Financial Officer
Slide 68: 2018 Business EPS in the high range of the guidance
2018 Business EPS in the high range of the guidance Sales Business EPS €35,072m €34,463m €5.52 €5.47 +2.5% +5.1% at CER at CER 2017 2018 2017 2018 CER= Constant Exchange Rates 68
Slide 69: Sanofi met 2018 financial performance objectives
Sanofi met 2018 financial performance objectives Objectives 2018 Results Gross margin 70-71% at CER 70.7% OpEx growth rate at CER 4%-5% +4.6% Tax rate ~22% 21.6% Business EPS guidance at CER 4%-5% +5.1% Dividend growth Progressive +4 cents CER= Constant Exchange Rate 69
Slide 70: 2018 sales supported by Specialty Care
2018 sales supported by Specialty Care % of sales Growth Growth at CER at CER/CS 71.6% Pharmaceuticals €24,685m +2.4% -0.2% 24.0% Specialty Care €8,269m +29.0% +14.8% 17.7% Diabetes & Cardiovascular €6,083m -7.9% -7.9% 25.7% Established Products €8,843m -6.1% -6.1% 4.3% Generics €1,490m -9.8% -0.6%
Slide 71: Business net income up 4.2% at CER in 2018
Business net income up 4.2% at CER in 2018 %Change %Change M€ 2018 2017 (reported€) (CER) Sales 34,463 35,072 -1.7% +2,5% Gross profit 24,356 24,774 -1.7% +2,5% As % of net sales 70.7% 70.6% - - R&D expenses (5,894) (5,472) +7.7% +10,3% SG&A expenses (9,831) (10,072) -2.4% +1,6% Other current operat
Slide 72: Reconciliation of business net income to IFRS net income reported
Reconciliation of business net income to IFRS net income reported €m 2018 2017 %Change (reported€) Business net income 6,819 6,943 -1.8% Amortization of intangible assets (2,170) (1,866) Impairment of intangible assets (718) (293) Fair value remeasurement of contingent consideration liabilities 117
Slide 73: Strong balance sheet on December 31, 2018
Strong balance sheet on December 31, 2018 December 31, 2018 Change vs. (€bn) December 31, 2017 Intangible assets 66.1 +12.8 Other non-current assets 20.6 +0.6 ASSETS WCR(1) 2.9 +1.1 Net cash(2) (B) 7.0 -3.4 Equity attribuable 59.0 +0.8 LIABILITIES Provisions and other non-current liabilities 13.0 +1
Slide 74: A declining albeit high free cash flow
A declining albeit high free cash flow Free cash flow(1) Net debt €17.6bn €7.5bn €6.8bn €16.8bn €5.1bn €8.2bn €5.2bn March 2016 2017 2018 2016 2017 2018 2019 • Successful bond issues in March 2019 • Debt reflecting acquisitions of Bioverativ and Ablynx • €2bn across 3 tranches: • Average cost of deb
Slide 75: Disciplined investments in 2019
Disciplined investments in 2019 Pursuing efforts in biologics production Capital expenditure evolution and breakdown in 2018 Pharma Pharma Commercial €1.7bn Industrial Operations+CHC €1.5bn 5% €1.4bn Affairs Pharma R&D 7% 47% 2018 12% Support Functions 29% 2016 2017 2018 Sanofi Pasteur 75
Slide 76: Strong First Quarter 2019 Results
Strong First Quarter 2019 Results Sales Business EPS €8,391m €1.42 €7,898m €1.28 +6.2%(1) +9.4% at CER at CER Q1 2018 Q1 2019 Q1 2018 Q1 2019 CER= Constant Exchange Rates 76
Slide 77: 2019 financial guidance confirms return to growth
2019 financial guidance confirms return to growth 2019 Business EPS +3% to +5% at CER(1,2) FX impact on Business EPS Approximately +2%(3) based on April 2019 average exchange rates (1) Compared to FY2018 and barring major unforeseen adverse events (2) FY 2018 Business EPS was €5.47 77 (3) Difference
Slide 78: 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 79: Reports and statements prepared by the Statutory Auditors
Reports and statements prepared by the Statutory Auditors and made available to Shareholders • Financial statements • Operations on capital (cont’d) • Report on statutory financial statements (resolution #1) • Report on the issuance of shares and various securities • Report on the consolidated finan
Slide 80: Questions / Answers
Questions / Answers
Slide 81: Vote on the Resolutions
Vote on the Resolutions SANOFI