Slide 1: Q3 2018 Results
Q3 2018 Results October 31, 2018
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 Olivier Brandicourt Chief Executive Officer Financial Results Jean-Baptiste de Chatillon Executive Vice President, Chief Financial Officer Olivier Charmeil Executive Vice President, General Medicines & Emerging Markets Karen Linehan Executive Vice President, Legal Affairs and G
Slide 4: Key highlights
Olivier Brandicourt Chief Executive Officer Key highlights
Slide 5: Sanofi entered a new growth phase with strong results in Q3 2018
Sanofi entered a new growth phase with strong results in Q3 2018 Company sales Business EPS €9,056m €9,392m €1.84 €1.70 +6.3% +11.2% at CER(1) at CER Q3 2017 Q3 2018 Q3 2017 Q3 2018 CER: Constant Exchange Rates 5 (1) Q3 2018 sales increased +3.4% at CER/CS; Constant Structure adjusting for Bioverati
Slide 6: Solid sales growth achieved in Q3, further enhanced by contribution from Bioverativ acquisition
Solid sales growth achieved in Q3, further enhanced by contribution from Bioverativ acquisition Q3 2018 company sales €9,624m +3.2% at CER +€280m €9,056m +€519m +6.3% at CER -€231m Q3 2017 U.S. Lantus®, Pharma, Rare Blood Disorders Q3 2018 U.S. sevelamer Vaccines & CHC(1) at CER CER: Constant Exchan
Slide 7: Q3 2018 sales performance driven by Specialty Care, Vaccines and CHC
Q3 2018 sales performance driven by Specialty Care, Vaccines and CHC Q3 2018 sales by Global Business Unit Growth at CER/CS(1) Company Sales €9,392m +3.4% (7) Sanofi Genzyme (Specialty Care) (2) €1,904m +14.9% Sanofi Pasteur (Vaccines) €2,069m +8.2% Diabetes & Cardiovascular (8) €1,146m -12.1% Consu
Slide 8: Strong sales growth in EM across franchises supported by recovery of Pentaxim supply
Strong sales growth in EM across franchises supported by recovery of Pentaxim® supply in China Q3 2018 sales by franchise (3) Mature markets Emerging markets Growth at Growth at Growth at Sales (1) Sales (1) Sales (1) CER/CS CER/CS CER/CS (2) (2) (2) Specialty Care €2,160m +16.4% €1,904m +14.9% €256
Slide 9: Double-digit growth in Specialty Care reflected solid contributions from all franchises
Double-digit growth in Specialty Care reflected solid contributions from all franchises Sales by franchise (% growth at CER) Rare Diseases €247m Solid growth in Pompe (+13.7%), Gaucher (+8.1%) and Fabry (+12.0%) Multiple Sclerosis €726m Strong Aubagio® sales in all geographies drove double-digit gro
Slide 10: Dupixent is core driver of growing Immunology franchise
Dupixent® is core driver of growing Immunology franchise Quarterly sales evolution • Strong Q3 U.S. performance metrics for Dupixent® • 16% sequential increase in TRx(1) • Rx trends ahead of other biologic launches in dermatology • Trade inventory steady at ~4 weeks Non U.S. sales €225m U.S. sales €
Slide 11: Three important regulatory approvals in Specialty Care
Three important regulatory approvals in Specialty Care Immunology Oncology Rare Blood Disorders FDA approved for treatment of Only FDA approved treatment for First therapeutic approved in EU for moderate-to-severe asthma advanced CSCC treatment of aTTP • ~900,000 U.S. uncontrolled • EMA decision exp
Slide 12: Strong Vaccines performance reflects Pentaxim supply recovery in China and flu differentiation strategy
Strong Vaccines performance reflects Pentaxim® supply recovery in China and flu differentiation strategy Q3 2018 Vaccines sales evolution • PPH franchise grew 20% as supply constraint in China resolved €42m €2,073m • Slightly faster than expected supply recovery of Pentaxim® €27m €88m • Flu vaccine
Slide 13: Quality of access to Praluent expected to improve in 2019; Global Diabetes benefited from non-U.S. sales
Quality of access to Praluent® expected to improve in 2019; Global Diabetes benefited from growing non-U.S. sales U.S. payer coverage(2,3) (% of lives covered) • Praluent® sales up 64% to €68m • U.S. TRx share gain largely due to ESI exclusive coverage(1) Commercial Medicare • Improved quality of ac
Slide 14: Consumer Healthcare franchise delivers balanced growth as sales increased in all geographies
Consumer Healthcare franchise delivers balanced growth as sales increased in all geographies Q3 2018 CHC sales by geography • CHC sales increased 4.1% to €1,113m • Growth demonstrated in all four strategic €151m growth categories(1) +6.1% • Emerging Markets sales up 4.6% €382m +4.6% • Growth primari
Slide 15: Strong Emerging Markets growth of +10.4% in Q3 2018
Strong Emerging Markets(1) growth of +10.4%(2) in Q3 2018 Geographic breakdown of Q3 2018 sales €3,668m €2,334m U.S. €267m €861m EUROPE EURASIA(4) ROW(3) +5.5% +1.9 % +8.9% +9.4% €601m of which €604m AME(5) €1,028m LATAM ASIA(2) €644m +8.1% CHINA +10.3% +12.6% +17.7% All growth at CER unless specifi
Slide 16: New organization to provide greater focus on operations in mature markets and emerging markets
New organization to provide greater focus on operations in mature markets and across emerging markets(1) Primary Care China & Specialty Care Vaccines Consumer (in Mature Markets) Emerging Markets (in Mature Markets) Healthcare Dieter Weinand Olivier Charmeil Bill Sibold David Loew Alan Main • Diabet
Slide 17: Several potentially significant approvals for new drugs and additional indications over the next 12 months
Several potentially significant approvals for new drugs and additional indications over the next 12 months 2018 2019 Q4 Q1 Q2 Q3 Q4 Dupixent®(2) in Asthma in Adults and Adolescents (EU) Cablivi® in acquired Thrombotic Thrombocytopenic Purpura (U.S.) Potential Dupixent®(2,3) in Atopic Dermatitis in 1
Slide 18: Financial results
Jean-Baptiste de Chatillon Executive Vice President, Chief Financial Officer Financial results
Slide 19: Currency impact on sales and EPS significantly diminished in Q3 as U.S. dollar strengthened
Currency impact on sales and EPS significantly diminished in Q3 as U.S. dollar strengthened Currency impact Company sales(1) Business EPS -€232m -€0.05 -3.0% -2.6% -€0.08 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 2017 2018 2017 2018 (1) Main currency impact on Company Sales in Q3 2018: US Dollar (+€38m), Brazil
Slide 20: Business EPS driven by strong sales, lower tax rate and decreased share count
Business EPS driven by strong sales, lower tax rate and decreased share count (1) €m Q3 2018 Q3 2017 % Change % Change (reported €) (CER) Net Sales 9,392 9,056 +3.7% +6.3% Gross Profit 6,727 6,543 +2.8% +4.8% Gross Profit margin % 71.6% 72.3% - - Business Operating Income 3,018 2,904 +3.9% +6.4% Bus
Slide 21: Higher Opex from acquisitions and high comparison base in OOI offset by profit from associates
Higher Opex from acquisitions and high comparison base in OOI offset by increase in profit from associates €m Q3 2018 Q3 2017 (1) % Change (CER) Net Sales 9,392 9,056 +6.3% Other revenues 352 340 +2.6% Gross Profit 6,727 6,543 +4.8% Gross margin % 71.6% 72.3% R&D (1,461) (1,341) +9.5% SG&A (2,301) (
Slide 22: Gross margin declined due to product mix while investments in late stage pipeline accelerated
Gross margin declined due to product mix while investments in late stage pipeline accelerated Gross margin ratio(1) Operating expenses €3,762m 72.3% 71.6%(2) €3,660m +4.5% at CER(4) €1,341m €1,461m 71.7% +9.5% at CER R&D €2,319m €2,301m +1.6% at CER SG&A (3) (3) Q3 2017 Q3 2018 Q3 2017 Q3 2018 CER:
Slide 23: Net debt evolution in 9M 2018
Net debt evolution in 9M 2018(1) €517m €824m €683m €3,773m €2,123m €13,091m €18,705m €3,221m €5,161m Net Debt Free Acquisitions Restructuring Net Share Proceeds Dividend Other Net Debt (2) December cash flow & Licences costs & repurchase from disposal September (3) (3) 31, 2017 similar items & share
Slide 24: FY 2018 financial guidance confirms return to growth
FY 2018 financial guidance confirms return to growth FY 2018 Business EPS +4% to +5% at CER(1,2) Approximately -6%(3) FX impact on Business EPS based on October 2018 average exchange rates (1) Compared to FY2017 and barring major unforeseen adverse events (2) FY 2017 Business EPS was €5.52 when appl
Slide 25: Key highlights
Olivier Brandicourt Chief Executive Officer Key highlights
Slide 26: New product sales contribution exceeded impact from U.S. LoEs in Q3 2018
New product sales contribution exceeded impact from U.S. LoEs in Q3 2018 New Products(1) Incremental sales year/year(2) €319m €325m €405m Products with U.S. loss of exclusivity -€306m -€357m • Lantus® • sevelamer €231m Q1 Q2 Q3 2018 LoEs: Losses of Exclusivity (1) New products launched since 2015 (2
Slide 27: Executing our strategic transformation
Executing our strategic transformation • Strong Q3 performance confirms return to growth • Three important new regulatory approvals in Specialty Care • Refocus of GBU structure 27
Slide 28: Finance appendices
SANOFI wy Finance appendices
Slide 29: 2018 Currency Sensitivity and Q3 2018 Currency Exposure
2018 Currency Sensitivity and Q3 2018 Currency Exposure 2018 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 0.01 Chinese Yuan + 0.2 CNY/EUR - EUR 0.02 Brazilian Real + 0.4 BRL/EUR - EUR 0.02 Russian R
Slide 30: Business Net Income Statement – Q3 2018
Business Net Income Statement – Q3 2018 Third Quarter 2018 Pharmaceuticals Consumer Healthcare Vaccines Others(2) Total Group € million Q3 2018 Q3 2017 (1) Change Q3 2018 Q3 2017 (1) Change Q3 2018 Q3 2017 (1) Change Q3 2018 Q3 2017(1) Change Q3 2018 Q3 2017(1) Change Net sales 6,210 6,016 3.2% 1,11
Slide 31: Business Net Income Statement – 9M 2018
Business Net Income Statement – 9M 2018 Nine Months 2018 Pharmaceuticals Consumer Healthcare Vaccines Others (2) Total Group € million 9M 2018 9M 2017 (1) Change 9M 2018 9M 2017 (1) Change 9M 2018 9M 2017 (1) Change 9M 2018 9M 2017 (1) Change 9M 2018 9M 2017(1) Change Net sales 18,409 19,054 (3.4%)
Slide 32: Consolidated Income Statements
Consolidated Income Statements € million Q3 2018 Q3 2017 (1) 9M 2018 9M 2017 (1) Net sales 9,392 9,056 25,466 26,380 Other revenues 352 340 885 859 Cost of sales (3,032) (2,853) (8,297) (8,524) Gross profit 6,712 6,543 18,054 18,715 Research and development expenses (1,461) (1,341) (4,216) (4,008) S
Slide 33: Reconciliation to Business Net Income – Q3 2018
Reconciliation of Consolidated Net Income Attributable to Equity Holders of Sanofi to Business Net Income – Q3 2018 € million Q3 2018 Q3 2017(1) Change Net income attributable to equity holders of Sanofi 2,274 1,561 45.7% (2) Amortization of intangible assets 537 434 Impairment of intangible assets
Slide 34: Reconciliation to Business Net Income – 9M 2018
Reconciliation of Consolidated Net Income Attributable to Equity Holders of Sanofi to Business Net Income – 9M 2018 € million 9M 2018 9M 2017(1) Change Net income attributable to equity holders of Sanofi 4,052 8,290 (51.1%) (2) Amortization of intangible assets 1,536 1,424 Impairment of intangible a
Slide 35: Research & Development appendices
Research & Development appendices
Slide 36: R&D Pipeline – New Molecular Entities
R&D Pipeline – New Molecular Entities(*) Phase 1 Phase 2 Phase 3 Registration (Total:19) (Total:12) (Total:8) (Total:3) SAR439794 BIVV001(3) SAR440340(**) SAR422459 isatuximab cemiplimab(**) TLR4 agonist rFVIIIFc – vWF – XTEN(4) Anti-IL33 mAb ABCA4 gene therapy Anti-CD38 mAb PD-1 inhibitor mAb Peanu
Slide 37: Additional Indications
Additional Indications(*) Phase 1 Phase 2 Phase 3 Registration (Total:6) (Total:17) (Total:23) (Total:6) O cemiplimab(**) + REGN3767(1) dupilumab(**) isatuximab + atezolizumab(**) dupilumab(**) isatuximab dupilumab(**) PD-1 inhibitor mAb + anti LAG-3 mAb Anti-IL4Rα mAb Anti-CD38 mAb + PD-L1 inhibito
Slide 38: Expected Submission Timeline
Expected Submission Timeline(1) avalglucosidase alfa GZ389988 ALX0171 Neo GAA TRKA antagonist Anti RSV Nanobody Pompe Disease Osteoarthritis Respiratory Syncitial Virus olipudase alfa SAR156597 SAR228810 SAR407899 rhASM IL4/IL13 bi-specific mAb Anti-protofibrillar AB mAb rho kinase NMEs ASD(4) Syste
Slide 39: Pipeline Movements Since Q2 2018
Pipeline Movements Since Q2 2018 Additions Removals Dupixent®(**) Registration dupilumab Atopic Dermatitis 12 – 17 years old (U.S.(1)/EU) sarilumab(**) dupilumab(**) Anti-IL6R mAb Anti-IL4Rα mAb Giant Cell Arteritis Eosinophilic Esophagitis Phase 3 sarilumab(**) isatuximab Anti-IL6R mAb Anti-CD38 mA
Slide 40: R&D Pipeline Summary – Total Projects
R&D Pipeline Summary – Total Projects(1) Phase 1 Phase 2 Phase 3 Registration TOTAL Immuno-inflammation 1 10 7 2 20 Oncology 13 5 8 1 27 Rare Diseases 0 4 3 0 7 Rare Blood Disorders 3 0 2 1 6 Multiple Sclerosis and 3 2 2 0 7 Neurology Diabetes 1 1 4 1 7 Cardiovascular Disease 2 2 2 1 7 Vaccines 2 5
Slide 41: Expected R&D Milestones
Expected R&D Milestones Products Expected milestones Timing Fluzone® QIV HD Phase 3 results for prevention of Influenza Q4 2018 efpeglenatide Start of Phase 3 in Type 2 Diabetes as add-on to basal insulins Q4 2018 Dupixent® U.S. FDA filing in Atopic Dermatitis in Adolescent patients Q4 2018 isatuxim