Sanofi Sa · EURONEXT:SAN
Sanofi Sa — Q3 2019 Earnings Presentation
41 slides from Sanofi Sa's earnings presentation, Oct 31, 2019
Slide 1: Q3 2019 Results
Q3 2019 Results October 31, 2019
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 Paul Hudson Chief Executive Officer Financial results Jean-Baptiste de Chatillon EVP, Chief Financial Officer Conclusion Paul Hudson Chief Executive Officer Q&A session 3
Slide 4: Key highlights
Key highlights Paul Hudson Chief Executive Officer
Slide 5: Q3 business EPS stable despite U.S. flu sales phasing
Q3 business EPS stable despite U.S. flu sales phasing Company sales Key highlights €9,392m €9,499m • Continued strong uptake of Dupixent® -1.1% • U.S. flu sales weighted to Q4 versus prior year at CER(1) • CHC U.S. Zantac® recall Q3 2018 Q3 2019 • Pricing pressures in Primary Care Business EPS • Cos
Slide 6: Solid underlying performance in Q3
Solid underlying performance in Q3 Q3 2019 Company sales +0.5% at CER/CS €9,392m -€281m -€156m €9,236m +€503m €9,284m -€174m Q3 2018 EU Generics Adjusted for U.S. Lantus®, Pharma, Flu Q3 2019 Disposal(1) EU Gx (2) U.S. sevelamer Vaccines & CHC Vaccines at CER Disposal(1) CER: Constant Exchange Rates
Slide 7: Q3 performance supported by Specialty Care and EM
Q3 performance supported by Specialty Care and EM Consumer Total sales Specialty Care Primary Care Vaccines Healthcare Growth at CER/CS €2,359m €2,185m €1,448m €722m €6,714m Mature Markets +20.4% -12.7% -15.2% -3.3% -2.9% Emerging €295m €1,595m €481m €414m €2,785m Markets +21.9% China & EM(1) +7.9%
Slide 8: Specialty Care – strong growth driven by key brands
Specialty Care – strong growth driven by key brands Q3 2019 Specialty Care sales by brand • Dupixent® outstanding growth continues • AD adult penetration increased €570 +142% • Global roll-out in asthma progressing €494m +12% • Launched in 30 countries €226m +8% €221m +11% • Aubagio® growth despite
Slide 9: Dupixent – strong U.S. NBRx momentum
Dupixent® – strong U.S. NBRx momentum U.S. NBRx by specialist(1) • Sequential NBRx growth(1) of +15% across specialists CRSwNP launch • >1,350 total NBRx per week(2) 2 500 Adolescent AD launch • Asthma NBRx outpacing recent launch analogs Asthma launch 2 000 Branded DTC TV launch • CRSwNP encouragin
Slide 10: Vaccines – on-track for full year flu sales
Vaccines – on-track for full year flu sales Q3 2019 Vaccines sales evolution • Flu sales lower due to delayed WHO strain selection • U.S. flu shipments weighted towards Q4 €2,069m €1,929m • 2019 flu sales expected to exceed prior year €735m • Execution of flu differentiation strategy -28.5% -9.8% •
Slide 11: Primary Care – continued pricing pressures
Primary Care – continued pricing pressures Primary Care GBU sales • Diabetes sales €837m, down -18% (by geography at CER/CS) • Europe diabetes sales of €295m (-3.0%) €2,446m €2,185m • U.S. Admelog® sales impacted by -44% WAC decrease -12.7% • U.S. payer coverage expected to be maintained in 2020(1,2
Slide 12: CHC – stable performance
CHC – stable performance Q3 2019 CHC sales by categories • CHC sales up 0.4% • Performance supported by Emerging Markets, up 7.3% Allergy, Nutritional +1.8% €178m Cough • Sales impacted by ~1% to 2% due to divestments €287m & Cold and additional regulatory requirements +1.4% • Precautionary voluntar
Slide 13: Another strong quarter in Emerging Markets in Q3
Another strong quarter in Emerging Markets(1) in Q3 EURASIA(3) €318m +13.5% ASIA(2) €1,172m +10.8% LATAM €685m of which +21.4% CHINA AME(4) €744m €564m +13.7% -8.0% Emerging Markets sales of €2,785m, up 9.7% at CER All growth at CER unless specified otherwise (3) Eurasia: Russia, Ukraine, Georgia, B
Slide 14: China – anticipated decline in Q4
China – anticipated decline in Q4 Sanofi China Q3 sales breakdown • China sales benefited from broad portfolio Aprovel® • Significant sales decrease expected in Q4(1) €74m family Vaccines +1.4% • Progressive implementation of national VBP rollout + and price adjustment of inventory in channel Lantus
Slide 15: Pipeline momentum over next 12 months
Pipeline momentum over next 12 months 2019 2020 Q4 Q1 Q2 Q3 Fluzone® QIV HD for ≥ 65-years old age group (U.S.) Potential Isatuximab in 3L Relapsed-Refractory Multiple Myeloma (U.S. and EU) approvals(1) MenQuadfi™ for ≥ 2 year old age group (U.S.) Fluzone® QIV HD for ≥ 65-years old age group (EU) Su
Slide 16: Q3 progress on sustainability
Q3 progress on sustainability Factory of the future(1) significantly reduces environmental impact -80% -80% energy consumption CO2 emissions per year per year -91% -94% use of water use of chemicals per year per year Ranked #3 most sustainable pharma company by Dow Jones Sustainability Index (1) New
Slide 17: Financial results
Financial results Jean-Baptiste de Chatillon EVP, Chief Financial Officer
Slide 18: Efficiency initiatives reflected in Opex
Efficiency initiatives reflected in Opex €m Q3 2019 Q3 2018 % Change (CER) Net Sales 9,499 9,392 -1.1% Other revenues 422 352 +14.8% Gross Profit 6,787 6,727 -1.8% Gross margin % 71.4% 71.6% R&D (1,362) (1,461) -8.1% SG&A (2,314) (2,301) -1.5% Other current operating income & expenses (119) (74) - S
Slide 19: Gross margin broadly stable; R&D and SG&A lower
Gross margin broadly stable; R&D and SG&A lower Gross margin ratio(1) Operating expenses 71.4%(2) €3,676m 71.6% €3,762m -4.1%(3) at CER €1,461m €1,362m 71.7% -8.1% at CER R&D €2,301m €2,314m SG&A -1.5% at CER Q3 2018 Q3 2019 Q3 2018 Q3 2019 CER: Constant Exchange Rates (1) Gross Margin is calculated
Slide 20: FY 2019 business EPS guidance reaffirmed
FY 2019 business EPS guidance reaffirmed Business EPS Approximately +5% at CER(1,2) FX impact Around +3%(3) on business EPS based on October 2019 average exchange rates (1) Compared to FY2018 and barring major unforeseen adverse events (2) FY 2018 Business EPS was €5.47 20 (3) Difference between var
Slide 21: Conclusion
Conclusion Paul Hudson Chief Executive Officer
Slide 22: Q3 performance on-track
Q3 performance on-track ✓• Outperformance of Dupixent® ✓• Strong Growth in Specialty Care and EM ✓• Business EPS stable supported by smart spending Sanofi offices, Cambridge, Massachusetts Strategic priorities to be laid out at CMD Dec 10th in Sanofi offices in Cambridge, MA 22
Slide 23: 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 24: Financial appendices
Financial appendices Q3 2019 Results October 31, 2019
Slide 25: Q3 sales and EPS benefited from stronger U.S. dollar
Q3 sales and EPS benefited from stronger U.S. dollar Currency impact Company sales(1) Business EPS +€215m +€0.08 +2.2% -€0.08 +4.3% Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 2018 2019 2018 2019 (1) Main currency impact on Company Sales in Q3 2019: US Dollar (+€171m),, Argentine Peso (-€57m), Japanese Yen (+€35m
Slide 26: Net debt evolution in 9M 2019
Net debt evolution in 9M 2019(1) €32m €4,976m €3,834m €17,628m €16,910m €525m €917m (2) Net Debt Free cash flow Acquisitions & Restructuring Dividend Other Net Debt December Licenses net of & Operational September(3) (3) 31, 2018 Proceeds from Excellence 30, 2019 disposal of assets (1) Credit rating
Slide 27: 2019 currency sensitivity and Q3 2019 currency exposure
2019 currency sensitivity and Q3 2019 currency exposure 2019 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 0.02 Chinese Yuan + 0.2 CNY/EUR - EUR 0.02 Brazilian Real + 0.4 BRL/EUR - EUR 0.01 Russian R
Slide 28: Business Net Income Statement – Q3 2019
Business Net Income Statement – Q3 2019 Third Quarter 2019 Pharmaceuticals Consumer Healthcare Vaccines Others(1) Total Group € million Q3 2019 Q3 2018 Change Q3 2019 Q3 2018 Change Q3 2019 Q3 2018 Change Q3 2019 Q3 2018 Change Q3 2019 Q3 2018 Change Net sales 6,434 6,210 3.6% 1,136 1,113 2.1% 1,929
Slide 29: Business Net Income Statement – 9M 2019
Business Net Income Statement – 9M 2019 Nine Months 2019 Pharmaceuticals Consumer Healthcare Vaccines Others (1) Total Group € million 9M 2019 9M 2018 Change 9M 2019 9M 2018 Change 9M 2019 9M 2018 Change 9M 2019 9M 2018 Change 9M 2019 9M 2018 Change Net sales 19,160 18,409 4.1% 3,535 3,466 2.0% 3,82
Slide 30: Consolidated Income Statements
Consolidated Income Statements € million Q3 2019 Q3 2018 9M 2019 9M 2018 Net sales 9,499 9,392 26,518 25,466 Other revenues 422 352 1,096 885 Cost of sales (3,134) (3,032) (8,519) (8,297) Gross profit 6,787 6,712 19,095 18,054 Research and development expenses (1,360) (1,461) (4,332) (4,216) Selling
Slide 31: Consolidated Income Statements
Consolidated Income Statements € million Q3 2019 Q3 2018 9M 2019 9M 2018 Net sales 9,499 9,392 26,518 25,466 Other revenues 422 352 1,096 885 Cost of sales (3,134) (3,032) (8,519) (8,297) Gross profit 6,787 6,712 19,095 18,054 Research and development expenses (1,360) (1,461) (4,332) (4,216) Selling
Slide 32: Reconciliation of Consolidated Net Income to Business Net Income – Q3 2019
Reconciliation of Consolidated Net Income Attributable to Equity Holders of Sanofi to Business Net Income – Q3 2019 € million Q3 2019 Q3 2018 Change Net income attributable to equity holders of Sanofi 1,766 2,274 (22.3%) (1) Amortization of intangible assets 520 537 Impairment of intangible assets 1
Slide 33: Reconciliation of Consolidated Net Income to Business Net Income – 9M 2019
Reconciliation of Consolidated Net Income Attributable to Equity Holders of Sanofi to Business Net Income – 9M 2019 € million 9M 2019 9M 2018 Change Net income attributable to equity holders of Sanofi 2,816 4,052 (30.5%) Amortization of intangible assets(1) 1,636 1,536 Impairment of intangible asset
Slide 34: R&D appendices
R&D appendices Q3 2019 Results October 31, 2019
Slide 35: R&D Pipeline – New Molecular Entities
R&D Pipeline – New Molecular Entities(*) Phase 1 Phase 2 Phase 3 Registration (Total : 22) (Total : 7) (Total : 6) (Total : 2) SAR441344(**)(1) BIVV001(**)(5) SAR440340(**)(12) SAR422459(**)(14) avalglucosidase alfa isatuximab Anti-CD40L mAb rFVIIIFc – vWF – XTEN(6) Anti-IL33 mAb ABCA4 gene therapy
Slide 36: Additional Indications
Additional Indications(*) Phase 1 Phase 2 Phase 3 Registration (Total : 6) (Total : 16) (Total : 24) (Total : 2) SAR439459 + cemiplimab(**)(1) dupilumab(**)(1) isatuximab + cemiplimab(**)(1) Dupixent®(**)(1) isatuximab Fluzone® QIV HD Advanced Solid Tumors Grass pollen allergy Relapsing Refractory M
Slide 37: Additional Indications – Expected submission timeline
Expected submission timeline(1) SAR442168(**)(8) SAR339375 Multiple Sclerosis Alport Syndrome sutimlimab avalglucosidase alfa SAR408701 romilkimab (SAR156597) nirsevimab(**)(9) NMEs Cold Agglutinin Disease Pompe Disease 2-3L NSCLC Systemic Scleroderma Respiratory syncytial virus HIV fitusiran olipud
Slide 38: Pipeline movements since Q2 2019
Pipeline movements since Q2 2019 Additions / Moves Removals from Sanofi pipeline Registration Phase 3 isatuximab + cemiplimab(**)(4) Anti-CD38 mAb + PD-1 inh mAb Phase 2 Advanced Malignancies SAR442085 SAR443122(**)(3) SAR441255 Anti CD38 mAb Fc engineered RIPK1 inhibitor GLP1R/GIPR/GCGR agonist Mul
Slide 39: 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 7 0 18 Oncology 14 6 7 1 28 Rare Diseases 0 4 3 0 7 Rare Blood Disorders 5 0 3 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 3 2 5
Slide 40: Expected R&D milestones
Expected R&D milestones Products Expected milestones Timing Fluzone® QIV HD U.S. regulatory decision for ≥ 65-year old age group Q4 2019 sutimlimab Pivotal trial read-out in Cold Agglutinin Disease Q4 2019 SAR439859 (SERD) Proof of concept study read-out in 3L metastatic Breast Cancer Q4 2019 sutiml
Slide 41: Q3 2019 Results
Q3 2019 Results October 31, 2019