Slide 1: Q1 2018 Results
Q1 2018 Results April 27, 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 • Jérôme Contamine - Executive Vice President, Chief Financial Officer Q&A Session • Olivier Charmeil - Executive Vice President, General Medicines & Emerging Markets • Karen Linehan - Executive Vice President, L
Slide 4: Key Highlights
Olivier Brandicourt Chief Executive Officer KEY HIGHLIGHTS
Slide 5: Q1 Performance Reflects Anticipated Headwinds While Executing on Key Drivers for Growth
Q1 Performance Reflects Anticipated Headwinds While Executing on Key Drivers for Growth Recovery in H2 2018 Company Sales Business EPS €8,653m €1.42 €7,898m €1.28 -0.4% at CER(1) +1.4% at CER Q1 2017 Q1 2018 Q1 2017 Q1 2018 CER = Constant Exchange Rates 5 (1) Q1 2018 sales declined -1.1% at CER/CS;
Slide 6: Contributions from Growth Drivers Anticipated to Increase in H2 2018
Contributions from Growth Drivers Anticipated to Increase in H2 2018 as Headwinds Expected to Subside Q1 2018 Company Sales €8,653m €8,617m +€74m -€351m +€241m -0.4% at CER(3) Q1 2017 U.S. Lantus®, Pharma, Rare Blood Q1 2018 U.S. sevelamer Vaccines & CHC (1) Disorders (2) at CER (1) Excludes U.S. La
Slide 7: Sanofi Genzyme Sales Continue to Grow Strongly
Sanofi Genzyme Sales Continue to Grow Strongly and Surpassed Diabetes & Cardiovascular GBU in Q1 2018 Q1 2018 Sales by Global Business Unit Growth at CER/CS(1) Company Sales €7,898m -1.1% (7) Sanofi Genzyme (Specialty Care) (2) €1,460m +11.2% Sanofi Pasteur (Vaccines) €711m -0.9% Diabetes & Cardiova
Slide 8: Double Digit Growth in Specialty Care and Performance in EM
Double Digit Growth in Specialty Care and Performance in EM Largely Offset Impact from LoE and Vaccines in Q1 Q1 2018 Sales by Franchise (3) Developed Markets Emerging Markets Total Growth at Growth at Growth at (1) Sales (1) Sales (1) Sales CER/CS CER/CS CER/CS (2) (2) (2) Specialty Care €1,710m +1
Slide 9: New Rare Blood Disorder and Immunology Franchises Expand Specialty Care
New Rare Blood Disorder and Immunology Franchises Expand Rapidly Growing Specialty Care Business Global Specialty Care • Rare Blood Disorder franchise contributed €64m Franchise Sales • Bioverativ sales consolidated as of March 9, 2018 • Dupixent sales reached €107m €1,710m €1,622m • Strong underly
Slide 10: Innovative Hemophilia Portfolio Positions Sanofi as a Leader in Rare Blood Disorders
Strong Performance of Our Innovative Hemophilia Portfolio Positions Sanofi as a Leader in Rare Blood Disorders Eloctate® and Alprolix® • Eloctate® and Alprolix® continue to change the U.S. Patient Share Tracker(3) hemophilia treatment paradigm • Eloctate® pro-forma growth: +27% at CER(1) • Alprolix®
Slide 11: Advancing Next Generation Hemophilia Treatment Options with Fitusiran and BIVV001
Advancing the Next Generation of Hemophilia Treatment Options with Fitusiran and BIVV001 Initiated 2018 Start 2018 Start • Fitusiran Phase 3 reinitiated in hemophilia A and B patients • ATLAS-INH: 1st patient dosed • Adults and • Adults and • Adults and adolescents with adolescents with adolescents
Slide 12: Strong Performance in Europe Nearly Offset Pentaxim Supply Constraint in China
Strong Performance in Europe Nearly Offset Pentaxim® Supply Constraint in China Sanofi Pasteur Sales • Sanofi Pasteur sales of €711m (-0.9% at CER) €784m • European business delivers 38% growth €711m supported by Repevax® recovery • Pediatric vaccines up 26% to €71m -0.9% at CER • Pediatric combinat
Slide 13: DCV Building on Positive Praluent ODYSSEY OUTCOMES Results
DCV Building on Positive Praluent® ODYSSEY OUTCOMES Results(1) while Managing Challenges in U.S. Diabetes • Praluent® ODYSSEY OUTCOMES study Praluent® (alirocumab) • 15% reduction in MACE(2) vs placebo, p=0.0003 All-Cause Death(1,3) • Associated with 15% reduction in all-cause death, nominal p=0.026
Slide 14: Consumer Healthcare Franchise Delivers Growth
Consumer Healthcare Franchise Delivers Growth Supported by Strong Performance in Emerging Markets • CHC franchise sales up +2.0% to €1,238m Q1 2018 CHC Sales by Geography • Emerging Markets +14% growth primarily driven by sales Latin America €160m • Developed Markets declined -3.5% on high base +2.9
Slide 15: Leadership in Emerging Markets Drives 8.3% Growth in Q1 2018
Leadership in Emerging Markets(1) Drives 8.3% Growth in Q1 2018 Geographic Breakdown of Q1 2018 Sales €2,198m €2,416m U.S. €290m €817m EUROPE EURASIA(4) ROW(3) -8.2% +0.5 % +11.0% -3.4% €491m of which AME(5) €1,000m €650m ASIA(2) €641m -0.7%(6) CHINA LATAM +9.3% +13.6% +13.6% All growth at CER unles
Slide 16: Key R&D Milestones Over Next 12 Months
Key R&D Milestones Over Next 12 Months Q1 Q2 Q3 Q4 Q1 Cemiplimab(1,2) in locally advanced CSCC Sotagliflozin(3) in T1D Potential Praluent®(1) ODYSSEY OUTCOMES label update submissions Dupixent®(1) in Atopic Dermatitis in Adolescents Isatuximab in Relapsed-Refractory Multiple Myeloma Praluent(1)
Slide 17: Financial Results
Jérôme Contamine Executive Vice President, Chief Financial Officer FINANCIAL RESULTS
Slide 18: Currency Impact on Sales and EPS Intensified in Q1
Currency Impact on Sales and EPS Intensified in Q1 but Expected to Progressively Ease Over the Course of 2018 Currency Impact Company Sales(1) Business EPS -€719m -€0.08 -€0.16 -8.3% -11.3% Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2017 2018 2017 2018 (1) Main currency impact on Company Sales in Q1 2018: US Dol
Slide 19: BOI Reflects U.S. LoEs and Investments in R&D and SG&A
BOI Reflects U.S. LoEs and Investments in R&D and SG&A to Drive Anticipated Growth Phase Starting in H2 2018 €m Q1 2018 Q1 2017 (1) % Change (CER) Net Sales 7,898 8,653 -0.4% Other revenues 228 249 +4.4% Gross Profit 5,611 6,205 -0.8% Gross margin % 71.0% 71.7% R&D (1,280) (1,309) +4.5% SG&A (2,310)
Slide 20: Q1 2018 Gross Margin Declined While Operating Expense Growth Was Slight
Q1 2018 Gross Margin Declined While Disciplined Expense Management Led to Slight Operating Expense Growth Gross Margin Ratio(1) Operating Expenses 71.7% 71.0%(2) €3,791m €3,590m +2.2% at CER(4) €1,309m €1,280m 71.7% +4.5% at R&D CER €2,482m €2,310m +1.0% at CER SG&A (3) (3) Q1 2017 Q1 2018 Q1 2017 Q
Slide 21: Business EPS Growth at CER Benefited from Lower Tax Rate
Business EPS Growth at CER Benefited from Lower Tax Rate and Positive Financial Items in the Quarter €m Q1 2018 Q1 2017 (1) % Change % Change (reported €) (CER) Net Sales 7,898 8,653 -8.7% -0.4% Gross Profit 5,611 6,205 -9.6% -0.8% Business Operating Income 2,034 2,437 -16.5% -6.5% Business operatin
Slide 22: Maintaining Balanced Approach to Capital Allocation
Maintaining Balanced Approach to Capital Allocation • Net debt increased to €14.1bn following Net Debt Evolution in Q1 2018 closing of Bioverativ acquisition €252m • 0.96% average cost of recently issued debt • Credit ratings reaffirmed €8,979m • Moody’s A1/stable €14,142m • S&P AA/stable €597m • Sc
Slide 23: Reaffirming 2018 Financial Guidance
Reaffirming 2018 Financial Guidance FY 2018 Business EPS +2% to +5% at CER(1,2) Approximately -7%(3) FX impact on Business EPS based on April 2018 average exchange rates (1) Compared to FY2017 and barring major unforeseen adverse events (2) FY 2017 Business EPS of €5.52 when applying the new IFRS15
Slide 24: Closing Remarks
Olivier Brandicourt Chief Executive Officer CLOSING REMARKS
Slide 25: Progress in Q1 2018 Supports Transition to a New Growth Phase
Progress in Q1 2018 Supports Transition to a New Growth Phase 1• Q1 consistent with FY18 outlook 2• Progress on new products 3• Building leadership in rare blood disorders 25
Slide 26: Appendices Finance
APPENDICES FINANCE SANOFI wy
Slide 27: 2018 Currency Sensitivity and Q1 2018 Currency Exposure
2018 Currency Sensitivity and Q1 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 28: Net Debt Evolution in Q1 2018
Net Debt Evolution in Q1 2018 Net Debt €343m €8,888m €14,142m €1,247m FCF €5,229m €915m €597m €332m Net Debt Net Cash from CapEx Net Share Acquisitions, Other (4) Net Debt (1) (2) (1) Dec 31, 2017 Operating Activities Repurchase and Licensing, Net Mar 31, 2018 Share Issuance of Disposals (3) FCF: Fr
Slide 29: Business Net Income Statement – Q1 2018
Business Net Income Statement – Q1 2018 First Quarter 2018 Pharmaceuticals Consumer Healthcare Vaccines Others (2) Total Group € million Q1 2018 Q1 2017 (1) Change Q1 2018 Q1 2017 (1) Change Q1 2018 Q1 2017 (1) Change Q1 2018 Q1 2017 Change Q1 2018 Q1 2017 (1) Change Net sales 5,949 6,539 (9.0%) 1,2
Slide 30: Consolidated Income Statements
Consolidated Income Statements € million Q1 2018 Q1 2017 (1) Net sales 7,898 8,653 Other revenues 228 249 Cost of sales (2,545) (2,785) Gross profit 5,581 6,117 Research and development expenses (1,280) (1,309) Selling and general expenses (2,312) (2,482) Other operating income 25 60 Other operating
Slide 31: Reconciliation of Net Income to Business Net Income – Q1 2018
Reconciliation of Consolidated Net Income Attributable to Equity Holders of Sanofi to Business Net Income – Q1 2018 € million Q1 2018 Q1 2017 (1) Change Net income attributable to equity holders of Sanofi 1,016 5,696 (82.2%) Amortization of intangible assets (2) 458 503 Impairment of intangible asse
Slide 32: Appendices Research & Development
APPENDICES RESEARCH & DEVELOPMENT
Slide 33: R&D Pipeline – New Molecular Entities
R&D Pipeline – New Molecular Entities(*) Phase 1 Phase 2 Phase 3 Registration (Total:14) (Total:15) (Total:6) (Total:2) SAR439794 SAR442168(3) SAR440340(**) SAR425899 isatuximab cemiplimab(10)(**) TLR4 agonist BTK inhibitor Anti-IL33 mAb GLP-1/GCG dual agonist Anti-CD38 mAb PD-1 inhibitor mAb Peanut
Slide 34: Additional Indications
Additional Indications(*) Phase 1 Phase 2 Phase 3 Registration (Total:5) (Total:12) (Total:16) (Total:4) SAR439459 + cemiplimab(1)(**) dupilumab(**) sotagliflozin(**) dupilumab(**) isatuximab dupilumab(**) Anti-TGFb mAb + PD1 inhibitor mAb Anti-IL4Rα mAb SGLT 1 & 2 inhibitor Anti-IL4Rα mAb Anti-CD38
Slide 35: Expected Submission Timeline
Expected Submission Timeline(1) avalglucosidase alfa GZ389988 SAR422459 Combination Neo GAA TRKA antagonist ABCA4 gene therapy ferroquine / OZ439(**) Pompe Disease - U.S./EU Osteoarthritis - U.S./EU Stargardt Disease -- U.S./EU Antimalarial - U.S./EU isatuximab olipudase alfa SAR156597 SP0232 mAbs(1
Slide 36: Pipeline Movements Since Q4 2017
Pipeline Movements Since Q4 2017 Additions to the pipeline Removals from the pipeline BIVV001 lumasiran(3) rFVIIIFc – vWF – XTEN(1) Investigational RNAi therapeutic Hemophilia A Primary Hyperoxaluria Type 1 (PH1) Phase 1 BIVV009 Anti Complement C1s mAb Immune Thrombocytopenia SAR440340(**) isatuxima
Slide 37: R&D Pipeline Summary – Total Projects
R&D Pipeline Summary – Total Projects(1) Phase 1 Phase 2 Phase 3 Registration TOTAL Immuno-inflammation 1 6 5 1 13 Oncology 8 4 5 1 18 Rare Diseases 0 4 2 0 6 Rare Blood Disorders 2 0 1 0 3 Multiple Sclerosis, Neurology, 3 2 2 0 7 Gene therapy Diabetes 1 2 3 1 7 Cardiovascular Diseases 2 2 1 0 5 Inf