Sanofi Sa · EURONEXT:SAN
Sanofi Sa — Q1 2016 Earnings Presentation
40 slides from Sanofi Sa's earnings presentation, Apr 29, 2016
Slide 1: Q1 2016 Results
Q1 2016 RESULTS April 29, 2016
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 Q1 2016 Key Highlights ● Olivier Brandicourt - Chief Executive Officer Q1 2016 Financial Results ● Jérôme Contamine - Executive Vice President, Chief Financial Officer Q&A Session ● Olivier Charmeil - Executive Vice President, Sanofi Pasteur ● Peter Guenter - Executive Vice President, General
Slide 4: Q1 2016 Key Highlights
Q1 2016 KEY HIGHLIGHTS Olivier Brandicourt Chief Executive Officer 4
Slide 5: Q1 2016 – Progressing on our 2020 Roadmap
Q1 2016 – Progressing on our 2020 Roadmap 1 ● Aggregate Sales reached €8,543m (after VaxServe reclassification), Financial up +0.7% or +3.0% excluding Venezuela at CER(1) Results ● Solid Business EPS growth of +5.3% at CER(2) to €1.34 2 ● Exclusive Boehringer Ingelheim asset swap expected to be sign
Slide 6: Aggregate Sales Up Slightly in Q1 2016 Given High Base for Comparison
As Expected, Aggregate Sales Up Slightly in Q1 2016 Given High Base for Comparison in Venezuela & Japan (1) Aggregate Group Sales Business EPS +€61m -€0.05 -€228m +€0.07 €8,710m €1.34 €8,543m €1.32 +0.7% +5.3% at CER(3) at CER(3) (2) Q1 2015 Incremental FX Impact Q1 2016 Q1 2015 Incremental FX Impac
Slide 7: New Organization by Global Business Unit in Place as of January 1st 2016
New Organization by Global Business Unit in Place as of January 1st 2016 Q1 2016 Aggregate Sales by Global Business Unit Growth at CER Group Aggregate Sales €8,543m +0.7% €1,169m (1) Sanofi Genzyme +20.5% (1) Diabetes & Cardiovascular €1,499m -5.8% (2,3) (4) General Medicines & Emerging Markets €4,4
Slide 8: Q1 2016 Sales Up 3% excluding Venezuela at CER
Q1 2016 Sales Up 3% excluding Venezuela at CER Driven by Specialty Care, Vaccines and Animal Health Q1 2016 Aggregate Sales by Franchise Developed Markets Emerging Markets Total Growth Sales at CER Sales Growth Sales Growth Specialty Care €1,371m +18.4% €1,169m +20.5% €202m +9.3% (1) Diabetes & Card
Slide 9: Rare Disease Franchise Shows High-Single Digit Growth in Q1 2016
Rare Disease Franchise Shows High-Single Digit Growth in Q1 2016 Global Rare Diseases Sales ● Comparable franchise growth in Developed and Emerging Markets €646m +8.5% at CER (+8.5% / +8.3% at CER, respectively) €613m ● Sales split Developed / Emerging: 83% / 17% €182m ● Growth driven by patient acc
Slide 10: Multiple Sclerosis Franchise Continues to Deliver Strong Growth
Multiple Sclerosis Franchise Continues to Deliver Strong Growth in Q1 2016 €243m Global Multiple Sclerosis Sales ● Aubagio® continues to expand oral segment with sales up +64.1% at CER €367m ● Remains fastest growing oral MS drug +76.9% at CER ● Sales now annualizing at more than €1bn €88m ● U.S. we
Slide 11: Vaccines Franchise Up 8.2% at CER in Q1 2016
Vaccines Franchise Up 8.2% at CER in Q1 2016 (1) Sanofi Pasteur Sales ● PPH vaccines up +6.0% at CER €625m ● Strong sales in Emerging Markets driven €597m by Hexaxim® ● Low U.S. sales given expected +8.2% Pentacel® supply constraint at CER ● Menactra® performance more than offsets softness in Booste
Slide 12: Diabetes Franchise Reflected Lower U.S. Glargine Average Net Price
Diabetes Franchise Reflected Lower U.S. Glargine(1) Average Net Price, Moderated by Growth in EU and China Global Diabetes Sales ● Sales of €1,734m, down -4.5%(2) at CER ● U.S. sales down by -11.1% reflecting €1,837m €1,734m expected lower Glargine average net price -4.5% at CER ● Europe up +4.0% de
Slide 13: Progressive Launch Underway Awaiting Outcomes Study Results
Progressive Launch Underway Awaiting Outcomes Study Results ● Q1 2016 sales of €12m reflecting current payer restrictions limiting uptake ● ODYSSEY OUTCOMES first interim data analysis for futility conducted and study continues ● Second interim analysis for futility and overwhelming efficacy potenti
Slide 14: CHC Franchise Grows by +4.1% Excluding Venezuela Impact
CHC Franchise Grows by +4.1% Excluding Venezuela Impact and at Constant Structure(1) CHC Franchise Global Sales +4.1% €979m at CER -€67m +€37m -€44m €912m €905m Q1 2015 Venezuela & Q1 2015 Organic Fx Impact Q1 2016 Minor Adjusted Base Growth Divestments ● Strong U.S. performance up +7.7% at CER driv
Slide 15: Sanofi Continues to Show a Balanced Geographic Profile
Sanofi Continues to Show a Balanced Geographic Profile Q1 2016 Aggregate Group Sales by Geography (€m) RoW (2) Emerging Markets Sales by Region Europe €832m €2,372m -13.3% at CER €833m +1.7% at CER 9.7% Emerging €668m 27.8% Markets (1) €571m €2,373m +4.2% at CER 27.8% or +13.1% at CER €259m 34.7% ex
Slide 16: Seven Registrational Studies Expected to Start in 2016
Seven Registrational Studies Expected to Start in 2016 Expected Regulatory Decisions Q1 Q2 Q3 Q4 ● Dengvaxia® in endemic countries ● Lixisenatide in Diabetes (U.S.) ● LixiLan in Diabetes (U.S.) ● Sarilumab in Rheumatoid Arthritis (U.S.) Expected Regulatory Submissions Q1 Q2 Q3 Q4 ● LixiLan in
Slide 17: First Fully-Human, Subcutaneously Delivered IL-6R Antibody Studied in RA
First Fully-Human, Subcutaneously Delivered IL-6R Antibody Studied in RA ● Sarilumab efficacy/safety results in moderate to severe RA patients ● Sarilumab 200mg Q2W + MTX(1) in MTX- inadequate responders showed 91% inhibition of structural damage ● Sarilumab + MTX in anti-TNFα-inadequate responders
Slide 18: First IL-4/IL-13 Receptor Antibody to Show Positive Phase III Results in AD
First IL-4/IL-13 Receptor Antibody to Show Positive Phase III Results in AD ● Dupilumab Phase IIb data in Atopic Dermatitis Images of a patient before and after published in The Lancet dupilumab therapy in Phase IIb trial (Individual results did vary) ● Dupilumab 300mg QW / Q2W demonstrated the foll
Slide 19: Financial Results
FINANCIAL RESULTS Jérôme Contamine Executive Vice President, Chief Financial Officer 19
Slide 20: FX Headwind on Top and Bottom Line in Q1 2016
FX Headwind on Top and Bottom Line in Q1 2016 Currency Impact Aggregate Group Sales(1,2) Business EPS +15.4% +€0.18 +11.1% +9.8% +€888m +10.2% +€764m +€0.12 +7.1% +5.6% +€0.10 +€487m +3.7% +3.4% +€332m +€0.05 Q1 2016 Q1 2016 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2015 -€228m -€0.
Slide 21: Aggregate BOI Increased +3.0% at CER in Q1 2016
Aggregate BOI Increased +3.0% at CER in Q1 2016 (1) % Change % Change €m Q1 2016 Q1 2015 (reported €) (CER) Aggregate Group sales 8,543 8,710 -1.9% +0.7% Aggregate Other revenues 155 180 -13.9% -15.0% Aggregate Cost of sales (2,693) (2,786) -3.3% -0.1% Aggregate Gross profit 6,005 6,104 -1.6% +0.6%
Slide 22: A Good Start to 2016 with Mid-Single Digit Growth of Business EPS
A Good Start to 2016 with Mid-Single Digit Growth of Business EPS at CER % Change % Change €m Q1 2016 Q1 2015 (reported €) (CER) Aggregate Business operating income 2,384 2,398 -0.6% +3.0% Aggregate Net financial expenses (118) (97) - - Income tax expense (544) (575) - - Effective tax rate 24.0% 25.
Slide 23: Stable Gross Margin Ratio in Q1 2016
Stable Gross Margin Ratio in Q1 2016 Aggregate Gross Margin(1) ● Stable Cost of Sales (CoS) of €2,693m in Q1 2016 70.4% 70.7% 70.3% ● Gross margin of 70.3% in Q1 2016 70.1% 69.0% reflects: ● Positive impact from Specialty Care franchise and Vaccines more than offsetting the impact from lower Glargin
Slide 24: Limited OpEx Growth Mostly Driven by R&D in Q1 2016
Limited OpEx Growth Mostly Driven by R&D in Q1 2016 Operating Expenses ● Q1 2016 OpEx of €3,696m, up +3.0% at CER €3,637m €3,696m ● R&D expenses of €1,278m up 6.5% at CER mainly due to: €1,199m €1,278m R&D ● Immuno-Oncology activities ● Dupilumab Phase III program ● SG&A expenses of €2,418m, €2,438m
Slide 25: €1.4bn of Share Repurchase Completed in Q1 2016
€1.4bn of Share Repurchase Completed in Q1 2016 Net Debt -€25m -€569m -€1,403m €8,373m FCF €1,203m €878m €7,254m -€325m (1) (4) (1) Net Debt Net Cash from CapEx Share Repurchase Acquisitions, Other Net Debt Dec 31, 2015 Operating Licensing, Net Mar 31, 2016 (2) (3) Activities of Disposals FCF: Free
Slide 26: Confirmed 2016 Business EPS Growth at CER
Confirmed 2016 Business EPS Growth at CER FY 2016 Business EPS Growth Broadly stable at CER(1,2) FX impact on Business EPS Around -3%(3) based on March 2016 average exchange rates (1) Barring major unforeseen adverse events (2) FY 2015 Business EPS of €5.64 (3) Difference between variation on a repo
Slide 27: Closing Remarks
CLOSING REMARKS Olivier Brandicourt Chief Executive Officer 27
Slide 28: Delivering on our Strategic Priorities
Delivering on our Strategic Priorities 1● Solid financial results in Q1 2016 2● Reshaping the portfolio ● CHC/Animal Health asset swap ● End joint Vaccines operations in Europe 3● Focus on execution of launches 4● New wave of innovation with seven pivotal trials expected to start in 2016 28
Slide 29: Q&A Session
Q&A SESSION 29
Slide 30: Appendices: R&D Pipeline
APPENDICES R&D Pipeline @& oS
Slide 31: R&D Pipeline – Pharma & Vaccines
R&D Pipeline – Pharma & Vaccines Phase I Phase II Phase III Registration N N dupilumab N N N GZ402668 GZ402666 olipudase alfa SAR342434 lixisenatide Anti-IL4Rα mAb GLD52 (anti-CD52 mAb) neoGAA Nasal polyposis; rhASM insulin lispro GLP-1 agonist Relapsing multiple sclerosis Pompe Disease Eosinophilic
Slide 32: R&D Pipeline Summary Table
R&D Pipeline Summary Table(1) Phase I Phase II Phase III Registration TOTAL Oncology 4 1 0 0 5 Diabetes 4 1 2 2 9 Cardiovascular Diseases 2 0 0 0 2 Immune Mediated Diseases 1 2 1 1 5 Infectious Diseases 0 1 0 0 1 34 Ophthalmology 1 0 0 0 1 Rare Diseases 4 3 2 0 9 Multiple Sclerosis 1 0 0 0 1 Neurode
Slide 33: Expected R&D Milestones (1/2)
Expected R&D Milestones (1/2) Product Event Timing Dengvaxia® Expected regulatory decision in endemic countries Throughout 2016 Lixisenatide and LixiLan FDA Advisory Committee May 25, 2016 Men Quad TT Expected start of Phase III trial Q2 2016 insulin lispro Expected SORELLA Phase III top line result
Slide 34: Expected R&D Milestones (2/2)
Expected R&D Milestones (2/2) Product Event Timing Praluent® Expected results of ODYSSEY OUTCOMES 2nd interim analysis(1) H2 2016 sarilumab Expected U.S. regulatory decision in Rheumatoid Arthritis Q4 2016 VaxiGrip® QIV IM (3 years+) Expected EU regulatory decision Q4 2016 sotagliflozin Expected sta
Slide 35: Appendices: Finance
APPENDICES FINANCE @& oS SANOFI %
Slide 36: 2016 - Currency Sensitivity
2016 - Currency Sensitivity 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 Ruble +10 RUB/EUR -EUR 0.04 Currency Expos
Slide 37: 2016 - Headwinds and Tailwinds
2016 - Headwinds and Tailwinds Headwinds Tailwinds ● Residual impact of Plavix® generic ● Easier base for comparison for Diabetes erosion in Japan and Venezuela(2) in H2 2016 ● Biosimilar insulin glargine launched in ● Stronger Vaccines outlook in H2 2016 Japan & EU in H2 2015 ● Q4 2015 negatively i
Slide 38: Q1 2016 - Business Net Income Statement
Q1 2016 - Business Net Income Statement First quarter 2016 Pharmaceuticals Vaccines Others Total Group Animal Health(1) Total: aggregate basis(4) € million Q1 2016 Q1 2015 Change Q1 2016 Q1 2015(3) Change Q1 2016 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Q1 2015 Change Q1 2016 Q1 2015 Change Net sales 7,158 7
Slide 39: Reconciliation of Business Net Income to Consolidated Net Income
Q1 2016 - Reconciliation of Business Net Income to Consolidated Net Income Attributable to Equity Holders of Sanofi € million Q1 2016(1) Q1 2015 (1) Change Business net income 1,722 1,726 (0.2%) Amortization of intangible assets(2) (444) (499) Impairment of intangible assets - (27) Fair value remeas
Slide 40: Q1 2016 - Consolidated Income Statements
Q1 2016 - Consolidated Income Statements € million Q1 2016(1) Q1 2015(1)(2) Net sales 7,783 8,052 Other revenues 145 168 Cost of sales (2,447) (2,566) Gross profit 5,481 5,654 Research and development expenses (1,235) (1,159) Selling and general expenses (2,212) (2,250) Other operating income 217 34