Sanofi Sa · EURONEXT:SAN
Sanofi Sa — Q1 2017 Earnings Presentation
37 slides from Sanofi Sa's earnings presentation, Apr 28, 2017
Slide 1: Q1 2017 Results
Q1 2017 Results April 28, 2017
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 Building an Immunology Franchise ● David Meeker - Executive Vice President, Sanofi Genzyme Financial Results ● Jérôme Contamine - Executive Vice President, Chief Financial Officer Additional Participants for Q&A Session ● Olivier
Slide 4: Key Highlights
KEY HIGHLIGHTS Olivier Brandicourt Chief Executive Officer 4
Slide 5: Q1 2017 Underlying Sales Performance Consistent with Prior two Quarters
Q1 2017 Underlying Sales Performance Consistent with Prior two Quarters Company Sales €194m €8,648m €287m €384m €8,167m +3.5% at CER/CS(4) €7,783m (1) Q1 2016 BI CHC / SPMSD Q1 2016 Sales (3) Fx Q1 2017 CS (2) (1) Primarily includes SPMSD (€49m) and BI CHC (€368m on a Full Sales recognition basis; €
Slide 6: Q1 2017 Sales Benefited from Change in Structure and Simplified Organization Supported Business EPS Growth
Q1 2017 Sales Benefited from Change in Structure and Simplified Organization Supported Business EPS Growth Company Sales Business EPS €8,648m €1.42 €7,783m €1.34 +8.6% +3.0% at CER at CER Q1 2016 Q1 2017 Q1 2016 Q1 2017 CER : Constant Exchange Rate 6
Slide 7: Diversified Business Model Drives Growth and More than Offset Diabetes Performance in Q1 2017
Diversified Business Model Drives Growth and More than Offset Diabetes Performance in Q1 2017 Q1 2017 Sales by Global Business Unit Growth at CER/CS(1) Company Sales €8,648m +3.5% (2) Sanofi Genzyme (Specialty Care) €1,379m +15.5% (3) Sanofi Pasteur (Vaccines) €784m +13.2% €1,419m (2) Diabetes & Car
Slide 8: Growth Driven by Specialty Care and Vaccines, Combined with Solid Performance in Emerging Markets
Growth Driven by Specialty Care and Vaccines, Combined with Solid Performance in Emerging Markets Q1 2017 Sales by Franchise Developed Markets Emerging Markets Total Growth at Growth at Growth at Sales Sales Sales CER/CS(1) CER/CS(1) CER/CS(1) Specialty Care €1,620m +15.6% €1,379m +15.5% €241m +16.3
Slide 9: Sanofi Genzyme Delivers Strong Growth Across All Franchises
Sanofi Genzyme Delivers Strong Growth Across All Franchises Global Specialty Care ● Specialty Care franchise continues to grow Franchise Sales double digits in both developed and emerging markets €1,620m ● Myozyme and Fabrazyme up double digits ● Gaucher franchise broadly stable (-1%) due to €1,37
Slide 10: Vaccines Growth Accelerated Due To Strong Pediatric Combination Sales
Vaccines Growth Accelerated Due To Strong Pediatric Combination Sales Sanofi Pasteur Sales ● Vaccines sales up +13.2% at CER/CS(1) €784m ● Pediatric combination(2) franchise +38% at €675m CER/CS to €432m in Q1 2017 ● Strong growth across geographies +13.2% at CER/ ● Pentacel increased in the U.S. s
Slide 11: CHC: Stronger GBU Focus Drives Improved Growth Sequentially
CHC: Stronger GBU Focus Drives Improved Growth Sequentially Q1 2017 Global CHC Sales ● Reported sales up +43% at CER and +4.7% at CER/CS(1) €1,341m ● Solid growth in Allergy/Cold/Cough and Pain €1,233m +108m mainly driven by early season in Europe ● Xyzal launch generated €43m +€328m €905m ● Integr
Slide 12: DCV Sales Evolution Impacted by U.S. Formulary Changes Only Partially Offset by Strong EM Performance
DCV(1) Sales Evolution Impacted by U.S. Formulary Changes Only Partially Offset by Strong EM Performance Q1 2017 Global Diabetes Sales ● Global Diabetes sales decline -6.0% at CER to €1,663m ● U.S. diabetes sales decline (-15% in Q1 2017) Europe expected to accelerate over the remainder of the €326m
Slide 13: Emerging Markets Grew High Single-Digit With Strong Sales in China
Emerging Markets(1) Grew High Single-Digit With Strong Sales in China(2) €2,411m €2,764m EUROPE €298m €930m U.S. +1.8% EURASIA(4) ROW(3) +1.2% +9.9% +2.2% €983m €546m ASIA AME(5) +12.4% €676m -0.7% LATAM +12.0% Emerging Markets(1) grew +8.5% at CER/CS(6) All growth at CER/CS unless specified otherwi
Slide 14: Multiple Proof of Concept and Phase 3 Studies Ongoing or Expected to be Initiated in 2017
Multiple Proof of Concept and Phase 3 Studies Ongoing or Expected to be Initiated in 2017 for Key Pipeline Projects Proof of Concept Studies Phase 3 / Registration Studies isatuximab SAR566658 SAR439684 isatuximab Anti-CD38 Maytansin-anti-CA6 PD-1 Inhibitor Anti-CD38 Phase 2 – multiple indications P
Slide 15: Building an Immunology Franchise
BUILDING AN IMMUNOLOGY FRANCHISE David Meeker Executive Vice President, Sanofi Genzyme 15
Slide 16: Dupilumab: A Pipeline in a Product – First Approval in Adults with Moderate-to-Severe AD
Dupilumab: A Pipeline in a Product – First Approval in Adults with Moderate-to-Severe Atopic Dermatitis (AD) Atopic Dermatitis Il-4/IL-13 signaling is considered to be Eosinophilic IL-4/ Asthma central to many Type-2 Esophagitis IL-13 mediated allergic diseases Nasal Polyps (1) Dupilumab is under cl
Slide 17: U.S. Launch Focused on Patients with the Highest Unmet Medical Need
U.S. Launch Focused on Patients with the Highest Unmet Medical Need ● U.S. launch focused on ~300,000 adult AD patients with highest unmet medical need ● Detailing ~7,000 physicians who treat AD and have experience prescribing biologics ● >1,200 HCPs have written a prescription ● U.S. Market Access
Slide 18: Kevzara - Potential Global Launches of IL-6 mAb in RA in 2017
Kevzara - Potential Global Launches of IL-6 mAb in RA in 2017(1) Trends in RA(2)… … potentially addressed by Kevzara® ● IL-6 plays a key role in the ● Use of non-TNFα MOA(3) pathophysiology of RA products is increasing ● Positive Phase 3 results ● Anti-TNFα cycling declining in MTX-IR and TNF-IR pa
Slide 19: Financial Results
FINANCIAL RESULTS Jérôme Contamine Executive Vice President, Chief Financial Officer 19
Slide 20: Currency Tailwind In-Line with Expectations
Currency Tailwind In-Line with Expectations Currency Impact Company Sales(1) Business EPS +3.0% +2.5% +€0.04 +€194m -€10m -€83m -0.1% -€0.02 -1.0% -1.2% -€0.04 -€215m -€0.05 -3.1% -2.6% -3.8% -€0.07 +€0.05 -€353m -5.0% -4.2% Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2016 2017 2016 2017 (1) Main currency impact
Slide 21: Operating Improvements More Than Offset Tax and Change in Structure Headwinds
Operating Improvements More Than Offset Tax and Change in Structure Headwinds €m Q1 2017 Q1 2016 % Change % Change (reported €) (CER) Net Sales 8,648 7,783 +11.1% +8.6% Gross Profit 6,200 5,481 +13.1% +10.6% Business Operating Income 2,442 2,123 +15.0% +11.7% Business operating margin 28.2% 27.3% -
Slide 22: Q1 2017 Delivers Sales Growth and Operating Leverage at Constant Structure
Q1 2017 Delivers Sales Growth and Operating Leverage at Constant Structure (1) €m Q1 2017 Q1 2016 CS % Change (CER/CS) (2) Net Sales 8,648 8,174 +3.5% Other revenues 249 140 +72.9% Gross Profit 6,200 5,752 +5.4% R&D (1,309) (1,258) +2.1% SG&A (2,478) (2,387) +1.5% Other current operating income & ex
Slide 23: Gross Margin Increased in Q1 2017 Due to Product Mix and Productivity Improvements
Gross Margin Increased in Q1 2017 Due to Product Mix and Productivity Improvements Gross Margin Ratio(1) Operating Expenses €3,787m +1.3pp +1.7% at CER/CS(2) €3,645m 71.7% €1,309m 71.7% +0.2pp +2.1% at R&D €1,258m CER/CS 70.4% €2,478m €2,387m +1.5% at SG&A 70.2% CER/CS Q1 2015 Q1 2016 Q1 2017 Q1 201
Slide 24: Net Debt Evolution in Q1 2017
Net Debt Evolution in Q1 2017 Net Debt -€222m FCF -€1,252m €1,336m €954m -€382m €5,288m €8,206m -€247m €3,685m (1) (4) (1) Net Debt Net Cash from CapEx Net Share Acquisitions, Net cash from Other Net Debt Dec 31, 2016 Operating Repurchase Licensing, Net CHC/Merial Mar 31, 2017 Activities(2) of Dispo
Slide 25: Reaffirming Outlook for 2017
Reaffirming Outlook for 2017 FY 2017 Stable to -3% Business EPS at CER(1,2) FX impact on Business EPS +3% to +4%(3) based on March 2017 average exchange rates (1) Compared to FY2016 and barring major unforeseen adverse events (2) FY 2016 Business EPS of €5.68 (3) Difference between variation on a re
Slide 26: Closing Remarks
CLOSING REMARKS Olivier Brandicourt Chief Executive Officer 26
Slide 27: Executing on our 2020 Strategic Roadmap
Executing on our 2020 Strategic Roadmap 1 Diversified business model delivered strong Q1 results 2 Simplified organization supported operational execution 3 CHC integration progressing well and new strategy in place 4 Managing challenging U.S. payer environment in diabetes 5 Focused on building our
Slide 28: Q&A Session
Q&A SESSION SANOFI %
Slide 29: Appendices: R&D Pipeline
APPENDICES R&D Pipeline SANOFI %
Slide 30: R&D Pipeline – Pharma & Vaccines
R&D Pipeline – Pharma & Vaccines Phase 1 Phase 2 Phase 3 Registration SAR440340 N SAR438335 N dupilumab SAR425899 N dupilumab sarilumab N Anti-IL33 mAb GLP-1R/GIPR dual agonist Anti-IL4Rα mAb GLP-1R/GCGR dual agonist Anti-IL4Rα mAb Anti-IL6R mAb Asthma & COPD Type 2 diabetes Eosinophilic oesophagiti
Slide 31: R&D Pipeline Summary Table
R&D Pipeline Summary Table(1) Phase I Phase II Phase III Registration TOTAL Oncology 2 2 1 0 5 Diabetes 2 2 1 1 6 Cardiovascular Diseases 3 2 0 0 5 Immuno-inflammation 2 2 0 2 6 32 Infectious Diseases 0 1 0 0 1 Rare Diseases 0 3 2 0 5 Multiple Sclerosis, Neurology, Ophthalmology 3 1 0 0 4 Vaccines 3
Slide 32: Expected R&D Milestones
Expected R&D Milestones Products Expected milestones Timing dupilumab Start of Phase 3 trial in Asthma in 6-11 year-olds Q2 2017 Kevzara®(1) U.S. regulatory decision in Rheumatoid Arthritis Q2 2017 Kevzara®(1) European Commission approval in Rheumatoid Arthritis Q2 2017 Dupixent®(1) Start of Phase 3
Slide 33: Appendices: Finance
APPENDICES FINANCE SANOFI %
Slide 34: 2017 Currency Sensitivity
2017 Currency Sensitivity 2017 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 0.02 Russian Ruble + 10 RUB/EUR - EUR 0.03 C
Slide 35: Business Net Income Statement
Business Net Income Statement First-quarter 2017 Pharmaceuticals Vaccines Others Total Group € million Q1 2017 Q1 2016 Change Q1 2017 Q1 2016 Change Q1 2017 Q1 2016 Q1 2017 Q1 2016 Change Net sales 7,864 7,158 9.9% 784 625 25.4% 8,648 7,783 11.1% Other revenues 76 54 40.7% 173 91 90.1% 249 145 71.7%
Slide 36: Reconciliation of Consolidated Net Income to Business Net Income
Reconciliation of Consolidated Net Income Attributable to Equity Holders of Sanofi to Business Net Income € million Q1 2017 Q1 2016 Change Net income attributable to equity holders of Sanofi 5,701 1,087 424.5% Amortization of intangible assets (1) 503 444 Impairment of intangible assets - - Fair val
Slide 37: Consolidated Income Statements
Consolidated Income Statements € million Q1 2017 (1) Q1 2016 (1) Net sales 8,648 7,783 Other revenues 249 145 Cost of sales (2,785) (2,447) Gross profit 6,112 5,481 Research and development expenses (1,309) (1,235) Selling and general expenses (2,478) (2,212) Other operating income 60 217 Other oper