Slide 1: Q2 2018 Results
Q2 2018 Results July 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 • 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: Stable Performance in Q2 2018 at CER
Stable Performance in Q2 2018 at CER Company Sales Business EPS €8,671m €1.34 €8,176m €1.25 +0.1% +1.5% at CER(1) at CER Q2 2017 Q2 2018 Q2 2017 Q2 2018 CER: Constant Exchange Rates 5 (1) Q2 2018 sales declined -2.5% at CER/CS; Constant Structure adjusting for Bioverativ acquisition
Slide 6: Sanofi Genzyme Sales Growth Largely Offsets Impact of U.S. LoEs and Vaccines Phasing in Q2 2018
Sanofi Genzyme Sales Growth Largely Offsets Impact of U.S. LoEs and Vaccines Phasing in Q2 2018 Q2 2018 Sales by Global Business Unit Growth at CER/CS(1) Company Sales €8,176m -2.5% (7) Sanofi Genzyme (Specialty Care) (2) €1,808m +14.1% Sanofi Pasteur (Vaccines) €811m -15.7% Diabetes & Cardiovascula
Slide 7: Diversified Businesses Compensate for Headwinds in Q2
Diversified Businesses Compensate for Headwinds in Q2 Q2 2018 Sales by Franchise (3) Developed 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 €2,071m +13.5% €1,808m +14.1% €263m +10.3% Vaccines €811m -15.7% €482m -
Slide 8: Strong Growth in Specialty Care Driven by Immunology and Hemophilia Products
Strong Growth in Specialty Care Driven by Immunology Franchise and Leading EHL Hemophilia Products in Q2 Global Specialty Care • Immunology franchise sales of €196m driven by Franchise Sales launch execution for Dupixent and Kevzara • Rare Blood Disorder franchise contributed sales of €2,071m €257
Slide 9: Strong Sales Growth for Dupixent and Continued Progress for Kevzara
Strong Sales Growth for Dupixent® and Continued Progress for Kevzara® Monthly NBRx and TRx Share Quarterly Sales Progression (Sales in €m) in IL-6 SC Market(1,2) (U.S. Market) 50% 176 NBRx Non U.S. Sales 40% U.S. Sales 118 30% 107 75 20% TRx 26 10% 0% Q2 Q3 Q4 Q1 Q2 1 2 3 4 5 6 7 8 9 10 11 12 2017 2
Slide 10: Expand Opportunity in Rare Blood Disorders
Significant Progress in Building a Leading Rare Blood Disorder Franchise in Q2 2018 Sanofi Genzyme Rare Blood Disorder Franchise Expand Opportunity in Rare Blood Disorders Other Rare Blood Disorders BIVV003 • IND accepted by U.S. FDA for treatment in sickle cell disease(1) Hemophilia A and B ST-400
Slide 11: Q2 2018 Vaccines Performance Reflects Phasing Effects and Pentaxim Impact in China
Q2 2018 Vaccines Performance Reflects Anticipated Phasing Effects and Impact from Pentaxim® in China Q2 2018 Vaccines Sales Evolution • Vaccines sales of €811m (-15.7% at CER) impacted by high bases of comparison €1,016m -€83m • PPH(1) decline due to public order phasing in EM • Menactra® down due t
Slide 12: U.S. Payer Discussions Ongoing for Praluent; Diabetes Sales Declined in-line with Guidance
U.S. Payer Discussions Ongoing for Praluent® Market Access; Diabetes Sales Declined in-line with Guidance Quarterly Sales Progression • Praluent® sales of €62m (+55% at CER) (Sales in €m) • U.S. sales +28% to €35m, EU sales doubled to €22m • ODYSSEY OUTCOMES(1) data submitted in Q2(2) • Engaging wit
Slide 13: Consumer Healthcare Franchise Delivers Solid Growth in Q2 Led by Emerging Markets
Consumer Healthcare Franchise Delivers Solid Growth in Q2 Led by Emerging Markets Q2 2018 CHC Sales by Geography • CHC franchise sales up +4.1% to €1,115m • Growth demonstrated in all four key categories: Allergy Cough & Cold, Pain, Digestive Health €145m and Nutritionals +2.0% €392m • Emerging Mark
Slide 14: Emerging Markets Generated 31% of Company Sales in Q2 2018
Emerging Markets(1) Generated 31% of Company Sales in Q2 2018 with Solid Growth of +5.2%(2) Geographic Breakdown of Q2 2018 Sales €2,479m €2,342m U.S. €307m €830m EUROPE EURASIA(5) ROW(4) -4.4% +0.1 % +17.3% -0.7% €539m of which AME(6) €993m €648m ASIA(3) €613m -7.4%(7) CHINA LATAM +9.0% +4.5% +11.0
Slide 15: Impact from U.S. Lantus and Sevelamer LoEs Peak in H1 2018
Impact from U.S. Lantus® and Sevelamer LoEs Peak in H1 2018 Ahead of Expected Progressive Growth Recovery H1 2018 Company Sales €17,324m €17,301m +€351m -€719m -0.1% +€345m at CER H1 2017 U.S. Lantus®, Pharma, Rare Blood H1 2018 at CER U.S. sevelamer Vaccines & CHC (1,2) Disorders (3) LoE: Loss of E
Slide 16: Several Potentially Significant Approvals for New Drugs and Indications over Next 12 Months
Several Potentially Significant Approvals for New Drugs and Additional Indications over the Next 12 Months 2018 2019 Q3 Q4 Q1 Q2 Q3 CabliviTM (caplacizumab) in aTTP(1) (EU) Cemiplimab(3,4) in locally advanced CSCC Potential Dupixent®(5) in Asthma in Adults and Adolescents approvals(2) Praluent®(5) O
Slide 17: Financial Results
Jérôme Contamine Executive Vice President, Chief Financial Officer FINANCIAL RESULTS
Slide 18: Currency Impact on Sales and EPS Diminished in Q2
Currency Impact on Sales and EPS Diminished in Q2 and Expected to Continue to Ease Over the Remainder of 2018 Currency Impact Company Sales(1) Business EPS -€508m -€0.11 -€0.08 -5.8% -8.2% Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 2017 2018 2017 2018 (1) Main currency impact on Company Sales in Q2 2018: US Doll
Slide 19: Business EPS Growth at CER Benefited from Improved Gross Margin and Lower Tax Rate
Business EPS Growth at CER Benefited from Improved Gross Margin and Lower Tax Rate in Q2 2018 €m Q2 2018 Q2 2017 (1) % Change % Change (reported €) (CER) Net Sales 8,176 8,671 -5.7% +0.1% Gross Profit 5,830 6,143 -5.1% +0.9% Gross Profit margin % 71.3% 70.8% - - Business Operating Income 2,092 2,297
Slide 20: BOI Evolution Driven Primarily by U.S. LoEs and Investments in Growth Drivers
BOI Evolution Driven Primarily by U.S. LoEs and Investments in Growth Drivers €m Q2 2018 Q2 2017 (1) % Change (CER) Net Sales 8,176 8,671 +0.1% Other revenues 305 270 +21.1% Gross Profit 5,830 6,143 +0.9% Gross margin % 71.3% 70.8% R&D (1,475) (1,358) +13.1% SG&A (2,499) (2,572) +2.7% Other current
Slide 21: Q2 2018 Gross Margin Improved while Late Stage Pipeline Investments Accelerated
Q2 2018 Gross Margin Improved due to Favorable Product Mix while Investments in Late Stage Pipeline Accelerated Gross Margin Ratio(1) Operating Expenses €3,974m 70.8% 71.3%(2) €3,930m +6.3% at CER(4) €1,358m €1,475m 71.7% +13.1% at CER R&D €2,572m €2,499m +2.7% at CER SG&A (3) (3) Q2 2017 Q2 2018 Q2
Slide 22: Net Debt Evolution in H1 2018
Net Debt Evolution in H1 2018(1) €545m €3,773m €711m €414m €21,278m €12,460m €1,854m €5,229m Net Debt Free cash flow Acquisitions Restructuring Net Share Dividend Other Net Debt Dec 31, 2017 & Licences(2) costs & repurchase & June 30, 2018 similar items share issuance (1) Credit ratings reaffirmed:
Slide 23: FY 2018 Financial Guidance Confirms Return to Growth
FY 2018 Financial Guidance Confirms Return to Growth FY 2018 Business EPS +3% to +5% at CER(1,2) Approximately -6%(3) FX impact on Business EPS based on July 2018 average exchange rates (1) Compared to FY2017 and barring major unforeseen adverse events (2) FY 2017 Business EPS was €5.52 when applyin
Slide 24: Closing Remarks
Olivier Brandicourt Chief Executive Officer CLOSING REMARKS
Slide 25: Progress in H1 2018 Advances Sanofi to New Growth Phase Beginning in Second Half
Progress in H1 2018 Advances Sanofi to New Growth Phase Beginning in Second Half 1• Q2 performance in line with expectations 2• Impact from LoEs in the U.S. peaked in Q2 3• Dupixent® growth trajectory on track 4• Progress in building leadership in rare blood disorders 5• FY 2018 Business EPS guidanc
Slide 26: Appendices: Finance
APPENDICES FINANCE
Slide 27: 2018 Currency Sensitivity and Q2 2018 Currency Exposure
2018 Currency Sensitivity and Q2 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: Business Net Income Statement – Q2 2018
Business Net Income Statement – Q2 2018 Second Quarter 2018 Pharmaceuticals Consumer Healthcare Vaccines Others (2) Total Group € million Q2 2018 Q2 2017 (1) Change Q2 2018 Q2 2017 (1) Change Q2 2018 Q2 2017 (1) Change Q2 2018 Q2 2017 (1) Change Q2 2018 Q2 2017 (1) Change Net sales 6,250 6,499 (3.8%
Slide 29: Business Net Income Statement – H1 2018
Business Net Income Statement – H1 2018 First Half 2018 Pharmaceuticals Consumer Healthcare Vaccines Others (2) Total Group € million H1 2018 H1 2017 (1) Change H1 2018 H1 2017 (1) Change H1 2018 H1 2017 (1) Change H1 2018 H1 2017 (1) Change H1 2018 H1 2017 (1) Change Net sales 12,199 13,038 (6.4%)
Slide 30: Consolidated Income Statements
Consolidated Income Statements € million Q2 2018 Q2 2017 (1) H1 2018 H1 2017 (1) Net sales 8,176 8,671 16,074 17,324 Other revenues 305 270 533 519 Cost of sales (2,720) (2,886) (5,265) (5,671) Gross profit 5,761 6,055 11,342 12,172 Research and development expenses (1,475) (1,358) (2,755) (2,667) S
Slide 31: Reconciliation to Business Net Income – Q2 2018
Reconciliation of Consolidated Net Income Attributable to Equity Holders of Sanofi to Business Net Income – Q2 2018 € million Q2 2018 Q2 2017 (1) Change Net income attributable to equity holders of Sanofi 762 1,033 (26.3%) Amortization of intangible assets (2) 541 487 Impairment of intangible assets
Slide 32: Reconciliation to Business Net Income – H1 2018
Reconciliation of Consolidated Net Income Attributable to Equity Holders of Sanofi to Business Net Income – H1 2018 € million H1 2018 H1 2017 (1) Change Net income attributable to equity holders of Sanofi 1,778 6,729 (73.6%) Amortization of intangible assets (2) 999 990 Impairment of intangible asse
Slide 33: Change in Net Debt
Change in Net Debt € million H1 2018 H1 2017(1) Business net income 3,156 3,482 Depreciation, amortization and impairment of property, plant and equipment and software 591 604 Gains and losses on disposals of non-current assets, net of tax (216) (79) Other non cash items 151 167 Operating cash flow
Slide 34: Simplified Consolidated Balance Sheet – H1 2018
Simplified Consolidated Balance Sheet – H1 2018 ASSETS Jun 30, Dec 31, LIABILITIES & EQUITY Jun 30, Dec 31, € million 2018 2017(1) € million 2018 2017(1) Equity attributable to equity holders of Sanofi 56,197 58,070 Equity attributable to non-controlling interests 164 169 Total equity 56,361 58,239
Slide 35: Appendices: Research & Development
APPENDICES RESEARCH & DEVELOPMENT
Slide 36: R&D Pipeline – New Molecular Entities
R&D Pipeline – New Molecular Entities(*) Phase 1 Phase 2 Phase 3 Registration (Total:16) (Total:13) (Total:8) (Total:3) SAR439794 SAR228810 SAR440340(**) ST400(8) isatuximab cemiplimab(**) TLR4 agonist Anti-protofibrillar AB mAb Anti-IL33 mAb ZFN Gene Editing Technology Anti-CD38 mAb PD-1 inhibitor
Slide 37: Additional Indications
Additional Indications(*) Phase 1 Phase 2 Phase 3 Registration (Total:6) (Total:16) (Total:20) (Total:5) SAR439459 + cemiplimab(**) dupilumab(**) cemiplimab(**) dupilumab(**) isatuximab dupilumab(**) Anti-TGFb mAb + PD-1 inhibitor mAb Anti-IL4Rα mAb PD-1 inhibitor mAb Anti-IL4Rα mAb Anti-CD38 mAb An
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 ASD(4) Systemic S
Slide 39: Pipeline Movements Since Q1 2018
Pipeline Movements Since Q1 2018 Additions Removals CabliviTM Bivalent anti-vWF Nanobody acquired Thrombotic Thrombocytopenic Purpura (EU) Registration Praluent®(**) alirocumab CV events reduction (U.S.(1)/EU) mavacamten(2)(**) ZynquistaTM(**) Myosin inhibitor SGLT 1 & 2 inhibitor Obstructive Hypert
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 5 1 17 Oncology 11 4 7 1 23 Rare Diseases 0 4 3 0 7 Rare Blood Disorders 2 1 2 1 6 Multiple Sclerosis and 3 2 2 0 7 Neurology Diabetes 1 1 4 1 7 Cardiovascular Diseases 2 2 2 1 7 Vaccines 2 5
Slide 41: Expected R&D Milestones
Expected R&D Milestones Products Expected milestones Timing Praluent® U.S. sBLA filing to include ODYSSEY OUTCOMES results(1) Q3 2018 isatuximab Start of Phase 3 in 1st line Multiple Myeloma in SCT eligible patients (GMMG) Q3 2018 CabliviTM (caplacizumab) U.S. FDA filing in acquired Thrombotic Throm