Sanofi Sa · EURONEXT:SAN
Sanofi Sa — Q3 2016 Earnings Presentation
38 slides from Sanofi Sa's earnings presentation, Oct 28, 2016
Slide 1: Q3 2016 Results
Q3 2016 RESULTS October 28, 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 Key Highlights ● Olivier Brandicourt - Chief Executive Officer Update on Diabetes and Cardiovascular ● Peter Guenter - Executive Vice President, Diabetes & Cardiovascular Financial Results ● Jérôme Contamine - Executive Vice President, Chief Financial Officer Q&A Session ● Olivier Charmeil -
Slide 4: Key Highlights
KEY HIGHLIGHTS Olivier Brandicourt Chief Executive Officer 4
Slide 5: 2020 Strategic Roadmap Progress
2020 Strategic Roadmap Progress 1 ● Q3 2016 Sales up +3.0% and Business EPS up +12.4% at CER(1) ● Focused organization contributed to strong financial performance Financial ● Cost savings expected to be at least €1.5bn by 2018 ● Raising 2016 guidance: +3% to +5% Business EPS growth at CER ● Initiati
Slide 6: New Simplified GBU Structure Begins to Deliver Financial Benefits
New Simplified GBU Structure Begins to Deliver Financial Benefits Aggregate(1) Company Sales Business EPS -€0.02 -€90m €1.79 €9,652m +€0.20 +€287m €1.61 €9,455m +3.0% +12.4% at CER(3,4) at CER(3,4) (2) Q3 2015 Incremental FX Q3 2016 Q3 2015 Incremental FX Q3 2016 Sales at CER Impact EPS at CER Impac
Slide 7: Sanofi Genzyme and Vaccines Remain Growth Drivers While DCV and GEM Improve
Sanofi Genzyme and Vaccines Remain Growth Drivers While DCV(1) and GEM(2) Improve Sequentially Q3 2016 Aggregate Sales by Global Business Unit Growth at CER Company Aggregate Sales €9,652m +3.0% (1) Sanofi Genzyme (Specialty Care) €1,270m +16.9% (1) Diabetes & Cardiovascular €1,585m -2.5% (2,3) Gene
Slide 8: Emerging Markets Growth in Q3 2016 Supported by Diabetes, Specialty Care and Vaccines
Emerging Markets Growth in Q3 2016 Supported by Diabetes, Specialty Care and Vaccines Q3 2016 Aggregate Sales by Franchise Developed Markets Emerging Markets Total Growth Sales at CER Sales Growth Sales Growth Specialty Care €1,517m +18.5% €1,270m +16.9% €247m +26.5% (1) Diabetes & Cardiovascular €1
Slide 9: Significant Contribution from New Products More than Offset Lantus Sales Decline in 9M 2016
Significant Contribution from New Products More than Offset Lantus® Sales Decline in 9M 2016 9M 2016 Aggregate Sales -€499m +€1,130m -€718m €27,763m €27,433m +€417m +1.2% at CER 9M 2015 Rest of New Lantus® (2) Plavix® Japan 9M 2016 (3) (1,3) Portfolio Products & Venezuela at CER (1) Includes Aubagio
Slide 10: Specialty Care Continues to be an Important Growth Engine for Sanofi
Specialty Care Continues to be an Important Growth Engine for Sanofi Global Specialty Care ● Multiple Sclerosis franchise annualizing Franchise Sales at €1.8bn ● Aubagio® sales up +49.8% to €334m €1,517m ● Lemtrada® sales reached €112m €1,299m ● Positive 6-year data from the extension study €708m +1
Slide 11: Vaccines Growth Boosted by Early Flu Vaccine Shipment
Vaccines Growth Boosted by Early Flu Vaccine Shipment Sanofi Pasteur Sales(1) ● Flu vaccine franchise up 34.6% due to early U.S. shipments and benefits from €1,803m differentiation strategy €1,581m ● 52m doses shipped in the U.S. in Q3 2016 vs +14.4% 43m doses in Q3 2015 +4.9% at CER ● Expect to del
Slide 12: Global Diabetes and Cardiovascular Franchise Stable Despite U.S. Diabetes Pricing Pressure
Global Diabetes and Cardiovascular Franchise Stable Despite U.S. Diabetes Pricing Pressure Toujeo Market Share(2) ● Global Diabetes sales declined -1.5% Top EU Countries, Japan and the U.S. at CER in Q3 2016 to €1,805m ● U.S. sales declined -5.4% 15% ● EU sales stable ● Emerging Markets sales up +1
Slide 13: Q3 CHC Franchise Stable at CER and Constant Structure
Q3 CHC Franchise Stable at CER and Constant Structure(1,2) CHC Market Share(7) ● Developed Markets up 2.6%(3) MAT(8) June 2016 (Growth in €) ● U.S. sales (+3.3%) despite mildest allergy season in the last four years ● Europe up +1.0%(4) GSK (+8.2%) Bayer (+1.4%) + (+3.7%) 4.4% ● Emerging Markets dow
Slide 14: Established Products in Developed Markets Impacted by Plavix LoE in Japan and Auvi-Q
Established Products in Developed Markets Impacted by Plavix® LoE in Japan and Auvi-Q® Impact EP Sales by Market ● Developed Markets: €2,535m / -7.4%(2,3) at CER ● Impacted by Plavix LoE in Japan(1) and high comparison base with Auvi-Q in the U.S. Developed Emerging Markets Markets (4) €1,587m €94
Slide 15: Solid Growth in Emerging Markets in Q3 2016
Solid Growth in Emerging Markets in Q3 2016 €2,264m €4,001m EUROPE €251m €839m U.S. -0.5% EURASIA(3) ROW(2) +7.0% -1.1% -12.2% €853m €699m ASIA AMESA(4) +4.0% €714m +8.1% LATAM +8.5% Emerging Markets(1) account for 26% of Company Sales and grew +5.6% to €2,548m All Growth at Constant Exchange Rates
Slide 16: Potential Important Regulatory Approvals in the Next 12 Months
Potential Important Regulatory Approvals for Dengvaxia®, LixiLan, Sarilumab and Dupilumab in the Next 12 Months Expected Regulatory Decisions Q3 Q4 Q1 Q2 ● Dengvaxia® in endemic countries ● LixiLan in Diabetes (U.S.) ● Sarilumab in Rheumatoid Arthritis (U.S.) ● Dupixent®(1) in Atopic Dermatitis
Slide 17: Update on Diabetes and Cardiovascular
UPDATE ON DIABETES AND CARDIOVASCULAR Peter Guenter Executive Vice President, Diabetes & Cardiovascular 17
Slide 18: Glargine Franchise 2017 U.S. Formulary Status Update
Glargine Franchise 2017 U.S. Formulary Status Update Payer Coverage U.S. Commercial and Medicare Part D (as % of Lives covered(1,2)) 99% 13% 90% 15% 23% 15% 19% Commercial - Decision pending 17% 86% 68%(3) Commercial - Non-Preferred 67% 66% 48% 49% Commercial - Preferred 95% 94% 2% 89% 88% 2% 4% 4%
Slide 19: Unlocking the Value of Innovation
- Unlocking the Value of Innovation Detailing Appropriate Patient Profiles(4) ● Praluent® U.S. TRx sequentially increased 60% in Q3 2016 ● New U.S. educational campaign provides tools to support HCPs: ● 1 Patient identification assistance MI and coronary revascularization ● 2 Guide to determine Util
Slide 20: Financial Results
FINANCIAL RESULTS Jérôme Contamine Executive Vice President, Chief Financial Officer 20
Slide 21: Q3 2016 Delivers Sales Growth and Operating Leverage
Q3 2016 Delivers Sales Growth and Operating Leverage (1) % Change % Change €m Q3 2016 Q3 2015 (reported €) (CER) Aggregate Company sales 9,652 9,455 +2.1% +3.0% Aggregate Other revenues 276 225 +22.7% +24.0% Aggregate Gross profit 6,933 6,682 +3.8% +4.6% Aggregate R&D (1,267) (1,355) -6.5% -6.4% Agg
Slide 22: Cost Saving Program Contributes to Margin Improvement in Q3 2016
Cost Saving Program Contributes to Margin Improvement in Q3 2016 Aggregate Gross Margin(1) Aggregate Operating Expenses €3,756m 71.8% €3,816m -1.1% at CER 70.7%(2) R&D €1,355m €1,267m -6.4% at CER SG&A €2,461m €2,489m +1.8% at CER Q3 2015 Q3 2016 Q3 2015 Q3 2016 (1) Gross Margin is calculated as the
Slide 23: Currency Headwind Begins to Ease
Currency Headwind Begins to Ease Currency Impact Aggregate Company Sales(1,2) Business EPS +7.1% +5.6% +€487m +€0.10 +3.7% +€332m +3.4% +€0.05 Q1 2016 Q2 2016 Q3 2016 Q3 2015 Q4 2015 -€90m Q1 2016 Q2 2016 Q3 2016 -0.9% Q3 2015 Q4 2015 -€0.02 -€228m -2.6% -1.2% -€382m -€0.05 -4.1% -3.8% -€0.07 -5.0%
Slide 24: Sanofi Financial Flexibility Remains Strong with Net Debt Down
Sanofi Financial Flexibility Remains Strong with Q3 2016 Net Debt Down Over Q3 2015(1) Net Debt -€526m -€3,759m €5,833m €8,905m -€724m €7,254m FCF -€1,403m €4,761m -€1,072m Net Debt (2) Net Cash from CapEx Share Acquisitions, Dividends Other (5) Net Debt (2) Dec 31, 2015 Operating Repurchase Licensi
Slide 25: Closing Remarks
CLOSING REMARKS Olivier Brandicourt Chief Executive Officer 25
Slide 26: Raising FY 2016 Business EPS Guidance
Raising FY 2016 Business EPS Guidance FY 2016 Business EPS Growth Around +3% to +5% at CER(1,2) FX impact on FY 2016 Business EPS Around -4%(3) based on Sept 2016 average exchange rates (1) Barring major unforeseen adverse events (2) FY 2015 Business EPS of €5.64 (3) Difference between variation on
Slide 27: Q&A Session
Q&A SESSION 27
Slide 28: Appendices: R&D Pipeline
APPENDICES R&D Pipeline 28
Slide 29: R&D Pipeline – Pharma & Vaccines
R&D Pipeline – Pharma & Vaccines Phase I Phase II Phase III Registration N fitusiran (ALN-AT3) N dupilumab GZ402671 N dupilumab N sarilumab N SAR440340 / REGN3500 Anti-IL4Rα mAb siRNA targeting Anti-Thrombin Nasal polyposis; Oral GCS inhibitor Anti-IL4Rα mAb Anti-IL6R mAb Immuno-Inflammation Hemophi
Slide 30: R&D Pipeline Summary Table
R&D Pipeline Summary Table(1) Phase I Phase II Phase III Registration TOTAL Oncology 3 2 0 0 5 Diabetes 3 1 1 2 7 Cardiovascular Diseases 3 1 0 0 4 Immuno-inflammation 1 3 0 2 6 33 Infectious Diseases 0 1 0 0 1 Rare Diseases 3 2 1 0 6 Multiple Sclerosis, Neurology, Ophthalmology 3 1 0 0 4 Vaccines 1
Slide 31: Expected R&D Milestones
Expected R&D Milestones Product Event Timing Dengvaxia® Expected regulatory decisions in endemic countries Throughout 2016 NeoGAA (GZ402666) Expected start of Phase III trial in Pompe Disease Q4 2016 LixiLan Expected U.S. regulatory decision in Type 2 Diabetes Q4 2016 sarilumab Expected U.S. regulat
Slide 32: Appendices: Finance
APPENDICES FINANCE SANOFI \%
Slide 33: 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 34: Business Net Income Statement
Business Net Income Statement Nine Months 2016 Pharmaceuticals Vaccines Others Total Group Animal Health(1) Total: aggregate basis(2) € million 9M 2016 9M 2015 Change 9M 2016 9M 2015 Change 9M 2016 9M 2015 9M 2016 9M 2015 9M 2016 9M 2015 Change 9M 2016 9M 2015 Change Net sales 21,729 22,522 (3.5%) 3
Slide 35: Business Net Income Statement
Business Net Income Statement Third Quarter 2016 Pharmaceuticals Vaccines Others Total Group Animal Health(1) Total: aggregate basis(2) € million Q3 2016 Q3 2015 Change Q3 2016 Q3 2015 Change Q3 2016 Q3 2015 Q3 2016 Q3 2015 Q3 2016 Q3 2015 Change Q3 2016 Q3 2015 Change Net sales 7,225 7,267 (0.6%) 1
Slide 36: Reconciliation of Business Net Income to Consolidated Net Income
Reconciliation of Business Net Income to Consolidated Net Income Attributable to Equity Holders of Sanofi € million Q3 2016(1) Q3 2015(1) Change Business net income 2,300 2,096 9.7% Amortization of intangible assets(2) (403) (454) Impairment of intangible assets (21) (206) Fair value remeasurement o
Slide 37: Reconciliation of Business Net Income to Consolidated Net Income
Reconciliation of Business Net Income to Consolidated Net Income Attributable to Equity Holders of Sanofi € million 9M 2016(1) 9M 2015(1) Change Business net income 5,702 5,662 0.7% Amortization of intangible assets(2) (1,280) (1,442) Impairment of intangible assets (73) (234) Fair value remeasureme
Slide 38: Consolidated Income Statements
Consolidated Income Statements € million Q3 2016(1) Q3 2015(1)(2) 9M 2016(1) 9M 2015(1)(2) Net sales 9,028 8,848 24,954 25,477 Other revenues 267 213 577 566 Cost of sales (2,776) (2,786) (7,746) (8,054) Gross profit 6,519 6,275 17,785 17,989 Research and development expenses (1,221) (1,313) (3,735)