Sanofi Sa · EURONEXT:SAN
Sanofi Sa — Q2 2017 Earnings Presentation
42 slides from Sanofi Sa's earnings presentation, Jul 31, 2017
Slide 1: Q2 2017 Results
Q2 2017 Results July 31, 2017 SANOFI
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 Launching our Immunology Franchise ● Bill Sibold - Executive Vice President, Sanofi Genzyme Advances in our Specialty Care Pipeline ● Elias Zerhouni - President, Global R&D Financial Results ● Jérôme Contamine - Executive Vice Pre
Slide 4: Key Highlights
KEY HIGHLIGHTS Olivier Brandicourt Chief Executive Officer 4
Slide 5: Q2 2017 Sales Performance Consistent with Expectations
Q2 2017 Sales Performance Consistent with Expectations Company Sales €76m €8,663m €50m €394m €8,537m +0.6% at CER/CS(4) €8,143m (1) Q2 2016 BI CHC / SPMSD Q2 2016 Sales (3) Fx Q2 2017 CS (2) (1) Primarily includes SPMSD (€47m) and BI CHC (€371m on a Full Sales recognition basis; €348m when adjusting
Slide 6: Q2 2017 Financial Results Benefit from Simplification; Raised 2017 Guidance
Q2 2017 Financial Results Benefit from Simplification; H1 Performance Allows for Raised 2017 Guidance Company Sales Business EPS €8,663m €1.31 €1.35 €8,143m +5.5% +1.5% at CER at CER Q2 2016 Q2 2017 Q2 2016 Q2 2017 Business EPS grew +2.7% at CER in H1 2017 CER : Constant Exchange Rates 6
Slide 7: Strong Performance for Specialty Care and Vaccines, Offset by U.S. Diabetes Decline
Strong Performance in Q2 2017 for Specialty Care and Vaccines, Offset by Anticipated U.S. Diabetes Decline Q2 2017 Sales by Global Business Unit Growth at CER/CS(1) Company Sales €8,663m +0.6% (2) Sanofi Genzyme (Specialty Care) €1,439m +14.4% (3) Sanofi Pasteur (Vaccines) €1,016m +19.2% €1,386m (2)
Slide 8: Emerging Markets Supported Growth While Developed Markets Faced Headwinds
Emerging Markets Supported Growth While Developed Markets Faced Some Headwinds in Q2 2017 Q2 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 €1,711m +13.6% €1,439m +14.4% €272m +9.7% Vaccine
Slide 9: Sanofi Genzyme Delivered Double-Digit Growth and Launched Immunology Franchise
Sanofi Genzyme Delivered Double-Digit Growth and Launched an Immunology Franchise Global Specialty Care ● Specialty Care franchise up +14% with all Franchise Sales franchises growing across both Emerging and Developed markets €1,711m €1,493m ● Rare Disease Franchise increases +5.9% €752m ● Myozyme
Slide 10: Double-Digit Vaccines Growth Driven by Pediatric Combination and Menactra
Double-Digit Vaccines Growth in Q2 Driven by Pediatric Combination Strategy and Menactra Sanofi Pasteur Sales ● Q2 2017 Vaccines sales up +19% at €1,016m CER/CS(3) ● Pediatric combo(1) franchise up +31% €844m ● Menactra sales up +41% at CER, driven by +19.2% U.S. CDC(2) stocking at CER/ CS ● Europ
Slide 11: Accelerated Decline in Diabetes Sales Partially Mitigated by Toujeo
Accelerated Decline in Diabetes Sales Partially Mitigated by Toujeo Toujeo Market Share(1) ● Diabetes sales declined -12% at CER driven by Top EU Countries, Japan, the U.S. and Other anticipated U.S. challenges ● U.S. diabetes sales decline (-19% in H1 2017) 20% expected to accelerate in H2 2017 1
Slide 12: CHC Sales Stable in Q2 2017 as Seasonality Impacted Growth
CHC Sales Stable in Q2 2017 as Seasonality Impacted Growth Q2 2017 Global CHC Sales at CER/CS ● CHC sales stable at CER/CS(1) ● Europe was down -7.8% due to strong and early cough and cold season(2) €202m ● U.S. sales increased +2.5% +2.6% €255m -1.6% ● Emerging Markets up +4.6% with all core catego
Slide 13: Emerging Markets Continue Strong Growth With China Up Double Digits
Emerging Markets(1) Continue Strong Growth With China Sales Increasing Double Digits(2) €2,350m €2,798m EUROPE €312m €886m U.S. -1.0% EURASIA(4) ROW(3) -2.7% +15.2% -1.1% €934m €626m ASIA AME(5) +10.0% €729m +1.4% LATAM +3.9% Emerging Markets(1) grew +6.6% at CER/CS All growth at CER/CS unless speci
Slide 14: Launching Our Immunology Franchise
LAUNCHING OUR IMMUNOLOGY FRANCHISE Bill Sibold Executive Vice President, Sanofi Genzyme 14
Slide 15: Strong Dupixent Launch Driven by Patient Need and Initial Market Access
Strong Launch Driven by High Patient Need, HCP Engagement and Initial Market Access Dupixent Weekly TRx ● U.S. prescriptions trending ahead of other since launch(2) recently launched dermatology biologics 1 800 ● Over 5,100 prescribers since launch(1) 1 600 ● Cumulatively over 13,000 patients presc
Slide 16: Kevzara: Positioned to Grow IL-6 Class
Positioned to Grow IL-6 Class and Benefit from Evolving RA(1) Treatment Paradigm Consistent Efficacy Data ● Launch underway in the U.S. and now in MTX-IR and TNF-IR patients % of patients achieving ACR20/50/70 at week 24 approved in Europe 66.4% ● U.S. product label includes: 58.0% MOBILITY MTX-IR(3
Slide 17: Advances in Our Specialty Care Pipeline
ADVANCES IN OUR SPECIALTY CARE PIPELINE Elias Zerhouni President, Global R&D 17
Slide 18: SAR439684 (PD-1 inhibitor): Registrational Phase 2 Underway in CSCC
SAR439684 (PD-1 inhibitor): Registrational Phase 2 Underway Supported by Positive Early Results in CSCC PD-1 (SAR439864) ORR ● PD-1 (SAR439684) positive Phase 1 in Phase 1 CSCC(8) study results in advanced CSCC(1) ● 46.2% ORR(2) and 69.2% DCR(3) Percent change in target lesions from baseline ● Gener
Slide 19: Fitusiran: Positive Phase 2 OLE Data and ATLAS Program Initiated
Fitusiran – Positive Phase 2 data and Phase 3 ATLAS Program Initiated Summary of Median ABRs(4) ● Phase 2 OLE(1) study results with fitusiran 12 for Hemophilia A and B patients with and Patients without without inhibitors Inhibitors ● 48% of patients bleed-free ● 67% of patients reported no 2 1.7 sp
Slide 20: Financial Results
FINANCIAL RESULTS Jérôme Contamine Executive Vice President, Chief Financial Officer 20
Slide 21: Currency Tailwind Diminishes in Q2 2017
Currency Tailwind Diminishes in Q2 2017 Currency Impact Company Sales(1) Business EPS +3.0% +2.5% +€0.04 +€194m +1.6% +0.9% +€0.02 -€10m +€76m -€83m -0.1% -€0.02 -1.0% -1.2% -€0.04 -3.1% -€0.07 +€0.05 -€353m -5.0% -4.2% Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 2016 2017 2016 2017 (1) Main currency impact on Co
Slide 22: Q2 2017 Operating Margin Improvement Offset Structure Change and Higher Tax
Q2 2017 Operating Margin Improvement More than Offset Change of Structure and Higher Tax Rate €m Q2 2017 Q2 2016 % Change % Change (reported €) (CER) Net Sales 8,663 8,143 +6.4% +5.5% Gross Profit 6,136 5,785 +6.1% +4.9% Business Operating Income 2,299 2,093 +9.8% +8.5% Business operating margin 26.
Slide 23: Quarterly Performance Benefits from More Focused Organization
Quarterly Performance Continues to Benefit from Sanofi’s More Focused Organization (1) €m Q2 2017 Q2 2016 CS % Change (CER/CS) Net Sales 8,663 8,537 +0.6% Other revenues 270 160 +66.3% Gross Profit 6,136 6,055 +0.3% R&D (1,358) (1,304) +3.1% SG&A (2,568) (2,566) -0.9% Other current operating income
Slide 24: Q2 2017 Gross Margin Broadly Stable With Disciplined Expense Management
Q2 2017 Gross Margin Broadly Stable With Disciplined Expense Management Gross Margin Ratio(1) Operating Expenses €3,926m 70.9% 70.8% +0.5% at CER/CS(2) €3,870m €1,358m 71.7% €1,304m +3.1% at R&D CER/CS €2,568m €2,566m -0.9% at SG&A CER/CS Q2 2016 Q2 2017 Q2 2016 Q2 2017 CS(3) CS(3) Investing in our
Slide 25: Net Debt Evolution in H1 2017
Net Debt Evolution in H1 2017 Net Debt -€246m FCF -€350m €2,987m €2,299m -€1,599m -€688m €4,349m -€3,710m €8,206m €7,463m (1) (4) (1) Net Debt Net Cash from CapEx Net Share Acquisitions, Net cash from Dividend Other Net Debt Dec 31, 2016 Operating Repurchase Licensing, Net CHC/Merial Jun 30, 2017 Ac
Slide 26: Raising Business EPS Guidance at CER for H1 2017 Performance
Raising Business EPS Guidance at CER for H1 2017 Performance FY 2017 Business EPS Broadly Stable at CER(1,2) FX impact on Business EPS +1%(3) based on June 2017 average exchange rates (1) Compared to FY2016 and barring major unforeseen adverse events (2) FY 2016 Business EPS of €5.68 (3) Difference
Slide 27: Closing Remarks
CLOSING REMARKS Olivier Brandicourt Chief Executive Officer 27
Slide 28: Executing on our 2020 Strategic Roadmap
Executing on our 2020 Strategic Roadmap 1 FY guidance raised on solid H1 financials 2 Focused organization driving performance and expense discipline 3 Managing challenging U.S. payer environment in diabetes 4 Strong Dupixent launch 5 Investing in R&D and advancing innovation platforms 28
Slide 29: Q&A Session
Q&A SESSION SANOFI x
Slide 30: Appendices: R&D Pipeline
APPENDICES R&D PIPELINE SANOFI x
Slide 31: R&D Pipeline – Pharma & Vaccines
R&D Pipeline – Pharma & Vaccines Phase 1 Phase 2 Phase 3 Registration SAR440340 N SAR438335 N dupilumab efpeglenatiden N dupilumab Dupixent Anti-IL33 mAb GLP-1R/GIPR dual agonist Anti-IL4Rα mAb Long-acting GLP-1 receptor agonist Anti-IL4Rα mAb Anti-IL4Rα mAb Asthma & COPD Type 2 diabetes Eosinophil
Slide 32: R&D Pipeline Summary Table
R&D Pipeline Summary Table(1) Phase 1 Phase 2 Phase 3 Registration TOTAL Oncology 3 1 2 0 6 Diabetes 2 2 1 1 6 Cardiovascular Diseases 3 1 0 0 4 Immuno-inflammation 2 3 0 0 5 31 Infectious Diseases 0 1 0 0 1 Rare Diseases 0 2 3 0 5 Multiple Sclerosis, Neurology, Ophthalmology 3 1 0 0 4 Vaccines 3 7
Slide 33: Expected R&D Milestones
Expected R&D Milestones Products Expected milestones Timing Dupixent® Start of Phase 3 trial in Atopic Dermatitis in 6-11 year-olds Q3 2017 Fluzone QIV HD Start of Phase 3 trial Q3 2017 VaxiGrip® QIV IM (6-35 months) EU regulatory submission Q3 2017 patisiran Phase 3 results in Hereditary ATTR amylo
Slide 34: Appendices: Finance
APPENDICES FINANCE SANOFI x
Slide 35: 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 36: Business Net Income Statement – Q2 2017
Business Net Income Statement Second quarter 2017 Pharmaceuticals Vaccines Others Total Group € million Q2 2017 Q2 2016 Change Q2 2017 Q2 2016 Change Q2 2017 Q2 2016 Q2 2017 Q2 2016 Change Net sales 7,647 7,346 4.1% 1,016 797 27.5% 8,663 8,143 6.4% Other revenues 73 68 7.4% 197 97 103.1% 270 165 63.
Slide 37: Business Net Income Statement – H1 2017
Business Net Income Statement First half 2017 Pharmaceuticals Vaccines Others Total Group € million H1 2017 H1 2016 Change H1 2017 H1 2016 Change H1 2017 H1 2016 H1 2017 H1 2016 Change Net sales 15,511 14,504 6.9% 1,800 1,422 26.6% 17,311 15,926 8.7% Other revenues 149 122 22.1% 370 188 96.8% 519 31
Slide 38: Consolidated Income Statements
Consolidated Income Statements € million Q2 2017 (1) Q2 2016 (1) H1 2017 (1) H1 2016 (1) Net sales 8,663 8,143 17,311 15,926 Other revenues 270 165 519 310 Cost of sales (2,885) (2,523) (5,670) (4,970) Gross profit 6,048 5,785 12,160 11,266 Research and development expenses (1,358) (1,279) (2,667) (
Slide 39: Reconciliation of Net Income to Business Net Income – Q2
Reconciliation of Consolidated Net Income Attributable to Equity Holders of Sanofi to Business Net Income € million Q2 2017 Q2 2016 Change Net income attributable to equity holders of Sanofi 1,037 1,158 (10.4%) (1) Amortization of intangible assets 487 433 Impairment of intangible assets 12 52 Fair
Slide 40: Reconciliation of Net Income to Business Net Income – H1
Reconciliation of Consolidated Net Income Attributable to Equity Holders of Sanofi to Business Net Income € million H1 2017 H1 2016 Change Net income attributable to equity holders of Sanofi 6,738 2,245 200.1% (1) Amortization of intangible assets 990 877 Impairment of intangible assets 12 52 Fair v
Slide 41: Cash Flow Statements
Cash Flow Statements € million H1 2017 H1 2016 Business net income 3,491 3,402 Depreciation, amortization and impairment of property, plant and equipment and software 604 600 Gains and losses on disposals of non-current assets, net of tax (79) (27) Other non cash items 156 (324) Operating cash flow
Slide 42: Balance Sheets
Balance Sheets ASSETS LIABILITIES & EQUITY 06/30/17 12/31/16 06/30/17 12/31/16 € million € million Equity attributable to equity holders of Sanofi 57,631 57,554 Equity attributable to non-controlling interests 161 170 Total equity 57,792 57,724 Long-term debt 15,186 16,815 Non-current liabilities re