Post on 15-Jul-2015
May 4, 2015
GENERAL MEETING
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 theirunderlying assumptions, statements regarding plans, objectives, intentions and expectations with respect to future financial results, events,operations, services, product development and potential, and statements regarding future performance. Forward-looking statements aregenerally identified by the words "expects", "anticipates", "believes", "intends", "estimates", "plans" and similar expressions. Although Sanofi'smanagement believes that the expectations reflected in such forward-looking statements are reasonable, investors are cautioned thatforward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generallybeyond the control of Sanofi, that could cause actual results and developments to differ materially from those expressed in, or implied orprojected by, the forward-looking information and statements. These risks and uncertainties include among other things, the uncertaintiesinherent in research and development, future clinical data and analysis, including post marketing, decisions by regulatory authorities, such asthe FDA or the EMA, regarding whether and when to approve any drug, device or biological application that may be filed for any such productcandidates as well as their decisions regarding labeling and other matters that could affect the availability or commercial potential of suchproduct candidates, the absence of guarantee that the product candidates if approved will be commercially successful, the future approvaland commercial success of therapeutic alternatives, the Group's ability to benefit from external growth opportunities, trends in exchange ratesand prevailing interest rates, the impact of cost containment policies and subsequent changes thereto, the average number of sharesoutstanding as well as those discussed or identified in the public filings with the SEC and the AMF made by Sanofi, including those listedunder "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements" in Sanofi's annual report on Form 20-F for the yearended December 31, 2014. Other than as required by applicable law, Sanofi does not undertake any obligation to update or revise anyforward-looking information or statements.
2
Agenda
2014 Results & PerformanceJérôme Contamine, Executive Vice President, Chief Financial Officer
3
Introduction & GovernanceSerge Weinberg, Chairman of the Board of Directors
Compensation PolicyGérard Van Kemmel, Director, Compensation Committee
Progress in Research & DevelopmentElias Zerhouni, President, Global R&D
Questions & Answers
Vote on the resolutions
Priorities & LaunchesOlivier Brandicourt, Chief Executive Officer
Introduction & GovernanceSerge Weinberg
Chairman of the Board of Directors
An Independent, Diversified and Renewed Board
14 Directors16 Directors
5
Current Board Composition Proposed Board Composition
A majority of independent Directors (11 out of 16)
Recent arrival of Bonnie Bassler and Olivier Brandicourt
5 non-French Directors (31%)
No over-boarding, for increased attendance and involvement
A Board renewed over the past few years
International
Widely independant (10 out of 14)
Gender balanced (36% of women)
A smaller Board
Expertise in the scientific and pharmaceutical field
High attendance rate from Directors
>92%
In 2014:
An Active and Engaged Board
● Increased activity: 11 meetings
● Presentations by key Group managers on their business units
● Review of many proposed acquisitions
● Transitional period for the office of Chief Executive Officer
6
Four Specialist Committees
Audit Committee
Compensation Committee
● Chairman: Robert Castaigne● 5 financial experts● 5 independent members out of 6 ● 6 meetings in 2014
● 3 independent members out of 4● 12 meetings in 2014
AttendanceRate97%
AttendanceRate98%
● Regular reviews: main risks which may have an impact on financial statements
● Specific reviews: notably progress reports on acquisitions and investments and update on compliance programs
● The main activities of this Committee will be presented by Gérard Van Kemmel
7
Four Specialist Committees (cont’d)
Appointments and Governance Committee
Strategy Committee
● 3 independent members out of 4● 11 meetings in 2014
● 2 independent members out of 5 ● 7 meetings in 2014
AttendanceRate98%
AttendanceRate87%
8
● Review of the Chief Executive Officer’s (CEO) situation and his departure conditions
● Search for a new CEO● Temporary combination of the offices of Chairman and CEO● Chairmanship entrusted to Jean-René Fourtou
● Business overviews: Diabetes, Digital, Oncology, Generics, Biosurgery● R&D financing● Strategic opportunities● Review of proposed acquisitions and partnerships
Sanofi Share Performance vs. CAC 40 since January 2011
9Source: Bloomberg (12/31/2010 - 04/30/2015)
30 €
40 €
50 €
60 €
70 €
80 €
90 €
100 €
€91.20+91%
CAC 405046.5+33%
Sanofi Share Performance vs. Pharma Company Peers since January 2011
10Source: Bloomberg (12/31/2010 - 04/30/2015)
+74%+65%+60%+54%
+23%
+207%
+141%
+105%+103%+97%+94%+91%
+137%
2013 2014
€2.85€2.80
2012
€2.77
2011
€2.65
2010
€2.50
2009
€2.40
11
The Dividend Is a Core Part of our Value Proposition to Shareholders
● Proposed dividend of €2.85 per share for 2014 financial year(1)
● 21st consecutive year of dividend increase ● Payout of 52% of our 2014 free cash flow(2)
(1) Submitted for approval by shareholders at the Annual General Meeting on May 4, 2015(2) Free cash flow before restructuring costs. The total amount of dividend to be distributed (€3,760m) is calculated on the basis of the number of shares entitled to dividend as of December 31, 2014, i.e.
1,319,367,445, and may change if the number of shares entitled to dividend changes between January 1, 2015 and the dividend ex-date, in particular as a result of changes in the number of treasury shares, the vesting of consideration-free shares and the exercise of stock options (if the beneficiary is entitled to dividend under the rules of the relevant plan).
(1)
Evolution of Dividend
An International and Diversified Shareholder Base(1)
12(1) Shareholder structure as of December 31, 2014, source: NASDAQ Corporate Solutions
Institutional investors
77.3 %
Individual ShareholdersEmployees 7.5 %
7.8%
6.2%
9.0%
5.5%12.9%
13.7%29.1%
United States
France
UK
Other EU countries
Asia
Germany
Switzerland
Canada
Rest of the worldL’Oréal
1,319,367,445shares
0.7% Treasury
Miscellaneous
2.6%
3.4%1.3%
1.6%
2.8%3.4%
Strengthen Employee Share Ownership
13
Sanofi Wants to Strengthen Employee Share Ownership
● 21th resolution submitted to the present Shareholders’ General Meeting vote
● To be implemented in H2 2015
● More than 80 participating countries
(1) At December 31, 2014
4 Plans since 2005
● >2 million shares subscribed
● >1.5 million shares subscribed
Global share plan awarding 20 restricted shares to each Group employee● >2.1 million restricted shares allocated
● >1.6 million shares subscribed
1.3%(1)
of Sanofishare capital
is held by employees
Action 2005
Action 2007
Share2010
Action 2013
Compensation PolicyGérard Van Kemmel
Director, Compensation Committee
Composition of the Compensation Committee
● Jean-René Fourtou
● Claudie Haigneré
● Christian Mulliez
● Gérard Van Kemmel, Chairman
In accordance with the
AFEP-MEDEF Code,
more than half the members are
independent(3 out of 4)
The Compensation Committee is composed of:
15
Compensation Policy for the Chairman of the Board
16
● No Directors’ attendance fee
● No annual variable compensation
● No equity compensation
● No compensation payable upon termination of office
● No pension entitlement
● Annual fixed compensation (gross amount)
● No adjustment in spite of the temporary combining of the offices of Chairman of the Board and Chief Executive Officer for five months
● Benefits in kind
Elements of Compensation of Serge Weinberg in 2014
17
(in euro) Amounts due Comments
Fixed compensation 700,000Fixed compensation unchanged since his appointment as Chairman of the Board on May 17, 2010
Benefits in kind 8,174 Company car
Total 708,174
Elements of Compensation of Christopher Viehbacher in 2014
(in euro) Amounts due Comments
Fixed compensation 1,040,870 Amounts prorated in accordance with his presence within the Group in 2014
Variable compensation 1,338,750
85% of the target compensation, due in 2015, prorated in accordance with his presence within the Group in 2014 on the basis of four types of criteria:
● Attainment of financial targets compared to budget (45%)● New product registrations and submissions (25%) ● Organizational structure of the Group and succession
planning for key posts in the Group (0%)● Corporate Social Responsibility (15%)
Benefits in kind 3,424 Company car
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Equity Compensation of Christopher Viehbacher in 2014
● 240,000 options to subscribe for shares● Same quantity as in 2013
● 45,000 performance shares● Same quantity as in 2013
● Performance conditions measured over 3 years
● 3 performance criteria:● Business Net Income (40%) ● Return on Assets (40%)● Total Shareholder Return (20%)
2014 Plan Conditions 2014 Grant
19
Settlement Agreement Signed in 2015 with Christopher Viehbacher
20
(in euro) Amounts due Comments
Severance benefit 0 Loss of the entire benefit due to the absence of change of control or strategy
Top-up pension 0 Loss of the entire benefit
Settlement indemnity 2,961,000 Corresponding to his fixed and variable compensation for one year
Confidentiality undertaking - 24 months
Undertaking not to hire away previous employees - 18 months
Undertaking to cooperate - In connection with ongoing or future legal procedures
Non-compete 246,750/month Until June 30, 2015
Compensation Policy for the Chief Executive Officer
● Annual fixed compensation (gross amount)
● Annual variable compensation (gross amount)
● Equity compensation, options to subscribe for shares and performance shares
● Benefits in kind
● No Directors’ attendance fee
● Compensation payable upon on termination of office● Severance benefit● Top-up pension plan● Non-compete undertaking
21
Elements of Compensation of Olivier Brandicourt in 2015
22
(in euro) Amounts due Comments
Fixed compensation 1,200,000
Variable compensation Between 0% and 250% of his fixed compensationtarget set at 150% of his fixed compensation
Benefits in kind Company car
Options awards 220,000 options
Performance shares 45,000 performance shares
Indemnification of Elements Lost by Olivier Brandicourt
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(in euro) Amounts due Comments
Exceptional compensation 2015 2,000,000 Upon his taking up office
Exceptional compensation 2016 2,000,000 Payable in January 2016 and subject to a
condition of continued employment
Performance shares grant
66,000 performance shares granted in 2015 with a 3-year vesting period and subject to performance conditions
Pension plan Attribution of ten years’ service
Post-Office Compensation Elements of Olivier Brandicourt
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Severance Benefit Non-Compete Indemnity Pension Plan
● Departure is non-voluntary and linked to a change in control or strategy
● Contingent upon fulfillment of performance criteria
● Amounts limited to 24 months of fixed and variable compensation
● Agreed upon at hiring● 12 months of fixed and variable
compensation● The amount of the termination
benefit will be reduced by any amount received under this non-compete indemnity
● At the Board’s discretion
● Top-up pension may not exceed 37.5% of the reference compensation
● Progression rate 1.5% per year of service
Priorities & LaunchesOlivier Brandicourt
Chief Executive Officer
Sanofi – Solid Assets for the Future
26
● Good performance and financial discipline
● Many new products addressing unmet medical needs
● Strong positions in our business areas● Leadership in Emerging Markets
Wave of launches
Diversified activities
Innovation in R&D
● A successful open innovation model● Balance between internal and external R&D
Key challenges● Bring differentiated solutions
to physicians, patients and payors
● Focus our R&D efforts on the most significant innovations
● Be competitive in businesses where we are able to win
● Adapt our expenses and investments to opportunities and challenges ● Strong balance sheet and financial disciplinePerformance
financière
A Clear Set of Near-Term Priorities
27
Focus on launches of new medicines and vaccines
Continue strong momentum in R&D
Develop a deep understanding of the organization while strategic review is underway
1
2
3
Engage with our shareholders4
28
Substantial Improvement of Returns from R&D
10 launches
achieved
2007 - 2013
2014 - 2020
Up to
18 launches
expected
DengueVaccine
PR5IVaccine
® ® ® ®
Five Major New Products Launches since 2014
Recent Product Launches
29
Relapsing remitting multiple sclerosis
Oral treatment for Type 1 Gaucher disease
Chewable flea and tick treatment for dogs
New basal long-acting insulin
Rapid-acting inhaled insulin
®
● Approved in the U.S. in February 2015● Launched in late March 2015
● Toujeo® COACH patient support program
● Approved in Europe in April 2015● Launch in Germany and UK expected
in Q2 2015
● Launches in other countries expected in H2 2015 and early 2016
Toujeo® - Launch of our New Long-Acting Basal Insulin Underway
30
50%of patients not at goal
despite treatments
Afrezza® - The Only Rapid-Acting Inhaled Insulin Launched in the U.S. in February 2015
● Small portable inhaler
● Powder dissolves rapidly upon inhalation to the lung and delivers insulin quickly to the bloodstream
● No cleaning required
● No parts to be replaced
● Disposed of after 15 days of use
An Innovative and Patient Friendly Device
31
Lemtrada® - An Important Treatment for Patients with Relapsing Remitting Multiple Sclerosis
32(1) Genzyme holds the worldwide rights to alemtuzumab and has responsibility for its development and commercialízation in MS.
Bayer Healthcare receives contingent payments based on global sales revenue.
● Genzyme has expanded its multiple sclerosis (MS) franchise
● Successful launch of Aubagio®
● FY 2014 sales of €433m
● Lemtrada® approved in more than 40 countries● Launched in the U.S. in December 2014(1)2.3
million people live with MS
worldwide
Expanding Genzyme’s Gaucher Franchise with Cerdelga®
33
● Oral therapy eliminating infusion challenges
● Launched in the U.S. in September 2014
● EU approval granted in January 2015● First launches in Germany and Nordic
countries
(1) Source: www.alliance-maladies-rares.org, www.orpha.net
Gaucher Disease Prevalence
1/100 000(1)
Successful launch of NexGard®, a New Oral Anti-Parasitic for Dogs
34
● First and only beef-flavored oral treatment in the U.S.
● Chewable tablet
● Eliminates fleas and ticks in dogs
● Launched in the U.S. and in France in early 2014
Praluent® (alirocumab) is developed in collaboration with Regeneron(1) Rolling submission process in some endemic countries in Asia initiated in January 2015
Three Products Submitted for Regulatory Review
Key Regulatory Filings
Dengue Vaccine Dengue
Hypercholesterolemia
Pediatric hexavalent vaccine (Polio, diphteria, tetanos, pertussis,Hib and hepatitis B)
PR5I 6-in-1 U.S.
U.S.
Endemic markets(1)
Europe
35
Praluent® - Targeting Hypercholesterolemic Patients at High Cardiovascular (CV) Risk with Unmet Needs
36
24million
patients with high CV risk(1)
● 12 positive Phase III studies(2)
● LONG TERM study(3)
● LDL-C(4) reduction of -62% compared to placebo
● 81% of patients reached LDL-C goal
● Regulatory reviews underway in the U.S. and Europe● FDA decision expected on July 24, 2015
● EU decision expected in Q1 2016
Praluent® (alirocumab) is developed in collaboration with Regeneron(1) 2016 estimates for U.S., EU Top 5 and Japan. Source: U.S. NHANES, Market Scan, IMS and Sanofi estimates. For further information, see presentation of Nov 20, 2014(2) For further information, see press releases dated March 27, 2014, July 30, 2014, Nov 19, 2014 and January 9, 2015(3) > 2,300 patients at high CV risk studied for 65 weeks(4) LDL-C: Low density lipoprotein cholesterol or “bad cholesterol”
Make Dengue the Next Vaccine-Preventable Disease
(1) WHO, Dengue and severe dengue, factsheet no.117, updated in March 2014, available on http://www.who.int/mediacentre/factsheets/fs117/en/(2) WHO, 2012, Global Strategy for Dengue Prevention and Control 37
A Breakthrough Innovation to Help Reduce the Burden of Dengue(2)
Dengue Vaccine
100 million
dengue cases per year(1)
37
● Rolling submission for Dengue vaccine initiated in several endemic countries in Asia and Latin America
● First commercial batches produced and inventory build-up underway
● Up to 80 million lyophilized doses by end of 2015
● First license anticipated before year-end 2015
Corporate Social Responsibility (CSR) A Strategy Placing the Patient at the Core of our Activity
● 4 strategic pillars
● PATIENT – Improving access to healthcare
● ETHICS – Acting ethically
● PEOPLE – Working together
● PLANET – Preserving the environment
● Committed to the United Nations Global Compact for 15 years
● External recognition of our CSR performance
38
Expanding Access to Healthcare and Ensuring Patient Safety
In 2014, Sanofi’s access to healthcare programs resulted in:
● 270,000 healthcare professionals trained
● 89 million patients receiving diagnosis, vaccination, treatment, or disease self-management training
● 100 million people targeted by awareness campaigns
300access to healthcare programs
Partnerships with local players
in
80countries
39
Strong Partnerships to Help Patients Most in Need
World Health
Organization
DNDi FoundationPATHMMV
Bill and Melinda Gates Foundation
Partnership fighting neglected tropical diseases
● $75m in financial support and drug donations
● Objective: Eliminating sleeping sickness by 2020
Commitment against malaria
● Training and education programs
● Development of an anti-malarial treatement not protected by patent, accessible for the neediest(1)
● Development of semi-synthetic artemisinin
• 30 million people screened for sleeping sickness since 2001
• >180,000 patients treated
• 7.7 million children educated about prevention(2)
• >340 million treatments distributed since 2007
40
DNDi: Drugs for Neglected Diseases intitiativePATH: NGO specialised in health solutionsMMV: Medicines for Malaria Venture(1) Coarsucam / Artesunate-Amodiaquine Winthrop (Asaq Winthrop®)(2) Via our «Schoolchildren against malaria » program
Our Focus Continues to Be on Excellence in Execution of Sanofi’s Strategy
Adapt structure for futurechallenges and opportunities3
Bring innovative products to market2
Grow a global healthcare leader with synergistic platforms1
Seize value-enhancinggrowth opportunities4
2015 Priorities
Maintain financial discipline
Focus company resourceson must-win priorities
Ensure successful launches
Strategy
Sustain leadership positions
41
Progress in Research & DevelopmentElias Zerhouni
President, Global R&D
Significant Achievements in Phase III
Familial Amyloid Cardiomyopathy
Type 2 Diabeteslixisenatide (U.S.)
revusiran
Atopic DermatitisAsthmadupilumab
Sarilumab and dupilumab are developed in collaboration with RegeneronPatisiran and revusiran are developed in collaboration with Alnylam
Type 2 Diabetes
Familial Amyloid Polyneuropathy
sarilumab
LixiLan
patisiran
Rheumatoid Arthritis
Key Advances of Phase III Projects
43
Sarilumab: An Investigational Monoclonal Antibody for Rheumatoid Arthritis (RA)
Phase III ongoing● First positive results in
moderate to severe rheumatoid arthritis(2)
● Additional results expected in 2015
Sarilumab is developed in collaboration with Regeneron / IL6R –Interleukin-6 receptor: contributes to the inflammatory mechanism of rheumatoid arthritis(1) World Health Organization: Worldwide chronic rheumatic conditions (2) SARIL-RA-MOBILITY in patients resistant to methotrexate with moderate to severe RA
sarilumab
70 million people estimated
to be affected by RA(1)
Fully human monoclonal antibody targeting IL6R● Delivered
subcutaneously● Evaluated for use with
pre-filled syringe or autoinjector
Regulatory submissions expected ● Late 2015 in the U.S.● Late 2016 in
Europe and Japan
44
Dupilumab Offers Potential to Change Management of Patients Severely Affected by Various Allergic Diseases(1)
Dupilumab is developed in collaboration with Regeneron / IL4Rα – Interleukin-4 alpha receptor(1) Atopic Dermatitis, Asthma, Nasal Polyposis, Eosinophilic Oesophagitis (2) Adapted from White Book on Allergy published in 2011, http://www.worldallergy.org/UserFiles/file/WAO-White-Book-on-Allergy_web.pdf(3) World Health Organization, http://www.who.int/mediacentre/factsheets/fs307/en
IL‐4
IL‐4R c
Type IReceptor
Type IIReceptor
IL‐13
IL‐4R IL‐13R1
or
Fully-human monoclonal antibody targeting IL4Rα
● Atopic Dermatitis● Phase III ongoing
● Dupilumab received “Breakthrough Therapy” designation by FDA
● Asthma● Phase III initiated
● Nasal Polyposis● Start of Phase III expected
in Q3 2015
● Eosinophilic Oesophagitis● Phase II ongoing
Atopic Dermatitis
5 million people in the
U.S. and Europe(2)
Asthma
235-300million
people worldwide(3)
45
LixiLan: Fixed-Ratio Combination of Lantus® and Lyxumia®
in a Single Daily Injection
46
Phase III ongoing● LixiLan-O: study in patients
insufficiently controlled on oral anti-diabetics
● LixiLan-L: study in patients not at goal on basal insulin
Results expected in Q3 2015
Regulatory submissions expected
● Late 2015 in the U.S.
● Early 2016 in Europe
®+
=Phase II results● 84% of patients
reached A1c goal < 7%(1)
(1) Proof of concept study (323 patients) : a 24-week randomized, open-label trial comparing the efficacy and safety of insulin glargine/ lixisenatide fixed ratio combination versus insulin glargine, in type 2 diabetes inadequately controlled with metformin
Lyxumia® (lixisenatide) for Patients with Type 2 Diabetes Submitted in the U.S. Soon
47
GLP-1 receptor agonistapproved in more than
50 countries
Regulatory submission in the U.S.
● Expected in Q3 2015
®
study
● Positive results on the cardiovascular safetyof lixisenatide in a high-risk population of adults with type 2 diabetes
Patisiran and revusiran developped in collaboration with Alnylam(1)
48TTR: transthyretin is the disease-causing protein in TTR-mediated amyloidosis(1) Genyzme’s exclusive territory rights for the ALN-TTR programs concern the world, excluding North America and Western Europe
patisiransiRNA inhibitor targeting transthyretin (TTR)
● Administered by intravenous injection
Phase III ongoing in Familial Amyloid Polyneuropathy
revusiransiRNA inhibitor targeting transthyretin (TTR)
● Administered by subcutaneous injection
Phase III ongoing inFamilial Amyloid Cardiomyopathy
49
A Successful Model for Productive R&D Collaborations
(1) REGN closing share price on Dec 31, 2014 was $410.25(2) “Significant influence” under IFRS rules allows Sanofi to account for its investment in Regeneron using the Equity method from April 4, 2014(3) ALNY closing share price on Dec 31, 2014 was $97.00
● Access to highly productive therapeutic human antibody platform
● Market value of 22.3% ownership of €7,724m on Dec 31, 2014(1,2)
● World-class RNAi technology providing a platform for the development of medicines in rare genetic diseases
● Market value of 11.8% ownership of €728m on Dec 31, 2014(3)
● Novel adeno-associated virus (AAV) gene therapies for severe central nervous system disorders
● Upfront commitment of $100m and potential milestone payments of up to $745m
49
Vatelizumab(1)
Multiple Sclerosis
IL4/IL13 bi-specific mAbIdiopathic Pulmonary Fibrosis
Anti-GDF8 mAbSarcopenia
Oral GCS InhibitorFabry Disease
Anti-CD38 mAbMultiple Myeloma
Olipudase alfaNiemann-Pick type B
Neo GAAPompe Disease
C-MET kinase inhibitorSolid Tumors
Anti-CXCR5 mAbSystemic Lupus Erythematosus
GLP-1/GIP co-agonistDiabetes
Phase II
A New Wave of Potentially Transformative Drugs in Phase I and II
Phase I
50Anti-GDF8 mAb is developed in collaboration with Regeneron(1) Anti-VLA2 mAb
2014 Results & PerformanceJérôme ContamineExecutive Vice President, Chief Financial Officer
52
Solid Top and Bottom Line Growth Achieved in 2014
(1) On a reported basis, FY 2014 sales were up +2.5% and Business EPS was up +3.0%(2) With retroactive application of IFRIC 21(3) Business EPS: Business earnings per share is defined as business net income divided by the weighted average number of shares outstanding. Business net income is defined as net income attributable to equity holders of Sanofi
excluding (i) amortization of intangible assets, (ii) impairment of intangible assets, (iii) fair value remeasurement of contingent consideration liabilities related to business combinations, (iv) other impacts associated with acquisitions (including impacts of acquisitions on associates), (v) restructuring costs, (vi) other gains and losses (including gains and losses on disposals of non-current assets), (vii) costs or provisions associated with litigation, (viii) tax effects related to the items listed above as well as effects of major tax disputes, (ix) tax (3%) on dividends paid to Sanofi shareholders, (x) adjustment by the one-time additional yearly expense, unrelated to segment performance and recorded in 2014 on the income statement line selling and general expenses, following the final US IRS regulation related to annual Branded Prescription Drug Fee issued in July 2014. The items (v), (vi) and (vii) correspond to those reported in the income statement lines “Restructuring costs” and “Gains and losses on disposals, and litigation”.
Net Sales Business EPS(3)
32 951M€
33 770M€
5,05€
5,20€(2)
FY 2014FX Impact
-€0.22
Incremental EPS at CER
+€0.37
FY 2013FX Impact FY 2014FY 2013
+€1,611m-€792m
Incremental Sales at CER
€32,951m
€33,770m€5.05
€5.20(2)
(2)
+4.9%à TCC(1)
+7.3%à TCC(1)
Strong Performance of Most Business Areas in 2014
53
Full-Year 2014 Sales by Business Areas
CER: Constant Exchange Rates(1) Some products recorded in prescription pharmaceuticals in 2013 were transferred as Consumer Healthcare products and totaled €273m in FY 2013.
When excluding this category change, sales of Consumer Healthcare grew +6.8% in FY 2014 at CER
9.9%
7.7%
6.1%
11.8%
21.5%
Growth at CER
Consumer Healthcare(1)
Genzyme
Animal Health
Vaccines
Diabetes
€3,337m
€2,604m
€2,076m
€3,974m
€7,273m
€11,300m
+16.5%
+24.3%
+6.7%
+7.2%
+12.1%
% of Sales
82.1% Pharmaceuticals €27,720m +4.4%
33.5%
4.2% Oncology
Established Rx Brands
€1,401m -2.5%
-6.7%
5.3% Generics €1,805m +16.2%
Geographical Sales Mix in 2014Growth at CER
CER: Constant Exchange Rates (1) World excluding U.S., Canada, Western Europe, Japan, Australia, and New Zealand(2) Row: Japan, Canada, Australia and New Zealand(3) Excluding Generics in Brazil, LatAm grew +10.8% in FY 2014 at CER
Well-Balanced Geographical Sales Split in 2014 with Solid Growth in Emerging Markets and the U.S.
+5.0% +6.3% +21.1%+2.5%
Emerging Markets Total Sales by Region
(3)
54
33.6%
33.6%
23.3%9.5%
(1) €2,095m€2,541m
€3,205m €3,363m
Africa & MiddleEast
Eastern Europe,Russia & Turkey
Asia Latin America
Emerging Markets
€11,347m+9.3%
U.S.€11,339m
+8.2%
Western EU€7,865m
+0.0%
Rest of the World€3,219m
-7.2%
(2)
55
FY 2014 Business EPS Growth of +7.3% in Line with Financial Guidance
€m 2014 2013% Change
(reported €)% Change
(CER)
Net sales 33,770 32,951 2.5% 4.9%
Other revenues 339 355 -4.5% -5.1%
Gross profit 23,080 22,323 3.4% 5.9%
R&D (4,824) (4,770) +1.1% +1.9%
SG&A (8,991) (8,603) +4.5% +6.6%
Business operating income 9,449 9,323 1.4% 5.4%
Effective tax rate 24.0% 24.0% - -
Business net income 6,847 6,686 2.4% 6.7%
Business EPS €5.20(2) €5.05 3.0% 7.3%
CER: Constant Exchange Rates(1) With retroactive application of IFRIC 21(2) FY 2014 Business EPS at CER was €5.42. The negative FX impact on Business EPS was €0.22 in 2014
Moderate Increase in Expenses Due to Investments in R&D and Launches of New Products
56
201420132013 2014 20142013
Cost of Sales (€m) R&D Expenses (€m) SG&A Expenses (€m)
32.7%of sales
14.3%of sales
26.6%of sales
€8,991m
€4,824m
€11,029m€10,983m
€4,770m
€8,603m
(1) With retroactive application of IFRIC 21
(1) (1) (1)
Net Income(1) Increased by 18.1%
57
€m 2014 2013(2) % Change(reported €)
Business net income 6,847 6,686 2.4%
Amortization of intangible assets (2,482) (2,914)
Impairment of intangible assets 26 (1,387)
Fair value remeasurement of contingent consideration liabilities (303) 314
Restructuring costs (411) (300)
Other gains and losses, and litigation(3) and expenses arising from the impact of acquisitions on inventories 35 (8)
Additional yearly expense related to US Branded Prescription Drug Fee(4) (116)
Tax effect of items listed above 1,094 1,480
Other tax items(5) (110) (109)
Restructuring costs of associates and joint ventures and expenses arising from the impact of acquisitions on associates and joint ventures, and share of items listed above attributable to non-controlling interests (190) (46)
Net income attributable to equity holders of Sanofi 4,390 3,716 18.1%
(1) Attributable to equity holders of Sanofi(2) Including impact of transition to IFRIC 21(3) Day one profit on Alnylam shares presented in financial result(4) Annual fee related to 2013 sales following the final IRS regulation issued in July 2014 that has changed the timing of liability recognition and leads to a one-time “double” expense in the year of 2014(5) Tax on dividends paid to shareholders of Sanofi
58 58
(1) Including derivatives related to the financial debt +€290m at December 31st 2013 and +€302m at December 31st 2014(2) Excluding Restructuring costs(3) Including €1,629m in Regeneron and €535m in Alnylam(4) Other including Restructuring costs
Free Cash Flow (FCF) Up 12.3% in 2014
Net Debt (in €m)
Other Net Debt Dec 31, 2014
-€1,205m
Dividend
-€3,676m
Acquisitions, Licensing, Net of Disposals
-€2,374m
Share Repurchase
-€1,801m
Proceeds from Issuance of Shares
€680m
CapEx
-€1,223m
Net Cash from Operating Activities
Net Debt Dec 31, 2013(1)(2)
€6,043m€7,171m
€8,471m
(4) (1)
FCF€7,248m
(3)
Capital Investments Grew Slightly in 2014
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Important Investments in our Industrial Capacity in 2014
2014
€1,223m
2013
€1,198m
IndustrialAffairs
R&DLicences & Alliances
SupportFunctions
Animal Health, Genzyme & Vaccines(1)
PharmaceuticalOperations
(1) Excluding Industrial Affairs
In 2015, CapEx should be between €1.8bn and €1.9bn, reflecting continued investment in biologic manufacturing capacity and capabilities
CapEx Evolution and Breakdown in 2014
7%
12%
8%
2%7%
64%
Our International Development Enables a Strong Presence in France
60(1) Human and animal health(2) Companies with headquarters in France
● Of which 25% in France 27,000 employees on 48 sites
#1R&D investor
accross all industries(2)
>110,000 employeesworldwide
● Of which 7% in France €2.5bn in 2014
€33.8bn global sales #1
producer of medicines and
vaccines in France(1)
€4.6bn industrial investments
worldwide over 5 years● Of which 38% in France
€1.7bn over 5 years
€4.8bn global R&D expenses
● Of which 45% in France€2.2bn in 2014
An Industrial Heritage in France Serving Patients Worlwide
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● Of which 24% in France● 22 production sites● 4 distribution platforms
● 85% of French production for export● €12.9bn exportations
Neuville-sur-Saône (Rhône, France)First dengue vaccine production site
#1 industrial
pharmaceuticalplayer
in France
#4exporter company
of France
107 industrial sites worldwide
Strong Balance Sheet
December 31, 2014
Assets
Liabilities & Equity
Net Debt (A-B) 7.2
In €bnChange vs.
December 31, 2013
+ 1.2
- 1.3- 0.9
- 0.7
+ 0.1
+ 0.2
+ 1.2
53.7
20.2
4.47.3
56.3
14.8
14.5
(1) Including interest rate and currency derivatives used to hedge debt 62
+ 0.6
Intangible assets
Other non-current assets
WCR
Net cash (B)
Equity attributable
Provisions and other non-current liabilities
Financial debt (A)(1)
Outlook for 2015 - Investing in Future Growth Drivers
636363
Business EPS Growth
FX impact on Business EPS Approximately +12%(2)
Stable to slightly growing at CER(1)
2015
(1) FY 2014 Business EPS of €5.20(2) Difference between variation on a reported basis and variation at CER, when applying March 2015 average exchange rates to the remaining three quarters of the year
FX Impact
+€0.12
Incremental EPS at CER
+€0.03
Q1 2014 Q1 2015
+€782m
Incremental Sales at CER
FX Impact Q1 2015Q1 2014
+€186m
Q1 2015 - A Good Start to the Year
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Net Sales Business EPS
+2.6%at CER(1)
€8,810m
€1.17
€1.32
+2.4%at CER(1)
(1) On a reported basis, Q1 2015 sales were up +12.3% and Business EPS was up +12.8%
€7,842m
Paris
● SANOFI IR: Mobile application dedicated to Sanofi’s financial news
● Available in the App Store and on Google Play
● Publications for individual shareholders● Shareholder Handbook
● Letter to Shareholders
● Fact Sheet
● A rich and useful Website● With a dedicated section for individual shareholders
www.sanofi.com/shareholders
● Regular meetings● 6 shareholder meetings in France in 2014
● Actionaria shareholder exhibition
● Individual Shareholders Committee
Regular Information for our Shareholders
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