2014

Sanofi: 2011 Results Benefit from Genzyme Acquisition Net Sales and Business EPS(1) up 9.2%(2) in Q4

PARIS, Feb. 8, 2012  /PRNewswire/ --

(Logo : http://photos.prnewswire.com/prnh/20110616/NY20158LOGO )



Q4 2011

Change on a

reported basis

Change at constant

exchange rates

2011

Change on a

reported basis

Change at constant

exchange rates

Net sales

euro 8,508m

+8.8%

+9.2%

euro 33,389m

+3.2%

+5.3%

Business net income(1)

euro 2,077m

+13.0%

+11.7%

euro 8,795m

-4.6%

-2.7%

Business EPS(1)

euro 1.56

+10.6%

+9.2%

euro 6.65

-5.8%

-3.8%

In order to facilitate an understanding of our operational performance, we comment on our business net income statement. Business net income(1) is a non-GAAP financial measure. The consolidated income statement for 2011 is provided in Appendix 7. A reconciliation of business net income to consolidated net income is provided in Appendix 6. Consolidated net income for 2011 was euro 5,693 million, compared to euro 5,467 million for 2010. Consolidated EPS for 2011 was euro 4.31 versus euro 4.19 for 2010.




Commenting on the Group's performance in 2011, Sanofi Chief Executive Officer, Christopher A. Viehbacher said, "2011 was a key year in transforming Sanofi. We successfully acquired and integrated Genzyme, our growth platforms(3) recorded double-digit growth, we delivered cost savings as planned and submitted filings to regulatory authorities for five new products. Several product exclusivity losses were absorbed and we successfully limited the impact on business EPS. Beyond the remaining patent cliff in 2012, the robust performance of our diversified growth platforms, the reduced exposure to future patent expiries and progress on R&D, position Sanofi for a period of sustainable growth".

2011 Performance

  • Total sales(4) grew 5.3%(5) to euro 33,389 million. Excluding Genzyme and A/H1N1 sales, sales decreased by 1.2%. euro 2,206 million of sales were lost due to generic competition compared to 2010.
  • Growth platforms sales increased 10.8% (excluding A/H1N1 sales). Sales of growth platfoms and Genzyme reached euro 21,703 million and accounted for 65% of total sales.
  • Sales in Emerging Markets(6) grew 10.4% (excluding Genzyme and A/H1N1 sales) to euro 10,133 million.
  • Diabetes delivered growth of 12.0%. In the fourth quarter, Lantus® sales exceeded euro 1 billion in quarterly sales for the first time.
  • Vaccines sales were up 7.2% (excluding A/H1N1 sales) to euro 3,469 million.
  • Genzyme sales (consolidated from April 1, 2011) increased 7.7%(7) to euro 2,395 million. The $700 million targeted cost synergies by 2013 are on track and $230 million were already achieved in 2011.
  • CHC and Generics recorded another year of impressive growth, up 22.8% and 16.2%, respectively. The Allegra® OTC launch in the U.S. by Chattem was a success with sales of euro 211 million.
  • Merial sales were up 4.3%, which included growth of 12.4% in Emerging Markets.
  • Business EPS(1) of euro 6.65 was down 3.8% at CER.
  • The proposed dividend of euro 2.65 per share corresponds to a payout ratio of 40%.

Outlook

  • Production recovery is well underway at Genzyme. The Framingham plant recently received important regulatory approvals by both the FDA and EMA for the production of Fabrazyme®.
  • Five new products were submitted to regulatory authorities since last July. In February, Aubagio™ in the EU and Zaltrap™ in the U.S. were submitted.
  • As announced last September, the loss of Plavix® and Avapro® exclusivity in the U.S. is anticipated to impact the 2012 business net income by around euro 1.4 billion(2). Taking into account this impact, the performance of growth platforms, contribution from Genzyme and cost control as well as other generic competition should lead to a 2012 business EPS(1) 12% to 15% lower at CER than 2011(8), barring unforeseen adverse events. This objective is in-line with the mid-term plan presented last September for a return to growth over 2012-2015.

(1) See Appendix 10 for definitions of financial indicators; (2) At Constant Exchange Rates; (3) See Appendix 4; (4) Growth in net sales is expressed at constant exchange rates (CER) unless otherwise indicated (see Appendix 10 for a definition); (5) 2010 includes consolidated Merial sales (euro 1,983 million); (6) See definition in the section, "Net sales by geographic region"; (7) on a constant structure basis and at constant exchange rates; (8) euro 6.65

2011 fourth-quarter and full-year net sales

Unless otherwise indicated, all sales growth figures in this press release are stated at constant exchange rates(1).

In the fourth quarter of 2011, Sanofi generated sales of euro 8,508 million, up 8.8% on a reported basis. Exchange rate movements had a negative effect of 0.4 percentage points. The positive effect from the Japanese yen, the U.S. dollar and the Chinese Yuan was offset by an unfavorable impact from various currencies (notably the Venezuelan Bolivar, Turkish Lira and the Brazilian Real). At constant exchange rates, and including changes in the scope of consolidation (primarily the consolidation of Genzyme), net sales increased by 9.2%.

Sales in 2011 grew 3.2% on a reported basis to euro 33,389 million. Exchange rate movements had an unfavorable effect of 2.1 percentage points. The impact of the depreciation of the U.S. dollar, Venezuelan Bolivar and Turkish Lira against the Euro was mitigated by the favorable effect of the Japanese Yen and Australian dollar. At constant exchange rates, and accounting for changes in the scope of consolidation (primarily the consolidation of Genzyme from April 1), net sales increased by 5.3%. Excluding Genzyme and A/H1N1 sales, 2011 sales decreased by 1.2%.

Growth Platforms (see Appendix 4)

Sales of the Group's growth platforms grew by 7.7% in the fourth quarter. Emerging Markets, Diabetes, Consumer Health Care and Animal Health grew at a double-digit pace in the quarter. The Group's growth platforms together with Genzyme accounted for 66.4% of total consolidated sales in Q4 2011, up from 58.4% in the fourth quarter of 2010. In 2011, the growth platforms and Genzyme comprised 65.0% of total consolidated sales compared with 56.9% in 2010. Full year 2011 sales of growth platforms grew 10.8% excluding A/H1N1 vaccines sales.

Pharmaceuticals

Fourth-quarter sales for the Pharmaceuticals business reached euro 7,220 million, an increase of 10.5%, which reflects the positive contribution (euro 831 million) from Genzyme (consolidated from April 1, 2011) as well as the negative effect of generic competition to Lovenox®, Ambien® CR and Taxotere® in the U.S., Plavix® and Taxotere® in the EU, and the impact of EU austerity measures. Full year 2011 pharmaceuticals sales were euro 27,890 million, an increase of 6.7%.

Flagship Products(9)


(millions of euros)

Q4 2011

net sales

Change at constant

exchange rates

2011

net sales

Change at constant

exchange rates

Lantus®

1,054

+17.8%

3,916

+15.0%

Apidra®

35

-28.6%

190

+9.6%

Plavix®

529

+2.2%

2,040

-2.9%

Lovenox®

498

-13.4%

2,111

-23.4%

Aprovel®

314

-3.4%

1,291

-2.4%

Eloxatin®

325

+119.0%

1,071

+160.9%

Taxotere®

150

-67.5%

922

-57.0%

Multaq®

64

+1.6%

261

+56.4%

Jevtana®

47

+14.6%

188

+135.4%

Cerezyme®

133

-17.4%*

441**

+11.1%*

Myozyme® / Lumizyme®

108

+15.9%*

308**

+27.4%*

Renagel®/Renvela®

143

+9.4%*

415**

+10.2%*

Synvisc®/ Synvisc One®

87

+15.2%*

256**

+14.7%*

* on a constant structure basis and at constant exchange rates;** Sales since April 1st 2011


(1) See Appendix 10 for definitions of financial indicators

(9) See Appendix 2 for a geographical split of consolidated net sales by product




Diabetes

The Diabetes business generated sales of euro 1,242 million in the fourth quarter, an increase of 12.5%. Lantus® registered another quarter of strong growth and exceeded euro 1 billion in quarterly sales for the first time. Sales of the product were driven by the U.S. (+16.7% to euro 627 million), Emerging Markets (+30.7% to euro 172 million) and Japan (+18.0% to euro 34 million).

In the U.S, Lantus® SoloSTAR® represented 50.0% of total Lantus® sales in the quarter, versus 40.2% in the fourth quarter of 2010. In China, sales of Lantus® grew by 65.5% reflecting reimbursement coverage in the municipalities of Shanghai (December 2010) and Beijing (July 2011). In Brazil, sales of Lantus® were up 32.0%. In Russia, sales of Lantus® were up 23.5%. Full year 2011 sales of Lantus® reached euro 3,916 million, up 15.0% supported by strong performance in the U.S. (up 14.6% at euro 2,336 million), Emerging Markets (+26.0% at euro 617 million) and Japan (+19.5%).

At the World Diabetes Congress in Dubai last December, new meta-analysis data was presented and added to the wealth of evidence from more than 80,000 patients enrolled in clinical trials and 38 million patient years of treatment exposure to Lantus®. This new meta-analysis on the relationship between diabetes and cancer risk demonstrated no increased risk in patients using Lantus®.

Sanofi is sponsoring a large-scale, methodologically robust epidemiology program as agreed upon with the European Medicines Agency (EMA) and shared with health authorities worldwide. The program includes three large studies including two retrospective cohort studies and one case-control study conducted by independent investigators. The results of the 'Northern European Database Study of Insulin and Cancer Risk' are under review by health authorities and will be presented at scientific conferences in 2012. These results confirm Sanofi's confidence in the safety of Lantus®.

Fourth-quarter sales of the rapid-acting insulin analog Apidra® were euro 35 million, down 28.6%, reflecting a temporary shortage of Apidra® 3mL cartridges, which impacted supplies in some markets. The production of Apidra® 3mL cartridges will return to full capacity in the first half of 2012. Full year 2011 sales of Apidra® reached euro 190 million, an increase of 9.6%.

Sales of Amaryl® were euro 113 million in the fourth quarter, down 8.9% reflecting generic competition in Japan which was partially offset by the growth in Emerging Markets (+8.9% to euro 58 million). Full year 2011 sales of Amaryl® were euro 436 million, down 7.9%.

The Diabetes business generated double digit growth of 12.0% in 2011 to euro 4,684 million.

Oncology

Fourth-quarter sales of Eloxatin® were up 119.0% to euro 325 million due to the further recovery of U.S. sales (euro 260 million, versus euro 79 million in the fourth quarter of 2010). Full year 2011 sales of the product reached euro 1,071 million. In September 2011, the U.S. District Court for the District of New Jersey ruled against Sun Pharmaceuticals in favor of Sanofi U.S. with respect to a contractual dispute arising from the resolution of the Eloxatin® patent litigation. This ruling, under appeal, supports the U.S. market exclusivity of Eloxatin® through August 9, 2012.

As expected, sales of Taxotere® declined significantly (-67.5% to euro 150 million) in the fourth quarter, reflecting generic erosion in the U.S. (sales down 90.4% to euro 14 million) and Western Europe (sales decreased 84.2% to euro 23 million). Full year 2011 sales of Taxotere® were euro 922 million, down 57.0%. In 2011, Taxotere sales generated outside the U.S. and Western Europe totaled euro 490 million.

Jevtana® sales reached euro 47 million in the fourth quarter. Sales in the U.S. and Western Europe reached euro 24 million and euro 18 million, respectively. Full year 2011 sales of Jevtana® were euro 188 million compared to euro 82 million in 2010.

Worldwide presence(1) of Plavix®/Iscover®

In the fourth quarter, the worldwide presence of Plavix® was stable at euro 1,750 million. Sales in the U.S. (consolidated by Bristol-Myers Squibb) were euro 1,159 million, down 2.1%. Over the period, Plavix® reported strong growth in Japan (up 22.7% to euro 208 million) and China (up 23.8% to euro 74 million). Sales in Europe were euro 129 million, down 24.3%, reflecting generic competition. In 2011, the worldwide presence of Plavix® reached euro 6,989 million, an increase of 4.5%. Full year 2011 sales in Japan and China were euro 671 million (up 22.9%) and euro 277 million (up 27.7%), respectively. Full year 2011 consolidated sales of Plavix® in Emerging Markets recorded double digit-growth (up 11.9% to euro 706 million).

Worldwide presence of Plavix®/Iscover®: geographic split


(millions of euros)

Q4 2011

Change at constant

exchange rates

2011

Change at constant

exchange rates

Europe

129

-24.3%

574

-29.8%

United States

1,159

-2.1%

4,758

+7.8%

Other Countries

462

+17.2%

1,657

+13.8%

TOTAL

1,750

-0.1%

6,989

+4.5%




Worldwide presence(1) of Aprovel®/Avapro®/Karvea®/Avalide®

In the fourth quarter, the worldwide presence of Aprovel® was euro 421 million, down 11.1% reflecting the growing penetration of losartan generics. In 2011, the worldwide presence of Aprovel® totaled euro 1,805 million, a decrease of 11.0%. Full year 2011 consolidated sales of the product in Emerging Markets reached euro 363 million, up 6.7%.

Worldwide presence of Aprovel®/Avapro®/Karvea®: geographic split


(millions of euros)

Q4 2011

Change at constant

exchange rates

2011

Change at constant

exchange rates

Europe

197

-13.4%

824

-13.0%

United States

80

-8.5%

374

-18.8%

Other Countries

144

-9.2%

607

-2.1%

TOTAL

421

-11.1%

1,805

-11.0%




Other Pharmaceutical Products

Lovenox® sales in the fourth quarter were down 13.4% to euro 498 million, reflecting generic competition in the U.S. (euro 118 million, down 50.2%). In Western Europe and in Emerging Markets, Lovenox® continued to record solid growth (+8.1% to euro 215 million and +19% to euro 140 million, respectively). Full year 2011 sales of Lovenox® reached euro 2,111 million, down 23.4%. Sales generated outside the U.S. grew 9.0% to euro 1,478 million and accounted for 70.0% of total Lovenox® sales. In September 2011, the FDA approved a second competing generic version of enoxaparin. Sanofi commercializes an authorized generic of Lovenox® in the U.S.

Fourth-quarter sales of Multaq® were euro 64 million, of which euro 47 million was generated in the U.S. and euro 15 million in Western Europe. Full year 2011 sales of Multaq® were euro 261 million. In the third quarter of 2011, the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA), modified the indication for Multaq®. The FDA approved a label update in December 2011 to ensure its use in the appropriate patient population, specifically in patients in sinus rhythm with history of paroxysmal or persistent atrial fibrillation (AF) and reinforcing Warnings and Precautions for use.

Sales of the Ambien® family of products decreased by 18.1% (to euro 137 million) in the fourth quarter, reflecting generic competition to Ambien®CR in the U.S. (Ambien® sales in the U.S. were down 66.7% to euro 18 million). In Japan, Myslee® grew 8.5% to euro 86 million over the quarter. Full year 2011 sales of the Ambien® family were euro 490 million of which euro 82 million were in the U.S. (down 80.6%). In Japan, Myslee® sales increased 9.2% to euro 284 million.

(1) See Appendix 10 for definitions of financial indicators

Allegra® sales in the fourth quarter as a prescription drug were euro 142 million of which euro 116 million (up 11.9%) was generated in Japan. Allegra® moved to the OTC market in the U.S. in March 2011 (sales reported in CHC). Full year 2011 sales of Allegra® as a prescription drug were euro 580 million, 80.2% of which (euro 465 million) were generated in Japan and increased by 22.1% reflecting a strong allergy season. In December 2011, the Japan patent office found two Japanese patents covering Allegra® invalid. This decision was subsequently appealed by Sanofi.

Sales of Copaxone® declined by 31.7% to euro 86 million, reflecting the transfer of the Copaxone® business to Teva in certain countries, notably Germany during the fourth quarter. Full year 2011 sales of the product reached euro 436 million, down 15.4%. All of the remaining Copaxone® business will be transferred to Teva during the first quarter of 2012. Following the transfer, Sanofi will receive a payment of 6% on sales from Teva for a period of two years, on a country-by-country basis.

Genzyme(10)


(millions of euros)

Q4 2011

net sales

Change on a constant

structure basis and at

constant exchange rates

Net sales since

April 1st 2011

Change on a constant

structure basis and at

constant exchange rates*

Cerezyme®

133

-17.4%

441

+11.1%*

Myozyme® / Lumizyme®

108

+15.9%

308

+27.4%*

Fabrazyme®

47

+3.7%

109

+9.4%*

Renagel®/Renvela®

143

+9.4%

415

+10.2%*

Synvisc®/ Synvisc One®

87

+15.2%

256

+14.7%*

Total Genzyme

831

+0.8%

2,395

+7.7%*

*April to December 2011 sales compared to April to December 2010 sales




Genzyme sales in the fourth quarter were euro 831 million, an increase of 0.8% over the fourth quarter of 2010. Consolidated sales of Genzyme in 2011 (consolidated since April 1, 2011) reached euro 2,395 million, up 7.7% over the same period of 2010.

Sales of Cerezyme® were euro 133 million in the fourth quarter, a decrease of 17.4%. As communicated last quarter, the reduction in global supply allocations continued to effect sales in the quarter. Consolidated sales of Cerezyme® in 2011 grew 11.1% (to euro 441 million) compared to the same period of 2010, reflecting higher production levels than in 2010. Genzyme continues to expect an improving Cerezyme® supply outlook from February 2012 forward.

Sales of Myozyme®/Lumizyme® were euro 108 million in the fourth-quarter, an increase of 15.9%. Consolidated sales in 2011 were euro 308 million, an increase of 27.4% compared to the same period of 2010 and were driven by continued expansion of Lumizyme® in the U.S. and volume growth across all geographies.

Sales of Fabrazyme® in the fourth quarter were euro 47 million, up 3.7% from the fourth quarter of 2010. Consolidated sales in 2011 reached euro 109 million, an increase of 9.4% compared to the same period of 2010. Growth was driven by stabilized production runs and an increase in product availability. In January 2012, the European Medicines Agency (EMA) and the Food and Drug Administration (FDA) approved the Genzyme manufacturing plant in Framingham, for the production of Fabrazyme®. The approval of the Framingham site allows Genzyme to begin the process of returning patients to full dosing levels. Following the EMA approval, Genzyme will begin the process of moving the most severely affected patients in Europe to full dose of Fabrazyme® in the first quarter of 2012. Beginning in March, all patients in the U.S. currently on therapy will be returned to full dosing. In addition, the company will begin to transition new patients in the U.S. onto Fabrazyme®, at full dosing levels.

Globally, the complete return to normal supply levels of Fabrazyme will begin in the second quarter and continue throughout the year as planned, as Genzyme works to obtain all global regulatory approvals throughout the year and to build inventory.

(10) Historical Genzyme perimeter; sales growth of Genzyme are stated on a constant structure basis and at constant exchange

Sales of Renvela®/Renagel® were euro 143 million in the fourth quarter, an increase of 9.4%. Growth was driven primarily by the U.S. market which achieved an all-time high in market share of 53.3%. Consolidated sales in 2011 were euro 415 million, up 10.2% compared to the same period of 2010.

Fourth-quarter sales of Synvisc®/Synvisc One® were euro 87 million, up 15.2%. Consolidated sales grew 14.7% (to euro 256 million) compared to the same period of 2010. The solid growth was a result of strong performance of the Synvisc One® franchise in the U.S. and in Japan.

Consumer Health Care

Sales of the Consumer Health Care (CHC) business registered another quarter of double digit growth (up 15.4% to euro 645 million), driven by Allegra® OTC in the U.S. (euro 25 million), the performance of Doliprane® (up 13.8%), Lactacyd® (up 42.1%), Enterogermina® (up 30.0%) and the positive impact from acquisitions (mainly BMP Sunstone in China). The CHC performance was particularly strong in Latin America with sales up 20.4% in the fourth quarter. Full year 2011 sales of CHC grew 22.8% to euro 2,666 million. Allegra® was successfully switched from Rx-to-OTC status in the U.S. in 2011. Sales of Allegra® OTC reached euro 245 million (of which euro 211 million in the U.S.) and the product has become Sanofi's CHC product with highest sales.

In the fourth quarter of 2011, Aventis Pharma Limited (an Indian subsidiary of Sanofi) completed the acquisition of Universal Medicare Private Limited's business of marketing and distribution of branded nutraceutical formulations in India. With this acquisition, Aventis Pharma will advance its sustainable growth strategy in India and facilitate the development of a CHC platform in that country.

Generics

Sales of generics in the fourth quarter reached euro 488 million, an increase of 21.0%, driven by increased authorized generics sales in the U.S. (U.S. sales of generic products were up 107.7% to euro 82 million). Over the period, sales both in Emerging Markets and Western Europe recorded double digit growth, up 11.0% (to euro 291 million) and 14.0% (to euro 106 million) respectively.

Full year 2011 generics sales were up 16.2% to euro 1,746 million, reflecting robust growth in Emerging Markets and recent launches of authorized generics of Taxotere®, Ambien®CR and Lovenox® in the U.S. (U.S. sales of generic products were up 79.4% to euro 177 million). In 2011, sales of generic products in Emerging Markets exceeded euro 1 billion (euro 1,092 million, up 14.0%).

Human Vaccines

Fourth-quarter consolidated sales of Sanofi Pasteur totaled euro 818 million, a decrease of 8.1% reflecting the impact of early supply of seasonal influenza vaccines in the third quarter in the U.S. Excluding influenza vaccines, fourth-quarter consolidated sales were up 24.1%. Full year 2011 consolidated sales for the Human Vaccines business were euro 3,469 million, an increase of 7.2% excluding A/H1N1 influenza vaccines sales booked in 2010, or a decrease of 5.5% including A/H1N1 vaccines sales.

Seasonal influenza vaccines sales were euro 66 million in the fourth quarter compared to euro 285 million in the fourth quarter of 2010, reflecting the early supply in the U.S. in the third quarter 2011. 2011 was a record year for seasonal influenza vaccines with total sales of euro 826 million, an increase of 2.5%, supported by strong Southern Hemisphere seasonal sales. In the U.S., our offering has been further differentiated with the launches of Fluzone® High Dose in 2010 and Fluzone® Intradermal in 2011 which was approved by the FDA in May. Fluzone® Intradermal experienced a limited launch in 2011 focused on the education of patients and healthcare professionals, the first doses were shipped in September.

Polio/Pertussis/Hib vaccines grew 23.4% to euro 325 million in the fourth quarter, driven by another strong performance of Pentaxim® (5-in-1 combination vaccine against diphtheria, tetanus, pertussis, polio and haemophilus influenzae type b) which is primarily sold in Emerging Markets (sales up 42.5% to euro 64 million). Sales of Pentacel® (another 5-in-1 combination vaccine, mainly sold in the U.S.) were up 15.1% (to euro 109 million). Full year 2011 sales of Polio/Pertussis/Hib vaccines totaled euro 1,075 million (up 12.0%), reflecting the performances of Pentaxim® (up 30.2% to euro 238 million), Pentacel® (up 9.1% to euro 332 million) and haemophilus influenzae type b vaccines notably in Japan. Total Hib vaccines sales grew 27.7% to euro 178 million.

Menactra® sales recorded strong double-digit growth (up 43.2%) to euro 93 million in the fourth quarter, led by robust performance in the U.S. where sales were up 53.9% to euro 86 million. U.S. sales benefited from the ACIP (Advisory Committee on Immunization Practices) recommendation of a booster dose for adolescents. Full year 2011 sales of Menactra® were euro 427 million, an increase of 4.3%, including euro 386 million in the U.S., which were up 2.7%.

Fourth-quarter sales of adult boosters grew 16.2% to euro 137 million, led by the performance of Adacel® which sales were up 13.0% to euro 90 million and tetanus/diphtheria vaccines. Full year 2011 sales of adult boosters totaled euro 465 million, an increase of 7.3%, including euro 314 million of Adacel® sales which were up 9.2%.

Travel and other endemic vaccines sales were euro 101 million increasing 10.9% in the fourth quarter and were down 1.6% to euro 370 million in 2011.

Consolidated vaccines sales


(millions of euros)

Q4 2011

net sales

Change at constant

exchange rates

2011

net sales

Change at constant

exchange rates

Influenza Vaccines (incl. Vaxigrip® and Fluzone®)

66

-76.5%

826

-33.2%

         of  which seasonal vaccines

66

-76.5%

826

+2.5%

         of  which pandemic vaccines

0

-

0

-100.0%

Polio/Pertussis/Hib Vaccines (incl. Pentacel® and Pentaxim®)

325

+23.4%

1,075

+12.0%

Meningitis/Pneumonia Vaccines (incl. Menactra®)

115

+35.6%

510

+2.3%

Adult Booster Vaccines (incl. Adacel ®)

137

+16.2%

465

+7.3%

Travel and Other Endemics Vaccines

101

+10.9%

370

-1.6%

Other Vaccines

74

+53.4%

223

+37.8%

TOTAL

818

-8.1%

3,469

-5.5%




Fourth-quarter sales (not consolidated by Sanofi) of Sanofi Pasteur MSD, the joint venture with Merck & Co in Europe were euro 223 million, down 12.7% (on a reported basis). Full year 2011 sales of Sanofi Pasteur MSD reached euro 791 million, down 13.8%, on a reported basis, reflecting a decrease in Gardasil® sales (down 31.1% to euro 181 million) and in flu vaccines sales.

Animal Health

Sales of Merial grew 10.0% to euro 470 million in the fourth quarter, reflecting a recovery of Frontline® family sales despite the entry of generic competition to Frontline® Plus in the U.S. in the third quarter. On June 21, the U.S. District Court for the Middle District of Georgia ruled in favor of Merial holding that sales of PetArmor™ Plus products infringed Merial's patent and barred Cipla and Velcera from making or selling those products in the U.S. A court-ordered seizure of the inventory in the U.S. still in possession of the generic manufacturers went into effect on August 21, 2011. However, the generic products already sold to retailers were not recalled.

Fourth-quarter sales of the companion animals segment were up 9.7% to euro 249 million. Frontline® family products sales were up 16.8% to euro 132 million and recorded double digit growth in all regions. In the U.S., sales of Frontline® family products were up 12.2% (to euro 56 million) reflecting a recovery in Frontline® Plus sales and the July launch of Certifect®, a new combination parasiticide for flea and tick control for dogs.

Fourth-quarter sales of the production animals segment grew 10.4% to euro 221 million reflecting the double digit growth of the Veterinary Public Health segment and the Ruminant segment, which was driven by the launch in the U.S. of the antibiotic Zactran® against bovine respiratory disease.

Full year 2011 sales of Merial were up 4.3% to euro 2,030 million. The companion animals segment recorded sales of euro 1,277 million up 1.8%. Despite generic competition and new competitors in the U.S. and in Western Europe, Frontline® family products sales were up 0.9% to euro 764 million. Sales of the production animals segment increased 8.9% to euro 753 million driven by the robust performance of Ruminant segment (up 11.6%). The Avian segment, which benefited from the success of the vaccine Vaxxitek®, grew 7.8%. In 2011, Emerging Markets sales recorded double digit growth (up 12.4% to euro 507 million) accounting for 25.0% of total Merial sales.

Net sales by geographic region


(millions of euros)

Q4 2011

net sales

Change at

constant

exchange rates

2011

net sales

Change at

constant

exchange rates

United States

2,475

+9.8%

9,957

+6.8%

Western Europe*

2,208

-2.6%

9,130

-4.0%

Emerging Markets**

2,649

+18.7%

10,133

+10.1%

 of which Eastern Europe and Turkey

667

+10.8%

2,666

+3.7%

 of which Asia

634

+18.7%

2,416

+16.6%

 of which Latin America

828

+27.2%

3,111

+11.8%

 of which Africa

239

+14.3%

949

+9.7%

 of which Middle East

237

+14.2%

872

+8.6%

Rest of the world***

1,176

+12.3%

4,169

+13.8%

 of which Japan

840

+17.5%

2,865

+20.2%

TOTAL

8,508

+9.2%

33,389

+5.3%


* France, Germany, UK, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Netherlands, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark

** World less the U.S. and Canada, Western Europe, Japan, Australia and New Zealand  

*** Japan, Canada, Australia and New Zealand




Emerging Markets recorded strong double digit growth of 18.7% to euro 2,649 million, or 13.8% excluding Genzyme in the fourth quarter. BRIC (Brazil, Russia, India, China) sales were euro 933 million, up 24.0%, or up 20.2% excluding Genzyme. China recorded sales of euro 270 million, up 30.4% (excluding Genzyme), led by the performance of Plavix®, Lantus®, Aprovel® and the contribution from BMP Sunstone. Brazil sales were euro 398 million, up 14.7% (excluding Genzyme), led by Lantus®, CHC, generics and Vaccines. Sales in Russia reached euro 202 million, an increase of 23.2% excluding Genzyme, driven notably by Lantus®, Lovenox® and Vaccines.

Full-year 2011 sales in Emerging Markets totaled euro 10,133 million, an increase of 10.4% (excluding Genzyme and A/H1N1 vaccines sales of euro 361 million booked in 2010). Full-year sales in BRIC countries reached euro 3,467 million, up 19.8%, (excluding Genzyme and A/H1N1 vaccines sales). Brazil sales in 2011 were euro 1,522 million (up 16.9% excluding Genzyme and A/H1N1 sales). Sales in China in 2011 reached euro 981 million (up 38.5% excluding Genzyme). Russia recorded 2011 sales of euro 732 million, an increase of 7.4% (excluding Genzyme). In 2011, Asia and Latin America continued to deliver strong double digit sales growth of 15.7% and 18.1% respectively (excluding Genzyme and A/H1N1 sales). Full-year sales in Eastern Europe and Turkey were slightly down  (- 0.4% excluding Genzyme and A/H1N1 sales) to euro 2,666 million, which were particularly impacted by price cuts and generic competition for Taxotere® in Turkey.

Fourth-quarter sales in the U.S. were euro 2,475 million up 9.8%, or down 8.2% excluding Genzyme (euro 423 million). Sales in the U.S. in the fourth quarter were impacted by generics of Taxotere®, Lovenox®, Ambien®CR and early supply of seasonal flu vaccines, which were partially offset by growth of Lantus® and Eloxatin®. Full-year 2011 sales in the U.S. were euro 9,957 million, up 6.8 % and down 5.7% excluding Genzyme and A/H1N1 sales.

Fourth-quarter sales in Western Europe reached euro 2,208 million, down 2.6% (or down 11.6% excluding Genzyme and A/H1N1 sales), and were impacted by competition for Taxotere® and Plavix®, the transfer of the Copaxone® business to Teva in certain countries, as well as the impact of austerity measures. Full-year 2011 sales in Western Europe reached euro 9,130 million, down 4.0% or down 10.5% excluding Genzyme and A/H1N1 sales.

Japan recorded sales of euro 840 million, up +17.5%, or up 9.4% excluding Genzyme, notably driven by Plavix® (up 22.7%) and Lantus® (up 18.0%). Full-year 2011 sales in Japan were euro 2,865 million, up 20.2%, or up 12.0% excluding Genzyme and were supported by Plavix® (up 22.9% to euro 671 million), Allegra® (up 22.2% to euro 465 million) and Hib vaccine sales.

R&D update

Sanofi submitted the following products to regulatory authorities in the U.S. and/or EU since July 2011:

  • Kynamro™(11) (mipomersen), licensed from Isis Pharmaceuticals Inc., was filed in the EU in July 2011 for the treatment of patients with homozygous familial hypercholesterolemia (hoFH) and severe heterozygous familial hypercholesterolemia (heFH). In the U.S., the submission of the hoFH indication is planned in the first quarter of 2012.
  • Aubagio™ (teriflunomide) in the EU at the beginning of February 2012 for the treatment of relapsing multiple sclerosis. Teriflunomide was submitted in the U.S. in August 2011.
  • Visamerin®/Mulsevo® (semuloparin) was submitted in the EU and U.S. in September 2011 for the prevention of Venous Thrombo-Embolism events in cancer patients initiating a chemotherapy regimen.
  • Lyxumia® (lixisenatide), licensed from Zealand Pharma, was filed in the EU in October of 2011 for the treatment of type 2 diabetes. Submission of lixisenatide in the U.S. is expected in the fourth quarter of 2012.
  • Zaltrap™ (aflibercept), from the Regeneron partnership, was submitted in second line metastatic colorectal cancer in EU in December 2011 and in the U.S. in early February 2012.

Genzyme is completing the dossier for Lemtrada (alemtuzumab(12)) for relapsing remitting multiple sclerosis which will be submitted to the FDA and EMA in the second quarter of 2012.

Additional regulatory milestones were achieved since the beginning of November with the submission to EU authorities of a pediatric indication for Lantus® and the filing of Plavix® in Japan for the treatment of peripheral arterial disease and ST- elevated myocardial infection. Plavix® was also approved in Japan in a new indication, stable angina/old myocardial infarction undergoing PCI (percutaneous coronary interventions).

Since the R&D update on November 3, the evolution of the R&D portfolio has been favourable with additional positive Phase III results for Lemtrada (alemtuzumab), Lyxumia® (lixisenatide) and Aubagio® (teriflunomide); the beginning of a Phase III program for a new formulation of insulin glargine and for a JAK-2 inhibitor; the entry into Phase II of 5 compounds.

At the beginning of February, the R&D portfolio comprises 60 NMEs (New Molecular Entities) projects and vaccines in clinical development of which 17 are in Phase III or have been submitted to the health authorities for approval.

Evolution of the late stage portfolio:

In November, Sanofi and Regeneron announced positive preliminary results from the Phase 2 study program in which patients with elevated low-density lipoprotein cholesterol (LDL-C) were treated with SAR236553. This compound is a novel, high-affinity, subcutaneously administered, fully-human antibody targeting PCSK9. Blocking the PCSK9 pathway is a novel mechanism for lowering LDL-C, the leading known risk factor for coronary artery disease. Detailed Phase II data will be presented at the American College of Cardiology congress (ACC) in March. The Phase III program is targeted to start in the second quarter of 2012.

In November, Sanofi and its subsidiary Genzyme announced that the Phase lll CARE-MS ll trial, which compared Lemtrada (alemtuzumab) to interferon beta-1a, Rebif®, in patients with relapsing-remitting multiple sclerosis met both of its co-primary endpoints. Relapse rate and sustained accumulation (worsening) of disability were significantly reduced in multiple sclerosis patients receiving alemtuzumab (Lemtrada™) as compared with Rebif®. Results for both of these co-primary endpoints were highly statistically significant. The full results of CARE-MS II will be presented at a forthcoming scientific meeting.

(11)Zaltrap™, Lemtrada™, Aubagio™, Kynamro™ and Lyxumia® are registered trade names submitted to health authorities for investigational agents

(12) Genzyme is developing alemtuzumab in Multiple Sclerosis in collaboration with Bayer HealthCare

In December, positive topline results were announced for Lyxumia® (lixisenatide) in combination with Lantus® in patients with type 2 diabetes uncontrolled on oral anti-diabetics. In this GetGoal Duo 1 study, lixisenatide achieved its primary efficacy endpoint of significantly reducing HbA1c, with a significant improvement in post-prandial glucose.

Positive top-line results of GetGoal-M evaluating Lyxumia® (lixisenatide) given as a morning or evening dosing as add-on therapy to metformin were presented at the 21st World Diabetes Congress in December.

Today, Sanofi announces positive top line results of the GetGoal-P study. In this study, Lyxumia® (lixisenatide) achieved its primary efficacy endpoint of significantly reducing HbA1c compared with placebo (p<0.0001) with HbA1c in the lixisenatide group decreasing from a mean baseline value of 8.08% to a mean value of 7.06% after 24 weeks.

Lyxumia® (lixisenatide), our new once-daily GLP-1, delivered positive results throughout the GetGoal phase III program.

In December, Genzyme reported top-line results from TENERE, a Phase III clinical trial comparing the effectiveness, safety and tolerability of once-daily oral Aubagio (teriflunomide) to interferon beta-1a (Rebif®), an approved injectable therapy, in people with relapsing forms of multiple sclerosis. No statistical superiority was observed between the Rebif® and teriflunomide arms (7mg and 14mg) on risk of treatment failure, the primary composite endpoint of the study. Both the 7mg and 14mg doses of teriflunomide were safe and generally well tolerated.

ENCORE, ENGAGE and EDGE, the Phase III trials evaluating eliglustat, potentially the first oral therapy for Gaucher disease, are fully enrolled.

Three projects entered Phase III:

  • A new formulation of insulin glargine started Phase III trial. The EDITION I trial compares the new formulation of insulin glargine with Lantus® in patients with type II diabetes on basal plus meal-time insulin. The EDITION II trial compares the new formulation of insulin glargine with Lantus® in patients with type II diabetes with oral anti-diabetic agents. The estimated number of patients enrolled in each study is 800. Recruitment started at the end of 2011.
  • SAR302503, a JAK-2 inhibitor, entered Phase III in myelofibrosis;
  • VaxiGrip®, a quadrivalent inactivated influenza vaccine

Five compounds entered Phase II or started additional Phase II:

  • SAR279356, an anti-PNAG monoclonal antibody in prevention of serious infections;
  • SAR3419, a monoclonal antibody maytansinoid loaded anti CD19 for the treatment of Diffuse Large B-cell Lymphoma (DLBCL);
  • SAR113945, an Ikβ kinase inhibitor for the treatment of symptoms of osteoarthritis;
  • SAR245408/XL147, an oral PI3K inhibitor for breast cancer. This compound is already in Phase II for endometrial cancer;
  • SAR256212/MM-121, a monoclonal antibody anti-ErbB3 for non-small cell lung cancer. This compound is already in Phase II for breast cancer.

Two projects in Phase I (SAR101099 – an urotensin II receptor antagonist evaluated in diabetes nephropathy and SAR103168 – a Multi-Kinase Inhibitor in oncology), three projects in Phase II (FOV2302 – a plasma kallikrein inhibitor evaluated in ophthalmology, a recombinant human TSH modified for Goiter, and ataluren- a transcription modulator evaluated in cystic fibrosis) and one project in Phase III (prochymal – a mesenchymal stem cell evaluated for graft-versus-host disease) have been discontinued.

In December, Regeneron announced top-line results of the Phase II, AFFIRM trial that studied Zaltrap® (aflibercept) in combination with the modified FOLFOX6 regimen in first-line therapy for metastatic colorectal cancer. The results showed that in patients who received Zaltrap® in combination with modified FOLFOX6, the Progression Free Survival rate at one year (the primary endpoint of the study) was similar to that seen in the standard therapy arm for patients who received modified FOLFOX6 alone.

Fourth-quarter financial results

Business Net Income(1)

Sanofi net sales in the fourth quarter reached euro 8,508 million, up 8.8% on a reported basis (up 9.2% at constant exchange rates), reflecting the performance of growth platforms, the acquisition of Genzyme (euro 831 million), the impact from EU austerity measures, and the loss of euro 387 million of sales due to generic competition. Other revenues were down 1.0% to euro 415 million, reflecting the slight decrease in Plavix® sales in the U.S. (-2.1%) and a positive dollar effect. At constant exchange rates, other revenues were down 1.9%.

Gross profit was up 7.5% (or up 7.3% at constant exchange rates) to euro 6,202 million. The ratio of cost of sales to net sales reached 32.0%, an increase of 0.4 percentage points due to the impact of generic competition.

Research and development expenses increased 10.7% (or 10.5% at constant exchange rates) to euro 1,293 million. Excluding Genzyme, R&D expenses decreased 1.7% at constant exchange rates. The ratio of R&D expenses to net sales was 15.2%, up 0.3 percentage point versus the fourth quarter of 2010.

Selling and general expenses were euro 2,221 million, an increase of 0.9% (or up 1.0% at constant exchange rates). Excluding Genzyme, SG&A expenses were down 9.2% at constant exchange rates. The ratio of selling and general expenses to net sales decreased 2.0 percentage points to 26.1%, reflecting tight cost control and start of Genzyme synergies.

Other current operating income net of expenses was stable at -euro 59 million.

The share of profits from associates reached euro 256 million, an increase of 1.2% (stable at constant exchange rates). The share of after-tax profits from the territories managed by BMS under the Plavix® and Avapro® alliance was euro 258 million, up 4.9%.

Net income attributable to non-controlling interests was euro 57 million (up 3.6%) of which euro 49 million was the profits paid to BMS from territories managed by Sanofi.

Business operating income increased 11.3% (up 10.0% at constant exchange rates) to euro 2,828 million. The ratio of business operating income to net sales reached 33.2%, 0.7 percentage points higher than in the fourth quarter of 2010.

Net financial expenses were euro 113 million, compared to euro 95 million. This line included an impairment of euro 18 million recognized on Greek bonds valued at mark-to-market and a gain linked to revaluation at fair value of Yves Rocher stake.

The effective tax rate was 25.4%, compared to 27.0% in the fourth quarter of 2010, reflecting the positive effect of the Advance Pricing Agreement concluded between France and the U.S. in December 2011 on 2011 intercompany flows.

Business net income(1) was euro 2,077 million, up 11.7% at constant exchange rates or 13.0% on a reported basis.

In Q4 2011, Business earnings per share(1) (EPS) was euro 1.56, up 9.2% at constant exchange rates, or up 10.6% on a reported basis. The average number of shares outstanding increased to 1,330.0 million this quarter versus 1,304.9 million in Q4 2010.

(1) See Appendix 10 for definitions of financial indicators, and Appendix 6 for reconciliation of business net income to consolidated net income attributable to equity holders of Sanofi

2011 financial results

Business Net Income(1)

In 2011, Sanofi net sales reached euro 33,389 million, an increase of 3.2% on a reported basis and 5.3% at constant exchange rates reflecting the performance of growth platforms, the consolidation of Genzyme from April 1, the impact from EU austerity measures, and the loss of euro 2,206 million of sales due to generic competition. Other revenues were stable at euro 1,669 million, or increased 4.0% at constant exchange rates.

Gross profit was euro 24,632 million, down 0.4% or up 1.9% at constant exchange rates. The ratio of cost of sales was 31.2%, 2.4 percentage points higher, reflecting the impact of generic competition and the lack of A/H1N1 vacines sales.

Research and development expenses reached euro 4,811 million, up 5.6% (or 7.4% at constant exchange rates) and included euro 419 million of R&D expenses from Genzyme. Excluding Genzyme, R&D expenses were down 2.4% at constant exchange rates reflecting transforming initiatives. The ratio of R&D expenses to net sales was 14.4%, 0.3 percentage points higher than in 2010.

Selling and general expenses totaled euro 8,536 million, an increase of 4.5% or 6.7% at constant exchange rates. Excluding Genzyme, SG&A expenses were down 2.6% at constant exchange rates as transforming initiatives more than offset launch costs for Jevtana® in the EU, and Allegra® OTC in the U.S. and greater promotional effort behind Lantus® in the U.S. The ratio of selling and general expenses to net sales was 25.6%, 0.4 percentage points higher than in 2010.

Other current operating income net of expenses was euro 4 million versus euro 77 million in 2010, which included a euro 87 million payment received from Teva on sales of Copaxone® in North America (these payments ceased at the end of Q1 2010) and acquisition expenses related to Genzyme (euro 65 million in 2011).

The share of profits from associates reached euro 1,102 million, up 6.4% compared to 2010. The share of after-tax profits from the territories managed by BMS under the Plavix® and Avapro® alliance was euro 1,070 million, up 9.2%.

Net income attributable to non-controlling interests reached euro 247 million, down 3.9%. The profits paid to BMS from territories managed by Sanofi were euro 225 million, down 5.5 %, reflecting competition from clopidogrel generics in Europe.

Business operating income reached euro 12,144 million, a decrease of 3.9% at constant exchange rates, or down 5.6% on a reported basis. The ratio of business operating income to net sales was 36.4%, 3.3 percentage points lower than 2010.

Net financial expenses reached euro 412 million versus euro 362 million in 2010. Net financial expenses included an impairment of euro 49 million recognized on Greek bonds valued at mark-to-market. The average cost of gross debt was 2.6% in 2011.

The effective tax rate decreased 1.0 percentage point to 27.0% compared to 2010.

Business net income(1) reached euro 8,795 million, a decrease of 2.7% at constant exchange rates, or a decrease of 4.6% on a reported basis.

In 2011, Business earnings per share(1) (EPS) was euro 6.65, a decrease of 3.8% at constant exchange rates, or a decrease of 5.8% on a reported basis. The average number of shares outstanding increased to 1,321.7 million in 2011 versus 1,305.3 million in 2010.

(1) See Appendix 10 for definitions of financial indicators, and Appendix 6 for reconciliation of business net income to consolidated net income attributable to equity holders of Sanofi

From business net income to consolidated net income (see Appendix 6)

In 2011, the main reconciling items between business net income and consolidated net income attributable to equity holders of Sanofi were:

  • A euro 3,314 million amortization charge against intangible assets arising on the application of purchase accounting to acquired companies (primarily Aventis: euro 1,788 million, Genzyme: euro 709 million and Merial euro 353 million) and to acquired intangible assets (licenses/products: euro 178 million). The fourth quarter amortization charge against intangible assets was euro 809 million (primarily Aventis: euro 369 million, Genzyme euro 233 million and Merial euro 94 million), euro 40 million of which related to acquired intangible assets (licenses/products). This item has no cash impact on the Group.
  • An impairment loss against intangible assets of euro 142 million (including euro 66 million in the fourth quarter notably for a project from Genzyme in Phase II for Goiter). This item has no cash impact on the Group.
  • An income of euro 15 million reflecting a decrease in the fair value of contingent considerations related to the CVRs (euro 211 million of which a charge of euro 41 million booked in Q4), an increase in the fair value of contingent considerations related to TargeGen business combination (euro 69 million of which euro 21 million booked in Q4), and Bayer contingent considerations (euro 127 million of which euro 90 million booked in Q4).
  • A charge of euro 476 million arising from the workdown of inventories of acquired companies (mainly due to Genzyme) remeasured at fair value due to the application of purchase accounting to acquisitions, of which euro 72 million in the fourth quarter. This item has no cash impact on the Group. This charge impacted the consolidated gross margin.
  • euro 1,314 million of restructuring costs (including euro 777 million in the fourth quarter) mainly related to continuing transformation of R&D, Operations in the U.S. and Europe and Industrial Affairs in Europe.
  • Damages of euro 210 million were awarded to Sanofi as part of a Plavix® patent litigation against Apotex. On October 18, 2011, in the damages phase of the Plavix® patent infringement case against Apotex, the U.S. Court of Appeals upheld the damages award, and Sanofi is to receive payment of $273 million in February 2012.
  • A non-recurring amortization charge of euro 519 million booked in the first quarter of 2011 due to the change of plan for Merial assets that were previously classified as held for sale or exchange in accordance with IFRS5. This charge corresponds to the depreciation and amortization of Merial assets that would have been recognized for the period from September 18, 2009 to December 31, 2010, had these assets not been classified as held for sale or exchange. This item has no cash impact on the Group.
  • A euro 1,905 million tax effect arising from the items listed above, comprising euro 1,178 million generated by amortization charged against intangible assets, euro 191 million by the non-recurring amortization charge on Merial assets, euro 143 million by the workdown of inventories of acquired companies and euro 399 million linked to restructuring costs. The fourth-quarter tax effect from the items listed above was euro 476 million, including euro 265 million of deferred taxes generated by amortization charged against intangible assets, euro 23 million by the workdown of inventories of acquired companies and euro 225 million linked to restructuring costs (see Appendix 6).
  • A euro 577 million non-recurring tax effect related to the impact of Franco-American APA on prior period and an adjustment of deferred taxes liabilities linked to revaluation of intangible assets following legislation changes.
  • In "Share of profits/losses from associates", a charge of euro 32 million (of which euro 11 million in Q4 2011), net of tax, mainly relating to the share of amortization of intangible assets. This item has no cash impact on the Group.

Strong cash flow from operating activities in 2011

Net cash generated by operating activities after changes in working capital and before restructuring costs was euro 10,002 million, a decrease of 7.3% compared to 2010. This amount largely provided finance for capital expenditures (euro 1,644 million), the dividend paid by Sanofi (euro 1,372 million), repurchasing of shares (euro 1,074 million), and restructuring costs (euro 707 million). The acquisitions and partnerships made during the period (euro 14,079 million) were mainly Genzyme (euro 13,528 million) and BMP Sunstone (euro 377 million) and the disposals (euro 359 million) were mainly Dermik (euro 321 million). As a consequence, net debt increased from euro 1,577 million at December 31, 2010 to euro 10,859 million (debt of euro 14,983 million, net of euro 4,124 million cash and cash equivalents) at December 31, 2011.

The Board meeting which signed off the financial statements for the year ended December 31, 2011 was held on February 7, 2012. Audit procedures on the consolidated financial statements are complete. The audit opinion will be issued by the statutory auditors once they have finalized the specific verifications and other procedures required for the purposes of filing the French-language "document de reference" and the Form 20-F with the market authorities.

Forward-Looking Statements

This press release 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 underlying 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 are generally identified by the words "expects," "anticipates," "believes," "intends," "estimates," "plans" and similar expressions. Although Sanofi's management believes that the expectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of Sanofi, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include among other things, the uncertainties inherent in research and development, future clinical data and analysis, including post marketing, decisions by regulatory authorities, such as the FDA or the EMA, regarding whether and when to approve any drug, device or biological application that may be filed for any such product candidates as well as their decisions regarding labeling and other matters that could affect the availability or commercial potential of such product candidates, the absence of guarantee that the products candidates if approved will be commercially successful, the future approval and commercial success of therapeutic alternatives, the Group's ability to benefit from external growth opportunities, trends in exchange rates and prevailing interest rates, the impact of cost containment policies and subsequent changes thereto, the average number of shares outstanding as well as those discussed or identified in the public filings with the SEC and the AMF made by Sanofi, including those listed under "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements" in Sanofi's annual report on Form 20-F for the year ended December 31, 2010. Other than as required by applicable law, Sanofi does not undertake any obligation to update or revise any forward-looking information or statements.

Appendices

List of appendices


Appendix 1: 2011 fourth-quarter and 2011 consolidated net sales by product

Appendix 2:   2011 fourth-quarter and 2011 consolidated net sales by geographic region and product

Appendix 3:   Consolidated net sales by business segment

Appendix 4: Net sales of Growth Platforms

Appendix 5:  2011 fourth-quarter and 2011 business net income statements

Appendix 6:  Reconciliation of business net income to net income attributable to equity holders of Sanofi

Appendix 7:  2011 fourth-quarter and 2011 consolidated income statements

Appendix 8: Change in net debt

Appendix 9: Simplified consolidated balance sheet

Appendix 10: Definitions



Appendix 1: 2011 fourth-quarter and 2011 consolidated net sales by product

Pharmaceuticals


(euro million)

Q4 2011

net sales

Change at constant

exchange rates

Change on a

reported basis

Lantus®

1,054

17.8%

17.9%

Apidra®

35

-28.6%

-28.6%

Insuman®

36

0.0%

2.9%

Amaryl®

113

-8.9%

-8.1%

    Total Diabetes

1,242

12.5%

12.8%

Lovenox®

498

-13.4%

-14.4%

Plavix®

529

2.2%

4.8%

Taxotere®

150

-67.5%

-67.1%

Aprovel®

314

-3.4%

-3.4%

Eloxatin®

325

119.0%

121.1%

Multaq®

64

1.6%

1.6%

Jevtana®

47

14.6%

14.6%

Stilnox®/Ambien®/Ambien CR®/Myslee®

137

-18.1%

-14.4%

Allegra®

142

-10.5%

-6.6%

Copaxone®

86

-31.7%

-31.7%

Tritace®

88

-4.2%

-8.3%

Depakine®

101

7.4%

6.3%

Xatral®

37

-46.5%

-47.9%

Actonel®

37

-32.1%

-33.9%

Nasacort®

18

-55.8%

-58.1%

Other Products

1,441

-1.9%

-3.5%

Consumer Health Care

645

15.4%

12.8%

Generics

488

21.0%

16.2%

Genzyme

831

ns

ns

Total Pharmaceuticals

7,220

10.5%

11.0%

Vaccines

818

-8.1%

-8.1%

Animal Health

470

10.0%

9.8%

Total

8,508

9.2%

8.8%




Vaccines


(euro million)

Q4 2011

net sales

Change at constant

exchange rates

Change on a

reported basis

Polio/Pertussis/Hib Vaccines

325

23.4%

22.6%

Influenza Vaccines

66

-76.5%

-76.8%

Méningitis/Pneumonia Vaccines

115

35.6%

36.9%

Adult Booster Vaccines

137

16.2%

17.1%

Travel and Other Endemics Vaccines

101

10.9%

9.8%

Other Vaccines

74

53.4%

57.4%

Total vaccines

818

-8.1%

-8.1%




Animal Health


(euro  million)

Q4 2011

net sales

Change at constant

exchange rates

Change on a

reported basis

Frontline® and other fipronil products

132

+16.8%

16.8%

Vaccines

190

+9.1%

8.0%

Avermectin

86

+13.2%

13.2%

Other

62

-3.2%

-1.6%

Total

470

10.0%

9.8%




Pharmaceuticals


(euro  million)

2011

net sales

Change at constant

exchange rates

Change on a

reported basis

Lantus®

3,916

15.0%

11.6%

Apidra®

190

9.6%

7.3%

Insuman®

132

-0.8%

-0.8%

Amaryl®

436

-7.9%

-8.8%

    Total Diabetes

4,684

12.0%

9.0%

Lovenox®

2,111

-23.4%

-24.8%

Plavix®

2,040

-2.9%

-2.1%

Taxotere®

922

-57.0%

-56.6%

Aprovel®

1,291

-2.4%

-2.7%

Eloxatin®

1,071

160.9%

150.8%

Multaq®

261

56.4%

51.7%

Jevtana®

188

135.4%

129.3%

Stilnox®/Ambien®/Ambien CR®/Myslee®

490

-41.4%

-40.2%

Allegra®

580

-8.6%

-4.4%

Copaxone®

436

-15.4%

-15.0%

Tritace®

375

-6.3%

-8.5%

Depakine®

388

5.4%

4.3%

Xatral®

200

-30.7%

-32.4%

Actonel®

167

-29.8%

-29.8%

Nasacort®

106

-41.8%

-43.9%

Other Products

5,773

-3.4%

-4.8%

Consumer Health Care

2,666

22.8%

20.3%

Generics

1,746

16.2%

13.8%

Genzyme*

2,395

ns

ns

Total Pharmaceuticals

27,890

6.7%

4.9%

Vaccines

3,469

-5.5%

-8.9%

Animal Health

2,030

4.3%

2.4%

Total

33,389

5.3%

3.2%

*Net sales since April 1st 2011




Vaccines


(euro  million)

2011

net sales

Change at constant

exchange rates

Change on a

reported basis

Polio/Pertussis/Hib Vaccines

1,075

12.0%

9.2%

Influenza Vaccines*

826

-33.2%

-36.3%

Méningitis/Pneumonia Vaccines

510

2.3%

-3.2%

Adult Booster Vaccines

465

7.3%

3.6%

Travel and Other Endemics Vaccines

370

-1.6%

-3.1%

Other Vaccines

223

37.8%

31.9%

Total vaccines

3,469

-5.5%

-8.9%

*Seasonal and pandemic influenza Vaccines




Animal Health


(euro  million)

2011

net sales

Change at constant

exchange rates

Change on a

reported basis

Frontline® and other fipronil products

764

0.9%

-1.3%

Vaccines

662

7.2%

5.6%

Avermectin

372

6.5%

4.8%

Other

232

4.4%

2.2%

Total

2,030

4.3%

2.4%




Appendix 2: 2011 fourth-quarter and 2011 consolidated net sales by geographic region and product

Pharmaceuticals


Q4 2011 net sales (euro million)

Western

Europe

Change

at CER

United

States

Change

at CER

Emerging

Markets

Change

at CER

Rest of the

World

Change

at CER

Lantus®

186

8.1%

627

16.7%

172

30.7%

69

26.9%

Apidra®

12

-36.8%

12

-18.8%

5

-44.4%

6

0.0%

Insuman®

27

-3.6%

0

-

8

28.6%

1

-

Amaryl®

7

-30.0%

1

0.0%

58

8.9%

47

-23.2%

    Total Diabetes

236

3.1%

640

15.6%

243

21.5%

123

0.0%

Lovenox®

215

8.1%

118

-50.2%

140

19.0%

25

-4.0%

Plavix®

90

-32.3%

35*

-30.6%

183

18.7%

221

23.8%

Taxotere®

23

-84.2%

14

-90.4%

64

-29.3%

49

-27.4%

Aprovel®

178

-11.1%

11*

22.2%

87

1.1%

38

29.6%

Eloxatine®

7

-41.7%

260

225.3%

41

-2.4%

17

21.4%

Multaq®

15

-26.3%

47

9.5%

2

100.0%

0

100.0%

Jevtana®

18

-

24

-41.5%

5

-

0

-

Stilnox®/Ambien®/Ambien CR®/Myslee®

13

0.0%

18

-66.7%

17

11.8%

89

6.6%

Allegra®

2

0.0%

-1

-103.2%

25

22.7%

116

11.3%

Copaxone®

81

-33.6%

0

-

0

-

5

25.0%

Tritace®

40

-10.9%

0

-

42

4.5%

6

-16.7%

Depakine®

37

0.0%

0

-

58

13.0%

6

0.0%

Xatral®

13

-13.3%

6

-83.8%

17

0.0%

1

0.0%

Actonel®

11

-47.8%

0

-

17

-9.5%

9

-41.7%

Nasacort®

6

0.0%

5

-82.8%

6

0.0%

1

0.0%

Consumer Health Care

156

3.3%

107

23.3%

324

22.7%

58

0.0%

Generics

106

14.0%

82

107.7%

291

11.0%

9

28.6%

Others

586

-10.9%

108

-25.0%

548

15.6%

199

0.0%

Genzyme

210

-

423

-

115

-

83

-

Total Pharmaceuticals

2,043

-2.9%

1,897

19.2%

2,225

19.3%

1,055

14.8%

*Sales of active ingredient to the American entity managed by BMS




Vaccines


Q4 2011 net sales (euro million)

Western

Europe

Change at

CER

United

States

Change at

CER

Emerging

Markets

Change at

CER

Rest of the

World

Change at

CER

Polio/Pertussis/Hib Vaccines

8

-27.3%

143

10.9%

141

52.6%

33

3.2%

Influenza Vaccines*

-1

-107.1%

25

-88.1%

40

-36.5%

2

-33.3%

Méningitis/Pneumonia Vaccines

1

0.0%

87

53.6%

23

-4.2%

4

30.6%

Adult Booster Vaccines

21

61.5%

99

8.8%

11

83.3%

6

-28.6%

Travel and Other Endemics Vaccines

6

100.0%

20

11.1%

57

9.4%

18

0.0%

Other Vaccines

4

-50.0%

60

71.4%

4

150.0%

6

1.6%

Total vaccines

39

-20.8%

434

-18.7%

276

16.0%

69

-2.9%




Animal Health


Q4 2011 net sales (euro million)

Western

Europe

Change at

CER

United

States

Change at

CER

Emerging

Markets

Change at

CER

Rest of the

World

Change at

CER

Frontline® and other fipronil products

30

20.0%

56

12.2%

24

14.3%

22

27.8%

Vaccines

54

14.6%

33

0.0%

98

12.4%

5

-33.3%

Avermectin

17

13.3%

31

28.0%

17

13.3%

21

-4.8%

Other

25

-11.1%

24

15.0%

9

50.0%

4

-75.0%

Total

126

9.6%

144

12.6%

148

15.0%

52

-7.5%




Pharmaceuticals


2011 net sales (euro million)

Western

Europe

Change at

CER

United

States

Change at

CER

Emerging

Markets

Change at

CER

Rest of the

World

Change at

CER

Lantus®

730

6.4%

2,336

14.6%

617

26.0%

233

22.3%

Apidra®

68

0.0%

65

11.3%

37

8.6%

20

58.3%

Insuman®

103

-4.6%

0

-

29

20.0%

0

-

Amaryl®

32

-23.8%

4

-33.3%

228

8.6%

172

-21.6%

    Total Diabète

943

4.3%

2,405

14.4%

911

20.1%

425

0.5%

Lovenox®

833

6.4%

633

-54.3%

551

14.0%

94

3.5%

Plavix®

414

-35.6%

196*

-8.0%

706

11.9%

724

18.6%

Taxotere®

189

-73.6%

243

-69.2%

294

-24.6%

196

-20.2%

Aprovel®

753

-9.1%

49*

25.6%

363

6.7%

126

8.6%

Eloxatin®

38

-19.6%

806

393.0%

162

9.3%

65

10.2%

Multaq®

66

66.7%

184

50.8%

7

250.0%

4

33.3%

Jevtana®

44

-

131

65.9%

13

-

0

-

Stilnox®/Ambien®/Ambien CR®/Myslee®

53

-3.6%

82

-80.6%

65

-1.5%

290

8.3%

Allegra®

13

-18.8%

3

-98.6%

99

19.3%

465

22.2%

Copaxone®

415

-14.1%

0

-

0

-100.0%

21

11.1%

Tritace®

170

-10.1%

0

-

181

0.0%

24

-23.3%

Depakine®

145

-2.0%

0

-

227

11.5%

16

-6.7%

Xatral®

58

-12.1%

75

-49.7%

63

-7.1%

4

-20.0%

Actonel®

54

-48.1%

0

-

78

-12.9%

35

-22.0%

Nasacort®

25

-10.7%

54

-57.7%

23

0.0%

4

-20.0%

Consumer Health Care

651

3.2%

549

80.0%

1,225

20.8%

241

5.1%

Generics

443

9.4%

177

79.4%

1,092

14.0%

34

-20.0%

Others

2,417

-8.9%

497

-19.9%

2,106

7.4%

753

1.4%

Genzyme**

621

-

1,180

-

347

-

247

-

Total Pharmaceuticals

8,345

-3.9%

7,264

8.5%

8,513

15.0%

3,768

14.0%

*Sales of active ingredient to the American entity managed by BMS; ** Net sales since April 1st 2011




Vaccines


2011 net sales (euro  million)

Western

Europe

Change at

CER

United

States

Change at

CER

Emerging

Markets

Change at

CER

Rest of the

World

Change at

CER

Polio/Pertussis/Hib Vaccines

36

-41.0%

463

2.8%

457

21.9%

119

66.7%

Influenza Vaccines*

77

-39.8%

435

-11.2%

296

-51.1%

18

-21.7%

Méningitis/Pneumonia Vaccines

3

-40.0%

390

2.7%

104

4.0%

13

-6.6%

Adult Booster Vaccines

76

40.7%

339

3.5%

30

-9.1%

20

11.8%

Travel and Other Endemics Vaccines

24

33.3%

89

17.5%

210

-9.4%

47

-8.2%

Other Vaccines

15

-12.5%

176

45.3%

16

13.3%

16

58.7%

Total vaccines

231

-18.4%

1,892

2.5%

1,113

-18.1%

233

24.2%

*Seasonal and pandemic influenza Vaccines




Animal Health


2011 net sales (euro  million)

Western

Europe

Change at

CER

United

States

Change at

CER

Emerging

Markets

Change at

CER

Rest of the

World

Change at

CER

Frontline® and other fipronil products

206

4.5%

411

-2.1%

86

8.8%

61

0.0%

Vaccines

195

2.6%

126

2.3%

325

14.2%

16

-21.1%

Avermectin

64

8.5%

177

2.8%

60

8.9%

71

13.6%

Other

89

-6.4%

87

24.3%

36

11.8%

20

-24.0%

Total

554

2.4%

801

2.1%

507

12.4%

168

-1.2%




Appendix 3: Consolidated net sales by business segment

Net sales

(euro million)

Q4 2011

Q4 2010

2011

2010

Pharmaceuticals

7,220

6,505

27,890

26,576

Vaccines

818

890

3,469

3,808

Merial

470

428

2,030

1,983

Total

8,508

7,823

33,389

32,267



Appendix 4: Net sales of Growth Platforms


(euro million)

Q4 2011

Change at constant

exchange rates

2011

Change at constant

exchange rates

Emerging Markets(1/2)

2,649

+18.7%

10,133

+10.1%

Emerging Markets excluding

Diabetes, Vaccines, CHC,

animal health and new

products

1,536

+10.1%

6,010

+6.6%

Diabetes

1,242

+12.5%

4,684

+12.0%

Vaccines

818

-8.1%

3,469

-5.5%

Consumer Health Care (CHC)

645

+15.4%

2,666

+22.8%

Animal Health

470

+10.0%

2,030

+4.3%

New products(3)

111

+6.7%

449

+81.9%

Total Growth Platforms

4,822

+7.7%

19,308

+8.1%*

(1) World excluding the U.S. and Canada, Western Europe, Japan, Australia and New Zealand.

(2) Include Diabetes, Vaccines, Consumer Health Care, animal health and new products sales generated in Emerging Markets;

(3) Multaq® and Jevtana®

* Excluding A/H1N1 sales, growth platforms sales increased 10.8%.




Appendix 5: Business net income statement


Fourth quarter 2011

Pharmaceuticals

Vaccines

Animal health(1)

Other

Group Total

Millions of euros

Q4 2011

Q4 2010

% change

Q4 2011

Q4 2010

% change

Q4 2011

Q4 2010

% change

Q4 2011

Q4 2010

Q4 2011

Q4 2010

% change

Net sales

7,220

6,505

11.0%

818

890

(8.1%)

470

428

9.8%



8,508

7,823

8.8%

Other revenues

400

408

(2.0%)

7

7


8

4

100.0%



415

419

(1.0%)

Cost of sales

(2,201)

(1,942)

13.3%

(352)

(368)

(4.3%)

(168)

(162)

3.7%



(2,721)

(2,472)

10.1%

As % of net sales

(30.5%)

(29.9%)


(43.1%)

(41.3%)


(35.7%)

(37.9%)




(32,0%)

(31.6%)


Gross profit

5,419

4,971

9.0%

473

529

(10.6%)

310

270

14.8%



6,202

5,770

7.5%

As % of net sales

75.1%

76.4%


57.8%

59.4%


66.0%

63.1%




72.9%

73.8%


Research and development expenses

(1,107)

(987)

12.2%

(146)

(139)

5.0%

(40)

(42)

(4.8%)



(1,293)

(1,168)

10.7%

As % of net sales

(15.3%)

(15.2%)


(17.8%)

(15.6%)


(8.5%)

(9.8%)




(15.2%)

(14.9%)


Selling and general expenses

(1,935)

(1,882)

2.8%

(138)

(175)

(21.1%)

(148)

(145)

2.1%



(2,221)

(2,202)

0.9%

As % of net sales

(26.8%)

(28.9%)


(16.9%)

(19.7%)


(31.4%)

(33.9%)




(26.1%)

(28.1%)


Other current operating income/expenses

(54)

(45)


(1)

6


4

(6)


(8)

(13)

(59)

(58)


Share of profit/loss of associates*

260

251


(4)

2







256

253


Net income attributable to non-controlling interests

(55)

(55)





(2)





(57)

(55)


Business operating income

2,528

2,253

12.2%

184

223

(17.5%)

124

77

61.0%

(8)

(13)

2,828

2,540

11.3%

As % of net sales

35.0%

34.6%


22.5%

25.1%


26.4%

18.0%




33.2%

32.5%


Financial income and expenses












(113)

(95)


Income tax expense












(638)

(607)


Tax rate**












25.4%

27.0%


Business net income












2,077

1,838

13.0%

As % of net sales












24.4%

23.5%


Business earnings per share*** (in euros)












1.56

1.41

10.6%

*   Net of tax

**  Determined on the basis of Business income before tax, associates, and non-controlling interests

*** Based on an average number of shares outstanding of 1,330 million in the fourth quarter of 2011 and 1,304.9 million in the third quarter of 2010

(1)   In 2010: the results of operations of the Merial business previously presented as "held-for-exchange" were reclassified and included in income from continuing operations

in accordance with IFRS5 § 36, following the announcement to maintain Merial and Intervet/Schering-Plough as two separate organizations.





Full-year 2011

Pharmaceuticals

Vaccines

Animal health(1)

Other

Group  Total

Millions of euros

FY 2011

FY 2010

% change

FY 2011

FY 2010

% change

FY 2011

FY 2010

% change

FY 2011

FY 2010

FY 2011

FY 2010

% change

Net sales

27,890

26,576

4.9%

3,469

3,808

(8.9%)

2,030

1,983

2.4%



33,389

32,367

3.2%

Other revenues

1,622

1,623

(0.1%)

25

28

(10.7%)

22

18

22.2%



1,669

1,669


Cost of sales

(8,368)

(7,316)

14.4%

(1,404)

(1,371)

2.4%

(654)

(615)

6.3%



(10,426)

(9,302)

12.1%

As % of net sales

(30.0%)

(27.5%)


(40.5%)

(36.0%)


(32.2%)

(31.0%)




(31.2%)

(28.8%)


Gross profit

21,144

20,883

1.2%

2,090

2,465

(15.2%)

1,398

1,386

0.9%



24,632

24,734

(0.4%)

As % of net sales

75.8%

78.6%


60.2%

64.7%


68.9%

69.9%




73.8%

76.4%


Research and development expenses

(4,101)

(3,884)

5.6%

(564)

(517)

9.1%

(146)

(155)

(5.8%)



(4,811)

(4,556)

5.6%

As % of net sales

(14.7%)

(14.6%)


(16.3%)

(13.6%)


(7.2%)

(7.8%)




(14.4%)

(14.1%)


Selling and general expenses

(7,376)

(6,962)

5.9%

(542)

(603)

(10.1%)

(617)

(604)

2.2%

(1)

(2)

(8,536)

(8,171)

4.5%

As % of net sales

(26.4%)

(26.2%)


(15.6%)

(15.8%)


(30.4%)

(30.5%)




(25.6%)

(25.2%)


Other current operating income/expenses

(13)

177



14


(7)

(6)


24

(108)

4

77


Share of profit/loss of associates*

1,088

1,009


1

19





13

8

1,102

1,036


Net income attributable to non-controlling interests

(246)

(258)



1


(1)





(247)

(257)


Business operating income

10,496

10,965

(4.3%)

985

1,379

(28.6%)

627

621

1.0%

36

(102)

12,144

12,863

(5.6%)

As % of net sales

37.6%

41.3%


28.4%

36.2%


30.9%

31.3%




36.4%

39.7%


Financial income and expenses












(412)

(362)


Income tax expense












(2,937)

(3,286)


Tax rate**












27.0%

28.0%


Business net income












8,795

9,215

(4.6%)

As % of net sales












26.3%

28.5%


Business earnings per share*** (in euros)












6.65

7.06

(5.8%)

*   Net of tax

**  Determined on the basis of Business income before tax, associates, and non-controlling interests

*** Based on an average number of shares outstanding of 1,321.7 million 2011 and 1,305.3 million in 2010


(1) In 2010: the results of operations of the Merial business previously presented as "held-for-exchange" were reclassified and included in income from continuing operations

in accordance with IFRS5 § 36, following the announcement to maintain Merial and Intervet/Schering-Plough as two separate organizations



Appendix 6: Reconciliation of Business net income to Net income attributable to equity holders of sanofi


Millions of euros

Q4 2011

Q4 2010(1)

% change

Business net income

2,077

1,838

13.0%

Amortization of intangible assets(2)

(809)

(848)


Impairment of intangible assets

(66)

(154)


Fair value remeasurement of contingent

consideration liabilities

(152)



Expenses arising from the impact of acquisitions on inventories

(72)

(6)


Restructuring costs

(777)

(892)


Other gains and losses, and litigation (3)

190

(138)


Discontinuation of depreciation of PP&E* (IFRS5)


19


Tax effect of items listed above:

476

653


  Amortization of intangible assets

265

265


  Impairment of intangible assets

15

50


  Fair value remeasurement of contingent    

  consideration liabilities

24



  Expenses arising on the workdown of acquired    

   inventories

23

1


  Restructuring costs

225

299


     Other gains and losses, and litigation

(76)

46


     Discontinuation of depreciation of PP&E (IFRS5)


(8)


Other tax items (4)

577



Share of items listed above attributable to non-controlling interests

6

1


Restructuring costs of associates and joint ventures, and expenses arising from the impact of acquisitions on associates and joint ventures

(11)

(36)


Net income attributable to equity holders of sanofi

1,439

437

229.3%

Consolidated earnings per share(5) (in euros)

1.08

0.33

227.3%


(1) the results of operations of the Merial business previously presented as "held-for-exchange" were reclassified and included in income from continuing operations in accordance with IFRS5 § 36, following the announcement to maintain Merial and Intervet/Schering-Plough as two separate organizations.


(2) Of which related to amortization expense generated by the remeasurement of intangible assets as part of business combinations: euro  769 million in the fourth quarter of 2011 and euro   795 million in the fourth quarter of 2010.


(3)  Of which euro 210 million of income related to the award received by Sanofi in reparation of damages on the Plavix patent litigation.


(4)  In 2011, related to Advance Price Agreement impact for euro 349 million and  euro 228 million reflecting a decrease in deferred taxes liabilities linked to revaluation of intangible assets following legislation changes.


(5) Based on an average number of shares outstanding of 1,330 million in the fourth quarter of 2011 and 1,304.9 million in the fourth quarter of 2010.


* Property, Plant and Equipment.




See the section, "From business net income to consolidated net income," for comments on the reconciliation of business net income to consolidated net income


Millions of euros

FY 2011

FY 2010(1)

% change

Business net income

8,795

9,215

(4.6%)

Amortization of intangible assets(2)

(3,314)

(3,529)


Impairment of intangible assets

(142)

(433)


Fair value remeasurement of contingent

consideration liabilities

15



Expenses arising from the impact of acquisitions on inventories

(476)

(142)


Restructuring costs

(1,314)

(1,384)


Other gains and losses, and litigation(3)

(327)

(138)


Discontinuation of depreciation of PP&E* (IFRS5)


77


Tax effect of items listed above:

1,905

1,856


    Amortization of intangible assets

1,178

1,183


    Impairment of intangible assets

37

143


    Fair value remeasurement of contingent    

    consideration liabilities

34



    Expenses arising on the workdown of acquired    

    inventories

143

44


    Restructuring costs

399

466


       Other gains and losses, and litigation

114

46


       Discontinuation of depreciation of PP&E (IFRS5)


(26)


Other tax items (4)

577



Share of items listed above attributable to non-controlling interests

6

3


Restructuring costs of associates and joint ventures, and expenses arising from the impact of acquisitions on associates and joint ventures

(32)

(58)


Net income attributable to equity holders of Sanofi

5,693

5,467

4.1%

Consolidated earnings per share(5) (in euros)

4.31

4.19

2.9%

(1) the results of operations of the Merial business previously presented as "held-for-exchange" were reclassified and included in income from continuing operations in accordance with IFRS5 § 36, following the announcement to maintain Merial and Intervet/Schering-Plough as two separate organizations.


(2) Of which related to amortization expense generated by the remeasurement of intangible assets as part of business combinations: euro  3,136 million in 2011 and euro  3,327 million in 2010.


(3) Of which in 2011: related to the "Catch up" in respect of 2009 and 2010 depreciation and amortization expense on PP&E* and intangible assets of Merial, previously classified as "Assets held for sale or exchange" (euro 519 million) and euro 210 million of income related to the award received by Sanofi in reparation of damages on the Plavix patent litigation.


(4) In 2011, related to Advance Price Agreement impact for euro 349 million and euro 228 million reflecting a decrease in deferred taxes liabilities linked to revaluation of intangible assets following legislation changes.


(5) Based on an average number of shares outstanding of 1,321.7 million in 2011 and 1,305.3 million in 2010.


* Property, Plant and Equipment.




Appendix 7: Consolidated income statements


Millions of euros

Q4 2011

Q4 2010(1)

FY 2011

FY 2010(1)

Net sales

8,508

7,823

33,389

32,367

Other revenues

415

419

1,669

1,669

Cost of sales

(2,793)

(2,469)

(10,902)

(9,398)

Gross profit

6,130

5,773

24,156

24,638

Research and development expenses

(1,293)

(1,167)

(4,811)

(4,547)

Selling and general expenses

(2,221)

(2,193)

(8,536)

(8,149)

Other operating income

38

30

319

369

Other operating expenses

(97)

(88)

(315)

(292)

Amortization of intangible assets

(809)

(848)

(3314)

(3,529)

Impairment of intangible assets

(66)

(154)

(142)

(433)

Fair value remeasurement of contingent consideration liabilities

(152)


15


Restructuring costs

(777)

(892)

(1,314)

(1,384)

Other gains and losses, and litigation

190

(138)

(327)

(138)

Operating income

943

323

5,731

6,535

Financial expenses

(165)

(138)

(552)

(468)

Financial income

52

43

140

106

Income before tax and associates and joint ventures

830

228

5,319

6,173

Income tax expenses

415

46

(455)

(1,430)

Share of profit/loss of associates and joint ventures

245

217

1,070

978

Net income

1,490

491

5,934

5,721

Net income attributable to non-controlling interests

51

54

241

254

Net income attributable to equity holders of sanofi

1,439

437

5,693

5,467

Average number of shares outstanding (million)

1,330

1,304.9

1,321.7

1,305.3

Earnings per share (in euros)

1.08

0.33

4.31

4.19

(1) The results of operations of the Merial business previously presented as "held-for-exchange" were reclassified and included in income from continuing operations in accordance with IFRS5 § 36, following the announcement to maintain Merial and Intervet/Schering-Plough as two separate organizations.




Appendix 8: Change in net debt


Millions of euros

FY 2011

FY 2010

Business net income

8,795

9,215

Depreciation, amortization and impairment of property, plant and equipment and intangible assets

1,156

1,080

Net gains and losses on disposals of non-current assets, net of tax

(52)

(111)

Other non cash items

579

550

Operating cash flow before changes in working capital (1)

10,478

10,734

Changes in working capital (1)

(476)

57

Acquisitions of property, plant and equipment and software

(1,644)

(1,349)

Free cash flow (1)

8,358

9,442

Acquisitions of intangibles, excluding software

(138)

(313)

Acquisitions of investments, including assumed debt(2)

(14,079)

(2,121)

Restructuring costs paid

(707)

(892)

Proceeds from disposals of property, plant and equipment, intangibles, and other non-current assets, net of tax

359

111

Issuance of sanofi shares

70

18

Dividends paid to sanofi shareholders

(1,372)

(3,131)

Acquisition of treasury shares

(1,074)

(321)

Disposals of treasury shares, net of tax

3

57

Other items(3)

(702)

(299)

Change in net debt

(9,282)

2,551

(1)  Excluding restructuring costs

(2)  In 2011: (euro 13,528 million) related to Genzyme acquisition

(3)  In 2011: of which foreign exchange effect on net debt (euro 754 million)




Appendix 9: Simplified consolidated balance sheets  


ASSETS

euro million

12/31/2011

12/31/2010

LIABILITIES & EQUITY

euro million

12/31/2011

12/31/2010

Property, plant and equipment

10,750

8,155

Equity attributable to equity-holders of sanofi

56,219

53,097

Intangible assets (including goodwill)

61,718

44,411

Equity attributable to non-controlling interests

170

191

Non-current financial assets, investments in associates, and deferred tax assets

6,839

5,619

Total equity

56,389

53,288




Long-term debt

12,499

6,695




Non-current liabilities related to business combinations and to non-controlling interests

1,336

388

Non-current assets

79,307

58,185

Provisions and other non-current liabilities

10,346

9,326




Deferred tax liabilities

6,011

3,808

Inventories, accounts receivable and other current assets

16,667

13,578

Non-current liabilities

30,192

20,217

Cash and cash equivalents

4,124

6,465

Accounts payable and other current liabilities

10,404

8,424




Current liabilities related to business combinations and  to non-controlling interests

220

98




Short-term debt and current portion of long-term debt

2,940

1,565

Current assets

20,791

20,043

Current liabilities

13,564

10,087

Assets held for sale or exchange

67

7,036

Liabilities related to assets held for sale or exchange

20

1,672

Total ASSETS

100,165

85,264

Total LIABILITIES & EQUITY

100,165

85,264




Appendix 10: Definitions

Re-presentation of Merial results

In accordance with IFRS 5.36 and as Merial has ceased to be qualified as held for sale or exchange in Q1/2011, the results of Merial classified as held for sale or exchange in previously-issued financial statements have been reclassified and included in income from continuing operations for all periods presented.

Definitions of non-GAAP financial indicators

Net sales at constant exchange rates

When we refer to changes in our net sales "at constant exchange rates", this means that we exclude the effect of changes in exchange rates.

We eliminate the effect of exchange rates by recalculating net sales for the relevant period at the exchange rates used for the previous period.

Reconciliation of reported net sales to net sales at constant exchange rates for the fourth quarter of 2011 and 2011


(millions of euros)

Q4 2011

2011

Net sales

8,508

33,389

Effect of exchange rates

(34)

(704)

Net sales at constant exchange rates

8,542

34,093




Net sales on a constant structure basis

We eliminate the effect of changes in structure by restating prior-period net sales as follows:

  • by including sales from the acquired entity or product rights for a portion of the prior period equal to the portion of the current period during which we owned them, based on sales information we receive from the party from whom we make the acquisition;
  • similarly, by excluding sales in the relevant portion of the prior period when we have sold an entity or rights to a product;
  • for a change in consolidation method, by recalculating the prior period on the basis of the method used for the current period.

Worldwide presence of Plavix®/Iscover®, Avapro®/Aprovel®

When we refer to the "worldwide presence" of a product, we mean our consolidated net sales of that product, minus sales of the product to our alliance partners plus non-consolidated sales made through our alliances with Bristol-Myers Squibb on Plavix®/Iscover® (clopidogrel bisulfate) and Aprovel®/Avapro®/Karvea® (irbesartan), based on information provided to us by our alliance partner.

Business net income

Sanofi publishes a key non-GAAP indicator in response to the application of IFRS 8. This indicator "Business net income", replaced "adjusted net income excluding selected items".

Business net income is defined as net income attributable to equity holders of Sanofi excluding:

  • amortization of intangible assets,
  • impairment of intangible assets,
  • fair value remeasurement of contingent consideration liabilities related to business combinations,
  • other impacts associated with acquisitions (including impacts of acquisitions on associates),
  • restructuring costs *,
  • other gains and losses (including gains and losses on disposals of non-current assets*),
  • costs or provisions associated with litigation*,
  • tax effects related to the items listed above as well as effects of major tax disputes,

*Reported in the line items Restructuring costs and Gains and losses on disposals, and litigation, which are defined in Note B.20. to our consolidated financial statements.

Sanofi : www.sanofi.com

Media Relations: (+) 33 1 53 77 46 46 - E-mail : MR@sanofi.com

Investor Relations : (+) 33 1 53 77 45 45 - E-mail : IR@sanofi.com

SOURCE Sanofi



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