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Solid sales and Business EPS (1) growth at CER in Q2 2014
Growth trajectory continues in the second quarter Group sales(2) up 6.4%(3) to €8,075 million driven by Genzyme (+29.1%) and Diabetes (+16.2%). Growth platforms(4) up 14.5%(3) to €6,163 million, representing 76.3% of total sales. Business net income(1) increased 13.0% at CER to €1,537 million, (+3.9% on a reported basis). Business EPS(1) grew 13.4% at CER to €1.17. Free Cash Flow(5) increased 33.1% to €2,390 million in H1 2014. Strong growth in Emerging Markets and executing on new launches Emerging Markets(6) sales grew 16.5%(3) to €2,855 million representing 35.4% of total Group sales. Merial grew 6.2% driven by a strong NexGard(TM) launch. Successful Nasacort® OTC launch in the U.S. contributed to CHC sales growth of 9.2%(7). Significant advances achieved in the R&D pipeline Positive results from nine Phase III ODYSSEY studies with alirocumab for hypercholesterolemia. Positive Phase III results for Toujeo® presented at ADA; filings submitted in the U.S., EU and Japan. Strong Phase II data sets with dupilumab in atopic dermatitis; Phase III expected to begin later this year. New detailed data from a positive Phase III trial with sarilumab in rheumatoid arthritis presented at EULAR. Lemtrada(TM) resubmission in multiple sclerosis accepted for review by the FDA. Financial guidance for 2014 adjusted Given our financial performance in H1 2014 and despite increasing U.S. competitive pressure at the payor level, 2014 business EPS is expected to be between 6% to 8% higher than 2013 at CER(1), barring major unforeseen adverse events.
Sanofi Chief Executive Officer, Christopher A. Viehbacher commented:"Our solid second quarter performance reflects consistent execution of our growth strategy and allows us to slightly adjust upwards our 2014 financial guidance. This quarter, growth platforms represented more than 75% of our sales. Based on the solid momentum in our late stage pipeline, we are actively preparing for a wave of new product launches that will further redefine Sanofi as a biopharmaceutical leader."
(1) See Appendix 10 for definitions of financial indicators; (2) Growth in net sales is expressed at constant exchange rates (CER) unless otherwise indicated (see Appendix 10 for a definition); (3) Excluding generics in Brazil, Group sales grew 3.9%, growth platforms grew 10.7% and Emerging Markets grew 8.6%; (4) See page 2; (5) Free Cash Flow after capital expenditures; (6) See definition on page 10; (7) Including the change of category, sales of CHC grew 20.2%.
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2014 second-quarter and first-half key figures
Business net income (1)
Business EPS (1)
In order to facilitate an understanding of our operational performance, Sanofi comments on the business net income statement. Business net income (1) is a non-GAAP financial measure. The consolidated income statement for H1 2014 is provided in Appendix 4 and a reconciliation of business net income to consolidated net income in Appendix 3. Consolidated net income for H1 2014 was €1,861 million compared to €1,437 million for H1 2013. Consolidated EPS for H1 2014 was €1.41 versus €1.09 for H1 2013.2014 second-quarter and first-half sales
Unless otherwise indicated, all sales growth figures in this press release are stated at constant exchange rates (1).
In the second quarter of 2014, Sanofi sales were €8,075 million, an increase of 0.9% on a reported basis. Exchange rate movements had a negative effect of 5.5 percentage points primarily reflecting the strength of the euro versus other currencies, in particular the U.S. Dollar.