Sanofi: Pre-quarterly Results Communication

Pre-quarterly Results Communication

Sanofi (EURONEXT: SAN and NYSE: SNY) has compiled the following items for consideration to assist in the financial modeling of the Group's Q1 2015 results.

Q1 2014 Business EPS

Sanofi's business EPS was €1.17 in Q1 2014.

Business Items

Vaccines

As previously communicated on February 5, 2015, Sanofi expects lower vaccines sales in Q1 2015 as the Southern Hemisphere influenza campaign is delayed because of two new strains this year.

Diabetes

As previously communicated on October 28, 2014, Sanofi concluded payor negotiations in the U.S. and secured favorable formulary positions for Lantus^® in 2015 with key payors. The level of rebates required starting from January 1, 2015 to maintain these positions increased significantly due to aggressive discounting by competitors.

Japan

In Q4 2014, sales in Japan decreased 12.0% to €550 million, reflecting the impact of generic competition to Allegra^®, Myslee^®, Amaryl^® and Taxotere^® and lower sales of vaccines.
In mid-2015, generic versions of Plavix^® are anticipated to enter the market in Japan.

Financial Results

Other revenues

As previously communicated on February 5, 2015, Sanofi expects other revenues to be lower at constant exchange rates due to the loss of most royalties received on Enbrel EU sales in Q1 2015.

Operating expenses

As previously communicated on February 5, 2015, Sanofi expects its total operating expenses to increase by mid-single-digits at constant exchange rates in 2015 due to significant investments in new product launches and continued development of its late-stage pipeline. Growth in operating expenses will be more significant in the first half than the second half of 2015.

Other operating income net of expenses

In Q1 2014, other operating income net of expenses was -€25 million and included additional provisions related to ramipril litigation in Canada (€24 million).

Net financial expenses

In Q1 2014, net financial expenses were €76 million and included a capital gain of €41 million linked to the partial sale of a financial investment. In Q4 2014, net financial expenses were €138 million.

Tax Rate

As previously communicated on February 5, 2015, Sanofi estimates that its effective tax rate for 2015 will be approximately 25%.

Share of profits from associates

As of April 4, 2014, Sanofi accounts for its stake in Regeneron using the Equity method. At the end of Q1 2015, Sanofi held an ownership interest in Regeneron of 22.3%.

Foreign Currency Impact

The full year business EPS sensitivity to the U.S. Dollar, Japanese Yen and Russian Ruble are the following:

The main exchange rates in Q1 2014, in Q1 2015 and at December 31, 2014 were:

As communicated on February 5, 2015, assuming December 31, 2014 exchange rates for the full year 2015, the positive foreign currency impact on 2015 business EPS was estimated to be between 4% and 5%.

Number of Shares

The average number of shares for EPS calculation is approximately 1,308.4 million in Q1 2015.

Share Buyback

In Q1 2015, Sanofi bought back 9.22 million shares totaling €793 million.

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 labelling and other matters that could affect the availability or commercial potential of such product candidates, the absence of guarantee that the product 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, 2014. Other than as required by applicable law, Sanofi does not undertake any obligation to update or revise any forward-looking information or statements.