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Paris, France - October 31, 2008
Third-quarter 2008 results
| Adjusted EPS excluding selected items (1): |
Q3 2008: |
€1.47, up 5.0% |
up 15.6% in U.S. dollars (2) |
First 9 months of 2008: |
€4.24, up 3.4% |
up 17.5% in U.S. dollars (2) |
|
In order to give a representation of our underlying economic performance,
we present and explain an adjusted (1) income statement. We also report
adjusted net income and adjusted EPS (excluding selected items) in U.S. dollars (2)
in order to facilitate comparisons with the majority of major pharmaceutical
groups. The consolidated income statement for the first nine months of 2008
is provided in Appendix 5. Consolidated net income for the first nine months
of 2008 was €3,669 million, compared with €4,510 million for the first nine
months of 2007.
Good third-quarter performance
- Net sales: €6,853m, up 5.5% on a comparable basis (down 2.4% on
a reported basis)
- Quarterly growth ahead of the pharmaceutical industry
- Good performance from the Top 15 (up 7.3%), especially Lantus® (up
29.1%)
- Leading supplier of influenza vaccines in the USA, and launch of Pentacel®
- 11.5% sales growth in the United States
- Operating income – current (1) up 1.2%, or 14.0% excluding
the effect of exchange rates
- An improvement of 0.9-point in the ratio of selling and general expenses
to net sales, to 24.1%
- Adjusted net income excluding selected items: €1,923m (up 2.1%),
and EPS €1.47 (up 5.0%)
Acquisitions
- Completion of acquisitions of Acambis (vaccines) and Symbion (nutraceuticals/OTC, Australia)
- Improved offer for Zentiva, with the unanimous backing of Zentiva’s Board of Directors
Regulatory Events
- Multaq® (dronedarone) assigned priority review status in the United States
- October 23, 2008: recommendation to suspend the marketing authorization for Acomplia® in the
European Union
Increase in 2008 Guidance
Barring major adverse events, sanofi-aventis now expects growth in adjusted
EPS excluding selected items (1) for 2008 to be around 9%, calculated at
a constant 2007 euro/dollar rate (1.371). Sensitivity to the euro/dollar exchange
rate is estimated at 0.5% of growth for a 1-cent movement in the rate.
Board of Directors of October 30, 2008
The Board has noted the resignation of Mr Gérard Le Fur from his office as Director with effect of
November 30, 2008 and has coopted Mr Chris Viehbacher with effect as of December 1, 2008.
2008 third-quarter and 9-month net sales
Unless otherwise indicated, all sales growth figures in this press release are stated on a comparable basis (1).
Sanofi-aventis generated third-quarter net sales of €6,853 million, up 5.5%. Exchange rate movements had an
unfavorable effect of 5.7 points, of which nearly 75% was due to the U.S. dollar. Changes in Group structure had
an unfavorable effect of 2.2 points, including the effect of the discontinuation of commercialization of Copaxone®
by sanofi-aventis in the United States and Canada under the agreements with Teva. On a reported basis, net
sales fell by 2.4%.
Over the nine months to end September, net sales rose 3.8% to €20,479 million. Exchange rate movements had
an unfavorable effect of 5.6 points, of which nearly 80% was due to the U.S. dollar. Changes in Group structure
had an unfavorable effect of 1.3 points. On a reported basis, net sales decreased by 3.1%.
Net sales by business segment – Pharmaceuticals
Third-quarter net sales for the pharmaceuticals business rose 4.9% to €5,906 million, driven by the performance
of the top 15 products (up 7.3%) and the resilience of the rest of the portfolio (up 0.4%).
Net sales for the pharmaceuticals business for the first nine months were
up 3.1% at €18,327 million. Net sales of the top 15 products amounted to
€12,306 million, an increase of 4.8%. Excluding the impact of the introduction
of generics of Ambien® IR in the United States and Eloxatin® in Europe (3),
the top 15 products would have recorded growth of 9.2%.
Net sales by business segment – Pharmaceuticals
| Value in €
million |
2008 Q3
net sales |
Change
on a
comparable
basis |
2008 9-month net sales |
Change
on a
comparable
basis |
| Lovenox® |
635 |
+8.5% |
1,989 |
+11.5% |
| Plavix® |
630 |
+5.7% |
1,956 |
+10.8% |
| Lantus® |
612 |
+29.1% |
1,745 |
+29.0% |
| Taxotere® |
505 |
+13.2% |
1,492 |
+13.5% |
| Eloxatin® |
325 |
-6.9% |
993 |
-6.0% |
| Aprovel® |
298 |
+14.6% |
898 |
+14.8% |
| Stilnox®/Ambien®/Ambien CR®/Myslee® |
201 |
-3.4% |
602 |
-40.5% |
| Copaxone® |
100 |
+19.0% |
520 |
+19.5% |
| Allegra® |
139 |
-4.1% |
514 |
0.0% |
| Tritace® |
122 |
-26.1% |
397 |
-26.8% |
| Amaryl® |
94 |
+2.2% |
281 |
-1.1% |
| Xatral® |
79 |
+2.6% |
247 |
+5.1% |
| Actonel® |
85 |
+11.8% |
247 |
+6.5% |
| Depakine® |
81 |
+6.6% |
244 |
+7.0% |
| Nasacort® |
51 |
-7.3% |
181 |
-11.3% |
| TOTAL TOP 15 |
3,957 |
+7.3% |
12,306 |
+4.8% |
| Reste du portefeuille |
1,949 |
+0.4% |
6,021 |
-0.2% |
| Total Pharma |
5,906 |
+4.9% |
18,327 |
+3.1% |
Comments by product
Lovenox®, the leading low molecular weight heparin on
the market, posted 8.5% growth in third-quarter net sales to €635 million. In
the United States, the product again achieved double-digit growth (of 10.9%),
driven by the expansion of its use in medical prophylaxis. In Europe, shipments
were affected by the impact on inventories of low levels of an impurity in some
batches. Over the nine months to end September, Lovenox® reported growth
of 11.5% to €1,989 million.
Lantus®, the world’s leading insulin brand, maintains
particularly high levels of growth quarter after quarter, confirming the Group’s
ambition of establishing the product as the world’s leading anti-diabetic by
value. Thirdquarter net sales of Lantus® were up 29.1% at €612 million.
In the United States, net sales of the product advanced 34.6% to €362 million,
supported by the success of the new-generation LantusSoloSTAR® pen. During
September, sanofi-aventis announced favorable results from various Lantus®
studies. The GINGER and LACE studies demonstrated that a basal-bolus insulin
regimen with once-daily Lantus® and Apidra® at mealtimes produced greater
HbA1C reduction versus pre-mixed insulin in people with type 2 diabetes. The
LACE study also demonstrated a cost advantage for the basal-bolus approach.
In addition, the results of three non-interventional studies demonstrated that
Lantus®:
- showed greater HbA1C lowering than detemir insulin and provided cost savings (THIN study);
- showed greater HbA1C lowering, resulted in a lower rate of hypoglycemia, and reduced total healthcare cost
compared to NPH (ROLE study);
- and resulted in better patient satisfaction than NPH (LIVE-DE study).
The performance of Lantus® for the nine months to end September was in line with the first-half performance, with
net sales up 29% at €1,745 million.
The third quarter reaffirmed the good performance of Taxotere®, which achieved double-digit growth in all three
geographic regions. In the United States, net sales were up 16.8% at €181 million, driven by the use of the
product in adjuvant breast cancer treatment and in prostate cancer. Furthermore, U.S. sales also benefited from
a new indication, obtained in May 2008, as an adjuvant treatment for HER2-positive breast cancer in combination
with Herceptin®. Taxotere® achieved third-quarter net sales growth of 10.2% in Europe (to €227 million) and of
14.1% in the Other Countries region (to €97 million). During the third quarter, Taxotere® obtained approval in
Japan as a treatment for prostate cancer. Over the first nine months of the year, Japanese sales of the product
increased 11.3% to €68 million. Overall net sales of Taxotere® for the nine months to end September were up
13.5% at €1,492 million.
In the United States, third-quarter net sales of Ambien CR® and Ambien® IR totaled $177 million and $28 million
respectively. In Japan, Myslee®, the leading hypnotic in the market, achieved net sales of €33 million in the third
quarter (up 15.9%) and of €94 million over the first nine months of 2008 (up 13.5%); these sales have been
consolidated by sanofi-aventis since January 1, 2008. Over the nine months to end September 2008, net sales of
Ambien CR® totaled $511 million, against $561 million for the comparable period of 2007.
Net sales of Eloxatin®, the leading cytotoxic agent in adjuvant and in first line metastatic colorectal cancer, rose
7.8% in the third quarter to €234 million in the United States, driven by the product’s use as an adjuvant. At end
July 2008, penetration of Eloxatin® in the U.S. market as an adjuvant stage III treatment had reached 76% in
terms of the number of patients (source: IntrsiQ Research).
The introduction of generics in Europe again weighed on net sales of Eloxatin®, which decreased 6.9% in the
quarter to €325 million.
Net sales of Acomplia® reached €27 million in the third quarter and €81 million in the first nine months of the
year. On October 23, 2008, following a recommendation from the European Medicines Agency (EMEA), sanofiaventis
announced the temporary suspension of the marketing authorization of Acomplia® in obese and
overweight patients.
Xyzal®, a new prescription oral antihistamine launched by sanofi-aventis and UCB in the United States at the start
of October 2007, generated net sales of €24 million in the third quarter and €68 million in the nine months to end
September. Net sales of Apidra®, a rapid-action human insulin analog, came to €25 million for the third quarter
and €68 million for the nine months to end September.
Worldwide presence (1) of Plavix® / Iscover®
Worldwide presence of Plavix® / Iscover®
| Value in €
million |
2008 Q3 |
Change
on a
comparable
basis |
9 month 2008 |
Change
on a
comparable
basis |
| Europe |
446 |
+0.9% |
1,376 |
+3.7% |
| United States |
821 |
+17.0% |
2,373 |
+25.4% |
| Other Countries |
230 |
+17.9% |
689 |
+23.0% |
| TOTAL |
1,497 |
+11.8% |
4,438 |
+17.4% |
In the United States, sales of Plavix® (consolidated by Bristol-Myers Squibb – BMS) were 17.0% higher in the
third quarter. Sales for the nine months to end September 2008 were 25.4% up on the comparable period of
2007, which was impacted by competition from a generic version in the early part of that period. In Europe, net
sales of Plavix® (clopidogrel bisulphate) advanced by a modest 0.9%. Germany is affected by competition from
several clopidogrel besylates in the monotherapy segment, though the share of the German market by volume
taken by Plavix®/Iscover® in the last week of September was over 80% (IMS Pharmatrend, week commencing
September 29). In the Other Countries region, Plavix® recorded growth of 17.9% for the quarter and 23.0% over
the first 9 months of the year. The product continued to enjoy success in Japan, as net sales reached €44 million
in the third quarter of 2008 (versus €17 million in the third quarter of 2007) and €114 million for the first nine
months of 2008 (versus €33 million in the comparable period of 2007).
Worldwide presence (1) of Aprovel®/ Avapro®/ Karvea®
Worldwide presence of Aprovel®/ Avapro®/ Karvea®
| Value in €
million |
2008 Q3 |
Change
on a
comparable
basis |
2008 9 months |
Change
on a
comparable
basis |
| Europe |
2421 |
+6.6% |
742 |
+8.6% |
| United States |
123 |
+8.8% |
359 |
+8.1% |
| Other Countries |
120 |
+26.3% |
355 |
+27.2% |
| TOTAL |
485 |
+11.5% |
1,456 |
+12.5% |
Third-quarter worldwide sales of Aprovel®/Avapro®/Karvea®
were up 11.5% at €485 million. In the United States, most of the growth was
due to favorable price effects. The product performed particularly well in the
Other Countries region, especially in Latin America. Sales of Aprovel®/Avapro®/Karvea®
for the nine months to end September 2008 were up 12.5% at €1,456 million.
In September 2008, the Committee for Medicinal Products for Human Use (CHMP)
issued a positive opinion on the authorization of a generic of irbesartan as
a monotherapy in Europe. The active ingredient of irbesartan is protected by
a patent in the principal European countries until August 2012. In some countries
(Spain, Portugal, Finland and Norway, and some Eastern European countries),
irbesartan is not protected by this active ingredient patent. However, other
patents may be in force locally. Net sales of Aprovel® as a monotherapy
in European countries not covered by the active ingredient patent totaled approximately
€50 million in 2007.
Net sales by business segment – Human Vaccines
Third-quarter consolidated net sales for the Human Vaccines business increased 9.4% to €947 million. In the
United States, net sales reached €605 million, an increase of 12.0%.
Net sales of influenza vaccines were up 9.7% at €374 million; the majority of shipments of seasonal influenza
vaccines in the United States are made during this quarter. This year, Sanofi-Pasteur has once again been the
leading supplier of influenza vaccines in the United States. Net sales of influenza vaccines for the nine months to
end September totaled €574 million, an increase of 18.4%, and include the shipment during the second quarter of
H5N1 vaccine for the U.S. Department of Health and Human Services worth $192.5 million (versus $113 million in
2007).
The Polio-Pertussis-Hib (Haemophilus influenzae type b) franchise reported growth of 42.6% to €194 million in
the third quarter, reflecting the launch of Pentacel® (the first 5-in-1 pediatric combination vaccine to protect
against diphtheria, tetanus, pertussis, polio and haemophilus influenzae type b) in the United States in July. This
new vaccine, which reinforces the position of Sanofi Pasteur in the U.S. pediatric vaccines market, achieved thirdquarter
net sales in line with forecasts at €25 million.
Third-quarter net sales of Menactra® were €141 million, a decrease of 2.3%, due to the timing of orders from
public health bodies in the United States relative to 2007. For the nine months to end September, net sales of the
vaccine were up 10.1% at €332 million.
Net sales of adult booster vaccines were €109 million, an increase of 9.0%, driven mainly by Adacel™ (adult and
adolescent tetanus-diphtheria-pertussis booster), which achieved 12.2% sales growth to €76 million for the third
quarter. Over the nine months to end September, net sales of Adacel™ were up 16.4% at €201 million.
Overall, the Human Vaccines business recorded consolidated net sales of €2,152 million for the nine months to
end September 2008 (up 9.8%), including €1,313 million in the United States (up 14.0%).
Net sales by business segment – Human Vaccines
| Value in €
million |
2008 Q3
net sales |
Change
on a
comparable
basis |
2008 9-month
net sales |
Change
on a
comparable
basis |
| Influenza Vaccines* |
374 |
+9.7% |
574 |
+18.4% |
| Polio/Pertussis/Hib Vaccines |
194 |
+42.6% |
549 |
+12.7% |
| Meningitis/Pneumonia Vaccines |
156 |
-7.7% |
381 |
+7.9% |
| Adult Booster Vaccines |
109 |
+9.0% |
309 |
+4.0% |
| Travel & Other Endemics Vaccines |
79 |
-4.8% |
236 |
-0.8% |
| Other Vaccines |
35 |
-5.4% |
103 |
+3.0% |
| TOTAL |
947 |
+9.4% |
2,152 |
+9.8% |
The acquisition of Acambis, completed at end September at a price of £285 million (€365 million), strengthened
the portfolio of vaccines in research and development.
Third-quarter sales at Sanofi Pasteur MSD (not consolidated by sanofi-aventis),
the joint venture with Merck & Co in Europe, were 14.9% higher on a reported
basis at €372 million, driven by the performance of Gardasil®,
the first vaccine against papillomavirus infections (which cause cervical cancer).
Net sales of Gardasil® rose 42.8% on a reported basis to €144 million.
Over the nine months to end September 2008, Sanofi Pasteur MSD reported sales
of €924 million, an increase of 38.2% on a reported basis. Net sales of Gardasil®
were €456 million, versus €182 million for the comparable period of 2007.
Net sales by geographic region
Net sales by geographic region
| Value in €
million |
2008 Q3
net sales |
Change
on a
comparable
basis |
2008 9 months
net sales |
Change
on a
comparable
basis |
| Europe |
2,958 |
-0.5% |
9,090 |
-0.1% |
| Etats-Unis |
2,216 |
+11.5% |
6,365 |
+4.8% |
| Autres pays |
1,679 |
+9.4% |
5,024 |
+10.2% |
| TOTAL |
6,853 |
5.5% |
20,479 |
3.8% |
In Europe, net sales decreased by 0.5% in the third quarter, mainly on lower sales in France (which was affected
by the introduction of Eloxatin® generics) and to reduced sales of Plavix® in Germany (due to competition from
several of clopidogrel besylates since August). Sales were also lower in Italy due to ongoing competition from
generics of Tritace®. Over the nine months to end September, net sales in Europe were stable at -0.1%.
In the United States, net sales returned to double-digit growth (11.5%) after several quarters impacted by the
introduction of generics of Ambien® IR. The main drivers were excellent performances from Lantus® (up 34.6%)
and Taxotere® (up 16.8%). Over the first nine months of the year, net sales rose by 4.8% in the United States.
Excluding the impact of generics of Ambien® IR4, growth for the period would have reached 11.0%.
Third-quarter net sales in the Other Countries region were up 9.4%, driven by the dynamic growth in Japan. Over
the nine months to end September, the region achieved growth of 10.2%.
Adjusted consolidated income statement
Third quarter of 2008
In the third quarter of 2008, sanofi-aventis generated net sales of €6,853 million, up 5.5% on a comparable basis
but down 2.4% on a reported basis due to the effects of exchange rates and changes in Group structure.
Gross profit was €5,372 million. Other revenues rose by 4.7%. The ratio of cost of sales to net sales was 26.2%,
an improvement of 0.8 of a point, reflecting the favorable effect of the end of commercialization of Copaxone® by
sanofi-aventis in North America.
Research and development expenses rose by 0.5% (or by 4.5% after excluding the effect of exchange rates) to
€1,089 million. This increase reflects the start of Phase III for AVE5026 (an ultra low molecular weight heparin),
AVE0010 (a GLP-1 receptor agonist for diabetes), and AVE5530 (a cholesterol absorption inhibitor).
Selling and general expenses decreased by 5.9% (or by 0.7% excluding the effect of exchange rates) to €1,651
million. The ratio of selling and general expenses to net sales was 0.9 of a point lower at 24.1%.
Other current operating income, net of expenses totaled €49 million, against €58 million for the comparable
period of 2007. The 2008 figure includes the payment by Teva of a fee calculated in proportion to North American
sales of Copaxone®, and a less favorable result on foreign exchange due to the recovery of the dollar against the
euro as of September 30.
Operating income – current (1) was 1.2% higher at €2,640
million. Excluding the effect of exchange rates, growth would have reached 14.0%.
The financial statements include restructuring costs of €51 million (€35 million after tax, included in selected
items), relating mainly to the adaptation of the sales force and industrial facilities in France.
Net financial expenses were €60 million, against €40 million for the third quarter of 2007. Interest expense on
debt was €57 million, compared with €64 million for the third quarter of 2007.
The reported tax rate was 29.6%. This compares with 31.8% for the third quarter of 2007, which included the
effect of a net expense of €30 million (included in selected items) related to cuts in income tax rates in Germany,
Spain and the United Kingdom. The effective tax rate for the third quarter of 2007 was 30.7%.
The share of profits from associates was €219 million (versus €213 million for the third quarter of 2007). The
share of after-tax profits from territories managed by BMS under the Plavix® and Avapro® alliance was up 9.9% at
€155 million. The contribution from Sanofi Pasteur MSD increased, while the contribution from Merial decreased
as a result of adverse exchange rate effects.
Minority interests were unchanged at €111 million. This line includes the share of pre-tax profits paid to BMS
from territories managed by sanofi-aventis (€104 million, versus €107 million for the third quarter of 2007).
Adjusted net income came to €1,888 million, an increase of 1.9%. Adjusted earnings per share (adjusted EPS)
was €1.45, 5.8% up on the 2007 third-quarter figure (€1.37), based on an average number of shares outstanding
of 1,304.8 million for the third quarter of 2008 and 1,349.3 million for the third quarter of 2007.
Adjusted net income excluding selected items (see Appendices
6 & 7) was €1,923 million, 2.1% up on the 2007 third-quarter figure
(€1,883 million).
Adjusted EPS excluding selected items was €1.47, up 5.0%
on the 2007 third-quarter figure (€1.40), and was up 15.6% in U.S.
dollars (2).
First nine months of 2008
In the first nine months of 2008, sanofi-aventis generated net sales of €20,479 million, up 3.8% on a comparable
basis but down 3.1% on a reported basis due to the effects of exchange rates and changes in Group structure.
Gross profit was €15,953 million. Royalty income rose by 4.4% to €882 million, due to the performance of
Plavix® in the United States. The ratio of cost of sales to net sales was in line with the figure for the first nine
months of 2007 (26.4%, versus 26.5%). The favorable effect of changes in product mix and of the discontinuation
(from the second quarter) of commercialization of Copaxone® by sanofi-aventis in North America canceled out
unfavorable exchange rate effects and the impact of generic competition for Ambien® IR in the United States
during the first quarter.
Research and development expenses amounted to €3,269 million, a rise of 0.1% (or 3.9% excluding the effect
of exchange rates).
Selling and general expenses totaled €5,223 million, a decrease of 6.0% (or 1.1% excluding the effect of
exchange rates). Our selective cost adaptation policy enabled us to further reduce the ratio of selling and general
expenses to net sales to 25.5%, compared with 26.3% for the nine months to end September 2007.
Operating income – current (1) was 1.2% lower at €7,564
million. Excluding the effect of exchange rates, this item showed an increase
of 8.7%. The ratio of operating income – current to net sales was 36.9%, an
improvement of 0.7 of a point relative to the nine months to end September 2007.
The financial statements for the first nine months of 2008 include restructuring costs of €258 million (€181 million
after tax, included in selected items) relating to the adaptation of industrial facilities in France and the sales force
in Europe. They also include an impairment loss of €69 million (€49 million after tax, included in selected items),
reflecting the discontinuation of the collaboration with Taiho on S-1 and the Data and Safety Monitoring Board
(DSMB) recommendation on the TRIST trial evaluating Trovax® in kidney cancer.
Net financial expenses were virtually unchanged at €110 million (versus €111 million for the first nine months of
2007). Interest expense on debt was €150 million, compared with €175 million for the first nine months of 2007.
This item also includes a gain of €38 million (€27 million after tax, included in selected items) on the sale of the
investment in Millennium.
The reported tax rate was 29.6%, versus 28.1% for the nine months to end September 2007. In 2007, the income
tax expense figure included non-recurring tax gains of €193 million. The effective tax rate for the first nine months
of 2007 was 30.7%.
The share of profits from associates was €670 million (versus €582 million for the first nine months of 2007).
The share of after-tax profits from territories managed by BMS under the Plavix® and Avapro® alliance rose by
18.6% to €446 million. The contributions from Sanofi Pasteur MSD and Zentiva increased, while the contribution
from Merial fell as a result of adverse exchange rate effects.
Minority interests were €331 million, compared with €322 million for the nine months to end September 2007.
The share of pre-tax profits paid to BMS from territories managed by sanofi-aventis was up 2.9% at €316 million.
Adjusted net income was down 5.2% at €5,356 million.
Adjusted earnings per share (adjusted EPS) was €4.09, 2.2% lower than the figure for the comparable period of
2007 (€4.18), based on an average number of shares outstanding of 1,310.7 million for the first nine months of
2008 and 1,350.8 million for the first nine months of 2007.
Adjusted net income excluding selected items (see Appendices
6 & 7) was €5,559 million, 0.5% higher than the figure for the first
nine months of 2007 (€5,532 million).
Adjusted EPS excluding selected items was €4.24, up 3.4% on the figure for the first nine months of 2007
(€4.10), and up 17.5% in U.S. dollars (2).
The adjusted consolidated income statement is presented in Appendix (4).
Refer to Appendix 1 for a definition of adjusted net income, and Appendix 5
for a reconciliation of the consolidated income statement to the adjusted consolidated
income statement.
2008 Guidance
In light of the good performance achieved during the first nine months of the year, sanofi-aventis has decided to
raise its 2008 full-year guidance.
Barring major adverse events, sanofi-aventis now expects growth in adjusted
EPS excluding selected items (1) for 2008 to be around 9%, calculated at
a constant 2007 euro/dollar rate (1.371).
Sensitivity to the euro/dollar exchange rate is estimated at 0.5% of growth
for a 1-cent movement in the rate.
Adjusted EPS excluding selected items for the year ended December 31, 2007 was €5.17.
Research and Development
Sanofi-aventis has decided to discontinue development of AVE2268(an oral SGLT-2 inhibitor intended for Type 2
diabetes) and of surinabant (a CB-1 receptor antagonist for smoking cessation).
Results from a Phase III trial of a high-dose intramuscular influenza vaccine, announced at the ICAAC/IDSA
conference in the United States, demonstrated increased immune responses among adults 65 years of age and
older compared with the standard influenza vaccine.
As regards Acambis plc, three vaccines (against dengue fever virus, Japanese encephalitis virus and West
Nile virus) were already being developed in collaboration with the company. A phase III study of the dengue
fever virus is due to start by end 2008. The Japanese encephalitis virus is in phase III, and the first submissions
for this vaccine are scheduled for 2009. The West Nile virus vaccine is currently in phase II, with the results of the
study expected before end 2008.
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 product
development, product potential projections and estimates and their underlying
assumptions, statements regarding plans, objectives, intentions and expectations
with respect to future events, operations, products and services, 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-aventis 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-aventis, 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 EMEA, 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 products candidates, the absence of guarantee that the products
candidates if approved will be commercially successful, the future approval
and commercial success of therapeutic alternatives as well as those discussed
or identified in the public filings with the SEC and the AMF made by sanofi-aventis,
including those listed under “Risk Factors” and “Cautionary Statement Regarding
Forward-Looking Statements” in sanofi-aventis’ annual report on Form 20-F for
the year ended December 31, 2007. Other than as required by applicable law,
sanofi-aventis does not undertake any obligation to update or revise any forward-looking
information or statements.
Recent events
Recent events
| August 1, 2008 |
Announcement that Sanofi Pasteur had begun shipping influenza
vaccine in the United States for the 2008/09 season |
| August 8, 2008 |
Announcement that the FDA had assigned priority review status for
the New Drug application for Multaq® |
| September 1, 2008 |
Announcement of the completion of the acquisition by sanofiaventis
of the Australian company Symbion Consumer |
| September 1, 2008 |
Announcement of marketing approval for Taxotere® in prostate
cancer in Japan |
| September 2, 2008 |
Approval of Sanofi Pasteur Holding’s offer by a large majority of
the shareholders of Acambis |
| September 3, 2008 |
Announcement that further analysis from the ATHENA study
showed that Multaq® reduced the risk of stroke in patients with
atrial fibrillation |
| September 8, 2008 |
Announcement at the EASD of results from three noninterventional
studies demonstrating greater HbA1C reduction and
cost savings for Lantus® versus detemir insulins and NPH |
| September 10, 2008 |
Announcement at the EASD that results of the studies, GINGER
and LACE, demonstrated that a basal-bolus insulin regimen with
Lantus® and Apidra® (at mealtime) produced greater A1C
reductions versus pre-mixed insulin in people with type 2 diabetes |
| September 10, 2008 |
Announcement of an upcoming change in Chief Executive Officer,
effective December 1, 2008 |
| September 17, 2008 |
Announcement of the launch of a Phase II study to evaluate the
administration of a therapeutic cancer vaccine regimen to fight
melanoma |
| September 18, 2008 |
Announcement of the extension of the validity period of the offer
for Zentiva to November 28, 2008 |
| September 22, 2008 |
Sanofi-Aventis Announces Intention to Raise Offer for Zentiva to
CZK 1150 in Cash per Share. The Board of Directors of Zentiva
recommends the intended improved offer |
| September 22, 2008 |
Announcement that sanofi-aventis had for a second time
strengthened its position in the internationally-renowned Dow
Jones Sustainability World Index |
| September 23, 2008 |
Announcement of FDA approval for Nasacort AQ® nasal spray in
children aged 2 to 5 years |
| September 25, 2008 |
Announcement that sanofi pasteur had completed the acquisition
of Acambis |
| September 26, 2008 |
Signature by sanofi-aventis of a collaboration agreement with
RainDance Technologies and Louis Pasteur University
(Strasbourg) to launch the dScreen Consortium within the Alsace
BioValley cluster
|
| October 14, 2008 |
Announcement of an agreement between sanofi-aventis and TB
Alliance in the fight against tuberculosis
|
| October 21, 2008 |
Announcement that sanofi-aventis is expanding its R&D presence in
China |
| October 23, 2008 |
Announcement of the temporary suspension of the marketing
authorization for Acomplia® in obese and overweight patients, in
compliance with a recommendation from the EMEA |
| October 29, 2008 |
Announcement that the FDA approves Rapid-Acting Insulin
Apidra® for Treatment of Children with Diabetes |
| October 30, 2008 |
New ADA/EASD Treatment Recommendations: Experts
recommend considering a basal insulin or sulfonylurea
when treatment goals not achieved with metformin alone |
Financial Timetable
Financial Timetable
| February 11, 2009 |
2008 results |
| April 17, 2009 |
Shareholders’ Annual General Meeting |
Appendices
List of Appendices
- Appendix 1: Explanatory Notes/Financial Indicators
- Appendix 2: 2008 third-quarter and 9-month consolidated net sales by geographic region and product (Top 15)
- Appendix 3: 2008 third-quarter, second-quarter, first-quarter and 9-month net sales by product
- Appendix 4: 2008 third-quarter and 9-month adjusted consolidated income statements
- Appendix 5: 2008 third-quarter and 9-month reconciliations of the consolidated income statement to the
adjusted consolidated income statement
- Appendix 6: Trends in selected items in the adjusted consolidated income statement, net of tax
- Appendix 7: Impact of selected items on adjusted net income
Appendix 1: Explanatory Notes/Financial Indicators
Comparable net sales
When we refer to the change in our sales on a “comparable” basis, we mean that we exclude the impact of
exchange rate movements and changes in Group structure (acquisitions and divestments of interests in entities
and rights to products, and changes in consolidation method for consolidated entities).
We exclude the impact of exchange rates by recalculating sales for the prior period on the basis of exchange
rates used in the current period. We exclude the impact of acquisitions 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, we exclude 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, the prior period is recalculated on the basis of the method used for the
current period.
Reconciliation of 2007 third-quarter net sales to 2007 third-quarter comparable net sales, and of 2007 9-month
net sales to 2007 9-month comparable net sales:.
Comparable 2007 Q3 net sales
| Value in € million |
2007 Q3 |
| 2007 Q3 net sales |
7,025 |
| Impact of changes in Group structure |
(140) |
| Impact of exchange rates |
(390) |
| 2007 Q3 comparable net sales |
6,495 |
Comparable 2007 9-month net sales
| Value in € million |
2007: 9 months |
| 2007 9-month net sales |
21,141 |
| Impact of changes in Group structure |
(254) |
| Impact of exchange rates |
(1,153) |
| 2007 9-month comparable net sales |
19,734 |
Worldwide presence of a product
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) and Aprovel®/Avapro®/Karvea® (irbesartan), based on
information provided to us by our alliance partner.
Operating income – current
We define “operating income – current” as operating income before restructuring, impairment of property, plant
and equipment and intangibles, gains/losses on disposals, and litigation.
Adjusted net income
We define “adjusted net income” as accounting net income after minority interests adjusted to exclude (i) the
material impacts of the application of purchase accounting to acquisitions and (ii) acquisition-related integration
and restructuring costs. We believe that eliminating these impacts from net income gives investors a better
understanding of the underlying economic performance of the combined Group.
The material impacts of the application of purchase accounting to acquisitions, primarily the acquisition of Aventis,
are as follows:
- charges arising from the remeasurement of inventories at fair value, net of tax
- amortization/impairment expense generated by the remeasurement of intangible assets, net of tax;
- any impairment of goodwill.
We also exclude from adjusted net income any integration and restructuring costs (net of tax) that are specific to
the acquisition of Aventis by sanofi-aventis.
Adjusted net income
| Value in €
million |
2008: Q3
consolidated
financial
statements
(unaudited) |
2008: Q3
adjusted
consolidated
financial
statements
(unaudited) |
2008: 9 months
consolidated
financial
statements
(unaudited) |
2008: 9 months
adjusted
consolidated
financial
statements
(unaudited) |
| Net sales |
6,853 |
6,853 |
20,479 |
20,479 |
| Net income (after minority interests) |
1,334 |
1,888 |
3,669 |
5,356 |
| Basic EPS |
1.02 |
1.45 |
2.80 |
4.09 |
Appendix 2: 2008 third-quarter and 9-month consolidated net sales by geographic region and product (Top 15)
2008 third-quarter consolidated net sales by geographic
region and product (Top 15)
2008: Q3 net sales
(€ million) |
Europe |
Change on a
comparable
basis |
United
States |
Change on a
comparable
basis |
Other
Countries |
Change on a
comparable
basis |
| Lovenox® |
187 |
+3.3% |
375 |
+10.9% |
73 |
+10.6% |
| Plavix® |
420 |
0.0% |
43(6) |
-2.3% |
167 |
+26.5% |
| Lantus® |
176 |
+12.8% |
362 |
+34.6% |
74 |
+51.0% |
| Taxotere® |
227 |
+10.2% |
181 |
+16.8% |
97 |
+14.1% |
| Eloxatin® |
49 |
-44.3% |
234 |
+7.8% |
42 |
-4.5% |
| Aprovel® |
225 |
+9.2% |
– |
– |
73 |
+35.2% |
| Stilnox®/Ambien®/Ambien CR®/Myslee®
|
19 |
-13.6% |
132 |
-8.3% |
50 |
+19.0% |
| Copaxone® |
97 |
+19.8% |
– |
– |
3 |
0.0% |
| Allegra® |
8 |
-20.0% |
72 |
-6.5% |
59 |
+1.7% |
| Tritace® |
85 |
-28.6% |
– |
– |
37 |
-19.6% |
| Amaryl® |
24 |
-11.1% |
1 |
0.0% |
69 |
+7.8% |
| Xatral® |
35 |
-12.5% |
28 |
+27.3% |
16 |
+6.7% |
| Actonel® |
58 |
+16.0% |
– |
– |
27 |
+3.8% |
| Depakine® |
54 |
+1.9% |
– |
– |
27 |
+17.4% |
| Nasacort® |
8 |
0.0% |
37 |
-9.8% |
6 |
0.0% |
2008 9-month consolidated net sales by geographic region
and product (Top 15)
2008: 9-month net sales
(€ million) |
Europe |
Change on a
comparable
basis |
United
States |
Change on a
comparable
basis |
Other
Countries |
Change on a
comparable
basis |
| Lovenox® |
594 |
+7.0% |
1,178 |
+13.5% |
217 |
+13.6% |
| Plavix® |
1,304 |
+3.6% |
142(6) |
+9.2% |
510 |
+35.6% |
| Lantus® |
522 |
+16.3% |
1,017 |
+32.1% |
206 |
+53.7% |
| Taxotere® |
674 |
+11.2% |
529 |
+15.5% |
289 |
+15.6% |
| Eloxatin® |
174 |
-40.8% |
683 |
+5.9% |
136 |
+16.2% |
| Aprovel® |
677 |
+9.2% |
– |
– |
221 |
+36.4% |
| Stilnox®/Ambien®/Ambien CR®/Myslee®
|
61 |
-6.2% |
402 |
-51.0% |
139 |
+10.3% |
| Copaxone® |
282 |
+18.0% |
210 |
+19.3% |
28 |
+40.0% |
| Allegra® |
34 |
-22.7% |
247 |
-4.3% |
233 |
+9.9% |
| Tritace® |
271 |
-24.7% |
– |
– |
126 |
-30.4% |
| Amaryl® |
76 |
-16.5% |
4 |
-20.0% |
201 |
+6.9% |
| Xatral® |
116 |
-7.2% |
82 |
+18.8% |
49 |
+19.5% |
| Actonel® |
164 |
+7.9% |
– |
– |
83 |
+3.8% |
| Depakine® |
164 |
+3.1% |
– |
– |
80 |
+15.9% |
| Nasacort® |
31 |
-8.8% |
132 |
-12.6% |
18 |
-5.3% |
Appendix 3: 2008 third-quarter, second-quarter, first-quarter and 9-month net sales by product
2008 third-quarter net sales by product
2008 third-quarter net sales by product
| Value in € million |
Q3 2008
net sales |
Q3 2007
comparable
net sales |
Q3 2007
reported
net sales |
| Lovenox® |
635 |
585 |
633 |
| Plavix® |
630 |
596 |
614 |
| Lantus® |
612 |
474 |
518 |
| Taxotere® |
505 |
446 |
475 |
| Eloxatin® |
325 |
349 |
383 |
| Aprovel® |
298 |
260 |
267 |
| Stilnox®/Ambien®/Ambien CR®/Myslee®
|
201 |
208 |
207 |
| Copaxone® |
100 |
84 |
301 |
| Allegra® |
139 |
145 |
159 |
| Tritace® |
122 |
165 |
168 |
| Amaryl® |
94 |
92 |
94 |
| Xatral® |
79 |
77 |
82 |
| Actonel® |
85 |
76 |
79 |
| Depakine® |
81 |
76 |
79 |
| Nasacort® |
51 |
55 |
61 |
| TOTAL TOP 15 |
3,957 |
3,688 |
4,120 |
| Other Products |
1,949 |
1,941 |
1,962 |
| TOTAL Pharmaceuticals |
5,906 |
5,629 |
6,082 |
| Vaccines |
947 |
866 |
943 |
| TOTAL Net sales |
6,853 |
6,495 |
7,025 |
2008 second-quarter net sales by product
2008 second-quarter net sales by product
| Value in € million |
Q2 2008
net sales |
Q2 2007
comparable
net sales |
Q2 2007
reported
net sales |
| Lovenox® |
637 |
609 |
671 |
| Plavix® |
664 |
612 |
632 |
| Lantus® |
576 |
453 |
503 |
| Taxotere® |
503 |
441 |
474 |
| Eloxatin® |
326 |
343 |
380 |
| Aprovel® |
311 |
262 |
272 |
| Stilnox®/Ambien®/Ambien CR®/Myslee®
|
191 |
246 |
252 |
| Copaxone® |
103 |
83 |
307 |
| Allegra® |
171 |
180 |
198 |
| Tritace® |
137 |
165 |
167 |
| Amaryl® |
95 |
100 |
103 |
| Xatral® |
85 |
79 |
85 |
| Actonel® |
87 |
80 |
82 |
| Depakine® |
81 |
78 |
81 |
| Nasacort® |
60 |
77 |
87 |
| TOTAL TOP 15 |
4,027 |
3,808 |
4,294 |
| Other Products |
2,005 |
1,989 |
2,026 |
| TOTAL Pharmaceuticals |
6,032 |
5,797 |
6,320 |
| Vaccines |
657 |
561 |
619 |
| TOTAL Net sales |
6,689 |
6,358 |
6,939 |
2008 first-quarter net sales by product
2008 first-quarter net sales by product
| Value in € million |
Q1 2008
net sales |
Q1 2007
comparable
net sales |
Q1 2007
reported
net sales |
| Lovenox® |
717 |
590 |
634 |
| Plavix® |
662 |
557 |
569 |
| Lantus® |
557 |
426 |
458 |
| Taxotere® |
484 |
427 |
449 |
| Eloxatin® |
342 |
364 |
393 |
| Aprovel® |
289 |
260 |
264 |
| Stilnox®/Ambien®/Ambien CR®/Myslee®
|
210 |
557 |
606 |
| Copaxone® |
317 |
268 |
289 |
| Allegra® |
204 |
189 |
201 |
| Tritace® |
138 |
212 |
211 |
| Amaryl® |
92 |
92 |
94 |
| Xatral® |
83 |
79 |
82 |
| Actonel® |
75 |
76 |
78 |
| Depakine® |
82 |
74 |
76 |
| Nasacort® |
70 |
72 |
79 |
| TOTAL TOP 15 |
4,322 |
4,243 |
4,483 |
| Other Products |
2,067 |
2,105 |
2,127 |
| TOTAL Pharmaceuticals |
6,389 |
6,348 |
6,610 |
| Vaccines |
548 |
533 |
567 |
| TOTAL Net sales |
6,937 |
6,881 |
7,177 |
2008 9-month net sales by product
2008 9-month net sales by product
| Value in € million |
2008 9-month
net sales |
2007 9-month
comparable
net sales |
2007 9-month
reported
net sales |
| Lovenox® |
1,989 |
1,784 |
1,938 |
| Plavix® |
1,956 |
1,765 |
1,815 |
| Lantus® |
1,745 |
1,353 |
1,479 |
| Taxotere® |
1,492 |
1,314 |
1,398 |
| Eloxatin® |
993 |
1,056 |
1,156 |
| Aprovel® |
898 |
782 |
803 |
| Stilnox®/Ambien®/Ambien CR®/Myslee®
|
602 |
1,011 |
1,065 |
| Copaxone® |
520 |
435 |
897 |
| Allegra® |
514 |
514 |
558 |
| Tritace® |
397 |
542 |
546 |
| Amaryl® |
281 |
284 |
291 |
| Xatral® |
247 |
235 |
249 |
| Actonel® |
247 |
232 |
239 |
| Depakine® |
244 |
228 |
236 |
| Nasacort® |
181 |
204 |
227 |
| TOTAL TOP 15 |
12,306 |
11,739 |
12,897 |
| Other Products |
6,021 |
6,035 |
6,115 |
| TOTAL Pharmaceuticals |
18,327 |
17,774 |
19,012 |
| Vaccines |
2,152 |
1,960 |
2,129 |
| TOTAL Net sales |
20,479 |
19,734 |
21,141 |
Appendix 4: 2008 third-quarter and 9-month adjusted consolidated income statements
2008 third-quarter adjusted consolidated income statement (unaudited)
2008 third-quarter adjusted consolidated income statement
(unaudited)
| Value in €
million |
Q3 2008
adjusted
consolidated
income |
As % of
net
sales |
Q3 2007
adjusted
consolidated
income
statement |
As % of
net
sales |
% change |
| Net sales |
6,853 |
100.0% |
7,025 |
100.0% |
-2.4% |
| Other revenues |
312 |
4.6% |
298 |
4.2% |
4.7% |
| Cost of sales |
(1,793) |
(26.2%) |
(1,903) |
(27.0%) |
-5.8% |
| Gross profit |
5,372 |
78.4% |
5,420 |
77.2% |
-0.9% |
| Research and development expenses |
(1,089) |
(15.9%) |
(1,084) |
(15.4%) |
0.5% |
| Selling and general expenses |
(1,651) |
(24.1%) |
(1,754) |
(25.0%) |
-5.9% |
| Other current operating income/expenses |
49 |
– |
58 |
– |
-15.5% |
| Amortization of intangibles |
(41) |
– |
(31) |
– |
– |
| Operating income – current* |
2,640 |
38.5% |
2,609 |
37.1% |
1.2% |
| Restructuring costs |
(51) |
– |
– |
– |
– |
| Impairment of PP&E and intangibles |
– |
– |
– |
– |
– |
| Gain/loss on disposals, and litigation |
– |
– |
– |
– |
– |
| Operating income |
2,589 |
37.8% |
2,609 |
37.1% |
-0.8% |
| Financial expenses |
(589) |
– |
(86) |
– |
– |
| Financial income |
29 |
– |
46 |
– |
– |
| Income before tax and associates |
2,529 |
36.9% |
2,569 |
36.6% |
-1.6% |
| Income tax expense |
(749) |
– |
(818) |
– |
– |
| Reported tax rate |
29.6% |
– |
31.8% |
– |
– |
| Share of profit/loss of associates |
219 |
– |
213 |
– |
– |
| Minority interests |
(111) |
– |
(111) |
– |
– |
| Net income (after minority interests) |
1,888 |
27.5% |
1,853 |
26.4% |
1.9% |
| Average number of shares outstanding (million) |
1,304.8 |
– |
1,349.3 |
– |
– |
| Earnings per share (in euros) |
1.45 |
– |
1.37 |
– |
+5.8% |
* Operating income before restructuring, impairment of property, plant
& equipment and intangibles, gains/losses on disposals, and litigation.
2008 9-month adjusted consolidated income statement (unaudited)
2008 9-month adjusted consolidated income statement (unaudited)
| Value in €
million |
2008 9-month
adjusted
consolidated
income
statement |
As % of
net
sales |
2007 9-month
adjusted
consolidated
income
statement |
As % of
net
sales |
% change |
| Net sales |
20,479 |
100.0% |
21,141 |
100.0% |
-3.1% |
| Other revenues |
882 |
4.3% |
845 |
4.0% |
4.4% |
| Cost of sales |
(5,408) |
(26.4%) |
(5,607) |
(26.5%) |
-3.5% |
| Gross profit |
15,953 |
77.9% |
16,379 |
77.5% |
-2.6% |
| Research and development expenses |
(3,269) |
(16.0%) |
(3,266) |
(15.4%) |
0.1% |
| Selling and general expenses |
(5,223) |
(25.5%) |
(5,558) |
(26.3%) |
-6.0% |
| Other current operating income/expenses |
227 |
– |
200 |
– |
13.5% |
| Amortization of intangibles |
(124) |
– |
(98) |
– |
– |
| Operating income – current* |
7,564 |
36.9% |
7,657 |
36.2% |
-1.2% |
| Restructuring costs |
(258) |
– |
(50) |
– |
– |
| Impairment of PP&E and intangibles |
(69) |
– |
– |
– |
– |
| Gain/loss on disposals, and litigation |
– |
– |
– |
– |
– |
| Operating income |
7,237 |
35.3% |
7,607 |
36.0% |
-4.9% |
| Financial expenses |
(249) |
– |
(256) |
– |
– |
| Financial income |
139 |
– |
145 |
– |
– |
| Income before tax and associates |
7,127 |
34.8% |
7,496 |
35.5% |
-4.9% |
| Income tax expense |
(2,110) |
– |
(2,108) |
– |
– |
| Reported tax rate |
29.6% |
– |
28.1% |
– |
– |
| Share of profit/loss of associates |
670 |
– |
582 |
– |
– |
| Minority interests |
(331) |
– |
(322) |
– |
– |
| Net income (after minority interests) |
5,356 |
26.2% |
5,648 |
26.7% |
-5.2% |
| Average number of shares outstanding (million) |
1,310.7 |
– |
1,350.8 |
– |
– |
| Earnings per share (in euros) |
4.09 |
– |
4.18 |
– |
-2.2% |
* Operating income before restructuring, impairment of property, plant
& equipment and intangibles, gains/losses on disposals, and litigation.
Appendix 5: 2008 third-quarter and 9-month reconciliations of the consolidated income
statement to the adjusted consolidated income statement
2008 third-quarter reconciliation of the consolidated income statement to the adjusted consolidated
income statement (unaudited)
The adjustments to the income statement reflect the elimination
of material impacts of the application of purchase accounting to acquisitions,
primarily the acquisition of Aventis, amounting to €554 million net of
deferred taxes (with no cash impact for the Group).
2008 third-quarter reconciliation of the consolidated
income statement to the adjusted consolidated income statement (unaudited)
| Value in €
million |
Q3 2008
consolidated |
Adjustments |
Q3 2008
adjusted
consolidated |
| Net sales |
6,853 |
– |
6,853 |
| Other revenues |
312 |
– |
312 |
| Cost of sales |
(1,793) |
– |
(1,793) |
| Gross profit |
5,372 |
– |
5,372 |
| Research and development expenses |
(1,089) |
– |
(1,089) |
| Selling and general expenses |
(1,651) |
– |
(1,651) |
| Other current operating income/expenses |
49 |
– |
49 |
| Amortization of intangibles |
(848) |
807 |
(41) |
| Operating income - current* |
1,833 |
807 |
2,640 |
| Restructuring costs |
(51) |
– |
(51) |
| Impairment of PP&E and intangibles |
– |
– |
– |
| Gain/loss on disposals, and litigation |
– |
– |
– |
| Operating income |
1,782 |
807 |
2,589 |
| Financial expenses |
(89) |
– |
(89) |
| Financial income |
29 |
– |
29 |
| Income before tax and associates |
1,722 |
807 |
2,529 |
| Income tax expense |
(476) |
(273) |
(749) |
| Share of profit/loss of associates |
199 |
20 |
219 |
| Minority interests |
(111) |
– |
(111) |
| Net income (after minority interests) |
1,334 |
554 |
1,888 |
| Average number of shares outstanding (million) |
1,304,8 |
– |
1,304,8 |
| Earnings per share (in euros) |
1.02 |
0.43 |
1.45 |
* Operating income before restructuring, impairment of property, plant
& equipment and intangibles, gains/losses on disposals, and litigation.
The material impacts of the application of purchase accounting to acquisitions (primarily the acquisition of
Aventis) on the 2008 third-quarter consolidated income statement are:
- a) An amortization charge of €807 million against intangible assets. This adjustment has no cash impact on
the Group.
- b) Deferred taxes of €273 million, generated by the €807 million amortization charge.
- c) In “Share of profits/losses of associates”, a reversal of €20 million relating to the amortization of intangible
assets, net of tax. This adjustment has no cash impact on the Group.
2008 9-month reconciliation of the consolidated income statement to the adjusted consolidated income statement (unaudited)
The adjustments to the income statement reflect the elimination
of material impacts of the application of purchase accounting to acquisitions,
primarily the acquisition of Aventis, amounting to €1,687 million net of
deferred taxes (with no cash impact for the Group).
2008 9-month reconciliation of the consolidated income
statement to the adjusted consolidated income statement (unaudited)
| Value in €
million |
2008: 9 months
consolidated |
Adjustments |
2008: 9 months
adjusted
consolidated |
| Net sales |
20,479 |
– |
20,479 |
| Other revenues |
882 |
– |
882 |
| Cost of sales |
(5,408) |
– |
(5,408) |
| Gross profit |
15,953 |
– |
15,953 |
| Research and development expenses |
(3,269) |
– |
(3,269) |
| Selling and general expenses |
(5,223) |
– |
(5,223) |
| Other current operating income/expenses |
227 |
– |
227 |
| Amortization of intangibles |
(2,557) |
2,433 |
(124) |
| Operating income – current* |
5,131 |
2,433 |
7,564 |
| Restructuring costs |
(258) |
– |
(258) |
| Impairment of PP&E and intangibles |
(126) |
57 |
(69) |
| Gain/loss on disposals, and litigation |
– |
– |
– |
| Operating income |
4,747 |
2,490 |
7,237 |
| Financial expenses |
(249) |
– |
(249) |
| Financial income |
139 |
– |
139 |
| Income before tax and associates |
4,637 |
2,490 |
7,127 |
| Income tax expense |
(1,247) |
(863) |
(2,110) |
| Share of profit/loss of associates |
610 |
60 |
670 |
| Minority interests |
(331) |
– |
(331) |
| Net income (after minority interests) |
3,669 |
1,687 |
5,356 |
| Average number of shares outstanding (million) |
1,310,7 |
– |
1,310,7 |
| Earnings per share (in euros) |
2,80 |
1,29 |
4,09 |
* Operating income before restructuring, impairment of property, plant
& equipment and intangibles, gains/losses on disposals, and litigation.
The material impacts of the application of purchase accounting to acquisitions (primarily the acquisition of
Aventis) on the 2008 nine-month consolidated income statement are:
- a) An amortization charge of €2,433 million against intangible assets. This adjustment has no cash impact on the
Group.
- b) An impairment loss of €57 million, arising from the discontinuation of ilepatril. This adjustment has no cash
impact on the Group.
- c) Deferred taxes of €863 million, generated by the €2,433 million amortization charge and the €57 million
impairment loss.
- d) In “Share of profits/losses of associates”, a reversal of €60 million relating to the amortization of intangible
assets, net of tax. This adjustment has no cash impact on the Group.
Appendix 6: Trends in selected items in the adjusted income statement, net of tax
Trends in selected items in the adjusted income statement,
net of tax
| Value en €
million |
2008 Q3 |
2007 Q3 |
2008: 9 month |
2007: 9 month |
| Restructuring costs |
(35) |
– |
(181) |
(35) |
| Impairment of PP&E and intangibles |
– |
– |
(49) (a) |
– |
| Gain/loss on disposals |
– |
– |
27 |
– |
| Provisions for financial instruments, litigation, tax inspections
& other items |
– |
(30) (b) |
– |
151 (c) |
| TOTAL net of tax |
(35) |
(30) |
(203) |
116 |
a) Includes impairment losses on S-1 and Trovax
b) Income tax expense of €51 million related to cuts in income tax rates in Germany, Spain and the United Kingdom, partly
offset by a €21 million gain on settlement of tax disputes
c) Includes:
- Tax risks/settlement of tax disputes: €244 million
- Income tax expense related to cuts in income tax rates in Germany, Spain and the United Kingdom: -€51 million
- Harmonization of welfare and healthcare plans for retirees: -€42 million
Appendix 7: Impact of selected items(5) on adjusted net income
2008: third quarter
Impact of selected items on adjusted net income - 2008: third quarter
| Value in (€
million) |
2008: Q3 |
2007: Q3 |
Change |
| Adjusted net income |
1,888 |
1,853 |
+1.9% |
| Total selected items, net of tax (5) |
(35) |
(30) |
– |
| Adjusted net income excluding selected items |
1,923 |
1,883 |
+2.1% |
| Adjusted EPS excluding selected items |
1.47 |
1.40 |
+5.0% |
2008: first 9 months
Impact of selected items on adjusted net income - 2008:
first 9 months
| Value in (€
million) |
2008: 9 months |
2007: 9 months |
Change |
| Adjusted net income |
5,356 |
5,648 |
-5.2% |
| Total selected items, net of tax (5) |
(203) |
116 |
– |
| Adjusted net income excluding selected items |
5,559 |
5,532 |
+0.5% |
| Adjusted EPS excluding selected items |
4.24 |
4.10 |
+3.4% |
References
- 1. See Appendix 1 for a definition of financial indicators, and Appendix 6 for a description of selected items.
- 2. U.S. dollar figures obtained by translating euro-denominated figures at the average exchange rate for the period (Q3 2008: 1.504, Q3 2007: 1.374; first 9 months of 2008: 1.522, first 9 months of 2007: 1.344).
- 3. Excluding net sales of Ambien® IR in the United States in Q1 2007 and Q1 2008, and of Eloxatin® in Europe for the first 9 months of 2007 and 2008.
- 4. Excluding net sales of Ambien® IR in the United States in the first quarter of 2007 and 2008.
- 5. See Appendix 6 for a description of selected items.
- 6. Sales of active ingredient to the American joint venture managed by BMS.
