PARIS, Feb. 11 /PRNewswire-FirstCall/ --
FY 2008 % change Q4 2008 % change
------- -------- ------- --------
Comparable net sales*: EUR27,568m +3.7% EUR7,089m +3.6%
Adjusted net income
excluding selected
items(1): EUR7,186m +3.2% EUR1,627m +13.9%
Adjusted EPS excluding EUR5.49 +6.2% EUR1.25 +16.8%
selected items(1):
In order to facilitate the understanding of the Group's operational performance, we comment adjusted income statement excluding selected items (1), a non-GAAP financial measure. 2008 fourth-quarter and full-year consolidated income statements are provided in appendix 4, as are details of adjustments and selected items. Consolidated net income for 2008 was EUR 3,851 million, compared with EUR 5,263 million in 2007, the decline being mainly due to an impairment charge of EUR 1,485 million taken against intangible assets related to the acquisition of Aventis.
2008 performance
- EPS(2) growth at constant euro/dollar exchange rates above guidance (up 11.2% against guidance of around 9%)
- Solid sales performance driven by Lantus(R) (up 27.7%), Taxotere(R) (up 13.2%), Lovenox(R) (up 10.6%), Plavix(R) (up 10.5%), Aprovel(R) (up 14.2%) and vaccines (up 9.6%)
- Successful launch of Pentacel(R) and filing for approval of Multaq(R) and Ciltyri(R) in the United States and Europe
- Growth ahead of the market in the United States, and double-digit growth in emerging markets and in Japan
- Continued improvement in operating ratios
- Net debt reduced to EUR 1.8 billion
- Proposed dividend of EUR 2.20 per share, payable April 28, 2009
2009 guidance
- In 2009, sanofi-aventis expects growth in adjusted EPS excluding selected items(1) of at least 7% at constant exchange rates, barring major adverse events such as the launch of a generic of Lovenox(R) in the United States
* Unless otherwise indicated, all sales growth figures in this press release are stated on a comparable basis (see appendix 7 for a definition)
(1) See appendix 7 for a definition of financial indicators
(2) Adjusted EPS excluding selected items
Transforming sanofi-aventis into a diversified global leader in healthcare
Sanofi-aventis has core strengths in the field of healthcare: a global presence, market leadership in vaccines, major biological products (such as Lovenox(R) and Lantus(R)) and a strong and long-established presence in emerging markets, not to mention a track record of adapting cost structures and a solid financial situation. But although these are solid foundations, we need to develop new growth platforms in light of the important challenges of patent expirations and declining R&D productivity facing the pharmaceutical industry. Our response to these challenges is an ambitious one: to deliver sustainable growth, we need to transform ourselves into a diversified global healthcare leader.
This is why we have initiated a wide-ranging transformation program, focusing on three key themes:
- Increasing innovation in Research & Development
We have begun a complete and objective review of our research portfolio, in order to reassess the allocation of resources. This review has already led to a rationalization of our portfolio and will be ongoing in the first half of 2009. In the future, we must focus our R&D strategy on key technologies and diseases to better serve the needs of patients. Our internal R&D division needs to be organized to maximize flexibility and innovation and a part of our existing resources in R&D should be reallocated to external collaborations. Finally, we are redefining the decision-making process in R&D to better integrate the commercial perspective and the scope for value creation. In the context of this transformation and the new environment, two positions have been created: Chief Medical Officer, who will attentively monitor the balance between benefit and risk in both marketed products and those in development; and the position of Scientific Advisor, who will contribute to the R&D decision-making process related to the portfolio and strategy, particularly in the creation of partnerships.
- Adapting our structures to meet the challenges of the future
We need to adapt our operating model, too focused today on traditional markets, to reflect the diversity of our activities and our geographical reach. Anticipation of future changes in volumes and analysis of growth opportunities will lead us to realign our industrial capacity. The simplification of our organizational structure and operational processes will translate into a reduction of our general and administrative costs.
- Exploring external growth opportunities
Our business development must be perfectly integrated in our overall strategy and translate into disciplined acquisitions and partnerships to build or strengthen platforms for long-term growth and create value for our shareholders. We have already taken first steps in this direction through our alliance with Regeneron, our acquisitions of Acambis plc and Symbion Consumer, and our bid for Zentiva. We are encouraging business development initiatives within operations in order to reinforce our regional approach. Our external research collaborations will be broadened so that we further develop creativity within R&D and deliver innovation to patients. The position of Chief Strategic Officer has been created at the Executive Committee level to achieve this integrated approach to strategy and business development.
This transformation program has already led to the rollout of a number of initiatives, the conclusions of which will be implemented from the summer of 2009.
Commenting on the objectives of the program, Chris Viehbacher, sanofi-aventis Chief Executive Officer, said: "Our ambition is to become a diversified global leader in healthcare, with one of the most productive R&D in the sector. Our objective is to deliver EPS growth ahead of current expectations of financial markets, while strengthening or building platforms for growth for 2012 and beyond."
2008 fourth-quarter and full-year net sales
Unless otherwise indicated, all sales growth figures in this press release are stated on a comparable basis(1) (excluding the impact of exchange rate movements and changes in Group structure).
Sanofi-aventis generated fourth-quarter net sales of EUR 7,089 million, up 3.6%. 2008 full-year sales rose by 3.7% to EUR 27,568 million.
Pharmaceuticals
Fourth-quarter net sales for the Pharmaceuticals business were up 3.1% at EUR 6,380 million, with the withdrawal of Acomplia(R) costing 0.5 of a point of growth over the quarter.
Full-year net sales for the Pharmaceuticals business were up 3.1% at EUR 24,707 million. The impact of generics(3) of Ambien IR(R) in the United States and of Eloxatin(R) in Europe pared around 2.2 points off growth.
EUR million Change on a Change on a
Q4 2008 comparable FY 2008 comparable
net sales basis net sales basis
Lovenox(R) 749 +8.4% 2,738 +10.6%
Plavix(R) 660 +9.5% 2,616 +10.5%
Lantus(R) 705 +24.8% 2,450 +27.7%
Taxotere(R) 541 +12.2% 2,033 +13.2%
Eloxatin(R) 355 -5.1% 1,348 -5.7%
Aprovel(R) 304 +12.2% 1,202 +14.2%
See appendix 2 for a geographical split of consolidated net sales by
product.
Fourth-quarter net sales of Lovenox(R), the leading low molecular weight heparin on the market, rose by 8.4% to EUR 749 million. In the United States, the product reported growth of 7.2%. In Europe, after two quarters adversely affected by limited product availability (following the withdrawal of certain batches in which small quantities of an impurity were present), Lovenox(R) achieved double-digit growth in the fourth quarter of 11.1%, to EUR 221 million. Over 2008 as a whole, net sales of the product were up 10.6% at EUR 2,738 million.
Lantus(R), the world's leading insulin brand, was the biggest contributor to the Group's top-line growth in 2008. The product achieved strong growth in all three regions: 30.8% in the United States, 16.3% in Europe and 46.2% in the "Other Countries" region. The new-generation Lantus(R)SoloSTAR(R) pen was a significant driver of sales growth in the United States. Our goal is to establish Lantus(R) as the leading anti-diabetic in the world by value.
In the fourth quarter, Taxotere(R) posted another fine performance, especially in the United States where net sales were up 16.9% at EUR 208 million, driven by the product's use in adjuvant breast cancer treatment and in prostate cancer. Full-year sales exceeded EUR 2 billion for the first time in 2008 (EUR 2,033 million), with double-digit growth in all three regions: 15.9% in the United States, 10.8% in Europe, and 13.8% in the "Other Countries" region.
(3) Excluding net sales of Ambien IR(R) in the United States in Q1 2007 and Q1 2008, and of Eloxatin(R) in Europe in 2007 and 2008
Fourth-quarter net sales of the hypnotics Ambien CR(R) and Ambien IR(R) in the United States were $170 million and $24 million respectively. Over the full year, net sales of Ambien CR(R) totaled $681 million, and Ambien IR(R) posted net sales of $125 million. In Japan, Myslee(R), the leading hypnotic on the market, again performed well: net sales (consolidated by sanofi-aventis since January 1, 2008) increased by 17.8% (to EUR 49 million) in the fourth quarter and by 14.9% (to EUR 142 million) over the full year.
In the United States, net sales of Eloxatin(R), the leading cytotoxic agent in the colorectal cancer market as an adjuvant and in the metastatic phase, rose by 6.9% to EUR 265 million in the fourth quarter and by 6.2% to EUR 948 million over 2008 as a whole, driven by the adjuvant indication. In the "Other Countries" region, the product reported robust growth of 13.4% to EUR 186 million.
Net sales of Acomplia(R), which was withdrawn from the market in the fourth quarter, totaled EUR 72 million in 2008.
Worldwide presence(1) of Plavix(R) / Iscover(R)
EUR million Change on a Change on a
comparable comparable
Q4 2008 basis FY 2008 basis
Europe 457 +1.8% 1,833 +3.2%
United States 978 +11.6% 3,351 +21.1%
Other Countries 270 +19.5% 959 +22.0%
TOTAL 1,705 +9.9% 6,143 +15.3%
Full-year 2008 sales of Plavix(R) in the United States (consolidated by BMS) were sharply higher than in 2007, when sales were affected by competition from a generic version in the early part of the year. In Europe, the product's 3.2% growth rate reflected competition from several clopidogrel besylates in the monotherapy segment since August in Germany, where the market share of Plavix(R)/Iscover(R) by volume remained around 75% in December (IMS Pharmatrend, week commencing December 22, 2008). In the "Other Countries" region, growth for Plavix(R) benefited from its success in Japan, where net sales reached EUR 67 million in the fourth quarter of 2008 (vs. EUR 33 million in the fourth quarter of 2007) and EUR 182 million over 2008 as a whole (vs. EUR 66 million in 2007).
Worldwide presence(1) of Aprovel(R)/Avapro(R)/Karvea(R)
EUR million Change on a Change on a
comparable comparable
Q4 2008 basis FY 2008 basis
Europe 250 +9.2% 992 +8.8%
United States 140 +2.2% 499 +6.4%
Other Countries 120 +4.3% 475 +20.6%
TOTAL 510 +6.0% 1,966 +10.8%
Despite a very competitive environment, worldwide sales of Aprovel(R) achieved double-digit growth in 2008.
(1) See appendix 7 for a definition of financial indicators
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. However, the active ingredient of irbesartan is protected by a patent in the principal European countries until August 2012. In some countries (Spain, Portugal, Finland, Norway, and some Eastern European countries), irbesartan is not protected by this active ingredient patent, though other patents may be in force locally. Net sales of Aprovel(R) as a monotherapy in European countries not covered by the active ingredient patent were approximately EUR 50 million in 2008.
Human Vaccines
Fourth-quarter consolidated net sales for the Human Vaccines business were up 8.9% at EUR 709 million, with full-year growth reaching 9.6% at EUR 2,861 million. In the United States, 2008 full-year net sales were up 9.7% at EUR 1,683 million.
Net sales of influenza vaccines in 2008 rose 1.5% to EUR 736 million. This increase includes the shipment during the second quarter of a batch of H5N1 vaccine to the U.S. Department of Health and Human Services worth $192.5 million (vs. $113 million in 2007). Fourth-quarter sales of influenza vaccines in the United States were down compared to previous year, as three-quarters of 2008 shipments were completed during the third quarter of the year.
Net sales of Menactra(R) (quadrivalent meningococcal meningitis vaccine) rose 7.9% in 2008 at EUR 404 million.
Pentacel(R) -- the first 5-in-1 pediatric combination vaccine to protect against diphtheria, tetanus, pertussis, polio and haemophilus influenzae type b licensed in the United States-- confirmed its success with strong sales uptake promptly after its launch in July 2008, reaching net sales of EUR 56 million in the fourth quarter and EUR 82 million in 2008.
Adacel(R) (adult and adolescent tetanus-diphtheria-pertussis booster) continued to perform very well in the United States, up 35.6% in the fourth quarter to EUR 54 million and by 20.0% for the year, reaching EUR 255 million.
Sales of Act-Hib(R) increased by 19.9% reaching EUR 120 million in 2008, driven by the significant commercial and industrial effort to provide additional doses to the US market during competitor's supply shortage combined with Act-Hib(R) launch in Japan in November 2008.
2008 sales growth was also driven by the uptake of Pentaxim(R) -- another 5-in-1 pediatric combo vaccine, which protects against diphtheria, tetanus, pertussis, polio and haemophilus influenzae type b -- in the "other countries" region.
EUR million Q4 2008 Change on a FY 2008 Change on a
net comparable net comparable
sales basis sales basis
Polio/Pertussis/Hib Vaccines 219 +53.1% 768 +21.9%
Influenza Vaccines* 162 -32.5% 736 +1.5%
Meningitis/Pneumonia Vaccines 91 +3.4% 472 +7.0%
Adult Booster Vaccines 90 +25.0% 399 +8.1%
Travel & Other Endemics
Vaccines 73 -3.9% 309 -1.6%
Other Vaccines 74 +131.3% 177 +34.1%
TOTAL 709 +8.9% 2,861 +9.6%
* Seasonal and pandemic influenza vaccines
A major event in 2008 was the acquisition of Acambis plc (finalized in September), which augmented our pipeline with new vaccine candidates.
Fourth-quarter sales at Sanofi Pasteur MSD (not consolidated by sanofi-aventis), the joint venture with Merck & Co in Western Europe, were down 7.5% on a reported basis at EUR 348 million. Fourth quarter sales of Gardasil(R), the first vaccine licensed in Europe against papillomavirus infection, a major cause of cervical cancer, fell by 20% to EUR 128 million. Sanofi Pasteur MSD reached 2008 full-year sales of EUR 1,272 million, an increase of 21.8% on a reported basis. Full-year net sales of Gardasil(R) were EUR 584 million, compared with EUR 342 million in 2007.
Net sales by geographic region
EUR million Q4 2008 Change on a FY 2008 Change on a
net comparable net comparable
sales basis sales basis
Europe 3,006 -2.2% 12,096 -0.6%
United States 2,244 +7.2% 8,609 +5.4%
Other Countries 1,839 +9.8% 6,863 +10.1%
TOTAL 7,089 3.6% 27,568 3.7%
During 2008, sales in France and Germany weighed on net sales in Europe, which fell slightly (by 0.6%). The generifications(4) of Eloxatin(R) (especially in France) pared around 1.3 points of growth in Europe. Since August 2008, sales of Plavix(R) in Germany have been affected by competition from several clopidogrel besylates in certain indications.
In the United States, sales growth resumed at a healthier pace in the last two quarters of 2008 after having been hampered by competition from generics of Ambien IR(R) in the first part of the year, due to particularly excellent performances from Lantus(R) and Taxotere(R). Generics of Ambien IR(R)(5) cost 4.6 points of sales growth over 2008 as a whole.
Net sales in the "Other Countries" region during 2008 were lifted by a particularly strong performance in Japan (up 18.5% at EUR 1,408 million), driven by the success of Plavix(R) (net sales reached EUR 182 million in 2008 vs. EUR 66 million in 2007 and Myslee(R) (net sales reached EUR 142 million in 2008, up 14.9%)
(4) Excluding net sales of Eloxatin(R) in Europe in 2007 and 2008
(5) Excluding net sales of Ambien IR(R) in the United States in Q1 2007 and Q1 2008
2008 fourth-quarter financial results
Adjusted income statement excluding selected items(1)
Sanofi-aventis generated fourth-quarter net sales of EUR 7,089 million, a rise of 3.6% on a comparable basis. The appreciation of the U.S. dollar against the euro meant that exchange rate movements had a favorable effect of 1.1 points, despite the impact of other currencies. Changes in Group structure had an unfavorable effect of 2.1 points, and included the discontinuation of commercialization of Copaxone(R) in the United States and Canada by sanofi-aventis in accordance with the agreements signed with Teva. On a reported basis, net sales rose by 2.6%.
Gross profit was up 5.2% at EUR 5,529 million. Other revenues increased by 18.4%, benefiting from the impact of the rising dollar on royalties received on sales of Plavix(R) and Avapro(R) in the United States. The ratio of cost of sales to net sales improved by 1.2 points to 27.2%, reflecting to favorable foreign exchange effects and the discontinuation of commercialization of Copaxone(R) in North America.
Research and development expenses were EUR 1,306 million, a rise of 2.8% (1.3% at constant exchange rates), and include the full cost of discontinuing trials on Acomplia(R) (EUR 41 million). Selling and general expenses fell by 2.6% (-4.6% at constant exchange rates) to EUR 1,945 million. The ratio of selling and general expenses to net sales improved by 1.5 points to 27.4%, reflecting our ongoing cost adaptation measures
Other current operating income and expenses showed a net expense of EUR 24 million, against net income of EUR 15 million in the comparable period of 2007. This item includes an improvement in net income from alliances (primarily on Copaxone(R)), but also additional provisions for environmental risks, mainly in the United States.
Operating income - current(1) rose by 12.1% to EUR 2,198 million. Excluding foreign exchange effects, the rise was 11.4%.
Net financial expenses totaled EUR 122 million (vs. EUR 28 million in the fourth quarter of 2007), mainly due to the impact of the evolution of the EUR/$ exchange rate on the hedging of dividends from our American subsidiaries to the parent company. Interest expense was little changed at EUR 41 million, against EUR 48 million in the fourth quarter of 2007.
The effective tax rate was 26.9%, reflecting the adjustment of the effective tax rate for the first 9 months of the year (29.6%) to align on the full-year effective rate (29.0%).
The share of profits from associates was up 23.6% at EUR 220 million, with the share of after-tax profits from territories managed by BMS under the Plavix(R) and Avapro(R) alliance up 19.5% at EUR 178 million.
Minority interests increased by 13.4% to EUR 110 million. The share of pre-tax profits paid to BMS from territories managed by sanofi-aventis was up 10.4% at EUR 106 million.
Adjusted net income excluding selected items(1) was up 13.9% at EUR 1,627 million.
Adjusted earnings per share (EPS) excluding selected items(1) was EUR 1.25, 16.8% higher than the 2007 fourth-quarter figure of EUR 1.07.
(1) See appendix 7 for definitions of financial indicators
Selected items (refer to the appendix 4)
After tax, selected items represented a net gain of EUR 85 million in the fourth quarter of 2008 (versus a net gain of EUR 33 million in the comparable period of 2007), comprising:
- EUR 327 million of restructuring costs related to the adaptation of industrial facilities in France and of the Group's sales force;
- EUR 76 million of releases of provisions for litigation;
- EUR 115 million in tax effects on the selected items described above, plus EUR 221 million of net gains arising from releases of provisions for and settlements of tax disputes in Europe, making a total of EUR 336 million on the "Income tax expense" line.
Adjustments in the consolidated financial statements to reflect the application of purchase accounting to acquisitions, primarily that of Aventis (refer to the appendix 4)
2008 full-year financial results
Adjusted income statement excluding selected items(1)
Sanofi-aventis generated 2008 full-year net sales of EUR 27,568 million, up 3.7% on a comparable basis. Foreign exchange movements had an unfavorable impact of 3.9 points, over 70% of which was related to the U.S. dollar. Changes in Group structure had an unfavorable effect of 1.5 points, primarily reflecting the discontinuation of commercialization of Copaxone(R) in North America from the second quarter. On a reported basis, net sales fell by 1.7%.
Gross profit was EUR 21,482 million. Royalty income was up 8.1% at EUR 1,249 million, driven by the performance of Plavix(R) in the United States and despite a negative impact of the US dollar over the year as a whole. The ratio of cost of sales to net sales improved by 0.4 of a point to 26.6%.
Research and development expenses totaled EUR 4,575 million, up 0.8% (3.2% at constant exchange rates). Costs arising from the discontinuation of programs (primarily Acomplia(R)) had a negative effect of approximately one percentage point. Selling and general expenses were down 5.1% (-2.0% at constant exchange rates) at EUR 7,168 million. The selective cost adaptation policy implemented since 2006 led to a further improvement of 0.9 of a point in the ratio of selling and general expenses to net sales, which fell to 26.0%.
Other current operating income and expenses showed net income of EUR 203 million, versus net income of EUR 276 million in 2007. In terms of alliances, income from Copaxone(R) more than offset lower income from other products (Actonel(R), Allegra(R), etc). Other factors explaining the year-on-year change in this item include lower gains on disposals, environmental provisions, and less favorable foreign exchange results.
Operating income - current(1) was EUR 9,762 million (up 0.9% on a reported basis, or 8.5% at constant exchange rates), and represented 35.4% of net sales - an improvement of 0.9 of a point relative to 2007.
Net financial expenses were EUR 270 million, against EUR 139 million in 2007. Interest expense on debt totaled EUR 191 million, compared with EUR 223 million in 2007. Financial foreign exchange brought a net charge of EUR 74 million, versus a net gain of EUR 87 million in 2007; this was mainly due to the impact of the differential in interest rates between the U.S. dollar and the euro on hedges of cash invested by our American subsidiaries.
The effective tax rate was 29.0%, compared with 30.6% in 2007, due in particular to tax rate cuts in Germany.
The share of profits from associates was up 17.1% at EUR 890 million, with the share of after-tax profits from territories managed by BMS under the Plavix(R) and Avapro(R) alliance 18.9% higher at EUR 624 million. The contributions from Sanofi Pasteur MSD and Zentiva rose, while the Merial contribution fell due to adverse foreign exchange effects.
Minority interests were 5.3% higher at EUR 441 million. The share of pre-tax profits paid to BMS from territories managed by sanofi-aventis was up 4.7% at EUR 422 million.
Adjusted net income excluding selected items(1) was up 3.2% at EUR 7,186 million.
Adjusted earnings per share (EPS) excluding selected items(1) was EUR 5.49, 6.2% higher than the 2007 figure of EUR 5.17.
At a constant 2007 euro/dollar exchange rate, growth in adjusted earnings per share excluding selected items(1) was 11.2%, ahead of the guidance of around 9% issued by the company.
(1) See appendix 7 for definitions of financial indicators
Selected items (refer to the appendix 4)
After tax, selected items represented a net expense of EUR 118 million in 2008 (versus a net gain of EUR 149 million in 2007), comprising:
- EUR 585 million of restructuring costs, on the adaptation of industrial facilities in France and of the Group's sales force;
- EUR 69 million of impairment losses, 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(R) in kidney cancer;
- EUR 38 million in gains on the sale of the investment in Millennium;
- EUR 76 million of releases of provisions for litigation;
- EUR 201 million in tax effects on the selected items described above, plus EUR 221 million of net gains arising from releases of provisions for and settlements of tax disputes in Europe, making a total of EUR 422 million on the "Income tax expense" line.
Adjustments in the consolidated financial statements to reflect the application of purchase accounting to acquisitions, primarily that of Aventis (refer to the appendix 4)
Consolidated cash flow statement and balance sheet as at December 31, 2008 (refer to the appendices 5 and 6)
Operating cash flow before changes in working capital totaled EUR 8,524 million in 2008, against EUR 7,917 million in 2007.
The Group held working capital needs steady year on year.
Investing activities generated a net cash outflow of EUR 2,154 million. Acquisitions of property, plant and equipment and intangible assets amounted to EUR 1,606 million, mainly comprising investment in industrial and research facilities (EUR 1,389 million) and contractual payments related to intangible rights (EUR 217 million), the main item being the payment made under the agreement with Astellas on Myslee(R) signed in 2007. Acquisitions (EUR 667 million) mainly comprised the purchase of shares in Acambis plc and Symbion Consumer. Proceeds from disposals net of taxes amounted to EUR 123 million, mainly from the sale of the investment in Millennium.
After the dividend payout of EUR 2,708 million and the purchase of 23.8 million treasury shares for EUR 1,227 million (primarily at the end of the share repurchase program authorized by the Shareholders' General Meeting of May 2007), net cash generated during 2008 was EUR 2,450 million, enabling the Group to reduce net debt from EUR 4,230 million at December 31, 2007 to EUR 1,780 million at December 31, 2008. Gearing stood at 3.9% at December 31, 2008, compared with 9.5% at December 31, 2007.
Research and Development
A full review of our Research and Development portfolio has been initiated in order to reassess the allocation of resources and distribute them to the projects with the highest potential in the currently prevailing healthcare environment. Based on an initial evaluation, a number of projects have been discontinued either on the basis of an unsatisfactory benefit/risk ratio or inadequate additional clinical benefit, or because of the expected sub-optimal return on investment. This review will continue until April 2009. As of now, the R&D portfolio comprises 65 projects in clinical development, of which 27 are in phase III or have been submitted to health authorities for approval. The main events are:
- An application for approval of Ciltyri(R) (eplivanserin) in the treatment of sleep disorders was submitted to the FDA and the EMEA during the fourth quarter of 2008 and accepted for filing.
- Subsequent to the submission of the application of Multaq(R) mid 2008 in the EU and U.S. which granted a priority review, a FDA advisory committee is scheduled for March 18.
- Numerous molecules and vaccines have recently entered phase IIa, phase IIb or phase III:
Phase III:
- the IMOJEV(TM) vaccine (Japanese encephalitis), for which the phase III study has started;
- the micro-injection influenza vaccine, which has entered phase III in the United States.
Phase IIb:
- the FAAH inhibitor SSR411298, in depression in the elderly;
- the Dengue vaccine for moderate to severe fever
- the ACAM-Cdiff (Clostridium difficile) vaccine, enters phase IIb after entering the portfolio in phase I via the acquisition of Acambis plc.
Phase IIa:
- the NHE3 inhibitor (AVE0657) in sleep apnea;
- the monoclonal antibody (AVE1642) in the treatment of breast cancer;
- ataciguat, a guanylate cyclase activator, in neuropathic pain;
- SAR97276 in the treatment of malaria;
- a therapeutic vaccine against melanoma;
- anti-rabies monoclonals (post-exposure prophylaxis).
- The development of volinanserin (sleep disorders), satavaptan
(dilutional hyponatremia and cirrhotic ascites), and SSR240600
(urge urinary incontinence) has been discontinued.
- The development of some projects has been refocused. Larotaxel's
(XRP9881) development is ongoing for the treatment of second-line
pancreatic cancer and bladder cancer, but it has been
discontinued for the treatment of breast cancer.
The development of cabazitaxel (XRP6258) in prostate cancer is
ongoing, but the project has been halted for metastatic breast
cancer.
The development of celivarone was stopped in atrial fibrillation.
Its future development will depend on the outcome of the Multaq(R)
FDA Advisory Committee on March 18, 2009. The development of
ataciguat has been discontinued in peripheral arterial disease.
The product is still being developed for the treatment of
neuropathic pain.
AVE5026 proceeds in phase III in the prevention of venous
thromboembolic events in patients that require a hip or knee
replacement or have undergone hip fracture surgery or abdominal
surgery according to the original plans. Regarding the medical
indications for AVE5026, it was decided to currently proceed only
with those that target oncology patients.
- Concerning Life Cycle Management, the combination of Plavix(R) with
simvastatin and Plavix(R) with irbesartan will not be pursued. The
Plavix(R) plus aspirin combination project has been discontinued in
the United States, but will be re-submitted in Europe in 2009 and
is still on track.
Based on recently published studies (ADVANCE, VADT, ACCORD) which
suggest that a trial duration longer than 5 years may be
necessary to determine the effect in the reduction of
cardiovascular risk of intensive glucose management versus
standard care, the ORIGIN Steering Committee recommended an
extension of the Lantus ORIGIN study by approximately 2 years.
This decision was endorsed by sanofi-aventis. The trial has
enrolled 12,612 pre-diabetic and early type 2 diabetic patients,
and the results are anticipated in 2012
Please go to www.sanofi-aventis.com to view the full details along with Appendix 8: Research and Development Portfolio
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.
2008 Full Year Results & Outlook
Paris - February 11, 2009
9:30 (GMT +1) - Press Conference
Presentation of 2008 Full Year Results & Outlook followed by a Question &
Answer session with the audience. The presentation will be in English
with simultaneous translation available in French.
14:00 - 16:00 (GMT +1) - Presentation to the financial community
The presentation of 2008 Full Year Results & Outlook will be webcasted
Live on www.sanofi-aventis.com. The presentation, conducted in English
with simultaneous translation in French, will include a Question & Answer
session with the audience.
DIAL-IN NUMBERS
The presentation will also be available via the following numbers:
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UK +44 (0) 203 147 4744
USA +1 866 928 6050
Access code 843754#
Appendices
List of appendices
Appendix 1: 2008 fourth-quarter and full-year consolidated net sales by product
Appendix 2: 2008 fourth-quarter and full-year consolidated net sales by geographic region and product
Appendix 3: 2008 fourth-quarter and full-year adjusted income statements excluding selected items
Appendix 4: Reconciliation of adjusted income statement excluding selected items to adjusted income statement and consolidated income statement for fourth-quarter and full-year, 2008 and 2007
Appendix 5: Simplified consolidated cash flow statement
Appendix 6: Simplified consolidated balance sheet
Appendix 7: Definition of non-GAAP financial indicators
Appendix 8: Please go to www.sanofi-aventis.com to view the full details along with Research and Development Portfolio
Appendix 1: 2008 fourth-quarter and full-year consolidated net
sales by product
EUR million Q4 2008 Change on a FY 2008 Change on a
net comparable net comparable
sales basis sales basis
Lovenox(R) 749 +8.4% 2,738 +10.6%
Plavix(R) 660 +9.5% 2,616 +10.5%
Lantus(R) 705 +24.8% 2,450 +27.7%
Taxotere(R) 541 +12.2% 2,033 +13.2%
Eloxatin(R) 355 -5.1% 1,348 -5.7%
Aprovel(R) 304 +12.2% 1,202 +14.2%
Stilnox(R)/Ambien(R)/
Ambien CR(R)/Myslee(R) 227 -8.1% 829 -34.1%
Of which Ambien CR(R) 130 -9,7% 475 -8,7%
Allegra(R) 174 +8.7% 688 +2.1%
Copaxone(R) 102 +20.0% 622 +19.6%
Tritace(R) 116 -39.6% 513 -30.1%
Amaryl(R) 106 -1.9% 387 -1.3%
Xatral(R) 84 -1.2% 331 +3.4%
Actonel(R) 83 +7.8% 330 +6.8%
Depakine(R) 85 +9.0% 329 +7.5%
Nasacort(R) 60 -14.3% 241 -12.0%
TOP 15 4,351 +6.4% 16,657 +5.2%
Rest of the Portfolio 2,029 -3.5% 8,050 -1.1%
Total Pharmaceuticals 6,380 +3.1% 24,707 +3.1%
Appendix 2: 2008 fourth-quarter and full-year consolidated net
sales by geographic region and product
Pharma
Q4 2008 net sales
(EUR million)
Change on a Change on a Change on a
Comparable United comparable Other comparable
Europe basis States basis Countries basis
Lovenox(R) 221 +11.1% 447 +7.2% 81 +8.0%
Plavix(R) 428 3.4% 30(6) -18.9% 202 +32.9%
Lantus(R) 191 +16.5% 435 +27.9% 79 +29.5%
Taxotere(R) 226 +9.7% 208 +16.9% 107 +9.2%
Eloxatin(R) 40 -49.4% 265 +6.9% 50 +6.4%
Aprovel(R) 233 +12.0% - - 71 +12.7%
Stilnox(R)/Ambien(R)/
Ambien CR(R)/
Myslee(R) 21 0.0% 145 -15.7% 61 +13.0%
Allegra(R) 5 -37.5% 86 +10.3% 83 +12.2%
Copaxone(R) 99 +19.3% - - 3 50.0%
Tritace(R) 87 -40.8% - - 29 -35.6%
Amaryl(R) 24 -11.1% 2 -33.3% 80 +2.6%
Xatral(R) 32 -20.0% 37 +23.3% 15 0.0%
Actonel(R) 56 +12.0% - - 27 0.0%
Depakine(R) 55 +3.8% - - 30 +20.0%
Nasacort(R) 8 -11.1% 43 -17.3% 9 0.0%
FY 2008 net sales
(EUR million)
Change on a Change on a Change on a
Comparable United comparable Other comparable
Europe basis States basis Countries basis
Lovenox(R) 815 +8.1% 1,625 +11.7% 298 +12.0%
Plavix(R) 1,732 +3.5% 172(6) +3.0% 712 +34.8%
Lantus(R) 713 +16.3% 1,452 +30.8% 285 +46.2%
Taxotere(R) 900 +10.8% 737 +15.9% 396 +13.8%
Eloxatin(R) 214 -42.6% 948 +6.2% 186 +13.4%
Aprovel(R) 910 +9.9% - - 292 +29.8%
Stilnox(R)/Ambien(R)/
Ambien CR(R)/
Myslee(R) 82 -4.7% 547 -44.9% 200 +11.1%
Allegra(R) 39 -25.0% 333 -0.9% 316 +10.5%
Copaxone(R) 381 +18.3% 210 +19.3% 31 +40.9%
Tritace(R) 358 -29.4% - - 155 -31.4%
Amaryl(R) 100 -15.3% 6 -25.0% 281 +5.6%
Xatral(R) 148 -10.3% 119 +20.2% 64 +14.3%
Actonel(R) 220 +8.9% - - 110 +2.8%
Depakine(R) 219 +3.3% - - 110 +17.0%
Nasacort(R) 39 -9.3% 175 -13.8% 27 -3.6%
(6) Sales of active ingredient to the American joint venture
managed by BMS
Vaccines
Q4 2008 net sales
(EUR million)
Change on a Change on a Change on a
Comparable United comparable Other comparable
Europe basis States basis Countries basis
Polio/Pertussis/
Hib Vaccines 37 -19.6% 101 +110.4% 81 +65.3%
Influenza
Vaccines* 20 -16.7% 80 -51.5% 62 +21.6%
Meningitis/
Pneumonia Vaccines 2 0.0% 70 -2.8% 19 +35.7%
Adult Booster
Vaccines 15 +25.0% 68 +23.6% 7 +40.0%
Travel & Other
Endemics Vaccines 6 -14.3% 16 -11.1% 51 0.0%
Other Vaccines 32 - 35 +45.8% 7 +75.0%
* Seasonal and pandemic influenza vaccines
FY 2008 net sales
(EUR million)
Change on a Change on a Change on a
Comparable United comparable Other comparable
Europe basis States basis Countries basis
Polio/Pertussis/
Hib Vaccines 160 +20.3% 317 +36.6% 291 +9.8%
Influenza
Vaccines* 94 -8.7% 459 +3.1% 183 +3.4%
Meningitis/
Pneumonia Vaccines 11 -8.3% 400 7.0% 61 +10.9%
Adult Booster
Vaccines 54 +22.7% 317 +5.7% 28 +12.0%
Travel & Other
Endemics Vaccines 31 -3.1% 76 -8.4% 202 +1.5%
Other Vaccines 45 +181.3% 114 +14.0% 18 +12.5%
* Seasonal and pandemic influenza vaccines
Appendix 3: Adjusted income statements excluding selected items
Fourth-quarter income statement
EUR million
as % of as % of
net net %
Q4 2008 sales Q4 2007 sales change
Net sales 7,089 100.0% 6,911 100.0% 2.6%
Other revenues 367 5.2% 310 4.5% 18.4%
Cost of sales (1,927) (27.2%) (1,964) (28.4%) -1.9%
Gross profit 5,529 78.0% 5,257 76.1% 5.2%
Research and
development
expenses (1,306) (18.4%) (1,271) (18.4%) 2.8%
Selling and
general expenses (1,945) (27.4%) (1,996) (28.9%) -2.6%
Other current
operating income/
expenses (24) 15
Amortization of
intangibles (56) (45)
Operating income -
current* 2,198 31.0% 1,960 28.4% 12.1%
Restructuring costs
Impairment of PP&E
and intangibles
Gain/loss on disposals,
and litigation
Operating income 2,198 31.0% 1,960 28.4% 12.1%
Financial expenses (86) (73)
Financial income (36) 45
Income before tax and
associates 2,076 29.3% 1,932 28.0% 7.5%
Income tax expense (559) (584)
Effective tax rate 26.9% 30.2%
Share of profit/loss
of associates 220 178
Minority interests (110) (97)
Net income (after
minority interests) 1,627 23.0% 1,429 20.7% 13.9%
Average number of
shares outstanding
(million) 1,305.1 1,335.3
Earnings per share
(in euros) 1.25 1.07 +16.8%
* Operating income before restructuring, impairment of property, plant
& equipment and intangibles, gains/losses on disposals, and litigation
Full-year income statement
EUR million
as % of as % of
net net %
FY 2008 sales FY 2007 sales change
Net sales 27,568 100.0% 28,052 100.0% -1.7%
Other revenues 1,249 4.5% 1,155 4.1% 8.1%
Cost of sales (7,335) (26.6%) (7,571) (27.0%) -3.1%
Gross profit 21,482 77.9% 21,636 77.1% -0.7%
Research and
development
expenses (4,575) (16.6%) (4,537) (16.2%) 0.8%
Selling and general
expenses (7,168) (26.0%) (7,554) (26.9%) -5.1%
Other current
operating
income/expenses 203 276
Amortization of
intangibles (180) (143)
Operating income -
current* 9,762 35.4% 9,678 34.5% 0.9%
Restructuring costs
Impairment of PP&E
and intangibles
Gain/loss on disposals,
and litigation
Operating income 9,762 35.4% 9,678 34.5% 0.9%
Financial expenses (335) (329)
Financial income 65 190
Income before tax
and associates 9,492 34.4% 9,539 34.0% -0.5%
Income tax expense (2,755) (2,919)
Effective tax rate 29.0% 30.6%
Share of profit/loss
of associates 890 760
Minority interests (441) (419)
Net income (after
minority interests) 7,186 26.1% 6,961 24.8% 3.2%
Average number of
shares outstanding
(million) 1,309.3 1,346.9
Earnings per share
(in euros) 5.49 5.17 6.2%
* Operating income before restructuring, impairment of property, plant
& equipment and intangibles, gains/losses on disposals, and litigation
Appendix 4: Reconciliation of adjusted income statement excluding
selected items to adjusted income statement and consolidated income
statement
2008 fourth-quarter income statement
Adjusted,
excluding
selected Selected Consolidated
EUR million items items Adjusted Adjustments (IFRS)
Net sales 7,089 7,089 7,089
Other revenues 367 367 367
Cost of sales (1,927) (1,927) (2) (1,929)
Gross profit 5,529 5,529 (2) 5,527
Research and
development
expenses (1,306) (1,306) (1,306)
Selling and
general
expenses (1,945) (1,945) (1,945)
Other current
operating income/
expenses (24) (24) (24)
Amortization of
intangibles (56) (56) (870) (926)
Operating income -
current* 2,198 2,198 (872) 1,326
Restructuring costs (327) (327) (327)
Impairment of PP&E
and intangibles (1,428) (1,428)
Gain/loss on
disposals, and
litigation 76 76 76
Operating income 2,198 (251) 1,947 (2,300) (353)
Financial expenses (86) (86) (86)
Financial income (36) (36) (36)
Income before tax
and associates 2,076 (251) 1,825 (2,300) (475)
Income tax expense (559) 336 (223) 788 565
Share of profit/loss
of associates 220 220 (18) 202
Minority interests (110) (110) (110)
2008 net income (after
minority interests) 1,627 85 1,712 (1,530) 182
2007 net income
(after minority
interests) 1,429 33 1,462 (709) 753
Change 2008 vs.
2007 (%) 13.9% 17.1%
2008 earnings per share
(in euros)** 1.25 0.06 1.31 (1.17) 0.14
2007 earnings per share
(in euros)** 1.07 0.02 1.09 (0.53) 0.56
Change in EPS 2008 vs.
2007 (%) 16.8% 20.2%
* Operating income before restructuring, impairment of property,
plant & equipment and intangibles, gains/losses on disposals,
and litigation
** Based on an average number of shares outstanding of 1,305.1
million in the fourth quarter of 2008 and 1,335.3 million in the
fourth quarter of 2007
2008 full-year income statement
Adjusted,
excluding
selected Selected Consolidated
EUR million items items Adjusted Adjustments (IFRS)
Net sales 27,568 27,568 27,568
Other revenues 1,249 1,249 1,249
Cost of sales (7,335) (7,335) (2) (7,337)
Gross profit 21,482 21,482 (2) 21,480
Research and
development
expenses (4,575) (4,575) (4,575)
Selling and
general expenses (7,168) (7,168) (7,168)
Other current
operating income/
expenses 203 203 203
Amortization of
intangibles (180) (180) (3,303) (3,483)
Operating income -
current* 9,762 9,762 (3,305) 6,457
Restructuring costs (585) (585) (585)
Impairment of PP&E
and intangibles (69) (69) (1,485) (1,554)
Gain/loss on
disposals, and
litigation 76 76 76
Operating income 9,762 (578) 9,184 (4,790) 4,394
Financial expenses (335) (335) (335)
Financial income 65 38 103 103
Income before tax
and associates 9,492 (540) 8,952 (4,790) 4,162
Income tax expense (2,755) 422 (2,333) 1,651 (682)
Share of profit/loss
of associates 890 890 (78) 812
Minority interests (441) (441) (441)
2008 net income
(after minority
interests) 7,186 (118) 7,068 (3,217) 3,851
2007 net income
(after minority
interests) 6,961 149 7,110 (1,847) 5,263
Change 2008 vs.
2007 (%) 3.2% -0.6%
2008 earnings per
share (in euros)** 5.49 (0.09) 5.40 (2.46) 2.94
2007 earnings per
share (in euros)** 5.17 0.11 5.28 (1.37) 3.91
Change in EPS 2008
vs. 2007 (%) 6.2% 2.3%
* Operating income before restructuring, impairment of property,
plant & equipment and intangibles, gains/losses on disposals,
and litigation
** Based on an average number of shares outstanding of 1,309.3
million in 2008 and 1,346.9 million in 2007
For a description of 2008 fourth-quarter and full-year selected items, see pages 8 and 10 respectively.
The material effects of the application of purchase accounting to acquisitions, primarily that of Aventis, on the consolidated income statement were as follows:
2008 - Fourth quarter
- An amortization charge of EUR 870 million against intangible assets. This adjustment has no cash impact on the Group.
- Impairment losses of EUR 1,428 million, mainly reflecting discontinuation of the development of larotaxel and XRP6258 in breast cancer (EUR 1,175 million) and the settlement agreed with Barr relating to Nasacort(R) in November 2008. This adjustment has no cash impact on the Group.
- Deferred taxes of EUR 788 million generated by the EUR 870 million amortization charge and the EUR 1,428 million of impairment losses.
- In "Share of profits/losses of associates", a reversal of EUR 18 million relating to the amortization of intangible assets, net of tax. This adjustment has no impact on the cash position of the Group.
2008 - Full year
- An amortization charge of EUR 3,303 million against intangible assets. This adjustment has no cash impact on the Group.
- Impairment losses of EUR 1,485 million, mainly reflecting discontinuation of the development of Larotaxel and XRP6258 in breast cancer (EUR 1,175 million), the settlement agreed with Barr relating to Nasacort(R) in November 2008, and the discontinuation of ilepatril. This adjustment has no cash impact on the Group.
- Deferred taxes of EUR 1,651 million generated by the EUR 3,303 million amortization charge and the EUR 1,485 million of impairment losses.
- In "Share of profits/losses of associates", a reversal of EUR 78 million relating to the amortization of intangible assets, net of tax. This adjustment has no cash impact on the Group.
2007 fourth-quarter income statement
Adjusted,
excluding
selected Selected Consolidated
EUR million items items Adjusted Adjustments (IFRS)
Net sales 6,911 6,911 6,911
Other revenues 310 310 310
Cost of sales (1,964) (1,964) (1,964)
Gross profit 5,257 5,257 5,257
Research and
development
expenses (1,271) (1,271) (1,271)
Selling and
general expenses (1,996) (1,996) (1,996)
Other current
operating income/
expenses 15 15 15
Amortization of
intangibles (45) (45) (870) (915)
Operating income -
current* 1,960 1,960 (870) 1,090
Restructuring costs (87) (87) (87)
Impairment of PP&E
and intangibles (63) (63)
Gain/loss on
disposals, and
litigation
Operating income 1,960 (87) 1,873 (933) 940
Financial expenses (73) (73) (73)
Financial income 45 45 45
Income before tax
and associates 1,932 (87) 1,845 (933) 912
Income tax expense (584) 120 (464) 347 (117)
Share of profit/loss
of associates 178 178 (123) 55
Minority interests (97) (97) (97)
2007 net income
(after minority
interests) 1,429 33 1,462 (709) 753
2007 earnings per
share (in euros)** 1.07 0.02 1.09 (0.53) 0.56
* Operating income before restructuring, impairment of property,
plant & equipment and intangibles, gains/losses on disposals,
and litigation
** Based on an average number of shares outstanding of 1,335.3
million in the fourth quarter of 2007
2007 full-year income statement
Adjusted,
excluding
selected Selected Consolidated
EUR million items items Adjusted Adjustments (IFRS)
Net sales 28,052 28,052 28,052
Other revenues 1,155 1,155 1,155
Cost of sales (7,571) (7,571) (7,571)
Gross profit 21,636 21,636 21,636
Research and
development
expenses (4,537) (4,537) (4,537)
Selling and
general expenses (7,554) (7,554) (7,554)
Other current
operating income/
expenses 276 (61) 215 215
Amortization of
intangibles (143) (143) (3,511) (3,654)
Operating income -
current* 9,678 (61) 9,617 (3,511) 6,106
Restructuring costs (137) (137) (137)
Impairment of PP&E
and intangibles (58) (58)
Gain/loss on
disposals, and
litigation
Operating income 9,678 (198) 9,480 (3,569) 5,911
Financial expenses (329) (329) (329)
Financial income 190 190 190
Income before tax
and associates 9,539 (198) 9,341 (3,569) 5,772
Income tax expense (2,919) 347 (2,572) 1,885 (687)
Share of profit/loss
of associates 760 760 (163) 597
Minority interests (419) (419) (419)
2007 net income
(after minority
interests) 6,961 149 7,110 (1,847) 5,263
2007 earnings per
share (in euros)** 5.17 0.11 5.28 (1.37) 3.91
* Operating income before restructuring, impairment of property,
plant & equipment and intangibles, gains/losses on disposals,
and litigation
** Based on an average number of shares outstanding of 1,346.9
million in 2007
Appendix 5: Simplified consolidated cash flow statement
EUR million 2008 2007
Adjusted net income 7,068 7,110
Depreciation, amortization and impairment of
property, plant & equipment and intangibles 1,195 1,095
Net gain/loss on disposals of non-current assets,
net of tax (45) (64)
Other items 306 (224)
Operating cash flow before changes in working
capital 8,524 7,917
Changes in working capital (1) (811)
Net cash provided by operating activities 8,523 7,106
Acquisitions of property, plant & equipment and
intangibles (1,606) (1,610)
Acquisitions of investments, net of cash acquired (667) (435)
Proceeds from disposals of property, plant and
equipment and intangibles (net of tax), and other
items 119 329
Net cash used in investing activities (2,154) (1,716)
Issuance of sanofi-aventis shares 51 271
Proceeds from sale of own shares on exercise of
stock options 6 23
Repurchase of own shares (1,227) (1,806)
Dividends (2,708) (2,373)
Other items (41) 56
Change in net debt 2,450 1,561
Appendix 6: Simplified consolidated balance sheet
ASSETS 12/31/08 12/31/07 LIABILITIES & EQUITY 12/31/08 12/31/07
EUR million EUR million
Property, plant 6,961 6,538 Equity attributable 44,866 44,542
and equipment to equity-holders of
the company
Intangible assets 43,423 46,381 Minority interests 205 177
(including
goodwill)
Non-current 6,200 6,442 Total equity 45,071 44,719
financial
assets, investments
in associates and
deferred taxes
Long-term debt 4,173 3,734
Non-current assets 56,584 59,361 Provisions and 7,730 6,857
other non-current
liabilities
Deferred tax 5,668 6,935
liabilities
Inventories, 11,177 10,842 Non-current 17,571 17,526
accounts liabilities
receivable and
current financial
assets
Cash and cash 4,226 1,711 Accounts payable 7,512 7,462
equivalents and other current
liabilities
Short-term debt 1,833 2,207
Current assets 15,403 12,553 Current liabilities 9,345 9,669
Total ASSETS 71,987 71,914 Total LIABILITIES 71,987 71,914
& EQUITY
Appendix 7: Definitions of non-GAAP 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 fourth-quarter net sales to 2007 fourth-quarter comparable net sales, and of 2007 full-year net sales to 2007 full-year comparable net sales:
EUR million Q4 2007 FY 2007
Net sales 6,911 28,052
Impact of changes in Group structure (139) (393)
Impact of exchange rates 70 (1,083)
Comparable net sales 6,842 26,576
Worldwide presence of Plavix(R)/Iscover(R), Avapro(R)/Aprovel(R)
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(R)/Iscover(R) (clopidogrel bisulfate) and Aprovel(R)/Avapro(R)/Karvea(R) (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 (see appendix 3 for a detailed reconciliation)
We define "adjusted net income" as accounting net income after minority interests adjusted to exclude the material after-tax impacts of (i) 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.
Adjusted net income excluding selected items
We define "selected items" as accounting items reflecting significant events occurring during the period that would alter a user's understanding of our operational performance if they were not disclosed separately. Consequently, selected items are limited in number, unusual in nature, and involve significant amounts.
Selected items are primarily recorded in the following line items:
- Restructuring costs
Restructuring costs include early retirement benefits,
compensation for early termination of contracts, and
rationalization costs relating to restructured sites. Asset
impairment losses directly attributable to restructuring are also
recorded on this line. Restructuring costs included on this line
relate only to unusual and major restructuring plans.
- Impairment of property, plant and equipment and intangibles
This line includes major impairment losses (other than those
directly attributable to restructuring) on property, plant and
equipment and intangibles, including goodwill. It also includes
any reversals of such losses.
- Gains and losses on disposals, and litigation
This line comprises gains and losses on major disposals of
property, plant and equipment and intangible assets, and costs
and provisions related to major litigation.
- Income tax expense, as regards the effect of material tax
disputes and any tax effects of other income or expenses that are
treated as selected items.
To view in full detail please go to www.sanofi-aventis.com
CONTACT: Jean-Marc Podvin
Vice President, Media Relations
sanofi-aventis
+331-53-77-4223
