Q3 2008: EUR 1.47, up 5.0% --> up 15.6% in U.S. dollars(2)
First 9 months of 2008: EUR 4.24, up 3.4% --> up 17.5% in U.S. dollars(2)
BRIDGEWATER, N.J., Oct. 31 /PRNewswire-FirstCall/ -- 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 EUR 3,669 million, compared with EUR 4,510 million for the first nine months of 2007.
Good third-quarter performance
* Net sales: EUR 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(R)
(up 29.1%)
-- Leading supplier of influenza vaccines in the USA, and launch
of Pentacel(R)
-- 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: EUR 1,923m (up 2.1%),
and EPS EUR 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(R) (dronedarone) assigned priority review status in the United
States
* October 23, 2008: recommendation to suspend the marketing authorization
for Acomplia(R) in the European Union
Increase in 2008 Guidance (see page 9)
Barring major adverse events, sanofi-aventis now expects growth in adjusted EPS excluding selected items1 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 Gerard 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 EUR 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(R) 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 EUR 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 EUR 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 EUR 18,327 million. Net sales of the top 15 products amounted to EUR 12,306 million, an increase of 4.8%. Excluding the impact of the introduction of generics of Ambien(R) IR in the United States and Eloxatin(R) in Europe(3), the top 15 products would have recorded growth of 9.2%.
EUR million 2008 Q3 Change 2008 Change
net sales on a 9-month on a
comparable net comparable
basis sales basis
Lovenox(R) 635 +8.5% 1,989 +11.5%
Plavix(R) 630 +5.7% 1,956 +10.8%
Lantus(R) 612 +29.1% 1,745 +29.0%
Taxotere(R) 505 +13.2% 1,492 +13.5%
Eloxatin(R) 325 -6.9% 993 -6.0%
Aprovel(R) 298 +14.6% 898 +14.8%
Stilnox(R)/Ambien(R)/
Ambien CR(R)/Myslee(R) 201 -3.4% 602 -40.5%
Copaxone(R) 100 +19.0% 520 +19.5%
Allegra(R) 139 -4.1% 514 0.0%
Tritace(R) 122 -26.1% 397 -26.8%
Amaryl(R) 94 +2.2% 281 -1.1%
Xatral(R) 79 +2.6% 247 +5.1%
Actonel(R) 85 +11.8% 247 +6.5%
Depakine(R) 81 +6.6% 244 +7.0%
Nasacort(R) 51 -7.3% 181 -11.3%
TOP 15 3,957 +7.3% 12,306 +4.8%
Rest of the portfolio 1,949 +0.4% 6,021 -0.2%
Total Pharmaceuticals 5,906 +4.9% 18,327 +3.1%
See Appendix 2 for a geographical split of consolidated net sales by product (top 15).
Comments by product
Lovenox
(R), the leading low molecular weight heparin on the market, posted 8.5% growth in third-quarter net sales to EUR 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(R) reported growth of 11.5% to EUR 1,989 million.
Lantus(R), 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. Third-quarter net sales of Lantus(R) were up 29.1% at EUR 612 million. In the United States, net sales of the product advanced 34.6% to EUR 362 million, supported by the success of the new-generation LantusSoloSTAR(R) pen. During September, sanofi-aventis announced favorable results from various Lantus(R) studies. The GINGER and LACE studies demonstrated that a basal-bolus insulin regimen with once-daily Lantus(R) and Apidra(R) 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(R):
- 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(R) for the nine months to end September was in line with the first-half performance, with net sales up 29% at EUR 1,745 million.
The third quarter reaffirmed the good performance of Taxotere(R), which achieved double-digit growth in all three geographic regions. In the United States, net sales were up 16.8% at EUR 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(R). Taxotere(R) achieved third-quarter net sales growth of 10.2% in Europe (to EUR 227 million) and of 14.1% in the Other Countries region (to EUR 97 million). During the third quarter, Taxotere(R) 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 EUR 68 million. Overall net sales of Taxotere(R) for the nine months to end September were up 13.5% at EUR 1,492 million.
In the United States, third-quarter net sales of Ambien CR(R) and Ambien(R) IR totaled $177 million and $28 million respectively. In Japan, Myslee(R), the leading hypnotic in the market, achieved net sales of EUR 33 million in the third quarter (up 15.9%) and of EUR 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(R) totaled $511 million, against $561 million for the comparable period of 2007.
Net sales of Eloxatin(R), the leading cytotoxic agent in adjuvant and in first line metastatic colorectal cancer, rose 7.8% in the third quarter to EUR 234 million in the United States, driven by the product's use as an adjuvant. At end July 2008, penetration of Eloxatin(R) 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(R), which decreased 6.9% in the quarter to EUR 325 million.
Net sales of Acomplia(R) reached EUR 27 million in the third quarter and EUR 81 million in the first nine months of the year. On October 23, 2008, following a recommendation from the European Medicines Agency (EMEA), sanofi-aventis announced the temporary suspension of the marketing authorization of Acomplia(R) in obese and overweight patients.
Xyzal(R), 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 EUR 24 million in the third quarter and EUR 68 million in the nine months to end September. Net sales of Apidra(R), a rapid-action human insulin analog, came to EUR 25 million for the third quarter and EUR 68 million for the nine months to end September.
Worldwide presence(1) of Plavix
(R)
/ Iscover
(R)
Change Change
on a on a
2008 comparable 2008 comparable
EUR million Q3 basis 9 months 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(R) (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(R) (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(R)/Iscover(R) in the last week of September was over 80% (IMS Pharmatrend, week commencing September 29). In the Other Countries region, Plavix(R) 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 EUR 44 million in the third quarter of 2008 (versus EUR 17 million in the third quarter of 2007) and EUR 114 million for the first nine months of 2008 (versus EUR 33 million in the comparable period of 2007).
Worldwide presence
(1)
of Aprovel
(R)
/ Avapro
(R)
/ Karvea
(R)
Change Change
on a on a
2008 comparable 2008 comparable
EUR million Q3 basis 9 months basis
Europe 242 +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(R)/Avapro(R)/Karvea(R) were up 11.5% at EUR 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(R)/Avapro(R)/Karvea(R) for the nine months to end September 2008 were up 12.5% at EUR 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(R) as a monotherapy in European countries not covered by the active ingredient patent totaled approximately EUR 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 EUR 947 million. In the United States, net sales reached EUR 605 million, an increase of 12.0%.
Net sales of influenza vaccines were up 9.7% at EUR 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 EUR 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 EUR 194 million in the third quarter, reflecting the launch of Pentacel(R) (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 third-quarter net sales in line with forecasts at EUR 25 million.
Third-quarter net sales of Menactra(R) were EUR 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 EUR 332 million.
Net sales of adult booster vaccines were EUR 109 million, an increase of 9.0%, driven mainly by Adacel(TM) (adult and adolescent tetanus-diphtheria-pertussis booster), which achieved 12.2% sales growth to EUR 76 million for the third quarter. Over the nine months to end September, net sales of Adacel(TM) were up 16.4% at EUR 201 million.
Overall, the Human Vaccines business recorded consolidated net sales of EUR 2,152 million for the nine months to end September 2008 (up 9.8%), including EUR 1,313 million in the United States (up 14.0%).
Change 2008 Change
on a 9-month on a
2008 Q3 comparable net comparable
EUR million net sales basis sales basis
Influenza Vaccines* 374 +9.7% 574 +18.4%
Polio/Pertussis/Hib 194 +42.6% 549 +12.7%
Vaccines
Meningitis/Pneumonia 156 -7.7% 381 +7.9%
Vaccines
Adult Booster 109 +9.0% 309 +4.0%
Vaccines
Travel & Other 79 -4.8% 236 -0.8%
Endemics Vaccines
Other Vaccines 35 -5.4% 103 +3.0%
TOTAL 947 +9.4% 2,152 +9.8%
* Seasonal and pandemic influenza vaccines
The acquisition of Acambis, completed at end September at a price of 285 million pounds Sterling (EUR 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 EUR 372 million, driven by the performance of Gardasil(R), the first vaccine against papillomavirus infections (which cause cervical cancer). Net sales of Gardasil(R) rose 42.8% on a reported basis to EUR 144 million.
Over the nine months to end September 2008, Sanofi Pasteur MSD reported sales of EUR 924 million, an increase of 38.2% on a reported basis. Net sales of Gardasil(R) were EUR 456 million, versus EUR 182 million for the comparable period of 2007.
Net sales by geographic region
Change 2008 Change
on a 9-month on a
2008 Q3 comparable net comparable
EUR million net sales basis sales basis
Europe 2,958 -0.5% 9,090 -0.1%
United States 2,216 +11.5% 6,365 +4.8%
Other Countries 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(R) generics) and to reduced sales of Plavix(R) 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(R). 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(R) IR. The main drivers were excellent performances from Lantus(R) (up 34.6%) and Taxotere(R) (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(R) IR(4), 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 EUR 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 EUR 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(R) 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 EUR 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 EUR 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 EUR 49 million, against EUR 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(R), 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 EUR 2,640 million. Excluding the effect of exchange rates, growth would have reached 14.0%.
The financial statements include restructuring costs of EUR 51 million (EUR 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 EUR 60 million, against EUR 40 million for the third quarter of 2007. Interest expense on debt was EUR 57 million, compared with EUR 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 EUR 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 EUR 219 million (versus EUR 213 million for the third quarter of 2007). The share of after-tax profits from territories managed by BMS under the Plavix(R) and Avapro(R) alliance was up 9.9% at EUR 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 EUR 111 million. This line includes the share of pre-tax profits paid to BMS from territories managed by sanofi-aventis (EUR 104 million, versus EUR 107 million for the third quarter of 2007).
Adjusted net income came to EUR 1,888 million, an increase of 1.9%. Adjusted earnings per share (adjusted EPS) was EUR 1.45, 5.8% up on the 2007 third-quarter figure (EUR 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 EUR 1,923 million, 2.1% up on the 2007 third-quarter figure (EUR 1,883 million).
Adjusted EPS excluding selected items was EUR 1.47, up 5.0% on the 2007 third-quarter figure (EUR 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 EUR 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 EUR 15,953 million. Royalty income rose by 4.4% to EUR 882 million, due to the performance of Plavix(R) 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(R) by sanofi-aventis in North America canceled out unfavorable exchange rate effects and the impact of generic competition for Ambien(R) IR in the United States during the first quarter.
Research and development expenses amounted to EUR 3,269 million, a rise of 0.1% (or 3.9% excluding the effect of exchange rates).
Selling and general expenses totaled EUR 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 EUR 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 EUR 258 million (EUR 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 EUR 69 million (EUR 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(R) in kidney cancer.
Net financial expenses were virtually unchanged at EUR 110 million (versus EUR 111 million for the first nine months of 2007). Interest expense on debt was EUR 150 million, compared with EUR 175 million for the first nine months of 2007. This item also includes a gain of EUR 38 million (EUR 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 EUR 193 million. The effective tax rate for the first nine months of 2007 was 30.7%.
The share of profits from associates was EUR 670 million (versus EUR 582 million for the first nine months of 2007). The share of after-tax profits from territories managed by BMS under the Plavix(R) and Avapro(R) alliance rose by 18.6% to EUR 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 EUR 331 million, compared with EUR 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 EUR 316 million.
Adjusted net income was down 5.2% at EUR 5,356 million.
Adjusted earnings per share (adjusted EPS) was EUR 4.09, 2.2% lower than the figure for the comparable period of 2007 (EUR 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 EUR 5,559 million, 0.5% higher than the figure for the first nine months of 2007 (EUR 5,532 million).
Adjusted EPS excluding selected items was EUR 4.24, up 3.4% on the figure for the first nine months of 2007 (EUR 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 EUR 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.
(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(R) IR in the United States in Q1 2007 and Q1 2008, and of Eloxatin(R) in Europe for the first 9 months of 2007 and 2008
(4) Excluding net sales of Ambien(R) IR in the United States in the first quarter of 2007 and 2008
About sanofi-aventis
Sanofi-aventis, a leading global pharmaceutical company, discovers, develops and distributes therapeutic solutions to improve the lives of everyone. Sanofi-aventis is listed in Paris (EURONEXT: SAN) and in New York (NYSE: SNY). For more information, visit: www.sanofi-aventis.us or www.sanofi-aventis.com.
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.
Contact:
Jean-Marc Podvin
+33-1-53-77-42-23
Jean-marc.podvin@sanofi-aventis.com
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(R)
September 1, 2008 Announcement of the completion of the acquisition
by sanofi-aventis of the Australian company
Symbion Consumer
September 1, 2008 Announcement of marketing approval for
Taxotere(R) 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(R) reduced the
risk of stroke in patients with atrial
fibrillation
September 8, 2008 Announcement at the EASD of results from three
non-interventional studies demonstrating greater
HbA1C reduction and cost savings for Lantus(R)
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(R) and
Apidra(R)(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(R)
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(R) 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(R) 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
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:.
EUR 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
EUR 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(R)/Iscover(R) (clopidogrel) 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
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.
2008: 2008: Q3 2008: 2008: 9 months
Q3 Adjusted 9 months Adjusted
Consol- consol- Consol- consol-
idated idated idated idated
financial financial financial financial
statements statements statements statements
(unaudited) (unaudited) (unaudited) (unaudited)
EUR million
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: Q3 Change on a Change on a Change on a
net sales comparable United comparable Other comparable
(EUR million) Europe basis States basis Countries basis
Lovenox(R) 187 +3.3% 375 +10.9% 73 +10.6%
Plavix(R) 420 0.0% 43(6) -2.3% 167 +26.5%
Lantus(R) 176 +12.8% 362 +34.6% 74 +51.0%
Taxotere(R) 227 +10.2% 181 +16.8% 97 +14.1%
Eloxatin(R) 49 -44.3% 234 +7.8% 42 -4.5%
Aprovel(R) 225 +9.2% - - 73 +35.2%
Stilnox(R)/
Ambien(R)/
Ambien CR(R)/
Myslee(R) 19 -13.6% 132 -8.3% 50 +19.0%
Copaxone(R) 97 +19.8% - - 3 0.0%
Allegra(R) 8 -20.0% 72 -6.5% 59 +1.7%
Tritace(R) 85 -28.6% - - 37 -19.6%
Amaryl(R) 24 -11.1% 1 0.0% 69 +7.8%
Xatral(R) 35 -12.5% 28 +27.3% 16 +6.7%
Actonel(R) 58 +16.0% - - 27 +3.8%
Depakine(R) 54 +1.9% - - 27 +17.4%
Nasacort(R) 8 0.0% 37 -9.8% 6 0.0%
2008: Change Change Change
9-month on a on a on a
net sales Compar- United Compar- Other Compar-
(EUR million) Europe able States able Countries able
basis basis basis
Lovenox(R) 594 +7.0% 1,178 +13.5% 217 +13.6%
Plavix(R) 1,304 +3.6% 142(6) +9.2% 510 +35.6%
Lantus(R) 522 +16.3% 1,017 +32.1% 206 +53.7%
Taxotere(R) 674 +11.2% 529 +15.5% 289 +15.6%
Eloxatin(R) 174 -40.8% 683 +5.9% 136 +16.2%
Aprovel(R) 677 +9.2% - - 221 +36.4%
Stilnox(R)/
Ambien(R)/
Ambien CR(R)/
Myslee(R) 61 -6.2% 402 -51.0% 139 +10.3%
Copaxone(R) 282 +18.0% 210 +19.3% 28 +40.0%
Allegra(R) 34 -22.7% 247 -4.3% 233 +9.9%
Tritace(R) 271 -24.7% - - 126 -30.4%
Amaryl(R) 76 -16.5% 4 -20.0% 201 +6.9%
Xatral(R) 116 -7.2% 82 +18.8% 49 +19.5%
Actonel(R) 164 +7.9% - - 83 +3.8%
Depakine(R) 164 +3.1% - - 80 +15.9%
Nasacort(R) 31 -8.8% 132 -12.6% 18 -5.3%
(6) Sales of active ingredient to the American joint venture managed by BMS
Appendix 3: 2008 third-quarter, second-quarter, first-quarter and 9-month net sales by product
2008 third-quarter net sales by product:
Q3 2007 Q3 2007
Q3 2008 comparable reported
EUR million net sales net sales net sales
Lovenox(R) 635 585 633
Plavix(R) 630 596 614
Lantus(R) 612 474 518
Taxotere(R) 505 446 475
Eloxatin(R) 325 349 383
Aprovel(R) 298 260 267
Stilnox(R)/Ambien(R)/
Ambien CR(R)/Myslee(R) 201 208 207
Copaxone(R) 100 84 301
Allegra(R) 139 145 159
Tritace(R) 122 165 168
Amaryl(R) 94 92 94
Xatral(R) 79 77 82
Actonel(R) 85 76 79
Depakine(R) 81 76 79
Nasacort(R) 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:
Q2 2007 Q2 2007
Q2 2008 comparable reported
EUR million net sales net sales net sales
Lovenox(R) 637 609 671
Plavix(R) 664 612 632
Lantus(R) 576 453 503
Taxotere(R) 503 441 474
Eloxatin(R) 326 343 380
Aprovel(R) 311 262 272
Stilnox(R)/Ambien(R)/
Ambien CR(TM)/Myslee(R) 191 246 252
Copaxone(R) 103 83 307
Allegra(R) 171 180 198
Tritace(R) 137 165 167
Amaryl(R) 95 100 103
Xatral(R) 85 79 85
Actonel(R) 87 80 82
Depakine(R) 81 78 81
Nasacort(R) 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:
Q1 2007 Q1 2007
Q1 2008 comparable reported
EUR million net sales net sales net sales
Lovenox(R) 717 590 634
Plavix(R) 662 557 569
Lantus(R) 557 426 458
Taxotere(R) 484 427 449
Eloxatin(R) 342 364 393
Aprovel(R) 289 260 264
Stilnox(R)/Ambien(R)/
Ambien CR(TM)/Myslee(R) 210 557 606
Copaxone(R) 317 268 289
Allegra(R) 204 189 201
Tritace(R) 138 212 211
Amaryl(R) 92 92 94
Xatral(R) 83 79 82
Actonel(R) 75 76 78
Depakine(R) 82 74 76
Nasacort(R) 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:
2007 2007
2008 9-month 9-month
9-month comparable reported
EUR million net sales net sales net sales
Lovenox(R) 1,989 1,784 1,938
Plavix(R) 1,956 1,765 1,815
Lantus(R) 1,745 1,353 1,479
Taxotere(R) 1,492 1,314 1,398
Eloxatin(R) 993 1,056 1,156
Aprovel(R) 898 782 803
Stilnox(R)/Ambien(R)/
Ambien CR(R)/Myslee(R) 602 1,011 1,065
Copaxone(R) 520 435 897
Allegra(R) 514 514 558
Tritace(R) 397 542 546
Amaryl(R) 281 284 291
Xatral(R) 247 235 249
Actonel(R) 247 232 239
Depakine(R) 244 228 236
Nasacort(R) 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)
Q3 2008 Q3 2007
adjusted adjusted
Consol- consol-
idated as % idated as %
income of net income of net %
EUR million statement sales statement 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 (89) - (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 2007
9-month 9-month
adjusted adjusted
Consol- Consol-
idated as % idated as %
income of net income of net %
EUR million Statement Sales Statement 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 EUR 554 million net of deferred taxes (with no cash impact for the Group).
Q3 2008
Q3 2008 Adjusted
EUR million Consolidated Adjustments 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 EUR 807 million against intangible assets. This adjustment has no cash impact on the Group.
b) Deferred taxes of EUR 273 million, generated by the EUR 807 million amortization charge.
c) In "Share of profits/losses of associates", a reversal of EUR20 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 EUR1,687 million net of deferred taxes (with no cash impact for the Group).
2008:
2008: 9 months
9 months Adjusted
EUR million Consolidated Adjustments 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 EUR 2,433 million against intangible assets. This adjustment has no cash impact on the Group.
b) An impairment loss of EUR 57 million, arising from the discontinuation of ilepatril. This adjustment has no cash impact on the Group.
c) Deferred taxes of EUR 863 million, generated by the EUR 2,433 million amortization charge and the EUR 57 million impairment loss.
d) In "Share of profits/losses of associates", a reversal of EUR 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
2008: 2007:
EUR million 2008: Q3 2007: Q3 9 months 9 months
Restructuring costs (35) - (181) (35)
Impairment of PP&E and (49)(2)
intangibles
Gain/loss on disposals - - 27
Provisions for financial - (30)(1) - 151(3)
instruments, litigation,
tax inspections & other
items
TOTAL net of tax (35) (30) (203) 116
(1) Income tax expense of EUR 51 million related to cuts in income tax rates in Germany, Spain and the United Kingdom, partly offset by a EUR 21 million gain on settlement of tax disputes
(2) Includes impairment losses on S-1 and Trovax
(3) Includes:
- Tax risks/settlement of tax disputes: EUR 244 million
- Income tax expense related to cuts in income tax rates in Germany, Spain and the United Kingdom: -EUR 51 million
- Harmonization of welfare and healthcare plans for retirees: -EUR 42 million
Appendix 7: Impact of selected items(5) on adjusted net income
2008: third quarter
(EUR 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
(EUR million) 2008: 2007: change
9 months 9 months
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%
(5) See Appendix 6 for a description of selected items
