Sanofi (NASDAQ:GCVR.Z) Q2 2018 Earnings Conference Call - Final Transcript

Jul 31, 2018 • 08:30 am ET


Sanofi (NASDAQ:GCVR.Z) Q2 2018 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, good morning or good afternoon. Welcome to Sanofi Second Quarter 2018 Earnings Results Conference Call and Live Webcast. I am Sherry, the Chorus Call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. After the presentation there will be Q&A session. (Operator Instructions) The conference must not be recorded for publication or broadcast.

At this time, it is my pleasure to hand over to Mr. George Grofik, VP, Head of IR at Sanofi. Please go ahead, sir.

George Grofik

Good morning, and good afternoon to everyone on the call. Thank you for joining us to review Sanofi's second quarter results. As usual, you can find the slides for this call at the Investors page of our website at

(Forward-Looking Cautionary Statements)

With that, please advance to Slide three, and let me introduce our speakers today. With me are Olivier Brandicourt, CEO; and Jerome Contamine, EVP and CFO. Olivier will discuss key highlights of the quarter, while Jerome will review the financials in detail. We will then follow with a Q&A session.

Joining us for the Q&A will be Olivier Charmeil, EVP, General Medicines & Emerging Markets; Karen Linehan, EVP, Legal Affairs and General Counsel; David Loew, EVP, Sanofi Pasteur; Alan Main, EVP, Consumer Healthcare; Stefan Overage, EVP, Diabetes and Cardiovascular; John Reed, EVP, Global R&D; and Bill Sibold, EVP of Sanofi Genzyme.

With that, I'd like to turn the call over to Olivier.

Olivier Brandicourt

Thank you, George. Good morning, and good afternoon to everyone, and welcome to our second quarter earnings conference call.

So moving to Slide five. We -- you can see we delivered stable second quarter results. These were in line with our expectations and allowed us to raise the lower end of our full year guidance. Our second quarter sales were about EUR8.2 billion, and our business EPS increased by 1.5% at CER to EUR1.25.

On Slide six, you can see the sales picture across our five GBUs. The highlight was a continued double-digit growth in our Specialty Care business, Sanofi Genzyme. We were also pleased to show solid growth in CHC.

As expected, sales in our vaccines business were consistent with our guidance that first half sales would be lower than in the first half 2017. And of course, we continue to see the effect in DCV and GEM of the losses of exclusivity in the U.S. on Lantus and Sevelamer.

Turning to Slide seven. We are now looking at sales by franchise and geography in Q2. What you see here is a clear benefit of our diversified business structure, which has compensated for the headwinds I just noted. In particular, you will see another solid performance from our market-leading emerging market business. Here, we delivered growth of 5% despite the expected decline in vaccines. This solid EM performance was driven by increases of 9% in our pharmaceutical business and 10% in Consumer Healthcare.

Moving to the next slide, to our Specialty Care franchise.