First 9 Months of 2005: Adjusted EPS(1) up 26.6%,
Net Sales up 11.0% on a Comparable Basis(1)
PARIS, Nov. 8 /PRNewswire-FirstCall/ -- The consolidated income statement
for the first 9 months of 2005 is shown in Appendix 4. Consolidated net income
for the first 9 months of 2005 was euro 1,802 million. This figure takes
account of the effects of the application of purchase accounting to the
Aventis acquisition, including an impairment loss of euro 339 million net of
deferred tax arising from the launch of generics of Allegra in the United
States in September 2005 and post-tax restructuring costs of euro 465 million.
In order to give a better representation of our underlying economic
performance, we have decided to publish and explain adjusted(1) consolidated
income statements for the first 9 months of 2005 and the third quarter of
2005, and to compare them with adjusted proforma(1) income statements for the
first 9 months of 2004 and the third quarter of 2004 respectively. Adjusted
net income for the first 9 months of 2005 was euro 4,891 million, compared
with euro 3,830 million for the first 9 months of 2004.
THIRD QUARTER
-- Net sales: euro 7,200 million, up 11.6% (11.0% on a comparable basis).
-- 20.2% growth in "Adjusted operating income - current".
-- 28.7% rise in adjusted net income to euro 1,923 million.
-- 27.4% increase in adjusted EPS to euro 1.44 (vs. euro 1.13 for the
third quarter of 2004).
FIRST 9 MONTHS
-- Net sales: euro 20,304 million, up 8.9% (11.0% on a comparable basis).
-- 23.8% growth in "Adjusted operating income - current".
-- 27.7% rise in adjusted net income to euro 4,891 million.
-- 26.6% increase in adjusted EPS to euro 3.66 (vs. euro 2.89 for the
first 9 months of 2004).
CONFIRMATION OF 2005 GUIDANCE
Barring major adverse events, despite impact of Allegra(R) in Q4 2005, the
Group confirms its guidance of adjusted EPS growth in 2005 of at least 20%(2).
Net sales for third quarter of 2005 and first 9 months of 2005
Unless otherwise indicated, growth figures in this press release are on a
comparable basis and calculated on 2004 pro forma figures (see explanatory
notes).
In the third quarter of 2005, sanofi-aventis generated net sales of euro
7,200 million, up 11.0%. Exchange rate movements had a favorable effect of 1.3
points, and changes in Group structure a negative effect of 0.7 of a point.
After allowing for these impacts, reported-basis growth was 11.6%.
Net sales for the 9 months to end September 2005 totaled euro 20,304
million, up 11.0%. Exchange rate movements had a negative effect of 1.2
points, and changes in Group structure a negative effect of 0.9 of a point.
After allowing for these impacts, reported-basis growth was 8.9%.
Net sales by business segment
Net sales reported by sanofi-aventis comprise net sales generated by the
pharmaceuticals business and net sales generated by the human vaccines
business.
Pharmaceuticals
Third-quarter net sales for the pharmaceuticals business were up 9.4% at
euro 6,483 million. Net sales of the top 15 products rose by 15.7% to euro
4,283 million, representing 66.1% of pharmaceuticals net sales, compared with
62.5% for the third quarter of 2004.
In the 9 months to end September 2005, net sales for the pharmaceuticals
business were up 10.5% at euro 18,885 million. Net sales of the top 15
products rose by 16.7% to euro 12,076 million, representing 63.9% of
pharmaceuticals net sales, compared with 60.5% in the 9 months to end
September 2004.
Millions of euros 2005 Q3 Change on a 2005 Change on a
net sales comparable 9-month comparable
basis net sales basis
Lovenox(R) 551 +13.8% 1,571 +15.7%
Plavix(R) 534 +22.8% 1,508 +21.4%
Eloxatin(R) 422 +28.3% 1,141 +35.2%
Taxotere(R) 420 +13.8% 1,184 +11.9%
Stilnox(R)/Ambien(R) 419 +5.5% 1,089 +7.6%
Allegra(R) 367 -0.8% 1,185 +8.3%
Lantus(R) 325 +44.4% 869 +48.5%
Tritace(R) 260 +7.0% 724 +1.8%
Copaxone(R) 240 +23.7% 646 +23.8%
Aprovel(R) 225 +14.8% 661 +14.2%
Amaryl(R) 195 +19.6% 542 +12.2%
Actonel(R) 99 +20.7% 275 +25.6%
Depakine(R) 81 +5.2% 238 +5.3%
Xatral(R) 80 +15.9% 237 +16.2%
Nasacort(R) 65 -7.1% 206 -1.0%
Total 4,283 +15.7% 12,076 +16.7%
Third-quarter net sales of other pharmaceutical products were down 1.1% at
euro 2,200 million. Excluding DDAVP, which faced competition from generics in
the United States during the quarter, net sales of other pharmaceutical
products were stable.
Net sales of other pharmaceutical products for the 9 months to end
September were up 0.8% at euro 6,809 million.
Human Vaccines
Third-quarter consolidated net sales for the Human Vaccines business were
euro 717 million, a rise of 27.8%.
In the 9 months to end September, consolidated net sales for this business
reached euro 1,419 million, up 18.5%.
The successful launch of Menactra(R) in the United States in March 2005
added euro 77 million to third-quarter net sales and euro 147 million to net
sales for the first 9 months of the year.
The fine performance by Adult Booster vaccines benefited from two US
launches: Decavac(R) in January 2005 (euro 152 million to end September), and
Adacel(TM) (tetanus-diphtheria-whooping cough-Tdap) in July 2005.
The influenza vaccination season began as usual in September, and will
continue through the final quarter.
Net sales
Millions of euros 2005 Q3 Change on a 2005 Change on a
net sales comparable 9-month comparable
basis net sales basis
Polio/Whooping Cough/
Hib Vaccines 151 +14.2% 409 -0.5%
Adult Booster Vaccines 90 +91.1% 211 +48.2%
Influenza Vaccines 274 +8.7% 338 +12.4%
Travel Vaccines 48 +5.2% 129 -3.3%
Meningitis/
Pneumonia Vaccines 110 +150.0% 208 +128.6%
Other Vaccines 44 +12.8% 124 +4.2%
Total 717 +27.8% 1,419 +18.5%
Sanofi Pasteur MSD, the joint venture with Merck & Co in Europe, generated
third-quarter net sales of euro 246 million (up 8.8% on a reported basis). For
the 9 months to end September, the joint venture posted sales of euro 527
million (up 9.7% on a reported basis). These sales are not consolidated by
sanofi-aventis.
Net sales by geographical region
Millions of euros 2005 Q3 Change on a 2005 Change on a
net sales comparable 9-month comparable
basis net sales basis
Europe 3,010 +10.1% 9,085 +9.6%
United States 2,725 +12.9% 7,129 +14.9%
Other countries 1,465 +9.2% 4,090 +7.7%
Total 7,200 +11.0% 20,304 +11.0%
In Europe, third-quarter sales growth was propelled by a strong showing
from the entire portfolio, and in particular from Lantus(R) (up 44.5%),
Eloxatin(R) (up 27.7%), Taxotere(R) (up 26.8%), Plavix(R) (up 20.6%) and
Lovenox(R) (up 12.4%).
In the United States, despite competition from generics of Allegra(R) in
September, sales rose by 12.9% in the third quarter, driven by Lantus(R) (up
38.8%), Eloxatin(R) (up 25.4%) and Lovenox(R) (up 13.4%).
In other countries, sales growth accelerated, reaching 9.2% in the third
quarter.
Developed sales
Developed sales give an indication of the overall presence of sanofi-
aventis products in the market. Third-quarter developed sales reached euro
8,110 million, up 10.4%. In the 9 months to end September, developed sales
amounted to euro 22,732 million, up 11.2%.
Developed sales of Plavix(R)/Iscover(R):
Millions of euros 2005 Q3 Change on a 2005 Change on a
comparable basis 9 months comparable basis
Europe 408 +21.8% 1,165 +21.7%
United States 685 +7.4% 1,832 +15.8%
Other countries 149 +22.1% 411 +22.3%
Total 1,242 +13.4% 3,408 +18.5%
In the United States, total prescriptions (TRx) of Plavix(R) rose by
13.6%(3) to end September.
In Europe, Plavix(R) again achieved robust growth in the third quarter,
especially in France (up 22.4%).
Developed sales of Aprovel(R)/Avapro(R)/Karvea(R):
Millions of euros 2005 Q3 Change on a 2005 Change on a
comparable basis 9 months comparable basis
Europe 199 +11.2% 586 +11.8%
United States 120 -1.6% 319 -0.6%
Other countries 86 +16.2% 226 +14.7%
Total 405 +8.0% 1,131 +8.5%
In the United States, total prescriptions of Avapro(R) (TRx) rose by
13.1%(3) to end September compared with market growth (ARB) of 10.6%(3). At
end September, the product had market share of 15.0%(4).
Comments by therapeutic class
Cardiovascular/Thrombosis
Lovenox(R) /Clexane(R)
2005 third-quarter net sales of Lovenox(R) were euro 551 million, up
13.8%, with growth of 13.4% (to euro 334 million) in the United States and
12.4% (to euro 159 million) in Europe. In the United States, growth was driven
largely by the use of Lovenox(R) in medical prophylaxis.
In the 9 months to end September, net sales of Lovenox(R) rose by 16.8%
(to euro 934 million) in the United States and by 13.3% (to euro 484 million)
in Europe.
Plavix(R)
Third-quarter consolidated net sales of Plavix(R) came to euro 534
million, up 22.8%. In the 9 months to end September, net sales of the product
rose by 21.4% to euro 1,508 million.
Delix(R)/Tritace(R)
Third-quarter net sales of Delix(R)/Tritace(R) came to euro 260 million,
up 7.0%, thanks to a return to growth in Germany and good performances in
France and Canada.
In the 9 months to end September, net sales of Delix(R)/Tritace(R) grew by
1.8% to euro 724 million.
Aprovel(R)
Third-quarter consolidated net sales of Aprovel(R) came to euro 225
million, up 14.8%.
In the 9 months to end September, consolidated net sales of Aprovel(R)
rose by 14.2% to euro 661 million.
Oncology
Taxotere(R)
Third-quarter consolidated net sales of Taxotere(R) were euro 420 million,
up 13.8%. In Europe, growth accelerated in the quarter to 26.8% (euro 164
million), thanks largely to increased sales force effectiveness and clearer
differentiation between Taxotere(R) and Taxol(R).
In the United States, Taxotere(R) is gaining market share with new
patients in early stage breast cancer as an adjuvant treatment (26%(5)) and in
the treatment of hormone-resistant prostate cancer (82%(5)), but is still
being adversely affected by the introduction of Taxol(R) generics. Third-
quarter sales in the United States came to euro 180 million, up 5.9%.
In the 9 months to end September, net sales of Taxotere(R) were euro 1,184
million, up 11.9%. The product achieved growth of 19.0% in Europe (to euro 464
million) and 8.1% in the United States (to euro 512 million).
Eloxatin(R)
Third-quarter net sales of Eloxatin(R) were euro 422 million, up 28.3%.
Net sales of the product rose by 25.4% in the United States (to euro 245
million) and by 27.7% in Europe (to euro 141 million). Eloxatin(R) is gaining
market share as an adjuvant treatment for colorectal cancer in Europe and in
the United States, where the product has 59.3%(5) market share in stage III
patients.
In the 9 months to end September, net sales of Eloxatin(R) advanced by
35.1% in the United States (to euro 651 million) and by 34.4% in Europe (to
euro 404 million). A new formulation (solution) was launched at the start of
June in the United States and France, and already represents around 80% of
Eloxatin(R) use.
Central Nervous System
Ambien(R)
Third-quarter net sales of Ambien(R) amounted to euro 371 million in the
United States, up 4.8%. Prescription growth to end September was 5.9%3 in the
United States.
Ambien CR, approved in the United States on September 6, 2005, has been
available in pharmacies since beginning of October. The product is being
marketed by a sales force of around 3,500 medical professionals.
In the 9 months to end September, net sales of Ambien(R) in the United
States rose 8.8% to euro 948 million. In Japan, sales of Myslee(R) (not
consolidated by sanofi-aventis) were up 19.4% at euro 76 million.
Copaxone(R)
Third-quarter net sales of Copaxone(R) came to euro 240 million, up 23.7%.
Net sales rose by 26.6% in the United States (to euro 168 million), and by
20.0% in Europe (to euro 59 million).
In the 9 months to end September, net sales of Copaxone(R) advanced by
24.8% (to euro 440 million) in the United States and by 23.2% in Europe (to
euro 170 million).
Depakine(R)
Third-quarter net sales of Depakine(R) were euro 81 million, up 5.2%. In
the 9 months to end September, net sales of Depakine(R) increased by 5.3% to
euro 238 million.
Diabetes
Lantus(R)
Third-quarter net sales of Lantus(R) were euro 325 million, up 44.4%. The
product reported net sales growth of 38.8% in the United States (to euro 191
million) and 44.5% in Europe (to euro 110 million). In the United States,
Lantus(R), the best-selling insulin product on the market and the only insulin
analog to provide 24-hour coverage, continues to gain market share, and had
28.1%4 of the market at end September 2005.
In the 9 months to end September, net sales of Lantus(R) advanced by 45.4%
in the United States to euro 511 million. In Europe, the product posted sales
growth of 45.7% to euro 301 million.
Amaryl(R)
Third-quarter net sales of Amaryl(R) were euro 195 million, up 19.6%. Net
sales rose by 33.6% in the United States (to euro 63 million), and by 10.0% in
Europe (to euro 68 million).
In the 9 months to end September, net sales of Amaryl(R) advanced by 18.9%
in the United States (to euro 172 million). In Europe, the product achieved
growth of 11.1%, to euro 195 million.
In early October, Prasco Laboratories launched an authorized generic of
Amaryl(R) in the United States.
Internal Medicine
Allegra(R)
Third-quarter net sales of Allegra(R) fell by 0.8% to euro 367 million,
including euro 305 million in the United States (down 0.9%). Allegra(R) has
been facing competition from generics in the United States since September. On
September 14, 2005, Prasco Laboratories launched an authorized generic version
of Allegra(R).
In the 9 months to end September, net sales of Allegra(R) rose by 8.3% to
euro 1,185 million. Net sales in the United States were up 5.6% at euro 914
million.
Actonel(R)
Third-quarter worldwide sales of Actonel(R), including the alliance with
Procter & Gamble, amounted to euro 387 million. Sales consolidated by sanofi-
aventis were up 20.7% at euro 99 million. Consolidated Japanese sales for the
third quarter rose by 10.6% to euro 13 million.
In the 9 months to end September, worldwide sales of Actonel(R), including
the alliance with Procter & Gamble, totaled euro 1,009 million. Sales
consolidated by sanofi-aventis over the period were euro 275 million, an
increase of 25.6%.
Ketek(R)
Third-quarter net sales of Ketek(R) were euro 38 million, 7.3% lower than
in the third quarter of 2004, when the product was launched in the United
States.
In the 9 months to end September, net sales of Ketek(R) increased by 35.9%
to euro 159 million.
Xatral(R)
Third-quarter net sales of Xatral(R) came to euro 80 million, up 15.9%.
In the 9 months to end September, net sales of Xatral(R) advanced by 16.2%
to euro 237 million.
Adjusted consolidated income statement (unaudited)
The adjusted consolidated income statement (unaudited) is presented in
Appendix 3.
Refer to Appendix 1 for a definition of "Proforma income statement" and
"Adjusted net income", and to Appendix 4 for reconciliations of the
consolidated income statement to the adjusted consolidated income statement.
Third quarter of 2005 (vs. 2004 third-quarter adjusted pro forma)
Net sales generated by sanofi-aventis in the third quarter of 2005 came to
euro 7,200 million, an increase of 11.0% on a comparable basis. Exchange rate
movements had a favorable effect of 1.3 points, and changes in Group structure
a negative effect of 0.7 of a point. After allowing for these impacts,
reported-basis growth was 11.6%.
Gross profit was euro 5,665 million, 11.6% up on the third quarter of
2004. The gross margin ratio (78.7%) was unchanged from the comparable period
of 2004. Cost of sales continued to fall as a percentage of net sales (25.7%,
vs. 26.3% in the third quarter of 2004. Other revenues were stable in value
terms.
Research and development expenses rose by 1.6% year-on-year to euro 992
million.
Selling and general expenses, at euro 2,018 million, were 4.2% higher than
in the third quarter of 2004, and represented 28.0% of net sales (vs. 30.0% in
Q3 2004). Promotional expenses grew at a faster rate in the third quarter than
in the second quarter, while the reduction in general expenses was again more
marked than in the previous quarter.
Other current operating income came to euro 59 million, against euro 96
million in the third quarter of 2004, reflecting a less favorable foreign
exchange position over the quarter.
Operating income - current was up 20.2% at euro 2,653 million,
representing 36.8% of net sales versus 34.2% in the third quarter of 2004, an
improvement of 2.6 points.
Other operating income and expenses showed a net gain of euro 37 million,
compared with a net loss of euro 14 million in the third quarter of 2004. In
2005, this line includes the euro 70 million gain on the divestment of the
oral health business to Procter & Gamble.
Operating income rose by 24.2% to euro 2,687 million.
Net financial expense came to euro 19 million, compared with euro 213
million in the third quarter of 2004. This marked improvement reflects firstly
a lower cost of debt capital, a reduction in debt due to cash flow generated
by the Group, and a favorable effect from the remeasurement of financial
instruments; and secondly euro 64 million of gains on the disposal of equity
holdings (primarily Transkaryotic and Viropharma).
Income tax expense totaled euro 829 million, compared with euro 583
million for the third quarter of 2004, giving an effective tax rate of 31.1%
(vs. 29.9% for the third quarter of 2004).
The share of profit from associates was euro 175 million, against euro 201
million for the third quarter of 2004. This line includes the Group's share of
after-tax profits from the territories managed by BMS under the Plavix(R) and
Avapro(R) alliance (euro 112 million, vs. euro 107 million for the third
quarter of 2004). The reduction in the share of profits from associates
reflects the deconsolidation of Wacker-Chemie GmbH at the start of the third
quarter.
Minority interests in net income were euro 91 million, compared with euro
74 million in the third quarter of 2004. This line includes the share of pre-
tax profits paid over to BMS from territories managed by sanofi-aventis (euro
82 million, vs. euro 60 million for the third quarter of 2004).
Net income was up 28.7% at euro 1,923 million, and represented 26.7% of
net sales, against 23.2% for the third quarter of 2004.
Earnings per share (EPS) came to euro 1.44, 27.4% higher than the 2004
third-quarter figure of euro 1.13, based on an average number of shares of
1,337,056,282 for the third quarter of 2005 and 1,327,656,093 for the third
quarter of 2004.
First 9 months of 2005 (vs. adjusted pro forma, first 9 months of 2004)
In the 9 months to end September 2005, sanofi-aventis generated net sales
of euro 20,304 million, a rise of 11.0% on a comparable basis. Exchange rate
movements had a negative effect of 1.2 points, and changes in Group structure
a negative effect of 0.9 of a point. After allowing for these impacts,
reported-basis growth was 8.9%.
Gross profit for the 9 months to end September 2005 was euro 15,899
million, up 10.4% on the comparable period in 2004. The gross margin ratio was
78.3%, against 77.2% for the comparable period of 2004. This improvement
reflects the combined effect of sales growth, productivity gains and
purchasing efficiencies.
Research and development expenses were 0.3% higher than in the comparable
period of 2004 at euro 2,894 million. The lack of significant growth in R&D
spend reflects the impact of restructuring initiated by Aventis prior to the
acquisition and the discontinuation of some R&D collaborations.
Selling and general expenses were 2.0% up on the comparable period of 2004
at euro 5,967 million, representing 29.4% of net sales. Promotional expenses
increased faster than sales growth, while general expenses were sharply down.
Other current operating income came to euro 192 million, against euro 185
million on the comparable period of 2004, The Group's share of profits from
alliances, especially the Actonel(R) alliance, continues to grow.
Operating income - current was up 23.8% at euro 7,052 million,
representing 34.7% of net sales, an improvement of 4.1 points over the
comparable period of 2004.
Other operating income and expenses showed a net gain of euro 44 million,
compared with euro 180 million for the comparable period of 2004. In 2004,
this line included gains on divestments of euro 373 million (mainly from
divestments by Aventis) and bid defense costs of euro 154 million. In 2005, it
includes the euro 70 million gain on the divestment of the oral health
business to Procter & Gamble.
Operating income was up 22.9% at euro 7,063 million, representing 34.8% of
net sales (vs. 30.8% for the comparable period of 2004).
Net financial expense came to euro 224 million, versus euro 606 million
for the comparable period of 2004. This improvement reflects a lower cost of
debt capital, a reduction in debt due to cash flow generated by the Group, a
favorable effect from the remeasurement of financial instruments, and gains on
disposals of equity holdings (primarily Transkaryotic and Viropharma) in 2005.
Income tax expense was euro 2,131 million, against euro 1,530 million for
the comparable period of 2004, giving an effective tax rate of 31.2% to end
September 2005 (vs. 29.8% to end September 2004).
The share of profit from associates was euro 444 million, compared with
euro 434 million for the first 9 months of 2004. This line includes the
Group's share of after-tax profits from the territories managed by BMS under
the Plavix(R) and Avapro(R) alliance (euro 295 million, vs. euro 265 million
for the first 9 months of 2004).
Minority interests amounted to euro 261 million, against euro 215 million
for the first 9 months of 2004. This line includes the share of pre-tax
profits paid over to BMS from territories managed by sanofi-aventis (euro 220
million, vs. euro 175 million for the first 9 months of 2004).
Net income was up 27.7% at euro 4,891 million, representing 24.1% of net
sales (vs. 20.5% for the first 9 months of 2004).
Earnings per share (EPS) came to euro 3.66, 26.6% higher than the figure
for the first 9 months of 2004 (euro 2.89), based on an average number of
shares of 1,335,779,796 for the first 9 months of 2005 and 1,326,234,913 for
the first 9 months of 2004.
Consolidated net debt
Consolidated net debt (defined as short-term debt plus long-term debt, net
of cash and cash equivalents) fell from euro 12.8 billion at end June 2005 to
euro 11.6 billion at end September 2005.
Share issue reserved for employees*
Under the authority granted by the shareholders' meeting of May 31, 2005,
the Board of Directors decided at its meeting of November 7, 2005 to carry out
a share issue reserved for employees before the end of 2005. The main terms of
the proposed issue are:
-- maximum issue: 0.5% of the share capital
-- subscription price: 54.09 euros, i.e. a discount of 20%
-- lock-up period: 5 years
-- subscription period: November 21, 2005 through December 2, 2005
In accordance with IFRS, the fair value of the employee benefit arising
from this share issue will be recognized in the final quarter of 2005.
2005 guidance
Based on its strong 2005 third-quarter performance, sanofi-aventis
maintains its 2005 guidance.
Sanofi-aventis expects 2005 full-year comparable-basis net sales growth to
be ahead of the world pharmaceutical market growth rate. Barring major adverse
events, sanofi-aventis also expects 2005 full-year adjusted EPS growth of at
least 20% (based on an exchange rate of euro 1:$1.25, with sensitivity to the
euro/dollar exchange rate estimated at 0.5% of growth for a 1-cent movement in
the exchange rate).
* Read the "Important Information" at the end of this press release
Recent events
September 6, 2005 Announcement of FDA approval for Ambien CR(TM) in the
United States.
September 6, 2005 Announcement of discontinuation of ACTIVE W arm
(clopidogrel + aspirin versus oral anticoagulation)
designed to evaluate clopidogrel in the prevention of
vascular events in atrial fibrillation patients; the
ACTIVE A and ACTIVE I arm of the clinical trial
program are to continue.
September 8, 2005 Recommendation by the FDA advisory committee panel
that Exubera(R) be approved for use in adults with
type 1 and type 2 diabetes.
September 13, 2005 Announcement of distribution and supply agreement
with Prasco Laboratories to launch an authorized
generic version of Allegra(R) in the United States.
September 13, 2005 Trial date of April 3, 2006 set for the Plavix(R)
patent infringement litigation against Apotex Inc.
and Apotex Corp. in the United States.
September 15, 2005 Publication of interim analysis of phase III study on
early-stage HER2-positive breast cancer showing
Taxotere(R)-based chemotherapy combined with
Herceptin(R) improves disease-free survival.
September 15, 2005 Signature by Sanofi pasteur of a $100 million
contract to produce vaccines against the H5N1 bird
flu strain for the US government.
September 21, 2005 Sanofi pasteur announces donation of 200,000 doses of
influenza vaccine to support the American
government's efforts to tackle health problems in the
aftermath of Hurricane Katrina.
September 26, 2005 Acceptance by the FDA of filing of license
application for Pentacel(TM), a new combined
pediatric vaccine.
September 30, 2005 Announcement that Sanofi pasteur and the FDA have
been informed of 5 cases of Guillain-Barre syndrome
following administration of Menactra. The FDA has
requested Sanofi pasteur to inform patients and to
report any further cases of Guillain-Barre syndrome.
October 7, 2005 Announcement that Ambien CR(TM) is available in the
United States.
October 27, 2005 Start of hearings of motion for preliminary
injunction in the Allegra(R) patent infringement
case.
October 28, 2005 Announcement by Pfizer and sanofi-aventis that they
have been informed by the FDA in the United States
that the original review period for the Exubera(R)
license application is to be extended by three
months.
November 7, 2005 Decision by the sanofi-aventis Board of Directors to
carry out a share issue reserved for Group employees
2006 Financial Diary
January 30, 2006 2005 fourth-quarter net sales
February 24, 2006 2005 results - analyst/investor meeting in Paris
APPENDICES:
List of appendices:
Appendix 1: Explanatory notes
Appendix 2: Net sales by product: third quarter of 2005 and first 9
months of 2005
Appendix 3: Adjusted consolidated income statements (unaudited): third
quarter and first 9 months of 2005
Appendix 4: Reconciliation of consolidated income statement to adjusted
consolidated income statement (unaudited): third quarter of
2005 and first 9 months of 2005
Appendix 1: Explanatory notes
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).
For any two periods, we exclude the impact of exchange rates by
recalculating sales for the earlier period on the basis of exchange rates used
in the later period. We exclude the impact of acquisitions by including sales
for a portion of the prior period equal to the portion of the current period
during which we owned the entity or product rights 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 2004 pro forma reported net sales to 2004 pro forma
comparable net sales
euro million 2004: 9 months
Pro forma reported net sales 18,648
Impact of changes in Group structure (161)
Impact of exchange rates (192)
Pro forma comparable net sales 18,295
euro million 2004: Q3
Pro forma reported net sales 6,452
Impact of changes in Group structure (38)
Impact of exchange rates 74
Pro forma comparable net sales 6,488
Developed sales: When we refer to "developed sales" of a product, we mean
consolidated net sales, excluding sales of products to our alliance partners,
but including those that are made through our alliances and are not included
in our consolidated net sales (with Bristol-Myers Squibb on Plavix(R)/
Iscover(R) (clopidogrel) and Aprovel(R)/Avapro(R)/Karvea(R) (irbesartan) and
with Fujisawa on Stilnox(R)/ Myslee(R)). Our alliance partners provide us with
information regarding their sales in order to allow us to calculate developed
sales.
We believe that developed sales are a useful measurement tool because they
demonstrate the overall presence of our products in the market.
Reconciliation of net sales to developed sales
euro million 2005: 9 months 2004: 9 months*
Net sales 20,304 18,295
Non-consolidated sales of Plavix(R)/
Iscover(R) net of sales of product
to Bristol-Myers Squibb 1,900 1,633
Non-consolidated sales of Aprovel(R)/
Avapro(R)/Karvea(R) net of sales of
product to Bristol-Myers Squibb 470 463
Non-consolidated sales of Stilnox(R)/
Myslee(R) net of sales of product
to Fujisawa 58 52
Developed sales 22,732 20,443
* Pro forma net sales
euro million 2005: Q3 2004: Q3*
Net sales 7,200 6,488
Non-consolidated sales of Plavix(R)/
Iscover(R) net of sales of product
to Bristol-Myers Squibb 708 660
Non-consolidated sales of Aprovel(R)/
Avapro(R)/Karvea(R) net of sales of
product to Bristol-Myers Squibb 180 179
Non-consolidated sales of Stilnox(R)/
Myslee(R) net of sales of product
to Fujisawa 22 19
Developed sales 8,110 7,346
* Pro forma net sales
Adjusted net income: We define "adjusted net income" as accounting net
income (determined under IFRS) adjusted to exclude (i) the material impacts of
purchase accounting for the Aventis acquisition and (ii) acquisition-related
integration and restructuring costs. Sanofi-aventis believes 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 the
acquisition are as follows:
-- charges arising from the remeasurement of Aventis inventories at fair
value, net of tax;
-- amortization/impairment expense generated by the remeasurement of
Aventis intangible assets, net of tax;
-- any impairment charged against the goodwill arising on the acquisition.
Sanofi-aventis also excludes acquisition-related integration and
restructuring costs from adjusted net income.
The adjusted pro forma income statements for the third quarter of 2004 and
the first 9 months of 2004 are presented for comparability purposes as though
the offer for Aventis, and the transactions described below, had occurred on
January 1, 2004. The basis of preparation of the pro forma income statements
is as follows:
-- Elimination of the income statement contribution of Arixtra,
Fraxiparine and Campto.
-- Elimination of Aventis Behring, divested at the start of 2004.
euro million 2005: 9 months 2005: 9 months 2004: 9 months
consolidated adjusted adjusted
(unaudited) consolidated pro forma
(unaudited) (unaudited)
Net sales 20,304 20,304 18,648
Net income 1,802 4,891 3,830
Basic EPS (in euros) 1.35 3.66 2.89
euro million 2005: Q3 2005: Q3 2004: Q3
consolidated adjusted adjusted
(unaudited) consolidated pro forma
(unaudited) (unaudited)
Net sales 7,200 7,200 6,452
Net income 715 1,923 1,494
Basic EPS (in euros) 0.54 1.44 1.13
Appendix 2: Net sales by product
Third quarter of 2005: Net sales by product
euro million Q3 2005 Q3 2004 Q3 2004
net sales pro forma pro forma
net sales net sales
(comparable)
Lovenox(R) 551 484 480
Plavix(R) 534 435 428
Allegra(R) 367 370 367
Taxotere(R) 420 369 366
Stilnox(R)/Ambien(R) 419 397 397
Eloxatin(R) 422 329 327
Lantus(R) 325 225 224
Tritace(R) 260 243 237
Aprovel(R) 225 196 193
Copaxone(R) 240 194 192
Amaryl(R) 195 163 162
Actonel(R) 99 82 80
Depakine(R) 81 77 76
Xatral(R) 80 69 68
Nasacort(R) 65 70 69
Total 4,283 3,703 3,666
Other products 2,200 2,224 2,231
Total Pharmaceuticals 6,483 5,927 5,897
Vaccines 717 561 555
Total net sales 7,200 6,488 6,452
First 9 months of 2005: Net sales by product
euro million 2005: 9-month 2004: 9-month 2004: 9-month
net sales pro forma pro forma
net sales net sales
(comparable)
Lovenox(R) 1,571 1,358 1,385
Plavix(R) 1,508 1,242 1,232
Allegra(R) 1,185 1,094 1,130
Taxotere(R) 1,184 1,058 1,077
Stilnox(R)/Ambien(R) 1,089 1,012 1,041
Eloxatin(R) 1,141 844 861
Lantus(R) 869 585 599
Tritace(R) 724 711 707
Aprovel(R) 661 579 577
Copaxone(R) 646 522 534
Amaryl(R) 542 483 492
Actonel(R) 275 219 220
Depakine(R) 238 226 225
Xatral(R) 237 204 204
Nasacort(R) 206 208 214
Total 12,076 10,345 10,498
Other products 6,809 6,753 6,935
Total Pharmaceuticals 18,885 17,098 17,433
Vaccines 1,419 1,197 1,215
Total net sales 20,304 18,295 18,648
Appendix 3: Adjusted consolidated income statements (unaudited) for the
third quarter and first 9 months of 2005
The adjusted consolidated income statements are derived from the
consolidated income statements as presented in Appendix 4.
Sanofi-aventis 2005 third-quarter adjusted consolidated income statement
euro million Q3 2005 as % Q3 2004 as % % change
Adjusted of Adjusted of net
consolidated net pro forma sales
income sales income
statement statement
(unaudited) (unaudited)
Net sales 7,200 100% 6,452 100% +11.6%
Other revenues 318 4.4% 324 5.0% -1.9%
Cost of sales (1,853) (25.7%) (1,700) (26.3%) 9.0%
Gross profit 5,665 78.7% 5,076 78.7% +11.6%
Research &
development
expenses (992) (13.8%) (976) (15.1%) +1.6%
Selling & general
expenses (2,018) (28.0%) (1,937) (30.0%) +4.2%
Other current
operating income 59 -- 96 -- -38.5%
Other current
operating
expenses (30) -- (21) -- +42.9%
Amortization of
intangibles (31) -- (30) -- --
Operating income
- current 2,653 36.8% 2,208 34.2% +20.2%
Restructuring
costs (3) -- (31) -- --
Impairment of PP&E
and intangibles 0 -- 0 -- --
Other operating
income and
expenses 37 -- (14) -- --
Operating income 2,687 37.3% 2,163 33.5% +24.2%
Financial
expenses (123) -- (199) -- -38.2%
Financial income 104 -- (14) -- --
Income before tax
and associates 2,668 37.1% 1,950 30.2% +36.8%
Income tax
expense (829) (11.5%) (583) (9.0%) +42.2%
Effective tax
rate 31.1% -- 29.9% -- --
Share of profit/
loss of
associates 175 -- 201 -- -12.9%
Net income before
minority
interests 2,014 28.0% 1,568 24.3% +28.4%
Minority
interests (91) -- (74) -- +23.0%
Net income 1,923 26.7% 1,494 23.2% +28.7%
Average number
of shares
outstanding 1,337,056,282 1,327,656,093 --
Earnings per
share
(in euros) 1.44 1.13 +27.4%
Sanofi-aventis consolidated income statement: first 9 months of 2005
euro million 2005: 9 months as % 2004: 9 months as % % change
Adjusted of Adjusted of net
consolidated net pro forma sales
income sales income
statement statement
(unaudited) (unaudited)
Net sales 20,304 100% 18,648 100% +8.9%
Other revenues 866 4.3% 831 4.5% +4.2%
Cost of sales (5,271) (26.0%) (5,079) (27.3%) +3.8%
Gross profit 15,899 78.3% 14,400 77.2% +10.4%
Research &
development
expenses (2,894) (14.3%) (2,885) (15.5%) +0.3%
Selling & general
expenses (5,967) (29.4%) (5,848) (31.4%) +2.0%
Other current
operating income 192 -- 185 -- +3.8%
Other current
operating expenses (94) -- (69) -- +36.2%
Amortization of
intangibles (84) -- (86) -- -2.3%
Operating income
- current 7,052 34.7% 5,697 30.6% +23.8%
Restructuring costs (30) -- (130) -- -76.9%
Impairment of PP&E
and intangibles (3) -- -- -- --
Other operating income
and expenses 44 -- 180 -- --
Operating income 7,063 34.8% 5,747 30.8% +22.9%
Financial expenses (428) -- (691) -- -38.1%
Financial income 204 -- 85 -- --
Income before tax
and associates 6,839 33.7% 5,141 27.6% +33.0%
Income tax expense (2,131) (10.5%) (1,530) (8.2%) +39.3%
Effective tax rate 31.2% -- 29.8% -- --
Share of profit/loss
of associates 444 -- 434 -- +2.3%
Net income before
minority interests 5,152 25.4% 4,045 21.7% +27.4%
Minority interests (261) -- (215) -- +21.4%
Net income 4,891 24.1% 3,830 20.5% +27.7%
Average number of
shares
outstanding 1,335,779,796 1,326,234,913 --
Earnings per
share
(in euros) 3.66 2.89 +26.6%
Appendix 4: Reconciliation of consolidated income statement to adjusted
consolidated income statement (unaudited) for the third quarter of 2005 and
the first 9 months of 2005
Third quarter of 2005:
The adjustments to the income statement reflect the elimination of
material impacts of the application of purchase accounting to the Aventis
acquisition (euro 1,140 million net of deferred taxes, with no cash
impact for the Group) and restructuring charges (euro 68 million net of
tax), i.e. a total impact of euro 1,208 million.
Third quarter of 2005: Reconciliation of consolidated income statement to
adjusted consolidated income statement (unaudited)
euro million Q3 2005 Adjustments Q3 2005
consolidated adjusted
(unaudited) consolidated
(unaudited)
Net sales 7,200 -- 7,200
Other revenues 318 -- 318
Cost of sales (1,972) 119(a) (1,853)
Gross profit 5,546 119 5,665
Research & development expenses (992) -- (992)
Selling & general expenses (2,018) -- (2,018)
Other current operating income 59 -- 59
Other current operating expenses (30) -- (30)
Amortization of intangibles (974) 943(b) (31)
Operating income - current 1,591 1,062 2,653
Restructuring costs (111) 108(c) (3)
Impairment of PP&E
and intangibles (651) 651(d) 0
Other operating income
and expenses 37 -- 37
Operating income 866 1,821 2,687
Financial expenses (123) -- (123)
Financial income 104 -- 104
Income before tax and associates 847 1,821 2,668
Income tax expense (141) (688)(e) (829)
Share of profit/loss of associates 99 76(f) 175
Net income before minority
interests 805 1,209 2,014
Minority interests (90) (1)(g) (91)
Net income 715 1,208 1,923
Average number of shares
outstanding 1,337,056,282 1,337,056,282
Earnings per share (in euros) 0.54 1.44
The material impacts of the application of purchase accounting to the
Aventis acquisition and of restructuring charges on the 2005 third-quarter
consolidated income statement are as follows:
(a) A charge of euro 119 million arising from the workdown of acquired
inventories remeasured at fair value. This adjustment has no cash
impact on the Group.
(b) An amortization charge of euro 943 million against intangible assets.
This adjustment has no cash impact on the Group.
(c) A pre-tax restructuring charge of euro 108 million.
(d) Impairment losses of euro 651 million, mainly relating to Allegra.
This adjustment has no cash impact on the Group.
(e) The tax impact primarily comprises:
(1) Deferred taxes of euro 648 million generated by the amortization
charge of euro 943 million taken against intangible assets; by
impairment of intangibles of euro 651 million; and by a euro 119
million charge arising from the workdown of inventories
remeasured at fair value. This adjustment has no cash impact on
the Group.
(2) A tax saving of euro 40 million on the euro 108 million of
restructuring charges.
(f) The impact on "Share of profit/loss from associates" comprises:
(1) A charge of euro 21 million corresponding to the amortization of
intangibles (net of tax) and the workdown of acquired
inventories. This adjustment has no cash impact on the Group.
(2) A post-tax impairment loss of euro 55 million relating to
Hexavac. This adjustment has no cash impact on the Group.
(g) In "Minority interests", an impact of euro 1 million representing the
share attributable to minority shareholders of amortization charged
against intangibles. This adjustment has no cash impact on the Group.
First 9 months of 2005:
The adjustments to the income statement reflect the elimination of
material impacts of the application of purchase accounting to the Aventis
acquisition (euro 2,624 million net of deferred taxes, with no cash impact for
the Group) and restructuring charges (euro 465 million net of tax), i.e. a
total impact of euro 3,089 million.
First 9 months of 2005: Reconciliation of consolidated income statement to
adjusted consolidated income statement (unaudited)
euro million 2005: 9 months Adjustments 2005: 9 months
consolidated adjusted
(unaudited) consolidated
(unaudited)
Net sales 20,304 -- 20,304
Other revenues 866 -- 866
Cost of sales (5,662) 391(a) (5,271)
Gross profit 15,508 391 15,899
Research & development expenses (2,894) -- (2,894)
Selling & general expenses (5,967) -- (5,967)
Other current operating income 192 -- 192
Other current operating expenses (94) -- (94)
Amortization of intangibles (2,944) 2,860(b) (84)
Operating income - current 3,801 3,251 7,052
Restructuring costs (749) 719(c) (30)
Impairment of PP&E and
intangibles (757) 754(d) (3)
Other operating income
and expenses 44 -- 44
Operating income 2,339 4,724 7,063
Financial expenses (428) -- (428)
Financial income 204 -- 204
Income before tax and associates 2,115 4,724 6,839
Income tax expense (373) (1,758)(e) (2,131)
Share of profit/loss of associates 307 137(f) 444
Net income before
minority interests 2,049 3,103 5,152
Minority interests (247) (14)(g) (261)
Net income 1,802 3,089 4,891
Average number of shares
outstanding 1,335,779,796 1,335,779,796
Earnings per share (in euros) 1.35 3.66
The material impacts of the application of purchase accounting to the
Aventis acquisition and of restructuring charges on the consolidated income
statement for the first 9 months of 2005 are as follows:
(a) A charge of euro 391 million arising from the workdown of acquired
inventories remeasured at fair value. This adjustment has no cash
impact on the Group.
(b) An amortization charge of euro 2,860 million against intangible
assets. This adjustment has no cash impact on the Group.
(c) A pre-tax restructuring charge of euro 719 million.
(d) Impairment losses of euro 754 million, mainly relating to Allegra.
This adjustment has no cash impact on the Group.
(e) The tax impact primarily comprises:
(1) Deferred taxes of euro 1,504 million generated by the
amortization charge of euro 2,860 million taken against
intangible assets; by impairment of intangibles of euro 754
million; and by a euro 391 million charge arising from the
workdown of inventories remeasured at fair value. This adjustment
has no cash impact on the Group.
(2) A tax saving of euro 254 million on the euro 719 million of
restructuring charges.
(f) The impact on "Share of profit/loss from associates" comprises:
(1) A charge of euro 82 million corresponding to the amortization of
intangibles (net of tax) and the workdown of acquired
inventories. This adjustment has no cash impact on the Group.
(2) A post-tax impairment loss of euro 55 million, relating primarily
to Hexavac. This adjustment has no cash impact on the Group.
(g) In "Minority interests", an impact of euro 14 million representing the
share attributable to minority shareholders of charges for the
amortization and impairment of intangibles. This adjustment has
no cash impact on the Group.
REMINDER
The 3rd quarter 2005 results will be reviewed at 8.00 am (Paris time) by
Mr. Hanspeter Spek, Executive Vice-President Pharmaceutical Operations and Mr.
Jean-Claude Leroy, Senior Vice-President CFO. The slides will be available on
http://www.sanofi-aventis.com. This presentation will be followed by a Q&A
session.
CALL-IN NUMBERS The conference will also be available on telephone via
the following numbers:
France +33 (0) 1 71 23 04 18
UK +44 (0) 207 365 1849
USA +1 718 354 1172
AUDIO REPLAY Available online at http://www.sanofi-aventis.com and
through the numbers below (until November 18, 2005):
France +33 (0) 1 71 23 02 48
UK +44 (0) 207 784 1024
USA +1 718 354 1112
Access code 7979744#
Important Information
This press release does not constitute an offer to sell or a solicitation
of offers to purchase sanofi-aventis shares. The employee share offering will
only be carried out in those jurisdictions in which such offering may be made
pursuant to a prospectus or registration statement that has been filed with
and/or approved by the relevant local authorities, or pursuant to an exemption
from the requirement to file or publish a prospectus or registration
statement. More generally, the offering will only be made in jurisdictions in
which all required local filings and notices have been made and approvals
obtained. This press release is not intended for any jurisdiction in which
such a prospectus has not been approved or such an exemption is not available,
or in which all other required filings and notifications have not been made or
approvals obtained.
(1) Refer to the Appendices for definitions of financial indicators
(2) Based on an exchange rate of euro 1:$1.25. Sensitivity to the
euro/dollar exchange rate is estimated at 0.5% of growth for a 1-cent
movement in the exchange rate.
(3) IMS NPA 3 channels -YTD September 2005
(4) IMS NPA 3 channels -September 2005
(5) Source: Intrinsiq Research - rolling 3 months to August 2005
(excluding Herceptin(R) only patients in early stage breast cancer)
About sanofi-aventis
The sanofi-aventis Group is the world's third largest pharmaceutical
company, ranking number one in Europe. Backed by a world-class R&D
organization, sanofi-aventis is developing leading positions in seven major
therapeutic areas: cardiovascular, thrombosis, oncology, metabolic diseases,
central nervous system, internal medicine, and vaccines. The sanofi-aventis
Group is listed in Paris (EURONEXT: SAN) and in New York (NYSE: SNY)
Forward-Looking Statements
This press release contains forward-looking statements as defined in the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
are statements that are not historical facts. These statements include
financial projections and estimates and their underlying assumptions,
statements regarding plans, objectives and expectations with respect to future
operations, products and services, and statements regarding future
performance. Forward-looking statements are generally identified by the words
"expect," "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 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, 2004. Other than as required by applicable law, sanofi-
aventis does not undertake any obligation to update or revise any forward-
looking information or statements. The sanofi-aventis Group conducts its
business in the United States through its subsidiaries Sanofi-Synthelabo Inc.,
Aventis Pharmaceuticals Inc. and Sanofi Pasteur Inc.
Contact: Jean-Marc Podvin, 33 1.53.77.42.23,
jean-marc.podvin@sanofi-aventis.com
SOURCE sanofi-aventis
 back to top
Related links:
http://www.sanofi-aventis.com
Company News On-Call:
http://www.prnewswire.com/comp/232375.html
CONTACT:
Jean-Marc Podvin of sanofi-aventis,
+33-1-53-77-42-23, jean-marc.podvin@sanofi-aventis.com
|
