Sanofi: Press Releases, Monday, December 9, 2019
Accelerate efficiency
Sanofi expects to expand its business operating income (BOI) margin1 to 30% by 2022, with an ambition for its BOI margin to exceed 32% by 2025. The company is also announcing efficiency initiatives that are expected to generate €2 billion savings by 2022. These savings will fund investment in its key growth drivers and accelerate priority pipeline projects as well as support the expansion of the BOI margin.
The efficiency savings are expected to result primarily from limiting spend on de-prioritized businesses, from smart spending (procurement) initiatives and from operational excellence in manufacturing and organizational productivity. Regarding de-prioritized businesses, Sanofi is announcing a discontinuation of research in diabetes and cardiovascular (DCV) and will not pursue plans to launch efpeglenatide6. The company will also optimize the commercial model for DCV and rheumatoid arthritis, including right-sizing the resources deployed behind Praluent® (alirocumab)2 and Kevzara® (sarilumab)2.
Reinventing how we work
Sanofi will be structured with three core global business units to support the company’s strategy7 – Specialty Care (immunology, rare diseases, rare blood disorders, neurology and oncology), Vaccines, and General Medicines (diabetes, cardiovascular, and established products). Consumer Healthcare will be a standalone business unit with integrated R&D and manufacturing functions.
Hudson explained, “Our objective for the Consumer Healthcare business is to unlock value and entrepreneurial energy by growing faster than the market over the mid term. We believe the new standalone structure, coupled with plans to accelerate the over-the-counter switches for Cialis® and Tamiflu®, will position the business well to accomplish this ambition.”
Focused capital allocation
Sanofi expects to increase its annual Free Cash Flow by approximately 50% by 2022 compared with an adjusted base of €4.1bn in 2018.8
Sanofi continues its focused and disciplined capital allocation policy. It expects to deploy cash generated from its three core GBUs as well as the standalone CHC business with the following order of preference: