Emerging Markets and US lift Sanofi's sales

Emerging Markets and US lift Sanofi's sales
Sanofi's Consumer Healthcare business is "very complementary" to the Pharmaceuticals business, says Sanofi's chief executive officer Olivier Brandicourt

11 February 2019 - Deborah Wilkes

Sanofi's Consumer Healthcare business reported worldwide sales up by 1.9% at constant exchange rates in the fourth quarter of 2018. The Emerging Markets region and the US recorded significant growth but sales in Europe dropped back.

Sales in the full year of 2018 were up by 3.0% at constant exchange rates.

Olivier Brandicourt, Sanofi's chief executive officer, said Sanofi Consumer Healthcare's broad geographic footprint and leadership position in consumer healthcare continued to drive growth ahead of the average of its global peers.

Asked whether Sanofi intended to keep its "conglomerate" structure, Brandicourt said diversification had been reduced and "we think we now have the right structure". He added that the Consumer Healthcare business was "very complementary" to the Pharmaceuticals business, particularly in Emerging Markets.

Sanofi Consumer Healthcare's sales in the Emerging Markets region were up by 6.4% at constant exchange rates to EUR405 million (USD459 million) in the fourth quarter of 2018. The company said growth had been driven by a "solid demand in Brazil", mainly in the pain category.

The best-performing product categories in the Emerging Markets region were Nutritional with a 19.7% rise in sales and Digestive with 8.5% growth.

Continued improvement in the US

In the US, the business achieved growth for the second consecutive quarter, with sales up by 6.0% at constant exchange rates to EUR274 million. Sales in the third quarter of 2018 rose by 2.9% but the business recorded declines of 5.8% in the second quarter and 4.9% in the first quarter.

Brandicourt said growth in the US had been driven by the Digestive category, which reported sales up by 10.9%, and the Gold Bond skincare franchise.

Sanofi Consumer Healthcare's sales in Europe were down by 3.6% to EUR368 million. Brandicourt said this reflected "comparison with the strong early cough and cold season in the prior year as well as the impact of divestments". He added that "both of these factors are likely to persist in the first quarter of 2019".

European sales of Allergy, Cough & Cold products decreased by 13.3% to EUR91 million in the fourth quarter of 2018.

Sales in the Rest of the World region were down by 2.7% to EUR147 million.

Worldwide sales at Sanofi Consumer Healthcare increased by 1.9% at constant exchange rates to EUR1.19 billion in the fourth quarter of 2018. As reported, sales were up by 0.5%.

Development of categories

Pain was the largest category for Sanofi Consumer Healthcare, with sales up by 4.6% at constant exchange rates to EUR336 million. Sales of Doliprane were up by 3.2% to EUR98 million, but sales of Buscopan were flat at EUR49 million.

Allergy, Cough & Cold was the second-largest category, but sales were down by 6.3% to EUR268 million.

Doliprane was Sanofi Consumer Healthcare's largest brand in the quarter.

Operating income increased

Consumer Healthcare's operating income increased by 8.8% as reported to EUR346 million, representing 29.0% of sales.

Expenditure on research and development during the quarter was up by 17.1% to EUR48 million, representing 4.0% of sales.

Consumer Healthcare accounted for 13.3% of Sanofi’s total worldwide sales in the fourth quarter of 2018, which were up by 3.9% at constant exchange rates to EUR9.00 billion. The rise was 3.5% as reported.

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