Sanofi (SAN) Q2 2024 earnings summary

Executive summary

• Q2 2024 sales grew 10.2% at constant exchange rates to €10,745 million, driven by Dupixent (+29.2% to €3,303 million), new launches, and strong Opella performance (+9.6%), with upgraded 2024 EPS guidance to stable at CER.

• Dupixent sales surpassed €3 billion in a quarter for the first time, on track for ~€13 billion in 2024, with broad-based growth across geographies and indications.

• Pharma launches contributed €0.7 billion (+80.4%), led by ALTUVIIIO, Nexviazyme, Rezurock, and Sarclisa.

• Opella (Consumer Healthcare) grew 10%, driven by the US Qunol acquisition.

• Major strategic moves included the acquisition of Inhibrx, a co-exclusive licensing agreement with Novavax, and expanded industrial investments in France.

Financial highlights

• Q2 2024 net sales reached €10,745 million (+10.2% CER, +7.8% reported); H1 net sales were €21,209 million (+8.4% CER, +5.1% reported).

• Gross margin Q2: 74.2% (down 0.3pp year-over-year), mainly due to currency and product mix; business operating income Q2: €2,813 million (+8.3% CER); business EPS: €1.73 (+4.0% CER).

• Net debt at June 30, 2024: €15,112 million (up from €7,793 million at year-end 2023); credit ratings reaffirmed.

• Free cash flow Q2: €854 million (-46.4%); H1: €545 million (-82.6%).

• SG&A and R&D expenses grew, but SG&A increased less than sales, supporting margin leverage.

Outlook and guidance

• 2024 business EPS guidance upgraded to stable at CER, from prior low single-digit decrease; currency impact expected at -5.5% to -6.5%.

• Dupixent 2024 sales target of ~€13 billion reaffirmed; Beyfortus expected to achieve blockbuster status in 2024.

• Flu vaccine sales expected to decline low single digits year-over-year due to softer vaccination rates.

• Positive momentum and cost discipline expected to continue supporting growth, with pipeline acceleration and 12 phase 3 readouts expected over 2024-2025.

• Positive outlook for 2025, with expectations for solid top-line growth, improved gross margin, and flat R&D spend.