What Drove Sanofi’s Growth in 2Q15?
An Investor’s Guide to Sanofi's 2Q15 Earnings
Sanofi’s growth rate
Sanofi (SNY) achieved a ~4.9% growth rate in revenue (at a constant exchange rate) in 2Q15 over 2Q14. The company’s 2Q15 revenues were 9,378 million euros, which is ~16.1% higher than 2Q14 revenues of 8,075 million euros.
Segment-wise performance in 2Q15
Sanofi’s business is divided into three business segments:
Sanofi, the pharmaceuticals segment
Sanofi Pasteur, the human vaccines segment
Merial, animal health segment
The pharmaceuticals segment revenues increased by 3.7% at a constant exchange rate to 7.8 billion euros in 2Q15, as compared to 2Q14. This segment is classified further into six therapeutic areas: diabetes, genzyme, consumer healthcare (or CHC), generics, oncology, and established prescription products. The increase in 2Q15 was mainly driven by Genzyme and generics, and was partially offset by lower sales in diabetes.
Sanofi Pasteur’s revenues in 2Q15 increased 8.6% at constant exchange rates to 887 million euros. This was mainly driven by increased sales of influenza vaccines, adult booster vaccines, and VaxServe, and partially offset by Polio/Pertussis/Hib vaccines and travel and other vaccines.
Merial, the animal health segment, reported a double-digit growth of 14.2% at constant exchange rates to 691 million euros in 2Q15. This was driven by both companion animal products and production animal products.
Year-over-year performance
Due to the strength of its diversified business and operations worldwide, Sanofi’s revenues have varied both positively and negatively in the last few years. The 2014 revenues increased by more than 2.5% to 33.8 billion euros compared to 33.2 billion euros in 2013. This growth was due to improved performance across all segments, and partially offset by the impact of foreign exchange.
Sanofi revenues rose by ~4.9% in 2Q15 as compared to 2Q14, while Merck’s (MRK) revenues fell by ~11%, Pfizer’s (PFE) revenues fell by ~7%, AstraZeneca’s (AZN) revenues fell by ~7%, and Novartis’s (NVS) revenues fell by ~5% in 2Q15, due to changes in foreign exchange. Investors can consider ETFs like the Health Care Select Sector SPDR ETF (XLV) or the Market Vectors Pharmaceutical ETF (PPH) in order to divest the risk.
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