Sanofi: In line 2012 despite heavier Opex, disappointing guidance, mixed to negative R&D update

BUY, Fair Value Under Review

News published on February Thursday 7, 2013
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Sanofi delivered this morning a press release that includes three main elements in our view: (i) full-year 2012 results that are good at the top line level thanks to outstanding Vaccines performance in Q4 and to a lesser extent for Genzyme as well. Lantus and new products did well but emerging markets were weak. Opex were heavier than expected and so operating margin was disappointing at 24.6% in Q4, 2pp lower than expected. Only a 19% tax rate in Q4 helped 2012 core EPS be in line with expectations; (ii) guidance for 2013 is shy, as we feared, with Core EPS anticipated between -5% and 0% which should translate in reported -7% to -2% considering currency fluctuations, far from the actual flat to 1% increase in consensus (BG: flat); (iii) update in R&D is mixed with second positive phase III for eliglustat but removal of Lantus/lixisenatide from phase III development planning.

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