PROFIT AND LOSS ACCOUNT BY DESTINATION AND SEGMENT REPORTING

Transcription

1 PROFIT AND LOSS ACCOUNT BY DESTINATION AND SEGMENT REPORTING Presentation of Mr. Christian MULLIEZ September 1 st 2005

2 Plan Page Recapitulation of IFRS impact: - on net sales on operating profit 5 - on pre-tax profit. 6 - on earnings per share 7 Profit and loss account: New presentation by destination.. 9 Definition of lines by destination : - Net sales Cost of sales Research & development 12 - Advertising and promotion Selling, general and administrative expenses. 14 Profit and loss account by destination: from net sales to operating profit.. 16 Operating profit of geographic zones Operating profit of branches and divisions...19 Profit and loss account: from operating profit to pro forma net profit and pro forma net profit excluding nonrecurrent items st half

3 Recapitulation of IFRS impact on sales, operating profit, pre-tax profit, earnings per share Recapitulation of IFRS impact on: - net sales - operating profit - pre-tax profit - earnings per share -3-

4 Recapitulation of IFRS impact on net sales ( millions) Net sales French standards 14, ,396.8 Personnel costs: reinvoicing of beauty advisors -6.3 } External costs: sales incentives granted to customers Changes in provisions for returns Financial expense - net: cash discounts granted to customers Net sales IFRS standards Total reclassifications , ,921.6 September 1st, 2005

5 Recapitulation of IFRS impact on operating profit ( millions) Adjusted operating profit French standards 2, ,140.1 Cash discounts granted to customers Stock option costs Elimination of charge for depreciation of actuarial gains and losses Impact on profit of time value of foreign currency hedges Operating profit IFRS standards Total adjustments , ,

6 Recapitulation of IFRS impact on pre-tax profit ( millions) Total adjustments of operating profit Positive impact on financial expense (reclassification of cash discounts) Impact on pre-tax profit

7 Recapitulation of IFRS impact on earnings per share (1) French standards IFRS standards Average number of shares 673,547, ,598,404 Net income after minority interests Net profit excluding non-recurrent items after minority interests Net profit excluding non-recurrent items after minority interests, Sanofi-Aventis deconsolidated (1) based on diluted number of shares -7-

8 Profit and loss account: new presentation by destination Profit and loss account: New presentation by destination -8-

9 Profit and loss account: New presentation by destination By nature Net sales Purchases and variation in inventories Personnel costs External charges Taxes and similar payments Depreciation Charges to provisions Operating profit Exchange gains and losses Adjusted operating profit Net sales Cost of sales Gross profit Research & development Advertising & promotion Selling, general & administrative expenses Operating profit before foreign exchange gains and losses Foreign exchange gains and losses Operating profit By destination -9-

10 Definition of lines by destination Net sales Net sales are accounted for: net of rebates, discounts and product returns. net of sales incentives granted to distributors and consumers such as: - commercial co-operation; - coupons; - cash discounts; - loyalty programmes. -10-

11 Definition of lines by destination Cost of sales Cost of sales consists of the following items: the cost price, which consists of the full cost of the products, i.e. raw materials, packaging items, and direct and indirect manufacturing costs; royalties paid to third parties; inventory depreciation costs; physical distribution, i.e. order preparation and dispatching costs. -11-

12 Definition of lines by destination Research & development Research & development expenses consist of all research & development expenses recorded in the group s centres, both for fundamental and applied research. All research & development expenses are recorded as costs in the year in which they are incurred. -12-

13 Definition of lines by destination Advertising & promotion Advertising & promotional expenses consist of: the purchase of advertising space; the fees of advertising agencies and models; sample distribution and other promotional campaigns and activities; the costs of point-of-sales advertising; the cost of consumer advice and selling services; technical training for distributors; medical visitors. These items are recorded as costs in the year in which they are incurred. -13-

14 Definition of lines by destination Selling, general and administrative expenses Selling, general and administrative expenses consist mainly of expenses relating to: sales forces and their management; marketing teams; administrative departments; and general expenses. -14-

15 Profit and loss account by destination: from sales to operating profit Profit and loss account by destination: from net sales to operating profit -15-

16 Profit and loss account by destination: From sales to operating profit 2004 and 1st half 2004 ( millions) Net sales Cost of sales Gross profit , , ,540.2 % of sales % of sales 6, % -2, % 69.9% 4, % Research and development % % Advertising and promotion -4, % -2, % Selling, general and administrative expenses Operating profit before foreign exchange gains and losses -2, , % 15.0% -1, , % 15.7% Foreign exchange gains and losses % % Operating profit 2, % 1, % -16-

17 Operating profit of geographic zones, branches and divisions Operating profit: - of geographic zones - of branches and divisions -17-

18 Operating profit of geographic zones (as % of sales) Western Europe North America Rest of the World 2004 Reported (French standards) 15.3% 13.5% 10.4% 2004 New presentation 20.2% 17.7% 13.5% ZONES TOTAL Non-allocated 13.7% 18.0% +1.0%* -2.8%** COSMETICS TOTAL 14.8% 15.3% * Balance of central revenues and expenses - As % of total sales. ** Group central expenses, fundamental research expenses, stock option costs and miscellaneous expenses As % of total sales. -18-

19 Operating profit of branches and divisions (as % of sales) 2004 Professional Products Consumer Products Luxury Products Active Cosmetics COSMETICS TOTAL Non-allocated* COSMETICS BRANCH DERMATOLOGY BRANCH GROUP 19.0% 16.8% 20.1% 18.6% 18.0% -2.8% 15.3% 17.3% 15.3% * Non-allocated: group central expenses, fundamental research expenses, stock option costs and miscellaneous expenses As % of total sales. -19-

20 Profit and loss account : From operating profit to pro forma net profit and pro forma net profit excluding non-recurrent items From operating profit to: Profit and loss account : - pro forma net profit - pro forma net profit excluding non-recurrent items -20-

21 From operating profit to net profit 2004 ( millions) Operating profit Sanofi-Aventis dilution capital gain Other income and expenses Operational profit Finance costs Other financial income (expense) Sanofi-Aventis dividends Share in net income of equity affiliates Profit before tax and minority interests Income tax Net profit before minority interests Minority interests Net profit after minority interests EPS** ( ) IFRS pro forma* 1, , , ,438.7 * For purposes of comparison, the pro forma profit and loss account presented has been restated to allow for the deconsolidation of Sanofi-Synthélabo on January 1st 2004: - by replacing the share in the net profit of Sanofi-Synthélabo by the dividends received, - and by neutralising the dilution capital gain, net of tax, relating to these shares. ** Earnings per share: diluted net earnings per share based on the net profit excluding non-reccurent items after minority interests pro forma* excluding nonrecurrent items 2, , , , ,

22 From operating profit to net profit 1st half 2004 ( millions) Operating profit Sanofi-Aventis dilution capital gain Other income and expenses Operational profit Finance costs Other financial income (expense) Sanofi-Aventis dividends Share in net income of equity affiliates Profit before tax and minority interests Income tax Net profit before minority interests Minority interests Net profit after minority interests EPS** ( ) pro forma* 1, , , * For purposes of comparison, the pro forma profit and loss account presented has been restated to allow for the deconsolidation of Sanofi-Synthélabo on January 1st 2004: - by replacing the share in the net profit of Sanofi-Synthélabo by the dividends received, - and by neutralising the dilution capital gain, net of tax, relating to these shares. ** Earnings per share: diluted net earnings per share based on the net profit excluding non-reccurent items after minority interests pro forma* excluding nonrecurrent items 1, ,

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