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Segment Information | 6 Months Ended
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Jun. 30, 2023
Disclosure of operating segments [abstract] |
Segment Information |
B.20. SEGMENT INFORMATION
In 2022, Sanofi reported three operating segments (Pharmaceuticals, Vaccines and Consumer Healthcare). The costs of the global support functions (Corporate Affairs, Finance, People & Culture, Legal Affairs, Ethics & Business Integrity, Information Solutions & Technology, Sanofi Business Services, etc.), which are mainly managed centrally at group-wide level, were presented within the “Other” category. In 2023, Sanofi reviewed the presentation of its segment information following adjustments to its internal reporting systems in order to reflect (i) progress on the “Play to Win” strategy leading to the creation of the standalone Consumer Healthcare Global Business Unit (GBU) which, in addition to integrated research, development and production functions now also has its own dedicated global support functions (including Finance, People & Culture, Legal Affairs, Ethics & Business Integrity, Information Solutions & Technology, Global Business Services, etc.); and (ii) organizational changes to Sanofi’s Manufacturing & Supply global function (previously known as Industrial Affairs). Consequently, with effect from January 1, 2023, Sanofi reports two operating segments: Biopharma and Consumer Healthcare. The Biopharma operating segment comprises commercial operations and research, development and production activities relating to the Speciality Care, General Medicines and Vaccines franchises, for all geographical territories. The segment’s results include the costs of global support functions that are not within the managerial responsibility of the Consumer Healthcare GBU. The Consumer Healthcare operating segment comprises commercial operations relating to Consumer Healthcare products, and research, development and production activities and global support functions (as listed above) dedicated to the segment, for all geographical territories. The Consumer Healthcare GBU segment’s results reflect all incurred costs of global support functions attributable to its business. The “Other” category comprises reconciling items, primarily but not limited to (i) gains and losses on centralized foreign exchange risk hedging transactions that cannot be allocated to the operating segments and (ii) gains and losses on retained commitments in respect of previously divested operations.
B.20.1. SEGMENT RESULTS
B.20.1.1. Analysis of net sales The table below sets forth net sales for the six months ended June 30, 2023 and June 30, 2022:
(€ million) | Europe | United States | Other countries | June 30, 2023 | Europe | United States | Other countries | June 30, 2022 (a)
Biopharma | 4,194 |  | 7,366 |  | 5,907 |  | 17,467 |  | 3,986 |  | 6,917 |  | 6,244 |  | 17,147 |
Specialty Care | 1,621 |  | 5,622 |  | 1,448 |  | 8,691 |  | 1,535 |  | 4,829 |  | 1,278 |  | 7,642 |
of which | Dupixent® | 587 |  | 3,682 |  | 609 |  | 4,878 |  | 450 |  | 2,653 |  | 474 |  | 3,577 |
| Aubagio® | 249 |  | 348 |  | 38 |  | 635 |  | 269 |  | 689 |  | 59 |  | 1,017 |
| Cerezyme® | 120 |  | 94 |  | 163 |  | 377 |  | 126 |  | 94 |  | 147 |  | 367 |
| Myozyme/Lumizyme® | 181 |  | 135 |  | 120 |  | 436 |  | 206 |  | 163 |  | 118 |  | 487 |
| Fabrazyme® | 122 |  | 251 |  | 123 |  | 496 |  | 116 |  | 221 |  | 121 |  | 458 |
| Jevtana® | 8 |  | 128 |  | 40 |  | 176 |  | 19 |  | 142 |  | 42 |  | 203 |
| Alprolix® | — |  | 215 |  | 45 |  | 260 |  | — |  | 198 |  | 39 |  | 237 |
| Eloctate® | — |  | 183 |  | 65 |  | 248 |  | — |  | 232 |  | 59 |  | 291 |
General Medicines | 2,003 |  | 1,087 |  | 3,296 |  | 6,386 |  | 2,130 |  | 1,410 |  | 3,767 |  | 7,307 |
Core Assets | 1,011 |  | 762 |  | 1,409 |  | 3,182 |  | 978 |  | 773 |  | 1,454 |  | 3,205 |
of which | Lovenox® | 329 |  | 5 |  | 273 |  | 607 |  | 353 |  | 7 |  | 354 |  | 714 |
| Toujeo® | 221 |  | 118 |  | 241 |  | 580 |  | 211 |  | 128 |  | 202 |  | 541 |
| Plavix® | 48 |  | 4 |  | 424 |  | 476 |  | 52 |  | 5 |  | 451 |  | 508 |
Non-Core Assets | 728 |  | 322 |  | 1,874 |  | 2,924 |  | 858 |  | 624 |  | 2,304 |  | 3,786 |
of which | Lantus® | 191 |  | 180 |  | 429 |  | 800 |  | 223 |  | 425 |  | 623 |  | 1,271 |
| Other non-core assets | 497 |  | 139 |  | 1,274 |  | 1,910 |  | 593 |  | 196 |  | 1,481 |  | 2,270 |
Industrial sales | 264 |  | 3 |  | 13 |  | 280 |  | 294 |  | 13 |  | 9 |  | 316 |
Vaccines | 570 |  | 657 |  | 1,163 |  | 2,390 |  | 321 |  | 678 |  | 1,199 |  | 2,198 |
of which | Polio/Pertussis/ Hib Vaccines | 148 |  | 200 |  | 806 |  | 1,154 |  | 161 |  | 224 |  | 817 |  | 1,202 |
| Influenza Vaccines | 37 |  | 19 |  | 106 |  | 162 |  | 37 |  | 12 |  | 132 |  | 181 |
Consumer Healthcare | 840 |  | 622 |  | 1,258 |  | 2,720 |  | 781 |  | 645 |  | 1,217 |  | 2,643 |
of which | Allergy | 49 |  | 246 |  | 151 |  | 446 |  | 37 |  | 249 |  | 148 |  | 434 |
| Pain Care | 254 |  | 89 |  | 216 |  | 559 |  | 261 |  | 103 |  | 218 |  | 582 |
| Digestive Wellness | 285 |  | 69 |  | 460 |  | 814 |  | 252 |  | 62 |  | 412 |  | 726 |
Total net sales | 5,034 |  | 7,988 |  | 7,165 |  | 20,187 |  | 4,767 |  | 7,562 |  | 7,461 |  | 19,790 |
(a) 2022 figures have been adjusted to take account of the two new operating segments, Biopharma and Consumer Healthcare, effective from January 1, 2023. B.20.1.2. Business operating income Sanofi reports segment results on the basis of “Business operating income”, a non-IFRS financial measure used internally by the chief operating decision maker to measure the performance of each operating segment and to allocate resources. “Business operating income” is derived from Operating income, adjusted as follows: •the amounts reported in the line items Restructuring costs and similar items, Fair value remeasurement of contingent consideration relating to business combinations (IFRS 3) or divestments and Other gains and losses, and litigation are eliminated; •expenses arising from the remeasurement of inventories following a business combination (IFRS 3) are eliminated; •amortization and impairment losses charged against intangible assets (other than software and other rights of an industrial or operational nature) are eliminated; •the share of profits/losses from investments accounted for using the equity method is added for joint ventures and associates with which Sanofi has entered into a strategic partnership agreement; and •net income attributable to non-controlling interests is deducted. Segment results are shown in the table below:
| June 30, 2023 (6 months)
(€ million) | Biopharma | Consumer Healthcare | Other (a) | Total
Net sales | 17,467 |  | 2,720 |  | — |  | 20,187 |
Other revenues | 1,331 |  | 27 |  | — |  | 1,358 |
Cost of sales | (5,388) |  | (949) |  | (5) |  | (6,342) |
Research and development expenses | (3,082) |  | (111) |  | — |  | (3,193) |
Selling and general expenses | (4,248) |  | (936) |  | 2 |  | (5,182) |
Other operating income and expenses | (897) |  | 100 |  | (8) |  | (805) |
Share of profit/(loss) from investments accounted for using the equity method | 48 |  | 7 |  | — |  | 55 |
Net income attributable to non-controlling interests | (11) |  | (8) |  | — |  | (19) |
Business operating income | 5,220 |  | 850 |  | (11) |  | 6,059 |
(a) The “Other” column reconciles segmental results to the total per the consolidated financial statements. .
| June 30, 2022 (6 months) (a)
(€ million) | Biopharma | Consumer Healthcare | Other (b) | Total
Net sales | 17,147 |  | 2,643 |  | — |  | 19,790 |
Other revenues | 975 |  | 30 |  | — |  | 1,005 |
Cost of sales | (5,211) |  | (925) |  | 9 |  | (6,127) |
Research and development expenses | (3,062) |  | (90) |  | 5 |  | (3,147) |
Selling and general expenses | (4,081) |  | (881) |  | 9 |  | (4,953) |
Other operating income and expenses | (884) |  | 114 |  | (18) |  | (788) |
Share of profit/(loss) from investments accounted for using the equity method | 47 |  | 8 |  | — |  | 55 |
Net income attributable to non-controlling interests | (8) |  | (9) |  | — |  | (17) |
Business operating income | 4,923 |  | 890 |  | 5 |  | 5,818 |
(a) 2022 figures have been adjusted to take account of the two new operating segments, Biopharma and Consumer Healthcare, effective from January 1, 2023. (b) The “Other” column reconciles segmental results to the total per the consolidated financial statements.
| December 31, 2022 (12 months) (a)
(€ million) | Biopharma | Consumer Healthcare | Other (b) | Total
Net sales | 37,812 |  | 5,185 |  | — |  | 42,997 |
Other revenues | 2,330 |  | 62 |  | — |  | 2,392 |
Cost of sales | (11,793) |  | (1,903) |  | 4 |  | (13,692) |
Research and development expenses | (6,503) |  | (205) |  | 2 |  | (6,706) |
Selling and general expenses | (8,736) |  | (1,761) |  | 5 |  | (10,492) |
Other operating income and expenses | (1,679) |  | 148 |  | 17 |  | (1,514) |
Share of profit/(loss) from investments accounted for using the equity method | 76 |  | 12 |  | — |  | 88 |
Net income attributable to non-controlling interests | (17) |  | (16) |  | — |  | (33) |
Business operating income | 11,490 |  | 1,522 |  | 28 |  | 13,040 |
(a) 2022 figures have been adjusted to take account of the two new operating segments, Biopharma and Consumer Healthcare, effective from January 1, 2023. (b) The “Other” column reconciles segmental results to the total per the consolidated financial statements. The table below, presented in compliance with IFRS 8, shows a reconciliation between “Business operating income” and Income before tax and investments accounted for using the equity method:
(€ million) | June 30, 2023 (6 months) | June 30, 2022 (6 months) | December 31, 2022 (12 months)
Business operating income | 6,059 |  | 5,818 |  | 13,040 |
Share of profit/(loss) from investments accounted for using the equity method | (55) |  | (55) |  | (88) |
Net income attributable to non-controlling interests | 19 |  | 17 |  | 33 |
Amortization and impairment of intangible assets (a) | (1,050) |  | (997) |  | (1,599) |
Fair value remeasurement of contingent consideration | (26) |  | (17) |  | 27 |
Expense arising from the impact of acquisitions on inventories (b) | (5) |  | (3) |  | (3) |
Restructuring costs and similar items | (547) |  | (792) |  | (1,336) |
Other gains and losses, and litigation | (73) |  | (142) |  | (370) |
Income from out-licensing (c) | — |  | — |  | 952 |
Operating income | 4,322 |  | 3,829 |  | 10,656 |
Financial expenses | (370) |  | (189) |  | (440) |
Financial income | 286 |  | 34 |  | 206 |
Income before tax and investments accounted for using the equity method | 4,238 |  | 3,674 |  | 10,422 |
(a)For the year ended December 31, 2022, this line includes a reversal of €2,154 million on Eloctate® franchise products following the FDA approval of ALTUVIIIO TM on February 22, 2023, partly offset by an impairment of €1,586 million relating to SAR444245 (non-alpha interleukin-2). (b)This line records the impact of the workdown of acquired inventories remeasured at fair value at the acquisition date. (c)For the year ended December 31, 2022, this line includes an upfront payment of $900 million and a regulatory milestone payment of $100 million related to the out-licensing of Libtayo® following the restructuring of the Immuno-Oncology Collaboration and License Agreement with Regeneron (see Note C.1. to the consolidated financial statements for the year ended December 31, 2022).
B.20.2. OTHER SEGMENT INFORMATION
The tables below show the split by operating segment of (i) the carrying amount of investments accounted for using the equity method for which Sanofi has entered into a strategic partnership agreement, (ii) acquisitions of property, plant and equipment, and (iii) acquisitions of intangible assets. Investments accounted for using the equity method in the Biopharma segment mainly comprise MSP Vaccine Company and Infraserv GmbH & Co. Höchst KG (see Note B.5.). Acquisitions of intangible assets and property, plant and equipment correspond to acquisitions paid for during the period.
| June 30, 2023 (6 months)
(€ million) | Biopharma | Consumer Healthcare | Total
Investments accounted for using the equity method | 231 |  | 10 |  | 241 |
Acquisitions of property, plant and equipment | 751 |  | 31 |  | 782 |
Acquisitions of other intangible assets | 132 |  | 16 |  | 148 |
| June 30, 2022 (6 months) (a)
(€ million) | Biopharma | Consumer Healthcare | Total
Investments accounted for using the equity method | 253 |  | 42 |  | 295 |
Acquisitions of property, plant and equipment | 664 |  | 29 |  | 693 |
Acquisitions of other intangible assets | 274 |  | 7 |  | 281 |
(a) 2022 figures have been adjusted to take account of the two new operating segments, Biopharma and Consumer Healthcare, effective from January 1, 2023.
| December 31, 2022 (12 months) (a)
(€ million) | Biopharma | Consumer Healthcare | Total
Investments accounted for using the equity method | 248 |  | 37 |  | 285 |
Acquisitions of property, plant and equipment | 1,529 |  | 77 |  | 1,606 |
Acquisitions of other intangible assets | 574 |  | 21 |  | 595 |
(a) 2022 figures have been adjusted to take account of the two new operating segments, Biopharma and Consumer Healthcare, effective from January 1, 2023.
B.20.3. INFORMATION BY GEOGRAPHICAL REGION
The geographical information on net sales provided below is based on the geographical location of the customer. In accordance with IFRS 8, the non-current assets reported below exclude financial instruments, deferred tax assets, pre-funded pension obligations, and right-of-use assets as determined under IFRS 16.
| June 30, 2023 (6 months)
(€ million) | Total | Europe | of which France | North America | of which United States | Other countries
Net sales | 20,187 |  | 5,034 |  | 1,174 |  | 8,264 |  | 7,988 |  | 6,889 |
Non-current assets: |  |  |  |  |  |
•property, plant and equipment | 9,804 |  | 5,462 |  | 2,921 |  | 3,268 |  | 2,364 |  | 1,074 |
•goodwill | 49,243 |  | — |  | — |  | — |  | — |  | — |
•other intangible assets | 24,590 |  | 5,961 |  | — |  | 17,598 |  | — |  | 1,031 |
| June 30, 2022 (6 months)
(€ million) | Total | Europe | of which France | North America | of which United States | Other countries
Net sales | 19,790 |  | 4,767 |  | 1,105 |  | 7,875 |  | 7,562 |  | 7,148 |
Non-current assets: |  |  |  |  |  |
•property, plant and equipment | 9,767 |  | 5,391 |  | 2,935 |  | 3,246 |  | 2,414 |  | 1,130 |
•goodwill | 50,555 |  | — |  | — |  | — |  | — |  | — |
•other intangible assets | 21,978 |  | 6,467 |  | — |  | 14,505 |  | — |  | 1,006 |
| December 31, 2022 (12 months)
(€ million) | Total | Europe | of which France | North America | of which United States | Other countries
Net sales | 42,997 |  | 9,999 |  | 2,296 |  | 18,984 |  | 18,275 |  | 14,014 |
Non-current assets: |  |  |  |  |  |
•property, plant and equipment | 9,869 |  | 5,365 |  | 2,875 |  | 3,284 |  | 2,457 |  | 1,220 |
•goodwill | 49,892 |  | — |  | — |  | — |  | — |  | — |
•other intangible assets | 21,640 |  | 6,257 |  | — |  | 14,178 |  | — |  | 1,205 |
As stated in Note D.5. to the consolidated financial statements for the year ended December 31, 2022, goodwill is not allocated by geographical region.
B.20.4. PRINCIPAL CUSTOMERS AND CREDIT RISK
Sales generated by Sanofi with its biggest customers, in particular certain wholesalers in the United States, represented 27% of net sales in the first half of 2023. Sanofi’s three largest customers respectively accounted for approximately 11%, 9% and 7% of consolidated net sales in the first half of 2023, mostly in the Biopharma segment (versus approximately 12%, 8% and 7% in the first half of 2022).

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