Sanofi fell by €20 billion after publishing financial statements and plans for the future
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The French pharmaceutical company Sanofi published results third quarter and outlined the next steps to implement the “Game to Win” strategy. Investors reacted to the reports, not to the plans. The company’s shares fell 15.5%, to their lowest level in more than eight months. As a result, he reports Reutersthe company’s market capitalization decreased by €20 billion.
As follows from reportingSanofi’s third-quarter net sales fell 4.1% year-on-year to €11.96 billion, net profit rose 21.6% to €2.53 billion, free cash flow fell 31.2%, to €1.9 billion, operating profit decreased by 10.4% to €4.02 billion.
As part of the “Play to Win” strategy announced in 2019, which, according to the company’s vision, should provide it with growth, development of innovation and increased efficiency, it is planned to spin off the over-the-counter drug division into a separate structure in 2024. This will allow Sanofi to concentrate on its key production of prescription drugs, increasing investment in it and reducing costs. Sanofi is considering various options for spinning off its OTC division, with it likely to become a public company headquartered in France. This division brought in more than $4 billion in revenue to Sanofi last year and employs about 11,000 people. The separation of the companies could occur as early as the fourth quarter of 2024.
As part of the reporting, Sanofi also confirmed previously made forecasts that by the end of 2023, earnings per share growth will be expressed in the “single-digit range from 4 to 6” percent. In 2024, this figure is expected to “remain stable relative to 2023 levels.” However, commenting on preliminary forecasts for 2025, Sanofi said that it no longer aims to achieve an operating profit margin of 32%, but will simply “strive for long-term profitability.”
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