Sanofi (SAN) Earnings Call Transcript & Summary

Ladies and gentlemen, good afternoon. I hereby call to order the general meeting of our company, a meeting that I have the honor of chairing for the last time because my term of office as director is expiring at the end of this meeting. I would like to thank all the shareholders who have voted by mail before the meeting and all those who are currently following the live stream of that same meeting. The recording will remain available on the Internet after broadcast. I have with me Paul Hudson, Chief Executive Officer; Jean-Baptiste de Chatillon, Chief Financial Officer; and Philippe Peyre, COO. Are also present and they will speak later from the lectern, Patrick Kron, Chairman of the Compensation Committee; Audrey Derveloy, Chair of Sanofi France; and Sandrine Bouttier-Stref, Head of CSR. We are now going to appoint the bureau. I suggest that we name Philippe Peyre as secretary of the meeting. I asked the company, L'Oreal, represented by [ Mr. Alexandre Mene ] and the company, Amundi Asset Management, represented by [ Ms. Azola Gal ], the 2 shareholders with the highest number of votes to please serve as tellers, a function that they have accepted. The statutory auditors are also attending this meeting. Ms. Anne-Claire Ferrié of the firm PricewaterhouseCoopers is representing the college of auditors, and she will present their reports. Mr. Alexis Hurtrel with her is representing the firm Ernst & Young. [ Mr. Eric Mile ], bailiff at court, is attending the meeting. This meeting is filmed and broadcast live on the company website. The recording will remain accessible on the web after broadcast. I will now give the floor to Mr. Philippe Peyre, our secretary.

Ladies and gentlemen, good afternoon. The shareholders have signed the attendance sheet at the entrance, both in their own name or as proxies. Based on this attendance list, the shareholders present or represented bring together over 1/4 of shares with voting rights. Together, they own 936,565,703 shares or 74.94% of shares with voting rights. Consequently, and although the quorum is not yet final, it already transpires from the attendance list that the assembly -- that the meeting can validly decide. On the desk, we have the Articles of Association of the company, a copy of the convening letter sent to nominative shareholders, copies and receipt warrants of the registered letters sent to the statutory auditors, a copy of [indiscernible] dated 7th April 2023 with the notice of the meeting, a copy of [indiscernible] and the [indiscernible] dated of the 5th of May 2023 with the convening notice, the Statutory Auditors' Report, the attendance list of the meeting, proxies for representing the shareholders as well as all the documents prescribed by law that were made available to shareholders at the head office, within the prescribed deadlines and sent to those who requested them. The agenda is on Pages 8 and 9 of the convening brochure. Detailed explanations on the resolutions are to be found in the Board of Directors' report accessible on the website and on Pages 10 and following of the convening brochure. No draft resolutions or extra items at the agenda were filed by share -- and tabled by shareholders. And finally, you've received either from [ Optavia ] or from your financial intermediary or the legally required documents related to this meeting.

Thank you, Philippe. Ladies and gentlemen, dear shareholders, I am happy to be with you for our general meeting, which is going to be an opportunity to present not only the accounts of Sanofi for 2022 but also the various achievement of this company. In a context marked by the utmost instability, both geopolitical but also economic and social in many parts of the world, Sanofi made significant progress in 2022 despite the return of inflation, supply difficulties, reduced activity in some countries and measures adopted to reduce health care costs incurred by states or local authorities. Several reasons explained that in spite of this subjectively deteriorated environment, Sanofi was able to achieve particularly robust performance. With sales exceeding for the very first time, EUR 40 billion, EUR 43 billion to be very precise and income per share growing by 17% at constant foreign exchange. Financial performance was there. The figures that will be presented more in detail later do not express the full extent of the work done and the progress achieved in various areas, chief amongst which significance progress in our research and development portfolio. First of all, the growth of Dupixent in its first indications, atopic dermatitis, asthma and nasal polyposis was remarkable. And it will be strengthened in the future by the demonstration of its efficacy in various other pathologies. More recently, we were able to announce that Dupixent was effective against chronic obstructive pulmonary disease, a disease for which there was so far no effective treatment. In 2022, it is noteworthy that 2 products went through the last few milestones to allow for a launch in 2023: ALTUVIIIO, a particularly innovative product in hematology coming from the acquisition of Bioverativ in 2018; and Beyfortus, a vaccine effective against lower respiratory tract disease in infants. You know that this disease reached epidemic levels last autumn. New steps were cleared in 2023. The further details of which will be given during the presentation to show that our research and development organization has achieved significant progress. And we can now consider accelerating the innovation produced by Sanofi. This results, moreover, into a major increase in our R&D expenditures, which grew by over EUR 1 billion in 2022. In other fields, the various programs aiming to strengthen the effectiveness of our organizations are at work, especially through the homogenization of industrial processes. 2022 was also the year of the IPO of EUROAPI, helping this company leverage resources for its development that it could not have been able to find in our group. Digitalization is well underway, especially in R&D, where data and artificial intelligence will allow for better relevance, especially with shortened clinical trials, faster marketing with tools that will help optimize the use of resources. This work is led jointly by our internal teams and the creation of enhanced competency centers like, for instance, the digital accelerator, a stone's throw from here. Also, through the recruitment of more skilled employees but also through partnerships with specialized start-ups, both in France and in the U.S. In 2022, all of the group's activities made a significant contribution to our efficiency. Specialty Care, of course, and more specifically, products related to immunology, the strong growth of Dupixent will significantly cushion the loss of patent on Aubagio in 2023. Aubagio is a product that's effective against multiple sclerosis on which we are still looking for innovative solutions. General Medicines, which is going from a universal model to a model focusing on the most significant products in countries and the streamlining of the product portfolio. But we can also show innovation there as evidenced by the recent acquisition of Provention Bio with a product against Type 1 diabetes. Vaccines, prevention growing by over 6% accelerated their development phase with especially the launch of Beyfortus and their R&D potential, especially with the messenger RNA platform where 450 people are working in France and in the U.S. The Consumer Healthcare business is growing by 8.6%, now exceeding EUR 5 billion. And it's come back to a growth level that actively contributes to the group's development. Sanofi's business is not limited to its natural borders. Sanofi is a lively player in strengthening the health care ecosystem, both in France with its active involvement in the oncology bio cluster with ST2 Gustave Roussy and Paris-Saclay or via the action of Foundation S and the group's action to develop access in southern countries contribute to the eradication of some diseases and providing 30 more compounds at cost price in Africa. This year, Sanofi is celebrating its 50th anniversary. In 1973, Pierre Guillaumat, who is then the Head of Elf Aquitaine, trusted René Sautier and Jean-Francois Dehecq with the task of determining a sector that will allow Elf Aquitain to maintain business in France at the moment of the depletion of the Lacq gas field. Together, they chose pharmaceuticals, which at the time was a very fragmented field. And I don't think that then they could have imagined that they, Sanofi, as it was called back then, could become one of the biggest global pharmaceutical companies. After this general meeting, I will no longer serve as Chairman of the Board of Directors, and I will pass on the torch to Frédéric Oudéa, if you approve his nomination and if, of course, the Board confirms its choice. I would like to testify about the reality of what experienced during the 13 years during which I had the honor and pleasure of working there because being Chairman of the Board is not just being the figurehead embodying the Board. Judging, rewarding or sanctioning, looking at what it can -- what it is shown. Actually the role of the Board is, first of all, to shoulder an essential responsibility, the choice of a manager. It is also codrafting strategy, deciding on the biggest acquisitions, caring about the long term and more generally doing its utmost to help the company grow and become stronger. And I would like to express my deepest gratitude to all the Board members who, throughout the years, worked tirelessly and were very actively involved in the evolution of Sanofi. I'll come back to it in a minute. I would also like to point out the role of Philippe Peyre, our Secretary, after 24 years in the group, he is going to retire. He was a very precious companion for me in my role as Chairman. In 2010, when I joined the company, the group had been through a major setback with the withdrawal of Rimonabant 2 years before, which was going to be one of the blockbusters driving its growth, and it was withdrawn from the market. After the time of acquisitions, over 300 of them, the biggest of them being Synthélabo and Aventis, which was the outcome of a merger between Rhone-Poulenc and Hoechst. Then came the time of harmonization. Sizing in of itself is not an asset, if it's just an addition of scattered entities without any ability to improve the efficiency of the whole. The efficiency of research and development is not proportionate either to the size of the group. It's very often the opposite. The beginning of the years 2010 lost us EUR 4 billion in sales in -- or just 3 years, nearly 15% of sales with the expiry of a few patents on some of our flagship products like Eloxatin, Plavix and above all, Lantus, an insulin that had a dominant market share in the care of diabetes. Back then, unfortunately, the pipeline was empty. There were 450 projects, research projects in 2010, and almost none of them culminated in a market launch. Gradually, after choices, not all of which were paid off, it was a difficult journey. And the number of research projects after having been an overabundance, they were focused under the impetus of our then research department. And then major acquisitions were made, Genzyme in 2011 in rare diseases; Bioverativ in 2016, bringing us into hematology and more recently, a large number of technological platforms, including Ablynx in 2018; and 14 acquisitions since Paul Hudson joined us, providing our researches with the necessary innovative tools to make Board bets. What's more, the partnership with Regeneron was revitalized. It was a long-standing partner for our group. It led to several products, the biggest of which is our Dupixent. The alliance of biology and technology opened an unheard of realm of possibilities for medical research. And now almost every month, there are major breakthroughs. In our group, the percentage of biological products in development went from 20% only in 2010 that was mostly vaccines, to 70% in 2022. Biotechnology, the advent of cell therapy and gene therapy is opening new spaces even though for the latter, there is still much to be done to prove their efficacy over the long term and to reduce production costs to make them more affordable. This issue is shared by the whole industry. And Sanofi, which was lagging behind, is now ranked amongst the most innovative laboratories again. In 10 years, Sanofi went from the 8th rank to the first rank in terms of success rate when it comes to development of new compounds. A relocation work in terms of therapeutic fields towards first-in-class or best-in-class products was accelerated over the last few years. Sanofi exited R&D in infectious diabetes and cardiovascular fields in order to focus on immuno-inflammation, rare diseases, hematology, vaccines and some areas of oncology. Now the percentage of research around products that have good chances of being first-in-class or best-in-class is now 90%. The increased acquisition price of compounds at an advanced stage led us to acquire compounds at an earlier stage and to develop technological platforms. Many acquisitions have been made since 2019 in this area. Synthorx, Principia, Chimera, to name but a few. The effect on the upstream pipeline is now beginning to be felt. What's more, Sanofi, I'd like to dwell on this. Sanofi is a French, a European and a global company. And this is a peculiarity in the pharmaceutical business. It is French because with only 4% of its sales in France, it employs 20% of its headcount, 40% its industrial footprint and 35% of its research in this country. To add other figures, we export EUR 19 billion worth from France. It is also European through its value, especially through its history. One of the striking characteristic features when you join Sanofi is the engagement of the men and women working there. How much do they care about their job, whether they are researchers, plant operators, development specialists, people in regulatory marketing, pharmacovigilance and now digital. It is also about the utmost professional quality of the men and women who have great experience and talent. When you work at Sanofi, you don't need to ask any questions about our purpose. It is obvious as soon as you join, to improve the health of human beings. Everybody's sensitivity to the importance of their mission to its essential character is experienced on a daily basis. We're also European because our vision did not stop at the boundaries of our P&L because we have a history in France, Germany, Italy, in the U.S., in Russia, China and Africa. And because all of these small stories that very often started before the creation of Sanofi have become our history, our know-how. Sometimes different but pulled together, they forge a common ambition at the service of patients. We're also European because we are trying to understand the world without trying to project a single vision on it. And we're also European so we are trying to take into account the needs of health care systems responsibly without constantly trying to maximize our own profit all the time. We're also global and this, in 2 ways. First, geographically because our biggest market is the U.S. Our second biggest market is China. These 2 markets are nothing alike. Each has specific challenges, innovation for one, access to care for the other. It would be too long to give you a detailed list of the specificities of each of these countries, but the solution is the same, innovate for better care and for the largest number possible. We're also global for another reason. We wanted to stay a diversified group, bringing together activities all focusing on human health but with different characteristics. This diversity helped invest more and more in research to finance our CapEx and our external growth, whilst having an extremely robust balance sheet. This gives the group robustness that not all pharmaceutical companies have. I would also add that after the fall of Aubagio's patent this year, we won't have any other patent expiries before 2031, unlike many competitors. Over the last 13 years, dissociated governance was put in place for the long term. This form of governance turned out to be perfectly suited to the group's challenges. The way the Board works has become more collegial with real contribution from every member. The makeup of the Board changed to find the skills adapted to the group's challenges, especially pharmaceutical and scientific skills but also good understanding of large geographical entities like the U.S. of A, China. And we've also developed our skills in terms of corporate social responsibility. Committees have also changed to adapt to challenges with the creation of the Scientific Committee in 2018, and then we added CSR to the Appointments and Governance Committee in 2019. And finally, and I think that this is of interest for all shareholders. The share price went from EUR 45 in May 2010 to over EUR 100 today or an increase of 120%. The share price was also bolstered by steady dividend growth, which went from EUR 2.5 in 2010 to EUR 3.56 in 2021 -- in 2022, if you approve this decision later or an increase of 42%. We still have major challenges ahead of us, carrying on with our efforts in R&D, our [indiscernible] to bring more innovative treatments to market and bolster our growth. Although noteworthy progress was achieved, we still have much to do, keep on improving the efficiency of our organizations. The digital challenge, which was ignored for a long time in this industry, has become key. The use of data and artificial intelligence in research and development in industry and marketing are fundamental for our future. And then continue to serve as partner for health care systems, not just as a supplier, but to help face the challenges met by all, the longer life expectancy and associated diseases, the effects of crisis and pandemic risk and naturally the impact of climate change on global health. So we'll probably need to change the remuneration of our products based on their efficacy, their measured efficacy. A research company, an industrial company, a commercial company, but also a company serving the common interest. Sanofi is a key player in the global economic and social landscape. Here and now I would like to thank every single employee who contributed to making this company what it is under the dynamic leadership of Paul Hudson, who breathed in a spirit of renewal into this group being able to prioritize issues and mobilizing energies. And finally, I would like to express how happy I am that Frédéric Oudéa is going to succeed me. He's going to be the fourth Chairman of Sanofi. He has a sense of values, a real appetite for work, real courage and essential determination to shoulder this responsibility. A company like ours cannot be middling, neither in its products nor in its behaviors. It needs to see far ahead to be able sometimes to be detached from the market short-term vision so that like every leader, it can carve its own path in full independence. Ratios do not write adventures, create passions or lead to success. Processes do not replace intelligence by building without any -- without ever lowering our standards, by building trust and pride on a daily basis, looking at difficulties in the face but also by celebrating and sharing successes that Sanofi is going to accelerate. I'm convinced of it, accelerated successes for the next 50 years. To wrap up, I would like to warmheartedly thank all the men and women of the group, all the Sanofians for their commitment, their achievements and their talents and also you, dear shareholders, for your unwavering support for our group. I will now continue with a presentation of the changes in governance over the year 2022. First of all, we are going to move to a presentation of the Board -- if what is happening? Yes, absolutely. So here on this slide, you have all of our Board, 16 members plus Frédéric Oudéa, who was appointed as External Director last year, to ensure an orderly transition so that Frédéric could learn a number of things and understand so that there would be no break in the continuity between one term of office and the other. The Board is not going to change much this year. If you agree to appoint Frédéric Oudéa as director of the company. There will only be one change in directors in 2023. And as I mentioned, Frédéric Oudéa will become Nonexecutive Chairman of the Board of Directors. And at this stage, I would like to give him the floor.

Ladies and gentlemen, dear shareholders, Mr. Chairman, good afternoon. It is a very big -- a great honor to offer my application to become a Director of the Sanofi Group. And if you give me your trust to request the Board's trust to succeed Serge Weinberg as Chairman. Before I say a few words about my professional background and my motivations, allow me to pay tribute to Serge Weinberg, our Chairman for the exceptional work accomplished over his 13 years chairmanship and his contribution to the development of Sanofi as one of the champions of the European and global in the pharmaceutical industry. I'm happy for him that he was able to reap the fruit of his commitment as a sort of final fireworks at the end of his term of office with some spectacular successes of recently announced drugs, a high level of market capitalization for Sanofi and the celebration of the 50-year anniversary of the company's creation. I would also like to warmly thank him personally for his trust and his help in preparing me as best he could through his succession and to express how much I look up to him. Now let's discuss my professional background. I'm nearly 60, and it's true that very early, had a contact with medical research because when I was small, I went to the research lab led by my father, a gastroenterologist; and my mother, a pharmacist. Beyond this anecdotal fact, I started my career in civil service, and I worked on the French health care system as a technical adviser to the budget minister. And then I spent 28 years at Societe Generale, of which 15 as Chairman and CEO. My last term of office ended last Tuesday. Now I would like to share with you how enthusiastic I am and how motivated I am in opening a new page in my career at the service of Sanofi in such a strategic sector. I think that there are several similarities between the pharmaceutical industry and the banking world. In particular, to name but a few, very strong impact on our lives and on societies. And consequently, a high ethical demand and a demand for social and environmental responsibility, sovereignty issues heightened by the fragmentation of today's world and considerable transformations expected because of the advent of digital technology, the use of data and of artificial intelligence. With great humility, I think that with my experience in these areas, I can contribute to the Board. What's more, I have strong experience in dissociated governance. I went through the dissociation of the functions of Chairman and CEO imposed by banking regulations in 2015. And so I'm used to saying that I'm a miracle. And I was cut in half, and I survived. But I'm also a reference shareholder for Capgemini and a shareholder for Societe Generale's sustainable mobility affiliate called ELD. And so I think that with Paul Hudson, our CEO, I can create a very harmonious and effective team leveraging our complementary experiences. Rest assured, if you give me your confidence and trust, that I will be fully committed to taking on this function as Chairman of the Board, constantly working in the best interest of all the stakeholders for this company, especially you, dear shareholders, of course, whilst preserving the highest standards in terms of governance. Thank you for your attention.

Thank you, Frédéric. Our Board is led by independent shareholders. Out of 16 directors, we have 11 independent directors. We have 43% women. We have a strong international representation, 7 directors out of 16, 44%. And we have 2 directors representing employees. We also strived to maintain a high level of key skills necessary for Sanofi in the scientific or financial fields but also in terms of management of large organizations. And we constantly think about what is necessary to add to the team that is this Board of Directors. Here, I would like to point out the high quality of our teamwork. Our Board regularly meets more and more or is working more and more. In 2022, there were 14 Board meetings or 2 more than in 2021. We looked, of course, at all strategic aspects, the progress in the Play to Win strategy, the succession plan for the Chairman, the exceptional situations like that's generated by the war in Ukraine, many reviews and monitoring of acquisition projects, digital CSR, the IPO of EUROAPI that I was talking about earlier. The attendance rate is high because we're at 97.25% of attendance for all committees. Regarding the committees, I'm not going to explain everything that is happening there. But I would like to point out that the Audit Committee met one more time than in 2021. It works on many programs, cared specifically about risk. There are more and more diverse risks, especially cyber risk, but also risk related to the effectiveness of information systems, but also precise monitoring of internal risk control and management with the audit department. The Compensation Committee, chaired by Patrick Kron, who will, in a minute, share with you the compensation policy; the Appointment & Nomination Committee, chaired by Gilles Schnepp, which has had 6 meetings, one more than last year than in 2021. It has worked a lot both on my succession the evaluation of the Board and CSR because the 4 pillars of CSR are examined during a meeting of the Nomination Committee. The Strategic Committee, which I chaired, has had a constant activity rate looking notably at a number of possible acquisitions or strategic evolutions with also we have taken stock of [indiscernible] acquisition to make sure that our anticipations have been indeed met. Finally, Scientific Committee, which has become much more active because in 2021, it had 3 meetings, but 6 in 2022 with in-depth examinations of a number of areas, notably in the area of therapeutic entities. And finally, 2 strategic seminars took place, a usual rhythm for our Board. All this done in close collaboration with Paul Hudson and with the executive team, the Executive Committee team, which meets with the Board on a regular basis. Regarding the share performance. You know that we always look at that. Here, you see the share performance since January 3, 2022, you see the significant progression of Sanofi much more, in fact, than all of the other peers, pharma in the U.S., [indiscernible] pharma in Europe with an increase of 11.3% for Sanofi. Regarding our main peers. Since beginning of last year, we are slightly above the average in the median. And I think that progressively, based on what we have said, i.e., the readouts for our new products, this evolution should continue. So we are, therefore, proposing to this general meeting to pay a dividend of EUR 3.56 more than last year. But this increase is permanent. As you know, we have had a regular increase in the dividend for more than 20 years. This year, the payout rate in relation to the income has gone down so that we can continue developing our ability to invest and acquire possible companies. Finally, our share ownership. It does not evolved a lot. Nevertheless, we note a small increase of U.S. and British companies and a slight reduction in French companies. We note an increase in the number of shares detained by our own employees. In that regard, I would like to underline an important point. Since 2015, we have a regular employee share ownership policy that has allowed Sanofi employees to go from 1.28% to more than 2% today, which represents 2.5 billion. I have to say that I'm really glad to see that the increase in the share price also benefit all of the employees, whereas this was not the case more than 10 years ago. So much for what I wanted to tell you before I give the floor to Patrick Kron, the President of our Compensation Policy, was going to tell us about the corporate officers.

Mr. Chairman, ladies and gentlemen, dear shareholders, good afternoon. As [indiscernible], I'd like to report on the activity of the Compensation Committee. More specifically, I would like to deal with the aspects related to the compensation of directors and corporate officers. Those elements are detailed in corporate government of our registration document. It is also included in the draft resolutions between 5 and 11. The Slide 18 you have in front of you shows that the fees paid in '22 have taken up all of the envelope of EUR 2 million, given the increase in the number of meetings for the Board and the different committees and the physical presence of foreign directors. It is proposed today, and this is a resolution to increase the amount by EUR 2.5 million of the envelope for director compensation, given that the compensation system, be it for the fixed and variable compensation related to actual participation will not be changed and remains unchanged. In the following slides, you see the compensation policy for the Chairman of the Board of Directors, which includes an annual fixed compensation of EUR 800,000, same level for 2023 until the end of the mandate of Mr. Weinberg. We also proposed to fix that to EUR 80,000, the future remuneration as of May 26. This remuneration of the Chairman is not subject to annual review. It is being reviewed after a number of years. In Slide 21 and 22 -- the next slide, sorry. Slide 22, you see the different elements in the compensation of the CEO, where you have a fixed compensation, an annual variable compensation and an equity-based compensation based on performance shares, the acquisition of which is based on presence and performance conditions over a period. We would like to recall also the provisions applicable after the mandate. A termination benefit in the event of forced departure. There's also a supplementary defined contribution pension plan subject to the fulfillment of performance conditions. Finally, the possibility given to the company to provide for a noncompete undertaking if the CEO leaves. So we would like to adjust the compensation policy. First, we're going to publish in a more detailed manner the different elements of the variable compensation, how is it that we calculate the bonus. That's the request by several shareholders. Of course, there's an absolute limitation, which is the secret of business. We don't want to publish some objectives that could give us new information about the objectives of the company that could be detrimental to the company. Secondly, we would like to integrate a criteria related to CSR in the conditions related to performance shares. Until now, the attribution of those shares was related to financial criteria. We would like to add to those financial criteria, a number of CSR criteria regarding access to drugs and impact on the climate. Those criteria, of course, will be perfectly quantified. In keeping with the U.S. legislation, we will consider a clawback policy in case of accounted -- accounting irregularity. And the Board of Directors will look at that, and I'm sure that this will never be used. Next slide, Slide 24. You have here the compensation elements for Mr. Hudson in 2022. Fixed compensation, EUR 1.4 million, a variable compensation of about EUR 2,350,000 according to our calculation I will detail in a moment. Performance shares allocated in 2022, whose calculation was made on the basis of a 3-year period in 2020 on the basis of a 3-year period, which gives an allocation rate of 87% of the initial envelope given the partial reuse of performance conditions corresponding to the value indicated in this slide. Finally, the supplementary pension plan related to performance conditions and finally, benefits in kind. Regarding the variable compensation in 2022. It was calculated in a very fine manner according to the criteria indicated here, i.e., half of which are financial objectives related to growth in sales, the free cash flow, BOE margin but also a number of elements related to the marketing of new assets and also what we call individual objectives for an important part quantified according to the 4 directions indicated on this slide. The accomplishment, the attainment rate was 111.3%, which gives, if we explain -- apply this to the target bonus of 150% of the variable compensation, that is a compensation that gives you the figure you see for variable compensation. In the next slide, you have the different compensation element of Mr. Hudson for 2023. The Board of Directors have decided to maintain at EUR 1.4 million his fixed remuneration adjustment in 2022 to keep the same variable compensation structure. Half of which will be financial objectives, which you see here behind me and half of which will be specific individual objectives. Once again, an important number is quantified. The Board of Directors would like to allocate in 2023, 82,500 performance shares totally submitted to internal performance criteria and internal criteria comparison with a panel of comparable companies. Ladies and gentlemen, dear shareholders, those are the elements I wanted to present to give you information about Resolutions 5 to 11. I'd like to thank you.

Thank you very much, Patrick. Before I give the floor to Paul Hudson, who is going to tell you about the implementation of our strategy, our activities and R&D, before that, we would like to show you a video that tells you about Sanofi since 1973. [Presentation]

Good afternoon, everyone. I am delighted to meet with you today here at Palais des Congrès, and I look forward to exchanging with you and take your questions. We're less than a kilometer away from La Maison Sanofi, which is the new headquarters of this company. The house is a symbol of the Sanofi want to become, that is a modern, inclusive Sanofi open to the world. A Sanofi whose heart beats in France but which radiates around the world and a Sanofi which will be reinventing itself over the next 50 years as well. Company has a significant track record of the past 50 years. It has mostly a beautiful future. And I believe that the year 2023 will be a turning point in our strategy. Last year, we successfully completed stage 1 of our Play to Win strategy. As you will be able to see in my presentation, we've made significant progress. The momentum of our pipeline is excellent beyond our expectations. All the drugs and vaccines that we are developing for the future may well turn around the practice of medicine. This year, we'll be launching 2 products in hemophilia and bronchiolitis. These products will make a major difference for patients and public health. We also want to make a positive difference for society as a whole. We are stepping up our partnership with the Paris 2024 Olympic Games, which will enable a large number of Sanofi employees to take part in this incredible event. I'm very proud of the work conducted by all the Sanofi teams in France and around the world, and I would like to thank them for all their fine efforts. And if you allow me, I will now continue in English. Thank you very much. I take my French wasn't translated to French by the translators. When we launched our Play to Win strategy 3.5 years ago, we knew we were setting the bar high. Today, I can say I'm incredibly proud of the progress that we've made. We said we would deliver, and we did. In a short period of time and in the midst of a global pandemic, we've been able to achieve in 3 years what has taken many other companies of our size, decades. We have reached 10 consecutive quarters of growth, a first in Sanofi's recent history. The clear goals we set, reinvesting in R&D and growth drivers, building out our pipeline and portfolio has put us ahead of the schedule as we launch Phase 2 of our strategy. With our strong financial performance, our breakthrough scientific achievements and our renewed commitment to society, we are on track to becoming the modern health care company we aspire to be. Looking a bit more closely at our 2022 performance. We ended the year on a high note with outstanding commercial performance, also marking the first year we exceeded EUR 40 billion in sales. For the first time, Specialty Care delivered the highest sales amongst our businesses for the full year fueled by Dupixent and rare diseases. In Vaccines, we maintained our leadership in flu while quickly gaining momentum as the pediatric vaccines company of choice. And the reinvention of our General Medicines and Consumer Health businesses paid off, thanks to our prioritization of key franchises and assets. I like to think of 2022 as an inflection point in our transformation journey, setting us up for a steady-state cadence we envisioned for the new Sanofi. This inflection point is also reflected in the scientific progress we made throughout the year. We want to be scientific leaders, not followers. Our scientific achievements in 2022 proves that our strategy to reinvest in our pipeline and prioritize first and best is working. I'd mention here the 9 publications in the leading medical journals. This underscores our growing scientific credibility. 5 priority assets also received expedited regulatory review, signaling the evolution of our portfolio from [ mid ] to late to those with potential to shift treatment paradigms and transform lives. Now turning to 2023. The next phase of our strategy kicked off with the launch of 2 best-in-class treatments that have the potential to shift the standard of care in hemophilia A and the prevention of RSV in all infants. These 2 assets have been prioritized back in December 2019. And we're very proud to being able to now bring them forward to those who need them. On the clinical data front. We've already had first-of-their-kind positive data for Dupixent in COPD. And in addition to the anticipated Phase III data for tolebrutinib in multiple sclerosis, we have 27 readouts still to come from our early pipeline on mid-stage pipelines. Let me share some additional color on all of these important milestones. ALTUVIIIO, our best-in-class medicine for hemophilia A has been approved and launched in the United States. And our teams are engaging other regulatory agencies across the world. We have already received excellent feedback from physicians and more importantly, from patients. ALTUVIIIO represents another innovation that underscores our mission to help transform the practice of medicine. It is the first treatment that delivers normal to near-normal factor levels. Simply put, prevention of bleeds and significant bleed protection in a once-weekly dose. Now turning to our second best-in-class launch is here, Beyfortus. After 50 years of research, we're incredibly proud to chart a new course in RSV protection. Beyfortus is the only immunization that has shown potential to protect all infants against RSV before they leave the hospital. RSV is the leading cause of hospitalization in all infants. And this winter saw higher rates of RSV-related infant hospitalizations than during the pandemic or the pre-pandemic years. We've recently shared data demonstrating the real-world impact of Beyfortus with 83% reduction in hospitalizations. In other words, we could potentially avoid 8 out of 10 hospitalizations if all newborns received protection against RSV. This perfectly illustrates the importance of our solution for all infants and their families, but also for public health and the sustainability of health care systems. All of our teams are working diligently with regulatory and health authorities to launch Beyfortus in time for the 2023 season, including importantly, here in France. Switching now to our scientific pipeline. We have made significant progress in immunology over the past years, thanks to the success of Dupixent. Now we're charting a new course by building on the knowledge we've gained from Dupixent. We've expanded our pipeline to potentially help millions more patients with other types of inflammatory diseases such as asthma, psoriasis, ulcerative colitis to name but a few. Our scientific strategy is built around a world-class team of experts exploring disruptive mechanisms that have the potential to be best-in-class by breaking efficacy ceilings. With 12 molecules across key inflammatory disease areas, we're laying down the foundation today for our ambition to be the industry leader for the next 25 years. Dupixent is the backbone of our immunology leadership and will continue to be in the coming decade. This medicine continues to deliver with an efficacy and safety profile that is yet to be beat by another biologic in its class. We announced in April the much anticipated results from our first Phase III trial in COPD, achieving clinical outcomes never seen with the biologic or with any other investigational treatment for this disease. Not a very well-known fact, COPD is the third leading cause of death worldwide. And tragically, 1 in 3 people who enter the hospital due to a COPD exacerbation sadly do not come out alive. Our clinical data were presented last week at one of the most prestigious medical congress in the United States and simultaneously published in the New England Journal of Medicine. Beyond Dupixent, we are developing with our partner, Regeneron, a second uniquely targeted therapy with itepekimab. Together, these 2 molecules have the potential to address more than 80% of the COPD patient population, which accounts for approximately 2 million patients in the G7 countries alone. Our late-stage immunology pipeline is also delivering and so start some of our exciting early-stage programs. Two of our promising molecules have the potential to disrupt current standard of care and transform the lives of millions of patients. We have just presented proof-of-mechanism data for an asset in asthma. These data are the first report of a novel biologic targeting both [ TSLP ] and IL-13 pathways. Similarly, we have exciting early stage in an oral TNF inhibitor that could potentially aim at biologic-like efficacy but with the convenience of being oral, a real paradigm shift for patients. We're advancing these molecules in ambitious Phase II clinical programs. These 2 assets perfectly illustrate our ambition to take shots and do scientific things that have never been done before across our industry. Moving from immunology to neurology. We're also building a strong pipeline with diverse clinical programs focused on the next wave of potential disease-modifying treatments for different forms of multiple sclerosis. Tolebrutinib, currently in Phase III trials, targets the enzyme, BTK, which plays a role in immune activities on both sides of the blood brain barrier. Crossing the blood-brain barrier could potentially address disability progression to people living with MS. Two additional first or best-in-class assets with different mechanisms of actions are currently in Phase II. More than 2 million people across the world live with multiple sclerosis. Thanks to Aubagio, we have a global presence and established expertise in the community that provides us with a strong foundation for further discovery and development in this field. Our science is also moving full speed ahead in vaccines, building on our strong legacy. We're advancing quickly to strengthen our leadership by adding mRNA to our broad set of technology platforms. In less than 2 years, we have built and put into motion something unique with an in-house proprietary mRNA center of excellence. 450 talented people co-located across France and the U.S. operate as an agile biotech center within the Sanofi powerhouse. We are investing at full speed across the value chain to develop Sanofi's best-in-class end-to-end mRNA platform. We are well on track with our ambition to move 10 vaccine candidates into the clinic by 2025, 6 of them using mRNA technologies. We've just never reached such a pace in vaccines R&D before. A broader update will soon be presented on the Investor Day -- investor event, where we'll share more data around our progress in RSV and influenza mRNA-based vaccines as well as pneumococcal and meningococcal vaccines. Finally, with the acquisition of ProventionBio, we have recently added another first-in-class potential blockbuster to our diabetes portfolio. TZIELD, already approved in the United States, can bring life-changing benefits to people at risk of developing Stage 3 type 1 diabetes, particularly young people. Because for the first time, we can disrupt the autoimmune attack delaying the need for insulin treatment for almost 3 years. This means kids can focus on being kids, not on their glucose levels. TZIELD will quickly benefit from our deep expertise in diabetes care and built-in prescriber network as well as our ability to scale and resource globally, reaching patients outside of the United States. More broadly, it complements our strategic shift to developing transformative therapies for immune-mediated diseases with high unmet need. In summary, all of the progress we are making on the commercial and scientific sides allow us to look at the long-term future of Sanofi with bold ambitions driving us to the end of the decade. We've set out 2 very clear, ambitious targets for immunology and vaccine businesses. Thanks to our industry-leading pipeline, we aim to be an industry, if not the industry leader in immunology with more than EUR 22 billion in sales by 2030. We also committed to double our vaccine sales by the end of the decade. More broadly, we have set what we think should be the new normal for a science-driven company like us with the ambition to launch 3 to 5 new products with EUR 2 billion to EUR 5 billion peak sales. It's also important to consider that we are in a unique position, certainly compared to our competitors with a portfolio uncompromised by a meaningful loss of exclusivity for the remainder of this decade. As we made progress with our commercial and scientific agendas, we also doubled down on our commitment to society. And I wanted to close this presentation by sharing some of the progress of our social impact strategy. You'll hear shortly from Sandrine, our Global Head of CSR, on some of our climate commitments. As we embed CSR into our business strategy, we're also pressing ahead with some bold moves that make us stand out from our peers. Last year, we created Foundation S, our new philanthropic platform whose ambition is to create healthier futures for generations to come. In addition to the assistance provided to people during times of crises through humanitarian aid and medicine donations, we have identified 3 commitment areas where we intend to make a big difference: reduce childhood cancer; supporting vulnerable communities to adapt to the impacts of climate change; and eliminate sleeping sickness. In parallel, we also made good progress with Sanofi Global Health, our pioneering nonprofit and sustainable social business model. Through our Impact brand, we have set the goal of reaching 2 million people by 2030 in 40 of the poorest countries with the highest unmet medical need. We're also focused on strengthening health care infrastructures with capacity building initiatives, local partnerships and through a dedicated impact investment fund supporting start-ups and innovators who did a scalable, sustainable health care solutions in underserved regions. Earlier this year, we kicked off an initiative aimed at building bridges of trust between underrepresented communities and health care stakeholders. The initiative named, A Million Conversations, comes in response to a global survey we conducted last year that revealed how an alarming number of people from marginalized communities have had challenging experiences and a lack of understanding with health care providers. Such negative experiences creates what we call a trust gap. We'll be deploying a EUR 50 million investment by 2030 to empower people from these communities to speak directly to the health care industry and to grow a pipeline of diverse health care professionals. We have a lot to learn ourselves on this journey, and we hope others will join us in this initiative to help drive sustainable change in health care systems. Last, I would like to mention our pride to be a partner to the upcoming Paris 2024 Games. Before sharing more about our partnership because a picture or at least in this case, a video is worth 1,000 words, let's take a minute to watch our campaign video. [Presentation]

As you saw, the links between sports and science are clear. And as these journey to the games doesn't happen overnight, it takes time, determination and courage. The same applies to the work that goes into turning a scientific discovery into a breakthrough medicine. The games are one of the most significant events on our planet. I think it is a unique opportunity to unify all of our employees globally and in France. Our journey with the games goes along with the culture change we drive to drive it across our organization and our ambition to be a more inclusive company. We have teamed up with a group of inspiring Olympic and Paralympic Igniters, who beyond their athleticism are also creating positive change in our world by speaking up about societal issues. We are organizing our own internal Olympiads to encourage our employees to practice sport and to get involved in volunteering activities. And finally, many Sanofians will also play a direct role in the organization of the games. Our internal call encouraged 11,000 of our people to apply to be Sanofi volunteers to the games. 2,024 of them were selected, making Sanofi the partner that will provide Paris '24 with the largest cohort of volunteers. The commitment of all our Sanofi teams in the partnership with Paris 2024 exemplifies their incredible sense of purpose. I would like to thank all of them because this sense of purpose is also what enabled us to have already come a long way in a short period of time. 2023 will be a pivotal year in solidifying our ambition to be a leading modern health care company. We're committed to that ambition and staying focused on accelerating our purpose in chasing the miracles of science scientifically, digitally, culturally to improve people's lives. And finally, I'd like to take a moment to warmly thank Serge Weinberg, for his leadership, mentorship, companionship and the fact that he's been alongside me without hesitation for the past nearly 4 years. As you've seen in my presentation, you've heard a little bit in his and others, he leaves the company in a strong position and with a very bright future. I wish Serge professionally, of course, but personally, the very best in his future endeavors. And I look forward to working and partnering closely with Frédéric Oudéa to take us to the next level. Thank you for your attention.

Thank you, Paul. And now I will leave the floor to -- oh sorry. I'm sorry, so used to using English. Well, now I would like to give the floor to Audrey Derveloy, who is the Head of Sanofi France, to tell us about the company in its home country. Over to you, Audrey.

Mr. Chairman, ladies and gentlemen, dear shareholders, it's above all a huge pleasure, and I'm absolutely delighted and honored to be with you today. I joined Sanofi 9 months ago as Head of Sanofi France. From day 1, I've been extremely impressed by the commitment and the sense of duty of also Sanofians with whom I am lucky to work on a daily basis. These first few months also allowed me to understand and grasp and appreciate the key role of Sanofi in France for the success of Sanofi in the world. Our modernization efforts and the ambitious initiatives that we are rolling out on this territory are essential to make France a pillar of excellence that will have a global reputation over the long term. I'd like to show you 5 projects, 5 initiatives. This is not an exhaustive list, but it's evidence of the dynamism and commitment of Sanofi in France for patients, of course, but also for the employment of young people or also environmental responsibility. First of all, in the area of research to bring medicine forward and bring new solutions to patients. We are a leading partner for research ecosystems, thanks to our agreements with academia, with clinical research or through our support to French biotechs. A recent example that we are very proud of is the creation of the Paris-Saclay Cancer Cluster in February 2022 with great partners like Gustave Roussy, University Paris-Saclay, l'Institut polytechnique and Inserm. This is the first bio cluster that won the France Innovation 2030 plan contest launched by the French government. The aim of the PSCC is to help a French oncocluster emerge. It is based on our belief that France has unique assets that allow it to compete with the best in oncology on the global level. The PSCC is a great opportunity for Sanofi to create an innovative and multidisciplinary approach with the best scientific players. This open innovation approach is also what's led us to create with other partners a unique structure in France and Europe, Future4care. Future4care is above all a forum of innovation, the aim of which is to accelerate the scale-up of European start-ups in eHealth to industrialize them. So far, over 37 start-ups have been supported since 2021. Future4care, therefore, start-ups to benefit from personalized support. This unique initiative helps Sanofi to become a driving force for sectors going to play a major role for the future of health care in France. Our commitment in France is strong in the scientific and technology research systems, but it's also very strong in the societal level with a desire to pass skills on that's very dear to all of our employees. This is, for instance, the case for the mentorship of young people. For 2023, over 1,600 work study plans or internships on all Sanofi sites were offered in France, including 10% for candidates for specific priority neighborhood. And this program is called [indiscernible], and it's part of the one young person, one solution governmental plan. And it's -- in 3 years, it's become an emblematic and iconic event for Sanofi in France. And the aim of [indiscernible] is to reveal the potential of all talents and to fight against young people self-censorship especially in priority areas and with young people with disability. For Paris -- for the 2023 edition, we can also leverage our partnership with Paris 2024 with unique mental coaching given by athletes that we support. The modernization of Sanofi in France also goes through major investments in the modernization of our industrial footprint. This is an essential dimension to stay at the bleeding edge of global innovation. Two major projects are making great strides, and we are very proud of them. The Evolutive Facility of Neuville-sur-Saone near Lyon has broken ground, and we are now accelerating its implementation. This is the first ultra innovative product factory of this type in the world that will help produce simultaneously various vaccines and biological treatments, especially using messenger RNA. With its modularity, it could play a major role for France and Europe in the fight against pandemics. Another example in the next few months, we are going to open our small volume launch unit in Sisteron. This investment announced in 2021 is a major asset in the area of chemistry, the aim of which is to anticipate the launch of new pharmaceutical ingredients. It will bring to the sites a unique industrial equipment to meet the challenges of the future whilst developing processes with a smaller environmental impact and a less energy consumption. Indeed, we are committed for the environment and committed to reducing the carbon footprint of our industrial sites in France. To date, all Sanofi sites in France are already powered by 100% renewable electricity, which makes France a global leader within Sanofi worldwide. But we want to go further. Our sites of Saint-Loubès, Ambarès and Aramon have been producing solar electricity for a few years now on a very small scale that is reinjected into the grid. But we are now going to scale up with the installation of solar farms on larger surfaces. I was lucky and proud a few weeks ago to open a PV solar farm in Montpellier of 3.3 hectares will produce renewable electricity, fully self-consumed by the site. And this is roughly the consumption of a city of a town of 4,000 inhabitants. A similar setup will soon be located on our Aramon site. To conclude, Sanofi's commitment in France is manyfold. It's rich with initiatives that, on a daily basis, help us build Sanofi of the next 50 years and turn it into an industrial flagship in France that is recognized as the best company in biopharmacies of the world. Thank you.

Thank you, Audrey. I will now give the floor to Sandrine Bouttier-Stref, who will tell us more about the progress achieved in 2022 in terms of societal commitments.

Ladies and gentlemen, dear shareholders, Mr. Chairman, in 2021, Sanofi renewed its societal commitments to make them more ambitious and integrated in the Play to Win strategy and based on 4 pillars: access to health; innovation for vulnerable populations; preservation of the planet; and diversity, inclusion and engagement with the communities. These aren't just ambitions but concrete actions for which we've made progress. Paul and Audrey mentioned a few of these concrete achievements in 2022. As we follow this journey as a responsible and committed company, we take on board the social, societal and environmental concerns in our activities. And we take up the transformation challenges for tomorrow whilst relying on robust governance. Further committed company is also a company that contributes to taking up the challenges that the world is facing. The successive crises that we're going through undeniably reveal our vulnerabilities. The first of them is climate change. It is one of the biggest challenges and the biggest threat for human health. Its effects on populations exacerbated by climate injustice are only spreading throughout the world and are moving into an uncontrollable spiral with many collateral social and societal effects. In 2022, 31 million climate refugees were counted. The prevalence of diseases like infectious diseases, but also allergies, asthma and other respiratory diseases is growing. Roughly 250,000 extra deaths per year will be expected between 2030 and 2050. What's more, climate change is fragilizing essential health care infrastructure like hospitals but also health care systems. The connection between health and climate no longer needs to be proven. As a response, we've adopted a holistic and unique climate strategy that combines mitigation, resilience and adaptation and covers both our activities, our products, health care systems, our patients and vulnerable populations. These are a few elements of those. Paris in 2015. Sanofi was the only and first pharmaceutical company committed in a climate COP, COP21. Back then already, we were warning about the connections between health and climate change. Then we made a commitment to become carbon-neutral aligning on the Paris Agreement. In 2022, we decided to accelerate our commitments to tend towards carbon neutrality by 2030 and net zero -- net emissions in 2045, bringing our agenda by 5 years. These commitments validated by the Science Based Targets initiative is evidence of our desire to be part of a more rigorous and multi annual monitored action plan. The aim is to reduce our emissions to the maximum. Since 2019, we've reduced our direct emissions Scope 1 and 2 by 29%. This is the outcome of our actions on energy efficiency but also with a more intensive use of renewable energies, whether they are bought or produced on our sites. Right now, in the world, 62% of the electricity that we use is of renewable energy, and the aim is to reach 100% by 2030. We're also working on avoiding emissions during the design of new activities or sites such as the evolutive vaccine facility in Singapore. Regarding our indirect emissions, the largest amount of which is related to the procurement of raw materials. We have reduced emissions by 7% since 2019. To do so, we've drawn up a support plan for our suppliers in the decarbonization of their activities. For instance, the energized plan, where we are associated with 9 other pharmaceutical companies, helps us -- help our shared supply chains to switch to renewables. We're also working on anticipating the impact that global warming is going to have or might have on our activities. We've regularly examined and updated the list of climate risks and opportunities like extreme weather events, the prevalence of diseases. And because we are taking the subject very seriously, the climate risk is now amongst our group risk mapping. We're also abiding by the highest standards in terms of climate reporting. And 2 years ahead of schedule, we've published the elements related to the European taxonomy called green taxonomy. The members of the Board and the members of the Executive Board are mobilized around this global challenge and are supporting the strategy that we're adopting. Yet the climate emergency also invites us to project ourselves into topics that go beyond the limits, the boundaries of our traditional activities. The planet needs much more than individual contributions. So we need to address issues at a more global level, starting with -- for us with health care systems. They are responsible for roughly 5% of global emissions. If health care systems were a country, they would be the fifth largest emitter in the world. Amongst these emissions, 50% are due to products and supply chains. I've talked about that for Sanofi, 5% for research and development and 45% for care journeys for patients, including health care facilities and direct emissions of patients. On this theme specifically, Sanofi positioned itself as a leader. We are a founding partner of the global initiative to decarbonize health care systems, and we are managing more specifically the working group on the decarbonization of patient journeys. Through our work, our ambition is to create new sectorial momentum by offering levers for action to help health care systems transform the way they deliver care and to prepare their resilience to climate change and to have emissions assessment tools in order to help and guide decision-making. We already know that prevention and digitalization are levers for improvement. These elements were all presented by Paul at COP27. And because it is urgent to take action and because we want to pave the way, Sanofi's already started studies to rethink the way that health care could be delivered in the future by relying on our products and digital solutions. Of course, whilst putting patients as a priority at center of our thinking. It's also important to create the success conditions for the decarbonization of health care systems by mobilizing all stakeholders so that collectively, we can drive change sustainably, pharmaceutical companies, health care authorities, payers, regulators, policymakers and also, of course, patients. Using our international positioning, we're playing a leading role in the commitment of these stakeholders worldwide. And finally, with the launch of Foundation S in 2022, our field of action is going further. We are supporting via this foundation, climate adaptation programs via targeted investment to help communities prevent, protect themselves and resist the inevitable effects of climate change. For instance, we are financing a hospital boat in Bangladesh to allow remote population to have access to care, whereas areas have become inaccessible because of overly repeated monsoons. The foundation is also positioned as an agitator to guide global financing towards climate resilience of populations. Adopting a holistic, integrated and transdisciplinary approach is one of the most promising prospects to take up the environmental and health challenges of the future without opposing patients and planets. Via our climate commitment, we are proving our ability to rethink our models, but also to take commitments above and beyond our own activities, above and beyond our own value chain because transforming patients' lives is also contributing to improving the society in which they live. This is a commitment of the whole of Sanofi to meet today's challenges and tomorrow's challenges and to raise the level of societal ambition so that we can do what we do best but even more. Thank you.

Thank you so much, Sandrine. Major efforts are being made within the company. Now I will give the floor to Jean-Baptiste de Chatillon, who is going to talk about the company's performance.

Ladies and gentlemen, dear shareholders, our financial performance in 2022 was once again sustained. Earnings per share from business grew by 17.1% at constant ForEx or a slightly higher level than the prospects announced for growth of roughly 16%. Sales grew by 7% at constant ForEx to EUR 43 billion. As you know, in December 2019, we communicated a twofold objective for 2022. On the one hand, EUR 2.5 billion in cost savings, and on the other hand, a business operating margin of 30%. Well, we've reached these 2 goals. Cost savings in 2022 reached EUR 2.7 billion or higher level than our goal. These savings were, for the most part, reinvested into our growth drivers and our key R&D programs in line with our strategy. Business operating margin in 2022 reached 30.3% and 30% at constant ForEx or a 540 points improvement compared to the level of 2018 on a published basis, restated for the disposal of the stake in Regeneron. Our tax rate is in line with the expectations, and the earnings per share goal was exceeded. And this year, we are presenting -- we are proposing a dividend growth of 6% to 9% as was explained by the President. Our business in 2022 was split in 3 segments: Pharmaceuticals, Vaccines and Healthcare -- Consumer Healthcare. In Pharmaceuticals, business growth was 6.9% mostly driven by Specialty Care, reflecting the strong performance of Dupixent. The lower business for General Medicines is due to the decline in sales from nonstrategic products due to product disposals in line with the Play to Win strategy and the deconsolidation of EUROAPI starting from May. Strategic products in General Medicines grew by 5.2%. The performance in our Vaccine activity was 6.3%, bolstered by the recovery of booster vaccines and travel vaccines in a post-pandemic environment. Our flu vaccines reached a new record level in 2022 with sales of around EUR 3 billion. And the 8.6% growth in our Consumer Healthcare business reflected the double-digit growth in the categories Cough & Cold, Digestive Health and Allergy, which mostly offset the disposal of nonstrategic brands. Moving on to the P&L. Our net business operating income grew by 17% constant ForEx more than revenues, which grew by 7%. Our gross margin rate grew by 2.4 points to 73.7%, reflecting a favorable product mix related to Specialty Care, also because of industrial productivity gains. Our business income, our operating income grew by 13.3% at constant ForEx because of an improved gross margin and also contained growth in SG&A, reflecting our operating efficiency. Our business operating income also reflected the reallocation of resources in our growth drivers and key R&D projects in line with our strategy. Our R&D efforts grew significantly from 12.3% in 2022 -- by 12.3% in 2022 to reach EUR 6.7 billion. Our CapEx reached a high level at EUR 1.6 billion in 2022, reflecting the continuation of our efforts in the production of biologics, in pharmaceuticals and vaccines. Moving on to the IFRS net consolidated earnings. IFRS net consolidated earnings reached EUR 8,371 million in 2022, an increase of 34.5%. Going from the net operating income 2022 of EUR 10,341 million to the net consolidated IFRS income of EUR 8,371 million mostly related to the depreciation of goodwill on past acquisitions, especially Genzyme, Bioverativ Boehringer Ingelheim Consumer Healthcare, Adlyxin Kadmon, a net impairment of goodwill reflecting 2 elements: an impairment of EUR 1,586 million related to non-alpha interleukin-2 because of delays in the launched calendar and a depreciation -- an impairment reversal of EUR 2,154 million because of the approval of Altuviiio in the U.S., which improved the asset value, payments of EUR 951 million received from Regeneron due to the collaboration and license agreement in immuno-oncology, the restructuring costs related to simplification initiatives and, of course, the tax impact of these elements. Our balance sheet on the 31st December 2022 is very robust. We have equity for a value of EUR 75 million. Our net financial debt at the end of 2022 reached EUR 6.4 billion, down by EUR 3.6 billion, thanks to the high amount of free cash flow generated. Our free cash flow reached EUR 8,483 million in 2022, up 4.8% compared to 2021, bolstered by the increase in our BOI. As you know, we've more than doubled our free cash flow since 2018 and exceeded our goal announced in December 2020 -- 2019 of a growth of 50% of our free cash flow in 2022 compared to 2018. We published very good results for Q1 2023 on 27 April. In Q1 '23, sales were EUR 10,222 million, up 5.7% on a published basis and 5.5% at constant ForEx. This growth was due to the continued strong performance of Dupixent and the Vaccine and Consumer Healthcare businesses. Earnings per share from business in Q1 grew by 11.3% on a published basis and 11.9% in constant ForEx. For 2023, we announced a goal of business EPS in the low single-digit range. This reflects robust growth from our growth drivers but also the expected loss of exclusivity of Aubagio in the U.S. last March. Given the foreign exchange levels in April, we're expecting a ForEx impact on our business EPS in 2023 to be between minus 5.5% and minus 6.5%. As you can see, we are confident about the quality of our results and the prospects for our activities. Ladies and gentlemen, thank you for your attention.

Thank you, Jean-Baptiste. I'm now going to give the floor to Mrs. Anne-Claire Ferrié from PricewaterhouseCoopers to represent the college of statutory auditors is going to present their report.

Mr. Chairman, ladies and gentlemen, on behalf of the joint statutory auditors, Ernst & Young and PricewaterhouseCoopers, I'm pleased to report to you on the completion of our engagement entrusted to us for 2022 and to present the different reports we have issued in the context of this shareholder -- combined shareholder meetings for you to exercise your judgment when voting on the resolutions. Notably, a report on the parent and consolidated financial statement or a special report on related party agreements and various reports on -- in relation to transactions, which could have an impact on the share capital of your company. I'd like to summarize the main point of the reports and our findings. Regarding our reports on the financial statements, you can find them on pages 185 and 297 of the universal registration document review [ should an ] an unqualified opinion on the financial statement of Sanofi and on the group's consolidated financial statements. You will find the key points of the orders, the points that have required a specific attention due to the nature, the relative significance to the financial statement or the significant degree of judgment required in assessing the assumptions and estimates. There are 4 key audit matters. First are the measurement of other intangible assets that amount to EUR 22 billion; the rebates and price reductions granted in the U.S.; also, the product liability risk and litigation faced by group; finally, the tax risks related to the group's operations. Regarding the parent company financial statements, the key audit matter is related to the measurement of investment amounting to EUR 84 billion in the balance sheet total assets. We explained in our reports the risk associated with these key matters as well as the description of the work that has been performed. Regarding our report on related party agreements, you will find it on Page 300 of the URD. We indicate that we have informed no related party agreement whose execution could have an effect on the fiscal year. Finally, regarding the various reports required by the law in Resolution 15 to 18, 20, 21, 23 that you will have to vote on. We have detailed these information in the report. So those operations concern a share capital reduction, the issuance of shares or securities giving access to the share capital of the company with shareholders' preferential rights and the increase of capital for employees. Those -- this is part of the law, and all of the information required for you to appreciate the impact has been brought to your attention. Thank you, ladies and gentlemen. Mr. Chairman, thank you for your attention.

Thank you, Madam Ferrié. Now before we open the debate with the shareholders, we can have a look at the written questions. We have received 3 batches of questions. One -- 3 from the form of responsible investment. The answers to these questions have been published on our website in keeping with regulations. The company has also received a number of electronic questions, questions we're going to answer in a minute after what, we will answer your other questions directly. Philippe, can you read the questions and answers that were asked?

Yes. As the Chairman said, we have received 3 electronic questions. One comment from [ Nicolas SCA ], May 23. I'm asking myself a question, the strategy that consists in focusing on innovative products to have more than 30% profitability with possible carve-out of CHC. I think this is risky. Don't you think that we should keep diversification with low-growth products that are less risky?

So the answer of management is the following. The unmet medical needs are very numerous, and our mission as a pharma company is to provide patients with innovative products. Our Play to Win strategy was implemented to stimulate innovation and growth in order to make decisive progress with increasingly promising drugs in the portfolio to answer a lot of unmet medical needs. In General Medicines, Sanofi has chosen to focus mainly on products that have differentiated or established profile and that have a significant growth potential on essential markets, which does not mean that we're not going to seize opportunity like Kadmon or a Provention Bio. The implementation of CHC has continued in 2022, which has accelerated the growth and will allow us to seize opportunities. Sanofi's ambition is a strong and sustainable growth based on a diversified portfolio.

The second question includes 2 part is from [ Mr. Dominique ], May 16, 2023. First part, what about the vaccine against AIDS? Why don't we have advertising about anti-COVID booster? First part of the question, Sanofi does not have a vaccine against AIDS in its R&D portfolio. Regarding the second part of the question, the booster -- the COVID booster is a pandemic vaccine. And the French regulation is very specific about it, which prevents us to promote it be it for health professional or for the general public. Regarding the information you'll find on the Internet, only public bodies like [ Amelie ] can do that, HAS, sante.gouv.fr, ansm.fr, but the pharma companies are not allowed to do such advertising. The third question is from [ Mr. Jacques Monet ], May 17, 2023. Let me read the question. I find the presentation of performance based on EPS, it is not good. We always have a reconciliation between IFRS. I think that the IFRS are very demanding. Most of the items in this reconciliation should be considered as operational and we included in the ROI. First, the restructuring costs are recurring and not exceptional. The acquisition of products or rights. Not yet marketed is also something that is recurring. It has become part and parcel of the normal activity. Therefore, the amortization and depreciation of intangibles should be considered as operational research expenditure and be part of the ROI. So not including that figure means that you overestimate the performance of activity, and you include in it significant expenditures. I was struck by the communication of results. In Q4, last February on the 3rd, we had an increase of 25% in your figure, but the IFRS only increased by 8% since the provision on Altuviiio was taken, which means that we have more comparable evolutions. In the previous years, the different provisions for EUR 3.6 billion on the acquisition of Bioverativ were never included in the performance of activities. Consequently, that has had an impact on the results. So integrating those elements even if it creates a significant variation would be a good thing to do because those are operational expenditures, IFRS. So my question is the following, why is it that Sanofi does not communicate about these figures that would be the most readable thing to do?

The answer of management is the following. As indicated in our '22 document, Page 141, this is the figure we use in the group to facilitate understanding of our operational performance by management and investors. This indicator does not replace the elements in IFRS. It is communicated together with IFRS. It's important to note that the communication of alternative performance indicators by issuers is a systematic practice in our industry. Second comment, restructuring costs are engaged in the context of the transformation process in order to optimize the activity. The nature of those expenditures is presented in the group's accounting principle in the universal registration document. That is mainly related to departure plans, closing of sites and also the costs related to the transformation strategy publicly announced. We think that the accounting impact of those decisions does not have an impact on operational performance. Consequently, restructuring costs are excluded from the net business income. Thirdly, taking into account intangible assets, R&D projects, brands, results from grouping of companies, acquisition of companies, for example, or our acquisition of assets or groups of [ active ]. Thus gives rise to a specific accounting treatment at the date of acquisition. The group thinks that accounting effects related to this exercise is not related to the operational performance of the -- in order to avoid any distortion, all of the amortization and depreciation of intangible assets are excluded from the net business income. The exclusion of restructuring cost for intangible [ assets ] from the performance indicator is applied also in the rest. We consider that the net business income is a relevant indicator to reflect the operational group performance.

Thank you, Philippe, for that. So now we're going to move to the questions in the room. You have the floor. Number 7. Please some discipline, if I may ask. Introduce yourself, give us the number of shares. [Operator Instructions]

Good afternoon. For [indiscernible], the association for individual shareholders. I have 2 comments and 2 questions if you don't mind. First comment, you told us you will overcome the fear of failure, free your potential. Congratulations to Mr. Hudson for your improvement in French. You have taken into account what we asked. A number of people arrived late, and I was myself accompanied. My 2 questions. First question, in October 2022, Sanofi announced the setting up of a new partnership with Dassault Systèmes with a view to optimizing production of EVFs, the future modular plants which you are in the process of building Neuville-sur-Saône and in Singapore. Are you going to be able to use that partnership with Dassault Systèmes to also optimize the marketing of the new target drugs? My second question, if I may ask a second question. Several targets are appearing here and there. How many dossiers for acquisitions do you look at? How many possible acquisitions do you look at every year? How many go through? And what is the area of the world where there are more opportunities, Europe, North America, Asia, India?

Paul? Can you take the first question?

I think I understood you correctly. And thank you -- well, thank you for the compliments about my French. Small improvements, but I'm trying. The collaboration with Dassault is a great collaboration. It's great to partner with another incredibly important French organization with shared objectives to modernize how we use digital and data to do things that have never been done before. The EVF is something that has never been done by any other company in any other sector. Incredible what we're building there. And we are bringing that technology and that digital emphasis to the rest of our manufacturing footprint. The adoption of iLab, for example, is really to share best practice in real time to improve yields to make sure we can get medicines through and approved faster and to ultimately to be able to get them to the patients that need them in the most efficient way. So I think our digitization agenda, I think, Serge touched on it, as an industry is behind many other industries, but I think we're gathering pace. And I'm very proud of the work that our manufacturing and supply group is doing to do that and how we collaborate with R&D to make future [ medicines ] possible.

If I may complement this answer, in reality, the mechanism of marketing is not totally controlled by us putting the drugs on the market. Depending on the countries, that mechanism is done in interaction with public authorities, be it the FDA in the U.S. or the HAS in France. Depending on regulations, depending the appetite for innovation, those processes take more or less time. Regarding France, it is true that the deadlines for approval, new drugs are long. There's been an effort made in the last few years to shorten those processes. Clearly, it is one of the objectives that was given to the French Ministry of Health. Nevertheless, if we compare with other countries, we do observe that a number of products find it difficult to be accepted in France not only for medical reasons, but also for reasons related to the prices given to those innovations. We do observe that in France, the medical benefit of the new products is much tougher than in other countries, which, of course, delays the launch. I'd like to take your second question by the same token, i.e., the number of opportunities we look at. Just one important point, the Board of Directors has given delegation to the CEO to look at all possible acquisitions under EUR 500 million. In pharma industry, figures are big. I was myself surprised when I arrived because I think that I thought that EUR 500 million was a significant figure. But in reality, that is how the market works. So we look at big operations, the most significant operations, it's not only acquisitions. It can be combinations with other companies. It can be legal agreements of partnership. So there are a series of situations we can look at sometimes just to think about our strategic options. Sometimes, indeed, we have specific ambitions to carry out growth operations. But globally, I would say that the ratio between operations we do and operations we just look at is about less than 10%. I would say the actual figure can be 5%. So we look at a lot of things, but we do very little. Why? Because our objectives are determined, as you may know, by innovation, the concern of innovation. Innovation is a key element for us. So we have to be sure when we acquire a company that in its portfolio, there will be innovation. And there are a few companies that can pass that test. We also make acquisitions at levels of product development that are quite early. There are few companies that can pass the test of scientific validation or also intellectual property. Those are 2 major criteria when we have to choose targets. Anything else, Paul, you'd like to add to that?

I realize the industry is complex that it's not uncommon now to pay EUR 1 billion for a medicine in Phase I, which is 7, 8, 9 years from launch that has a 90% chance of failure. You have to put it into perspective the -- how high risk doing drug discovery and development test, which is why we are so proud of the progress made. But also we have everybody working so hard to try and do these things when the odds are against them for success, and we do it for the right reasons. And it matters greatly that in areas of unmet need that we take those risks. We find ways to reinvest in R&D because there's patients who have no drug available in a disease that is untreatable. So that's why we do what we do, and we'll continue to do that.

One last thing, which is very important, is valuation. For many years, we have had a very high valuation of biotechs. You have seen, by the way, the drop in those valuations. Of course, that has slowed down our acquisition processes. I think that now the market is back at more appropriate and selective levels of valuation. So given the balance sheet we have, we have some leeway. And I'm glad that we have been disciplined in the last few years because we could have destroyed value. Question 7 again?

Yes, I work in a hospital, and we're in the process of setting up center to screen hemophilia in Africa. We're starting from scratch. What is Sanofi's ambition in the area of hemophilia and the new treatments? I know that other competitors have innovative treatment. We have had Sanofi with Lovenox. So we -- Lovenox, we have a lot of new treatments, AODs, a lot of prescriptions that are much easier to use. Have we -- have you positioned yourself on these oral antidiabetic? And you bought back Genzyme. We see now that medicine is more focused on rare diseases, treatments that are more targeted, i.e., combinations of molecules, so treatments that are really adapted, personalized to avoid those chemotherapies that are universal. But the problem is that those treatments are developed by biotechs that are more innovative. In fact, those biotechs are mainly U.S. The problem is that the valuation of U.S. biotechs are very high. You try to buy back some biotechs in the past. Visibly, there are U.S. and Swiss actors that have made important premiums, and we're able to buy. So do you think that the world of biotechs is no longer accessible for you because it's too expensive? And do you think that R&D should be internal going through artificial intelligence to screen more molecules to save time testing the molecules with what you call digital twins that allow you to have a faster access to Phase III?

Thank you very much. Paul, to answer to tell us about hemophilia and Lovenox and also maybe answer to this question, but I thought I answered during my previous presentations because we're always doing biotechs -- acquisitions of biotech. We've acquired biotech -- 15 biotechs in the last 4 years, which is about 4 a year. We're very active, but we're selective. I would like to give you one indication based on the figures that we have. 75% of biotechs bought back by big pharma lead to a failure. So it's not only a question of buying back biotechs to improve your research. Besides, we have had serious internal problem in our R&D. But today, we have -- we want to have a balance between internal and external research. Of course, internal research must be the main element and complemented by external partnerships or acquisitions of biotech. So it is a balance. To be found, it is a balance that is driving us. I think that we need a strong internal research to lead our growth and development policy. There's no way we can imagine a pharma with just collaboration or acquisitions of biotechs. It would be impossible to do it because we wouldn't have the talent, so the internal skills to carry out this acquisition policy. So the central element for us is to have researchers and developers that are of very high quality. All of the scores that we have seen about the evolution of R&D. So that now we are at levels of efficiency in R&D that is quite high. Meaning that we can trust our ability to develop research internally complemented by external growth operations.

Thank you, Serge. So just on the biotech piece, I think it is true that the availability of capital and perhaps some of the science in the U.S. because of a function of size means more biotechs are transacted. But we appreciate greatly the academic innovation that is happening in France and Europe. And in fact, it's a new area of focus for us. It is also clear that the translational medicine opportunity turning a brilliant academic paper into a potential medicine is an underdeveloped science in Europe. One of the reasons Audrey mentioned the collaboration for the oncology cluster in the Institute Gustave Roussy, Paris-Saclay is because we want to try and help foster the translational medicine component. So they're ultimately brilliant academic research or one of the most revered centers in the world that has great ideas can be in an ecosystem where maybe 5, 10, 20, 50 oncology biotechs may begin their life in that cluster over the next 10 years. That's incredible, and we're very proud of that. It is true the U.S. is better organized at that, but I don't think the science is better. So we want to help in the organizing. And we're a major European player. We're going to play a big part. For hemophilia, I think that was where we started if I remember correctly. Hemophilia is a devastating illness, as you know. And really, there's 2 approaches to treating hemophilia now, hemophilia A. One is to try and return the blood towards normal levels of factor as possible so you can live a life without fear. That's very difficult to do. The medicine we launched this year, Altuviiio, allows people to live almost a normal life -- well, certainly a normal life for 5 out of 7 days. If you're a young person at school, that is really an important step forward. You can go and play at the break, you can play with friends unsupervised, you won't get bleeding in the joints, et cetera. But you normally have to be infused, often held down by a parent 3 times a week and have an IV line put in you. And as a young person, that is quite a complicated thing. With the launch of Altuviiio, it's just once a week, not on a school day and a near-normal life. That's a major innovation opportunity. At the other end, some point in late summer, early fall, we'll get data on fitusiran or long-acting approach in hemophilia A, which may mean that we take severe disease to mild disease, not normal, but mild. And you only have one injection every 8 weeks. And incidentally, an injection that is thermostable at room temperature and allows for easier transportation, which means we can get into more challenging parts of the world, sub-Saharan Africa, for example, and to deliver a high-quality medicine. These things are greatly on our mind, and you'll see more innovation in that area. I think lastly, it was an oral anticoagulant question. Saying that there are other -- yes, there are new drugs. And Lovenox has played a major part before the pandemic [indiscernible] surgery through the pandemic, continues to play a role now. We look to continually innovate. We've just given you examples in hemophilia. We don't rest really trying to do the right thing. Some of these things are hard to crack. Not every company cracks everything all the time. But you know our commitment to trying to do these things correctly. In rare blood disorders, for example, we're one of the leading companies in the world and proud to be.

Question 8.

[indiscernible] I have a small question. Can you tell us about the distribution of your shareholders, L'Oreal, BlackRock, the employees? Can you tell us about that? Are you happy with the fact to having a lot of float? Or would you like to have more identified shareholders? I had a question about your COVID vaccine, VidPrevtyn. Is it better? I've seen on Page 202 that you have [ 260 million ] left over a contract. Was the situation at the end of the first quarter?

Jean-Baptiste, maybe regarding the contract or the contracts?

Yes. Thank you for your questions about the COVID-19 vaccine. Indeed, in 2022, we had a number of contracts [indiscernible] with Europe and other countries. And we had committed a number of expenditures. In 2023, those contracts are being settled. If you look at our results, we've indicated that we still have products coming in front of it. So we are normalizing all of this activity around COVID-19 i.e., without a significant or positive or a negative impact neither this year nor last year. So we're in the process of terminating the contracts we have had with different states in the world.

To answer your first question about the structure of our shareholders, I'd like to say that for a company like ours, with such an important share capital -- share capital in terms of dollars and euro, we can do a lot of things to promote the knowledge of the company. But in the end, the decisions or individuals made by individual or institutional shareholders. What we can observe is that what has taken place on the market is that we have seen a very strong rise in the purchases made through ETFs, a form of collective management that has led to the disappearance of the direct relationship that used to be with shareholders. That's why we've had the great development of BlackRock. It is a manager today which has close to 7% of all companies managed by a series of polls in the form of ETFs, which are shares from different companies. Those are formula that represent indices replicating the various indices so that cuts part of the direct link with shareholders. Our wish, of course, is to keep disseminating information about our company. We're delighted to have individual shareholders. Unfortunately, we do witness a reduction in the number of individual shareholders. Things are better in France lately. But nevertheless, I see a reduction in the number of French shareholders. In the last 2 years, it's paradoxical because it is at the benefit of shareholders from English-speaking countries. So we're trying to do our best to inform shareholders directly. We do the same efforts in all of the countries of the world. Of course, it is obvious that regarding Asian shareholders, they represent a very tiny minority in our capital because there are regional reasons that explain the fact that investors tend to invest more locally. Besides the understanding of the pharma industry is not always that great throughout the world. That's why we have a single barometer at the end of the day is our share price and its evolution. Regardless of the composition of our shareholders, that is the real test of our shareholders' satisfaction.

What about the beta in front of the name of your vaccine? Will you have a more stable version of that vaccine? Why do you call it beta?

Well, first of all, I'll take the opportunity to say I'm very proud of our vaccine team that worked for 2 years to make it a very good COVID vaccine. Realized everybody would like us to have been first. But as we maintained all the time, mRNA, if it worked, would have been faster. We didn't have mRNA. But if it had failed then we'd have come at the right time. It's not an excuse. It's just a reality. We made a very good Sanofi COVID vaccine. I would say that it is -- in our feedback we've had so far, by the way, that people are noticing that they're not getting anywhere near the type of side effects that we're getting over the last few vaccines that people have had, feeling ill, feeling flu-like. And that's tremendous. We're getting wonderful feedback from people who have had it around Europe. I think you're alluding to the beta piece. But the truth is, and I stand corrected by my Head of Vaccines, but I see is more a universal booster at this point. And I think we just have to accept that the data supports a great immune response, really great immune response and a durable immune response perhaps even longer than mRNA. So I think our team made a very good vaccine on a challenging platform. I think they've done an incredible job, and we're seeing a lot of patients ask to be vaccinated with it.

And beta means that we cover the beta variant. It has -- it's nothing to do with the provisional version. It's just because it covers the beta variant. Question number 7?

My name is [indiscernible] and I represent the French National Association of French shareholders. I have a question. Maybe Chairman can enlighten us in regards to this matter raised by this gentleman who works in a hospital. You have the costs of new products being developed. Do you have those costs related to internal R&D and external costs when you acquire a company or acquire a product? How is it broken down? I mean, over last year, can you give us a breakdown of how much internal, how much external or even over the past 4, 5 years, a 4-, 5-year period?