Sanofi-aventis Announces 2007 Earnings Ahead of Guidance Sharp Rise in Propose...(the buyout of several products and the e...),Health

Adjusted consolidated income statement

The adjusted consolidated income statement is presented in Appendix 3.

Refer to Appendix 1 for a definition of "adjusted net income", and to appendix 4 for a reconciliation of the consolidated income statement to the adjusted consolidated income statement.

Fourth quarter of 2007

The fourth quarter saw a marked fall in the dollar against the euro of 12.4%, compared with an average fall of 8% over the first nine months of the year.

Sanofi-aventis net sales for the fourth quarter of 2007 fell by 6.0% on a reported basis to euro 6,911 million.

Gross profit was euro 5,257 million. The gross margin ratio was 76.1%, against 76.5% for the fourth quarter of 2006. Royalty income rose by 36.0%, mainly due to a sharp rise in sales of Plavix(R) in the United States versus the fourth quarter of 2006 (when the product faced competition from a generic version), and despite the discontinuation of royalties on fipronil. The ratio of cost of sales to net sales was 28.4% (compared with 26.6% in the fourth quarter 2006), largely as a result of the introduction of generics of Ambien(R) IR in the United States and timing differences in sales of influenza vaccines between 2006 and 2007.

Research and development expenses rose by 5.0%. This includes the effect of discontinuing development of the ciclesonide/formoterol combination, the rights for which were returned to Nycomed.

Selling and general expenses totaled euro 1,996 million, representing a marked reduction of 7.3% relative to the fourth quarter of 2006. The ratio of selling and general expenses to net sales was 28.9%, against 29.3% in 2006.

Operating income - current(1) fell by 13.7%, and represented 28.4% of net sales versus 30.9% in 2006. This fall was due entirely to
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