Third quarter of 2007
Sanofi-aventis net sales for the third quarter of 2007 rose by 1.8% on a reported basis to euro 7,025 million.
Gross profit was euro 5,420 million. The gross margin ratio was 77.2%, against 76.8% for the third quarter of 2006. Royalty income rose by 23.7%, mainly due to the sharp rise in net sales of Plavix(R) in the United States versus the third quarter of 2006 (when the product faced competition from a generic version), and despite the discontinuation of royalties from fipronil. The ratio of cost of sales to net sales increased from 26.7% to 27.0%, mainly as a result of the introduction of generics of Ambien(R) IR in the United States.
Measures initiated in France, Germany and the United States during 2006, combined with the ongoing cost containment policy, led to a further decline in the ratio of selling and general and expenses to net sales to 25.0%, against 26.2% in the comparable period of 2006. In absolute terms, selling and general expenses were 2.9% lower than in the third quarter of 2006 at euro 1,754 million.
Operating income -- current rose by 5.2%, and represented 37.1% of net sales compared with 36.0% in the third quarter of 2006.
Net financial expenses were euro 40 million, against euro 53 million in the comparable period of 2006. Interest expense on debt was euro 64 million, compared with euro 92 million in the third quarter of 2006.
Income tax expense was euro 818 million, versus euro 743 million in the third quarter of 2006. The reported tax rate was 31.8%, against 30.6% for the comparable period of 2006. Tax rate cuts due to come into effect from 2008 in Germany, Spain and the United Kingdom led to the recognition of a euro 51 million expense on a net deferred tax asset, while euro 21 million of net
provisions were released as a re
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