PARIS, Nov. 8 /PRNewswire-FirstCall/ -- The consolidated income statement for the first 9 months of 2005 is shown in Appendix 4. Consolidated net income for the first 9 months of 2005 was euro 1,802 million. This figure takes account of the effects of the application of purchase accounting to the Aventis acquisition, including an impairment loss of euro 339 million net of deferred tax arising from the launch of generics of Allegra in the United States in September 2005 and post-tax restructuring costs of euro 465 million.
In order to give a better representation of our underlying economic performance, we have decided to publish and explain adjusted(1) consolidated income statements for the first 9 months of 2005 and the third quarter of 2005, and to compare them with adjusted proforma(1) income statements for the first 9 months of 2004 and the third quarter of 2004 respectively. Adjusted net income for the first 9 months of 2005 was euro 4,891 million, compared with euro 3,830 million for the first 9 months of 2004.
THIRD QUARTER -- Net sales: euro 7,200 million, up 11.6% (11.0% on a comparable basis). -- 20.2% growth in “Adjusted operating income - current”. -- 28.7% rise in adjusted net income to euro 1,923 million. -- 27.4% increase in adjusted EPS to euro 1.44 (vs. euro 1.13 for the third quarter of 2004). FIRST 9 MONTHS -- Net sales: euro 20,304 million, up 8.9% (11.0% on a comparable basis). -- 23.8% growth in “Adjusted operating income - current”. -- 27.7% rise in adjusted net income to euro 4,891 million. -- 26.6% increase in adjusted EPS to euro 3.66 (vs. euro 2.89 for the first 9 months of 2004). CONFIRMATION OF 2005 GUIDANCE
Barring major adverse events, despite impact of Allegra(R) in Q4 2005, the Group confirms its guidance of adjusted EPS growth in 2005 of at least 20%(2).
Net sales for third quarter of 2005 and first 9 months of 2005
Unless otherwise indicated, growth figures in this press release are on a comparable basis and calculated on 2004 pro forma figures (see explanatory notes).
In the third quarter of 2005, sanofi-aventis generated net sales of euro 7,200 million, up 11.0%. Exchange rate movements had a favorable effect of 1.3 points, and changes in Group structure a negative effect of 0.7 of a point. After allowing for these impacts, reported-basis growth was 11.6%.
Net sales for the 9 months to end September 2005 totaled euro 20,304 million, up 11.0%. Exchange rate movements had a negative effect of 1.2 points, and changes in Group structure a negative effect of 0.9 of a point. After allowing for these impacts, reported-basis growth was 8.9%.
Net sales by business segment
Net sales reported by sanofi-aventis comprise net sales generated by the pharmaceuticals business and net sales generated by the human vaccines business.
Pharmaceuticals
Third-quarter net sales for the pharmaceuticals business were up 9.4% at euro 6,483 million. Net sales of the top 15 products rose by 15.7% to euro 4,283 million, representing 66.1% of pharmaceuticals net sales, compared with 62.5% for the third quarter of 2004.
In the 9 months to end September 2005, net sales for the pharmaceuticals business were up 10.5% at euro 18,885 million. Net sales of the top 15 products rose by 16.7% to euro 12,076 million, representing 63.9% of pharmaceuticals net sales, compared with 60.5% in the 9 months to end September 2004. Millions of euros 2005 Q3 Change on a 2005 Change on a net sales comparable 9-month comparable basis net sales basis Lovenox(R) 551 +13.8% 1,571 +15.7% Plavix(R) 534 +22.8% 1,508 +21.4% Eloxatin(R) 422 +28.3% 1,141 +35.2% Taxotere(R) 420 +13.8% 1,184 +11.9% Stilnox(R)/Ambien(R) 419 +5.5% 1,089 +7.6% Allegra(R) 367 -0.8% 1,185 +8.3% Lantus(R) 325 +44.4% 869 +48.5% Tritace(R) 260 +7.0% 724 +1.8% Copaxone(R) 240 +23.7% 646 +23.8% Aprovel(R) 225 +14.8% 661 +14.2% Amaryl(R) 195 +19.6% 542 +12.2% Actonel(R) 99 +20.7% 275 +25.6% Depakine(R) 81 +5.2% 238 +5.3% Xatral(R) 80 +15.9% 237 +16.2% Nasacort(R) 65 -7.1% 206 -1.0% Total 4,283 +15.7% 12,076 +16.7%
Third-quarter net sales of other pharmaceutical products were down 1.1% at euro 2,200 million. Excluding DDAVP, which faced competition from generics in the United States during the quarter, net sales of other pharmaceutical products were stable.
Net sales of other pharmaceutical products for the 9 months to end September were up 0.8% at euro 6,809 million.
Human Vaccines
Third-quarter consolidated net sales for the Human Vaccines business were euro 717 million, a rise of 27.8%.
In the 9 months to end September, consolidated net sales for this business reached euro 1,419 million, up 18.5%.
The successful launch of Menactra(R) in the United States in March 2005 added euro 77 million to third-quarter net sales and euro 147 million to net sales for the first 9 months of the year.
The fine performance by Adult Booster vaccines benefited from two US launches: Decavac(R) in January 2005 (euro 152 million to end September), and Adacel(TM) (tetanus-diphtheria-whooping cough-Tdap) in July 2005.
The influenza vaccination season began as usual in September, and will continue through the final quarter.
Net sales Millions of euros 2005 Q3 Change on a 2005 Change on a net sales comparable 9-month comparable basis net sales basis Polio/Whooping Cough/ Hib Vaccines 151 +14.2% 409 -0.5% Adult Booster Vaccines 90 +91.1% 211 +48.2% Influenza Vaccines 274 +8.7% 338 +12.4% Travel Vaccines 48 +5.2% 129 -3.3% Meningitis/ Pneumonia Vaccines 110 +150.0% 208 +128.6% Other Vaccines 44 +12.8% 124 +4.2% Total 717 +27.8% 1,419 +18.5%
Sanofi Pasteur MSD, the joint venture with Merck & Co in Europe, generated third-quarter net sales of euro 246 million (up 8.8% on a reported basis). For the 9 months to end September, the joint venture posted sales of euro 527 million (up 9.7% on a reported basis). These sales are not consolidated by sanofi-aventis.
Net sales by geographical region Millions of euros 2005 Q3 Change on a 2005 Change on a net sales comparable 9-month comparable basis net sales basis Europe 3,010 +10.1% 9,085 +9.6% United States 2,725 +12.9% 7,129 +14.9% Other countries 1,465 +9.2% 4,090 +7.7% Total 7,200 +11.0% 20,304 +11.0%
In Europe, third-quarter sales growth was propelled by a strong showing from the entire portfolio, and in particular from Lantus(R) (up 44.5%), Eloxatin(R) (up 27.7%), Taxotere(R) (up 26.8%), Plavix(R) (up 20.6%) and Lovenox(R) (up 12.4%).
In the United States, despite competition from generics of Allegra(R) in September, sales rose by 12.9% in the third quarter, driven by Lantus(R) (up 38.8%), Eloxatin(R) (up 25.4%) and Lovenox(R) (up 13.4%).
In other countries, sales growth accelerated, reaching 9.2% in the third quarter.
Developed sales
Developed sales give an indication of the overall presence of sanofi- aventis products in the market. Third-quarter developed sales reached euro 8,110 million, up 10.4%. In the 9 months to end September, developed sales amounted to euro 22,732 million, up 11.2%.
Developed sales of Plavix(R)/Iscover(R): Millions of euros 2005 Q3 Change on a 2005 Change on a comparable basis 9 months comparable basis Europe 408 +21.8% 1,165 +21.7% United States 685 +7.4% 1,832 +15.8% Other countries 149 +22.1% 411 +22.3% Total 1,242 +13.4% 3,408 +18.5%
In the United States, total prescriptions (TRx) of Plavix(R) rose by 13.6%(3) to end September.
In Europe, Plavix(R) again achieved robust growth in the third quarter, especially in France (up 22.4%).
Developed sales of Aprovel(R)/Avapro(R)/Karvea(R): Millions of euros 2005 Q3 Change on a 2005 Change on a comparable basis 9 months comparable basis Europe 199 +11.2% 586 +11.8% United States 120 -1.6% 319 -0.6% Other countries 86 +16.2% 226 +14.7% Total 405 +8.0% 1,131 +8.5%
In the United States, total prescriptions of Avapro(R) (TRx) rose by 13.1%(3) to end September compared with market growth (ARB) of 10.6%(3). At end September, the product had market share of 15.0%(4).
Comments by therapeutic class Cardiovascular/Thrombosis Lovenox(R) /Clexane(R)
2005 third-quarter net sales of Lovenox(R) were euro 551 million, up 13.8%, with growth of 13.4% (to euro 334 million) in the United States and 12.4% (to euro 159 million) in Europe. In the United States, growth was driven largely by the use of Lovenox(R) in medical prophylaxis.
In the 9 months to end September, net sales of Lovenox(R) rose by 16.8% (to euro 934 million) in the United States and by 13.3% (to euro 484 million) in Europe.
Plavix(R)
Third-quarter consolidated net sales of Plavix(R) came to euro 534 million, up 22.8%. In the 9 months to end September, net sales of the product rose by 21.4% to euro 1,508 million.
Delix(R)/Tritace(R)
Third-quarter net sales of Delix(R)/Tritace(R) came to euro 260 million, up 7.0%, thanks to a return to growth in Germany and good performances in France and Canada.
In the 9 months to end September, net sales of Delix(R)/Tritace(R) grew by 1.8% to euro 724 million.
Aprovel(R)
Third-quarter consolidated net sales of Aprovel(R) came to euro 225 million, up 14.8%.
In the 9 months to end September, consolidated net sales of Aprovel(R) rose by 14.2% to euro 661 million.
Oncology Taxotere(R)
Third-quarter consolidated net sales of Taxotere(R) were euro 420 million, up 13.8%. In Europe, growth accelerated in the quarter to 26.8% (euro 164 million), thanks largely to increased sales force effectiveness and clearer differentiation between Taxotere(R) and Taxol(R).
In the United States, Taxotere(R) is gaining market share with new patients in early stage breast cancer as an adjuvant treatment (26%(5)) and in the treatment of hormone-resistant prostate cancer (82%(5)), but is still being adversely affected by the introduction of Taxol(R) generics. Third- quarter sales in the United States came to euro 180 million, up 5.9%.
In the 9 months to end September, net sales of Taxotere(R) were euro 1,184 million, up 11.9%. The product achieved growth of 19.0% in Europe (to euro 464 million) and 8.1% in the United States (to euro 512 million).
Eloxatin(R)
Third-quarter net sales of Eloxatin(R) were euro 422 million, up 28.3%. Net sales of the product rose by 25.4% in the United States (to euro 245 million) and by 27.7% in Europe (to euro 141 million). Eloxatin(R) is gaining market share as an adjuvant treatment for colorectal cancer in Europe and in the United States, where the product has 59.3%(5) market share in stage III patients.
In the 9 months to end September, net sales of Eloxatin(R) advanced by 35.1% in the United States (to euro 651 million) and by 34.4% in Europe (to euro 404 million). A new formulation (solution) was launched at the start of June in the United States and France, and already represents around 80% of Eloxatin(R) use.
Central Nervous System Ambien(R)
Third-quarter net sales of Ambien(R) amounted to euro 371 million in the United States, up 4.8%. Prescription growth to end September was 5.9%3 in the United States.
Ambien CR, approved in the United States on September 6, 2005, has been available in pharmacies since beginning of October. The product is being marketed by a sales force of around 3,500 medical professionals.
In the 9 months to end September, net sales of Ambien(R) in the United States rose 8.8% to euro 948 million. In Japan, sales of Myslee(R) (not consolidated by sanofi-aventis) were up 19.4% at euro 76 million.
Copaxone(R)
Third-quarter net sales of Copaxone(R) came to euro 240 million, up 23.7%. Net sales rose by 26.6% in the United States (to euro 168 million), and by 20.0% in Europe (to euro 59 million).
In the 9 months to end September, net sales of Copaxone(R) advanced by 24.8% (to euro 440 million) in the United States and by 23.2% in Europe (to euro 170 million).
Depakine(R)
Third-quarter net sales of Depakine(R) were euro 81 million, up 5.2%. In the 9 months to end September, net sales of Depakine(R) increased by 5.3% to euro 238 million.
Diabetes Lantus(R)
Third-quarter net sales of Lantus(R) were euro 325 million, up 44.4%. The product reported net sales growth of 38.8% in the United States (to euro 191 million) and 44.5% in Europe (to euro 110 million). In the United States, Lantus(R), the best-selling insulin product on the market and the only insulin analog to provide 24-hour coverage, continues to gain market share, and had 28.1%4 of the market at end September 2005.
In the 9 months to end September, net sales of Lantus(R) advanced by 45.4% in the United States to euro 511 million. In Europe, the product posted sales growth of 45.7% to euro 301 million.
Amaryl(R)
Third-quarter net sales of Amaryl(R) were euro 195 million, up 19.6%. Net sales rose by 33.6% in the United States (to euro 63 million), and by 10.0% in Europe (to euro 68 million).
In the 9 months to end September, net sales of Amaryl(R) advanced by 18.9% in the United States (to euro 172 million). In Europe, the product achieved growth of 11.1%, to euro 195 million.
In early October, Prasco Laboratories launched an authorized generic of Amaryl(R) in the United States.
Internal Medicine
Allegra(R)
Third-quarter net sales of Allegra(R) fell by 0.8% to euro 367 million, including euro 305 million in the United States (down 0.9%). Allegra(R) has been facing competition from generics in the United States since September. On September 14, 2005, Prasco Laboratories launched an authorized generic version of Allegra(R).
In the 9 months to end September, net sales of Allegra(R) rose by 8.3% to euro 1,185 million. Net sales in the United States were up 5.6% at euro 914 million.
Actonel(R)
Third-quarter worldwide sales of Actonel(R), including the alliance with Procter & Gamble, amounted to euro 387 million. Sales consolidated by sanofi- aventis were up 20.7% at euro 99 million. Consolidated Japanese sales for the third quarter rose by 10.6% to euro 13 million.
In the 9 months to end September, worldwide sales of Actonel(R), including the alliance with Procter & Gamble, totaled euro 1,009 million. Sales consolidated by sanofi-aventis over the period were euro 275 million, an increase of 25.6%.
Ketek(R)
Third-quarter net sales of Ketek(R) were euro 38 million, 7.3% lower than in the third quarter of 2004, when the product was launched in the United States.
In the 9 months to end September, net sales of Ketek(R) increased by 35.9% to euro 159 million.
Xatral(R)
Third-quarter net sales of Xatral(R) came to euro 80 million, up 15.9%.
In the 9 months to end September, net sales of Xatral(R) advanced by 16.2% to euro 237 million.
Adjusted consolidated income statement (unaudited)
The adjusted consolidated income statement (unaudited) is presented in Appendix 3.
Refer to Appendix 1 for a definition of “Proforma income statement” and “Adjusted net income”, and to Appendix 4 for reconciliations of the consolidated income statement to the adjusted consolidated income statement.
Third quarter of 2005 (vs. 2004 third-quarter adjusted pro forma)
Net sales generated by sanofi-aventis in the third quarter of 2005 came to euro 7,200 million, an increase of 11.0% on a comparable basis. Exchange rate movements had a favorable effect of 1.3 points, and changes in Group structure a negative effect of 0.7 of a point. After allowing for these impacts, reported-basis growth was 11.6%.
Gross profit was euro 5,665 million, 11.6% up on the third quarter of 2004. The gross margin ratio (78.7%) was unchanged from the comparable period of 2004. Cost of sales continued to fall as a percentage of net sales (25.7%, vs. 26.3% in the third quarter of 2004. Other revenues were stable in value terms.
Research and development expenses rose by 1.6% year-on-year to euro 992 million.
Selling and general expenses, at euro 2,018 million, were 4.2% higher than in the third quarter of 2004, and represented 28.0% of net sales (vs. 30.0% in Q3 2004). Promotional expenses grew at a faster rate in the third quarter than in the second quarter, while the reduction in general expenses was again more marked than in the previous quarter.
Other current operating income came to euro 59 million, against euro 96 million in the third quarter of 2004, reflecting a less favorable foreign exchange position over the quarter.
Operating income - current was up 20.2% at euro 2,653 million, representing 36.8% of net sales versus 34.2% in the third quarter of 2004, an improvement of 2.6 points.
Other operating income and expenses showed a net gain of euro 37 million, compared with a net loss of euro 14 million in the third quarter of 2004. In 2005, this line includes the euro 70 million gain on the divestment of the oral health business to Procter & Gamble.
Operating income rose by 24.2% to euro 2,687 million.
Net financial expense came to euro 19 million, compared with euro 213 million in the third quarter of 2004. This marked improvement reflects firstly a lower cost of debt capital, a reduction in debt due to cash flow generated by the Group, and a favorable effect from the remeasurement of financial instruments; and secondly euro 64 million of gains on the disposal of equity holdings (primarily Transkaryotic and Viropharma).
Income tax expense totaled euro 829 million, compared with euro 583 million for the third quarter of 2004, giving an effective tax rate of 31.1% (vs. 29.9% for the third quarter of 2004).
The share of profit from associates was euro 175 million, against euro 201 million for the third quarter of 2004. This line includes the Group’s share of after-tax profits from the territories managed by BMS under the Plavix(R) and Avapro(R) alliance (euro 112 million, vs. euro 107 million for the third quarter of 2004). The reduction in the share of profits from associates reflects the deconsolidation of Wacker-Chemie GmbH at the start of the third quarter.
Minority interests in net income were euro 91 million, compared with euro 74 million in the third quarter of 2004. This line includes the share of pre- tax profits paid over to BMS from territories managed by sanofi-aventis (euro 82 million, vs. euro 60 million for the third quarter of 2004).
Net income was up 28.7% at euro 1,923 million, and represented 26.7% of net sales, against 23.2% for the third quarter of 2004.
Earnings per share (EPS) came to euro 1.44, 27.4% higher than the 2004 third-quarter figure of euro 1.13, based on an average number of shares of 1,337,056,282 for the third quarter of 2005 and 1,327,656,093 for the third quarter of 2004.
First 9 months of 2005 (vs. adjusted pro forma, first 9 months of 2004)
In the 9 months to end September 2005, sanofi-aventis generated net sales of euro 20,304 million, a rise of 11.0% on a comparable basis. Exchange rate movements had a negative effect of 1.2 points, and changes in Group structure a negative effect of 0.9 of a point. After allowing for these impacts, reported-basis growth was 8.9%.
Gross profit for the 9 months to end September 2005 was euro 15,899 million, up 10.4% on the comparable period in 2004. The gross margin ratio was 78.3%, against 77.2% for the comparable period of 2004. This improvement reflects the combined effect of sales growth, productivity gains and purchasing efficiencies.
Research and development expenses were 0.3% higher than in the comparable period of 2004 at euro 2,894 million. The lack of significant growth in R&D spend reflects the impact of restructuring initiated by Aventis prior to the acquisition and the discontinuation of some R&D collaborations.
Selling and general expenses were 2.0% up on the comparable period of 2004 at euro 5,967 million, representing 29.4% of net sales. Promotional expenses increased faster than sales growth, while general expenses were sharply down.
Other current operating income came to euro 192 million, against euro 185 million on the comparable period of 2004, The Group’s share of profits from alliances, especially the Actonel(R) alliance, continues to grow.
Operating income - current was up 23.8% at euro 7,052 million, representing 34.7% of net sales, an improvement of 4.1 points over the comparable period of 2004.
Other operating income and expenses showed a net gain of euro 44 million, compared with euro 180 million for the comparable period of 2004. In 2004, this line included gains on divestments of euro 373 million (mainly from divestments by Aventis) and bid defense costs of euro 154 million. In 2005, it includes the euro 70 million gain on the divestment of the oral health business to Procter & Gamble.
Operating income was up 22.9% at euro 7,063 million, representing 34.8% of net sales (vs. 30.8% for the comparable period of 2004).
Net financial expense came to euro 224 million, versus euro 606 million for the comparable period of 2004. This improvement reflects a lower cost of debt capital, a reduction in debt due to cash flow generated by the Group, a favorable effect from the remeasurement of financial instruments, and gains on disposals of equity holdings (primarily Transkaryotic and Viropharma) in 2005.
Income tax expense was euro 2,131 million, against euro 1,530 million for the comparable period of 2004, giving an effective tax rate of 31.2% to end September 2005 (vs. 29.8% to end September 2004).
The share of profit from associates was euro 444 million, compared with euro 434 million for the first 9 months of 2004. This line includes the Group’s share of after-tax profits from the territories managed by BMS under the Plavix(R) and Avapro(R) alliance (euro 295 million, vs. euro 265 million for the first 9 months of 2004).
Minority interests amounted to euro 261 million, against euro 215 million for the first 9 months of 2004. This line includes the share of pre-tax profits paid over to BMS from territories managed by sanofi-aventis (euro 220 million, vs. euro 175 million for the first 9 months of 2004).
Net income was up 27.7% at euro 4,891 million, representing 24.1% of net sales (vs. 20.5% for the first 9 months of 2004).
Earnings per share (EPS) came to euro 3.66, 26.6% higher than the figure for the first 9 months of 2004 (euro 2.89), based on an average number of shares of 1,335,779,796 for the first 9 months of 2005 and 1,326,234,913 for the first 9 months of 2004.
Consolidated net debt
Consolidated net debt (defined as short-term debt plus long-term debt, net of cash and cash equivalents) fell from euro 12.8 billion at end June 2005 to euro 11.6 billion at end September 2005.
Share issue reserved for employees*
Under the authority granted by the shareholders’ meeting of May 31, 2005, the Board of Directors decided at its meeting of November 7, 2005 to carry out a share issue reserved for employees before the end of 2005. The main terms of the proposed issue are:
-- maximum issue: 0.5% of the share capital -- subscription price: 54.09 euros, i.e. a discount of 20% -- lock-up period: 5 years -- subscription period: November 21, 2005 through December 2, 2005
In accordance with IFRS, the fair value of the employee benefit arising from this share issue will be recognized in the final quarter of 2005.
2005 guidance
Based on its strong 2005 third-quarter performance, sanofi-aventis maintains its 2005 guidance.
Sanofi-aventis expects 2005 full-year comparable-basis net sales growth to be ahead of the world pharmaceutical market growth rate. Barring major adverse events, sanofi-aventis also expects 2005 full-year adjusted EPS growth of at least 20% (based on an exchange rate of euro 1:$1.25, with sensitivity to the euro/dollar exchange rate estimated at 0.5% of growth for a 1-cent movement in the exchange rate).
* Read the “Important Information” at the end of this press release Recent events September 6, 2005 Announcement of FDA approval for Ambien CR(TM) in the United States. September 6, 2005 Announcement of discontinuation of ACTIVE W arm (clopidogrel + aspirin versus oral anticoagulation) designed to evaluate clopidogrel in the prevention of vascular events in atrial fibrillation patients; the ACTIVE A and ACTIVE I arm of the clinical trial program are to continue. September 8, 2005 Recommendation by the FDA advisory committee panel that Exubera(R) be approved for use in adults with type 1 and type 2 diabetes. September 13, 2005 Announcement of distribution and supply agreement with Prasco Laboratories to launch an authorized generic version of Allegra(R) in the United States. September 13, 2005 Trial date of April 3, 2006 set for the Plavix(R) patent infringement litigation against Apotex Inc. and Apotex Corp. in the United States. September 15, 2005 Publication of interim analysis of phase III study on early-stage HER2-positive breast cancer showing Taxotere(R)-based chemotherapy combined with Herceptin(R) improves disease-free survival. September 15, 2005 Signature by Sanofi pasteur of a $100 million contract to produce vaccines against the H5N1 bird flu strain for the US government. September 21, 2005 Sanofi pasteur announces donation of 200,000 doses of influenza vaccine to support the American government’s efforts to tackle health problems in the aftermath of Hurricane Katrina. September 26, 2005 Acceptance by the FDA of filing of license application for Pentacel(TM), a new combined pediatric vaccine. September 30, 2005 Announcement that Sanofi pasteur and the FDA have been informed of 5 cases of Guillain-Barre syndrome following administration of Menactra. The FDA has requested Sanofi pasteur to inform patients and to report any further cases of Guillain-Barre syndrome. October 7, 2005 Announcement that Ambien CR(TM) is available in the United States. October 27, 2005 Start of hearings of motion for preliminary injunction in the Allegra(R) patent infringement case. October 28, 2005 Announcement by Pfizer and sanofi-aventis that they have been informed by the FDA in the United States that the original review period for the Exubera(R) license application is to be extended by three months. November 7, 2005 Decision by the sanofi-aventis Board of Directors to carry out a share issue reserved for Group employees 2006 Financial Diary January 30, 2006 2005 fourth-quarter net sales February 24, 2006 2005 results - analyst/investor meeting in Paris APPENDICES: List of appendices: Appendix 1: Explanatory notes Appendix 2: Net sales by product: third quarter of 2005 and first 9 months of 2005 Appendix 3: Adjusted consolidated income statements (unaudited): third quarter and first 9 months of 2005 Appendix 4: Reconciliation of consolidated income statement to adjusted consolidated income statement (unaudited): third quarter of 2005 and first 9 months of 2005 Appendix 1: Explanatory notes
Comparable net sales: When we refer to the change in our sales on a “comparable” basis, we mean that we exclude the impact of exchange rate movements and changes in Group structure (acquisitions and divestments of interests in entities and rights to products, and changes in consolidation method for consolidated entities).
For any two periods, we exclude the impact of exchange rates by recalculating sales for the earlier period on the basis of exchange rates used in the later period. We exclude the impact of acquisitions by including sales for a portion of the prior period equal to the portion of the current period during which we owned the entity or product rights based on sales information we receive from the party from whom we make the acquisition.
Similarly, we exclude sales in the relevant portion of the prior period when we have sold an entity or rights to a product.
For a change in consolidation method, the prior period is recalculated on the basis of the method used for the current period.
Reconciliation of 2004 pro forma reported net sales to 2004 pro forma comparable net sales
euro million 2004: 9 months Pro forma reported net sales 18,648
