Takeda Pharmaceutical Co. Ltd. · TSE:4502
Takeda Pharmaceutical — FY2018 Earnings Presentation
82 slides from Takeda Pharmaceutical's earnings presentation, May 14, 2019
Slide 1: FY2018 Reported Results in Detail
FY2018 REPORTED RESULTS IN DETAIL FY2017 FY2018 FY2018 LEGACY TAKEDA LEGACY TAKEDA*1 (A) SHIRE ACQUISITION RELATED COSTS*2 (B) LEGACY SHIRE*3 (C) PURCHASE ACCOUNTING IMPACT (D) CONSOLIDATED TOTAL (A)+(B)+(C)+(D) Revenue 1,770.5 1,788.0 +17.5 +1.0%—309.2—2,097.2 +326.7 +18.5% Cost of sales -495.9 -47
Slide 2: FY2019 Forecast
FY2019 FORECAST Note: This FY2019 Reported Forecast does not take into consideration the recently announced divestitures of XIIDRA and TACHOSIL, but Takeda does not expect these divestitures to have a material impact. The FY2019 Reported Forecast will be updated at a later date to reflect these dive
Slide 3: FY2018 Earnings Announcement
A COMPETITIVE, VALUES-BASED, R&D-DRIVEN, GLOBAL BIOPHARMACEUTICAL LEADER FY2018 Earnings Announcement May 14th, 2019
Slide 4: Important Notice
For the purposes of this notice, “presentation” means this document, any oral presentation, any question and answer session and any written or oral material discussed or distributed by Takeda Pharmaceutical Company Limited (“Takeda”) during the presentation. This presentation (including any oral bri
Slide 5: Agenda
AGENDA 01. Introduction 02. Business Area Focus 03. R&D Engine 04. Financial Strength 05. Closing Remarks 06. Q&A Session Christophe Weber President & CEO Costa Saroukos Chief Financial Officer Andrew Plump President, R&D Christophe Weber President & CEO
Slide 6: Introduction
Introduction 01. Business Area Focus 02. R&D Engine 03. Financial Strength 04. Closing Remarks 05. Q&A Session 06. INTRODUCTION Christophe Weber President & Chief Executive Officer
Slide 7: Clear Strategic Priorities
CLEAR STRATEGIC PRIORITIES AS A COMPETITIVE, VALUES-BASED, R&D-DRIVEN, GLOBAL BIOPHARMACEUTICAL LEADER 4 TAKEDA’S VALUES AND CULTURE Patient-Trust-Reputation-Business Best-in-class Employer 5 key business areas of GI, Rare Diseases, Plasma- Derived Therapies, Oncology, and Neuroscience Therapeutic A
Slide 8: Delivering on Strategic Priorities in FY2018
DELIVERING ON STRATEGIC PRIORITIES IN FY2018 5 • Key growth products continued to deliver strong revenue momentum (e.g. ENTYVIO +34.8%, NINLARO +36.1%, TRINTELLIX +19.4%) • Successful completion of Shire and TiGenix acquisitions • Acquired 10 new plasma collection centers since Shire acquisition clo
Slide 9: Business Momentum Delivering Excellent FY2018 Results
BUSINESS MOMENTUM DELIVERING EXCELLENT FY2018 RESULTS & A STRONG BASE FOR FUTURE GROWTH Well positioned for future growth • Momentum of key growth products in our 5 Key Business Areas expected to largely offset significant Loss of Exclusivity impact (e.g. VELCADE, FIRAZYR, ULORIC) and pricing headwi
Slide 10: FY2019 Management Guidance
7 UNDERLYING REVENUE GROWTH*1,2 Flat to slightly declining UNDERLYING CORE EARNINGS MARGIN Mid-twenties % UNDERLYING CORE EPS 350-370 yen ANNUAL DIVIDEND PER SHARE 180 yen Financial assumption for VELCADE in the U.S. is for one additional non-therapeutically equivalent competitor with intravenous an
Slide 11: Integration Highlights
INTEGRATION HIGHLIGHTS 8 INTEGRATION PROGRESSING WELL; INCREASING COST SYNERGY TARGET TO ~US$2B PRE-CLOSE POST-CLOSE PEOPLE & CULTURE ORGANIZATION/ LOCATIONS • Appointed new Takeda Executive Team (TET) • Appointed “TET-1” layer of top 200 leaders • Announced new operating model to leverage Takeda an
Slide 12: Diverse and Experienced Takeda Executive Team
DIVERSE AND EXPERIENCED TAKEDA EXECUTIVE TEAM SWITZERLAND US CHRISTOPHE WEBER President & CEO ANDY PLUMP President, Research & Development TERESA BITETTI President, Global Oncology Business Unit COSTA SAROUKOS Chief Financial Officer HARUHIKO HIRATE Corporate Communications & Public Affairs Officer
Slide 13: Board Composition for Best in Class Governance
BOARD COMPOSITION FOR BEST IN CLASS GOVERNANCE 10 Christophe Weber Representative Director, President & CEO Andrew Plump Director, President, Research & Development Yasuhiko Yamanaka Director, A&SC member Shiro Kuniya Independent Director, Chair A&SC Koji Hatsukawa Independent Director, A&SC member
Slide 14: Business Area Focus
Introduction 01. Business Area Focus 02. R&D Engine 03. Financial Strength 04. Closing Remarks 05. Q&A Session 06. BUSINESS AREA FOCUS Christophe Weber President & Chief Executive Officer 12
Slide 15: A Competitive, Values-Based, R&D-Driven Global Biopharmaceutical Leader
A COMPETITIVE VALUES-BASED, R&D-DRIVEN, GLOBAL BIOPHARMACEUTICAL LEADER Tokyo Takeda Global HQ Boston Area Global Hub Research sites Manufacturing sites APPROX. NET SALES BREAKDOWN BY REGION Listed on the Tokyo Stock Exchange (TSE: 4502) Listed on the New York Stock Exchange (NYSE: TAK) 13% EMERGING
Slide 16: Key Business Areas
5 KEY BUSINESS AREAS Magnyl Xefo Ebrantil ...etc. ~14%*2 *3 14
Slide 17: Balanced Portfolio of Key Products Including Global Brands
BALANCED PORTFOLIO OF KEY PRODUCTS INCLUDING 14 GLOBAL BRANDS EXPECTED TO CONTINUE TO DRIVE GROWTH OVER THE MID-TERM *1. Underlying Revenue shown for Legacy Takeda products. Pro-forma April 2018-March 2019 revenue shown for Legacy Shire products, converted at April 2018-March 2019 average exchange r
Slide 18: A Global Leader in Inflammatory Bowel Disease and Other GI Diseases
A GLOBAL LEADER IN INFLAMMATORY BOWEL DISEASE AND OTHER GI DISEASES Approved in 50+ countries, preparing to file in China Continue global roll out, positioning as first-line biologic option for patients who have failed conventional therapy Lifecycle management including subcutaneous formulation and
Slide 19: ENTYVIO Continues on Strong Growth Track
ENTYVIO CONTINUES ON STRONG GROWTH TRACK 5 YEARS FROM LAUNCH; WE NOW ESTIMATE PEAK SALES OF $4-5B*1 GI ENTYVIO (VEDOLIZUMAB) SUPERIOR TO ADALIMUMAB IN ACHIEVING CLINICAL REMISSION*2 AT WEEK 52 IN UC*3 31.3 22.5 0 20 40 60 PATIENTS, % (95% CI) 120/383 87/386 CLINICAL REMISSION (PRIMARY ENDPOINT) n= Î
Slide 20: Rare Metabolic: Maintain Stable Portfolio
RARE METABOLIC: MAINTAIN STABLE PORTFOLIO IN LYSOSOMAL STORAGE DISORDERS AND FOCUS ON NATPARA EXPANSION RARE DISEASES STABLE PORTFOLIO FOR LYSOSOMAL STORAGE DISORDERS Hunter syndrome Fabry disease Gaucher disease 17 NATPARA growth Stable portfolio for lysosomal storage disorders (ELAPRASE, REPLAGAL,
Slide 21: Rare Hematology
RARE HEMATOLOGY: CONTINUE TO DELIVER SIGNIFICANT VALUE TO PATIENTS IN INCREASINGLY COMPETITIVE ENVIRONMENT RARE DISEASES Approved in U.S., EU, Canada, Japan; continuing to roll-out launches in Europe and Emerging Markets Continue to focus on personalised Factor VIII replacement therapy with ADYNOVAT
Slide 22: Hereditary Angioedema: TAKHZYRO Growth
HEREDITARY ANGIOEDEMA: EXPECTED STRONG GROWTH OF TAKHZYRO SHOULD ENSURE TAKEDA MAINTAINS LEADERSHIP POSITION IN HAE RARE DISEASES Approved in the U.S., EU and Canada; under review in China Initial U.S. uptake comes from patients on existing prophylaxis therapies and those new to prophylaxis Focusing
Slide 23: Other Plasma-Derived Rare Immunology Products
OTHER PLASMA-DERIVED RARE IMMUNOLOGY PRODUCTS: MANAGING SUPPLY TO ENSURE STABLE GROWTH OF IG AND ALBUMIN PLASMA-DERIVED THERAPIES Approved in 50+ countries (KIOVIG in EU) Continue to build on GAMMAGARD LIQUID’s position as a highly recognized IVIG brand that is standard of care treatment for PID and
Slide 24: Making the Right Investments to Build a Competitive Leading Position
21 MAKING THE RIGHT INVESTMENTS TO BUILD A COMPETITIVE LEADING POSITION MANUFACTURING: RAMPING UP OPERATIONS AT COVINGTON • Received US FDA approval to manufacture FLEXBUMIN in March 2019 • Ramp up to full production over next several years, with a focus on manufacturing the IG portfolio and Albumin
Slide 25: Aspiration to Become a Global Top Oncology Player
ASPIRATION TO BECOME A GLOBAL TOP 10 ONCOLOGY PLAYER ONCOLOGY Approved in 60+ countries, FY2018 launches in China & France Continue global roll out and increase share in 2L+ MM based on profile of efficacy, convenience and tolerability Important data readout expected for transplant-ineligible MM mai
Slide 26: Strong U.S. Franchise with Leadership in ADHD
23 STRONG U.S. FRANCHISE WITH LEADERSHIP IN ADHD NEUROSCIENCE Approved in 23 countries, with Japan approval in March 2019 #1 branded ADHD medication in the U.S. Realize volume-driven U.S. growth over the mid-term by stabilizing market share in the pediatric population and expanding in adults Markete
Slide 27: Balanced Portfolio of Global Brands Expected to Drive Revenue Growth
24 BALANCED PORTFOLIO OF 14 GLOBAL BRANDS IN OUR KEY BUSINESS AREAS EXPECTED TO DRIVE REVENUE GROWTH IN THE MID-TERM WHILE THE R&D PIPELINE ADVANCES Key Growth Products in 5 Key Business Areas New launches GROWTH DRIVERS INCREMENTAL GROWTH Loss of Exclusivity Competitive pressure Pricing pressure HE
Slide 28: R&D Engine
Introduction 01. Business Area Focus 02. R&D Engine 03. Financial Strength 04. Closing Remarks 05. Q&A Session 06. R&D ENGINE Andrew Plump President, Research & Development
Slide 29: A Unique R&D Engine Driving Innovation
A UNIQUE R&D ENGINE DRIVING INNOVATION 26 HIGHLY FOCUSED PLASMA DERIVED THERAPIES ONCOLOGY GI RARE DISEASES VACCINE THERAPEUTIC AREAS LEADING PARTNERSHIP MODEL CULTURE OF INNOVATION UNIQUE R&D ENGINE Agile and lean organization, freeing up resources to be invested into pipeline development Dynamic a
Slide 30: Performance Against Important R&D Milestones in FY2018
PERFORMANCE AGAINST IMPORTANT R&D MILESTONES IN FY2018 COMPOUND EXPECTED EVENT ADCETRIS Front-Line Hodgkin’s Lymphoma EU approval decision H2 NEW Front-Line Hodgkin’s Lymphoma Japan approval decision H2 ALUNBRIG ALTA-1L Front-line ALK+ NSCLC 1st Interim Analysis H1 2nd-line ALK+ NSCLC EU approval de
Slide 31: New Molecular Entity Clinical Stage-Ups Since April 2018
INNOVATIVE PIPELINE HAS DELIVERED 15 NEW MOLECULAR ENTITY CLINICAL STAGE-UPS SINCE APRIL 2018 TAK-721 (SHP621) UCSD/Fortis Oral anti-inflammatory EoE CINRYZE C1 inhibitor TAK-609 (SHP609) I2S replacement Hunter CNS (IT) TAK-531 (SHP631) ArmaGen I2S replacement Hunter CNS TAK-611 (SHP611) ERT MLD TAK
Slide 32: Maximizing the Value of Our Approved Programs
MAXIMIZING THE VALUE OF OUR APPROVED PROGRAMS NATPARA PTH replacement Hypothyrodism (JP) NINLARO® Proteasome inhibitor R/R Amyloidosis (GL) ALUNBRIG® ALK inhibitor 1L ALK+NSCLC (EU, US) Cabozantinib Exelixis VEGFR/RTK inhibitor 1L RCC (JP) Cabozantinib Exelixis VEGFR/RTK inhibitor 2L HCC (JP) NINLAR
Slide 33: Selected Events Expected in FY2019 for New Molecular Entity Pipeline
NEXT WAVE OF INNOVATION: SELECTED EVENTS EXPECTED IN FY2019 FOR NEW MOLECULAR ENTITY PIPELINE MOA TAU /BU EXPECTED EVENT FY19 LATE PIPELINE ASSET TAK-924 (pevonedistat) NAE inhibitor Oncology Pivotal Ph-2 readout in myelodysplastic syndrome (MDS) H1 TAK-788 EGFR/HER2 inhibitor Oncology Ph-3 study st
Slide 34: Select R&D Pipeline Events for Approved Therapies in FY2019
SELECT R&D PIPELINE EVENTS FOR APPROVED THERAPIES EXPECTED IN FY2019 COMPOUND EXPECTED EVENT FY19 ADCETRIS ECHELON-2 submission in EU for front-line PTCL H1 ALUNBRIG 2nd interim analysis of ALTA-1L front-line ALK+ NSCLC H1 Cabozantinib 1st approval decision in Japan for 2nd-line renal cell cancer (R
Slide 35: Upcoming R&D Investor Days
UPCOMING R&D INVESTOR DAYS (ESTIMATED TIMING) 32 NEW YORK R&D Day Thursday, 14th November 2019* TOKYO R&D Day Thursday, 21st November 2019* * Invitations forthcoming upon confirmation of dates
Slide 36: Financial Strength
Introduction 01. Business Area Focus 02. R&D Engine 03. Financial Strength 04. Closing Remarks 05. Q&A Session 06. FINANCIAL STRENGTH Costa Saroukos Chief Financial Officer
Slide 37: FY2018 Excellent Results Driven by Key Growth Products and OPEX Discipline
FY2018 EXCELLENT RESULTS DRIVEN BY KEY GROWTH PRODUCTS AND STRICT OPEX DISCIPLINE FY18 LEGACY TAKEDA RESULTS*1 FY18 CONSOLIDATED RESULTS*2 UNDERLYING RESULTS GREATLY EXCEEDED ORIGINAL GUIDANCE • REVENUE +5.3% with significant contributions from ENTYVIO (+34.8%) & NINLARO (+36.1%) • CORE EARNINGS +38
Slide 38: FY2018 Legacy Takeda Reported Results
35 (BN YEN) FY2017 FY2018 VS. PY REVENUE 1,770.5 1,788.0 +1.0% OPERATING PROFIT 241.8 411.8 +70.3% NET PROFIT 186.9 312.9 +67.4% EPS*2 239 yen 399 yen +66.6% JPY/USD 111 yen 111 yen -0.4% JPY/EUR 129 yen 129 yen -0.4% FY2018 LEGACY TAKEDA*1 REPORTED RESULTS (VS. PY) FY2018 STRONG LEGACY TAKEDA PERFO
Slide 39: Legacy Takeda Performance Absorbed Shire Acquisition Costs
36 FY2018 STRONG LEGACY TAKEDA PERFORMANCE ENTIRELY ABSORBED SHIRE ACQUISITION RELATED COSTS INCURRED IN FY2018 *1. Announced on May 14, 2018. *2. Excludes Legacy Shire financials (from January 8, 2019 to March 31, 2019), costs incurred by Legacy Takeda and Legacy Shire related to the acquisition, a
Slide 40: FY2018 Consolidated Reported Results
37 FY2018 CONSOLIDATED REPORTED RESULTS REFLECT 3-MONTHS LEGACY SHIRE CONTRIBUTION *1. Includes Legacy Shire financials (from January 8, 2019 to March 31, 2019), costs incurred by Legacy Takeda and Legacy Shire related to the acquisition, and financial impact from purchase accounting *2. Number of s
Slide 41: FY2018 Reported Results Summary
38 FY2017 FY2018 FY2018 LEGACY TAKEDA LEGACY TAKEDA*1 (A) SHIRE ACQUISITION RELATED COSTS*2 (B) LEGACY SHIRE*3 (C) PURCHASE ACCOUNTING IMPACT (D) CONSOLIDATED TOTAL (A)+(B)+(C)+(D) REVENUE 1,770.5 1,788.0 +17.5 +1.0% - 309.2 - 2,097.2 +326.7 +18.5% OPERATING PROFIT 241.8 411.8 +170.0 +70.3% -85.0 59
Slide 42: *1. Excludes Legacy Shire financials (from January 8, 9 to March 31, 2019), costs
39 *1. Excludes Legacy Shire financials (from January 8, 2019 to March 31, 2019), costs incurred by Legacy Takeda and Legacy Shire related to the acquisition, and financial impact from purchase accounting Note: This slide does not include the revised guidance published on April 25, 2019
Slide 43: Underlying Core Earnings Margin Expanded 960bps in Two Years
40 UNDERLYING CORE EARNINGS MARGIN EXPANDED 960BPS IN 2 YEARS DRIVEN BY KEY GROWTH PRODUCTS AND EXECUTION OF THE GLOBAL OPEX INITIATIVE FY2017 FY2018 2 YEAR TOTAL*4 GROSS PROFIT*2 AS % OF REVENUE +280bps +140bps +420bps OPEX*3 AS % OF REVENUE +140bps +400bps +540bps UNDERLYING CORE EARNINGS MARGIN +
Slide 44: Purchase Price Allocation Resets Legacy Shire Balance Sheet
41 PURCHASE PRICE ALLOCATION RESETS LEGACY SHIRE BALANCE SHEET; INTANGIBLES LOWER THAN PRE-CLOSE ESTIMATE DUE TO UPDATED SYNERGY ASSUMPTION Other Assets, 629.4 Other Assets, 629.4 Other Inventory, 380.5 Inventory, 380.5 Assets, 1,115.5 Other Assets, 1,115.5 PPE, 707.9 PPE, 707.9 Inventory, 826.0 Inv
Slide 45: FY2019 Management Guidance
42 UNDERLYING REVENUE GROWTH*1,2 Flat to slightly declining UNDERLYING CORE EARNINGS MARGIN Mid-twenties % UNDERLYING CORE EPS 350-370 yen ANNUAL DIVIDEND PER SHARE 180 yen Financial assumption for VELCADE in the U.S. is for one additional non-therapeutically equivalent competitor with intravenous a
Slide 46: FY2019 Revenue Guidance Flat to Slightly Declining
43 FY2019 REVENUE GUIDANCE FLAT TO SLIGHTLY DECLINING ASSUMING SIGNIFICANT LOSS OF EXCLUSIVITY IMPACT *1. VELCADE financial assumption for the U.S. is one additional therapeutically non-equivalent competitor with intravenous and subcutaneous administration launching in July 2019. Also anticipating l
Slide 47: Increasing Expected Cost Synergy Target to ~US$2B
44 INCREASING EXPECTED COST SYNERGY TARGET FROM US$1.4B TO ~US$2B AFTER DEEP DIVE BOTTOM-UP REVIEW • Sales and marketing efficiencies • Consolidation of overlapping office locations • Elimination of duplicate IT systems • Reduction of duplicate costs across central support functions • Rationalizing
Slide 48: Cost Synergies and Global OPEX Initiative Drive Margin Improvement
45 • Leverage Global OPEX Initiatives platform (e.g. system and processes), with synergy tracking fully integrated • Tracking synergies monthly via key focused synergy cost packages (e.g. Compensation & Benefits, Travel, Meetings & Events, Facilities) • Embedded targets into KPIs and incentives of a
Slide 49: Targeting Top-Tier Underlying Core Earnings Margin
46 TARGETING UNDERLYING CORE EARNINGS MARGIN COMPARABLE TO TOP-TIER INDUSTRY LEVELS DRIVEN BY COST SYNERGIES AND THE GLOBAL OPEX INITIATIVE +960bps in two years MID 20’S STRONG TRACK RECORD OF DISPOSING NON-CORE ASSETS TO GENERATE CASH AND FOCUS THE BUSINESS FY2018 FY2019 TO DATE Agreement to divest
Slide 50: Divestiture of Non-Core Businesses
47 DIVESTITURE OF NON-CORE BUSINESSES Multilab & Techpool 27.5 DISPOSAL OF 39.3 REAL ESTATE 108.3 40.6 DISPOSAL OF MARKETABLE SECURITIES 65.0 FY2017 BN YEN BN YEN Note: Divestments of XIIDRA and TACHOSIL expected to close the second half of calendar year 2019, subject to customary closing conditions
Slide 51: Agreements for Two Divestitures: XIIDRA and TACHOSIL
48 SIMPLIFYING PORTFOLIO AND ACCELERATING DELEVERAGING WITH ANNOUNCEMENT OF AGREEMENTS FOR TWO DIVESTITURES XIIDRA (global rights) US$388M in fiscal year ended December 31, 2018 Novartis US$3.4B upfront in cash and up to an additional US$1.9B in potential milestone payments • Approximately 400 emplo
Slide 52: Committed to Investment Grade Credit Rating and Rapid Deleveraging
COMMITTED TO INVESTMENT GRADE CREDIT RATING AND RAPID DELEVERAGING 49 Note: Net Debt is defined as debt (bonds and loans of current and non-current liabilities) minus cash and cash equivalents *1. Pro forma adjusted EBITDA for April 2018 - March 2019 of both Legacy Takeda and Legacy Shire. Please re
Slide 53: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES 50 DE-LEVERAGE RAPIDLY INVEST IN GROWTH DRIVERS SHAREHOLDER RETURNS • Target 2.0x Net Debt / Adjusted EBITDA ratio in 3 to 5 years • Committed to investment grade credit ratings • Strategic internal investment in R&D and product launches • Disciplined and focused R&D pa
Slide 54: FY2019 Forecast: Strong Increase in Core Earnings
FY2019 FORECAST: STRONG INCREASE IN CORE EARNINGS +92.2%; NET PROFIT EXCLUDING DEAL-RELATED COSTS AND PURCHASE ACCOUNTING IMPACT +17.7% 51 FY2019 Forecast SHIRE ACQUISITION RELATED COSTS (B) PURCHASE ACCOUNTING IMPACT (C) - - -154.0 -693.0 -226.0 -570.0 -145 yen -367 yen FY2018 Actual FY2019 Forecas
Slide 55: Solid Delivery Against Our Financial Commitments
SOLID DELIVERY AGAINST OUR FINANCIAL COMMITMENTS FY2018 FY2019 AND BEYOND Increasing annual cost synergy target from $1. +540bps 4bn to ~$2bn by the end of FY2021 Deliver 100-200bps underlying Core Earnings margin improvement Embedded in systems, budgets, KPIs Executing and improving the Global Opex
Slide 56: Closing Remarks
Introduction 01. Business Area Focus 02. R&D Engine 03. Financial Strength 04. Closing Remarks 05. Q&A Session 06. CLOSING REMARKS Christophe Weber President & Chief Executive Officer
Slide 57: A Global, Values-Based, R&D-Driven Biopharmaceuticals Leader
54 A Global, Values-Based, R&D-Driven Biopharmaceuticals Leader Better Health, Brighter Future
Slide 58: Q&A Session
Introduction 01. Business Area Focus 02. R&D Engine 03. Financial Strength 04. Closing Remarks 05. Q&A Session 06. Q&A SESSION Christophe Weber President & Chief Executive Officer Costa Saroukos Chief Financial Officer Andrew Plump President, Research & Development Masato Iwasaki President, Japan Ph
Slide 59: Appendix
APPENDIX
Slide 60: Definition of Core and Underlying Growth
57 Definition of Core and Underlying Growth Takeda uses the concept of “Underlying Growth” for internal planning and performance evaluation purposes. Underlying Growth compares two periods (quarters or years) of financial results under a common basis and is used by management to assess the business.
Slide 61: Definition of EBITDA/Adjusted EBITDA
58 Definition of EBITDA/Adjusted EBITDA We present EBITDA and Adjusted EBITDA because we believe that these measures are useful to investors as they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We further believe t
Slide 62: FY2018 Reported Results in Detail
59 FY2018 REPORTED RESULTS IN DETAIL FY2017 FY2018 FY2018 LEGACY TAKEDA LEGACY TAKEDA*1 (A) SHIRE ACQUISITION RELATED COSTS*2 (B) LEGACY SHIRE*3 (C) PURCHASE ACCOUNTING IMPACT (D) CONSOLIDATED TOTAL (A)+(B)+(C)+(D) Revenue 1,770.5 1,788.0 +17.5 +1.0% - 309.2 - 2,097.2 +326.7 +18.5% Cost of sales -49
Slide 63: FY2018 Legacy Takeda Underlying Results
60 *1. Excludes Legacy Shire financials (from January 8, 2019, to March 31, 2019). (Bn yen) FY2017 FY2018 Revenue 1,673.2 1,762.3 +5.3% Gross Profit 1,201.1 1,290.2 +7.4% % of revenue 71.8% 73.2% +1.4pp OPEX -917.9 -897.5 +2.2% % of revenue -54.9% -50.9% +4.0pp Core Earnings 283.2 392.7 +38.7% % of
Slide 64: FY2018 Legacy Takeda's Growth Drivers
TOTAL LEGACY TAKEDA REVENUE FY2018 GASTROENTEROLOGY +19.4% ONCOLOGY +7.3% NEUROSCIENCE +15.5% EMERGING MARKETS +6.2% TOTAL +11.1% 61 FY2018 LEGACY TAKEDA’S GROWTH DRIVERS *1. Excludes Legacy Shire financials (from January 8, 2019, to March 31, 2019). 63%
Slide 65: Legacy Takeda Underlying Revenue Growth by Region
FY2018 LEGACY TAKEDA*1 UNDERLYING RESULTS (VS. PY) GROWTH DRIVERS Consumer Healthcare & Other Businesses U.S. JPY 608.3B +8.4% Japan JPY 496.9B +5.4% [+3.9%]*2 EUCAN JPY 329.0B +5.4% JPY 63.3B -19.9% EM JPY 264.9B +6.2% Emerging Markets Europe and Canada FY2018 Legacy Takeda*1 Underlying Revenue: JP
Slide 66: FY2018 Reconciliation from Reported to Core: Consolidated
63 FY2018 RECONCILIATION FROM REPORTED TO CORE: CONSOLIDATED Amortization & impairment of intangible assets Other operating income/ expense Shire acquisition related costs Shire purchase accounting adjustments Teva JV purchase accounting adjustments Other purchase accounting adjustments Gains on sal
Slide 67: FY2017 Reconciliation from Reported to Core: Consolidated
64 FY2017 RECONCILIATION FROM REPORTED TO CORE: CONSOLIDATED Amortization & impairment of intangible assets Other operating income/ expense Shire acquisition related costs Shire purchase accounting adjustments Teva JV purchase accounting adjustments Other purchase accounting adjustments Gains on sal
Slide 68: Legacy Takeda with Incurred Shire Acquisition Related Costs
65 Legacy Takeda*1 (A) Takeda incurred Shire acquisition related costs (B) Legacy Takeda incl. Shire acquisition related costs (A)+(B) Revenue 1,788.0 - 1,788.0 Cost of sales -476.4 - -476.4 Gross Profit 1,311.7 - 1,311.7 SG&A expenses -594.7 -23.8 -618.4 R&D expenses -323.7 - -323.7 Amortization of
Slide 69: FY2018 Reconciliation from Reported to Core/Underlying Core: Legacy Takeda
66 FY2018 RECONCILIATION FROM REPORTED TO CORE/UNDERLYING CORE: LEGACY TAKEDA Amortization & impairment of intangible assets Other operating income/ expense Shire acquisition related costs Shire purchase accounting adjustments Teva JV purchase accounting adjustments Other purchase accounting adjustm
Slide 70: FY2017 Reconciliation from Reported to Core/Underlying Core: Legacy Takeda
67 FY2017 RECONCILIATION FROM REPORTED TO CORE/UNDERLYING CORE: LEGACY TAKEDA Amortization & impairment of intangible assets Other operating income/ expense Shire acquisition related costs Shire purchase accounting adjustments Teva JV purchase accounting adjustments Other purchase accounting adjustm
Slide 71: Bridge from Reported Revenue to Underlying Revenue: Legacy Takeda
68 BRIDGE FROM REPORTED REVENUE TO UNDERLYING REVENUE: LEGACY TAKEDA (Bn yen) FY2017 FY2018 FY2017 FY2018 Revenue 401.0 408.0 +7.0 + 1.8% 1,770.5 1,788.0 +17.5 + 1.0% FX effects* -9.1 -0.7 +8.4 +2.2pp -37.8 -15.3 +22.5 +1.3pp Revenue excluding FX effects* 391.9 407.3 +15.4 + 3.9% 1,732.7 1,772.7 +40
Slide 72: Bridge from Operating Profit to Underlying Core Earnings
69 BRIDGE FROM OPERATING PROFIT TO UNDERLYING CORE EARNINGS : LEGACY TAKEDA * FX adjustment applies FY2018 plan rate to both years (1USD=105 yen, 1EUR=130 yen) ** Divestitures adjustments in FY2017, mainly include one-time gain from the 7 LLPs sold to the JV with Teva in May 2017, and in FY2018, mai
Slide 73: Bridge from Net Profit to Underlying Core Net Profit
70 BRIDGE FROM NET PROFIT TO UNDERLYING CORE NET PROFIT : LEGACY TAKEDA * FX adjustment applies FY2018 plan rate to both years (1USD=105 yen, 1EUR=130 yen) ** Divestitures adjustments in FY2017, mainly include one-time gain from the 7 LLPs sold to the JV with Teva in May 2017, and in FY2018, mainly
Slide 74: Free Cash Flow
71 (Bn yen) FY2017 FY2018 Net profit 186.7 109.0 -77.7 -41.6% Depreciation, amortization and impairment loss 195.7 282.6 +86.9 Decrease (increase) in trade working capital 19.9 28.9 +8.9 Income taxes paid -29.9 -44.9 -15.0 Other 5.4 -47.1 -52.5 Net cash from operating activities 377.9 328.5 -49.4 -1
Slide 75: Operating Free Cash Flow
OPERATING FREE CASH FLOW 72 • Sale of real estate and marketable securities generated an additional 173.4 Bn yen • Sale of non-core businesses Techpool and Multilab generated an additional 27.5 Bn yen The following items have been excluded from the above cash flow statement: *1 FY2017: 26.8 Bn yen o
Slide 76: Net Debt/Adjusted EBITDA
NET DEBT/ADJUSTED EBITDA 73 *1 FY2018 disposal objective: ~110 Bn yen in total *2 Includes short-term investments which mature or become due within one year from the reporting date *3 Bonds and loans of current and non-current liabilities 4 Please see slides 74 for details. (Bn yen) FY2017 FY2018 Op
Slide 77: Reconciliation from Net Profit to EBITDA/Adjusted EBITDA
74 RECONCILIATION FROM NET PROFIT TO EBITDA/ADJUSTED EBITDA 2017 2018 2019 Net profit for the year 115.5 186.7 109.0 Income tax expenses 27.8 30.5 -14.1 Depreciation and amortization 171.4 182.1 272.4 Interest expense, net 5.5 6.8 41.6 EBITDA 320.2 406.1 408.9 Impairment losses 51.4 13.5 10.1 Other
Slide 78: Consolidated Balance Sheet (as of March 31, 2019)
CONSOLIDATED BALANCE SHEET (AS OF MARCH 31, 2019) LEGACY TAKEDA 5,767.2 6,949.4 TOTAL ASSETS LEGACY TOTAL ASSETS SHIRE CURRENT ASSETS INTANGIBLE ASSETS GOODWILL OTHERS DEBT OTHER LIABILITIES CURRENT EQUITY ASSETS INTANGIBLE ASSETS GOODWILL OTHERS DEBT OTHER LIABILITIES EQUITY CURRENT ASSETS INTANGIB
Slide 79: FY2019 Forecast
76 FY2019 FORECAST Note: This FY2019 Reported Forecast does not take into consideration the recently announced divestitures of XIIDRA and TACHOSIL, but Takeda does not expect these divestitures to have a material impact. The FY2019 Reported Forecast will be updated at a later date to reflect these d
Slide 80: Our ESG Profile
OUR ESG PROFILE: FOCUSED ON CREATING CORPORATE VALUE AND FOSTERING SUSTAINABILITY 77 OUR LEADERSHIP • Access to Medicines Strategy • Global CSR Program in developing countries • Environmental targets and proactive CO2 reduction • Safe Takeda Initiative • Supply Chain and Compliance initiatives OUR R
Slide 81: Glossary of Abbreviations
78 AD Alzheimer’s disease ADC antibody drug conjugate ADHD attention deficit hyperactivity disorder ALK anaplastic lymphoma kinase ALS amyotrophic lateral sclerosis AML acute myeloid leukemia AMR antibody mediated rejection ASCT autologous stem cell transplant ARD acid-related diseases BTK Bruton’s
Slide 82: FY2018 Pipeline Supplemental
FY2018 PIPELINE SUPPLEMENTAL Takeda Pharmaceutical Company Limited (TSE code 4502) Contact: Global Finance, IR TEL: +81-3-3278-2306 https://www.takeda.com/ Quarterly Announcements / Presentations https://www.takeda.com/investors/reports/ Contents Pipeline 1. Development Activities 1-4 ⬛ Oncology Pip