Takeda Pharmaceutical Co. Ltd. · TSE:4502
Takeda Pharmaceutical — FY2020 Q4 Earnings Presentation
83 slides from Takeda Pharmaceutical's earnings presentation, May 11, 2021
Slide 1: FY2020 Q4 Earnings Announcement
BETTER HEALTH FOR PEOPLE, BRIGHTER FUTURE FOR THE WORLD FY2020 Q4 Earnings Announcement May 11, 2021
Slide 2: Important Notice
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”) regarding this presentation. This presentation (i
Slide 3: Agenda
01. Introduction Christophe Weber President & CEO 02. R&D Engine Andy Plump AGENDA President, R&D 03. Financial Strength Costa Saroukos Chief Financial Officer 04. Q&A Session
Slide 4: Better health for people, Brighter future for the world
Better health for people, Brighter future for the world Our vision is to discover and deliver life-transforming treatments, guided by our commitment to: PATIENTS PEOPLE PLANET fee 229 By & BY UNLEASHING THE POWER OF DATA AND DIGITAL Af
Slide 5: Pivoting from integration to accelerating topline & pipeline
PIVOTING FROM INTEGRATION TO ACCELERATING TOPLINE & PIPELINE FY2020 FY2021 A Year of Resilience While A Year of Inflection With Essentially Closing Out Integration Focus on Topline & Pipeline • Resilience through COVID-19 pandemic • Acceleration of topline growth • Maintained business continuity • M
Slide 6: FY2020 results demonstrated resilience of portfolio
FY2020 RESULTS DEMONSTRATED RESILIENCE OF PORTFOLIO DELIVERED MANAGEMENT GUIDANCE WITH STRONG MARGINS & ROBUST CASHFLOW • UNDERLYING REVENUE +2.2%1 growth Driven by 14 Global Brands with underlying growth of +16.0% • REPORTED REVENUE JPY 3,197.8B (~USD 28.9B) Declined -2.8% due to FX and divestiture
Slide 7: Effectively transforming the entire PDT value chain
EFFECTIVELY TRANSFORMING THE ENTIRE PDT VALUE CHAIN • Capacity investments and transformation across the value chain strengthened resilience during pandemic • Higher pandemic-related costs will be offset by process optimization and product mix, with margins improving over time PLASMA SOURCING PLASMA
Slide 8: Progress with vaccine partnerships to combat COVID-19
PROGRESS WITH VACCINE PARTNERSHIPS TO COMBAT COVID-19 Vaccine Mechanism Current status Candidate Recombinant s-protein • Partnership with Novavax in Japan for the development, manufacturing and commercialization TAK-019 vaccine candidate against of 250 million doses of their COVID-19 vaccine candida
Slide 9: Underlying revenue growth expected to accelerate in FY2021
UNDERLYING REVENUE GROWTH EXPECTED TO ACCELERATE IN FY2021; RAMPING UP R&D INVESTMENT TO SUPPORT THE PIPELINE FY2020 FY2021 UNDERLYING3 (BN YEN) RESULTS FORECAST (MANAGEMENT GUIDANCE) REVENUE 3,197.8 3,370.0 Mid-single-digit growth R&D EXPENSES -455.8 -522.0 REPORTED OPERATING PROFIT 509.3 488.0 Mid
Slide 10: Agenda
01. Introduction Christophe Weber President & CEO 02. R&D Engine Andy Plump AGENDA President, R&D 03. Financial Strength Costa Saroukos Chief Financial Officer 04. Q&A Session
Slide 11: Takeda R&D's pipeline momentum in FY2020
TAKEDA R&D’S PIPELINE MOMENTUM IN FY2020 ALUNBRIG 1L ALK+ NSCLC (US) REGULATORY ENTYVIO SC (EU) APPROVAL 6 Approvals in Japan 4 Approvals in China TAK-003 (Dengue vaccine) REGULATORY Mobocertinib SUBMISSION Eohilia1 Maribavir on track PHASE 2 Soticlestat & POC TAK-994 1. In activ
Slide 12: Our pipeline is poised to deliver now and in the future
OUR PIPELINE IS POISED TO DELIVER NOW AND IN THE FUTURE WAVE 11 CLINICAL-STAGE NMEs WAVE 22 Research engine is targeting 10-12 TARGET APPROVAL FY21 FY22 FY23 FY24 FY25 and Beyond IND filings in FY21 •• mobocertinib • pevonedistat mobocertinib pevonedistat TAK-981 TAK-676 TAK-252 TAK-102 2L NSCLC wit
Slide 13: Acceleration of pipeline events in Q4 FY2020
ACCELERATION OF PIPELINE EVENTS IN Q4 FY2020 TAK-861 (second oral orexin) PIPELINE TAK-186 (bispecific T-cell engager) ADDITION TAK-510 (once daily SC for Nausea/Vomiting) COVID-19 vaccines in Japan: TAK-019 (Novavax), TAK-919 (Moderna) Mobocertinib and TAK-919 (COVID-19 vaccine [JP]) file
Slide 14: TAK-994 oral agonist met early proof-of-concept
TAK-994 ORAL AGONIST MET EARLY PROOF-OF-CONCEPT AT 4 WEEKS AND PROGRESSED TO PHASE 2B Comparison of sleep latency in the Maintenance of Wakefulness Test (MWT)1 Placebo adjusted (minutes) TAK-994-1501: Criteria For Progression To Phase 2B MWT-placebo adjusted, minimum 30min 40 improvement over baseli
Slide 15: Solid performance in FY2020 for Wave 1 and Wave 2
SOLID PERFORMANCE IN FY2020 FOR WAVE 1 AND WAVE 2 MOA TAU /BU EXPECTED EVENT 1 FY20 COMMENTS Proof-of-concept data in Lennox-Gastaut syndrome for ELEKTRA study H1 Soticlestat CH24H inhibitor Neuroscience Proof-of-concept data in Dravet syndrome for ELEKTRA H1 TAK-935 Proof-of-concept data in complex
Slide 16: Global and regional brand expansion in FY2020
GLOBAL AND REGIONAL BRAND EXPANSION IN FY2020 COMPOUND EXPECTED EVENT 1 FY20 Comments ADCETRIS Approval decision for R/R HL and ALCL in China H1 ICLUSIG Submission in US of OPTIC data for CP-CML H2 Approval obtained from FDA in Dec 2020 Approval decision in US for 1L ALK+ NSCLC H1 ONCOLOGY ALUNBRIG
Slide 17: FY2021: Unprecedented year for the Takeda R&D pipeline
FY2021: UNPRECEDENTED YEAR FOR THE TAKEDA R&D PIPELINE Anticipate 5 to 6 NME submissions under US FDA and other major WAVE 1 global agency review SUBMISSIONS Potential for 4 NME approvals: TAK-003, mobocertinib, maribavir, AND APPROVALS Eohilia1 Orexin franchise WAVE 1 / WAVE 2 o TAK-994 Phase
Slide 18: R&D strategy
A GLOBAL VALUES-BASED BIOPHARMACEUTICAL COMPANY WITH A PATIENT-DRIVEN AND SCIENCE-FIRST R&D ENGINE R&D STRATEGY INNOVATIVE PIPELINE • 11 WAVE 1 NMEs INNOVATIVE BIOPHARMA • ~30 WAVE 2 NMEs • ~40% internal / ~60% external spend • Targeted population/high innovation bar ONCOLOGY RARE GENETICS & NEUROSC
Slide 19: Pipeline momentum drives R&D investment in FY2021
PIPELINE MOMENTUM, CAPABILITY BUILDING & PARTNERSHIPS DRIVE R&D INVESTMENT IN FY2021 R&D EXPENSES Pipeline Momentum (BN JPY) Further investment in 40+ prioritized NMEs, including Orexin franchise, 66.2 Cell Therapy (including TAK-007) and TAK-981 Legacy ~JPY 50BN reduction Shire1 driven by ~JPY 60BN
Slide 20: Preparing for an inflection year FY2021
PREPARING FOR AN INFLECTION YEAR FY2021 MAJOR MILESTONES INCLUDE 4 POSSIBLE NME APPROVALS MOA TAU /BU EXPECTED EVENT1 FY21 COMMENTS Eohilia Muco‐adherent topical In active discussions with the FDA. Projected approval Gastroenterology US NDA approval for Eosinophilic Esophagitis TBD TAK-721 corticost
Slide 21: Continued global and regional brand expansion in FY2021
CONTINUED GLOBAL AND REGIONAL BRAND EXPANSION IN FY2021 COMPOUND EXPECTED EVENT1 FY21 Comments ADCETRIS Approval decision for CTCL in China H1 Approval decision in JP for maintenance therapy in patients with newly diagnosed Multiple NINLARO H1 ONCOLOGY Myeloma not treated with stem cell transplant I
Slide 22: Our R&D engine is delivering
OUR R&D ENGINE IS DELIVERING 11 + 2 ~30 11 WAVE 1 pipeline NMEs with best-in-class / WAVE 2 programs with transformative or curative first-in-class potential in areas of high unmet need potential to support sustainable growth from FY2025. TAK-999 and TAK-981 are on the cusp of WAVE 1 with • Anticipa
Slide 23: Agenda
01. Introduction Christophe Weber President & CEO 02. R&D Engine Andy Plump AGENDA President, R&D 03. Financial Strength Costa Saroukos Chief Financial Officer 04. Q&A Session
Slide 24: Relentless execution against our financial commitments
RELENTLESS EXECUTION AGAINST OUR FINANCIAL COMMITMENTS Delivered FY2020 management guidance with resilient performance FINANCIALS driven by 14 Global Brands, accelerated cost synergies and OPEX efficiencies SYNERGIES Accelerated cost synergies and achieved $2.3B target one year ahead of plan MARGINS
Slide 25: Delivered FY2020 management guidance
DELIVERED FY2020 MANAGEMENT GUIDANCE WHILE CLOSING OUT INTEGRATION & BEGINNING RAMP-UP OF R&D SPEND FY2020 FY2020 GUIDANCE1 RESULTS DRIVERS UNDERLYING REVENUE GROWTH2 Low-single-digit +2.2% Topline growth driven by 14 Global Brands UNDERLYING CORE OPERATING High-single-digit +13.0% Growth of 14 Glob
Slide 26: Resilient FY2020 delivering low-30s core margins and robust cash flow
RESILIENT FY2020 DELIVERING LOW-30s CORE MARGINS AND ROBUST CASH FLOW FY2020 FINANCIAL RESULTS (SUMMARY) (BN YEN) REPORTED CORE*1 UNDERLYING*2 FY2020 VS. PRIOR YEAR FY2020 VS. PRIOR YEAR REVENUE 3,197.8 -2.8% 3,197.8 -2.8% +2.2% OPERATING PROFIT 509.3 +407.2% 967.9 +0.6% +13.0% Margin 15.9% +12.9pp
Slide 27: Business momentum driven by 14 Global Brands
BUSINESS MOMENTUM DRIVEN BY 14 GLOBAL BRANDS; CORE OPERATING PROFIT GROWTH DESPITE DIVESTITURES & FX Reported Revenue FY2020 vs FY2019 Core Operating Profit FY2020 vs FY20191 (BN JPY) -2.8% +0.6% +2.2pp -2.1pp 3,291.2 -3.0pp 3,197.8 962.2 967.9 FY2019 Business Divestitures FX FY2020 FY2019 Business
Slide 28: Underlying revenue growth driven by key business areas
UNDERLYING REVENUE GROWTH +2.2%1 DRIVEN BY 5 KEY BUSINESS AREAS +4.7%, REPRESENTING ~82% OF FY2020 REVENUE RARE DISEASES PLASMA-DERIVED % of Sales: 19% THERAPIES (PDT) OTHER Growth: -2% % of Sales: 18% GI ONCOLOGY NEUROSCIENCE Growth: -9% % of Sales: 24% RARE METABOLIC RARE HEMATOLOGY HEREDITARY ANG
Slide 29: Global brands underlying revenue growth of +16.0%
14 GLOBAL BRANDS UNDERLYING REVENUE GROWTH OF +16.0% DESPITE NATPARA U.S. RECALL IN PRIOR FISCAL YEAR AND ALBUMIN CHINA DYNAMICS FY2020 REVENUE FY2020 REVENUE versus PY GLOBAL versus PY GLOBAL (BN JPY) (MM USD) (underlying) BRAND (BN JPY) (MM USD) (underlying) BRAND 429.3 3,881 +26.2% IMMUNOGLOBULIN
Slide 30: Core operating profit adjusts for purchase accounting and one-time items
CORE OPERATING PROFIT ADJUSTS FOR ITEMS INCLUDING PURCHASE ACCOUNTING EXPENSES, OTHER ACQUISITION-RELATED COSTS, AND ONE-TIME GAINS/LOSSES BRIDGE FROM FY2020 REPORTED TO CORE OPERATING PROFIT 1 (BN JPY) 421.9 79.6 -124.1 Other 967.9 102.4 Adjustment of impact from items including: 319.5 Gain on sale
Slide 31: Faster and larger synergies delivered
FASTER AND LARGER SYNERGIES DELIVERED WHILE MAINTAINING BUSINESS MOMENTUM Cumulative Synergy Savings1 (USD BN) $2.3B SYNERGY TARGET DELIVERED 1 YEAR EARLY • Headcount rationalization completed resulting in $830m of savings; rapidly Manufacturing & Supply Actual by FY20 Target by FY21 executed employ
Slide 32: Accelerated synergy capture driving margin expansion
ACCELERATED SYNERGY CAPTURE DRIVING SIGNIFICANT MARGIN EXPANSION AND SETTING THE FOUNDATION FOR FUTURE GROWTH UNDERLYING CORE OPERATING PROFIT MARGIN EXPANSION FROM FY2018 TO FY2020 +8pp FY2021 MARGIN UPDATED FY21-23 30.2% GUIDANCE MARGIN TARGET +2pp ~30% Low-to-mid 30%s -1pp +7pp $2.3 BN SUCCESSFUL
Slide 33: Exceeded $10B non-core asset divestitures target
EXCEEDED $10B NON-CORE ASSET DIVESTITURES TARGET & INCREMENTAL TARGET FOR REAL ESTATE & MARKETABLE SECURITIES NON-CORE ASSET DIVESTITURES SALE OF REAL ESTATE (ANNOUNCED SINCE JANUARY 2019) DEAL CLOSED & MARKETABLE SECURITIES2 XIIDRA up to $5.3B JUN ‘19 (IN FY2020) NEMEA $200M MAR ‘20 CASH RECEIVED R
Slide 34: FY2020 robust cashflow covered dividend, debt repayment & interest
FY2020 ROBUST CASHFLOW COMFORTABLY COVERED FULL YEAR DIVIDEND, DEBT REPAYMENT & INTEREST Total liquidity of JPY 1.5T (USD 13.5B)2 (BN JPY) including JPY 700B from undrawn 1 committed line of credit Free Cash Flow 1,237.8 and excluding pass-through deposit 236.5 32. 638.8 175.5 175.5 472.2 283.4 76.3
Slide 35: Net debt reduced by JPY ~1.7TN since March 2019
NET DEBT REDUCED BY JPY ~1.7TN (USD ~15B) SINCE MARCH 2019 NET DEBT/ADJUSTED EBITDA AT 3.2x, DOWN FROM 4.7x CHANGE IN NET DEBT (BN JPY) 5,097.9 Free Cash Flow 1 1,237.8 Excludes restricted pass-through deposit of JPY 175.5 B 4,234.0 1,010.9 3,429.4 106.2 43.6 283.4 638.8 175.5 236.5 2019 2020 Operat
Slide 36: Underlying revenue growth expected to accelerate in FY2021
UNDERLYING REVENUE GROWTH EXPECTED TO ACCELERATE IN FY2021; RAMPING UP R&D INVESTMENT TO SUPPORT THE PIPELINE FY2020 FY2021 UNDERLYING3 (BN YEN) RESULTS FORECAST (MANAGEMENT GUIDANCE) REVENUE 3,197.8 3,370.0 Mid-single-digit growth R&D EXPENSES -455.8 -522.0 REPORTED OPERATING PROFIT 509.3 488.0 Mid
Slide 37: FY2021 reported revenue growth of +5.4%
FY2021 REPORTED REVENUE GROWTH OF +5.4% DESPITE NON-RECURRING NET HEADWINDS FROM DIVESTITURES, DRIVEN BY BUSINESS MOMENTUM (BN JPY) FY2021 Reported Revenue Forecast +5.4% 133.0 3,370.0 -185.0 3,197.8 FY2020 Underlying Business Sale of Japan Impact of Divestitures FX FY2021 Forecast Actual Momentum d
Slide 38: FY2021 core operating profit forecast
FY2021 CORE OPERATING PROFIT FORECAST: BUSINESS MOMENTUM MORE THAN OFFSETS NON-RECURRING IMPACT OF DIVESTITURES (BN JPY) FY2021 Core Operating Profit1 Forecast -3.9% 967.9 930.0 Year-on-year growth excluding incremental R&D investment FY2020 Actual Underlying Business Impact of FX FY2020 excl. Incre
Slide 39: FY2021 reported operating profit forecast
FY2021 REPORTED OPERATING PROFIT FORECAST REFLECTS HIGHER R&D SPEND, FEWER GAINS ON NON-CORE ASSET SALES, AND LOWER INTEGRATION COSTS (BN JPY) FY2021 Reported Operating Profit Forecast -4.2% 509.3 488.0 Reflecting higher R&D expense -228.9 Includes 130.0 Japan diabetes portfolio FY2020 Actual Change
Slide 40: Abundant cashflow enabled pay-down of maturities and early pre-payment
ABUNDANT CASHFLOW ENABLED PAY-DOWN OF FY2020 MATURITIES, AS WELL AS EARLY PRE-PAYMENT OF ALL DEBT MATURING IN FY2021 MATURITY LADDER AS OF MARCH 31, 2021 (AS ADJUSTED)1 1,000 800 $200m Bond $2B JBIC Loan Called April 2021 Called April 2021 BILLION JPY 600 CALLED 400 PAID OFF HYBRID PAID OFF 200 - ‖
Slide 41: FY2021 cash flow forecast
FY2021 CASH FLOW FORECAST: ROBUST CASH FLOW TO DRIVE FURTHER DELEVERAGING (BN JPY) Total liquidity of JPY 1.2T (USD 10.8B)4 including JPY 700B from undrawn ~450 committed line of credit 600 ~ 700 285 966.2 ~95 ~160 ~110 450 ~ 550 March 2021 Free Cash Flow1 Planned debt Dividend Interest Pass-through
Slide 42: Capital allocation to maximize value for patients & shareholders
CAPITAL ALLOCATION TO MAXIMIZE VALUE FOR PATIENTS & SHAREHOLDERS Takeda is delivering on its financial commitments and has a strong cash flow outlook driven by business momentum, cost synergies, and non-core asset divestures. Guided by our values and commitment to patients, people and the planet,
Slide 43: Pivoting from integration to accelerating topline & pipeline
PIVOTING FROM INTEGRATION TO ACCELERATING TOPLINE & PIPELINE FY2018-FY2020 FY2021 AND BEYOND FINANCIALS Delivered management guidance each year Acceleration of topline growth to Mid-single digit underlying revenue growth guidance in FY2021 through integration & pandemic Topline growth momentum expec
Slide 44: Q&A Session
Q&A SESSION Christophe Weber Andy Plump Costa Saroukos Milano Furuta Julie Kim President & Chief President, Research & Chief Financial Officer President, Japan Pharma President, Plasma-Derived Executive Officer Development Business Unit Therapies Business Unit
Slide 45: Appendix
APPENDIX n
Slide 46: Upcoming investor events
UPCOMING INVESTOR EVENTS ONCOLOGY JUNE 8TH, 2021, TUESDAY, 6:30pm (EDT) STRATEGIC UPDATE CALL JUNE 9TH, 2021, WEDNESDAY, 7:30am (JST) ANNUAL GENERAL MEETING OF JUNE 29TH, 2021, TUESDAY SHAREHOLDERS (TIME TO BE CONFIRMED) JULY 2021 FINANCE STRATEGY DAY (DATE TO BE CONFIRMED) FY2021 Q1 EARNINGS CALL J
Slide 47: Takeda's disclosure metrics
TAKEDA’S DISCLOSURE METRICS “REPORTED” “CORE” “UNDERLYING” Financial results recorded and From Reported Results, adjust for: From Core Results, further adjust for: prepared in accordance with 1. Amortization and impairment 1. Impact of foreign exchange International Financial Reporting expenses for
Slide 48: Definition of core and underlying growth
DEFINITION OF CORE AND UNDERLYING GROWTH Takeda uses the concept of Underlying Growth for internal planning and performance Core Operating Profit represents net profit adjusted to exclude income tax expenses, evaluation purposes. the share of profit or loss of investments accounted for using the equ
Slide 49: Definition of free cash flow
DEFINITION OF FREE CASH FLOW We present Free Cash Flow because we believe that this measure is useful to investors as similar measures of liquidity are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Free Cash Flow is als
Slide 50: Definition of EBITDA/Adjusted EBITDA and net debt
DEFINITION OF EBITDA/ADJUSTED EBITDA AND NET DEBT EBITDA and 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
Slide 51: Exceptional growth of GI franchise led by Entyvio
G A ST R OENT ER OL OG Y ( G I) EXCEPTIONAL GROWTH OF GI FRANCHISE SPEARHEADED BY GUT-SELECTIVE ENTYVIO® GI P O RTFOL IO EX P A ND ING P A T IENT SH A R E FY2020 REVENUE The only gut-selective IBD therapy, ENTYVIO provides early control, with superior long-term, multi-layered remission and because o
Slide 52: Hereditary angioedema portfolio posts double digit underlying growth
R A R E D ISEA SES HEREDITARY ANGIOEDEMA (HAE) PORTFOLIO POSTS DOUBLE DIGIT UNDERLYING GROWTH DRIVEN BY CONTINUED EXCELLENT PERFORMANCE FROM TAKHZYRO® TAKHZYRO IS EXPANDING THE HEREDITARY ANGIOEDEMA PROPHYLAXIS MARKET HEREDITARY ANGIOEDEMA FY 2020 R E V E N UE U.S.: (BN JPY) TAKHZYRO is market lea
Slide 53: Rare metabolic and rare hematology
R A R E D ISEA SES RARE METABOLIC SUSTAINED GROWTH EXCEPT FOR NATPARA® U.S. RECALL; RARE HEMATOLOGY COMPETITIVE LANDSCAPE IN LINE WITH EXPECTATIONS RARE METABOLIC RARE HEMATOLOGY FY 2020 R E V E N UE FY 2020 R E V E N UE (BN JPY) (+8% growth excluding NATPARA) (BN JPY) 200 +2% 400 -9% NATPARA 150 +6
Slide 54: PDT growth driven by Gammagard Liquid, Cuvitru & HyQvia
P L A SM A - D ER IVED T H ER A P IES PDT GROWTH DRIVEN BY GAMMAGARD LIQUID, CUVITRU & HYQVIA PDT IMMUNOLOGY PORTFOLIO FY 2020 R E V E N UE (BN JPY) Immunoglobulin products underlying growth (+16%) driven by strong demand for Gammagard Liquid in the U.S. and for subcutaneous IG 450 +10% portfolio
Slide 55: Strong oncology portfolio continues to expand indications
O NC OL OG Y STRONG ONCOLOGY PORTFOLIO CONTINUES TO EXPAND INDICATIONS A L U NB R IG R EC EIVES A P P R OVA L IN J A P A N ONCOLOGY PORTFOLIO FY2020 REVENUE Received manufacturing and marketing approval in Japan for first and second-line treatment of patients with unresectable, (BN JPY) advanced o
Slide 56: Neuroscience portfolio experiencing some impact from COVID-19
N EU R OSC IENC E NEUROSCIENCE PORTFOLIO EXPERIENCING SOME IMPACT FROM COVID-19; NEW PATIENT STARTS RECOVERING BUT NOT YET BACK TO PRE-COVID LEVELS COVID-19 related stay-at-home restrictions significantly NEUROSCIENCE PORTFOLIO reduced patient visits, subsequent diagnoses and FY2020 REVENUE create
Slide 57: FY2020 reported results
FY2020 REPORTED RESULTS (BN JPY) FY2019 FY2020 vs. PY Revenue 3,291.2 3,197.8 -93.4 -2.8% Cost of sales -1,089.8 -994.3 +95.5 +8.8% Gross Profit 2,201.4 2,203.5 +2.1 +0.1% Margin 66.9% 68.9% +2.0pp SG&A expenses -964.7 -875.7 +89.1 +9.2% R&D expenses -492.4 -455.8 +36.5 +7.4% Amortization of intangi
Slide 58: FY2020 Q4 (Jan-Mar) reported results
FY2020 Q4 (Jan-Mar) REPORTED RESULTS FY2019 FY2020 (BN JPY) Q4 Q4 vs. PY (Jan-Mar) (Jan-Mar) Revenue 771.7 770.3 -1.4 -0.2% Cost of sales -248.2 -253.4 -5.3 -2.1% Gross Profit 523.5 516.8 -6.7 -1.3% Margin 67.8% 67.1% -0.7pp SG&A expenses -253.1 -234.4 +18.7 +7.4% R&D expenses -139.3 -113.3 +26.0 +1
Slide 59: FY2020 core results
FY2020 CORE RESULTS1 (BN JPY) FY2019 FY2020 vs. PY Revenue 3,291.2 3,197.8 -2.8% Gross Margin 72.9% 71.6% -1.3pp Operating expenses -1,438.7 -1,323.0 +8.0% % of Revenue 43.7% 41.4% -2.3pp Core Operating profit 962.2 967.9 +0.6% Margin 29.2% 30.3% +1.0pp Core tax rate -27.8% -22.4% +5.4pp Core Net pr
Slide 60: FY2020 Q4 (Jan-Mar) core results
FY2020 Q4 (Jan-Mar) CORE RESULTS1 FY2019 FY2020 (BN JPY) Q4 Q4 vs. PY (Jan-Mar) (Jan-Mar) Revenue 771.7 770.3 -0.2% Gross Margin 71.8% 68.9% -2.9pp Operating expenses -384.1 -343.1 +10.7% % of Revenue 49.8% 44.5% -5.2pp Core Operating profit 170.0 187.3 +10.1% Margin 22.0% 24.3% +2.3pp Core tax rate
Slide 61: Reconciliation from reported revenue to underlying revenue FY2020
RECONCILIATION FROM REPORTED REVENUE TO UNDERLYING REVENUE FY2020 (BN JPY) FY2019 FY2020 vs. PY Revenue 3,291.2 3,197.8 -93.4 -2.8% Fx effects*1 +3.0pp Divestitures*2 +2.1pp XIIDRA +0.3pp Regional portofolio +1.2pp TACHOSIL +0.1pp Others +0.4pp Underlying Revenue Growth + 2.2% *1 FX adjustment appli
Slide 62: Reconciliation to underlying revenue FY2020 Q4
RECONCILIATION FROM REPORTED REVENUE TO UNDERLYING REVENUE FY2020 Q4 (Jan-Mar) FY2019 FY2020 (BN JPY) Q4 Q4 vs. PY (Jan-Mar) (Jan-Mar) Revenue 771.7 770.3 -1.4 -0.2% Fx effects*1 +2.2pp Divestitures*2 +3.4pp Regional portofolio +2.0pp TACHOSIL +0.4pp Others +1.1pp Underlying Revenue Growth + 5.4% *1
Slide 63: Reconciliation from reported to core/underlying core FY2020
RECONCILIATION FROM REPORTED TO CORE/UNDERLYING CORE FY2020 REPORTED TO CORE ADJUSTMENTS CORE TO UNDERLYING CORE ADJ. Amortization Other Shire Teva JV UNDERLYING (BN JPY) REPORTED & Shire CORE GROWTH operating integration purchase related TCHC Swiss Tax Others FX Divestitures impairment of income/ a
Slide 64: Reconciliation to core/underlying core FY2020 Q4
RECONCILIATION FROM REPORTED TO CORE/UNDERLYING CORE FY2020 Q4 (Jan-Mar) REPORTED TO CORE ADJUSTMENTS CORE TO UNDERLYING CORE ADJ. Amortization (BN JPY) REPORTED & Other Shire Teva JV CORE UNDERLYING impairment operating Shire purchase related TCHC Swiss Tax GROWTH of integration divestiture* Reform
Slide 65: Reconciliation to core/underlying core FY2019
RECONCILIATION FROM REPORTED TO CORE/UNDERLYING CORE FY2019 REPORTED TO CORE ADJUSTMENTS CORE TO UNDERLYING CORE ADJ. (BN JPY) REPORTED Amortization & Other Shire Shire Teva JV CORE UNDERLYING impairment of operating acquisition purchase related Swiss Tax CORE intangible income/ related accounting a
Slide 66: Reconciliation to core/underlying core FY2019 Q4
RECONCILIATION FROM REPORTED TO CORE/UNDERLYING CORE FY2019 Q4 (Jan-Mar) REPORTED TO CORE ADJUSTMENTS CORE TO UNDERLYING CORE ADJ. (BN JPY) REPORTED Amortization & Other Shire Teva JV CORE UNDERLYING impairment of operating Shire purchase related Swiss tax CORE integration reform Others FX Divestitu
Slide 67: Reconciliation from reported to core FY2018
RECONCILIATION FROM REPORTED TO CORE FY2018 FULL YEAR REPORTED TO CORE ADJUSTMENTS Amortization & Shire Shire*1 Teva JV Gains on (BN JPY) REPORTED*1 impairment of Other acquisition purchase related Sales of CORE operating income/ Others intangible expense related accounting accounting Securities & a
Slide 68: Free cash flow
FREE CASH FLOW (BN JPY) FY2019 FY2020 vs. PY Net profit 44.3 376.2 +331.9 +749.3 % Depreciation, amortization and impairment loss 685.5 585.1 -100.4 Decrease (increase) in trade working capital 72.7 53.3 -19.5 Income taxes paid -226.8 -201.7 +25.1 Other 94.0 198.0 +104.1 Net cash from operating acti
Slide 69: Net debt/adjusted EBITDA
NET DEBT/ADJUSTED EBITDA NET DEBT/ADJUSTED EBITDA RATIO NET INCREASE (DECREASE) IN CASH (BN JPY) FY2020 (BN JPY) FY2019 FY2020 vs. PY Cash and cash equivalents*1 790.7 Net cash from operating activities 669.8 1,010.9 +341.2 +50.9% Acquisition of PP&E -127.1 -111.2 Book value debt on the balance shee
Slide 70: Net profit to adjusted EBITDA bridge
NET PROFIT TO ADJUSTED EBITDA BRIDGE (BN JPY) FY2019 FY2020 vs. PY LTM*1 LTM*1 Net profit 44.3 376.2 +331.9 +749.3% Income tax expenses -105.0 -9.9 Depreciation and amortization 583.6 559.7 Interest expense, net 137.8 129.0 EBITDA 660.7 1,054.9 +394.2 +59.7% Impairment losses 101.9 25.5 Other operat
Slide 71: FY2020 results vs. forecast (Feb 2021)
FY2020 RESULTS VS. FORECAST (FEB 2021) FY2020 FY2020 (BN JPY) Forecast vs. Forecast Variances Actual (February 4, 2021) Revenue 3,200.0 3,197.8 -2.2 -0.1% Underlying business momentum offset by earlier closing of divestitures R&D expenses -448.0 -455.8 -7.8 -1.7% Amortization of intangible assets -4
Slide 72: FY2020 results vs. forecast: adjustment items, cash flow & other
FY2020 RESULTS VS. FORECAST (FEB 2021) CORE OPERATING PROFIT ADJUSTMENT ITEMS, CASH FLOW & OTHER CORE OPERATING PROFIT ADJUSTMENT ITEMS CASH FLOW FY2020 FY2020 FY2020 FY2020 (BN JPY) Forecast (BN JPY) Forecast (February 4, 2021) Actual (February 4, 2021) Actual Shire integration costs Free cash flow
Slide 73: FY2021 detailed forecast
FY2021 DETAILED FORECAST (BN JPY) FY2020 FY2021 vs. PY Variances Actual Forecast Revenue 3,197.8 3,370.0 +172.2 +5.4% Underlying business momentum growth with additional benefit of FX and gain on sale of Japan diabetes portfolio (+133.0 vs. PY), partially offset by divestitures Cost of sales -994.3
Slide 74: FY2021 core operating profit adjustment items & cash flow forecast
FY2021 CORE OPERATING PROFIT ADJUSTMENT ITEMS & CASH FLOW FORECAST CORE OPERATING PROFIT ADJUSTMENT ITEMS (BN JPY) FY2020 FY2021 vs. PY Actual Forecast Amortization of intangible assets -405.3 -406.0 -0.7 Of which Shire-acquisition related -319.5 -328.0 -8.5 Impairment of intangible assets -16.6 -50
Slide 75: Reconciliation to core operating profit: FY2021 forecast
RECONCILIATION FROM REPORTED OPERATING PROFIT TO CORE OPERATING PROFIT – FY2021 FORECAST REPORTED TO CORE ADJUSTMENTS (BN JPY) REPORTED Amortization of Impairment of Other Japan CORE intangible intangible operating diabetes Others assets assets income/ portfolio expenses divestiture Revenue 3,370.0
Slide 76: FX rates and FY2021 currency sensitivity
FX RATES AND FY2021 CURRENCY SENSITIVITY Average Exchange Rates vs. JPY Impact of 1% depreciation of yen from April 2021 to March 2022 (100 million JPY) FY2019 FY2020 FY2021 Core Actual Actual Assumption Operating Operating Revenue Profit Net Profit (Apr-Mar) (Apr-Mar) (Apr-Mar) Profit USD 109 106 1
Slide 77: Diverse and experienced Takeda Executive Team
DIVERSE AND EXPERIENCED TAKEDA EXECUTIVE TEAM (TET) The gender, age and geographic diversity of the Takeda Executive Team together with its functional expertise and unparalleled experience, ensures quick and transparent decision-making C H RI S T O PH E WE BE R C O S T A S A RO U K O S MA S A T O I
Slide 78: Diverse & experienced board with ~70% independent directors
DIVERSE & EXPERIENCED BOARD WITH ~70% INDEPENDENT DIRECTORS & THREE COMMITTEES Takeda cherishes best-in-class governance. Takeda’s board is comprised of 16 experienced global leaders from diverse backgrounds. Eleven of them are independent external directors. INTERNAL DIRECTORS INDEPENDENT DIRECTORS
Slide 79: FY2021 management KPIs
FY2021 MANAGEMENT KPIs FY2021 Short-Term Incentive (addition of new KPI: 14 Global Brands + New Product Incremental Revenue) Metric Rationale Weight Measurement Threshold Target Maximum Underlying Revenue • Key indicator of growth, including pipeline delivery 45% Performance Goal as a % of Target 97
Slide 80: Following through on our commitments and planning for Wave 1 growth
FOLLOWING THROUGH ON OUR COMMITMENTS AND PLANNING FOR ROBUST WAVE 1 NEAR-TERM GROWTH Prostate cancer; CN Potential approval of New Molecular Entities Potential extensions to global brands Potential extensions to regional brands Prostate cancer; JP F Y 20 F Y 21 F Y 22 F Y 23 F Y 24 1. All timelines
Slide 81: Maximizing the value of our global and regional brands
MAXIMIZING THE VALUE OF OUR GLOBAL AND REGIONAL BRANDS PHASE 1 & 2 PHASE 3 FILED NINLARO® ICLUSIG® Cabozantinib Proteasome inhibitor BCR-ABL inhibitor Exelixis ALUNBRIG® ADCETRIS® FL Ph+ ALL (US) VEGFR/RTK inhibitor ALK inhibitor Seattle Genetics Maint. ND MM post- 1L & 2L ALK+NSCLC (JP, CN) CD30 AD
Slide 82: Glossary of abbreviations
GLOSSARY OF ABBREVIATIONS Regional Abbreviations: CTCL cutaneous T-cell lymphoma IND investigational new drug PBS phosphate buffered saline CN: China; EU: Europe; JP: Japan; US: United States of America cTTP congenital thrombotic thrombocytopenic purpura iNHL Indolent non-Hodgkin’s lymphoma PCAB pot
Slide 83: © 2021 Takeda Pharmaceutical Company Limited. All rights reserved
© 2021 Takeda Pharmaceutical Company Limited. All rights reserved
Takeda Pharmaceutical Company — FY2020 Q4 Earnings Presentation on 6ix