Takeda Pharmaceutical Co. Ltd. · TSE:4502

Takeda Pharmaceutical — Q1 FY2022 Earnings Presentation

19 slides from Takeda Pharmaceutical's earnings presentation, Jul 28, 2022

1. Slide 1: Financial Appendix

   FINANCIAL APPENDIX Definition of Non-IFRS Measures Definition of Core Financial Measures, Constant Exchange Rate change, and Free Cash Flow A-1 Definition of EBITDA/Adjusted EBITDA and Net Debt A-2 Reconciliations and Other Financial Information FY2022 Q1 Reported Results with Actual and CER % Chang

2. Slide 2: Definition of Core Financial Measures, Constant Exchange Rate change, and Free Cash Flow

   Definition of Core Financial Measures, Constant Exchange Rate change, and Free Cash Flow Core Revenue represents revenue adjusted to exclude significant items unrelated to Takeda’s core operations. Core Operating Profit represents net profit adjusted to exclude income tax expenses, the share of prof

3. Slide 3: Definition of EBITDA/Adjusted EBITDA and Net Debt

   Definition of EBITDA/Adjusted EBITDA and Net Debt 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

4. Slide 4: Q1 Reported Results with Actual and CER % Change

   FY2022 Q1 Reported Results with Actual and CER % Change (Billion JPY) FY2021Q1 FY2022Q1 vs. PY ACTUAL % CHANGE CER % CHANGE*1 Revenue 949.6 972.5 22.9 2.4 % (6.8) % Cost of sales (241.3) (292.9) (51.6) (21.4) % (11.3) % Gross profit 708.3 679.6 (28.8) (4.1) % (13.0) % Margin 74.6 % 69.9 % (4.7) pp (

5. Slide 5: Q1 Core Results with Actual and CER % Change

   FY2022 Q1 Core Results with Actual and CER % Change (Billion JPY) FY2021 Q1 FY2022 Q1 vs. PY ACTUAL % CHANGE CER % CHANGE*1 Revenue 816.6 972.5 155.9 19.1 % 8.3 % Cost of sales (227.9) (278.2) (50.4) (22.1) % (12.1) % Gross profit 588.7 694.3 105.5 17.9 % 6.9 % Margin 72.1 % 71.4 % (0.7) pp (1.0) pp

6. Slide 6: Q1 Reconciliation from Reported to Core

   FY2022 Q1 Reconciliation from Reported to Core (Billion JPY) REPORTED REPORTED TO CORE ADJUSTMENTS COREAmortization of intangible assets Impairment of intangible assets Other operating income/ expenses Others Revenue 972.5 972.5 Cost of sales (292.9) 14.7 (278.2) Gross profit 679.6 14.7 694.3 SG&A e

7. Slide 7: FY2021 Q1 Reconciliation from Reported to Core

   FY2021 Q1 Reconciliation from Reported to Core (Billion JPY) REPORTED REPORTED TO CORE ADJUSTMENTS COREAmortization of intangible assets Impairment of intangible assets Other operating income/ expenses Sale of Japan diabetes portfolio Irish Tax Assessment *1 Others Revenue 949.6 — (133.0) 816.6 Cost

8. Slide 8: Free Cash Flow

   Free Cash Flow (Billion JPY) FY2021 Q1 FY2022 Q1 Change versus the previous year Net profit 137.7 105.0 (32.7) (23.7) % Depreciation, amortization and impairment loss 143.0 172.5 29.5 Decrease (increase) in trade working capital (87.7) (124.2) (36.5) Income taxes paid (35.9) (24.9) 11.0 Tax refunds

9. Slide 9: Q1 Net Debt to Adjusted EBITDA

   FY2022 Q1 Net Debt to Adjusted EBITDA NET DEBT/ADJUSTED EBITDA RATIO NET INCREASE (DECREASE) IN CASH (Billion JPY) FY2022 Q1 (Billion JPY) FY2021 Q1 FY2022 Q1 Change versus the previous year Cash and cash equivalents*1 492.0 Net cash from operating activities 166.9 84.2 (82.6) (49.5) % Book value de

10. Slide 10: FY2021 Q4 Net Debt to Adjusted EBITDA

    FY2021 Q4 Net Debt to Adjusted EBITDA NET DEBT/ADJUSTED EBITDA RATIO NET INCREASE (DECREASE) IN CASH (Billion JPY) FY2021 (Billion JPY) FY2020 FY2021 vs. PY Cash and cash equivalents*1 642.2 Net cash from operating activities 1,010.9 1,123.1 112.2 11.1 % Book value debt on consolidated statements of

11. Slide 11: Q1 and FY2021 Q1 Net Profit to Adjusted EBITDA Bridge

    FY2022 Q1 and FY2021 Q1 Net Debt to Adjusted EBITDA Bridge (Billion JPY) FY2021 Q1 FY2022 Q1 Change versus the previous year Net profit 137.7 105.0 (32.7) (23.7) % Income tax expenses 85.3 50.5 Depreciation and amortization 142.9 158.3 Interest expense, net 29.9 28.5 EBITDA 395.9 342.3 (53.6) (13.5)

12. Slide 12: Q1 Net Profit to Adjusted EBITDA LTM Bridge

    FY2022 Q1 Net Debt to Adjusted EBITDA LTM Bridge (Billion JPY) FY2021 Full Year (Apr-Mar) FY2021 Q1 (Apr - Jun) FY2022 Q1 (Apr - Jun) FY2022 Q1 LTM*1 (Jul-Jun) Net profit 230.2 137.7 105.0 197.5 Income tax expenses 72.4 85.3 50.5 37.6 Depreciation and amortization 583.2 142.9 158.3 598.5 Interest ex

13. Slide 13: FX Rates and FY2022 Currency Sensitivity

    FX Rates and FY2022 Currency Sensitivity Average Exchange Rates vs. JPY Impact of depreciation of yen from April 2022 to March 2023 on FY2022 forecast (100 million JPY) FY2021 Actual (Apr-Jun) FY2022 Actual (Apr-Jun) FY2022 Assumption (Apr-Mar) Revenue (IFRS) Operating Profit (IFRS) Net Profit (IFRS

14. Slide 14: CAPEX, Depreciation and Amortization and Impairment Losses

    CAPEX, Depreciation and Amortization and Impairment Losses (Billion JPY) FY2021 FY2021 Q1 FY2022 Q1 vs. PY FY2022 Forecast Capital expenditures* 186.0 42.3 98.4 56.1 132.6 % 260.0 to 310.0 Tangible assets 123.3 29.8 42.1 12.3 41.2 % Intangible assets 62.8 12.5 56.3 43.8 351.7 % * Cash flow base Depr

15. Slide 15: Detailed Forecast

    FY2022 Detailed Forecast (Billion JPY) FY2021 Actual FY2022 Forecast vs. PY Variances Revenue 3,569.0 3,690.0 121.0 3.4 % Core business growth & Fx tailwind offsetting the decrease from FY2021 booking of 133.0B in reported revenue from sale of Japan diabetes business Cost of sales (1,106.8) N/D*1 R&

16. Slide 16: Core Operating Profit Adjustment Items & Cash Flow Forecast

    FY2022 Core Operating Profit Adjustment Items & Cash Flow Forecast CORE OPERATING PROFIT ADJUSTMENT ITEMS (Billion JPY) FY2022 Q1 FY2022 Forecast Amortization of intangible assets associated with products 117.0 438.0 Of which Shire-acquisition related 94.7 358.0 Impairment losses on intangible asset

17. Slide 17: Reconciliation from Reported Operating Profit to Core Operating Profit

    FY2022 Reconciliation from Reported Operating Profit to Core Operating Profit (Billion JPY) REPORTED REPORTED TO CORE ADJUSTMENTS COREAmortization of intangible assets Impairment of intangible assets Other operating income (expenses) Others Revenue 3,690.0 3,690.0 Cost of sales 24.0 Gross Profit 24.

18. Slide 18: Important Notice

    Important Notice For the purposes of this notice, “report” 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 report. This report (including any oral

19. Slide 19: Financial Information and Certain Non-IFRS Financial Measures

    Financial Information and Certain Non-IFRS Financial Measures Takeda’s financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”). This report and materials distributed in connection with this report include certain financial measures not presented in a

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