Takeda Pharmaceutical Co. Ltd. · TSE:4502
Takeda Pharmaceutical — Investor Day (July 2021)
64 slides from Takeda Pharmaceutical's investor day presentation, Jul 13, 2021
Slide 1: Global Finance Investor Day
GLOBAL FINANCE INVESTOR DAY - Creating a best-in-class Finance organization by leveraging the power of data and digital July 12, 7pm Eastern / July 13, 2021, 8am JST
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: 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 fem 229 & BY UNLEASHING THE POWER OF DATA AND DIGITAL 4h &
Slide 4: Takeda's corporate transformation into a global values-based R&D-driven biopharmaceutical company
Takeda’s corporate transformation into a global values-based R&D-driven biopharmaceutical company Accelerating Growth & Patient Impact We Are One Takeda NEXT 10 YEARS Strategic Evolution TODAY • Translating Science Into Life-transforming Medicines • Wave 1 And Wave 2 Pipeline Growth • Global Values-
Slide 5: Pivoting from integration to accelerating topline & pipeline
Pivoting from integration to accelerating topline & pipeline FY2018-FY2020 FY2021 AND BEYOND Acceleration of topline growth to FINANCIALS Delivered mid-single digit underlying revenue management guidance each year through integration & pandemic growth guidance in FY2021 Topline growth momentum expec
Slide 6: Agenda
AGENDA EASTERN JST AGENDA PRESENTERS TIME 19:00 – 08:00 – Costa Saroukos Introduction 19:10 08:10 Chief Financial Officer 19:10 – 08:10 – Karl Hick Unleash the Power of Data and Digital 19:30 08:30 Chief Digital and Information Officer 19:30 – 08:30 – Sanjay Patel Takeda Business Solutions 19:50 08:
Slide 7: Unleash The Power of Data and Digital
Unleash The Power of Data and Digital Chief Digital Karl Hick, Chief Digital and Information Officer & Information Officer
Slide 8: Unleash the Power of Data and Digital
UNLEASH THE POWER OF DATA AND DIGITAL 8
Slide 9: Executed strategic integration, optimizing opportunities to accelerate data and digital transformation
Executed strategic integration, optimizing opportunities to accelerate data and digital transformation Accelerated completion of 20 essential integration programs and synergy delivery from 3 to 2 years HARMONIZED GLOBAL PLATFORMS AND PROCESSES Clinical Trials Plasma Donation Commercial Sales Human R
Slide 10: Unleashing the power of data and digital to deliver strategic priorities
Unleashing the power of data and digital to deliver strategic priorities 1 2 3 DATA & DIGITAL VISION AND PRIORITIES DIGITAL CULTURE TALENT & & ENGAGEMENT CAPABILITY BUILD ENTERPRISE DATA & OPERATION MODEL & NEW WAYS OF DIGITAL PLATFORMS WORKING A COHESIVE, A CLEAR VISION AND IMPERATIVE COMPREHENSIVE
Slide 11: Data and Digital Strategy Is Being Activated Across Multiple Dimensions
DATA AND DIGITAL STRATEGY IS BEING ACTIVATED ACROSS MULTIPLE DIMENSIONS 11
Slide 12: Digital Solutions, Data & Platforms, Cloud Native
DIGITAL SOLUTIONS ‣ Digital Advisory Board ‣ Distributed Innovation Engine ‣ Scaling via Digital Solutions Center DATA & PLATFORMS ‣ Global Data Council ‣ Enterprise Data Backbone ‣ Patient engagement, Real-world data platforms, etc. ‣ Optimized for Artificial Intelligence and Machine Learning CLOUD
Slide 13: Enablers and Ecosystem
ENABLERS ‣ Enterprise-level orchestration ‣ Democratizing technology ‣ Data and digital learning pathways ‣ Innovative mindsets and behaviors ‣ Insourcing differentiating skills ECOSYSTEM ‣ Strategic partnerships ‣ Commercial collaborations ‣ Health-tech investments ‣ Academic institutions 13
Slide 14: MIT-Takeda Program
MIT-TAKEDA PROGRAM 14 14
Slide 15: Using AI to solve specific business challenges, accessing MIT learning programs
USING AI TO SOLVE SPECIFIC BUSINESS CHALLENGES, ACCESSING MIT LEARNING PROGRAMS AI VS HUMAN INSPECTION OF TAK-003 VIALS Collaboration with Massachusetts Institute of Technology, part of the Abdul Latif Jameel Clinic for Machine Learning in Health Good vial Vial requiring additional Reject vial re-in
Slide 16: Plasma-Derived Therapies
PLASMA-DERIVED THERAPIES 16 16
Slide 17: Plasma Derived Therapies building a data and digital first business
Plasma Derived Therapies are building a data and digital first business, activating all aspects of Takeda’s data and digital strategy +1M PERSONALIZED DONOR MESSAGES A WEEK ENGAGED 90M TIMES WITH DONORS IN FY20 YEARS OF HISTORICAL DATA CENTRALIZED AND MADE AVAILABLE FOR USE ACROSS PDT GLOBALLY “ Des
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Slide 19: Takeda Business Solutions (TBS)
Takeda Business Solutions (TBS) Chief Digital & Information Officer Sanjay Patel, Head of Takeda Business Solutions
Slide 20: Takeda Business Solutions (TBS)
Takeda Business Solutions (TBS) Our mission is to partner with the business by building simplified and innovative solutions that deliver exceptional experiences GLOBAL EMPOWERED & DELIVERING DRIVING PROCESS OPTIMIZED PRESENCE DIVERSE TEAM GLOBAL SOLUTIONS EXCELLENCE FOR SUCCESS Supporting Female Mal
Slide 21: We execute end-to-end operational activities and provide scalability
We execute end-to-end operational activities and provide scalability to facilitate future growth We take on work that is ... And we ... HIGH VOLUME CONSOLIDATE RULE-BASED OPTIMIZE REPETITIVE DIGITALIZE FINANCE PROCUREMENT HUMAN OTHER TAKEDA RESOURCES FUNCTIONS CASH COLLECTION SUPPLIER ENROLLMENT EMP
Slide 22: TBS performance metrics
ZERO 5.0DAYS Service Faster Consolidated Disruptions Pre-Tax Close (vs. FY19) Our investments in advanced technology, in-house expertise & new process 130K 12 Support Requests Divestitures solutions have enabled an Managed Supported acceleration of our journey over the last 12 months. 17% LOW Scale-
Slide 23: Takeda Business Solutions
Takeda Business Solutions Re-imagining captive shared services as a solutions partner for the business. Takeda Business Solutions Shared Services UNLEASH THE 2019 Onwards .. POWER OF DATA & DIGITAL 2014-2018 Business Partner CREATE EXCEPTIONAL Value Creation PEOPLE EXPERIENCES Multi-Functional Fragm
Slide 24: Embedding a digital culture through Innovation Hub and Automation Digital Champion
We are embedding a digital culture through our UNLEASH THE Innovation Hub and Automation Digital Champion program POWER OF DATA & DIGITAL 24
Slide 25: Rapid democratization and scale-up of intelligent automation
UNLEASH THE POWER OF DATA & DIGITAL 1,700+ EMPLOYEES TRAINED Rapid democratization and scale-up of intelligent automation across Takeda, 360+ AUTOMATION BOTS DEVELOPED driving efficiencies. 385,000+ HOURS OF PRODUCTIVITY GAINED 25
Slide 26: Rikona Impact
We are embedding a digital culture through our UNLEASH THE Innovation Hub and Automation Digital Champion program POWER OF DATA & DIGITAL RIKONA IMPACT An Investor Relations Solution transforming investor and regulatory disclosure reporting, enabling end-to-end automation. > 200 HOURS SAVED PER QUAR
Slide 27: Dino Impact
We are embedding a digital culture through our UNLEASH THE Innovation Hub and Automation Digital Champion program POWER OF DATA & DIGITAL DINO IMPACT This Supply Chain Bot speeds-up optimization of product allocation ensuring supply consistency for our patients. 95% FASTER OPTIMIZED DISTRIBUTION SCA
Slide 28: CFOinUrpocket
Our award-winning, in-house developed financial data solution UNLEASH THE delivers decision-ready insights POWER OF DATA & DIGITAL CFOinUr pocket ONE VERSION OF THE TRUTH FULLY AUTOMATED DRILL-DOWN FUNCTIONALITY INSIGHT GENERATOR SAVINGS ENABLER 28
Slide 29: Our simplified and innovative solutions are creating exceptional experiences
CREATE EXCEPTIONAL PEOPLE EXPERIENCES SELF-SERVE 24/7 mobile-enabled user support via the Takeda Solutions Employee & Supplier portals Our simplified and innovative solutions are creating TOUCHLESS invoice processing via digital exceptional & engaging invoice management experiences for our Takeda co
Slide 30: TBS will continue to partner with the business
Takeda Business Solutions will continue to partner with the business by building simplified and innovative solutions that deliver exceptional experiences UNLOCK DATA TO UNLEASH THE CREATE EXCEPTIONAL GENERATE INSIGHTS POWER OF DIGITAL PEOPLE EXPERIENCES 30
Slide 31: Global Real Estate, Facilities, and Procurement (GREFP)
Global Real Estate, Facilities, and Procurement (GREFP) Jill Zunshine, Head of Global Real Estate, Facilities, and Procurement
Slide 32: Global Real Estate, Facilities, and Procurement
Takeda established the Global Real Estate, Facilities, and Procurement (GREFP) organization in 2018 to drive value and create impact Global Real Estate, Facilities, and Procurement REAL ESTATE FACILITIES PROCUREMENT MEETINGS TRAVEL Empowering Takeda with vital and innovative solutions to do its best
Slide 33: Location strategy and real estate consolidation plans
Before the Shire deal closed, Global Real Estate, Facilities, and Procurement worked with both teams to create our location strategy and real estate consolidation plans 681 PROPERTIES 70 COUNTRIES 31M SQUARE FEET FIVE KEY LEVERS 1) Site consolidation by country 2) Site consolidations by city 3) Sale
Slide 34: Integration approach for third party spend
Before day 1 as a combined company, we also crystalized our integration approach for third party spend 10 LEVERS Direct Negotiations Enterprise- Demand Wide Mgmt Supplier Term APPLICATION OF LEVERS Strategic Sourcing 225+ Harmonization • Quick Wins Potential Projects Identified • Savings Projects $4
Slide 35: Partner Value Summit 1.0
Takeda’s Partner Value Summit 1.0 was a key supplier conference designed to accelerate cost savings, improve working capital, & drive agility & innovation PROCUREMENT 50+ Takeda procurement leaders attended, specializing in 7+ spend categories BUSINESS ~$200M TOTAL SAVINGS 50+ Takeda business stakeh
Slide 36: Partner Value Summit 2.0 pivoted to fully virtual
We organized a Partner Value Summit (PVS) 2.0 version which pivoted to fully virtual in the early stages of the COVID-19 pandemic ~$100MTOTAL SAVINGS “This was very impressive and a gold standard for how a Takeda and suppliers navigated virtual meetings and virtual summit should be run.” – Takeda Su
Slide 37: Contributions to synergy delivery and cash
We collaborated, took a strategic approach, and unlocked value quickly, contributing to Takeda’s delivery of 3-year synergy targets in 2 years Contributions to Synergy Delivery Procurement: Cost Savings $716M Real Estate: Site Consolidation $110M TOTAL $826M Contributions to Cash Real Estate Sales,
Slide 38: Open-innovation ideas generated at PVS 2.0
Building open-innovation into PVS 2.0 generated many ideas that support Takeda’s business objectives 36 PATIENTS PVS GENERATED 67 PEOPLE 185 INNOVATION IDEAS Working with patients, suppliers, partners, and 6 DATA & DIGITAL other stakeholders 76 PLANET PVS: Partner Value Summit 38
Slide 39: Piloting 10 Virtual Clinical Trials
PVS: Virtual Clinical Trial Design and e-Clinical Trial Platforms We partnered with our suppliers to innovate Piloting 10 Virtual Clinical Trials: • Patients participate from home • Allows access to patients in diverse geographies • Reduces patient burden • Streamlines data collection Partner Value
Slide 40: Partnering to deliver on Sustainability Goals
PVS: Partnering to deliver on Sustainability Goals Meetings and Travel Center of Excellence Takeda, Delta Airlines and United Airlines support cleaner travel with agreements on use of sustainable aviation fuel (SAF) that will cover frequently flown routes. LONDON MINNEAPOLIS LOS ANGELES BOSTON CHICA
Slide 41: Purpose-Led Sustainability and ESG
Global Real Estate, Facilities, and Procurement is unlocking additional value through Purpose-Led Sustainability and ESG SOCIAL ENVIRONMENT GOVERNANCE 41
Slide 42: GREFP will continue to drive value and create impact
Global Real Estate, Facilities, and Procurement will continue to drive value and create impact to accelerate pipeline development SUMMARY POINTS Building New Savings and Function Integration Synergy Patient Planet Empowering Takeda with vital and innovative solutions to do its best work in transform
Slide 43: Treasury
Andy Plump President, Research & Development Treasury Amit Singh, Head of Treasury
Slide 44: Shire acquisition transformed Takeda's balance sheet
Shire acquisition transformed Takeda’s balance sheet… SHIRE ACQUISITION FINANCING1 (FY 2018) CAPITALIZATION B JPY 5,177.2 5,097.9 5,162.4 (~$47B) ¥500B (~$46B) (~$47B) ¥974B JPY Hybrid 2 3,429.4 (~$31B) EUR Term Loan ¥397B 2,172.0 USD JBIC Loan ($20B) ~¥3,330B 684.0 (~$30B) USD Bonds (~$6B) USD Term
Slide 45: Business has generated strong steady cash flows
FY19 & FY20: Business has generated strong steady cash flows 400 350 300 250 B JPY 200 150 100 50 0 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Op. Cash Flow 45
Slide 46: Supplemented by non-core asset divestitures
Supplemented by non-core asset divestitures… 400 350 300 250 B JPY 200 150 100 50 0 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Op. Cash Flow Divestiture Proceeds (*) Divestiture proceeds shown here do not include proceeds (~133B yen) from diabetes portfolio divestiture i
Slide 47: Unlocking of idle assets on balance sheet
…and unlocking of idle assets on balance sheet Total: ~3.0 Tr. Yen (~$27B) Cash Generated Since Shire Acquisition In Jan 2019 400 350 300 250 B JPY 200 150 100 50 0 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Op. Cash Flow Divestiture Proceeds Asset Disposals (Real Estate
Slide 48: We also re-aligned our debt maturities
We also re-aligned our debt maturities Leverage Neutral Re-Financing In July 20201… …Positioned Our Debt Maturities Comfortably DEBT MATURITY LADDER1 (June 2021) 1000 ¥130B Debt Called in Q2 FY21: to be paid in Q2 FY21 ¥276B Debt Called in Q1 FY21: paid in Q1 FY21 ¥130B 800 Debt paid prior to March
Slide 49: Data and digital solutions to enhance global cash visibility
We are deploying data and digital solutions to enhance global cash visibility… Cash in Local Markets CASHinUrpocket Best-in-Class Solution for Visualizing Local Market Cash to Centralize it and to Help Manage its FX and Credit Risks 49
Slide 50: CashinUrpocket
CashinUr pocket
Slide 51: Reducing idle cash and using it towards deleveraging
…Which is allowing us to reduce idle cash and to use it towards deleveraging TAKEDA CASH LOCATED IN LOCAL MARKETS 100 90 80 B Yen 70 -50% 60 50 40 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 51
Slide 52: Net debt to adjusted EBITDA and credit outlook upgrades
...All these efforts are leading us in the right direction NET DEBT TO ADJ. EBITDA Credit outlook upgrades (June 2021): 1. S&P: BBB+ negative outlook to BBB+ Stable 4.7 2. R&I : A Stable to A Positive 4.4 4.1 3.9 3.8 3.7 3.7 3.6 3.2 Low 2’s Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3
Slide 53: Takeda Global Finance
Andy Plump President, Research & Development TAKEDA GLOBAL FINANCE - Creating a best-in-class Finance organization by leveraging the power of data and digital
Slide 54: Our team is being recognized globally as best-in-class
…Our team is being recognized globally as best-in-class Institutional Investor 2021: #1 Best CEO (Christophe Weber) #1 Best CFO (Costa Saroukos) #1 Best Investor Relations Program #1 Best Investor Relations Professional (Christopher O’Reilly) #1 Best Environmental, Social and Corporate Governance 54
Slide 55: Q&A
Q&A Costa Saroukos Karl Hick Sanjay Patel Jill Zunshine Amit Singh Chief Financial Officer Chief Digital and Head of Takeda Head of Global Real Head of Treasury Information Officer Business Solutions Estate, Facilities, and Procurement 55
Slide 56: Appendix
APPENDIX 56
Slide 57: 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 58: 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 59: 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 60: 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 impairment of income/ accounting accounting di
Slide 61: 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 62: 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 63: Reconciliation from reported to core FY2018 full year
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 64: Reconciliation from reported to core/underlying core FY2014 full year
Reconciliation from reported to core/underlying core FY2014 full year Billion yen FY2013 FY2014 Revenue 1,691.7 1,777.8 Fx effects 6.0 (40.0) Divestments (22.1) (16.0) Underlying Revenue 1,675.7 1,721.9 Operating Profit 139.3 -129.3 Actos one off 274.1 Amortization of intangibles 119.7 123.8 Impairm
Takeda Pharmaceutical Company — Investor Day (July 2021) on 6ix