Takeda Pharmaceutical Co. Ltd. · TSE:4502

Takeda Pharmaceutical — Investor Presentation (February 2023)

37 slides from Takeda Pharmaceutical's investor presentation, Feb 22, 2023

  1. Slide 1: Better health for people, Brighter future for the world

    TSE: 4502 Better health for people, Brighter future for the world Costa Saroukos, Chief Financial Officer Koki Sato, Corporate Strategy Officer Retail Investor Event (Cooperation: Nomura IR) February 22, 2023

  2. 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

  3. Slide 3: Agenda

    Koki Sato About Takeda Corporate Strategy Officer Shire Integration Success Costa Saroukos AGENDA and Takeda’s New Chapter Chief Financial Officer Q&A Session

  4. Slide 4: Agenda

    Koki Sato About Takeda Corporate Strategy Officer Shire Integration Success Costa Saroukos AGENDA and Takeda’s New Chapter Chief Financial Officer Q&A Session

  5. Slide 5: We're Striving to Create Better Health for People and a Brighter Future for the World

    We’re Striving to Create Better Health for People and a Brighter Future for the World Our vision is to discover and deliver life-transforming treatments, guided by our commitment to: We are guided by our values of Takeda-ism which incorporate Integrity, Fairness, Honesty, and PATIENT PEOPLE PLANET P

  6. Slide 6: Takeda's History

    Takeda’s History 1781 1914 1949 1951 1980s & 90s COMPANY FOUNDED PROPRIETARY RESEARCH INITIAL PUBLIC OFFERING INTERNATIONAL BUSINESS EXPANSION OF Chobei Omiya I sets up his activities begin Takeda listed on the stock Starts with North and Central INTERNATIONAL BUSINESS business in Osaka market Ameri

  7. Slide 7: Takeda: A Leading Global Biopharmaceutical Company

    Takeda: A Leading Global Biopharmaceutical Company PRESENC E IN APPROX. OUR FY2021 REVENUE 80 COUNTRIES & REGIONS AS OF MARCH 2022 30 MANUFACTURING SITES BUSINESS JPY 3.6T HEADQUART ER S TOKYO, JAPAN 3 RESEARCH SITES SHONAN, JAPAN (~USD 29.4B ) 1 GLOB AL HUB CAMBRDIGE, MA, USA CAMBRIDGE, MA, USA SAN

  8. Slide 8: Diverse and Experienced Takeda Executive Team

    Diverse and Experienced Takeda Executive Team C H R I ST O P H E W E B E R ANDY PLUMP C O ST A SAR O U K O S G AB R I E L E R I C C I K O K I SAT O G I L E S P L AT FO R D JULIE KIM Representative Director; Director; President, Director; Chief Data & Corporate Strategy President, Plasma-Derived Pres

  9. Slide 9: Agenda

    Koki Sato About Takeda Corporate Strategy Officer Shire Integration Success Costa Saroukos AGENDA and Takeda’s New Chapter Chief Financial Officer Q&A Session

  10. Slide 10: Upon Shire Deal Close, Investors Had Many Questions On Their Minds

    Upon Shire Deal Close, Investors Had Many Questions On Their Minds Can Takeda successfully execute a large, cross-cultural global integration? Can Takeda achieve its $1.4B synergy target, and will savings reach the bottom line? Can Takeda successfully reduce its debts levels while maintaining the di

  11. Slide 11: The Shire Acquisition Gave Us Scale to be Globally Competitive

    The Shire Acquisition Gave Us Scale to be Globally Competitive FY2017 REVENUE FY2021 REVENUE JPY 1.8T x2 JPY 3.6T Growth & Growth & Emerging Emerging 16% 13% 34% U.S. Europe & Europe & Post-Shire 18% 21% 48% (FY2021) U.S. Canada Canada 33% 18% Japan Japan FY2017 EBITDA FY2021 EBITDA JPY 377.7B ~x3 J

  12. Slide 12: Takeda Acquired Shire in January 2019

    Takeda Acquired Shire in January 2019 The Largest Acquisition in Japanese History & Within Top 10 Largest Ever Global Pharma Deals Largest Pharma Acquisitions Worldwide, $B Merck / Schering-Plough (2009) Takeda / Shire (2019) Acquisition price AbbVie / Allergan (2019) JPY 6.2T Pfizer / Wyeth (2009)

  13. Slide 13: Successful Integration Was Built On Robust Planning Ahead of Close

    Successful Integration Was Built On Robust Planning Ahead of Close • Shareholder Meetings to approve transaction • Top 200 leaders (TET-1 level) and BU/Function Post-close operating model organization structures confirmed and new Takeda Executive • Listing of ADR on NYSE Team (TET) confirmed Deal an

  14. Slide 14: As We Integrated, We Closely Tracked Our Costs and Synergies

    As We Integrated, We Closely Tracked Our Costs and Synergies SYNERGY PACKAGE OPERATIONAL KPI REPORTS • Costs and synergies tracked across 10 cost packages • Full visibility of financials within weeks of deal close • Embedded targets into KPIs and incentives 14

  15. Slide 15: This Cost Visibility Enabled Higher Synergies, Delivered Faster

    This Cost Visibility Enabled Higher Synergies, Delivered Faster Synergy Target Synergies Achieved by end FY2021 by end FY2020 Delivered USD 2.3B (~JPY 250B) of synergies vs target of USD 1.4B (~JPY 150B) USD 2.3B (~JPY 250B) Synergies achieved one year ahead of plan 14% USD 1.4B WE UNLOCKED SIGNIFIC

  16. Slide 16: Synergies Fell to Bottom Line, Driving Tangible Margin Improvement

    Synergies Fell to Bottom Line, Driving Tangible Margin Improvement Core Operating Profit Margin1 Evolution +~10pp Shire Acquisition 31% 22% 18% FY2017 FY2018 FY2022 Q3 YTD 1. Please refer to slide 29 for definition, and slides 33-35 for reconciliations. 16 In FY2017 & FY2018, Core Operating Profit w

  17. Slide 17: Debt Reduction and Rapid De-Leveraging was Core Focus

    Debt Reduction and Rapid De-Leveraging was Core Focus Gross Debt at Deal Close was ~JPY 5.9T Net Debt / adj. EBITDA1 ~5x Target to Reach “low twos” Legacy Takeda net debt / adj. EBITDA ~JPY 1T • Generate strong cashflow from the business: topline growth, cost synergies, margin improvement • Working

  18. Slide 18: We Unlocked ~JPY 1.8T in Pre-Tax Proceeds from Sale of Non-Core Assets

    We Unlocked ~JPY 1.8T in Pre-Tax Proceeds from Sale of Non-Core Assets Non-Core Asset Divestitures (FY2018-2021) NON-CORE up to ~JPY 1.4T 1 PRODUCT PORTFOLIOS REAL ESTATE ~JPY 220B MARKETABLE SECURITIES ~JPY 220B TOTAL ~JPY 1.8T 1 Convenience translations using Dec 2018 FX rate of 111.0 JPY/USD 18 1

  19. Slide 19: We Reduced Debt by Almost JPY 2 Trillion in 3 Years

    We Reduced Debt by Almost 2 Trillion Yen in 4 years 1 Gross Debt Net debt / adj. EBITDA Deal Close Deal Close ~5x 7 ~JPY $5.9T 5.0x 6 4.5x 5 FY22 Q3 4.0x JPY Trillion ~JPY $4T 4 3.5x FY22 Q3 3 3.0x 2.5x 2 2.5x 1 2.0x 0 1.5x FY18 Q4 FY19 Q4 FY20 Q4 FY21 Q4 FY22 Q3 FY18 Q4 FY19 Q4 FY20 Q4 FY21 Q4 FY22

  20. Slide 20: We Have Improved our Maturity Profile Through Debt Paydown & Opportunistic Refinancing

    We Have Improved our Maturity Profile Through Debt Paydown & Opportunistic Refinancing at Favorable Terms OKU-YEN Debt Maturity Profile at Deal Close 8,000 Average annual 7,000 maturity to 2025 6,000 5,000 4,000 3,000 2,000 1,000 0 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 203

  21. Slide 21: Today 100% of our Debt is at Fixed Rates with Weighted Interest of ~2%

    Today 100% of our Debt is at Fixed Rates with Weighted Interest of ~2% OKU-YEN Debt Maturity Profile Today 8,000 7,000 6,000 5,000 4,000 3,000 Average annual maturity to 2025 2,000 1,000 0 FY 19 FY 20 FY 21 FY 22 FY 23 FY 24 FY 25 FY 26 FY 27 FY 28 FY 29 FY 30 FY 31 FY 32 FY 40 FY 45 FY 50 FY 60 FY

  22. Slide 22: Successful Integration of Shire Reflected in our Financials

    Successful Integration of Shire Reflected in our Financials Revenue JPY 1.8T → JPY 3.6T FY2017 FY2021 R&D Investment JPY 325.4B → JPY 620.0B FY2017 FY2022 Forecast Core Operating 18% 31% Profit Margin 1 → FY2017 FY2022 Q3 YTD Synergy Savings JPY 150B → JPY 250B Original Target Delivered Non-Core Por

  23. Slide 23: Growth & Launch Products Driving Topline & Profit Growth

    Growth & Launch Products Driving Topline & Profit Growth Strong FY2022 Q3 YTD Performance On Track to Full-year FY2022 Guidance Core Revenue Core EPS Revenue Core EPS +4.5% +17.1% JPY 3.93T 525 yen at CER1,2 at CER1,2 (USD 29.7B)3 (USD 3.97)3 Core Operating FY2022 MANAGEMENT GUIDANCE Growth & Launch

  24. Slide 24: Growth & Launch Products Grew +20% at CER in FY22 Q3 YTD

    Growth & Launch Products Grew +20% at CER in FY22 Q3 YTD FY2022 Q3 YTD REVENUE PLASMA-DERIVED THERAPIES (PDT) GI RARE DISEASES IMMUNOLOGY ONCOLOGY NEUROSCIENCE OTHER % of Sales: 28% % of Sales: 18% % of Sales: 16% % of Sales: 11% % of Sales: 16% % of Sales: 11% Growth: +11% Growth: +5% Growth: +18%

  25. Slide 25: Committed to Long-term Growth & Shareholder Returns

    Committed to Long-term Growth & Shareholder Returns Near-term Medium-term Long-term (FY2022-2023) (FY2024 - early 2030s) (FY2030s and beyond) • Growth & Launch Products • Continued expansion of • Additional contribution from expected to mitigate near- Growth & Launch Products clinical pipeline of ~4

  26. Slide 26: Q&A session

    Q＆A session Costa Saroukos Koki Sato Chief Financial Officer Corporate Strategy Officer

  27. Slide 27: Appendix

    APPENDIX

  28. Slide 28: 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

  29. Slide 29: 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

  30. Slide 30: FY2022 Q3 YTD Reported Results with Actual and CER % Change

    FY2022 Q3 YTD Reported Results with Actual and CER % Change *1 Please refer to slide 24 for the definition. Note: % change versus prior year is presented as positive when favorable to profits, and negative when unfavorable to profits. 30

  31. Slide 31: FY2022 Q3 YTD Core Results with Actual and CER % Change

    FY2022 Q3 YTD Core Results with Actual and CER % Change *1 Please refer to slide 24 for the definition. Note: % change versus prior year is presented as positive when favorable to profits, and negative when unfavorable to profits. 31

  32. Slide 32: FY2022 Q3 YTD Reconciliation from Reported to Core

    FY2022 Q3 YTD Reconciliation from Reported to Core 32

  33. Slide 33: FY2018 Reconciliation from Reported to Core

    FY2018 Reconciliation from Reported to Core REPORTED TO CORE ADJUSTMENTS (BN YEN) REPORTED Amortization & Shire Shire Teva JV Other Gains on CORE Other impairment of acquisition purchase purchase purchase sales of U.S. Tax operating income/ Others intangible related accounting accounting accounting

  34. Slide 34: FY2017 Reconciliation from Reported to Core

    FY2017 Reconciliation from Reported to Core 34 Note: In FY2017 & FY2018, Core Operating Profit was referred to as “Core Earnings” but the calculation methodology is the same.

  35. Slide 35: FY2022 Q3 YTD Net Debt to Adjusted EBITDA

    FY2022 Q3 YTD Net Debt to Adjusted EBITDA 35

  36. Slide 36: FY2022 Q3 YTD Net Profit to Adjusted EBITDA LTM Bridge

    FY2022 Q3 YTD Net Profit to Adjusted EBITDA LTM Bridge 36

  37. Slide 37: © 2023 Takeda Pharmaceutical Company Limited. All rights reserved.

    © 2023 Takeda Pharmaceutical Company Limited. All rights reserved.

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