Takeda Announces Third-Quarter FY2023 Results; On-Track Towards Full-Year Management Guidance With Strong Momentum in Growth & Launch Products

Takeda (TOKYO:4502/NYSE:TAK) today announced financial results for the third quarter of fiscal year 2023 (period ended December 31, 2023). With year-to-date strong momentum in its Growth & Launch Products (+12.7% at CER) offsetting the significant revenue impact of generic entrants, Takeda remains on track towards its full-year Management Guidance.

Takeda chief financial officer, Costa Saroukos, commented:
“In FY2023 Q3 we made further progress in our vision to discover and deliver life-transforming treatments, receiving two new U.S. FDA approvals and broadening the reach of our existing portfolio with multiple life-cycle management approvals for our Growth & Launch Products.

“We remain on track towards our full-year Management Guidance at CER, reflecting significant generic impact, lower coronavirus vaccines revenue and investment in R&D and data, digital and technology to secure our long-term competitiveness, as well as continued strong momentum in our Growth & Launch Products.

“We continue to improve our debt profile with 100% of our debt now at fixed interest rates averaging 1.6%, and our financial foundation remains strong as we enter the fourth quarter of FY2023.”

FINANCIAL HIGHLIGHTS
Results for FY2023 Q3 YTD Ended December 31, 2023
(Billion yen, except percentages and per share amounts)	REPORTED		CORE(c)   (Non-IFRS)(a)
	FY2023 Q3 YTD	vs. PRIOR YEAR (Actual % change)	FY2023 Q3 YTD	vs. PRIOR YEAR (Actual % change)	vs. PRIOR YEAR (CER % change(d))
Revenue	3,212.9	+4.6%	3,212.9	+4.6%	+0.0%
Operating Profit	224.1	-44.2%	865.6	-9.3%	-12.7%
Margin	7.0%	-6.1pp	26.9%	-4.1pp
Net Profit	147.1	-48.6%	643.6	-9.0%	-12.2%
EPS (yen)	94	-48.9%	412	-9.7%	-12.9%
Operating Cash Flow	437.8	-36.0%
Free Cash Flow (Non-IFRS)(a)(b)	36.3	-93.8%
(a) Further information regarding certain of Takeda’s Non-IFRS measures is posted on Takeda’s investor relations website at https://www.takeda.com/investors/financial-results/quarterly-results/.
(b) We define Free Cash Flow as cash flows from operating activities, subtracting acquisition of property, plant and equipment (“PP&E”), intangible assets and investments as well as removing any other cash that is not available to Takeda’s immediate or general business use, and adding proceeds from sales of PP&E, as well as from sales of investments and businesses, net of cash and cash equivalents divested.
(c) Core results adjust our reported results calculated and presented pursuant to IFRS to exclude the effect of items unrelated to Takeda’s core operations, such as, to the extent applicable for each line item, non-recurring items, purchase accounting effects and transaction related costs, as well as amortization and impairment of intangible assets and other operating income and expenses.
(d) CER (Constant Exchange Rate) change eliminates the effect of foreign exchange rates from year-over-year comparisons by translating Reported or Core results for the current period using corresponding exchange rates in the same period of the previous fiscal year.

FY2023 OUTLOOK
On track towards full-year FY2023 Management Guidance
(Billion yen except per share amounts)	FY2023 FORECAST (Unchanged from October 2023)	FY2023 MANAGEMENT GUIDANCE Core Change at CER (Non-IFRS) (Unchanged from May 2023)
Revenue	3,980.0
Core Revenue	3,980.0	Low-single-digit % decline
Reported Operating Profit	225.0
Core Operating Profit	1,015.0	Low-10s % decline
Reported Net Profit	93.0
Reported EPS (yen)	59
Core EPS (yen)	447	Low-20s % decline
Free Cash Flow*	400.0-500.0
Annual Dividend per Share (yen)	188

*Free Cash Flow forecast reflects expenditures related to the acquisition of TAK-279 from Nimbus and in-licensing of FRUZAQLA (fruquintinib) from HUTCHMED.

Additional Information About Takeda’s FY2023 Q3 Earnings Results
For more details on Takeda’s FY2023 Q3 results and other financial information, including key assumptions in FY2023 forecast and management guidance, please visit: https://www.takeda.com/investors/financial-results/quarterly-results/

For more information on Takeda’s commercial progress across the five key business areas and pipeline updates, please visit: https://takeda.info/qr2023_q3_qfr_en

About Takeda
Takeda is focused on creating better health for people and a brighter future for the world. We aim to discover and deliver life-transforming treatments in our core therapeutic and business areas, including gastrointestinal and inflammation, rare diseases, plasma-derived therapies, oncology, neuroscience and vaccines. Together with our partners, we aim to improve the patient experience and advance a new frontier of treatment options through our dynamic and diverse pipeline. As a leading values-based, R&D-driven biopharmaceutical company headquartered in Japan, we are guided by our commitment to patients, our people and the planet. Our employees in approximately 80 countries and regions are driven by our purpose and are grounded in the values that have defined us for more than two centuries. For more information, visit www.takeda.com.

Important Notice
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Financial information and Certain Non-IFRS Financial Measures
Takeda’s financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”).

This press release and materials distributed in connection with this press release include certain financial measures not presented in accordance with IFRS, such as Core Revenue, Core Operating Profit, Core Net Profit, Core EPS, Constant Exchange Rate (“CER”) change, Net Debt, EBITDA, Adjusted EBITDA and Free Cash Flow. Takeda’s management evaluates results and makes operating and investment decisions using both IFRS and non-IFRS measures included in this presentation. These non-IFRS measures exclude certain income, cost and cash flow items which are included in, or are calculated differently from, the most closely comparable measures presented in accordance with IFRS. By including these non-IFRS measures, management intends to provide investors with additional information to further analyze Takeda’s performance and core results, including when controlling for the effect of fluctuations in exchange rates. Takeda’s non-IFRS measures are not prepared in accordance with IFRS and such non-IFRS measures should be considered a supplement to, and not a substitute for, measures prepared in accordance with IFRS (which we sometimes refer to as “reported” measures). Investors are encouraged to review the definitions and reconciliations of non-IFRS financial measures to their most directly comparable IFRS measures, which are in the financial appendix at the end of Takeda's FY2023 Q3 investor presentation (available at takeda.com/investors/financial-results/quarterly-results/).

Medical information
This press release contains information about products that may not be available in all countries, or may be available under different trademarks, for different indications, in different dosages, or in different strengths. Nothing contained herein should be considered a solicitation, promotion or advertisement for any prescription drugs including the ones under development.

Please refer to slide 17 of Takeda’s FY2023 Q3 investor presentation (available at takeda.com/investors/financial-results/quarterly-results/) for the definition of Growth & Launch Products.

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Contact information

Investor Relations
Christopher O’Reilly
Christopher.oreilly@takeda.com
+81 (0) 3-3278-2543

Media Relations
Brendan Jennings
Brendan.jennings@takeda.com
+81 (0) 3-3278-2111