Takeda Announces FY2023 H1 Results; Updates Full-Year Forecasts While Remaining on Track Towards Management Guidance

• Revenue Growth of +6.4% at Actual Exchange Rate (AER); +1.4% Growth at Constant Exchange Rate (CER), Driven by Growth & Launch Products (+13% at CER)
• Core Operating Profit Year-on-Year Change of -9.5% at CER Reflecting Generic Impact, Lower Demand for Coronavirus Vaccines and Increased Investment in R&D and Data & Technology
• Reported Operating Profit and Net Profit Impacted by Non-Cash Impairment of Intangible Assets Booked in Q2
• Raising Full Year Revenue and Core EPS Forecasts to Reflect Updated FX and Tax Rate Assumptions; Lowering Full-Year Profit Forecasts on a Reported Basis Due to Non-Core Items Booked in Q2
• No Change to Free Cash Flow Outlook or Management Guidance

Takeda (TOKYO:4502/NYSE:TAK) today announced financial results for the first half of fiscal year 2023 (six months ended September 30, 2023), updating reported and Core forecasts and reconfirming Management Guidance for Core change at CER.

Takeda chief executive officer, Christophe Weber, commented:

“We continue to pursue our vision to discover and deliver life-transforming treatments, making further progress in the first half of our fiscal year to address unmet medical needs and provide new treatment options to improve patient outcomes and quality of life. Our pipeline is robust and we anticipate a number of important milestones in the second half of the fiscal year, including potentially up to three new product approvals in the U.S., for TAK-755, fruquintinib, and TAK-721.

“Development setbacks with EXKIVITY^® and ALOFISEL^®, which impacted our reported profit in FY2023 Q2, highlight the inherent risk in research and development in the pharmaceutical business, but do not hinder our strategy for a return to growth in the near-term and our confidence in the long-term strength of the business remains firm.”

Takeda chief financial officer, Costa Saroukos, commented:

“We are raising our full-year revenue and Core EPS forecasts to reflect updated foreign exchange and tax rate assumptions, while revising our reported operating profit and EPS forecasts to reflect large non-core items booked in our second quarter. These items do not reflect the underlying momentum of the business, and we remain on track to our Management Guidance, which is on a Core basis at CER.

“We continue to see strong performance of our Growth and Launch Products, which grew +13% at CER in the first half of the fiscal year and represent 42% of total revenue. While our Core revenue and profit performance in the first half continued to reflect the temporary headwinds we face this fiscal year, largely from generic competition, we believe our Growth and Launch Products will drive a return to revenue and profit growth in the near-term.”

FY2023 OUTLOOK

Updating Full-Year FY2023 Reported and Core Forecasts, and Reconfirming Management Guidance

*Free Cash Flow forecast reflects expenditures related to the acquisition of TAK-279 from Nimbus (JPY134.1 billion) and in-licensing of fruquintinib from HUTCHMED (JPY55.1 billion).

Additional Information About Takeda’s H1 Earnings Results

For more details on Takeda’s FY2023 H1 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_q2_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.

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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 Q2 investor presentation (available at takeda.com/investors/financial-results/quarterly-results/).

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Please refer to slide 19 of Takeda’s FY2023 Q2 investor presentation (available at takeda.com/investors/financial-results/quarterly-results/) for the definition of Growth & Launch Products.

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