CFO Message | Takeda Annual Integrated Report 2026

Message from our CFO

Dear Stakeholders,

Fiscal year 2025 marked an important inflection point for Takeda. As outlined in the message from our President and CEO, we delivered meaningful progress across our late-stage pipeline while continuing to invest in preparations for new product launches and organizational capabilities including digital technologies, which will underpin our future growth. We will strive to ensure that these initiatives are translated into sustainable financial outcomes through disciplined performance and financial management.

As we do, we will place greater emphasis on Total Shareholder Returns (TSR) as a core measure of value creation, driving long-term sustainable earnings growth while ensuring consistent annual cash returns to shareholders. While we have made substantial progress in reshaping our R&D pipeline and strengthening our development and launch capabilities, this has not yet fully translated into earnings growth, in part due to significant loss of exclusivity of certain medicines. As a result, until recently, TSR has been supported primarily by a progressive dividend underpinned by stable, strong cash flow. Sustainably improving TSR will require consistent earnings growth alongside a progressive dividend, driven by sustained revenue growth, improved profitability and disciplined reinvestment in opportunities that deliver returns above the cost of capital.

Against this backdrop, Takeda will manage its business and financial priorities through a clear two-horizon framework designed to establish a strong foundation in the near term and enable accelerated growth over the medium to long term.

Our foremost Horizon One is about foundation building and transformation focused on resetting the cost base and delivering clear proof points that support accelerated growth in Horizon Two. During Horizon One, we will invest in new product launches, further late-stage pipeline advancement and developing technology-enabled organizational capabilities. Our foremost financial priority during this period will be supporting these investments while preserving financial resilience. Through disciplined trade-off decisions, rigorous optimization of processes and ways of working, and the effective use of advanced digital technologies, we expect to free up resources while protecting our Core Operating Profit.

During Horizon One, we expect Reported Operating Profit to improve, supported primarily by reduced amortization and restructuring costs. Restoring Return on Equity to over 5% remains an important milestone not only to ensure our progressive dividend policy is sustainable but also to set us on the path toward longer- term capital efficiency improvements.

Strong cash generation will help us meet our financial commitments, including debt servicing and shareholder returns, while preserving the flexibility required to continue investing through this important transition period. Financial discipline at this stage will therefore be essential to establish the conditions for future growth‑driven value creation.

In Horizon Two, as we scale new products globally and launch additional late‑stage assets, we expect financial performance to increasingly reflect accelerated revenue growth, margin expansion, and improvements in Free Cash Flow and capital efficiency metrics. We anticipate that the transformation and cost‑base reset completed in Horizon One will deliver stronger operating leverage, enabling faster expansion of the Core Operating Profit margin as the next wave of launches becomes profit‑accretive.

With a more efficient operating model and an improved cost base, we expect incremental growth to translate more directly into earnings. We remain committed to improving our Core Operating Profit margin into the low to mid 30s%, while maintaining a robust balance sheet.

Financial discipline will continue to be anchored by a target adjusted net debt to adjusted EBITDA ratio of 2x, providing flexibility to invest in innovation and operational excellence while supporting sustainable shareholder returns. By maintaining a consistently high bar for investments – prioritizing opportunities that may generate returns significantly above the cost of capital – we aim to deliver sustained improvements in Return on Invested Capital and Return on Equity over the long term.

Across these two Horizons, we will apply a consistent capital allocation framework, with the aim of maintaining an appropriate balance between reinvestment for growth, shareholder returns and balance sheet strength. This disciplined approach will help ensure that we deploy capital in a way that supports both near‑term performance and long‑term enterprise value creation.

We remain deeply appreciative of the continued trust and long-term support of all stakeholders, whose confidence enables ongoing investment, innovation, and progress toward our purpose.

Sincerely,

Milano signature Milano Furuta
Chief Financial Officer