Takeda reports first half FY2016 results and raises full year profit guidance

Takeda reports first half FY2016 results and raises full year profit guidance

October 28, 2016

- Strong underlying H1 performance: Revenue +7.4%, Core Earnings +12.7% and Core EPS +49.3%-

Strong first half results led by Growth Drivers

  • Underlying Revenue grew +7.4%, led by a +15.3% increase of Takeda's Growth Drivers
    (GI, Oncology, CNS and Emerging Markets). Reported revenue declined -5.9%, due to unfavorable currencies (-8.6pt) and the impact of divestitures (-4.7pt).
  • Underlying Core Earnings advanced +12.7% with the Core Earnings margin increasing by 0.7pt. Despite unfavorable currencies and the negative impact of divestitures, reported operating profit was up +46.7% benefiting from strong underlying growth and a one-time gain on the Teva JV transaction.
  • Underlying Core EPS was up +49.3%, reflecting strong Core Earnings growth and a lower tax rate due to timing. Reported EPS more than doubled to 159 yen, up from 69 yen in the prior year period.
  • Reported Operating Free Cash Flow was up 34.0% to 74.6 billion yen driven by continued working capital improvements.

Takeda's Growth Drivers delivered 15.3% Revenue growth

  • GI underlying revenue grew +39.4%, driven by ENTYVIO® and TAKECAB®.
  • Oncology underlying revenue grew +4.9% driven by NINLARO® and ADCETRIS®.
  • CNS underlying revenue of +28.2% was boosted by a strong TRINTELLIX® performance.
  • Emerging Markets underlying revenue growth was +4.9% with Q2 growth accelerating to +5.7%.

Underlying Revenue growth across all regions, led by continued double-digit performance in the US

  • Japan underlying revenue was up +4.1%, driven by TAKECAB®, AZILVA® and LOTRIGA®.
  • US underlying revenue growth of +15.1%, led by ENTYVIO®, NINLARO® and TRINTELLIX®.
  • Europe and Canada underlying revenue grew +4.8%, driven by ENTYVIO® and ADCETRIS®.
  • Emerging Markets underlying revenue was up +4.9%, with robust growth in the key markets of Brazil (+11.1%), China (+9.7%) and Russia (+8.4%).
Christophe Weber, President and Chief Executive Officer of Takeda, commented:

"Today we reported strong first half results in a year of significant transformation. This strong momentum allows us to increase our full year profit guidance.
The recent positive CHMP opinion for the conditional approval of NINLARO® in the EU was an important step to bring this new treatment option to patients worldwide. I am confident that our Growth Drivers will continue to fuel our momentum well into the future."

Reported Results for H1 (April – September) of FY2016

(billion yen)FY2015
Core Earnings1174.9131.0-25.1%+12.7%
Operating Profit110.4162.1+46.7%N/A
Net Profit354.4124.3+128.6%N/A
EPS69 yen159 yen+129.4%N/A
Core EPS138 yen139 yen+1.2%+49.3%

 1   Core Earnings is calculated by taking reported gross profit and deducting SG&A expenses and R&D expenses. 

In addition, certain other items that are non-core in nature and significant in value may also be adjusted.
2   Underlying growth compares two periods of financial results under a common basis, showing the ongoing performance of the business excluding the impact of foreign exchange and divestitures.
3   Attributable to the owners of the company.

Takeda increases management guidance for Underlying Core Earnings to "mid- to high-teen growth" and Underlying Core EPS is trending to the high end of the "low- to mid-teen growth" range

FY2016 Management Guidance
 Previous Guidance
(May 10, 2016)
Revised Guidance
(Oct 28, 2016)
Underlying RevenueMid single digit growth (%)Mid single digit growth (%)
Underlying Core EarningsLow- to mid-teen growth (%)Mid- to high-teen growth (%)
Underlying Core EPSLow- to mid-teen growth (%)Low- to mid-teen growth (%)
Annual Dividend per Share180 yen180 yen

Reported Net Profit/EPS forecast increased despite accelerated R&D transformation costs and unfavorable currency impact 

Total estimated costs related to the R&D transformation program are unchanged at 75 billion yen; with 40 billion yen estimated in FY2016 (previous forecast was 25 billion yen) and 35 billion yen in FY2017.

FY2016 Reported Forecast
(billion yen)Previous Forecast
(May 10, 2016)
Revised Forecast
(Oct 28, 2016)
R&D Expenses-325.0-310.02
Operating Profit135.0135.0
Net Profit 388.091.0
EPS112 yen116 yen
Exchange Rate (annual average)1 US$=110 yen, 1 euro=125 yen1 US$=104 yen, 1 euro=117 yen

 Includes unfavorable currency impact of approximately 68 billion yen

Includes favorable currency impact of approximately 14 billion yen   
Attributable to the owners of the company

For more details on Takeda’s FY2016 H1 results and other financial information please visit http://www.takeda.com/investor-information/results/

About Takeda Pharmaceutical Company Limited

Takeda Pharmaceutical Company Limited is a global, research and development-driven pharmaceutical company committed to bringing better health and a brighter future to patients by translating science into life-changing medicines. Takeda focuses its R&D efforts on oncology, gastroenterology and central nervous system therapeutic areas plus vaccines. Takeda conducts R&D both internally and with partners to stay at the leading edge of innovation. New innovative products, especially in oncology and gastroenterology, as well as our presence in Emerging Markets, fuel the growth of Takeda. More than 30,000 Takeda employees are committed to improving quality of life for patients, working with our partners in health care in more than 70 countries. For more information, visit http://www.takeda.com/news.


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