DGAP-Ad-hoc: Takeda Pharmaceutical Company Limited / Key word(s): Annual
Results
Takeda Pharmaceutical Company Limited: Revised Forecast of Consolidated
Financials for FY2018 (IFRS)
25-Apr-2019 / 08:00 CET/CEST
Disclosure of an inside information acc. to Article 17 MAR of the Regulation
(EU) No 596/2014, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
*News Release
April 25, 2019
Revised Forecast of Consolidated Financials for FY2018 (IFRS)*
*Osaka, Japan, April 25, 2019 - *Takeda Pharmaceutical Company Limited
("Takeda") announced today its revised forecast for the full year
consolidated financials for the fiscal year ended March 31, 2019.
Takeda completed the acquisition of Shire plc ("Shire") on January 8, 2019,
and it has been Takeda's objective to disclose an updated forecast inclusive
of the Shire acquisition. Additionally, Japanese Securities Listing
Regulations by the Tokyo Stock Exchange require forecasts to be updated if
revenue or earnings are expected to differ more than 10% and 30%,
respectively, from previously disclosed forecasts. We are announcing our
revised forecast today as the estimated financial impact of the Shire
acquisition, including the valuation and the initial purchase price
allocation, has been determined.
Financial Highlights:
- Legacy Takeda management guidance and forecast is raised to significantly
increase Revenue and profit due to the strong momentum of the base business
and overall cost discipline.
- We expect legacy Takeda Underlying Core Earnings margin to grow
approximately 540 basis points which was previously projected at the higher
end of the 100 to 200 basis points range.
- Legacy Shire is expected to contribute approximately 309.0 billion yen to
revenue and 49.0 billion Yen to profit before income tax. (Shire has been
consolidated into Takeda's results since January 8, 2019.)
- The financial impact of the Purchase Price Allocation (PPA) from the Shire
acquisition to Operating Profit is expected to be 182.0 billion yen. This
non-cash cost, does not affect Core Earnings.
The revised forecast is based on information currently available to
management and does not represent a promise nor a guarantee that these
forecasts will be achieved. An announcement of Takeda's full year
consolidated financials for the fiscal year ending March 31, 2019 is
scheduled on May 14, 2019.
1. Legacy Takeda Financials (April 1, 2018 - March 3, 2019. Incurred costs
related to the acquisition of Shire are excluded.)
(millions of yen)
Revenue Core Operating Profit Net Basic
Earnings profit before profi earning
NOTE income t s
taxes attri per
butab share
le
to
owner
s of
the
Compa
ny
Previous 1,750,000 330,000 280,000 265,000 206,0 262.85
Forecast 00 yen
(A)*
Revised 1,788,000 393,000 412,000 357,000 - -
Forecast (B)
Difference +38,000 +63,000 +132,000 +92,000 - -
(B-A)
Change % +2.2% +19.1% +47.1% +34.7% - -
* Announced on October 31, 2018
- Revenue forecast has been increased to 1,788.0 billion yen due to improved
performance of Takeda's Growth Drivers including ENTYVIO and TAKECAB,
combined with delays in the launch of an additional competitor to our
multiple myeloma product VELCADE in the United States.
- Operating Profit forecast has been increased by 132.0 billion yen from
280.0 billion yen to 412.0 billion yen. The improvement in Operating Profit
margin is expected to be driven by continued strict cost discipline and
Growth Driver momentum. As a result, we expect strong legacy Takeda
performance to absorb all of the Shire acquisition-related costs incurred in
the fiscal year ended March 31, 2019 of approximately 126.0 billion yen.
Please refer to the next page (p. 3) regarding the Shire acquisition-related
costs.
- The increased forecast difference in Profit before income taxes of 92.0
billion yen is smaller compared to the increased forecast in Operating
profit of 132.0 billion yen due to an impairment charge in the third quarter
accounted for using the equity method that was not included in the previous
forecast. Therefore, profit before income taxes is forecasted to be
approximately 357.0 billion yen.
- Core Earnings forecast is increased by 63.0 billion yen to 393.0 billion
yen due to improved performance of Takeda's Growth Drivers and cost
discipline.
- Net profit and basic earnings per share forecast will not be updated as
the taxes are currently being calculated, and therefore the previously
stated forecast is rescinded. We plan to discuss this at the earnings
announcement on May 14, 2019.
2. Management Guidance - Underlying Growth NOTE of Legacy Takeda Business
Previous Guidance* Revised Guidance
(growth %) (growth %)
Underlying Revenue Low single digit Mid single digit
Underlying Core Earnings High teens High thirties
Underlying Core EPS Mid twenties -
* Announced on October 31, 2018.
Takeda revised its Management Guidance for the legacy Takeda business, for
the fiscal year ended March 31, 2019, considering the strong expected
performance. Takeda has upwardly revised its guidance for revenue and
profits. In addition, we expect Underlying Core Earnings margin to grow
approximately 540 basis points, which was previously projected at the higher
end of the 100 to 200 basis points range.
3. Shire Acquisition Related Costs
(millions of yen)
Revenue Core Operating Profit before
Earnings profit income taxes
NOTE
Revised Forecast - - -85,000 -126,000
- The updated forecast includes Takeda's acquisition costs, integration
costs, debt interest and other financial expenses as well as Shire's
acquisition-related costs. Total costs incurred by Takeda and Shire related
to the Shire acquisition is expected to be approximately 126.0 billion yen
comprised of 85.0 billion yen of operating cost and 41.0 billion yen of
financial expense.
4. Legacy Shire Financials (Incurred costs related to the acquisition of
Shire are excluded)
(millions of yen)
Revenue Core Operating Profit before
Earnings profit income taxes
NOTE
Revised Forecast 309,000 66,000 60,000 49,000
- Legacy Shire is expected to add approximately 309.0 billion yen to revenue
and 60.0 billion yen of Operating profit to the consolidated results. As
part of the integration, legacy Shire group's results are expected to be
impacted by the application of Takeda's distribution channel policies, and
will have a one-time effect resulting in significantly lower days-on-hand of
commercial product at wholesalers.
- Legacy Shire is forecasted to contribute 66.0 billion yen in Core
Earnings.
5. Financial Impact from Shire's Preliminary Purchase Price Allocation
(millions of yen)
Revenue Core Operating Profit before
Earnings profit income taxes
NOTE
Revised Forecast - - -182,000 -186,000
- We plan to record approximately 82.0 billion yen related to the fair value
step up on the acquired inventory and approximately 99.0 billion yen of
amortization for the acquired intangibles for the fiscal year ending March
31, 2019.
6. Revised Forecast for Full Year Consolidated Financials for the Fiscal
Year Ending March 31, 2019 (April 1, 2018 - March 3, 2019. Incurred costs
related to the acquisition of Shire are included.)
(millions of yen)
Revenue Core Operating Profit Net Basic
Earnings profit before profi earnings
NOTE income t per
taxes attri share
butab
le
to
owner
s of
the
Compa
ny
Previous 1,750,00 330,000 268,900 245,20 189,5 241.82
Forecast (A)* 0 0 00 yen
Revised 2,097,00 459,000 205,000 95,000 - -
Forecast (B) 0
Difference +347,000 +129,000 -63,900 -150,2 - -
(B-A) 00
Change % +19.8% +39.1% -23.8% -61.3% - -
Reference: 1,770,53 322,494 241,789 217,20 186,7 239.35
Consolidated 1 5 08 yen
Results
for the Year
Ending
March 31, 2018
(C)
Difference +326,469 +136,506 -36,789 -122,2 - -
(B-C) 05
Change % +18.4% +42.3% -15.2% -56.3% - -
* Announced on October 31, 2018, includes Shire acquisition-related costs
incurred until the second quarter of FY2018.
NOTE
- Core Earnings is a non-IFRS measure and it represents net profit adjusted
to exclude income tax expenses, our share of profit or loss of investments
accounted for using the equity method, finance expenses and income, other
operating expenses and income, amortization and impairment losses on
intangible assets associated with products and other items that management
believes are unrelated to our core operations, such as purchase accounting
effects and transaction related costs.
- Underlying Growth is a non-IFRS measure and it compares two periods
(quarters or years) of financial results under a common basis and is used by
management to assess the business. These financial results are calculated on
a constant currency basis and excluding the impacts of divestitures and
other amounts that are unusual, non-recurring items or unrelated to our
ongoing operations.
*Contacts*
*Investor Relations* *Media Relations*
Takashi Okubo, +81-(0)3-3278-2306 Kazumi Kobayashi, +81
takeda.ir.contact@takeda.com (0)3-3278-2095
kazumi.kobayashi@takeda.com
*Important Notice*
For the purposes of this notice, "press release" 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 release. This press release (including any oral
briefing and any question-and-answer in connection with it) is not intended
to, and does not constitute, represent or form part of any offer, invitation
or solicitation of any offer to purchase, otherwise acquire, subscribe for,
exchange, sell or otherwise dispose of, any securities or the solicitation
of any vote or approval in any jurisdiction. No shares or other securities
are being offered to the public by means of this press release. No offering
of securities shall be made in the United States except pursuant to
registration under the U.S. Securities Act of 1933, as amended, or an
exemption therefrom. This press release is being given (together with any
further information which may be provided to the recipient) on the condition
that it is for use by the recipient for information purposes only (and not
for the evaluation of any investment, acquisition, disposal or any other
transaction). Any failure to comply with these restrictions may constitute a
violation of applicable securities laws.
Unless specified otherwise, no statement in this press release (including
any statement of estimated synergies) is intended as a profit forecast or
estimate for any period and no statement in this press release should be
interpreted to mean that earnings or earnings per share for Takeda for the
current or future financial years would necessarily match or exceed the
historical published earnings per share for Takeda.
The companies in which Takeda directly and indirectly owns investments are
separate entities. In this press release, "Takeda" is sometimes used for
convenience where references are made to Takeda and its subsidiaries in
general. Likewise, the words "we", "us" and "our" are also used to refer to
subsidiaries in general or to those who work for them. These expressions are
also used where no useful purpose is served by identifying the particular
company or companies.
*Forward-Looking Statements*
This press release and any materials distributed in connection with this
press release may contain forward-looking statements, beliefs or opinions
regarding Takeda's future business, future position and results of
operations, including estimates, forecasts, targets and plans for Takeda.
Without limitation, forward looking statements often include the words such
as "targets", "plans", "believes", "hopes", "continues", "expects", "aims",
"intends", "will", "may", "should", "would", "could" "anticipates",
"estimates", "projects" or words or terms of similar substance or the
negative thereof. Any forward-looking statements in this document are based
on the current assumptions and beliefs of Takeda in light of the information
currently available to it. Such forward-looking statements do not represent
any guarantee by Takeda or its management of future performance and involve
known and unknown risks, uncertainties and other factors, including but not
limited to: the economic circumstances surrounding Takeda's business,
including general economic conditions in Japan, the United States and
worldwide; competitive pressures and developments; applicable laws and
regulations; the success of or failure of product development programs;
decisions of regulatory authorities and the timing thereof; changes in
exchange rates; claims or concerns regarding the safety or efficacy of
marketed products or products candidates; and post-merger integration with
acquired companies, any of which may cause Takeda's actual results,
performance, achievements or financial position to be materially different
from any future results, performance, achievements or financial position
expressed or implied by such forward-looking statements. For more
information on these and other factors which may affect Takeda's results,
performance, achievements, or financial position, see "Item 3. Key
Information-D. Risk Factors" in Takeda's Registration Statement on Form 20-F
filed with the U.S. Securities and Exchange Commission, available on
Takeda's website at: https://www.takeda.com/investors/reports/sec-filings/
[1] or at www.sec.gov [2]. Neither Takeda nor its management gives any
assurances that the expectations expressed in these forward-looking
statements will turn out to be correct, and actual results, performance or
achievements could materially differ from expectations. Persons receiving
this press release should not place undue reliance on forward looking
statements. Takeda undertakes no obligation to update any of the
forward-looking statements contained in this press release or any other
forward-looking statements it may make. Past performance is not an indicator
of future results and the results of Takeda in this press release may not be
indicative of, and are not an estimate, forecast or projection of Takeda's
future results.
*Certain Non-IFRS Financial Measures*
This press release includes certain non-IFRS financial measures not
presented in accordance with International Financial Reporting Standards
("*IFRS*"), including Underlying Revenue, Core Earnings, Underlying Core
Earnings, Core Net Profit, Underlying Core Net Profit, Underlying Core EPS,
Net Debt, EBITDA, Adjusted EBITDA and Operating Free Cash Flow. Takeda's
management evaluates results and makes operating and investment decisions
using both IFRS and non-IFRS measures included in this press release. 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, core results and
underlying trends. 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 reconciliation of non-IFRS financial measures to their most
directly comparable IFRS measures.
Further information on certain of Takeda's Non-IFRS measures is posted on
Takeda's investor relations website at
https://www.takeda.com/investors/reports/quarterly-announcements/quarterly-a
nnouncements-2018/ [3]
*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.
###
25-Apr-2019 CET/CEST The DGAP Distribution Services include Regulatory
Announcements, Financial/Corporate News and Press Releases.
Archive at www.dgap.de
803213 25-Apr-2019 CET/CEST
1: https://link.cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=661befb44ac9648638f94a535445077e&application_id=803213&site_id=vwd&application_name=news
2: https://link.cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=3c0817d56c1c8179994e46dea9ae47ba&application_id=803213&site_id=vwd&application_name=news
3: https://link.cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=634bb1a0644ba1b67e568cd00289c4b9&application_id=803213&site_id=vwd&application_name=news
(END) Dow Jones Newswires
April 25, 2019 02:00 ET (06:00 GMT)
© 2019 Dow Jones News
