OREANDA-NEWS. Takeda Reports Results for Fiscal Year 2015 (April 2015 -March 2016) and Forecast for Fiscal Year 2016.

Achieved Management Guidance for the Second Consecutive Year in a Turnaround Year to Sustained Growth

FY2015: A year of turnaround to sustained growth; achieved full year management guidance

  • Underlying revenue up +3.4% (reported revenue growing +1.7% to 1,807.4 billion yen), led by strong performances in Takeda's growth drivers (GI, Oncology, CNS and Emerging Markets)
  • Underlying Core Earnings up +8.1% (reported operating profit recorded 130.8 billion yen), aided by cost discipline
  • Underlying Core EPS up +21.7% (reported EPS was 102 yen), growing 2.5x faster than underlying core earnings

Growth Drivers continued to be robust

  • Consolidated underlying revenue growth of Gastroenterology (GI), Oncology, Central Nervous System (CNS) and Emerging Markets – Takeda's Growth Drivers – was +9.5% year-to-year
  • Underlying revenue of GI +23.6%, Oncology +1.0%* and CNS +37.3% year-to-year
  • Emerging Markets underlying revenue +4.8% year-to-year with continued growth in the key markets of China, Russia and Brazil

*Underlying growth of Oncology excluding VELCADE royalties was +4.4%

Broad portfolio of growing products offsets loss of exclusivity decline

  • ENTYVIO® is on track to exceed $2 billion MAT* sales within FY2018
  • Encouraging uptake of NINLARO® and TAKECAB®
  • BRINTELLIX® and ADCETRIS® showed continued growth
  • AZILVA® and LOTRIGA® are contributing to the Japan business

*Moving Annual Total @ constant currency

Efficiency gains continue

  • Project Summit well exceeded full-year target resulting in 30 billion yen additional cost savings
  • Strong cash flow performance with Operating Free Cash Flow, excluding Actos settlement payment, reaching 230 billion JPY

FY2016 management guidance: A year of strategic focus to sustain growth

  • Underlying Revenue: Mid-single digit growth (%)
  • Underlying Core Earnings: Low- to mid-teen growth (%)
  • Underlying Core EPS: Low- to mid-teen growth (%)

Christophe Weber, President and Chief Executive Officer of Takeda, commented:

"FY2015 was a turnaround year. We achieved our management guidance for the second consecutive year, led by our growth drivers, and aided by the global launches of new products such as ENTYVIO and NINLARO. Takeda will continue to deliver innovative new medicines to patients, especially in our focused R&D therapeutic areas. Takeda aims to relentlessly execute our strategic roadmap to deliver our long-term aspiration, and will serve the needs of the patients, with the best in class agility and innovation."

Key figures for the full year of FY2015 (April 2015 –March 2016)

 

FY 2014

FY 2015

Growth
billion yen  

Underlying2

Revenue

1,777.8

1,807.4

+1.7%

+3.4%

Operating Profit

-129.3

130.8

–

–

Core Earnings1

288.3

292.4

+1.4%

+8.1%

Net Profit3

-145.8

80.2

–

–

EPS

-185 yen

102 yen

–

–

Core EPS

225 yen

258 yen

+14.8%

+21.7%

1   Core Earnings is calculated from operating profit by excluding the impact of exceptional items, such as purchase accounting, amortization and impairment loss of intangible assets, restructuring costs and major litigation costs.
2   Underlying performance aims at understanding the real performance of the business. Underlying Revenue, Underlying Core Earnings, and Underlying Core EPS exclude the same as above and adjusted for acquisitions/divestments and foreign exchange.
3   Attributable to the owners of the company

Underlying revenue growth was mainly driven by Takeda's Growth Drivers: Gastroenterology(GI), Oncology, and Central Nervous System (CNS) in addition to Emerging Markets. The Growth Drivers account for 52% of Takeda's revenue. GI revenue grew by +23.6% year-to-year, driven by ENTYVIO®. Oncology revenue increased by +1.0%, contributed by VELCADE®, ADCETRIS® and NINLARO®, which has shown an encouraging start in the U.S. since it was launched in December,. Oncology revenue excluding VELCADE royalties grew +4.4%. CNS revenue, including BRINTELLIX®, increased by +37.3%. Emerging Markets revenue grew by +4.8% year-to-year, led by Value Brands (branded generics and Over-The-Counter medicines), with steady growth in China (+11.1%), Russia (+6.2%) and Brazil (+5.7%). However, our future aspiration for growth in Emerging Markets remains strong, in high single digits. Performance in the U.S. (+12.4% year-to-year underlying revenue growth) also contributed to total revenue growth. In Japan, which remains under increasing generic pressure, underlying revenue declined -3.3% year-to-year, but AZILVA® and LOTRIGA® showed significant sales growth of +30.1% and +69.0%, respectively, year-to-year. In addition to these growing products, TAKECAB® and ZAFATEK® are expected to be key sales drivers in Japan after the lifting of the 2-week limit on the prescription period.

Consolidated operating profit was 130.8 billion yen, an increase of 260.1 billion yen compared to the previous year, which exceeded the raised forecast of 120 billion yen announced in February at the FY2015 3rd quarter earnings announcement. Selling, general and administrative expenses increased by 38.2 billion yen (+6.2%) compared to the previous year, mainly due to the increase in sales expenses related to new products in the U.S., but R&D expenses decreased by 36.2 billion yen (-9.5%). Amortization and impairment losses on intangible assets associated with products decreased by 51.3 billion yen (-29.1%), mainly due to 30.5 billion yen of COLCRYS® impairment loss being recognized in 2014 compared to an 8.6 billion yen impairment reversal in fiscal 2015. Other operating income decreased by 82.1 billion yen (-76.6%), mainly due to 53.8 billion yen of revaluation of COLCRYS® contingent consideration liability and 32.8 billion yen of the gains on sales of real estate being recognized in the previous year. Other operating expenses decreased by 277.8 billion yen (-86.2%), mainly due to 274.1 billion yen of loss on Actos litigation in the U.S. being recognized in the previous year.

Project Summit – a company-wide strategic initiative to increase efficiency – continued to produce results, with 30 billion yen of additional savings in FY2015, exceeding the full year target as a result of higher Procurement savings.

As part of its ongoing effort to improve R&D productivity, Takeda is focusing on its core therapeutic areas of Oncology, GI and CNS. Takeda will further strengthen its initiatives and commitment to lead innovation in medicines and provide innovative new drugs to patients around the world including in emerging markets.

FY2015 was positioned for Takeda as a year of turnaround to sustained growth, and Takeda sets the following management guidance for FY2016 as a year of strategic focus to sustain growth.