Takeda Reports Results for the First Half of FY2015 Confirms Management Guidance for the Full Year
Takeda Pharmaceutical Company Limited (TOKYO:4502):
First half results aligned with management guidance
- Underlying revenue +3.8% year-to-year (reported revenue growing +6.2% to 904 billion yen)
- Underlying Core Earnings +3.7% year-to-year (operating profit -5.4% to 110.4 billion yen)
Continued performance of Takeda's strategic growth drivers in the first half
- Gastroenterology underlying revenue +28.7%, oncology up +1.6% year-to-year
- Emerging markets underlying revenue +7.1% year-to-year, with particularly strong contributions from Russia and China
- Consolidated underlying revenue of gastroenterology, oncology and emerging markets – Takeda's growth drivers – is +10.0% year-to-year
First half growth supported by innovative new products
- Entyvio success continues to support more than $2 billion peak sales target
- Brintellix and Adcetris show steady growth
- Azilva and Lotriga continue to grow strongly in Japan
- Year-to-year underlying revenue growth in U.S. +12.0% (driven by Entyvio and Brintellix), Europe and Canada +1.5% (Entyvio and Adcetris), and emerging markets +7.1% (Russia and China)
- Strong growth of new products in Japan. Underlying revenue in Japan decreased by 3.4% year-to-year as a result of increasing generic penetration
Efficiency gains continue
- Project Summit achieved 11 billion yen of cost savings in the first half of FY2015
- On track to deliver more than 20 billion yen savings this fiscal year
Affirming management guidance for profitable growth in FY2015
- Low single-digit underlying revenue growth in FY2015, with underlying core earnings growth higher than underlying revenue growth, and underlying core EPS growth higher than underlying core earnings growth
Christophe Weber, President and Chief Executive Officer of Takeda, commented:
"In the first half of FY2015, Takeda continued its turnaround with underlying revenue growth of 3.8%, led by our growth drivers of gastroenterology, oncology and emerging markets. Operating profit was down in the first half of the year, mainly due to an increase in expenses for several recent launches and in R&D, as planned, but underlying core earnings increased by 3.7%, getting closer to underlying revenue growth. On the basis of our first-half results, we confirm our full-year management guidance."
Key figures for H1 of FY2015
|FY 2014||FY 2015||Growth|
|EPS||78 yen||69 yen||-11.2%||–|
|Core EPS||134 yen||135 yen||+1.2%||+7.9%|
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 litigation costs.
2 Underlying performance aims at understanding the real performance of the business. Underlying Revenue and Underlying Core Earnings excludes the same as above and adjusted for acquisitions/divestments and foreign exchange.
3 Attributable to the owners of the company
Underlying revenue growth in the first half was +3.8%, Underlying Core Earnings was +3.7% and Underlying Core EPS was +7.9%, with no changes in our management guidance for FY2015. Reported revenue grew +6.2% to 904.0 billion yen. An increase in expenses for new launch products, as well as a decrease in other income related to sale of real estate in 2014, resulted in a year-to-year decline in Operating Profit, Net Profit and EPS, by 6.2 billion yen, 7.1 billion yen and 9 yen, respectively. These measures have improved in the second quarter compared to the first quarter.
Underlying revenue growth was mainly driven by Takeda's growth drivers, which are gastroenterology, oncology and emerging markets. Gastroenterology grew by +28.7% year-to-year, driven by Entyvio. Oncology revenue, including Velcade and Adcetris, increased by +1.6%. Emerging markets revenue grew by +7.1%, led by Value Brands (branded generics and OTC), with strong growth in Russia and China. Performance in the U.S. (+12.0% underlying revenue growth) and Europe and Canada (+1.5%) also contributed to revenue growth. In Japan, products such as Azilva and Lotriga contributed to revenue growth, but as a result of increasing generic competition, total revenue declined -3.4%.
Project Summit – a company-wide strategic initiative to increase efficiency – continued to produce results, with 11 billion yen savings in the first half. Execution of Summit initiatives in recent months include business restructuring programs, further optimization of production capacity utilization, and continued operational efficiency. A new global procurement organization also contributed by leveraging effective external spending. Efficiency initiatives as part of Project Summit remain on track, and Takeda is committed to continued operational efficiency.
Entyvio is expected to be a key global contributor to Takeda's sales growth over the next few years, and Azilva, Lotriga, and Takecab are the products that are expected to enable Takeda to maintain a leading position in Japan. As part of the ongoing efforts of the R&D organization, ixazomib for relapsed/refractory multiple myeloma was granted accelerated assessment status in Europe in July, and Priority Review status in the U.S. in September 2015. In Japan, Takeda submitted a New Drug Application for the fixed-dose combination tablet of Nesina and metformin, and received approval for Leuplin 24 week depot for the treatment of prostate cancer and premenopausal breast cancer and for Copaxone for the treatment of multiple sclerosis in September 2015.
Takeda confirmed its management guidance for FY2015, leading to long-term sales and profit growth.
Management Guidance for FY2015
|Underlying Revenue||Low single digit|
|Underlying Core Earnings||Higher than underlying revenue growth|
|Underlying Core EPS||Higher than underlying core earnings growth|
For more details on Takeda's FY2015 H1 results and other financial information please visit http://www.takeda.com/investor-information/results/
About Takeda Pharmaceutical Company Limited
Located in Osaka, Japan, Takeda (TOKYO:4502) is a research-based global company with its main focus on pharmaceuticals. As the largest pharmaceutical company in Japan and one of the global leaders of the industry, Takeda is committed to strive towards better health for people worldwide through leading innovation in medicine. Additional information about Takeda is available through its corporate website, www.takeda.com.