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MarketScreener Homepage  >  Equities  >  Tokyo  >  Takeda Pharmaceutical Company Limited    4502   JP3463000004


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Takeda Pharmaceutical : Revised Forecast of Consolidated Financials for FY2018

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04/26/2019 | 08:25am EDT

Osaka - 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.

Legacy Takeda Financials (April 1, 2018 - March 31, 2019. Incurred costs related to the acquisition of Shire are excluded.)

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.

Management Guidance - Underlying Growth NOTE of Legacy Takeda Business

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.

Shire Acquisition Related Costs

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.

Legacy Shire Financials (Incurred costs related to the acquisition of Shire are excluded)

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.

Financial Impact from Shire's Preliminary Purchase Price Allocation

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.

Revised Forecast for Full Year Consolidated Financials for the Fiscal Year Ending March 31, 2019 (April 1, 2018 - March 31, 2019. Incurred costs related to the acquisition of Shire are included.)


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.


Takashi Okubo

Tel: +81-(0)3-3278-2306

Email: takeda.ir.contact@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. 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/ or at www.sec.gov. 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.

(C) 2019 Electronic News Publishing, source ENP Newswire

Stocks mentioned in the article
ChangeLast1st jan.
SHIRE 2.42% 4690 End-of-day quote.0.00%
TAKEDA PHARMACEUTICAL COMPANY LIMITED -1.28% 3780 End-of-day quote.4.42%
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Sales 2020 3 327 B
EBIT 2020 -47 541 M
Net income 2020 -292 922 M
Debt 2020 4 304 B
Yield 2020 4,76%
P/E ratio 2020 -20,1x
P/E ratio 2021 38,2x
EV / Sales2020 3,07x
EV / Sales2021 2,93x
Capitalization 5 918 B
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Average target price 5 305,38  JPY
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Spread / Lowest Target -2,12%
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