Chugai Pharmaceutical : Supplementary Materials for Consolidated Financial Results for the 2nd Quarter of Fiscal Year 2021.12 (IFRS)

Supplementary Materials for

Consolidated Financial Results for

the 2nd Quarter of Fiscal Year 2021. 12 (IFRS)

Notes: 1. Portions of this report that refer to performance forecasts or any other future events are believed to be reasonable under information available at the time of the forecasts. Actual results may materially differ from these forecasts due to potential risks and uncertainties.

1. Amounts shown in this report are rounded to the nearest 0.1 billion yen. Variance and % are calculated based on the amounts shown.
2. Exchange rates used for each period are as follows.

QTR											(Yen)
			Actual*				Actual*
			FY2020				FY2021
		1-3	4-6		7-9	10-12	1-3	4-6		7-9	10-12
		QTR	QTR		QTR	QTR	QTR	QTR		QTR	QTR
CHF		112.61	111.54		115.39	115.52	117.08	120.11
EUR		120.19	118.35		124.06	124.51	127.65	131.87
USD		109.02	107.53		106.16	104.50	105.83	109.44
SGD		78.72	76.15		77.23	77.58	79.47	82.12
*Market average exchange rate
YTD
	Actual*		Actual*				Actual*			Assumption
	FY2019		FY2020				FY2021			FY2021
	1-12	1-3	1-6		1-9	1-12	1-3	1-6		1-9	1-12	1-12
	Full-year	YTD	YTD		YTD	Full-year	YTD	YTD		YTD	Full-year	Full-year
CHF	109.72	112.61	112.07		113.14	113.72	117.08	118.60				116.00
EUR	122.08	120.19	119.27		120.80	121.69	127.65	129.76				126.00
USD	109.05	109.02	108.28		107.57	106.80	105.83	107.63				105.00
SGD	79.94	78.72	77.42		77.36	77.41	79.47	80.80				78.00
*Market average exchange rate
Period-end
	Actual		Actual				Actual
	FY2019		FY2020				FY2021
	31 Dec.	31 Mar.	30 Jun.		30 Sep.	31 Dec.	31 Mar.	30 Jun.		30 Sep.	31 Dec.
CHF	112.31	112.49	113.07		114.92	117.10	117.14	120.02
EUR	121.93	119.13	120.93		124.08	126.89	129.30	131.48
USD	108.88	107.83	107.57		105.66	103.19	110.37	110.52
SGD	80.72	75.73	77.18		77.19	77.98	81.87	82.15

Chugai Pharmaceutical Co., Ltd. (4519) Supplementary Materials for Consolidated Financial Results for the 2nd quarter of FY2021(IFRS)

1

Reconciliation of IFRS results to Core results

										(Billions of yen)
			FY2020			FY2021
			1-6				1-6
		IFRS results	Intangible		Others	Core results	IFRS results	Intangible		Others	Core results
			assets					assets
Revenues	368.1	-		-	368.1	390.2	-		-	390.2
	Sales	305.7	-		-	305.7	304.1	-		-	304.1
	Royalties and other operating income	62.5	-		-	62.5	86.1	-		-	86.1
Cost of sales	(131.8)	0.6		-	(131.2)	(123.4)	1.5		-	(121.9)
Gross profit	236.3	0.6		-	236.9	266.8	1.5		-	268.4
Operatingexpenses	(95.7)	0.2		2.3	(93.2)	(106.2)	1.6		2.0	(102.5)
	Marketing and distribution	(32.8)	-		0.5	(32.3)	(33.8)	-		(0.2)	(34.0)
	Research and development	(54.9)	0.2		1.8	(52.9)	(63.3)	1.6		1.9	(59.9)
	General and administration	(8.0)	-		0.0	(8.0)	(9.1)	-		0.4	(8.7)
Operating profit	140.6	0.8		2.3	143.7	160.7	3.1		2.0	165.8
	Financing costs	(0.0)	-		-	(0.0)	(0.0)	-		-	(0.0)
	Other financial income (expense)	(0.2)	-		-	(0.2)	0.6	-		-	0.6
	Other expense	(0.9)	-		-	(0.9)	(0.0)	-		-	(0.0)
Profitbefore taxes	139.6	0.8		2.3	142.7	161.3	3.1		2.0	166.4
Income taxes	(37.3)	(0.2)		(0.7)	(38.2)	(43.1)	(0.9)		(0.6)	(44.7)
Net income	102.3	0.6		1.6	104.5	118.1	2.2		1.4	121.7
Attributable to
	Chugai shareholders	102.3	0.6		1.6	104.5	118.1	2.2		1.4	121.7
	Non-controlling interests	-	-		-	-	-	-		-	-

Core results

Chugai discloses its results on a Core basis from 2013 in conjunction with its transition to IFRS. Core results are the results after adjusting non-recurring items recognized by Chugai to IFRS results, and are consistent with the Core concept disclosed by Roche. Core results are used by Chugai as an internal performance indicator, for explaining the status of recurring profits both internally and externally, and as the basis for payment-by-results.

The table above shows the reconciliation of IFRS results into Core results. The detail is as below.

Intangible assets

Amortization （0.7 billion yen in 2020 and 1.5 billion yen in 2021)

Impairment （0.1 billion yen in 2020 and 1.6 billion in 2021）

Others

Restructuring expenses etc.（2.3 billion yen in 2020 and 2.0 billion yen in 2021）

		Chugai Pharmaceutical Co., Ltd. (4519) Supplementary Materials for Consolidated Financial Results for the 2nd quarter of FY2021(IFRS)	2
IFRS results (QTR)
															(Billions of yen)
				Actual						Actual
				FY2020						FY2021
			1-3	4-6		7-9	10-12	1-3	Change	4-6	Change		7-9	Change	10-12	Change
			QTR	QTR		QTR	QTR	QTR	(%)	QTR	(%)		QTR	(%)	QTR	(%)
Revenues	179.4	188.7		208.4	210.4	168.8	(5.9)	221.4	+17.3
	Sales	144.5	161.1		159.1	168.5	130.3	(9.8)	173.9	+7.9
		Domestic	101.9	102.7		98.6	105.9	94.9	(6.9)	108.5	+5.6
		Overseas	42.6	58.4		60.6	62.6	35.4	(16.9)	65.3	+11.8
	Royalties and other operating income	34.9	27.6		49.3	41.9	38.6	+10.6	47.5	+72.1
		Royalty and profit-sharing income	26.4	27.1		35.6	40.5	36.6	+38.6	46.7	+72.3
		Other operating income	8.5	0.5		13.6	1.4	2.0	(76.5)	0.8	+60.0
Cost of sales	(61.3)	(70.6)		(69.4)	(72.3)	(55.3)	(9.8)	(68.1)	(3.5)
		(% of Sales)	42.4	43.8		43.6	42.9	42.4	-	39.2	-
Gross profit	118.2	118.1		139.0	138.2	113.5	(4.0)	153.4	+29.9
		(% of Revenues)	65.9	62.6		66.7	65.7	67.2	-	69.3	-
Operating expenses	(45.7)	(49.9)		(52.4)	(64.2)	(49.5)	+8.3	(56.6)	+13.4
		(% of Revenues)	25.5	26.4		25.1	30.5	29.3	-	25.6	-
	Marketing and distribution	(15.8)	(17.0)		(17.0)	(22.8)	(15.9)	+0.6	(17.9)	+5.3
		(% of Revenues)	8.8	9.0		8.2	10.8	9.4	-	8.1	-
	Research and development	(26.1)	(28.8)		(30.1)	(32.8)	(29.7)	+13.8	(33.6)	+16.7
		(% of Revenues)	14.5	15.3		14.4	15.6	17.6	-	15.2	-
	General and administration	(3.9)	(4.1)		(5.2)	(8.6)	(3.9)	0.0	(5.2)	+26.8
		(% of Revenues)	2.2	2.2		2.5	4.1	2.3	-	2.3	-
Operating profit	72.4	68.2		86.7	73.9	64.0	(11.6)	96.7	+41.8
		(% of Revenues)	40.4	36.1		41.6	35.1	37.9	-	43.7	-
	Financing costs	(0.0)	(0.0)		(0.0)	(0.0)	(0.0)	0.0	(0.0)	0.0
	Other financial income (expense)	(0.6)	0.5		(0.8)	(0.5)	0.3	-	0.3	(40.0)
	Other expense	(0.5)	(0.3)		(0.3)	(0.4)	-	-	(0.0)	(100.0)
Profit before taxes	71.2	68.4		85.6	73.1	64.2	(9.8)	97.0	+41.8
		(% of Revenues)	39.7	36.2		41.1	34.7	38.0	-	43.8	-
Income taxes	(19.7)	(17.6)		(25.4)	(20.7)	(16.8)	(14.7)	(26.3)	+49.4
Net income	51.5	50.8		60.1	52.3	47.4	(8.0)	70.7	+39.2
		(% of Revenues)	28.7	26.9		28.8	24.9	28.1	-	31.9	-
Attributable to
	Chugai shareholders	51.5	50.8		60.1	52.3	47.4	(8.0)	70.7	+39.2
	Non-controlling interests	-	-		-	-	-	-	-	-
Earnings per share
	Basic (yen)	31.37	30.89		36.58	31.82	28.84	(8.1)	43.02	+39.3
	Diluted (yen)	31.33	30.85		36.55	31.80	28.82	(8.0)	42.99	+39.4

Other financial income (expense) includes net amount of FX related gains/losses.

Effective July 1, 2020, Chugai Pharmaceutical Co., Ltd. ("Chugai") implemented a three-for-one stock split of its common stock. "Earnings per share (Basic)" and "Earnings per share (Diluted)" presents the amount after the stock split.

		Chugai Pharmaceutical Co., Ltd. (4519) Supplementary Materials for Consolidated Financial Results for the 2nd quarter of FY2021(IFRS)	3
IFRS results (YTD)
																(Billions of yen)
			Actual		Actual						Actual
			FY2019		FY2020						FY2021
			1-12	1-3	1-6		1-9	1-12	1-3	Change	1-6	Change		1-9	Change	1-12	Change
			YTD	YTD	YTD		YTD	YTD	YTD	(%)	YTD	(%)		YTD	(%)	YTD	(%)
Revenues	686.2	179.4	368.1		576.5	786.9	168.8	(5.9)	390.2	+6.0
	Sales	588.9	144.5	305.7		464.8	633.3	130.3	(9.8)	304.1	(0.5)
		Domestic	437.6	101.9	204.6		303.2	409.1	94.9	(6.9)	203.4	(0.6)
		Overseas	151.3	42.6	101.0		161.6	224.2	35.4	(16.9)	100.7	(0.3)
	Royalties and other operating income	97.3	34.9	62.5		111.7	153.6	38.6	+10.6	86.1	+37.8
		Royalty and profit-sharing income	76.5	26.4	53.5		89.1	129.6	36.6	+38.6	83.3	+55.7
		Other operating income	20.8	8.5	9.0		22.6	24.1	2.0	(76.5)	2.8	(68.9)
Cost of sales	(266.1)	(61.3)	(131.8)		(201.2)	(273.5)	(55.3)	(9.8)	(123.4)	(6.4)
		(% of Sales)	45.2	42.4	43.1		43.3	43.2	42.4	-	40.6	-
Gross profit	420.1	118.2	236.3		375.3	513.5	113.5	(4.0)	266.8	+12.9
		(% of Revenues)	61.2	65.9	64.2		65.1	65.3	67.2	-	68.4	-
Operating expenses	(209.5)	(45.7)	(95.7)		(148.0)	(212.3)	(49.5)	+8.3	(106.2)	+11.0
		(% of Revenues)	30.5	25.5	26.0		25.7	27.0	29.3	-	27.2	-
	Marketing and distribution	(77.2)	(15.8)	(32.8)		(49.8)	(72.6)	(15.9)	+0.6	(33.8)	+3.0
		(% of Revenues)	11.3	8.8	8.9		8.6	9.2	9.4	-	8.7	-
	Research and development	(107.9)	(26.1)	(54.9)		(85.0)	(117.9)	(29.7)	+13.8	(63.3)	+15.3
		(% of Revenues)	15.7	14.5	14.9		14.7	15.0	17.6	-	16.2	-
	General and administration	(24.4)	(3.9)	(8.0)		(13.2)	(21.8)	(3.9)	0.0	(9.1)	+13.8
		(% of Revenues)	3.6	2.2	2.2		2.3	2.8	2.3	-	2.3	-
Operating profit	210.6	72.4	140.6		227.3	301.2	64.0	(11.6)	160.7	+14.3
		(% of Revenues)	30.7	40.4	38.2		39.4	38.3	37.9	-	41.2	-
	Financing costs	(0.1)	(0.0)	(0.0)		(0.0)	(0.1)	(0.0)	0.0	(0.0)	0.0
	Other financial income (expense)	0.5	(0.6)	(0.2)		(1.0)	(1.5)	0.3	-	0.6	-
	Other expense	(3.1)	(0.5)	(0.9)		(1.1)	(1.5)	-	-	(0.0)	(100.0)
Profit before taxes	207.9	71.2	139.6		225.1	298.2	64.2	(9.8)	161.3	+15.5
		(% of Revenues)	30.3	39.7	37.9		39.0	37.9	38.0	-	41.3	-
Income taxes	(50.3)	(19.7)	(37.3)		(62.7)	(83.5)	(16.8)	(14.7)	(43.1)	+15.5
Net income	157.6	51.5	102.3		162.4	214.7	47.4	(8.0)	118.1	+15.4
		(% of Revenues)	23.0	28.7	27.8		28.2	27.3	28.1	-	30.3	-
Attributable to
	Chugai shareholders	157.6	51.5	102.3		162.4	214.7	47.4	(8.0)	118.1	+15.4
	Non-controlling interests	-	-	-		-	-	-	-	-	-
Earnings per share
	Basic (yen)	95.95	31.37	62.26		98.84	130.66	28.84	(8.1)	71.86	+15.4
	Diluted (yen)	95.81	31.33	62.18		98.74	130.53	28.82	(8.0)	71.81	+15.5

Other financial income (expense) includes net amount of FX related gains/losses.

Effective July 1, 2020, Chugai Pharmaceutical Co., Ltd. ("Chugai") implemented a three-for-one stock split of its common stock. "Earnings per share (Basic)" and "Earnings per share (Diluted)" presents the amount after the stock split.