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Takeda FY20 Profit Surges, Revenue Drops; Guides For Weak FY21 Profit

05/11/2021 06:35
  • Takeda Pharmaceutical Co Ltd (NYSE: TAKreported an FY20 net profit of ¥376 billion, a 750% Y/Y increase, reflecting gains on non-core asset sales and lower acquisition-related expenses.
  • Takeda exceeded its $10 billion non-core asset divestiture target and has announced 12 deals since January 2019 to date for a total aggregate value of up to $12.9 billion.
  • Core net income expanded around 9% Y/Y to ¥655.5 billion.
  • Operating profit grew 407.2% Y/Y to ¥509.3 billion, and core operating profit remained unchanged at ¥967.9 billion.
  • Revenue of ¥3.2 trillion fell 2.8% from last year. On an underlying basis, revenue grew 2.2%, driven by the growth of Takeda's 14 global brands, up 16% Y/Y.
  • The company's five key business areas — Gastroenterology, Rare Diseases, Plasma-Derived Therapies, Oncology, and Neuroscience — with ¥2.6 trillion reported revenue delivered Y/Y underlying revenue growth of 4.7%.
  • At an underlying core operating profit margin of 30.2%, the company is also deleveraging, with a net debt/adjusted EBITDA ratio of 3.2x at the end of Q4, down from 3.8x in March 2020. Takeda is on course to meet its medium-term deleveraging goal of 2x within FY2021-FY2023.
  • Operating cash flow increased by 50.9% to ¥1 trillion. Free cash flow ¥1.2 trillion representing an increase of 27.9% Y/Y.
  • Guidance: For FY21, the company projects a net profit of ¥250 billion, core EPS of ¥394, operating profit of ¥488 billion, and core operating profit of ¥930 billion, all lower than FY20.
  • However, revenue for the year is expected to be ¥3.4 trillion, +5.4% than last year.
  • Takeda expects underlying revenue growth to accelerate to "mid-single-digit." Underlying core operating profit and underlying core EPS are expected to also grow at "mid-single-digit."
  • Tt anticipates up to six regulatory submissions by year-end FY2021, with the potential for four approvals.
  • Price Action: TAK shares closed 0.5% higher at $16.96 on Monday.