Document


Definition of Non-IFRS Measures
	Definition of Core Financial Measures, Constant Exchange Rate Change, Free Cash Flow, and U.S. Dollar Convenience Translations	A-1
	Definition of EBITDA/Adjusted EBITDA and Net Debt	A-2
Reconciliations and Other Financial Information
	FY2023 Q3 YTD Reported Results with CER % Change	A-3
	FY2023 Q3 (Oct-Dec) Reported Results with CER % Change	A-4
	FY2023 Q3 YTD Core Results with CER % Change	A-5
	FY2023 Q3 (Oct-Dec) Core Results with CER % Change	A-6
	FY2023 Q3 YTD Reconciliation from Reported to Core	A-7
	FY2023 Q3 (Oct-Dec) Reconciliation from Reported to Core	A-8
	FY2022 Q3 YTD Reconciliation from Reported to Core	A-9
	FY2022 Q3 (Oct-Dec) Reconciliation from Reported to Core	A-10
	FY2023 Q3 YTD Free Cash Flow	A-11
	FY2023 Q3 YTD Net Debt to Adjusted EBITDA	A-12
	FY2022 Net Debt to Adjusted EBITDA	A-13
	FY2023 Q3 YTD Net Profit to Adjusted EBITDA Bridge	A-14
	FY2023 Q3 YTD Net Profit to Adjusted EBITDA LTM Bridge	A-15
	FY2023 Q3 YTD CAPEX, Depreciation and Amortization and Impairment Losses	A-16
	FY2023 Full Year Detailed Forecast	A-17
	FY2023 Full Year Reconciliation from Reported Operating Profit to Core Operating Profit Forecast	A-18
	FY2023 Full Year FX Rates Assumptions and Currency Sensitivity vs Forecast	A-19
Important Notice
	Important Notice, Forward-Looking Statements, Financial Information and Certain Non-IFRS Financial Measures, and Medical Information	A-20

We present Free Cash Flow because we believe that this measure is useful to investors as similar measures of liquidity are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Free Cash Flow is also used by our management to evaluate our liquidity and our cash flows, particularly as they relate to our ability to meet our liquidity requirements and to support our capital allocation policies. We also believe that Free Cash Flow is helpful to investors in understanding how our strategic divestitures of non-core businesses and of portions of our investment portfolio contribute to the cash flows and liquidity available to us.

The usefulness of Free Cash Flow to investors has significant limitations including, but not limited to, (i) it may not be comparable to similarly titled measures used by other companies, including those in our industry, (ii) it does not reflect the effect of our current and future contractual and other commitments requiring the use or allocation of capital and (iii) the addition of proceeds from sales and redemption of investments and the proceeds from sales of business, net of cash and cash equivalents divested do not reflect cash received from our core ongoing operations. Free Cash Flow should not be considered in isolation and is not, and should not be viewed as, a substitute for cash flows from operating activities or any other measure of liquidity presented in accordance with IFRS. The most directly comparable measure under IFRS for Free Cash Flow is net cash from operating activities.

In Financial Appendix, certain amounts presented in Japanese yen have been translated to U.S. dollars solely for the convenience of the reader at an exchange rate of 1USD = 140.92 JPY, the Noon Buying Rate certified by the Federal Reserve Bank of New York on December 29, 2023. The rate and methodologies used for the convenience translations differ from the currency exchange rates and translation methodologies under IFRS used for the preparation of the condensed interim consolidated financial statements. The translation should not be construed as a representation that the Japanese yen amounts could be converted into U.S. dollars at this or any other rate.

We present EBITDA and Adjusted EBITDA because we believe that these measures are useful to investors as they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We further believe that Adjusted EBITDA is helpful to investors in identifying trends in its business that could otherwise be obscured by certain items unrelated to ongoing operations because they are highly variable, difficult to predict, may substantially impact our results of operations and may limit the ability to evaluate our performance from one period to another on a consistent basis.

The usefulness of EBITDA and Adjusted EBITDA to investors has limitations including, but not limited to, (i) they may not be comparable to similarly titled measures used by other companies, including those in our industry, (ii) they exclude financial information and events, such as the effects of an acquisition or amortization of intangible assets, that some may consider important in evaluating our performance, value or prospects for the future, (iii) they exclude items or types of items that may continue to occur from period to period in the future and (iv) they may not exclude all items which investors may consider to be unrelated to our long-term operations. These non-IFRS measures are not, and should not be viewed as, substitutes for IFRS reported net income (loss). We encourage investors to review our historical financial statements in their entirety and caution investors to use IFRS measures as the primary means of evaluating our performance, value and prospects for the future, and EBITDA and Adjusted EBITDA as supplemental measures.

We define EBITDA as consolidated net profit before income tax expenses, depreciation and amortization and net interest expense. We define Adjusted EBITDA as EBITDA further adjusted to exclude impairment losses, other operating income and expenses (excluding depreciation and amortization), finance income and expenses (excluding net interest expense), our share of loss from investments accounted for under the equity method and other items that management believes are unrelated to our core operations such as purchase accounting effects and transaction related costs.

We define Net Debt first by calculating the sum of the current and non-current portions of bonds and loans as shown on our consolidated statement of financial position, which is then adjusted to reflect (i) the use of prior 12-month average exchange rates for non-JPY debt outstanding at the beginning of the period and the use of relevant spot rates for new non-JPY debt incurred and existing non-JPY debt redeemed during the reporting period, which reflects the methodology our management uses to monitor our leverage, and (ii) a 50% equity credit applied to our aggregate principal amount of JPY 500.0 billion hybrid (subordinated) bonds issued in June 2019 by S&P Global Rating Japan in recognition of the equity-like features of those bonds pursuant to such agency’s ratings methodology. To calculate Net Debt, we deduct from this figure cash & cash equivalents, excluding cash temporarily held by Takeda on behalf of third parties related to vaccine operations and to the trade receivables sales program, and debt investments classified as Level 1 in the fair value hierarchy being recorded as Other Financial Assets.

The usefulness of Net Debt to investors has significant limitations including, but not limited to, (i) it may not be comparable to similarly titled measures used by other companies, including those in our industry, (ii) it does not reflect the amounts of interest payments to be paid on our indebtedness, (iii) it does not reflect any restrictions on our ability to prepay or redeem any of our indebtedness, (iv) it does not reflect any fees, costs or other expenses that we may incur in converting cash equivalents to cash, in converting cash from one currency into another or in moving cash within our consolidated group, (v) it applies to gross debt an adjustment for average foreign exchange rates which, although consistent with our financing agreements, does not reflect the actual rates at which we would be able to convert one currency into another and (vi) it reflects an equity credit due to the fact that the amounts of our subordinated bonds, although we believe it to be reasonable, do not affect the status of those instruments as indebtedness. Net Debt should not be considered in isolation and is not, and should not be viewed as, a substitute for bonds and loans or any other measure of indebtedness presented in accordance with IFRS.


(Billion JPY, except EPS)	FY2022 Q3 YTD		FY2023 Q3 YTD		vs. PY			(Million USD, except EPS) FY2023 Q3 YTD Convenience USD Translation
					AER		CER
					Amount of Change	% CHANGE	% CHANGE
Revenue	3,071.3		3,212.9		141.6	4.6%	0.0%	22,799
Cost of sales	(934.3)		(1,044.2)		(109.9)	(11.8)%	(6.8)%	(7,410)
Gross profit	2,137.0		2,168.7		31.7	1.5%	(3.0)%	15,390
Margin	69.6	%	67.5	%		(2.1) pp	(2.1) pp	67.5	%
SG&A expenses	(742.5)		(768.6)		(26.1)	(3.5)%	1.3%	(5,454)
R&D expenses	(472.4)		(534.1)		(61.7)	(13.1)%	(7.3)%	(3,790)
Amortization of intangible assets associated with products	(370.6)		(387.7)		(17.1)	(4.6)%	1.4%	(2,751)
Impairment losses on intangible assets associated with products*1	(38.6)		(119.3)		(80.7)	(208.9)%	(186.0)%	(847)
Other operating income	16.7		10.8		(5.9)	(35.4)%	(35.7)%	76
Other operating expenses	(127.6)		(145.7)		(18.0)	(14.1)%	(9.1)%	(1,034)
Operating profit	401.9		224.1		(177.8)	(44.2)%	(42.9)%	1,591
Margin	13.1	%	7.0	%		(6.1) pp	(5.6) pp	7.0	%
Finance income	55.1		46.1		(9.0)	(16.4)%	(17.1)%	327
Finance expenses	(126.8)		(172.7)		(45.9)	(36.2)%	(36.6)%	(1,225)
Share of profit (loss) of investments accounted for using the equity method	(3.1)		2.7		5.9	―	―	19
Profit before tax	327.2		100.3		(226.9)	(69.3)%	(67.9)%	712
Income tax (expenses) benefit	(41.3)		46.9		88.2	―	―	333
Net profit for the period	285.9		147.2		(138.7)	(48.5)%	(50.1)%	1,045
Non-controlling interests	(0.0)		(0.1)		(0.1)	(449.6)%	(439.4)%	(1)
Net profit attributable to owners of the Company	285.9		147.1		(138.8)	(48.6)%	(50.1)%	1,044
Basic EPS (JPY or USD)	184.32		94.10		(90.22)	(48.9)%	(50.5)%	0.67

*1 Includes in-process R&D

When comparing results to the same period of the previous fiscal year, the amount of change and percentage change based on Actual Exchange Rates are presented in “AER” (which is presented in accordance with IFRS) and percentage change based on Constant Exchange Rate (which is a non-IFRS measure) is presented in “CER”. Please refer to A-1 Definition of Core Financial Measures, Constant Exchange Rate Change, Free Cash Flow, and U.S. Dollar Convenience Translations, for the definition of the “Constant Exchange Rate change”.

% change versus prior year is presented as positive when favorable to profits, and negative when unfavorable to profits.


(Billion JPY, except EPS)	FY2022 Q3 (Oct-Dec)		FY2023 Q3 (Oct-Dec)		vs. PY			(Million USD, except EPS) FY2023 Q3 (Oct-Dec) Convenience USD Translation
					AER		CER
					Amount of Change	% CHANGE	% CHANGE
Revenue	1,096.6		1,111.2		14.6	1.3%	(2.6)%	7,885
Cost of sales	(336.0)		(379.5)		(43.5)	(13.0)%	(8.3)%	(2,693)
Gross profit	760.6		731.7		(28.9)	(3.8)%	(7.4)%	5,192
Margin	69.4	%	65.8	%		(3.5) pp	(3.4) pp	65.8	%
SG&A expenses	(262.3)		(267.5)		(5.2)	(2.0)%	2.1%	(1,898)
R&D expenses	(174.6)		(187.4)		(12.8)	(7.3)%	(3.2)%	(1,330)
Amortization of intangible assets associated with products	(129.8)		(133.8)		(4.0)	(3.1)%	1.1%	(949)
Impairment losses on intangible assets associated with products*1	(5.8)		(3.6)		2.2	38.6%	42.0%	(25)
Other operating income	3.2		0.9		(2.3)	(72.1)%	(70.0)%	6
Other operating expenses	(44.3)		(35.4)		8.8	20.0%	25.0%	(252)
Operating profit	147.0		104.9		(42.1)	(28.6)%	(29.5)%	744
Margin	13.4	%	9.4	%		(4.0) pp	(3.7) pp	9.4	%
Finance income	41.7		22.5		(19.1)	(45.9)%	(46.2)%	160
Finance expenses	(79.7)		(67.3)		12.4	15.6%	16.5%	(478)
Share of profit (loss) of investments accounted for using the equity method	(1.8)		1.1		2.9	―	―	8
Profit before tax	107.2		61.3		(45.9)	(42.8)%	(43.5)%	435
Income tax (expenses) benefit	12.0		44.5		32.5	270.9%	276.1%	316
Net profit for the period	119.1		105.8		(13.4)	(11.2)%	(11.3)%	750
Non-controlling interests	(0.0)		(0.0)		(0.0)	(61.1)%	(59.8)%	(0)
Net profit attributable to owners of the Company	119.1		105.7		(13.4)	(11.3)%	(11.3)%	750
Basic EPS (JPY or USD)	76.63		67.38		(9.25)	(12.1)%	(12.1)%	0.48

*1 Includes in-process R&D

When comparing results to the same period of the previous fiscal year, the amount of change and percentage change based on Actual Exchange Rates are presented in “AER” (which is presented in accordance with IFRS) and percentage change based on Constant Exchange Rate (which is a non-IFRS measure) is presented in “CER”. Please refer to A-1 Definition of Core Financial Measures, Constant Exchange Rate Change, Free Cash Flow, and U.S. Dollar Convenience Translations, for the definition of the “Constant Exchange Rate change”.

% change versus prior year is presented as positive when favorable to profits, and negative when unfavorable to profits.


(Billion JPY, except EPS)	FY2022 Q3 YTD		FY2023 Q3 YTD		vs. PY			(Million USD, except EPS) FY2023 Q3 YTD Convenience USD Translation
					AER		CER
					Amount of Change	% CHANGE	% CHANGE
Revenue	3,071.3		3,212.9		141.6	4.6%	0.0%	22,799
Cost of sales	(901.7)		(1,044.2)		(142.6)	(15.8)%	(10.7)%	(7,410)
Gross profit	2,169.6		2,168.7		(1.0)	(0.0)%	(4.4)%	15,389
Margin	70.6	%	67.5	%		(3.1) pp	(3.1) pp	67.5	%
SG&A expenses	(742.9)		(769.1)		(26.1)	(3.5)%	1.3%	(5,457)
R&D expenses	(472.1)		(534.1)		(62.0)	(13.1)%	(7.3)%	(3,790)
Operating profit	954.7		865.6		(89.1)	(9.3)%	(12.7)%	6,142
Margin	31.1	%	26.9	%		(4.1) pp	(3.9) pp	26.9	%
Finance income	9.2		45.6		36.4	398.2%	394.5%	324
Finance expenses	(114.2)		(152.9)		(38.7)	(33.9)%	(28.3)%	(1,085)
Share of profit (loss) of investments accounted for using the equity method	2.5		4.4		1.9	74.8%	74.9%	31
Profit before tax	852.1		762.6		(89.5)	(10.5)%	(13.5)%	5,412
Income tax (expenses) benefit	(144.9)		(118.9)		26.0	17.9%	20.0%	(844)
Net profit for the period	707.2		643.7		(63.5)	(9.0)%	(12.2)%	4,568
Non-controlling interests	(0.0)		(0.1)		(0.1)	(449.6)%	(439.4)%	(1)
Net profit attributable to owners of the Company	707.2		643.6		(63.6)	(9.0)%	(12.2)%	4,567
Basic EPS (JPY or USD)	456		412		(44)	(9.7)%	(12.9)%	2.92

When comparing results to the same period of the previous fiscal year, the amount of change and percentage change based on Actual Exchange Rates are presented in “AER” (which is presented in accordance with IFRS) and percentage change based on Constant Exchange Rate (which is a non-IFRS measure) is presented in “CER”. Please refer to A-1 Definition of Core Financial Measures, Constant Exchange Rate Change, Free Cash Flow, and U.S. Dollar Convenience Translations, for the definition of the “Constant Exchange Rate change”.

% change versus prior year is presented as positive when favorable to profits, and negative when unfavorable to profits.


(Billion JPY, except EPS)	FY2022 Q3 (Oct-Dec)		FY2023 Q3 (Oct-Dec)		vs. PY			(Million USD, except EPS) FY2023 Q3 (Oct-Dec) Convenience USD Translation
					AER		CER
					Amount of Change	% CHANGE	% CHANGE
Revenue	1,096.6		1,111.2		14.6	1.3%	(2.6)%	7,885
Cost of sales	(330.1)		(379.4)		(49.3)	(14.9)%	(10.2)%	(2,692)
Gross profit	766.4		731.8		(34.6)	(4.5)%	(8.1)%	5,193
Margin	69.9	%	65.9	%		(4.0) pp	(3.9) pp	65.9	%
SG&A expenses	(262.4)		(267.6)		(5.2)	(2.0)%	2.1%	(1,899)
R&D expenses	(174.6)		(187.4)		(12.8)	(7.3)%	(3.3)%	(1,330)
Operating profit	329.5		276.8		(52.7)	(16.0)%	(18.8)%	1,964
Margin	30.0	%	24.9	%		(5.1) pp	(5.0) pp	24.9	%
Finance income	39.5		21.6		(17.9)	(45.3)%	(45.4)%	153
Finance expenses	(76.2)		(65.1)		11.2	14.6%	15.1%	(462)
Share of profit (loss) of investments accounted for using the equity method	(0.2)		2.1		2.2	―	―	15
Profit before tax	292.5		235.4		(57.1)	(19.5)%	(22.6)%	1,670
Income tax (expenses) benefit	(32.0)		0.5		32.6	―	―	4
Net profit for the period	260.5		235.9		(24.6)	(9.4)%	(9.5)%	1,674
Non-controlling interests	(0.0)		(0.0)		(0.0)	(61.1)%	(59.8)%	(0)
Net profit attributable to owners of the Company	260.5		235.9		(24.6)	(9.4)%	(9.5)%	1,674
Basic EPS (JPY or USD)	168		150		(17)	(10.3)%	(10.3)%	1.07

When comparing results to the same period of the previous fiscal year, the amount of change and percentage change based on Actual Exchange Rates are presented in “AER” (which is presented in accordance with IFRS) and percentage change based on Constant Exchange Rate (which is a non-IFRS measure) is presented in “CER”. Please refer to A-1 Definition of Core Financial Measures, Constant Exchange Rate Change, Free Cash Flow, and U.S. Dollar Convenience Translations, for the definition of the “Constant Exchange Rate change”.

% change versus prior year is presented as positive when favorable to profits, and negative when unfavorable to profits.


(Billion JPY, except EPS and number of shares)	REPORTED		REPORTED TO CORE ADJUSTMENTS				CORE
			Amortization of intangible assets	Impairment of intangible assets	Other operating income/ expenses	Others
Revenue	3,212.9						3,212.9
Cost of sales	(1,044.2)					(0.1)	(1,044.2)
Gross profit	2,168.7					(0.1)	2,168.7
SG&A expenses	(768.6)					(0.5)	(769.1)
R&D expenses	(534.1)					0.0	(534.1)
Amortization of intangible assets associated with products	(387.7)		387.7				—
Impairment losses on intangible assets associated with products*1	(119.3)			119.3			—
Other operating income	10.8				(10.8)		—
Other operating expenses	(145.7)				145.7		—
Operating profit	224.1		387.7	119.3	134.9	(0.5)	865.6
Margin	7.0	%					26.9	%
Finance income and (expenses), net	(126.6)					19.3	(107.3)
Share of profit (loss) of investments accounted for using the equity method	2.7					1.6	4.4
Profit before tax	100.3		387.7	119.3	134.9	20.4	762.6
Income tax (expenses) benefit	46.9		(82.5)	(26.4)	(31.8)	(25.1)	(118.9)
Non-controlling interests	(0.1)						(0.1)
Net profit attributable to owners of the Company	147.1		305.2	92.9	103.1	(4.7)	643.6
Basic EPS (JPY)	94						412
Number of shares (millions)	1,563						1,563


(Billion JPY, except EPS and number of shares)	REPORTED		REPORTED TO CORE ADJUSTMENTS				CORE
			Amortization of intangible assets	Impairment of intangible assets	Other operating income/ expenses	Others
Revenue	1,111.2						1,111.2
Cost of sales	(379.5)					0.1	(379.4)
Gross profit	731.7					0.1	731.8
SG&A expenses	(267.5)					(0.1)	(267.6)
R&D expenses	(187.4)					0.0	(187.4)
Amortization of intangible assets associated with products	(133.8)		133.8				—
Impairment losses on intangible assets associated with products*1	(3.6)			3.6			—
Other operating income	0.9				(0.9)		—
Other operating expenses	(35.4)				35.4		—
Operating profit	104.9		133.8	3.6	34.6	(0.0)	276.8
Margin	9.4	%					24.9	%
Finance income and (expenses), net	(44.8)					1.3	(43.5)
Share of profit (loss) of investments accounted for using the equity method	1.1					0.9	2.1
Profit before tax	61.3		133.8	3.6	34.6	2.2	235.4
Income tax (expenses) benefit	44.5		(28.4)	(0.8)	(15.3)	0.5	0.5
Non-controlling interests	(0.0)						(0.0)
Net profit attributable to owners of the Company	105.7		105.3	2.8	19.3	2.8	235.9
Basic EPS (JPY)	67						150
Number of shares (millions)	1,569						1,569


(Billion JPY, except EPS and number of shares)	REPORTED		REPORTED TO CORE ADJUSTMENTS			CORE
			Amortization of intangible assets	Impairment of intangible assets	Other operating income/ expenses			Others
Revenue	3,071.3							3,071.3
Cost of sales	(934.3)						32.6	(901.7)
Gross profit	2,137.0						32.6	2,169.6
SG&A expenses	(742.5)						(0.4)	(742.9)
R&D expenses	(472.4)						0.3	(472.1)
Amortization of intangible assets associated with products	(370.6)		370.6					—
Impairment losses on intangible assets associated with products*1	(38.6)			38.6				—
Other operating income	16.7				(16.7)			—
Other operating expenses	(127.6)				127.6			—
Operating profit	401.9		370.6	38.6	111.0		32.5	954.7
Margin	13.1	%						31.1	%
Finance income and (expenses), net	(71.6)						(33.4)	(105.0)
Share of profit (loss) of investments accounted for using the equity method	(3.1)						5.6	2.5
Profit before tax	327.2		370.6	38.6	111.0		4.8	852.1
Income tax (expenses) benefit	(41.3)		(79.4)	(8.2)	(24.1)		8.0	(144.9)
Non-controlling interests	(0.0)							(0.0)
Net profit attributable to owners of the Company	285.9		291.2	30.4	86.9		12.8	707.2
Basic EPS (JPY)	184							456
Number of shares (millions)	1,551							1,551


(Billion JPY, except EPS and number of shares)	REPORTED		REPORTED TO CORE ADJUSTMENTS			CORE
			Amortization of intangible assets	Impairment of intangible assets	Other operating income/ expenses			Others
Revenue	1,096.6							1,096.6
Cost of sales	(336.0)						5.9	(330.1)
Gross profit	760.6						5.9	766.4
SG&A expenses	(262.3)						(0.1)	(262.4)
R&D expenses	(174.6)						0.1	(174.6)
Amortization of intangible assets associated with products	(129.8)		129.8					—
Impairment losses on intangible assets associated with products*1	(5.8)			5.8				—
Other operating income	3.2				(3.2)			—
Other operating expenses	(44.3)				44.3			—
Operating profit	147.0		129.8	5.8	41.1		5.8	329.5
Margin	13.4	%						30.0	%
Finance income and (expenses), net	(38.1)						1.3	(36.8)
Share of profit (loss) of investments accounted for using the equity method	(1.8)						1.6	(0.2)
Profit before tax	107.2		129.8	5.8	41.1		8.7	292.5
Income tax (expenses) benefit	12.0		(27.9)	(1.2)	(11.0)		(4.0)	(32.0)
Non-controlling interests	(0.0)							(0.0)
Net profit attributable to owners of the Company	119.1		101.9	4.6	30.1		4.7	260.5
Basic EPS (JPY)	77							168
Number of shares (millions)	1,555							1,555


FY2023 Q3 YTD Free Cash Flow

(Billion JPY)	FY2022 Q3 YTD	FY2023 Q3 YTD	vs. PY			(Million USD) FY2023 Q3 YTD Convenience USD Translation
Net profit	285.9	147.2	(138.7)	(48.5)	%	1,045
Depreciation, amortization and impairment loss	545.0	675.5	130.6			4,794
Decrease (increase) in trade working capital	(172.4)	(166.7)	5.7			(1,183)
Income taxes paid	(173.4)	(179.3)	(5.9)			(1,272)
Tax refunds and interest on tax refunds received	8.3	13.0	4.7			92
Other	190.0	(52.0)	(242.0)			(369)
Net cash from operating activities (Operating Cash Flow)	683.5	437.8	(245.7)	(36.0)	%	3,106
Adjustment for cash temporarily held by Takeda on behalf of third parties*1	76.2	9.6	(66.6)			68
Acquisition of PP&E	(104.9)	(130.9)	(26.0)			(929)
Proceeds from sales of PP&E	0.1	8.6	8.5			61
Acquisition of intangible assets	(84.7)	(285.5)	(200.8)			(2,026)
Acquisition of investments	(5.4)	(4.7)	0.7			(34)
Proceeds from sales and redemption of investments	20.6	1.1	(19.5)			8
Proceeds from sales of business, net of cash and cash equivalents divested	—	0.4	0.4			3
Free Cash Flow	585.2	36.3	(548.9)	(93.8)	%	257



*1 Adjustment refers to changes in cash balance that is temporarily held by Takeda on behalf of third parties related to vaccine operations and the trade receivables sales program.


FY2023 Q3 YTD Net Debt to Adjusted EBITDA

NET DEBT/ADJUSTED EBITDA RATIO		NET INCREASE (DECREASE) IN CASH
(Billion JPY)	FY2023 Q3 YTD	(Billion JPY)	FY2022 Q3 YTD	FY2023 Q3 YTD	vs. PY
Cash & cash equivalents and Level 1 debt investments*1	172.2	Net cash from operating activities	683.5	437.8	(245.7)	(36.0)	%
Book value debt on consolidated statements of financial position	(4,664.2)	Acquisition of PP&E	(104.9)	(130.9)
Hybrid bond 50% equity credit	250.0	Proceeds from sales of PP&E	0.1	8.6
FX adjustment*2	53.0	Acquisition of intangible assets	(84.7)	(285.5)
Gross debt*3	(4,361.2)	Acquisition of investments	(5.4)	(4.7)
Net cash (debt)	(4,189.0)	Proceeds from sales and redemption of investments	20.6	1.1



		Proceeds from sales of business, net of cash and cash equivalents divested	—	0.4
Net debt/Adjusted EBITDA ratio	3.1x	Net increase in short-term loans and commercial papers	—	280.0


		Proceeds from long-term loans	—	100.0
Adjusted EBITDA (LTM)*4	1,358.9	Repayment of long-term loans	(0.1)	(100.3)

		Repayment of bonds	(281.5)	(220.5)



		Proceeds from the settlement of cross currency interest rate swaps related to bonds	—	60.1
		Purchase of treasury shares	(26.9)	(2.3)
		Interest paid	(86.6)	(78.7)
		Dividends paid	(269.0)	(278.1)
		Others	(32.7)	(47.7)
		Net increase (decrease) in cash	(187.7)	(260.8)	(73.1)	(39.0)	%

*1 Represents cash & cash equivalents, excluding cash temporarily held by Takeda on behalf of third parties related to vaccine operations and to the trade receivables sales program, and debt investments classified as Level 1 in the fair value hierarchy being recorded as Other Financial Assets. For the calculation of net debt, starting from the quarter ended June 30, 2023, debt investments classified as Level 1 in the fair value hierarchy being recorded as Other Financial Assets are included in the items deducted from gross debt. Had the same methodology been used for the calculation of net debt as of March 31, 2023 and prior periods, net debt would have remained unchanged.
*2 FX adjustment refers to change from month-end rate to average rate used for non-JPY debt calculation outstanding at the beginning of the period to match with adjusted EBITDA (which is calculated based on average rates). New non-JPY debt incurred and existing non-JPY debt redeemed during the reporting period are translated to JPY at relevant spot rates as of the relevant date.
*3 Bonds and loans of current and non-current liabilities. JPY 250.0 billion reduction in debt due to JPY 500.0 billion hybrid bond issuance in June 2019, given that the hybrid bond qualifies for 50% equity credit for leverage purposes. Includes non-cash adjustments related to debt amortization and FX impact.
*4 LTM represents Last Twelve Months (January 2023 - December 2023). Calculated by subtracting FY2022 Q3 YTD from FY2022 Full Year and adding FY2023 Q3 YTD.


FY2022 Net Debt to Adjusted EBITDA

NET DEBT/ADJUSTED EBITDA RATIO			NET INCREASE (DECREASE) IN CASH
(Billion JPY)	FY2022		(Billion JPY)	FY2021	FY2022	vs. PY
Cash and cash equivalents*1	407.7		Net cash from operating activities	1,123.1	977.2	(145.9)	(13.0)	%
Book value debt on consolidated statements of financial position	(4,382.3)		Acquisition of PP&E	(123.3)	(140.7)
Hybrid bond 50% equity credit	250.0		Proceeds from sales of PP&E	1.8	1.0
FX adjustment*2	8.5		Acquisition of intangible assets	(62.8)	(493.0)
Gross debt*3	(4,123.9)		Acquisition of investments	(8.3)	(10.2)
Net cash (debt)	(3,716.1)		Proceeds from sales and redemption of investments	16.9	22.3
			Acquisition of business, net of cash and cash equivalents acquired	(49.7)	—
Upfront payment related to the acquisition of TAK-279*4	400.4		Proceeds from sales of business, net of cash and cash equivalents divested	28.2	8.0
Net cash (debt) excluding upfront payment related to the acquisition of TAK-279	(3,315.7)		Net decrease in short-term loans and commercial papers	(0.0)	40.0
			Proceeds from long-term loans	—	75.0
			Repayment of long-term loans	(414.1)	(75.2)
Net debt/Adjusted EBITDA ratio	2.6	x	Proceeds from issuance of bonds	249.3	—
Net debt/Adjusted EBITDA ratio excluding upfront payment related to the acquisition of TAK-279	2.3	x	Repayment of bonds	(396.0)	(281.5)
			Purchase of treasury shares	(77.5)	(26.9)
			Interest paid	(108.2)	(108.6)
Adjusted EBITDA	1,421.8		Dividends paid	(283.7)	(279.4)
			Others	(41.1)	(47.0)
			Net increase (decrease) in cash	(145.3)	(339.1)	(193.8)	(133.4)	%

*1 Includes short-term investments which mature or become due within one year from the reporting date and excludes cash temporarily held by Takeda on behalf of third parties related to vaccine operations and the trade receivables sales program.
*2 FX adjustment refers to change from month-end rate to average rate used for non-JPY debt calculation outstanding at the beginning of the period to match with adjusted EBITDA (which is calculated based on average rates). New non-JPY debt incurred and existing non-JPY debt redeemed during the reporting period are translated to JPY at relevant spot rates as of the relevant date.
*3 Bonds and loans of current and non-current liabilities. JPY 250.0 billion reduction in debt due to JPY 500.0 billion hybrid bond issuance in June 2019, given that the hybrid bond qualifies for 50% equity credit for leverage purposes. Includes non-cash adjustments related to debt amortization and FX impact.
*4 This represents the portion of the USD 4.0 billion upfront payment related to the acquisition of TAK-279 paid in February 2023 (such portion totaling USD 3.0 billion), converted to JPY using the Japanese yen – U.S. dollar exchange rate of 133.48, which is applicable to translation of foreign currency denominated cash as of March 31, 2023.


FY2023 Q3 YTD Net Profit to Adjusted EBITDA Bridge

(Billion JPY)	FY2022 Q3 YTD	FY2023 Q3 YTD	vs. PY
Net profit	285.9	147.2	(138.7)	(48.5)	%
Income tax expenses	41.3	(46.9)
Depreciation and amortization	503.0	541.3
Interest expense, net	86.0	82.0
EBITDA	916.2	723.6	(192.6)	(21.0)	%
Impairment losses	42.0	134.3
Other operating expense (income), net, excluding depreciation and amortization and other miscellaneous expenses (non-cash item)	105.4	116.4
Finance expense (income), net, excluding interest income and expense, net	(14.4)	44.6
Share of profit (loss) of investments accounted for using the equity method	3.1	(2.7)
Other adjustments:	77.2	50.5
Non-core expense related to COVID-19	8.4	—

Impact on profit related to fair value step up of inventory in Shire acquisition	24.9	—
Other costs*1	43.9	50.5

Adjusted EBITDA	1,129.5	1,066.6	(62.9)	(5.6)	%

*1 Includes adjustments for non-cash equity-based compensation expense and other one time non-cash expense.


FY2023 Q3 YTD Net Profit to Adjusted EBITDA LTM Bridge

(Billion JPY)	FY2022 Full Year (Apr - Mar)	FY2022 Q3 YTD (Apr - Dec)	FY2023 Q3 YTD (Apr - Dec)	FY2023 Q3 LTM*1 (Jan - Dec)
Net profit	317.0	285.9	147.2	178.3
Income tax expenses	58.1	41.3	(46.9)	(30.1)
Depreciation and amortization	664.4	503.0	541.3	702.7
Interest expense, net	111.5	86.0	82.0	107.4
EBITDA	1,151.0	916.2	723.6	958.3
Impairment losses	64.4	42.0	134.3	156.7
Other operating expense (income), net, excluding depreciation and amortization and other miscellaneous expenses (non-cash item)	109.0	105.4	116.4	120.0
Finance expense (income), net, excluding interest income and expense, net	(4.7)	(14.4)	44.6	54.3
Share of profit (loss) on investments accounted for using the equity method	8.6	3.1	(2.7)	2.8
Other adjustments:	93.5	77.2	50.5	66.8
Non-core expense related to COVID-19	9.9	8.4	—	1.6

Impact on profit related to fair value step up of inventory in Shire acquisition	24.9	24.9	—	—
Other costs*2	58.7	43.9	50.5	65.2
Adjusted EBITDA	1,421.8	1,129.5	1,066.6	1,358.9



*1 LTM represents Last Twelve Months (January 2023 - December 2023). Calculated by subtracting FY2022 Q3 YTD from FY2022 Full Year and adding FY2023 Q3 YTD.
*2 Includes adjustments for non-cash equity-based compensation expense and other one time non-cash expense.


(Billion JPY)	FY2022 Q3 YTD	FY2023 Q3 YTD	vs. PY			FY2023 Latest Forecast
Capital expenditures*1	189.6	416.4	226.8	119.6	%	480.0 - 530.0*4
Tangible assets	104.9	130.9	26.0	24.8	%
Intangible assets	84.7	285.5	200.8	237.0	%

Depreciation and amortization	503.0	541.3	38.3	7.6	%	680.0
Depreciation of tangible assets*2 (A)	113.3	129.8	16.5	14.6	%
Amortization of intangible assets (B)	389.7	411.4	21.8	5.6	%
Of which Amortization associated with products (C)	370.6	387.7	17.1	4.6	%	500.0
Of which Amortization excluding intangible assets associated with products (D)	19.1	23.8	4.7	24.4	%


Depreciation and amortization (excluding intangible assets associated with products) (A)+(D)	132.4	153.6	21.2	16.0	%	180.0

Impairment losses	42.0	134.3	92.3	220.0	%
Impairment losses associated with products*3	38.6	119.3	80.7	208.9	%	120.0

Amortization and impairment losses on intangible assets associated with products	409.2	507.0	97.8	23.9	%	620.0
*1 Cash flow base
*2 Includes depreciation of investment properties
*3 Includes in-process R&D
*4 FY2023 Latest Forecast reflects expenditures related to the acquisition of TAK-279 from Nimbus and in-licensing of FRUZAQLA (fruquintinib) from HUTCHMED.


(BN JPY)		FY2022 Actual	FY2023 Latest Forecast (Oct 26, 2023)	FY2023 Latest Forecast % change vs. PY

REPORTED	Revenue	4,027.5	3,980.0	(1.2)	%

	R&D expenses	(633.3)	(680.0)	(7.4)	%
	Amortization of intangible assets associated with products	(485.1)	(500.0)	(3.1)	%
	Impairment losses on intangible assets associated with products*1	(57.3)	(120.0)	(109.3)	%
	Other operating income	25.4	14.0	(44.9)	%
	Other operating expenses	(145.2)	(180.0)	(23.9)	%
	Operating profit	490.5	225.0	(54.1)	%
	Finance income (expenses), net	(106.8)	(157.0)	(47.0)	%
	Profit before tax	375.1	70.0	(81.3)	%
	Net profit attributable to owners of the Company	317.0	93.0	(70.7)	%
	Basic EPS (yen)	204	59	(70.9)	%

	Core Revenue*2	4,027.5	3,980.0	(1.2)	%
	Core Operating Profit*2	1,188.4	1,015.0	(14.6)	%
	Core EPS (yen)	558	447	(19.9)	%

	Free cash flow*3	446.2	400.0 to 500.0
	CAPEX (cash flow base)*3	(633.7)	(480.0) to (530.0)
	Depreciation and amortization (excl. intangible assets associated with products)	(179.3)	(180.0)	(0.4)	%
	Cash tax rate on adjusted EBITDA (excl. divestitures)	～13%	Mid-teen %*4

	USD/JPY	135	137	1.6	%
	EUR/JPY	141	145	3.1	%


Average Exchange Rates vs. JPY				Impact of depreciation of yen from April 2023 to March 2024 (100 million JPY)
	FY2022 Q3 Actual (Apr-Dec)	FY2023 Q3 Actual (Apr-Dec)	FY2023 Assumption (Apr-Mar)		Revenue (IFRS)	Operating Profit (IFRS)	Net Profit (IFRS)	Core Operating Profit (non-IFRS)
USD	136	143	137	1% depreciation	207.0	15.4	5.8	65.1
				1 yen depreciation	151.1	11.2	4.2	47.5
EUR	140	155	145	1% depreciation	57.2	(37.4)	(32.5)	(30.3)
				1 yen depreciation	39.5	(25.8)	(22.4)	(20.9)
RUB	2.2	1.6	1.6	1% depreciation	4.4	2.6	2.0	3.0
CNY	19.8	20.0	19.8		17.3	10.1	7.8	10.1
BRL	26.5	28.9	28.5		10.9	7.0	5.4	7.1

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This report and materials distributed in connection with this report include certain financial measures not presented in accordance with IFRS, such as Core Revenue, Core Operating Profit, Core Net Profit, Core EPS, Constant Exchange Rate (“CER”) change, Net Debt, EBITDA, Adjusted EBITDA and Free Cash Flow. Takeda’s management evaluates results and makes operating and investment decisions using both IFRS and non-IFRS measures included in this presentation. These non-IFRS measures exclude certain income, cost and cash flow items which are included in, or are calculated differently from, the most closely comparable measures presented in accordance with IFRS. By including these non-IFRS measures, management intends to provide investors with additional information to further analyze Takeda’s performance and core results, including when controlling for the effect of fluctuations in exchange rates. Takeda’s non-IFRS measures are not prepared in accordance with IFRS and such non-IFRS measures should be considered a supplement to, and not a substitute for, measures prepared in accordance with IFRS (which we sometimes refer to as “reported” measures). Investors are encouraged to review the definitions and reconciliations of non-IFRS financial measures to their most directly comparable IFRS measures.


FY2023 Full Year Detailed Forecast (unchanged from October 26, 2023)


FINANCIAL APPENDIX