Summary of Financial Statements for the Nine-month Period Ended December 31, 2019 (IFRS,
Consolidated)
February 4, 2020
Takeda Pharmaceutical Company Limited

Stock exchange listings:

TSE Code:4502

URL: http://www.takeda.com

Representative:

Christophe Weber, President & CEO

Contact:

Takashi Okubo

Tokyo, Nagoya, Fukuoka, Sapporo

Telephone: +81-3-3278-2306

Global Head of IR, Global Finance

Scheduled date of securities report submission: February 13, 2020
Scheduled date of dividend payment commencement: Supplementary materials for the financial statements: Yes
Presentation to explain for the financial statements: Yes(Million JPY, rounded to the nearest million)
1.

Consolidated Financial Results for the Nine-month Period Ended December 31, 2019 (April 1 to
December 31, 2019)(1) Consolidated Operating Results (year to date)(Percentage figures represent changes over the same period of the previous year)
Revenue(Million JPY)

Operating profit
(%)

(%)

(Million JPY)

Net profit
for the period

Profit before tax(Million JPY)

(%)

(%)

(Million JPY)

Nine-month period ended
December 31, 2019

2,519,486

82.6

162,544(42.9)

56,008(73.1)

42,728(74.0)

Nine-month period ended
December 31, 2018

1,380,013

0.8

284,420(11.7)

208,379(27.6)

164,353(31.7)Net profit attributable toowners of the Company(Million JPY)(%)

Total comprehensive
income for the period(%)(Million JPY)

Basic earnings
per share

Diluted earnings
per share

(JPY)

(JPY)

Nine-month period ended
December 31, 2019

42,517(74.1)(44,081)

—

27.31

27.19

Nine-month period ended
December 31, 2018

164,434(31.7)

143,970(60.5)

209.87208.64

Core Operating Profit
(%)

(JPY)

792.2

129.9

359.37

344.6

17.7

n/a

(Billion JPY)

Nine-month period ended
December 31, 2019
Nine-month period ended
December 31, 2018

Underlying Core EPS(2) Consolidated Financial Position

Total assets(Million JPY)

Total equity(Million JPY)

Equity attributableto owners of theCompany(Million JPY)

Ratio of equity
attributable toowners of theCompany to total
assets (%)

Equity attributableto owners of theCompany pershare (JPY)As of December 31, 201913,031,494

4,876,219

4,872,072

37.4

3,127.64

As of March 31, 201913,792,773

5,185,991

5,181,985

37.6

3,332.94

2.

Dividends
Annual dividends per share (JPY)
1st quarter end

Fiscal 2018
Fiscal 2019

2nd quarter end

3rd quarter end

—

90.00

—

—

90.00

—

Year-end

Fiscal 2019 (Projection)

Total

90.00

180.0090.00

180.00(Note) Modifications in the dividend projection from the latest announcement: None3.

Forecasts for Consolidated Operating Results for Fiscal 2019 (April 1, 2019 to March 31, 2020)(Percentage figures represent changes from previous forecast)

Revenue

Fiscal 2019

Core Operating Profit

Profit before
income taxes

Operating profit(Million JPY)(%)

(Million JPY)(%)

(Million JPY)(%)

3,286,000

0.8

950,000

2.2

10,000-(Million JPY)(%)

(140,000)(Note) Modifications in forecasts of consolidated operating results from the latest announcement: Yes
Fiscal 2019 Management Guidance
Underlying Revenue Growth

Flat to slightly increasing

Underlying Core Operating Profit Margin

High- twenties %Underlying Core EPS

385 - 405 yen(Note) Please refer to page 6 for details of "Underlying growth".
From FY2019, Takeda renamed "Core Earnings" to "Core Operating Profit". Its definition has not changed.

Net profit attributableto owners of theCompanyBasicearnings
per share

(%)

(JPY)

(Million JPY)-

(162,000)-(104.03)

Additional Information(1) Changes in significant subsidiaries during the period(changes in specified subsidiaries resulting in the change in consolidation scope)(2) Changes in accounting policies and changes in accounting estimates
1) Changes in accounting policies required by IFRS
2) Changes in accounting policies other than 1)
3) Changes in accounting estimates

: No

: Yes
: No
: No

(Note) For details of changes in accounting policies, refer to “2. Condensed Interim Consolidated Financial Statements [IFRS]
and Major Notes (6) Notes to Condensed Interim Consolidated Financial Statements (Significant Accounting Policies)” on
page 22.
(3) Number of shares outstanding (common stock)1) Number of shares outstanding (including treasury stock) at term end:
December 31, 2019
March 31, 20192) Number of shares of treasury stock at term end:
December 31, 2019
March 31, 20193) Average number of outstanding shares (for the nine-month period ended December 31):
December 31, 2019
December 31, 2018

1,576,356,908 shares
1,565,005,908 shares

18,611,605 shares
10,225,845 shares

1,557,038,034 shares
783,486,186 sharesThis summary of quarterly financial statements is not subject to quarterly review by the external auditor
Note to ensure appropriate use of forecasts, and other noteworthy items•

Takeda has adopted International Financial Reporting Standards (IFRS), and the disclosure information in thisdocument is based on IFRS.

•All forecasts in this document are based on information currently available to management, and do not
represent a promise or guarantee to achieve these forecasts. Various uncertain factors could cause actual
results to differ, such as changes in the business environment and fluctuations in foreign exchange rates.
Should any significant event occur which requires the forecast to be revised, Takeda will disclose it in atimely manner.

•

For details of the financial forecast, please refer to "1. Financial Highlights for the Nine-month Period Ended
December 31, 2019 (3) Outlook for Fiscal 2019" on page 12.

•

Supplementary materials for the financial statements (Data Book and Earnings Presentation of February 4,2020) and the audio of the conference will be promptly posted on Takeda’s website.
(Takeda Website):
http://www.takeda.com/investors/reports/

Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Nine-month
Period Ended December 31, 2019 (Consolidated)

Attachment Index
1. Financial Highlights for the Nine-month Period Ended December 31, 2019(1) Business Performance(2) Consolidated Financial Position(3) Outlook for Fiscal 2019(4) Other

2
2
9
12
14

2. Condensed Interim Consolidated Financial Statements [IFRS] and Major Notes(1) Condensed Interim Consolidated Statements of Income(2) Condensed Interim Consolidated Statements of Other Comprehensive Income(3) Condensed Interim Consolidated Statements of Financial Position(4) Condensed Interim Consolidated Statements of Changes in Equity(5) Condensed Interim Consolidated Statement of Cash Flows(6) Notes to Condensed Interim Consolidated Financial Statements

15
15
16
17
19
21
22

[Appendix]
1 Reconciliation from Reported Revenue to Underlying Revenue
2 Reported and Underlying Growth of Legacy Shire Product/Therapeutic Area Sales
3 FY2019Q3YTD Reconciliation from Reported to Core/Underlying Core
4 FY2018Q3YTD Reconciliation from Reported to Core

1

Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Nine-month
Period Ended December 31, 2019 (Consolidated)

1. Financial Highlights for the Nine-month Period Ended December 31, 2019(1) Business Performance(i) Consolidated Financial Results (April 1 to December 31, 2019)
Billion JPY or percentage

FY2018 Q3
YTD
Revenue
Cost of Sales
Selling, General and Administrative expenses
Research and Development expenses
Amortization and Impairment Losses on Intangible Assets
Associated with Products
Other Operating Income
Other Operating Expenses
Operating Profit
Finance Income
Finance Expenses
Share of Loss of Investments Accounted for Using
the Equity Method
Profit Before Income Tax
Income Tax Expenses
Net Profit for the Period*

FY2019 Q3
YTD*

Change versus the same period of
the previous fiscal year

1,380.0(369.9)(447.7)(228.9)2,519.5(841.6)(711.7)(353.1)

1,139.5(471.7)(264.0)(124.2)82.6 %
127.5 %
59.0 %
54.3 %(79.4)(329.1)(249.8)314.6 %

61.7
(31.4)
284.4
9.4(41.5)

29.8(151.3)162.5
32.5(124.0)(31.9)(119.8)(121.9)23.1(82.4)(51.7)%
381.0 %
(42.9)%
244.6 %
198.6 %

(44.0)(15.1)

28.9(65.7)%

208.4(44.0)
164.4

56.0(13.3)
42.7(152.4)30.7(121.6)(73.1)%(69.8)%(74.0)%

Consolidated financial results for the nine-month period ended December 31, 2019 include impacts from retrospective
adjustments recognized in association with business combination to reflect the finalized purchase price allocation of theShire acquisition.

Revenue. Revenue for the nine-month period ended December 31, 2019 was 2,519.5 billion JPY, an increase of 1,139.5
billion JPY, or 82.6%, compared to the same period of the previous year. The inclusion of revenue from the products
obtained through the acquisition of Shire (1,155.5 billion JPY) was the main driver of revenue growth.
Year-on-year change in revenue for this nine-month period in each of our main therapeutic areas was primarily
attributable to the following products:•

GI. In Gastroenterology, revenue was 533.2 billion JPY, a year-on-year increase of 140.3 billion JPY, or 35.7%.
Growth was driven by ENTYVIO (for ulcerative colitis (UC) and Crohn’s disease (CD)), Takeda's top-selling
product, with sales of 263.5 billion JPY, a year-on-year increase of 62.5 billion JPY, or 31.1%. Market share
growth in the U.S. and in Europe was driven by further penetration of bio-naïve segment in UC and CD,
combined with increased overall market share. In Japan, sales increased primarily as a result of the newly
approved CD indication. Sales of TAKECAB (for acid-related diseases) were 55.7 billion JPY, an increase of
11.3 billion JPY, or 25.4% versus the same period of the previous year. The increase was driven by the
expansion of new prescriptions in the Japanese market due to TAKECAB's efficacy in reflux esophagitis andthe prevention of recurrence of gastric and duodenal ulcers during low-dose aspirin administration. Sales of
GATTEX/REVESTIVE (for short bowel syndrome), obtained through the acquisition of Shire, contributed
46.9 billion JPY to consolidated revenue.

•

Rare Diseases. Our Rare Disease products, obtained through the acquisition of Shire, contributed 485.5 billion
JPY of revenue in the period. The biggest contributors in each therapeutic area were ELAPRASE in Rare
Metabolic (for Hunter syndrome), ADVATE in Rare Hematology (for hemophilia A), and TAKHZYRO, aprophylaxis against Hereditary Angioedema, with sales of 52.4 billion JPY, 123.1 billion JPY, and 48.8 billion
JPY, respectively.

2

Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Nine-month
Period Ended December 31, 2019 (Consolidated)•

PDT Immunology. In Plasma-Derived Therapies (PDT) Immunology, revenue increased by 284.1 billion JPY
compared to the same period of the prior year to 296.6 billion JPY, predominantly due to the addition of
products obtained through the acquisition of Shire. Aggregate sales of immunoglobulin products were 225.4
billion JPY, and in particular, GAMMAGARD LIQUID (mainly for the treatment of primary immunodeficiency(PID) and multifocal motor neuropathy (MMN)) continued to build its position as a highly recognizedintravenous immunoglobulin brand that is the standard of care treatment for PID and MMN in the U.S.
Aggregate sales of albumin products including ALBUMIN GLASS and FLEXBUMIN (primarily used for
hypovolemia and hypoalbuminemia) were 49.7 billion JPY and other PDT immunology products added 21.5
billion JPY of aggregate sales.

•

Oncology. In Oncology, revenue was 317.9 billion JPY, a year-on-year increase of 11.3 billion JPY, or 3.7%.
Sales of NINLARO (for multiple myeloma) were 58.1 billion JPY, an increase of 11.6 billion JPY, or 25.0%,
versus the same period of the previous year, reflecting strong growth in global sales particularly in the U.S. andChina. Additionally, sales of ADCETRIS (for malignant lymphomas) increased by 7.4 billion JPY, or 23.2%, to39.5 billion JPY, reflecting strong growth in sales particularly in Japan where it has obtained an additional
indication as a frontline treatment option for CD30-positive Hodgkin lymphoma. Revenue attributable to
ALUNBRIG (for non-small cell lung cancer) increased by 1.4 billion JPY, or 36.4%, to 5.1 billion JPY, as it
continues to launch in European countries. Sales of VELCADE (for multiple myeloma) decreased by 9.5 billion
JPY, or 9.5% compared to the same period of the previous year to 90.8 billion JPY, of which ex-US royalty
income was 8.4 billion JPY, a significant year-on-year decrease of 9.9 billion JPY, or 54.1%.

•

Neuroscience. In Neuroscience, revenue was 330.5 billion JPY, a year-on-year increase of 256.8 billion JPY, or
348.4%. This increase was largely attributable to the neuroscience portfolio obtained through the acquisition of
Shire, including VYVANSE (for attention deficit hyperactivity disorder (ADHD)) which added 206.8 billion
JPY of sales. TRINTELLIX (for major depressive disorder (MDD)) sales were 54.3 billion JPY, an increase of
9.7 billion JPY, or 21.7%, versus the same period of the previous year driven by increase in new patients andimproved persistence on therapy. Both brands were launched in Japan in this quarter period.

(Note) For more details of sales by product, please refer to the Data Book which is supplementary material for the financial statements.
Takeda’s web-site
https://www.takeda.com/investors/reports/

Revenue by Geographic Region:
Billion JPY; percentages are portion of total revenue
Revenue:Japan
United States
Europe and Canada
Russia/CIS
Latin America
Asia (excluding Japan)
Other
Total

FY2018 Q3 YTD

444.0
495.3
244.9
44.3
54.5
75.9
21.1
1,380.0

FY2019 Q3 YTD

32.2%
35.9%
17.7%
3.2%
4.0%
5.5%
1.5%
100.0%

467.4
1,215.7
483.5
59.3
111.7
127.3
54.6
2,519.5

18.6%
48.3%
19.2%
2.4%
4.4%
5.1%
2.2%
100.0%

Cost of Sales. Cost of Sales increased 471.7 billion JPY, or 127.5%, to 841.6 billion JPY compared to the same
period of the previous year. This was primarily caused by the inclusion of Cost of Sales related to the sale ofproducts obtained in the acquisition of Shire and by 168.9 billion JPY in non-cash charges, mainly from theunwinding of the fair value step up on inventory. These effects were partially offset by a decrease in Cost of Sales
for legacy Takeda products, primarily due to a more favorable product mix.

3

Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Nine-month
Period Ended December 31, 2019 (Consolidated)

Selling, General and Administrative (SG&A) expenses. SG&A expenses increased 264.0 billion JPY, or 59.0%, to711.7 billion JPY compared to the same period of the previous year, primarily due to expenses relating to theacquired operations of Shire. This increase was partially offset by the favorable impact of the Global Opex
Initiative* and cost synergies from the integration of Shire.
* Takeda's global operating expense reduction initiative with the aim of delivering annual margin improvements driven by
reduced consumption, procurement initiatives and organizational optimization.

Research and Development (R&D) expenses. R&D expenses increased 124.2 billion JPY, or 54.3%, to 353.1
billion JPY, primarily resulting from costs for the R&D programs acquired from Shire.
Amortization and Impairment Losses on Intangible Assets Associated with Products. Amortization andImpairment Losses on Intangible Assets Associated with Products increased by 249.8 billion JPY, or 314.6%, to329.1 billion JPY compared to the same period of the previous year. This increase is primarily attributable to 243.9
billion JPY* amortization of intangible assets related to the assets obtained through the acquisition of Shire andincludes an impairment charge of 15.6 billion JPY related to our decision to terminate the SHP616 AMR program
following the interim readout in May 2019. The increase of impairment for the current period is partially offset by a
7.2 billion JPY impairment during the same period of the previous year related to the termination of an R&D
collaboration with Mersana Therapeutics.
Other Operating Income. Other Operating Income decreased 31.9 billion JPY, or 51.7%, to 29.8 billion JPY
compared to the same period of the previous year, primarily due to a decrease in recognition of deferred gain
accelerated by impairment of intangible assets related to long-listed products business transferred to Teva Takeda
Pharma Ltd.* The deferred gain recorded for the current period was 10.8 billion JPY, a decrease of 18.9 billion JPY
compared to 29.7 billion JPY for the same period of the previous year. In addition, the decrease is also due to 18.4
billion JPY of gain on the sale of 100% of the shares held in Guangdon Techpool Bio-Pharma Co., LTD. recorded in
the same period of the previous year, partially offset by a 2.2 billion JPY of gain on sale of the shares Takeda held in
Axcelead Drug Discovery Partners, Inc. for the current period.
* Teva Takeda Pharma Ltd operates a business of long-listed products and generics.

Other Operating Expenses. Other Operating Expenses were 151.3 billion JPY, an increase of 119.8 billion JPY, or
381.0%, compared to the same period of the previous year, primarily due to an increase of 78.5 billion JPY in
restructuring expenses resulting from the progress of the Shire integration program. The valuation reserve for prelaunch inventories also was negatively impacted by 22.1 billion JPY comprised of 16.8 billion JPY recorded for thenine-month period ended December 31, 2019 and 5.3 billion JPY reversal of valuation reserve for pre-launch
inventories recorded in the same period of the previous year.
Operating Profit. As a result of the above factors, Operating Profit decreased by 121.9 billion JPY, or 42.9%
compared to the same period of the previous year to 162.5 billion JPY.
Net Finance Expenses.Net Finance Expenses were 91.4 billion JPY in the current period, an increase of 59.4
billion JPY compared to the same period of previous year, mainly due to an increase of 102.1 billion JPY interest
expenses on bonds and loans as a result of the acquisition of Shire. This increase of interest expenses is partially
offset by 16.1 billion JPY in financing fees related to the bridge loan associated with the acquisition of Shirerecorded in the same period of the previous year and a 25.7 billion JPY gain recognized on the warrant to purchasestocks of a privately held company upon that company's initial public offering for the current period.
Shares of Loss of Associates Accounted for Using the Equity Method. Shares of Loss of Associates Accounted for
Using the Equity Method was 15.1 billion JPY, a decrease of 28.9 billion JPY compared to the same period of theprevious year, mainly due to a decrease of impairment charge recognized by Teva Takeda Pharma Ltd.

4

Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Nine-month
Period Ended December 31, 2019 (Consolidated)

Income Tax Expenses. We recorded an income tax expense of 13.3 billion JPY in the current period, compared toincome tax expense of 44.0 billion JPY for the same period of the previous year. This decrease was mainly due tothe tax impact of lower pretax earnings in the current period primarily from amortization of purchase accounting
fair value step-ups and a non-cash deferred tax benefit of 66.6 billion JPY as a result of the enactment of a new
taxing regime in Switzerland (Swiss Tax Reform) in the current period. These were partially offset by current period
tax restructuring costs incurred in connection with the integration of the Shire entities principally consisting of anon-cash deferred tax charge of 52.6 billion JPY related to deferred tax liabilities on purchase accounting
intangibles as a result of change in tax rates.
Net Profit for the Period. Net Profit for the Period decreased 121.6 billion JPY, or 74.0%, compared to the same
period of the previous year to 42.7 billion JPY.

5

Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Nine-month
Period Ended December 31, 2019 (Consolidated)(ii) Underlying Results (April 1 to December 31, 2019)
Definition of Core and Underlying Growth
Takeda uses the concept of Underlying Growth for internal planning and performance evaluation purposes.
Underlying Growth compares two periods (fiscal quarters or years) of financial results under a common basis and isused by management to assess the business. These financial results are calculated on a constant currency basis andexclude the impacts of divestitures and other amounts that are unusual, non-recurring items or unrelated to ourongoing operations. Although these are not measures defined by IFRS, Takeda believes Underlying Growth isuseful to investors as it provides a consistent measure of our performance.
Takeda uses "Underlying Revenue Growth", "Underlying Core Operating Profit Growth", and "Underlying CoreEPS Growth" as key financial metrics.
Underlying Revenue represents revenue on a constant currency basis and excluding non-recurring items and theimpact of divestitures that occurred during the reported periods presented.
Underlying Core Operating Profit represents Core Operating Profit (as defined below) on a constant currency basis
and further adjusted to exclude the impacts of divestitures that occurred during the reporting periods presented.
Core Operating Profit* represents net profit adjusted to exclude income tax expenses, the share of profit or loss ofinvestments accounted for using the equity method, finance expenses and income, other operating expenses andincome, amortization and impairment losses on acquired intangible assets and other items unrelated to Takeda’s core
operations, such as purchase accounting effects and transaction related costs.
* From FY2019, Takeda renamed "Core Earnings" to "Core Operating Profit". Its definition has not changed.

Underlying Core EPS represents net profit based on a constant currency basis, adjusted to exclude the impact ofdivestitures, items excluded in the calculation of Core Operating Profit, and other non-operating items (e.g. amongst
other items, fair value adjustments and the imputed financial charge related to contingent consideration) that are
unusual, non-recurring in nature or unrelated to Takeda’s ongoing operations and the tax effect of each of theadjustments, divided by the outstanding shares (excluding treasury shares) as of the end of the comparative period.
Underlying Results
FY2019 Q3 YTD

-1.2%
30.9%
359.37 JPY

Underlying Revenue Growth*
Underlying Core Operating Profit Margin
Underlying Core EPS*

Growth versus FY2018 Q3 YTD pro-forma revenue (9-month April-December 2018 combined revenue of Legacy Takeda and Legacy
Shire, which was previously reported under US GAAP and conformed to IFRS without material differences, and excluding Legacy Shire's
oncology business, which was sold in August 2018, prior to Takeda's acquisition of Shire.)

Underlying Revenue Growth was -1.2% compared to the same nine-month period of the previous year. Underlying
revenue attributable to Takeda’s 14 global brands* grew by 20.4%, which was fully offset by the negative impact onother products due to intensified competition and generic erosion.
* Takeda's 14 global brands
GI: ENTYVIO, GATTEX/REVESTIVE, ALOFISEL
Rare Diseases: NATPARA, ADYNOVATE/ADYNOVI, TAKHZYRO, ELAPRASE, VPRIVPDT Immunology: GAMMAGARD LIQUID/KIOVIG, HYQVIA, CUVITRU, ALUBUMIN/FLEXBUMIN
Oncology: NINLARO, ALUNBRIG

6

Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Nine-month
Period Ended December 31, 2019 (Consolidated)•

GI. In Gastroenterology, underlying revenue increased by 10.5% compared to the same period of the previous
year. Growth of ENTYVIO (+35.4%) and TAKECAB (+25.4%) fully absorbed the declines of off-patented
products such as pantoprazole (-13.3%), lansoprazole (-20.5%), and LIALDA (-48.1%), which all faced further
generic erosion. GATTEX/REVESTIVE (+22.6%) further reinforced our leadership in GI, partly benefittingfrom a pediatric indication obtained in the U.S. in May 2019.

•

Rare Diseases. In Rare Diseases, underlying revenue decreased by 10.8% due to higher competitive pressure
and the product recall of NATPARA in the US. Competitive pressure was strong in Rare Hematology (-14.0%),
as our hemophilia A products were especially impacted by competition, with significant decreases in ADVATE(-17.4%) and FEIBA (-23.5%), and lower sales growth of ADYNOVATE (+4.4%), our extended half-life
product. Declines in therapies for Hereditary Angioedema (-11.0%) reflect lower sales of FIRAZYR (-61.8%),due to generic introduction and stocking in the prior year, offset by growth in TAKHZYRO (+622.2%) in the
U.S. and in Europe. Sales of CINRYZE (-41.1%) declined as certain patients transitioned to TAKHZRYO. In
Rare Metabolic (-3.6%), parathyroid hormone, NATPARA (-35.5%) was recalled in the U.S. in September 2019
due to an issue related to the rubber septum of its cartridge.

•

PDT Immunology. Underlying revenue of PDT Immunology increased by 5.1% compared to the same period of
the previous year. Immunoglobulin product revenue increased by 4.4% driven by the growth across IVIG
(intravenous immunoglobulin) and SCIG (subcutaneous immunoglobulin), with both CUVITRU and HYQVIA
marked double digit growth. Albumin product revenue increased by 9.8%.

•

Oncology. In Oncology, the year-over-year increase was 6.8%, led by NINLARO (+28.9%) and ADCETRIS(+34.5%). ALUNBRIG also marked a growth rate of 40.6%. The only major Oncology product that declined onan underlying basis was VELCADE (-7.9%) with a 53.3% decrease in ex-US royalty income due to generic
entry in Europe in April 2019.

•

Neuroscience. In Neuroscience, underlying revenue increased by 4.6% due to the growth of VYVANSE (+7.4%)
and TRINTELLIX (+23.9%), both of which are leading branded medications in the U.S. for ADHD and MDD,
respectively. ADDERALL XR declined by 46.9% due to greater impacts from generic competition.
Underlying Revenue Growth* by Therapeutic Area
GI

+10.5%-10.8%-3.6%-14.0%-11.0%
+5.1%
+6.8%
+4.6%
-11.9%-1.2%

Rare Diseases
Rare Metabolic
Rare Hematology
Hereditary Angioedema
PDT Immunology
Oncology
Neuroscience
Other
Total

* Growth versus FY2018 Q3 YTD pro-forma revenue (9-month April-December 2018 combined revenue of Legacy Takeda and Legacy
Shire, which was previously reported under US GAAP and conformed to IFRS without material differences, and excluding Legacy
Shire’s oncology business, which was sold in August 2018, prior to Takeda's acquisition of Shire.)

Major non-recurring items and the impact of divestitures excluded to calculate Underlying Revenue:•

Revenue of former subsidiaries, Guangdong Techpool Bio-Pharma Co., Ltd. ("Techpool"), and Multilab
Indústria e Comércio de Produtos Farmacêuticos Ltda. ("Multilab"), is excluded from the same period of theprior year consolidated revenue as both subsidiaries were divested in the fiscal year ended March 31, 2019.

•

Net sales from XIIDRA, the divestiture of which was completed in July 2019, and net sales from TACHOSIL
are excluded from both the current period and the same period of the prior year as Takeda agreed in May 2019
to divest these products.
7

Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Nine-month
Period Ended December 31, 2019 (Consolidated)

Underlying Core Operating Profit Margin for the current period was 30.9%, reflecting a favorable impact of the
Global Opex Initiative and cost synergies from the integration of Shire.
Core Operating Profit for the current period, which excludes items unrelated to Takeda's core operations such as theintegration of Shire related costs and non-cash expenses from purchase accounting, was 792.2 billion JPY.
Underlying Core EPS for the current period was 359.37 JPY.

8

Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Nine-month
Period Ended December 31, 2019 (Consolidated)(2) Consolidated Financial Position
The Consolidated Financial Position as of March 31, 2019 was retrospectively adjusted to reflect the finalizedpurchase price allocation related to the Shire acquisition.
Assets. Total Assets as of December 31, 2019 were 13,031.5 billion JPY, reflecting a decrease of 761.3 billion JPY
compared to the previous fiscal year-end. Goodwill and Intangible assets decreased by 136.1 billion JPY and 442.8
billion JPY, respectively, mainly due to FX impact and amortization of intangible assets. In addition, Assets Held forSale decreased by 327.7 billion JPY mainly from the completion of the XIIDRA divestiture. Cash and Cash
Equivalents also decreased by 133.8 billion JPY primarily from paying dividends and redemption of bonds. These
decreases were partially offset by an increase of 136.9 billion JPY in Property, Plant and Equipment mainly due tothe newly adopted accounting standards for leases (IFRS 16)*.
* IFRS 16 requires the value of leases to be recorded on the balance sheet as non-current assets with a corresponding
non-current liabilities, see below for discussion regarding the liability.
Liabilities. Total Liabilities as of December 31, 2019 were 8,155.3 billion JPY, reflecting a decrease of 451.5 billion
JPY compared to the previous fiscal year-end mainly driven by a decrease in Bonds and Loans of 529.2 billion JPY
to 5,221.8 billion JPY** due to FX impact, the redemption of bonds, and repayment of loans. We issued 500.0
billion JPY of Hybrid (subordinated) bonds in June 2019 while Loans decreased as a result of the repayment of
500.0 billion JPY Syndicated Loans. There were early redemptions totaling 1,404.5 million USD (150.2 billion
JPY) of unsecured USD denominated senior notes in August 2019. Further, we redeemed 3,300.0 million USD(350.7 billion JPY) of unsecured USD denominated senior notes in September 2019. In addition to the decrease in
Bonds and Loans, Liabilities Held for Sale decreased by 122.6 billion JPY primarily due to the completion of the
XIIDRA divestiture. These decreases were partially offset by an increase of 168.2 billion JPY in Other Non-Current
Financial Liabilities mainly due to the adoption of IFRS 16 as noted above.
** The carrying amount of Bonds was 3,238.8 billion JPY and Loans was 1,982.9 billion JPY as of December 31,
2019. Breakdown of Bonds and Loans carrying amount is as follows.
Bonds:
Billion JPY
Name of Bond
(Denominated in Foreign Currency)
15th Unsecured straight bonds
Unsecured US dollar denominated seniornotes (1,520 million USD)
Unsecured US dollar denominated seniornotes (8,800 million USD)
Unsecured US dollar denominated seniornotes (500 million USD)
Unsecured Euro denominated senior notes(7,500 million EUR)
Unsecured US dollar denominated seniornotes (4,500 million USD)
Hybrid bonds (subordinated bonds)
Commercial Papers

Issuance

Maturity

Carrying AmountJuly, 2013

July, 2020

60.0

June, 2015

June 2022~
June 2045
September 2021~
September 2026

164.7

July, 2017

January, 2022

54.2

November, 2018

November 2020~
November 2030
November 2021~
November 2028
June, 2079

908.9

January 2020~
February 2020

160.0

September, 2016

November, 2018
June, 2019
November, 2019

Total

908.4

486.1
496.6

3,238.8

9

Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Nine-month
Period Ended December 31, 2019 (Consolidated)

Loans:
Billion JPY
Name of Loans(Denominated in Foreign Currency)

Execution

Maturity

Syndicated Loans

July, 2013

July, 2020

60.0

Syndicated Loans

April, 2016

April, 2023 ~ April, 2026

200.0

Syndicated Loans

April, 2017

April, 2027

113.5

April, 2017

April, 2027

162.6

January, 2019

January, 2024

433.2

January, 2019

January, 2024

371.4

January, 2019

December, 2025

401.8

Syndicated Loans(1,500 million USD)
Syndicated Loans(3,987 million USD)
Syndicated Loans(3,047 million EUR)
Japan Bank for International Cooperation(3,700 million USD)
Other

Carrying Amount

240.4

Total

1,982.9

In September 2019, Takeda reached an agreement on a commitment facility of 700.0 billion JPY with various
Japanese and non-Japanese banks. The commitment facility is effective from October 2019 for five years at
minimum. In connection with entering into this new commitment facility, Takeda's existing short-term
commitment facility of 300.0 billion JPY expiring in March 2020 was canceled in September 2019. The purposeof the new commitment facility is for general business use.
In the quarter ended December 31, 2019, Takeda with the support of its banking partners amended various
financial covenants on certain borrowings. The key amendment was related to certain loans maturing beyond
July 2020, which contained the historic restrictive covenant that Takeda’s profit before tax must not be negative
for two consecutive fiscal years. This covenant was deleted and was replaced by one where Takeda’s ratio ofconsolidated net debt to consolidated EBITDA, as defined in the loan agreements, for the previous twelvemonth period should not surpass certain levels as of March 31 and September 30 of each year.
Equity. Total Equity as of December 31, 2019 was 4,876.2 billion JPY, a decrease of 309.8 billion JPY compared tothe previous fiscal year-end. This was mainly due to a decrease of 217.0 billion JPY in Retained Earnings resulting
from Dividends payment of 282.7 billion JPY, and a 110.6 billion JPY decrease in Other Components of Equity
mainly due to fluctuation in currency translation adjustments reflecting the appreciation of yen.

Consolidated Cash Flow
Billion JPY

Net Cash from (used in) operating activities
Net Cash from (used in) investing activities
Net Cash from (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effects of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents resulting from a transfer toassets held for sale
Cash and cash equivalents at the end of the period

10

FY2018 Q3
211.0(1,614.0)
1,412.0
8.9
294.5
(6.0)

FY2019 Q3
484.3
255.9
(861.3)(121.1)702.1(13.4)

0.5

0.6

297.9

568.3

Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Nine-month
Period Ended December 31, 2019 (Consolidated)

Net cash from operating activities was 484.3 billion JPY for the current period compared to 211.0 billion JPY forthe same period of the previous year. The increase of 273.3 billion JPY was driven by certain favorable non-cash
adjustments such as an increase in depreciation and amortization of 321.6 billion JPY mainly attributable tointangible assets recorded upon the acquisition of Shire, a decrease in inventories of 108.1 billion JPY primarily
attributable to the unwinding of the fair value step up recorded in relation to the acquisition of Shire, and an increasein provision of 43.0 billion JPY.
The increase in net cash from operating activities also includes other favorable adjustments such as an increase in
net finance expenses of 59.4 billion JPY primarily due to the interest expenses in connection with the financing forthe acquisition of Shire.
These increases were partially offset by a decrease in net profit for the period of 121.6 billion JPY and an increaseof income taxes paid of 181.9 billion JPY mainly resulting from higher tax payments by the legacy Shire entities.
Net cash from investing activities was 255.9 billion JPY for the current period compared to net cash used ininvesting activities of 1,614.0 billion JPY for the same period of the previous year. This increase in net cash frominvesting activities of 1,869.9 billion JPY was mainly due to payments into restricted deposits of 1,581.4 billion JPY
used for the acquisition of Shire in the same period of the previous year. In addition, proceeds from sales of businessincreased by 348.0 billion JPY reflecting the sale of XIIDRA of 375.5 billion JPY for the current period as well as adecrease in acquisition of business of 62.2 billion JPY primarily resulting from the acquisition of TiGenix of 66.7
billion JPY for the same period of the previous year. This increase was partially offset by a 71.8 billion JPY
decrease in proceeds from withdrawal of restricted deposits mainly used for the acquisition of TiGenix.
Net cash used in financing activities was 861.3 billion JPY for the current period compared to net cash fromfinancing activities of 1,412.0 billion JPY for the same period of the previous year. This decrease of 2,273.3 billion
JPY was mainly the result of 1,581.4 billion JPY proceeds from the issuance of bonds and long-term loans related tothe acquisition of Shire recorded for the same period of the previous year and 623.1 billion JPY repayment of bonds
and long-term loans in the current period. There were also an increase of dividends paid by 138.5 billion JPY, andan increase of interest paid by 98.2 billion JPY mainly resulting from the financing for the acquisition of Shire.
For the current period, the proceeds from issuance of bonds and long-term loans were 496.2 billion JPY including
the 500.0 billion JPY issuance of hybrid bonds, and net decrease in short-term loans was 324.7 billion JPY mainly
due to repayment of 500.0 billion JPY for the short-term syndicated loans.

11Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Nine-month
Period Ended December 31, 2019 (Consolidated)(3) Outlook for Fiscal 2019
The full year forecast for consolidated reported results for fiscal 2019 has been revised from the previous forecast(announced on October 31, 2019), as follows:
FY2019 Full Year Reported Forecast
Billion JPY or percentage(October 31, 2019)(February 4, 2020)

3,260.0(110.0)(290.0)3,286.0
10.0(140.0)vs. Previous
Forecast+26.0+120.0+150.0(273.0)(162.0)+111.0—(175.31)930.0(104.03)
950.0

—
+20.0

—
+2.2%

Previous Forecast Revised Forecast
Revenue
Operating profit
Profit before tax
Net profit for the period(attributable to owners of the Company)

EPS (JPY)
Core Operating Profit*
*

+0.8%
—
—

For FY2019, Takeda renamed "Core Earnings" to "Core Operating Profit". Its definition has not changed as described in section (ii)
Underlying Results (April 1 to December 31, 2019), Definition of Core and Underlying Growth.

The revised forecast in the table above reflects impacts from retrospective adjustments to amounts recognized inassociation with business combination to reflect the finalized purchase price allocation of the Shire acquisition. It
also includes the business momentum of Takeda’s 14 global brands and improved efficiency in operating expenses
and cost synergies.
The revenue forecast has been increased by 26.0 billion JPY, or 0.8%, to 3,286.0 billion JPY, primarily due tobusiness momentum led by Takeda’s 14 global brands.
Core Operating Profit has been increased by 20.0 billion JPY, or 2.2%, to 950.0 billion JPY, reflecting the businessmomentum coupled with positive impact from cost efficiencies and synergies.
The Operating Profit forecast has been increased by 120.0 billion JPY, to a profit of 10.0 billion JPY. This reflects a
100.0 billion JPY increase primarily attributable to the revised full year expense expectations reflecting
retrospective adjustments to amounts recognized in association with the purchase price allocation for the Shireacquisition. Due to the finalization of the purchase price allocation of the Shire acquisition, adjustments have been
made to reduce these expenses, such as cost of sales and amortization of intangible assets, by a total of 118.8 billion
JPY versus the previous full year forecast. It also reflects the 20.0 billion JPY increase in Core Operating Profit.
The net profit for the period attributable to owners of the Company has been increased by 111.0 billion JPY, to aloss of 162.0 billion JPY, primarily due to the factors explained above.

12

Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Nine-month
Period Ended December 31, 2019 (Consolidated)

Major assumptions used in preparing the FY2019 Revised Reported Forecast
Billion JPY

Previous Forecast

Revised Forecast(October 31, 2019)(February 4, 2020)

1 USD = 109 JPY
1 Euro = 121 JPY
1 RUB = 1.7 JPY
1 BRL = 26.9 JPY
1 CNY = 15.5 JPY

FX rates
R&D expenses
Shire acquisition related costs
Operating expenses (acquisition costs, etc.)
Other operating expenses (integration costs)
Financial expenses (interest costs, etc.)
Financial expenses
Impact from Shire's purchase accounting (major items)
Cost of sales (unwind of inventory fair value adjustment)
Cost of sales (depreciation of PPE step-up)
SG&A and R&D expenses
Amortization of intangibles assets (Shire acquisition)
Other non-cash items
Amortization of intangible assets (Legacy Takeda)
Impairment losses on intangible assets
Capital expenditures
Depreciation and amortization (excluding intangible assets
associated with products)

1 USD = 109 JPY
1 Euro = 122 JPY
1 RUB = 1.7 JPY
1 BRL = 27.0 JPY
1 CNY = 15.6 JPY(484.0)(485.0)(7.0)(146.0)(80.0)(172.0)(7.0)(154.0)(80.0)(172.0)(211.0)(6.0)(4.0)(423.0)(190.0)(7.5)(2.5)(325.2)(93.0)(121.0)180.0 - 230.0(94.8)(101.0)180.0 - 230.0(150.0)(150.0)Management GuidancePrevious Guidance

Revised Guidance(October 31, 2019)(February 4, 2020)

Underlying Revenue Growth

Flat to slightly increasing

Flat to slightly increasing

Underlying Core Operating Profit Margin

High-twenties %High-twenties %Underlying Core EPS

370 - 390 yen

385 - 405 yen

Annual dividend per share

180 yen180 yen** Constant Exchange Rate growth compared to baseline of 3,300 billion JPY. This baseline revenue is a pro-forma which adds Legacy
Shire’s (April - December 2018) revenue previously reported under US GAAP and conformed to IFRS without material differences,
excluding Legacy Shire’s oncology business, which was sold in August 2018, and converted to JPY using FY2018 full year average rate
(111 JPY/USD). Baseline revenue is also adjusted for divested assets such as Techpool, Multilab, and TACHOSIL from Legacy Takeda
and XIIDRA from Legacy Shire.

Takeda has upwardly revised its full-year Underlying Core EPS guidance to reflect the business momentum.
Forward looking statements
All forecasts in this document are based on information currently available to management, and do not represent a
promise or guarantee to achieve these forecasts. Various uncertain factors could cause actual results to differ, suchas changes in the business environment and fluctuations in foreign exchange rates. Should any significant event
occur which requires the forecast to be revised, the Company will disclose it in a timely manner.
13

Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Nine-month
Period Ended December 31, 2019 (Consolidated)(4) OtherF. Hoffmann-La Roche AG (Roche) filed patent infringement lawsuits against Takeda in Germany, Italy and Spain
alleging that ENTYVIO infringes a Roche patent issued in those countries. Additionally, Takeda filed a lawsuit in
the U.K. seeking nullification of Roche’s patent in the U.K. and Roche filed a counterclaim for infringement.
In December 2019, Takeda entered into a settlement and license agreement with Roche to resolve all ongoing patent
proceedings and disputes between the companies relating to ENTYVIO, and Roche’s European Patent number
2007809 relating to glycosylated antibodies. Anticipated payment obligations under the settlement and license
agreement are not expected to be material to Takeda.

14

Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Nine-month
Period Ended December 31, 2019 (Consolidated)

2. Condensed Interim Consolidated Financial Statements [IFRS] and Major Notes(1) Condensed Interim Consolidated Statements of Income
JPY (millions)Nine-month period ended December 31,
Revenue
Cost of sales
Selling, general and administrative expenses
Research and development expenses
Amortization and impairment losses on intangible assets associated withproducts
Other operating income
Other operating expenses
Operating profit
Finance income
Finance expenses
Share of loss of investments accounted for using the equity method
Profit before tax
Income tax expenses
Net profit for the period
Attributable to:
Owners of the Company
Non-controlling interests
Net profit for the period
Earnings per share (JPY)
Basic earnings per share
Diluted earnings per share

15

2018
1,380,013(369,855)(447,677)(228,893)

2019
2,519,486(841,583)(711,679)(353,072)(79,390)
61,667(31,445)
284,420
9,437(41,518)(43,960)
208,379(44,026)
164,353(329,148)
29,794(151,254)
162,544
32,517(123,955)(15,098)
56,008(13,280)
42,728164,434(81)
164,353

42,517211
42,728209.87208.64

27.31
27.19

Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Nine-month
Period Ended December 31, 2019 (Consolidated)(2) Condensed Interim Consolidated Statements of Other Comprehensive Income
JPY (millions)Nine-month period ended December 31,
2018
Net profit for the period
Other comprehensive income (loss)
Items that will not be reclassified to profit or loss:
Changes in fair value of financial assets measured at fair value throughother comprehensive income (loss)
Re-measurement income (loss) on defined benefit plans
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations
Cash flow hedges
Hedging cost
Share of other comprehensive loss of investments accounted for using theequity method
Other comprehensive loss for the period, net of tax
Total comprehensive income (loss) for the period
Attributable to:
Owners of the Company
Non-controlling interests
Total comprehensive income (loss) for the period

16

2019
164,353

42,728(6,478)461(6,017)

12,684(2,283)
10,401

3,203(15,666)(1,796)(97,125)
(86)
41

(107)
(14,366)(20,383)
143,970(40)(97,210)(86,809)(44,081)

144,224(254)
143,970(44,375)294(44,081)

Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Nine-month
Period Ended December 31, 2019 (Consolidated)(3) Condensed Interim Consolidated Statements of Financial Position
JPY (millions)
As of March 31,
As of December 31,
2019
2019
ASSETSNON-CURRENT ASSETS:
Property, plant and equipment
Goodwill
Intangible assets
Investments accounted for using the equity method
Other financial assets
Other non-current assets
Deferred tax assets
Total non-current assets
CURRENT ASSETS:
Inventories
Trade and other receivables
Other financial assets
Income tax receivables
Other current assets
Cash and cash equivalents
Assets held for sale
Total current assets
Total assets
LIABILITIES AND EQUITY
LIABILITIESNON-CURRENT LIABILITIES:
Bonds and loans
Other financial liabilities
Net defined benefit liabilities
Accrued income taxes
Provisions
Other non-current liabilities
Deferred tax liabilities
Total non-current liabilities
CURRENT LIABILITIES:
Bonds and loans
Trade and other payables
Other financial liabilities
Accrued income taxes
Provisions
Other current liabilities
Liabilities held for sale
Total current liabilities
Total liabilities

17

1,331,931
4,240,251
4,751,169
108,185
191,737
87,472
88,991
10,799,736

1,468,842
4,104,150
4,308,394
111,371
283,161
87,242148,009
10,511,169

919,670
741,907
23,276
7,212
109,666
702,093489,213
2,993,037
13,792,773

801,341
820,710
20,144
31,418116,890568,279
161,543
2,520,325
13,031,494

4,766,005
240,215
156,51361,90033,76273,882
721,456
6,053,733

4,610,052
408,413
159,768
60,48834,55560,936693,698
6,027,910

984,946
327,394
47,200150,698
388,722439,055
215,034
2,553,049
8,606,782

611,701
299,892
63,885
152,082434,663472,682
92,4602,127,365
8,155,275

Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Nine-month
Period Ended December 31, 2019 (Consolidated)

JPY (millions)
As of March 31,
2019
EQUITY
Share capital
Share premium
Treasury shares
Retained earnings
Other components of equity
Equity attributable to owners of the Company
Non-controlling interests
Total equity
Total liabilities and equity

1,643,585
1,650,232(57,142)
1,595,431
349,879
5,181,985
4,006
5,185,991
13,792,773

As of December 31,
2019
1,668,092
1,673,727(87,478)
1,378,447
239,284
4,872,072
4,147
4,876,219
13,031,494(Note) Takeda finalized the purchase price allocation for the assets acquired and the liabilities assumed related to business combinations during thenine-month period ended December 31, 2019. For this reason, the corresponding balances in Condensed Interim Consolidated Statements of Financial
Position as of March 31, 2019 were retrospectively adjusted. For details, please refer to "(6) Notes to Condensed Interim Consolidated Financial
Statements (Business Combinations)".

18

Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Nine-month
Period Ended December 31, 2019 (Consolidated)(4) Condensed Interim Consolidated Statements of Changes in Equity
Nine-month period ended December 31, 2018 (From April 1 to December 31, 2018)
JPY (millions)
Equity attributable to owners of the Company
Other components of equity

Share
capital
As of April 1, 2018

Sharepremium

77,914

Treasuryshares90,740Retainedearnings(74,373)

1,557,307

Cumulative effects of changes in accounting policies
Adjusted opening balance

Changes in fairvalue offinancial assets
measured at fai
r value throughothercomprehensive
incomeExchangedifferenceson translationofforeign
operations
272,597—

73,037

84,672(73,037)

272,597

84,672—(1,478)(6,526)(1,478)(6,526)

15,401
77,91490,740(74,373)

1,572,708

Net profit for the period

Net changes on revaluationof availablefor-salefinancialassets

164,434

Other comprehensive income (loss)
Comprehensive income (loss) for the period

—

—

28

28

—

164,434—

Transaction with owners:
Issuance of new shares(1,164)

Acquisition of treasury shares
Disposal of treasury shares(0)3(142,697)

Dividends
Changes in ownership(2,126)

Transfers from other components of equity

22,585

Share-based compensation

14,887

Exercise of share-based awards(18,557)

230(22,124)

18,397

Basis adjustment related to acquisitions
28(3,642)

17,236(122,238)

230(22,124)—

77,94287,098(57,137)

1,614,904

271,349

56,022—

Total

Noncontrollinginterests

Total transactions with owners
As of December 31, 2018

Equity attributable to owners of the Company
Other components of equity

Cash flow
hedges
As of April 1, 2018

3,391

Cumulative effects of changes in accounting policies(1,378)Adjusted opening balance

2,013

Hedging
cost

Remeasurement
gain or loss on
definedbenefit plans

1,606

—

Other
comprehensive income
related toassets held
for sale

Total
350,631(4,795)

10,257
1,606—

Net profit for the period

360,888(4,795)—Total
equity1,997,424

19,9852,017,409

25,658(10)

25,6482,023,082

19,9752,043,057

164,434(81)

164,353

Other comprehensive income (loss)(15,666)(1,796)461(25,005)

4,795(20,210)(173)(20,383)

Comprehensive income (loss) for the period(15,666)(1,796)461(25,005)

4,795

144,224(254)

143,970

Transaction with owners:
Issuance of new shares

—

56

56

Acquisition of treasury shares—(1,164)(1,164)

Disposal of treasury shares

—

3

3

Dividends—(142,697)(168)(142,865)

Changes in ownership

230(1,896)(15,657)(17,553)(22,585)———

14,887

14,887(461)

Transfers from other components of equity
Share-based compensation
Exercise of share-based awards
Basis adjustment related to acquisitions
Total transactions with owners
As of December 31, 2018

2,347

—

(160)

(160)

2,347

2,347

2,347

2,347

—

(461)

(20,008)—(128,624)(15,825)(144,449)(11,306)(190)—

315,875—

2,038,682

3,896

2,042,578

19

Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Nine-month
Period Ended December 31, 2019 (Consolidated)

Nine-month period ended December 31, 2019 (From April 1 to December 31, 2019)
JPY (millions)
Equity attributable to owners of the Company
Other components of equity

Share
capital
As of April 1, 2019

Sharepremium

TreasurysharesRetainedearnings

1,643,585

1,650,232(57,142)

1,595,431

1,643,585

1,650,232(57,142)

1,594,919

Changes in fairvalue offinancial assets
measured at fai
r value throughothercomprehensive
income299,128

46,380299,128

46,380(97,248)

12,684(97,248)

12,684(512)

Cumulative effects of changes in accounting policies
Adjusted opening balance

Exchangedifferences on translationof foreign
operations

Net profit for the period

42,517

Other comprehensive income (loss)
Comprehensive income (loss) for the period——

24,50724,507—42,517

Transaction with owners:
Issuance of new shares(52,744)

Acquisition of treasury shares
Disposal of treasury shares(0)1(282,692)

Dividends
Transfers from other components of equity
21,482

Exercise of share-based awards
Total transactions with owners
As of December 31, 2019(25,986)

23,703

Share-based compensation(22,494)

22,40724,50723,495(30,336)(258,989)—(25,986)

1,668,092

1,673,727(87,478)

1,378,447

201,880

33,078Equity attributable to owners of the Company
Other components of equity

Cash flow
hedges
As of April 1, 2019

Hedging
cost

Re-measurement
gain or loss on
defined benefit
plans

Noncontrollinginterests

Total

Total
5,181,985

2,959

1,412

—

349,879
—

(512)

2,959

1,412

—

349,879

Other comprehensive income (loss)

(86)

41

(2,283)Comprehensive income (loss) for the period

(86)

41

(2,283)(86,892)

Cumulative effects of changes in accounting policies
Adjusted opening balance
Net profit for the period

Total
equity4,006

5,185,991

5,181,473

4,006

5,185,479—

42,517211

42,728(86,892)(86,892)

83(86,809)(44,375)294(44,081)(512)

Transaction with owners:
Issuance of new shares—

49,01449,014

Acquisition of treasury shares—(52,744)(52,744)

Disposal of treasury shares—

1

Dividends—(282,692)

Transfers from other components of equity

2,283

Share-based compensation

As of December 31, 2019

(282,845)(23,703)———21,482

21,482

—

(87)

—

—

2,283

(23,703)(265,026)(153)(265,179)

2,873

1,453

—

239,284

4,872,072

4,147

4,876,219

Exercise of share-based awards
Total transactions with owners

1
(153)

(87)

(Note) Takeda finalized the purchase price allocation for the assets acquired and the liabilities assumed related to business combinations during thenine-month period ended December 31, 2019. For this reason, the corresponding balances in Condensed Interim Consolidated Statements of Changes
in Equity as of April 1, 2019 were retrospectively adjusted. For details, please refer to "(6) Notes to Condensed Interim Consolidated Financial
Statements (Business Combinations)".

20

Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Nine-month
Period Ended December 31, 2019 (Consolidated)(5) Condensed Interim Consolidated Statements of Cash Flows
JPY (millions)Nine-month period ended December 31,
2018
2019
Cash flows from operating activities:
Net profit for the period
Depreciation and amortization
Impairment losses
Equity-settled share-based compensation
Loss (gain) on sales and disposal of property, plant and equipment
Gain on divestment of business and subsidiaries
Loss (gain) on liquidation of foreign operations
Change in fair value of contingent consideration liabilities
Finance income and expenses, net
Share of loss of investments accounted for using the equity method
Income tax expenses
Changes in assets and liabilities:
Increase in trade and other receivables
Decrease (increase) in inventories
Increase (decrease) in trade and other payables
Increase (decrease) in provisions
Other, net
Cash generated from operations
Income taxes paid
Tax refunds and interest on tax refunds received
Net cash from operating activities
Cash flows from investing activities:
Interest received
Dividends received
Acquisition of property, plant and equipment
Proceeds from sales of property, plant and equipment
Acquisition of intangible assets
Acquisition of investments
Proceeds from sales and redemption of investments
Acquisition of businesses, net of cash and cash equivalents acquired
Proceeds from sales of business, net of cash and cash equivalents divested
Payments into restricted deposits
Proceeds from withdrawal of restricted deposits
Other, net
Net cash from (used in) investing activities
Cash flows from financing activities:
Net decrease in short-term loans
Proceeds from issuance of bonds and long-term loans
Repayment of bonds and long-term loans
Purchase of treasury sharesInterest paid
Dividends paid
Acquisition of non-controlling interests
Repayment of lease liabilities (2018: Repayment of obligations under finance lease)
Facility fees paid for loan agreements
Other, net
Net cash from (used in) financing activities
Net increase (decrease) in cash and cash equivalents

164,353
116,305
7,988
14,887(5,492)(44,051)(51)(1,230)32,081
43,96044,02642,728437,92134,97021,213381(12,964)
399
1,884
91,43815,09813,280(102,292)(15,375)
24,145(2,977)(39,728)
236,549(28,374)
2,821
210,996(68,919)
92,741(39,195)
40,055
16,478687,508(210,267)
7,074
484,315

2,423
2,326
(50,384)
6,077(39,180)(12,058)
39,325(66,749)
27,548(1,581,389)
71,774(13,748)(1,614,035)

9,547
1,382
(89,845)257(64,982)(7,327)
47,795(4,590)375,536——(11,899)
255,874(505)
1,581,389—(1,164)(6,934)(135,766)(2,392)(1,599)(19,507)(1,549)1,411,973
8,934(325,242)
496,190(623,149)(3,725)(105,161)(274,258)(1,700)(21,099)—(3,138)(861,282)(121,093)

Cash and cash equivalents at the beginning of the year
(Consolidated statements of financial position)
Cash and cash equivalents reclassified back from assets held for sale
Cash and cash equivalents at the beginning of the year

294,522702,093451
294,973629
702,722

Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the period(6,034)
297,873(13,350)
568,279

21

Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Nine-month
Period Ended December 31, 2019 (Consolidated)(6) Notes to Condensed Interim Consolidated Financial Statements(Significant Uncertainty Regarding Going Concern Assumption)
Nine-month period ended December 31, 2019 (April 1 to December 31, 2019)
Not applicable.

(Significant Accounting Policies)
Significant accounting policies adopted for the condensed interim consolidated financial statements are the same as
those adopted for the consolidated financial statements of the fiscal year ended March 31, 2019 except for the policies required
by IFRS 16 'Leases'.
Takeda calculated income tax expenses for the nine-month period ended December 31, 2019, based on theestimated average annual effective tax rate.
IFRS 16 'Leases' (“IFRS 16”)
Takeda adopted IFRS 16 on April 1, 2019. The standard replaces IAS 17 'Leases' ("IAS 17") and IFRIC 4'Determining whether an Arrangement contains a Lease' ("IFRIC 4") and introduces a single lease accounting model requiring a
lessee to recognize lease liabilities and right-of-use (ROU) assets for almost all leases. Of the costs from operating leases
previously included within cost of sales, selling, general and administrative expenses, research and development expenses, andother operating expenses, the portion related to the financing element is classified and reported as finance expenses. In thestatements of cash flow, the lease payments previously included within cash flows from operating activities are reported withincash flows from financing activities.
Takeda adopted IFRS 16 using the modified retrospective approach and the cumulative effect of adopting thestandard was recognized on April 1, 2019. At transition, lease liabilities were measured at the present value of the remaining
lease payments, discounted at the incremental borrowing rate as of April 1, 2019. ROU assets were measured at an amountequal to the lease liabilities, adjusted for any prepaid or accrued lease payments, onerous lease provisions and businesscombination related fair value adjustments.
The adoption of IFRS 16 resulted in the recognition of lease liabilities (included in "Other financial liabilities") of
217,325 million JPY and ROU assets (included in "Property, plant and equipment") of 199,256 million JPY, excluding theamount related to leases previously classified as finance leases under IAS 17 in the consolidated statements of financial position
as of April 1, 2019. The weighted average incremental borrowing rate applied to the lease liabilities on April 1, 2019 was 2.8%.
In the condensed interim consolidated statements of cash flows, cash outflow of 24,151 million JPY for the nine-month period
ended December 31, 2019 was presented in 'net cash from (used in) financing activities' instead of 'net cash from (used in)operating activities'. Other impact of applying IFRS 16 to the condensed interim consolidated financial statements was
immaterial.
Takeda elected the following transition practical expedients, to leases previously classified as operating leases
under IAS 17;–

Applying the recognition exemption for lease contracts for which the term ends within 12 months at the date of initial
application–

Adjusting the ROU assets by the amount of onerous contract provision recognized under IAS 37 'Provisions, Contingent
Liabilities and Contingent Assets' immediately before the date of initial application, as an alternative to an impairment
review

Takeda has also elected not to reassess whether a contract is, or contains a lease at the date of initial application.
Instead, for contracts entered into before April 1, 2019, Takeda relied on its assessment made applying IAS 17 and IFRIC 4.

22

Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Nine-month
Period Ended December 31, 2019 (Consolidated)

As a result of the adoption of IFRS 16, Takeda has updated and revised the related accounting policy for leases,
effective April 1, 2019, as follows:
As Lessee
Takeda assesses whether a contract is or contains a lease at inception of a contract. As a lessee, Takeda recognizes a
ROU asset and a corresponding lease liability for all contracts in which it is a lessee in the consolidated statements of financial
position at the lease commencement date.
The ROU asset is initially measured at cost, being the initial amount of the lease liability adjusted for any lease
payments made at or before the lease commencement date and subsequently at cost less any accumulated depreciation andimpairment losses. The ROU asset is subsequently depreciated using the straight-line method over the shorter of the lease termor the estimated useful life of the underlying asset. The ROU asset is subject to impairment assessment.
The lease liability is initially measured at the present value of the lease payments that are not paid at thecommencement date, discounted using the interest rate implicit in the lease or, if not readily determinable, the Takeda's
incremental borrowing rate.
Generally, Takeda uses its incremental borrowing rate as the discount rate. The lease term comprises a noncancellable period of lease contracts and periods covered by an option to extend or terminate the lease if Takeda is reasonably
certain to exercise that option. After initial recognition, the lease liability is measured at amortized cost using the effective
interest method. If there is a change in future lease payments, such as from reassessment of whether an extension or termination
option will be exercised, the lease liability is remeasured. A corresponding adjustment is made to the ROU asset or is recordedin the consolidated statements of income when the ROU asset has been fully depreciated.
Takeda has elected to apply recognition exemption for leases that have a lease term of 12 months or less and leasesof low-value assets. The lease payments for such leases are recognized as an expense on a straight-line basis over the leaseterm.
As a practical expedient, Takeda has elected not to separate non-lease components from lease components, andinstead accounts for each lease component and any associated non-lease components as a single lease component.
(Significant Changes in Equity Attributable to Owners of the Company)
Nine-month period ended December 31, 2019 (April 1 to December 31, 2019)
Not applicable.

23

Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Nine-month
Period Ended December 31, 2019 (Consolidated)(Business Combinations)
There were no significant business combinations for the nine-month period ended December 31, 2019.
On January 8, 2019, Takeda completed the acquisition of 100% of the outstanding shares of Shire plc ("Shire") in acash and equity transaction valued at 6,213,335 million JPY. Shire was a leading global biotechnology company focused onserving people with rare diseases.
The fair values of the assets acquired, and the liabilities assumed, which Takeda assessed as of March 31, 2019,were provisional and subject to change. Takeda has made adjustments as it obtained more information about facts andcircumstances that existed as of the acquisition date during the nine-month period ended December 31, 2019. Accordingly, thepurchase price allocation was finalized and the provisional fair values for certain assets acquired and the liabilities assumed
were retrospectively adjusted as follows:
Fair value of assets acquired, liabilities assumed as of the acquisition date (January 8, 2019)
JPY (millions)

Cash and cash equivalents
Trade and other receivables
Inventories
Property, plant and equipment
Intangible assets
Assets held for sale
Other assets
Trade and other payables
Provisions
Bonds and loans
Deferred tax liabilities
Liabilities held for sale
Other liabilities
Basis adjustments
Goodwill
Total

Provisional fair value
assessed as ofMarch 31, 2019
227,223
326,154825,985
684,487
3,899,298
463,526
103,283(61,382)(342,202)(1,603,199)(809,667)(196,294)(354,139)(37,107)3,087,369
6,213,335

24

Adjustments——(74,153)
15,144(130,222)
11,070(6,952)—
5,629—
152,180(15,369)(35,471)—
78,144—

Fair value assessed asof December 31, 2019
227,223
326,154751,832
699,6313,769,076
474,596
96,331(61,382)(336,573)(1,603,199)(657,487)(211,663)(389,610)(37,107)
3,165,513
6,213,335

Takeda Pharmaceutical Company Limited (4502)
Summary of Financial Statements for the Nine-month
Period Ended December 31, 2019 (Consolidated)

As a result of the finalized purchase price allocation, Takeda retrospectively adjusted the corresponding balances asof March 31, 2019 in the condensed interim consolidated statements of financial position.
Impact of the retrospective adjustments on Condensed Interim Consolidated Statements of Financial Position as of March 31,
2019
JPY (millions)
AssetsNon-current assets:
Property, plant and equipment
Goodwill
Intangible assets
Investments accounted for using theequity method
Other financial assets
Current assets:
Inventories
Assets held for sale

Liabilities and Equity
Non-current liabilities:
15,400
Other financial liabilities
78,848Provisions(109,199)
Other non-current liabilities(6,473)
Deferred tax liabilities(504) Current liabilities:
Other financial liabilities(67,074)
9,453

Income taxes payable
Provisions
Other current liabilities
Liabilities held for sale
Equity:Retained earnings
Other components of equity(Significant Subsequent Events)
Not applicable.

25

4,429
(1,602)(1,292)(145,605)(140)
31,213(4,011)
1,167
13,88926,066(3,663)

APPENDIX
1 Reconciliation from Reported Revenue to Underlying Revenue
2 Reported and Underlying Growth of Legacy Shire Product/Therapeutic Area Sales
3 FY2019Q3YTD Reconciliation from Reported to Core/Underlying Core
4 FY2018Q3YTD Reconciliation from Reported to Core

1 Reconciliation from Reported Revenue to Underlying Revenue
Q3YTD(BN YEN)

FY2018

Revenue

1,380.0

FY2019

vs. PY

2,519.5

Shire Revenue

1,291.5—

Pro-forma Revenue

2,671.5

2,519.5*2+1,139.5+ 82.6%(152.1)(5.7 )%

FX effects+3.3ppDivestitures*3+1.2ppTechpool & Multilab+0.3ppXIIDRA & TACHOSIL+1.0ppOthers(0.1)pp

Underlying Revenue Growth*1*1(1.2)%FY2018 Q3 YTD revenue is a pro-forma which adds Legacy Shire's 9-month (April-December 2018) revenue previously reported under US GAAP andconformed to IFRS without material differences, excluding Legacy Shire’s oncology business, which was sold in August 2018, and converted to JPY using
FY2018 actual rate for the period.
*2
FX adjustment applies constant FY2018 actual full year average rate to both years (1USD=111 yen, 1EUR=129 yen).
*3
Major adjustments are the exclusion of FY2018 Q3 YTD revenue of former subsidiaries, Guangdong Techpool Bio-Pharma Co., Ltd., and Multilab Indústriae Comércio de Produtos Farmacêuticos Ltda., both divested in FY2018, and FY2018 Q3 YTD and FY2019 Q3 YTD revenue of XIIDRA which was divested inJuly 2019 and TACHOSIL as Takeda agreed in May 2019 to divest this product.

2 Reported and Underlying Growth of Legacy Shire Product/Therapeutic Area Sales
FY2018 Q3YTD(BN YEN)
GI

Reported*1

FY2019 Q3YTD

FX

Reported

FX

Underlying Growth

496.9

+1.4

533.2

(14.1)+10.5%

Legacy Shire

104.0

+0.3

90.0

(2.2)

(11.0)%

LIALDA

36.6

+0.1

18.2

(0.7)

(48.1)%GATTEX / REVESTIVE

39.2

+0.1

46.9

(1.0)

+22.6%

572.2

+1.4

485.5

(23.8)(10.8)%

148.4

+0.5

132.3

(10.2)(3.6)%

NATPARA

20.5

+0.0

13.0

(0.2)

(35.5)%

Rare Hematology

314.8

+0.7

259.2

(10.8)(14.0)%ADVATE

156.5

+0.8

123.1

(5.5)

(17.4)%ADYNOVATE

44.0

+0.1

44.8

(1.0)

+4.4%

Rare Diseases
Rare Metabolic

FEIBA

54.4

(0.3)

39.6

(2.2)

(23.5)%

Hereditary Angioedema

109.0

+0.2

94.0

(2.8)

(11.0)%FIRAZYR

62.9

+0.2

22.7

(1.2)

(61.8)%

TAKHZYRO

6.9

+0.0

48.8

(1.0)

+622.2%CINRYZE

32.9

(0.1)

18.9

(0.5)

(41.1)%PDT Immunology

290.9

+0.9

296.6

(8.3)

+5.1%

Legacy Shire

278.4

+0.9

283.5

(8.3)

+5.1%

Immunoglobulin

222.4

+0.9

225.4

(5.8)

+4.4%

Legacy Shire

213.3

+0.9

215.6

(5.8)

+4.3%

47.1

(0.1)

49.7

(2.1)

+9.8%

45.9

(0.1)

48.5

(2.1)

+10.0%

21.4

+0.1

21.5

(0.4)

+2.6%

19.3

+0.1

19.4

(0.4)

+2.8%

323.4

+1.1

330.5

(6.7)

+4.6%
+2.1%

Albumin
Legacy Shire
OthersLegacy Shire
Neuroscience
Legacy Shire

*1

249.7

+1.0

248.1

(5.8)

VYVANSE

197.4

+0.7

206.8

(4.5)

+7.4%

ADDERALL XR

28.7

+0.1

15.0

(0.2)

(46.9)%

Pro-forma based Legacy Shire's product sales and therapeutic area sales include Legacy Shire's products. FY2018 Q3 YTD revenue is a pro-forma whichadds Legacy Shire's 9-month (April-December 2018) revenue previously reported under US GAAP and conformed to IFRS without material differences,
excluding Legacy Shire’s oncology business, which was sold in August 2018, and converted to JPY using FY2018 actual rate for the period.

3 FY2019Q3YTD Reconciliation from Reported to Core/Underlying Core
FY2019Q3YTD
CORE TOUNDERLYING
CORE ADJ.

REPORTED TO CORE ADJUSTMENTS(BN YEN)REPORTED

Revenue

2,519.5

Amortization &
impairme
Other
nt of
operatingintangibl income/e assets
expenseShire
acquisitionrelated
costs

Shire
purchaseaccountingadjustme
nts

Swiss
Tax
ReformTeva JV
purchaseaccountingadjustme
nts

OthersCORE

FX

Divestitures

2,519.5

75.2(26.2)

Cost of sales(841.6)168.9(672.7)(23.2)

4.0

Gross Profit

1,677.9

168.9

1,846.8

54.0(22.2)

SG&A expenses(711.7)1.6

3.3(706.8)(21.4)

R&D expenses(353.1)5.1

0.1(347.9)(5.7)

Amortization of intangible
assets(309.9)

66.1

243.9

—

Impairment losses on
intangible assets(19.2)

19.2—

Other operating income

29.8(19.0)

Other operating expenses(151.3)

62.9

88.3

Operating profit

162.5

44.0

95.0

Margin6.5%

Financial income/expenses(91.4)

Equity income/loss(15.1)

85.3(10.8)

—
416.2

4.6

792.2
(24.3)

21.8

56.0

85.3

44.0

99.6

427.7

Tax expenses(13.3)(20.4)(2.6)(18.5)(66.2)

Non-controlling interests(0.2)

Net profit

42.5

Number of shares (millions)(10.8)

11.4

Profit before tax

EPS (yen)—
24.9(22.2)

31.4%

30.9%

(99.7)

9.1

6.7

(0.0)

10.9

(24.3)

699.2

27.3

(22.2)

(3.3)

52.2

(138.8)(11.7)

5.1

(0.2)

(0.0)

560.2

15.6

(17.0)

27

360

11

(11)

1,557

1,557

64.9

UNDERL
YING
CORE

41.4

81.1

361.4

(66.6)(66.6)

7.6

27.9

359
1,555

4 FY2018Q3YTD Reconciliation from Reported to Core
FY2018 Q3YTDREPORTED TO CORE ADJUSTMENTS
Amortization&
impairment ofintangible
assetsOther
operatingincome/expenseShire
acquisition
relatedcosts

Teva JV
purchaseaccounting
adjustments(BN YEN)REPORTED

Revenue

1,380.0

Cost of sales(369.9)(369.9)Gross Profit

1,010.2

1,010.2

SG&A expenses(447.7)

R&D expenses(228.9)Amortization of intangible assets(71.9)

71.9—

Impairment losses on intangible
assets

(7.5)

7.5

—

Other operating income

61.7

Other operating expenses(31.4)

Operating profit

284.4

MarginFinancial income/expenses

OthersCORE
1,380.0

11.0(436.7)(228.9)(32.0)
79.4

17.3

14.1

(14.6)

25.1(29.7)—(29.7)

344.6

—

20.6%

25.0%

(32.1)

18.1

1.7(12.3)

Equity income/loss(44.0)

Profit before tax

208.4

79.4

(14.6)

43.2

22.4

1.7

340.4

Tax expenses(44.0)(18.8)

0.8

(8.7)

(6.9)

(0.0)

(77.6)

Non-controlling interests

52.1

8.1

0.1

0.1

Net profit

164.4

EPS (yen)

210

60.6

(13.9)

34.5

15.6

1.6

262.9
336

Number of shares (millions)

783

783

The companies in which Takeda Pharmaceutical Company Limited (Takeda) directly and indirectly owns investments are
separate entities. In this report, "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 whowork for them. These expressions are also used where no useful purpose is served by identifying the particular company orcompanies.
Forward-Looking Statements
This report and any materials distributed in connection with this report may contain forward-looking statements, beliefs or
opinions regarding Takeda’s future business, future position and results of operations, including estimates, forecasts, targets andplans for Takeda. Without limitation, forward-looking statements often include words such as "targets", "plans", "believes","hopes", "continues", "expects", "aims", "intends", "ensures", "will", "may", "should", "would", "could" "anticipates","estimates", "projects" or similar expressions or the negative thereof. Forward-looking statements in this document are based on
Takeda’s estimates and assumptions only as of the date hereof. 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 global business, including general economic
conditions in Japan and the United States; competitive pressures and developments; changes to applicable laws and regulations;the success of or failure of product development programs; decisions of regulatory authorities and the timing thereof;
fluctuations in interest and currency exchange rates; claims or concerns regarding the safety or efficacy of marketed products or
product candidates; the timing and impact of post-merger integration efforts with acquired companies; and the ability to divest
assets that are not core to Takeda’s operations and the timing of any such divestment(s), 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. For more information on theseand other factors which may affect Takeda’s results, performance, achievements, or financial position, see "Item 3. Key
Information-D. Risk Factors" in Takeda’s most recent Annual Report on Form 20-F and Takeda’s other reports filed with the
U.S. Securities and Exchange Commission, available on Takeda’s website at: https://www.takeda.com/investors/reports/secfilings/ or at www.sec.gov. Future results, performance, achievements or financial position of Takeda could differ materiallyfrom those expressed in or implied by the forward-looking statements. Persons receiving this report should not rely unduly on
any forward-looking statements. Takeda undertakes no obligation to update any of the forward-looking statements contained inthis report or any other forward-looking statements it may make, except as required by law or stock exchange rule. Past
performance is not an indicator of future results and the results of Takeda in this report may not be indicative of, and are not an
estimate, forecast or projection of Takeda’s future results.
Certain Non-IFRS Financial Measures
This report includes certain non-IFRS financial measures and targets. Takeda's management evaluates results and makes
operating and investment decisions using both IFRS and non-IFRS measures included in this report. Non-IFRS results exclude
certain income and cost items which are included in IFRS results. By including these non-IFRS measures, management intends
to provide investors with additional information to further analyze Takeda's performance, core results and underlying trends.
Non-IFRS results are not prepared in accordance with IFRS and non-IFRS information should be considered a supplement to,
and not a substitute for, financial statements prepared in accordance with IFRS. Investors are encouraged to review thereconciliations of non-IFRS financial measures to their most directly comparable IFRS measures, which are on appendices 1-4.
Medical information
This report contains information about products that may not be available in all countries, or may be available under different
trademarks, for different indications, in different dosages, or in different strengths. Nothing contained herein should beconsidered a solicitation, promotion or advertisement for any prescription drugs including the ones under development.
Financial information
Takeda’s financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS").
The acquisition of Shire closed on January 8, 2019, and our consolidated results for the fiscal year ended March 31, 2019
include Shire’s results from January 8, 2019 to March 31, 2019. References to "Legacy Takeda" businesses are to ourbusinesses held prior to our acquisition of Shire. References to "Legacy Shire" businesses are to those businesses acquired
through the acquisition of Shire.
This report includes certain pro forma information giving effect to the acquisition of Shire as if it had occurred on April 1,
2018. This pro forma information has not been prepared in accordance with Article 11 of Regulation S-X. This pro formainformation is presented for illustrative purposes and is based on certain assumptions and judgments based on information
available to us as of the date hereof, which may not necessarily have been applicable if the acquisition of Shire had actually
happened as of April 1, 2018. Moreover, this pro forma information gives effect to certain transactions and other events which
are not directly attributable to the acquisition of Shire and/or which happened subsequently to the acquisition of Shire, such asdivestitures and the effects of the purchase price allocation for the acquisition of Shire, and therefore may not accurately reflect
the effect on our financial condition and results of operations if the acquisition of Shire had actually been completed on April 1,
2018. Therefore, undue reliance should not be placed on the pro forma information included herein.