Takeda Earnings: In Line; Guiding for Revenue Declines Next Year; Dividend Increase Arrives

Narrow-moat Takeda’s fourth-quarter earnings met our expectations. Revenue was JPY 956 billion, which is 9.5% year-on-year growth, but a decline of 1.2% on a constant-currency basis. Full-year revenue was CNY 4 trillion, with core operating profit margin of 29.5%, both in line with the company’s guidance of JPY 3.7 trillion revenue and 29.8% core operating profit margin given last May, after adjusting for currency fluctuations. For fiscal 2023, the company is guiding for a low-single-digit decline in revenue at constant exchange rates and approximately 26.4% core operating profit margin. These are in line with our expectations due the loss of exclusivity for Vyvanse starting in August and also minimal revenue from COVID-19 vaccine sales. The company announced its dividend for fiscal 2023 will be increased to JPY 188 per share (from JPY 180), its first increase in 15 years.