2020-5-14 fy2019 financial results

4555.T, TSE 1st section

May 14, 2020

FY2019 Financial Results for fiscal year ended March 31, 2020

Overview

1

Operating income increased, despite a slight decline in sales due to the business environment in both Japan and the US.

Copyright © 2020 Sawai Pharmaceutical Co., Ltd. All Rights Reserved.

*With the adoption of IFRS, we have introduced “Core Operating Income” as an indicator of recurring profitability, and we regard this as a key indicator of business performance that excludes non-recurring factors from operating income

F/X rate, ave FY2018A FY2019A

1 US dollar 111 109

JPY, MM

Japan US Japan US +/- Growth

Net Sales 184,341 144,098 40,242 182,537 144,130 38,407 -1,804 -1.0%

Operating Income 25,798 24,230 1,568 26,793 24,401 2,388 996 3.9%

Profit before tax 25,666 ― ― 26,497 ― ― 831 3.2%

Profit attributable toowners of the parent 19,376 ― ― 19,279 ― ― -97 -0.5%

Core Operating Income * 37,738 28,130 9,563 34,391 26,483 7,883 -3,347 -8.9%

FY 2019 YoY

by Regionby Region

FY 2018

Operating Income Analysis

2

Japan US


25.8

26.8 +1.0

+0.1

+1.8-0.8

-1.0

FY2018 Gross profit SG & A, etc R & D US Operation income(Excluding Impairment

/ Amortization of Intangible assets)

Impairment /Amortization ofIntangible assets

FY2019

(JPY, bn)

Sales by Channel, Japan(Unconsolidated)

3Copyright © 2020 Sawai Pharmaceutical Co., Ltd. All Rights Reserved.

Made steady progress as planned through December, 2019 in both hospital and pharmacy channels. The trend in Q4 was marginal as a result of factors such as the flu season peaking earlier than usual.

Sales growth was sluggish for the full year, rising 1.7%.

# ofCustomers Sales Share # of

CustomersCoverage

Rate Sales Share # ofCustomers Sales Growth

8,304 8,116 11.8% 8,093 97.5% 11.5% -23 -0.5%

1,727 1,718 7.1% 1,725 99.9% 6.9% 7 -0.8%

106,311 39,576 9.8% 40,475 38.1% 9.3% 899 -3.4%

89,320 58,510 77.1% 59,137 66.2% 77.9% 627 2.9%

61,670 58,136 76.6% 58,799 95.3% 77.3% 663 2.7%

27,650 374 0.4% 338 1.2% 0.6% -36 36.3%

- - 1.3% - - 1.3% - -4.4%

203,935 106,202 100.0% 107,705 52.8% 100.0% 1,503 1.7%

*DPC: Diagnosis Procedure Combination, a fixed payment system for inpatients

Drug Stores, etc.

DPC* Hospital

Total

Channel

Clinic

Pharmacy

Others

Hospital

FY 2018 FY 2019 YoYTotal,

Nationwide

Dispensing

Sales by Product Launch Year, Japan

4

High single and double-digit growth from products launched FY2016 - FY2018.


JPY, MM

Year Launched FY 2018 FY 2019 YoY

FY2019 - 551 -

FY2018 5,526 7,918 43.3%

FY2017 6,373 6,995 9.8%

FY2016 1,416 1,599 12.9%

FY2015 6,243 6,072 -2.7%

FY2014 4,345 4,409 1.5%

FY2013 5,440 5,098 -6.3%

FY2012 4,362 4,350 -0.3%

FY2011 8,231 7,934 -3.6%

FY2010 5,878 6,091 3.6%

Launced before FY2010 96,284 93,111 -3.3%

Total 144,098 144,130 0.0%

5

Existing Products 38,896 32,482 32,600

New Productslaunched after 2018 1,346 5,925 2,700

Total 40,242 38,407 35,300 Branded Products(Reference)※ 5,436 6,885 ―

JPY: MM

※ Sales of Qudexy®, Zembrace®　Symtouch®, TosymraTM

FY2018A FY2019A FY2019E

Central nervous system 42.9% 45.3% 0.7%Cardiovascular 43.3% 38.6% -15.0%Hormone preparations 3.9% 4.4% 6.9%Agents for urogenital andrectal systems 4.3% 3.9% -12.7%Antineoplastic agents 1.8% 2.6% 35.8%The others 3.8% 5.2% 34.8%

Total 100.0% 100.0% -4.6%

Therapeutic Area YoYFY2018A FY2019A

US Sales Analysis

Existing Products: Performed close to original estimates. Products launched after FY2018︓Launched 6 new products in FY2019.

These products made steady progress and came in above forecast.

By therapeutic areas

FY2020 Forecasts, consolidated

6

Revenue is expected to increase and operating profit is expected to be on par with FY2019


F/X rate, ave FY2019A FY2020E

1 US dollar 109 110

JPY, MM

Mil. yen /Sales (%) Mil. yen /Sales (%) Mil. yen /Sales (%)

Net Sales 182,537 100.0% 200,200 100.0% 17,663 +9.7%Core Operating Income 26,793 14.7% 26,850 13.4% 57 +0.2%Operating Income 26,497 14.5% 26,550 13.3% 53 +0.2% Profit before tax 19,279 10.6% 20,050 10.0% 771 +4.0%

Profit attributable toowners of the parent

34,391 18.8% 34,800 17.4% 409 +1.2%

FY2019Full Year Results

FY2020Full Year Forecast Y o Y

FY2020 Forecasts, Japan

7

Sales and operating income are expected to increase due to growth in new productsto be launched in FY2020, despite the impact of drug price revisions.


Mil. yen /Sales (%) Mil. yen /Sales (%) Mil. yen Growth (%)

Net Sales 144,130 100.0% 159,600 100.0% 15,470 10.7%Gross profit 52,274 36.3% 58,600 36.7% 6,326 12.1%

SG&A Expenses (excluding R&D) 20,490 14.2% 23,100 14.5% 2,610 12.7%

R&D Expenses 7,551 5.2% 10,200 6.4% 2,649 35.1% Other income (expenses) 169 ― 0 ― -169 ―

Operating Income 24,401 16.9% 25,300 15.9% 899 3.7%Core Operating Income 26,483 18.4% 28,000 17.5% 1,517 5.7%

FY2020 Forecast YoYFY2019Full Year Results

8

6 launches are planned. Sales of the branded products acquired in FY2019 are expected to increase.

Overall revenue is projected to increase, however, this will be accompanied by adecrease in profit due to the entry of competitors to existing products.


F/X rate, ave FY2019A FY2020E

1 US dollar 109 110

JPY, MM Sales JPY, MM Sales JPY, MM Growth

Net Sales 38,407 100.0% 40,600 100.0% 2,193 5.7%

　Existing Products 32,482 84.6% 29,500 72.7% - 2,982 -9.2%

　Products launched after FY2018 5,925 15.4% 11,100 27.3% 5,175 87.3%

Gross profit 21,227 55.3% 22,000 54.2% 773 3.6%　SG&A Expenses (excluding R&D) 12,895 33.6% 13,300 32.8% 405 3.1%

　R&D Expenses 5,952 15.5% 7,400 18.2% 1,448 24.3%

　Other income (expenses) 8 0.0% 250 0.6% 242 ―

Operating Income 2,388 6.2% 1,550 3.8% 838 -35.1%

Core Operating Income 7,883 20.5% 6,800 16.7% - 1,083 -13.7%

FY2019A FY2020E YoY

FY2020 Forecasts, US

9

Commencement of Preparation forTransition to a Holding Company Structure through Sole-Share Transfer


◆ Background of the TransitionTo ensure the continuous growth of the Company’s group, it is essential to build new businesses which quickly respond to the needs of the time, while further reinforcing existing business conducted mainly in Japan and the United States. To achieve this goal, the Company determined that the Transition is the most appropriate measure to take.

◆ Purpose of the TransitionAcceleration of strategic alliance１

Building a system for promptly developing new businesses２

Separation of the management/supervision of the group from execution of operations３

Development of Personnel to Manage the Company’s Group４

◆ Schedule of the Transition (tentative)Jul. 28, 2020 Board of Directors’ meeting concerning the Transition

Sep. 30, 2020 Record date for the extraordinary general meeting of shareholders concerning the Transition

Dec. 21, 2020 Extraordinary general meeting of shareholders concerning the Transition

Apr. 1, 2021 Consummation of the Transition

4555.T, TSE 1st section

May 14, 2020

FY2019 Financial Results for fiscal year ended March 31, 2020Reference Materials

90,411 92,966

46,369 45,046

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

FY 2018 FY 2019

JPY, MM Wholesalers Agencies Marketing Alliances Others

Sales by Distribution Channel, Japan

11

( 32.2%)

(57.6%)

(31.3%)

( 64.5%)(62.7%)

△1,323（△2.9％）

＋2,555（+ 2.8％）

144,130144,098


Sales through wholesalers continued to increase.

Comparison of Sales Volume by therapeutic area, Japan

12

*The contracted sales of the Kashima factory are excluded from the calculation.

Steady growth in CNS (Central Nervous System) line.


FY2018 FY2019

Cardiovascular drugs 28.9% 29.4% 5.3% -2.6%Gastro-intestinal drugs 20.7% 19.5% -2.4% -8.9%Central nervous system drugs 12.4% 13.0% 8.3% 16.5%Blood/body fluid pharmaceutical products 8.1% 8.3% 5.9% -1.4%Respiratory organ agents 6.7% 6.9% 7.0% 7.5%Other metabolic drugs 6.5% 6.1% -2.2% -5.6%Antiallergic drugs 2.9% 2.9% 5.0% -4.1%Antibiotics drugs 2.5% 2.5% 4.0% -1.6%Antineoplastic agents 0.3% 0.4% 50.2% 28.1%Others 11.1% 11.1% 3.9% 4.3%Total 100.0% 100.0% 3.7% 0.1%

Therapeutic CategoryVolume Composition

YoY(volume)

YoY(value*)

Consolidated Financial Highlights-1


JPY, MM

/Sales（%） /Sales（%） YoY（%） 1H /Sales（%） Full Year /Sales（%） YoY（%）Key Income Statements DataNet Sales 184,341 100.0 182,537 100.0 -1.0 96,000 100.0 200,200 100.0 9.7Cost of Sales 109,442 59.4 109,036 59.7 -0.4 56,700 59.1 119,600 59.7 9.7Gross Profit 74,899 40.6 73,500 40.3 -1.9 39,300 40.9 80,600 40.3 9.7SG&A Expenses 32,380 17.6 33,375 18.3 3.1 17,300 18.0 36,400 18.2 9.1R&D Expenses 16,671 9.0 13,487 7.4 -19.1 8,800 9.2 17,600 8.8 30.5Other income( expenses) -50 ― 156 0.1 ― 150 0.2 250 0.1 60.7Operating Income 25,798 14.0 26,793 14.7 3.9 13,350 13.9 26,850 13.4 0.2Profit before tax 25,666 13.9 26,497 14.5 3.2 13,250 13.8 26,550 13.3 0.2Profit attributable to owners of the parent 19,376 10.5 19,279 10.6 -0.5 9,950 10.4 20,050 10.0 4.0Core operating income 37,738 20.5 34,391 18.8 -8.9 16,500 17.2 34,800 17.4 1.2EBITDA * 48,685 26.4 46,135 25.3 -5.2 22,400 23.3 46,800 23.4 1.4* Core operating income + amortization and depreciation expenses included in core operating income + impairment charges

Key Balance Sheets DataTotal AssetsEquityRatio of equity attributable toowners of the company to totalassets (%)

Amounts Per Common ShareBasic earnings per share 457.94Diluted earnings per Share ―Dividend 130.0

53.4

FY2019

442.62

135.0

FY2020 Forecast

FY2018 FY2020 Full Year Forecast

442.32130.0

440.37440.00

FY2018 FY2019

As of March 31, 2019 As of March 31, 2020

384,814233,686

54.6

372,889223,204



Japan JPY, MM

Key Income Statements Data /Sales（%） /Sales（%） YoY（%） /Sales（%） YoY（%）

Net Sales 144,098 100.0 144,130 100.0 0.0 159,600 100.0 10.7Cost of Sales 92,728 64.4 91,856 63.7 -0.9 101,000 63.3 10.0Gross Profit 51,370 35.6 52,274 36.3 1.8 58,600 36.7 12.1SG&A Expenses 19,495 13.5 20,490 14.2 5.1 23,100 14.5 12.7R&D Expenses 7,605 5.3 7,551 5.2 -0.7 10,200 6.4 35.1Other income( expenses) -40 ― 169 0.1 ― 0 ― ―Operating Income 24,230 16.8 24,401 16.9 0.7 25,300 15.9 3.7Core operating income 28,130 19.5 26,483 18.4 -5.9 28,000 17.5 5.7EBITDA *1 37,947 26.3 37,138 25.8 -2.1 38,000 23.8 2.3

US

Key Income Statements Data /Sales（%） /Sales（%） YoY（%） /Sales（%） YoY（%）

Net Sales 40,242 100.0 38,407 100.0 -4.6 40,600 100.0 5.7Cost of Sales 16,713 41.5 17,180 44.7 2.8 18,600 45.8 8.3Gross Profit 23,529 58.5 21,227 55.3 -9.8 22,000 54.2 3.6SG&A Expenses 12,929 32.1 12,895 33.6 -0.3 13,300 32.8 3.1R&D Expenses 9,067 22.5 5,952 15.5 -34.4 7,400 18.2 24.3Other income( expenses) 35 0.1 8 0.0 -78.6 250 0.6 －

Operating Income 1,568 ― 2,388 6.2 52.2 1,550 3.8 -35.1 Core operating income 9,563 23.8 7,883 20.5 -17.6 6,800 16.7 -13.7 EBITDA * 10,693 26.6 8,973 23.4 -16.1 8,800 21.7 -1.9 * Core operating income + amortization and depreciation expenses included in core operating income + impairment charges

FY2018

Sales and Operating Income by Area

FY2018

FY2020 Full Year Forecast


FY 2019

FY 2019



Adjusted from Full basis to Core basis JPY, MM

Full Basis Adjusting(Japan)

Adjusting(US)

Core Basis Full Basis Adjusting(Japan)

Adjusting(US)

Core Basis

184,341 ― ― 184,341 182,537 ― ― 182,537-109,442 1,332 906 -107,204 -109,036 -43 107 -108,972

Inventory step-up -410 ― 410 ― -115 ― 115 ―Impairment loss -999 999 ― ― ― ― ― ―

Other -108,032 333 495 -107,204 -108,723 -241 -8 -108,97274,899 1,332 906 77,137 73,500 -43 107 73,565

-32,380 528 3,639 -28,213 -33,375 538 4,259 -28,578Amortization of intangible assets -4,167 528 3,639 ― -4,787 528 4,259 ―

-16,671 1,999 3,486 -11,186 -13,487 1,755 1,136 -10,596Amortization of intangible assets -1,167 553 613 ― -1,422 710 712 ―Impairment loss -4,318 1,446 2,873 ― -1,467 1,043 424 ―

269 -219 -50 ― 238 -210 -28 ―-319 259 60 ― -83 43 40 ―

25,798 3,900 8,040 37,738 26,793 2,083 5,515 34,391

R&D Expenses

Gross ProfitSG&A Expenses

Other income

Operating Income

Other expenses

Net SalesCost of Sales

Consolidated Financial Data


JPY, MM

/Sales（%） /Sales（%） YoY（% ） /Sales（ %）

Japan 7,605 5.3 7,551 5.2 -0.7 6.4US 9,067 22.5 5,952 15.5 -34.4 18.2

16,671 9.0 13,487 7.4 -19.1 8.8AdvertisemetExpenses 1,418 0.8 2,829 1.5 99.5 1.4

Japan 4,351US 856

5,207Japan 10,899 11,893 11,500

8,191

　R&D Division 1,608

1,100

US 5,38216,280

*. Results of FY 2017 : Results for 10 months of US operations

Comp.(%) Comp.(%)

Japan 2,568 82.0 2,677 81.21,687 53.9 53.6

257 8.2 8.2624 19.9 19.4

(436)US 563 18.0 18.8

3,131 100.0 100.0

Total

DepreciationandAmortization

6,9006,061

　Manufacturing　Division

　AdministrationDiv.

& Business Div.

18,400

1,665

4,265

8,352

7,500

8,300

1,500

1,700

2,7357,000

6,800CapitalExpenditure

Total

(MRs)

Total

As of Dec 31, 2019 As of Dec 31, 2020

1,644251596

(394)575

3,066

Personnel InformationNumber of Employees

　Manufacturing Division　R&D Division　Administration Div. & Business Div.


10,2007,400

17,600

2,900

14,300

FY 2019 FY2020 Full Year Forecast

FY2018

R&D ExpensesTotal

Total

FY2018

FY 2019

Capital　Expenditure &Depreciation and Amortization

Selling General and Administrative Expenses

17,954

1,776

17

Contact Information

Disclaimer

• The plans, forecasts, strategy and other information regarding the Sawai Group contained in this presentation are based on the Company’s assumptions and judgments using information available at the time of publication. Therefore, due to potential risks and uncertainties, there is no guarantee of the accuracy of this information.

• Potential risks and uncertainties include, but are not limited to, the economic environment for prescription drugs, which is the main operating domain of the Sawai Group, market competition and services offered by the Group.

Sawai Pharmaceutical Co., Ltd. PR & IR Group, Corporate Strategy Department

E-mail： [email protected]


2020-5-14 fy2019 financial results

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