Top Management Presentation Financial Results of Fiscal Year 2013 - PowerPoint PPT Presentation

Top Management Presentation Financial Results of Fiscal Year 2013 Joji Nakayama President and CEO May 16, 2014 0

Overview of FY2013 Results IFRS Reference* : J-GAAP JPY Bn JPY Bn FY2012 FY2013 FY2012 FY2013 YoY Results Results Results Results +12.4% Net Sales 997.9 1,118.8 Revenue 994.7 1118.2 +123.6 313.7 375.5 Cost of Sales 338.5 402.3 +63.8 Cost of Sales 583.7 627.3 SG& A Expenses 184.4 191.2 +6.8 R& D Expenses R& D 183.0 189.7 Expenses Other 373.0 413.2 +40.2 SG& A Expenses 400.6 437.6 Expenses +13.0% Operating Operating 100.5 115.9 98.7 111.6 +12.8 Income Income 99.1 105.0 Ordinary Income Income before 95.9 99.8 +3.9 income taxes Income before 92.1 109.3 income taxes -4.8% Net income 64.0 60.9 -3.1 （ Ow ners of the company ） Net Income 66.6 65.7 Dividend * Non audit for FY2013 results on J-GAAP 60 yen 60 yen per share USD/JPY 83.11 100.24 (average) Currency EUR/JPY 107.15 134.38 (average) Rate 1 1 INR/JPY 1.50 1.68 ( Average)

FY2013 Results -Reference* : GAAP variance- JPY Bn IFRS J-GAAP variance Main Reasons 1,118.2 1,118.8 -0.5 Revenue Provision for sales returns -0.5 Transfer from SG& A expenses +16.3 (Amortization for Non-current assets+8.0, Transfer of Royalty+8.3) 402.3 375.5 +26.8 Cost of Sales Transfer from Non-operating income/expenses, Extraordinary income/losses +7.8 Transfer to Cost of sales -16.3 191.2 189.7 +1.5 R& D Expenses Transfer from Non-operating income/expenses, Extraordinary income/losses +4.6 413.2 437.6 -24.4 SG& A Expenses Non-amortization of goodw ill -7.6 Operating Transfer from Non-operating income/expenses, 111.6 115.9 -4.4 Extraordinary income/losses -12.6 Income Non-amortization of goodw ill +7.6 Income before Transfer sale of investment securities gains to 99.8 109.3 -9.5 comprehensive income -16.4 income taxes Non-amortization of goodw ill +7.6 Net income 60.9 65.7 -4.7 （ Ow ners of the company ） * Non audit for FY2013 results on J-GAAP 2 2

FY2013 Revenue JPY Bn 950.0 1,000.0 1,050.0 1,100.0 1,150.0 Positive Negative Factors Factors FY2012 Results 994.7 Japan + : Nexium +32.7 , Memary +9.5, Ranmark +3.6 Olmetec/Rezaltas +2.3 Japan - : Mevalotin -4.3, Cravit -2.4, Calblock -2.0 31.5 (incl. Vaccine, OTC) Global business ・ Daiichi Sankyo Inc. (DSI) ± 0 ・ Luitpold Pharmaceuticals, Inc. (LPI) -5.8 Global Business 9.4 ・ Daiichi Sankyo Europe GmbH (DSE) +2.5 ・ Asia, South and Central America (ASCA) +12.6* * including currency impact Ranbaxy (RLL) Ranbaxy 11.5 15month financial period (An additional Qtr.) +415 Forex Impact Currency Impact 77.4 (USD,EUR,INR) USD: +37.6 EUR: +16.1 INR: +23.6 Others 5.5 FY2012 FY2013 Results Results Currency USD/JPY 83.11 100.24 1,118.2 FY2013 Results Rate EUR/JPY 107.15 134.38 INR/JPY 1.50 1.68 3 3

FY2013 Operating Income JPY Bn Positive Negative 90.0 110.0 130.0 150.0 Factors Factors 98.7 FY2012 Results Daiich Sankyo Group Net sales: +86.2 59.3 COG: +26.9 Gross Profit Ranbaxy Group 0.5 Gross Profit R& D expenses: R& D Expenses 6.8 Currency Impact +17.0, Real -10.2 SG& A expenses: SG& A expenses Other Expenses 40.2 Currency Impact +38.4, Real +1.8 FY2013 Results 111.6 4 4

FY2013 Income / Net Income Income before income taxes JPY Bn Positive Negative 80.0 90.0 100.0 110.0 Factors Factors 95.9 FY2012 Results Operating Income 12.8 Financial Income RLL: derivatives losses and higher finance 7.9 cost etc. / Expenses Share of loss 1.0 * of investments FY2013 Results 99.8 *Share of loss of investments accounted for using the equity method Net Income(Ow ners of the company) JPY Bn 45.0 55.0 65.0 FY2012 Results 64.0 Income before 3.9 Income Taxes ： income taxes ・ Effective tax rate: 31.2% → 46.5% Income Taxes etc 16.5 ・ Non-application of R& D tax credit follow ing the tax loss carried forw ard Non-controlling after the tax w rite-off of edoxaban 9.5 interests clinical study expenses ・ DTA reversal due to expiration of the 60.9 FY2013 Results special corporation tax 5 5

Forecast of FY2014 - Daiichi Sankyo Group only- JPY Bn FY2013 FY2014 売上収益 Revenue YoY +2.3% Results Forecast Operating +2.3% 営業利益 +6.3% Revenue 899.1 920.0 +20.9 Income 282.9 285.0 +2.1 Cost of Sales 180.7 182.0 +1.3 R& D Expenses 920.0 322.7 333.0 +10.3 Other Expenses 899.1 +6.3% Operating 112.9 120.0 +7.1 Income Income before 112.9 120.0 +7.1 120.0 income tax Net income +13.3% （ attributable to 68.8 78.0 +9.2 112.9 ow ners ） Div Divid idend nd 60 y 60 yen 60 y 60 yen pe per sh share FY2013 FY2014 2013 年度 2013 2014 年度 2014 USD/JPY 100.24 100 Results （予想） Currency Forecast (average) Rate EUR/JPY 134.38 140 Figures do not include Ranbaxy, which will not be (average) consolidated, post its merger with Sun Pharma. 6 6

FY2014 Revenue Forecast JPY Bn 850.0 900.0 950.0 Positive Negative Factors Factors FY2013 899.1 Results Japan 51.6 (incl. Vaccine, OTC) Japan Memary +16.7, Nexium+12.8 , Pralia +8.8 Impact on 30.2 NHI price Cut Global Business 0.1 Global Business DSI -7.8, LPI +10.4, DSE -2.9 Others 0.4 FY2014 FY2013 FY2014 920.0 Results Forecast Forecast Currency USD/JPY 100.24 100 Rate (average) EUR/JPY 134.38 140 (average) 7 7

Sales of Olmesartan (Local Currency Basis) JPY Bn USD Mn, EUR Mn 1,200 1200 120.0 U.S (USD Mn) 1,000 1000 100.0 Japan (JPY Bn) 80.0 800 800 60.0 600 600 400 40.0 400 EU (EUR Mn) 200 200 20.0 ASCA etc. (JPY Bn) 0 0 0 FY2010 FY2011 FY2012 FY2013 FY2014 Results Results Results Results Plan 101.0 Japan (JPY Bn) 87.0 94.4 95.2 97.6 105.0 U.S. (USD Mn) 110.2 111.2 114.2 112.0 45.0 EU (EUR Mn) 40.8 46.8 44.8 48.8 24.0 ASCA etc.(JPY Bn) 13.9 16.5 20.7 24.7 Japan: Olmetec, Rezaltas Breakdow n for Olmesartan U.S.: Benicar, Benicar HCT, Azor, Tribenzor 8 8 Europe: Olmetec, Olmetec Plus, Sevikar, Sevikar HCT

FY2014: Principal management objectives  Target Revenue grow th and higher profits • Revenue : JPY 920 Bn （ YoY + 2.3% ） • Op. Income : JPY 120 Bn （ YoY + 6.3% ）  Maximize full potential of global products • Olmesartan ： Maintain sales at JPY 300 Bn level • Prasugrel ： Japan launch and expansion in existing markets • Edoxaban ： Secure NDA approval and launch  Focused regional strategy • Japan: Expanded market share through new products • LPI: Injectafer to bring back sales grow th  Ramp up efforts on improving profitability • Drive structural reform to optimize business operation 9 9

Target at Japan business

Efient: Antiplatelet agent  Aim to become the standard antiplatelet therapy in Japan  Prevent MACE* earlier after treatment  Similar safety profile w ith Clopidogrel  More stabile reduction of platelet aggregation activities * Major Adverse Cardiovascular Events  Japanese Anti-platelet market  Over JPY 180 billion scale (NHI price basis)  Expanded over 30% in last five years  Clopidogrel, market leader w ith over 60% market share 11 11

Major Products in Japan JPY Bn FY2014 FY2012 FY2013 Results Results Plan 78.3 79.1 79.0 Olmetec anti-hypertension 16.9 18.5 22.0 Rezaltas anti-hypertension analgesic and anti- 59.6 59.3 52.0 Loxonin inflammatory 35.9 33.5 29.0 Cravit antibacterial anti-ulcer 21.6 54.2 67.0 Nexium （ Proton Pump Inhibitor ） 23.8 33.3 50.0 Memary treatment for Alzheimer 25.8 21.5 17.0 Artist anti-hypertension 22.4 22.4 21.0 Mevalotin anti-hyperlipidemia 20.2 19.7 15.0 Omnipaque contrast medium 11.1 11.4 10.0 Urief treatment for dysuria anti-influenza 11.1 13.4 10.0 Inavir treatment for bone 4.4 8.1 10.0 Ranmark metastasis - 3.2 12.0 Pralia osteoporosis 12 7 12

Target at US / EU affiliates

Daiichi Sankyo Inc.  Olmesartan maintained its market share in ARB FY 2013 segment (Results)  Effient and Welchol grew  Protect Olmesartan and Effient sales  Welchol loss of Exclusivity FY 2014  Successful Edoxaban launch and smooth market (Target) dissemination  Look for in-organic grow th opportunities 14 14

Daiichi Sankyo Europe GmbH  Olmesartan sales grew  Increasing competition impacted Efient grow th FY 2013  (Results) Optimized sales force to tune w ith changing environment  Protect Olmesartan and Efient sales  Successful Edoxaban launch and smooth market FY 2014 dissemination (Target)  Secure the new marketing model, “Access model” 15 15

Luitpold Pharmaceuticals Inc .  Successful Injectafer launch and smooth market dissemination FY 2013 (Results)  Optimized manufacturing at Shirley, w hile undergoing GMP remediation process  Injectafer rapid grow th  Maintain Venofer solid position FY 2014 (Target)  Back to full scale manufacturing at Shirley and start manufacturing at New Ohio facility* * Subject to successful USFDA inspection 16 16