Kyowa Kirin : Consolidated Financial Summary (IFRS) Fiscal 2023 Third Quarter (0B)

November 01, 2023 at 02:51 am EDT

Kyowa Kirin Co., Ltd.

Consolidated Financial Summary (IFRS)

Fiscal 2023 Third Quarter

(January 1, 2023 - September 30, 2023)

This document is an English translation of the Japanese-language original.

Kyowa Kirin Co., Ltd. (4151)

SUMMARY OF CONSOLIDATED FINANCIAL STATEMENTS (IFRS)

for Nine Months Ended September 30, 2023

November 1, 2023

Company Name: Kyowa Kirin Co., Ltd.

Listed Exchanges: Tokyo Stock Exchange

Stock Code:

4151

President & Chief Executive Officer:

Masashi Miyamoto

Telephone:

+81 3 5205 7206

Inquiries:

Satoko Yoshida

Director,

Corporate Communications Department

URL:

https://www.kyowakirin.com/index.html

Scheduled date of submission of Quarterly Securities Report: November 1, 2023

Scheduled start date of dividend payment: -

Appendix materials to accompany the quarterly financial report: Yes

Quarterly results presentation meeting: Yes (for institutional investors and securities analysts)

(Millions of yen rounded off)

1. Consolidated Financial Results for the Nine Months Ended September 30, 2023

(1) Consolidated operating results

(Percentages indicate year-on-year changes.)

Revenue

Core operating profit

Profit before tax

Profit

Nine months ended

Millions of yen

September 30, 2023

306,053

7.9

60,872

0.0

64,339

6.5

53,554

8.8

September 30, 2022

283,775

11.7

60,860

30.0

60,404

44.2

49,212

49.5

Total comprehensive income:

Nine months ended September 30, 2023: ¥77,963 million; 53.6%

Nine months ended September 30, 2022: ¥50,756 million; 30.5%

Note: Core operating profit was calculated by deducting "selling, general and administrative expenses" and "research and development expenses" from "gross profit," and adding "share of profit (loss) of investments accounted for using equity method" to the amount.

	Profit attributable to	Basic earnings	Diluted earnings
	owners of parent	per share	per share
Nine months ended	Millions of yen	%	Yen	Yen
September 30, 2023	53,554	8.8	99.62	99.61
September 30, 2022	49,212	49.5	91.57	91.55

(2) Consolidated financial position

	Total assets	Total equity

As of	Millions of yen	Millions of yen
September 30, 2023	1,004,051	812,143
December 31, 2022	939,881	762,826

Equity attributable to

owners of parent

Millions of yen

812,143

762,826

Ratio of equity

attributable to owners

of parent to total

assets

80.9

81.2

2. Dividends

		Dividends per share
	First	Second	Third	Fiscal year-	Total
	quarter-end	quarter-end	quarter-end	end

	Yen	Yen	Yen	Yen	Yen
Fiscal year ended December 31, 2022	-	24.00	-	27.00	51.00
Fiscal year ending December 31, 2023	-	27.00	-
Fiscal year ending December 31, 2023				27.00	54.00
(Forecast)

Note: Revisions to the dividend forecast most recently announced: None

Kyowa Kirin Co., Ltd. (4151)

3. Consolidated Earnings Forecasts for the Fiscal Year Ending December 31, 2023 (from January 1, 2023 to December 31, 2023)

(Percentages indicate year-on-year changes.)

										Profit	Basic
			Core operating					attributable to
	Revenue	Profit before tax	Profit	earnings per
			profit						owners of	share
										parent

	Millions of	%	Millions of	%	Millions of	%	Millions of		%	Millions of	%	Yen
	yen		yen		yen		yen			yen
Full year	426,000	6.9	88,000	1.5	86,000	27.3	70,000		30.7	70,000	30.7	130.23

Note: Changes to the earnings forecasts most recently announced: None

* Notes

Changes to significant subsidiaries during the period (Changes of specified subsidiaries resulting in changes in the scope of consolidation during the period under review): No
Changes in accounting policies, and accounting estimates:
1. Changes in accounting policies required by IFRS: Yes
2. Changes in accounting policies other than a. above: No
3. Changes in accounting estimates: No

Note: See page 20, "2. Condensed Quarterly Consolidated Financial Statements and Significant Notes Thereto, (5) Notes to Condensed Quarterly Consolidated Financial Statements, Material accounting policies."

Number of shares issued (ordinary shares)
a. Number of shares issued (including treasury shares)

As of September 30, 2023

As of December 31, 2022

540,000,000 shares

b. Number of treasury shares

As of September 30, 2023

As of December 31, 2022

2,390,163 shares

2,521,197 shares

c. Average number of shares during the period

Nine months ended September 30, 2023

Nine months ended September 30, 2022

537,565,293 shares

537,418,763 shares

Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.
Notice regarding the appropriate use of the earnings forecasts and other special comments
The forward-looking statements, including earnings forecasts, contained in these materials are based on the information currently available to the Company and on certain assumptions deemed to be reasonable by management. As such, they do not constitute guarantees by the Company of future performance. Actual results may differ materially from these projections for a wide variety of reasons.

	Kyowa Kirin Co., Ltd. (4151)
Attachment Index
1. Operating Results and Financial Statements	4
(1)	Summary of Consolidated Financial Position	4
(2)	Summary of Consolidated Business Performance	5
(3)	Summary of Consolidated Cash Flows	9
(4)	Research and Development Activities	10
(5)	Summary of Consolidated Earnings Forecasts and Other Forward-looking Statements	12
2. Condensed Quarterly Consolidated Financial Statements and Significant Notes Thereto	13
(1)	Condensed Quarterly Consolidated Statement of Financial Position	13
(2)	Condensed Quarterly Consolidated Statement of Profit or Loss and Condensed Quarterly
	Consolidated Statement of Comprehensive Income	15
(3)	Condensed Quarterly Consolidated Statement of Changes in Equity	17
(4)	Condensed Quarterly Consolidated Statement of Cash Flows	19
(5)	Notes to Condensed Quarterly Consolidated Financial Statements	20
	Notes on going concern assumption	20
	Material accounting policies	20
	Changes in presentation	20
	Segment information	20

Kyowa Kirin Co., Ltd. (4151)

1. Operating Results and Financial Statements

(1) Summary of Consolidated Financial Position

	As of	As of
	December 31, 2022	September 30, 2023
Assets	939.9	1,004.1

Non-current assets	397.7	422.7
Current assets	542.2	581.4
Liabilities	177.1	191.9
Equity	762.8	812.1

Ratio of equity attributable to owners of	81.2%	80.9%
parent to total assets (%)

(Billions of yen)

Year-on-year change

64.2

25.0

39.2

14.9

49.3

(0.3)%

Assets as of September 30, 2023, were ¥1,004.1 billion, an increase of ¥64.2 billion compared to the end of the previous fiscal year.
- Non-currentassets increased by ¥25.0 billion compared to the end of the previous fiscal year, to ¥422.7 billion, due mainly to an increase in goodwill due to the effect of yen depreciation in foreign exchange, in addition to an increase in investments accounted for using equity method following the shift to a joint- venture structure for the established medicines business in Europe.
- Current assets increased by ¥39.2 billion compared to the end of the previous fiscal year, to ¥581.4 billion, due mainly to an increase in cash and cash equivalents, despite a decrease in assets held for sale.
Liabilities as of September 30, 2023, were ¥191.9 billion, an increase of ¥14.9 billion compared to the end of the previous fiscal year, due mainly to increases in trade and other payables and income taxes payable, despite a decrease in other non-current liabilities caused by a decrease in contract liabilities.
Equity as of September 30, 2023, was ¥812.1 billion, an increase of ¥49.3 billion compared to the end of the previous fiscal year, due mainly to an increase due to the recording of profit attributable to owners of parent as well as an increase in exchange differences on translation of foreign operations resulting from the impact of exchange rates, despite a decrease due to the payment of dividends, etc. As a result, the ratio of equity attributable to owners of parent to total assets as of the end of the third quarter was 80.9%, a decrease of 0.3 percentage points compared to the end of the previous fiscal year.

Kyowa Kirin Co., Ltd. (4151)

(2) Summary of Consolidated Business Performance

1) Overview of results

The Group now applies the International Financial Reporting Standards ("IFRS") in line with its policy of expanding business globally, and adopts "core operating profit" as a level of profit that shows the recurring profitability from operating activities. Core operating profit is calculated by deducting "selling, general and administrative expenses" and "research and development expenses" from "gross profit," and adding "share of profit (loss) of investments accounted for using equity method" to the amount.

					(Billions of yen)
		Nine months	Nine months
		ended	ended	Year-on-year	Rate of change
		September 30,	September 30,	change	(%)
		2022	2023
Revenue		283.8	306.1	22.3	7.9%
Core operating profit		60.9	60.9	0.0	0.0%
Profit before tax		60.4	64.3	3.9	6.5%
Profit attributable to owners of parent		49.2	53.6	4.3	8.8%
< Average exchange rates for each period >
		Nine months	Nine months
Currency		ended	ended	Year-on-year
	September 30,	September 30,	change

		2022	2023
USD (USD/¥)		¥126	¥137	Up ¥11
GBP (GBP/¥)		¥160	¥170	Up ¥10
EUR (EUR/¥)		¥135	¥148	Up ¥13

For the nine months ended September 30, 2023 (January 1, 2023 to September 30, 2023), revenue was ¥306.1 billion (up 7.9% compared to the same period of the previous fiscal year), and core operating profit was ¥60.9 billion (up 0.0%). Profit attributable to owners of parent was ¥53.6 billion (up 8.8%).

The increase in revenue was the result of growth of global strategic products mainly in North America and a rise in revenue from technology out-licensing. The positive effect on revenue from foreign exchange was ¥13.9 billion.
Core operating profit remained level with the previous fiscal year due to increases in selling, general and administrative expenses and research and development expenses, despite higher gross profit resulting from an increase in overseas revenue and a rise in revenue from technology out-licensing. The positive effect on core operating profit from foreign exchange was ¥4.2 billion.
Profit attributable to owners of parent increased as a result of an increase in other income due mainly to the gain on sales of share and valuation of remaining share following the shift to a joint-venture structure for established medicines business in Europe, despite an increase in other expenses due mainly to the recording of impairment losses associated with the decision to discontinue development of RTA 402.

Kyowa Kirin Co., Ltd. (4151)

2) Revenue by regional control function

				(Billions of yen)
	Nine months	Nine months
	ended	ended	Year-on-year	Rate of change
	September 30,	September 30,	change	(%)
	2022	2023
Japan	109.2	107.0	(2.3)	(2.1)%
North America	75.9	92.9	17.0	22.4%
EMEA	48.0	45.7	(2.3)	(4.7)%
APAC	22.5	26.0	3.5	15.4%
Others	28.1	34.5	6.3	22.5%
Total consolidated revenue	283.8	306.1	22.3	7.9%

Notes: 1. Revenue by regional control function is classified based on consolidated revenue from products of regional control functions in the One Kyowa Kirin (OKK) matrix global management structure, which combines a regional organization based on four regions of Japan, North America, EMEA and APAC, a functional organization, and a product organization (product franchises).

EMEA consists of Europe, the Middle East, Africa, etc.
Others consists of revenue from technology out-licensing, original equipment manufacturing, etc.

Kyowa Kirin Co., Ltd. (4151)

< Revenue of major products (Japan) >

				(Billions of yen)
	Nine months	Nine months
	ended	ended	Year-on-year	Rate of change
	September 30,	September 30,	change	(%)
	2022	2023
Darbepoetin Alfa Injection Syringe [KKF]	13.2	10.3	(2.9)	(21.7)%
Duvroq	4.4	6.9	2.4	54.4%
G-Lasta	22.7	23.2	0.5	2.3%
Romiplate	7.5	8.7	1.2	15.9%
Crysvita	6.4	7.4	1.0	16.0%

Revenue in Japan decreased year on year due mainly to the impact of the reductions in drug price standards implemented in April 2022 and April 2023.
- Revenue from Darbepoetin Alfa Injection Syringe [KKF] decreased due to the impact of the reductions in drug price standards and the market penetration of rival products.
- Revenue from Duvroq, a treatment for renal anemia, has been growing steadily since its launch in 2020.
- Revenue from G-Lasta, an agent for decreasing the incidence of febrile neutropenia, stayed at the same level as in the previous fiscal year.
- Revenue from ROMIPLATE, a treatment for chronic idiopathic thrombocytopenic purpura, increased as a result of receiving approval of its indication for treatment of patients with aplastic anemia who have had an inadequate response to conventional therapy, in 2019, and as a result of penetrating the market.
- Revenue from Crysvita, a treatment for FGF23-related diseases, has been growing steadily since its launch in 2019.

< Revenue of major products (overseas) >

				(Billions of yen)
	Nine months	Nine months
	ended	ended	Year-on-year	Rate of change
	September 30,	September 30,	change	(%)
	2022	2023
Crysvita	78.7	95.7	17.0	21.6%
Poteligeo	16.1	19.9	3.8	23.8%
Nourianz	4.5	5.5	1.0	22.9%
Gran	6.4	5.2	(1.2)	(19.2)%

Revenue in North America increased year on year due to the growth of global strategic products.

Revenue from Crysvita, a treatment for X-linked hypophosphatemia, has been growing steadily since its launch in 2018.
Revenue from POTELIGEO, an anticancer agent, has been growing since its launch in 2018.
Revenue from NOURIANZ (product name in Japan: NOURIAST), an antiparkinsonian agent, has been growing since its launch in 2019.

Revenue in EMEA decreased year on year due to a drop in revenue from the established medicines,

despite the growth of global strategic products.

Revenue from Crysvita, a treatment for X-linked hypophosphatemia, has been growing as the number of countries where it has been released has been increasing since its launch in 2018.
Revenue from POTELIGEO, an anticancer agent, has been growing as the number of countries where it has been released has been increasing since its launch in 2020.
Following the shift to a joint venture with Grünenthal for the established medicines business, in August 2023, revenue for 13 brands shifted from product sales to sales royalties and license fees, which led to a decrease in revenue from established medicines such as Abstral.

Kyowa Kirin Co., Ltd. (4151)

Revenue in APAC increased year on year.

- Revenue from Crysvita, a treatment for X-linked hypophosphatemia, has been growing particularly in Australia where sales were launched in November 2022.
- Revenue from Gran, a neutropenia treatment drug, declined due to the impact of the centralized governmental purchasing system* that started in some regions in China.
  * Volume-Based Procurement (VBP) program that was introduced in 2018 for reducing healthcare cost in China. Even though only 2 to 5 companies are selected as suppliers through a tender, drug prices are dramatically dropped down.
Revenue from Others >

Revenue from Others increased year on year.

 Royalties revenue from AstraZeneca in relation to benralizumab increased.
Core operating profit

Core operating profit remained level with the previous fiscal year due to an increase mainly in personnel expenses for starting our own marketing of Crysvita in North America on April 27, 2023, in addition to an increase in research and development expenses as a result of progress in development for KHK4083, for which a multi-regional phase III clinical trial is ongoing, and other factors, despite an increase in gross profit due to growth in revenue from global strategic products mainly in North America and a rise in revenue from technology out-licensing. The positive effect on core operating profit from foreign exchange was ¥4.2 billion.

Kyowa Kirin Co., Ltd. (4151)

(3) Summary of Consolidated Cash Flows

				(Billions of yen)
	Nine months	Nine months
	ended	ended	Year-on-year	Rate of change
	September 30,	September 30,	change	(%)
	2022	2023
Net cash provided by (used in) operating activities	35.5	84.3	48.7	137.1%

Net cash provided by (used in) investing activities	(13.4)	(12.5)	0.9	(6.9)%

Net cash provided by (used in) financing activities	(27.9)	(31.4)	(3.5)	12.4%

Cash and cash equivalents at beginning of period	335.1	339.2	4.1	1.2%

Cash and cash equivalents at end of period	332.8	382.3	49.5	14.9%

Cash and cash equivalents as of September 30, 2023 were ¥382.3 billion, an increase of ¥43.1 billion compared with the balance of ¥339.2 billion as of December 31, 2022.
The main contributing factors affecting cash flow during the nine months ended September 30, 2023 were as follows:
Net cash provided by operating activities was ¥84.3 billion, compared with net cash provided by operating activities of ¥35.5 billion in the same period of the previous fiscal year. Major inflows were depreciation and amortization of ¥15.5 billion, foreign exchange loss (gain) of ¥12.0 billion mainly relating to exchange differences on translation of foreign currency denominated deposits from consolidated subsidiaries, and impairment losses (reversal of impairment losses) of ¥9.3 billion, in addition to profit before tax of ¥64.3 billion. Major outflows included gain on sales of share and valuation of remaining share of ¥14.8 billion and income taxes paid of ¥5.7 billion.
Net cash used in investing activities was ¥12.5 billion, compared with net cash used in investing activities of ¥13.4 billion in the same period of the previous fiscal year. Major outflows were purchase of property, plant and equipment of ¥13.0 billion and purchase of intangible assets of ¥9.4 billion. Major inflows were proceeds from sale of investments in subsidiaries resulting in change in scope of consolidation of ¥7.8 billion and proceeds from redemption of bonds of subsidiaries and associates of ¥2.0 billion.
Net cash used in financing activities was ¥31.4 billion, compared with net cash used in financing activities of ¥27.9 billion in the same period of the previous fiscal year. A major outflow was dividends paid of ¥29.0 billion.

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Kyowa Hakko Kirin Co. Ltd. published this content on 01 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 November 2023 06:49:54 UTC.

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Kyowa Kirin : Consolidated Financial Summary (IFRS) Fiscal 2023 Third Quarter (0B)

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