Otsuka (4578) Q4 2024 earnings summary

Executive summary

• Revenue rose 15.4% year-over-year to ¥2,329.9 billion, driven by strong growth in both pharmaceutical and nutraceutical businesses.

• Business profit increased 37.7% to ¥430.5 billion, with net profit surging 182.1% to ¥343.1 billion, aided by one-time U.S. tax adjustments.

• Major growth drivers included Core 2 products, ABILIFY MAINTENA, JYNARQUE, Next 8, REXULTI/RXULTI, and LONSURF.

• Acquisition of Jnana Therapeutics Inc. completed in September 2024, expanding the R&D pipeline.

• Nutraceutical revenue climbed 15.2% to ¥557.0 billion, with notable gains in women's health and overseas markets.

Financial highlights

• Cost of sales ratio improved by 1.9ppt; business profit margin rose to 18.5% (+3.0ppt year-over-year).

• ROE increased to 13.4% from 5.3% year-over-year.

• Operating cash flow before R&D investments reached ¥6,531 hundred million, up from ¥5,762 hundred million.

• EPS jumped to ¥633.8 from ¥224.1 year-over-year.

• Cash and cash equivalents at year-end: ¥426,173 million.

Outlook and guidance

• FY2025 revenue forecasted at ¥2,380.0 billion (+2.2%), with net profit expected to rise 5.5% to ¥275.0 billion, excluding prior year’s one-time tax benefit.

• Business profit before R&D expenses projected at ¥727.0 billion, offsetting JYNARQUE’s loss of exclusivity by growth in other drivers.

• Business profit expected to decline 12.9% to ¥375,000 million.

• R&D expenses to increase by 12% to ¥352.0 billion, reflecting continued investment in pipeline and new acquisitions.