Kyowa Kirin (4151) Q2 2024 earnings summary

Executive summary

• Revenue for Q2 2024 rose 17% year-over-year to ¥233.0B, with overseas sales ratio increasing to 71% from 63% last year, driven by global product growth and technology out-licensing, with significant positive foreign exchange effects.

• Core operating profit grew 18% year-over-year to ¥44.1B, and net profit surged 75% to ¥37.8B, reflecting higher gross profit and lower other expenses.

• Growth was driven by strong performance of Crysvita and Poteligeo in North America and EMEA, increased royalties, upfront revenue, and the Orchard Therapeutics acquisition.

• Japan revenue declined 8% due to NHI price cuts and biosimilar competition, despite new product launches.

Financial highlights

• Revenue: ¥233.0B (+17% YoY); Core operating profit: ¥44.1B (+18% YoY); Net profit: ¥37.8B (+75% YoY); Gross margin: 74%.

• Profit before tax increased by ¥20.5B, with gains from asset disposals and lower income taxes; profit before tax: ¥46.5B (+78.6%).

• Basic EPS: ¥70.76, up from ¥40.27 in the prior year period.

• Total assets as of June 30, 2024: ¥1,070.0B (+¥44.1B from Dec 2023); equity: ¥862.7B; equity ratio: 80.6%.

• Cash and cash equivalents at period end: ¥311.1B, down ¥91.9B from Dec 2023, mainly due to the Orchard Therapeutics acquisition and treasury share purchases.

Outlook and guidance

• FY2024 revenue guidance maintained or revised upward to ¥492.0B, with 71% expected from overseas.

• Core operating profit forecast at ¥92.0B; net profit guidance at ¥68.0B.

• Progress to full-year targets: revenue 47%, gross profit 48%, core OP 48%, net profit 56%.

• Guidance revision reflects strong H1 performance and updated FX assumptions (¥151/USD, ¥191/GBP, ¥163/EUR).

• Medium-term business plan KPIs (ROE 10%+, CAGR 10%+) achievement extended to 2026 or beyond.