Takeda may end fiscal 2013 effectively debt-free
TOKYO -- Takeda Pharmaceutical expects to have more cash on hand than interest-bearing debt as soon as the end of fiscal 2013, says Chief Financial Officer Francois-Xavier Roger.
That would make the major Japanese drugmaker effectively debt-free for the first time in about three years. Takeda is working to improve its financial health by paring back interest-bearing debt, and aims to position itself to take advantage of growth opportunities further down the road, including through large acquisitions.
Starting in the latter half of the 1990s, Takeda was effectively debt-free until it acquired Nycomed of Switzerland in 2011 by borrowing 600 billion yen ($5.82 billion) to finance the roughly 1 trillion yen purchase.
After 2011, Takeda refrained from major acquisitions while trimming interest-bearing debt. As of December, the firm had cut net interest-bearing debt -- interest-bearing debt minus cash on hand -- to 59 billion yen, half of what it had been a year before.
Takeda will likely return to being debt-free by the end of this fiscal year or the first quarter of the next, Roger says. Excepting a brief period at the end of fiscal 2012 when cash on hand surpassed interest-bearing debt due to a later-than-usual payment date for taxes, this would be the first time for the company to reclaim the status since purchasing Nycomed.
At the same time, the firm plans to continue increasing free cash flow, which at the end of fiscal 2012 stood at 196.3 billion yen. Takeda aims to double that figure by the end of fiscal 2015, says Roger, and triple it by the end of fiscal 2017.
The CFO also revealed that Takeda will likely hold off on major acquisitions until fiscal 2015, concentrating instead on improving earnings. That could change though, he said, if the firm is able to achieve a stronger financial position.