You should read the following discussion of our operating and financial review and prospects together with our consolidated financial statements included in Item 18 in this annual report. Our consolidated financial statements are prepared in accordance with IFRS, as issued by the International Accounting Standards Board (“IASB”). IFRS includes IAS and related interpretations of the committees (SIC and IFRIC). The following discussion and analysis contain forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of factors, including, but not limited to, those under Item 3. D “Risk Factors” and elsewhere in this annual report. A. Operating Results Overview Takeda is a global R&D-driven biopharmaceutical company focused on discovering and delivering life-transforming treatments in our core therapeutic areas of gastrointestinal and inflammation, neuroscience and oncology, as well as through our plasma-derived therapies and vaccines business. We have grown both organically and through acquisitions, completing a series of major transactions that have resulted in growth in our areas of therapeutic, geographic and pipeline focus. For more information on the history and development of our company, please refer to “Item 4.A. History and Development of the Company”. Our business is organized as a single operating segment, reflecting the presentation of information to our management for the purposes of allocating resources, measuring performance and forecasting future periods. For the fiscal year ended March 31, 2026, our revenue and operating profit were JPY 4,505.7 billion and JPY 6.2 billion, respectively. Operating Environment Over the past several years, we have extended our global reach, strengthened our presence in Oncology, GI and Neuroscience, and established a leading position in Rare Diseases and PDT, while adding significant assets to our growing R&D pipeline. Commercially, we have significantly strengthened our presence in the United States, Europe, and other key markets, such as China. We have also accelerated our focus on data, digital and technology to make our business operations more effective and efficient, leading to greater innovation and better serving our stakeholders. Factors Affecting Our Results of Operations Our results are affected by global industry trends and our operating environment as described in “Item 3.D. Risk Factors” and “Item 4. Information on the Company” of this annual report and other factors described below. Patent Protection and Generic Competition For pharmaceutical products, in particular, patent protection and/or regulatory exclusivity benefit our results of operations by restricting competition. Newly introduced products, particularly those which treat conditions for which alternative treatments may not be readily available, may significantly contribute to sales. However, even protected products must compete with products of other manufacturers based on efficacy, lack of adverse reactions and price. On the other hand, the loss or expiration of patent protection or regulatory exclusivity with respect to any of our principal products could have a material adverse effect on our results of operations, as generic products, which tend to be quickly adopted once introduced, may enter the market. Some of our principal products face, or are expected to face, considerable competition due to the expiration of patent or other intellectual property protection. The following chart shows the performance of certain of our key products that have experienced the launch of generic or biosimilar competitors in the last three years (CER, or constant exchange rate, % change is a non-IFRS measure. For additional information on CER % change, see “Annex to Item 5. Certain Supplemental Non-IFRS Measures as Defined and Presented by Takeda”). Billion JPY or percentage Revenue: For the fiscal year ended March 31, 2025 2026 JPY Change CER % change VYVANSE/ELVANSE 350.6 203.2 (147.4) (43.0) % AZILVA 11.8 7.1 (4.7) (39.5) % Billion JPY or percentage Revenue: For the fiscal year ended March 31, 2024 2025 JPY Change CER % change VYVANSE/ELVANSE 423.2 350.6 (72.6) (21.6) % AZILVA 33.6 11.8 (21.8) (64.9) % 59 Table of Contents Generic erosion has negatively impacted sales of VYVANSE/ELVANSE, the composition of matter patent of which expired in the U.S. in August 2023, and a generic version of AZILVA was approved by the PMDA in Japan in February 2023 (with a drug price listing for the generic competitor approved in June 2023), leading to declines in sales for both products in the relevant jurisdictions. Sales of VYVANSE/ELVANSE decreased from JPY 350.6 billion in the fiscal year ended March 31, 2025 to JPY 203.2 billion in the fiscal year ended March 31, 2026; sales of AZILVA decreased from JPY 11.8 billion to JPY 7.1 billion over the same period. We expect these declining trends for both of these products to continue in the fiscal year ending March 31, 2027. In addition, we expect to face generic competition for TRINTELLIX, which generated JPY 121.8 billion in revenue in the fiscal year ended March 31, 2026, following the expiration of certain exclusivity in December 2026. In certain cases, generic competitors may successfully challenge the validity of patents, or the manufacturer may decide that the benefits of prematurely launching the generic drug “at risk” outweigh the costs of defending infringement litigation. In situations where the validity of patents or the value of the protection is challenged, we may record impairment losses with respect to the relevant intangible property. Development and Commercialization of New Products and Expansion of Existing Products The development and commercialization of new biopharmaceutical products is key to our business, as is the expansion of existing products to additional indications and/or geographic markets, particularly as we seek to grow our revenue and to offset the effect of losses of exclusivity. The process to achieve these goals is lengthy and expensive and requires us to incur significant research and development costs, which are recorded as a component of operating expenses in our consolidated statements of income. See “Item 4. Information on the Company—B. Business Overview—Research and Development” for information about our research and development efforts, and Note 3 to our audited consolidated financial statements contained in elsewhere in this annual report for discussions of our accounting policies regarding research and development expenses and intangible assets relating to products (including amortization and impairment thereof). In the fiscal year ended March 31, 2026, Takeda referred to certain products in its portfolio as “Growth & Launch Products1,” which Takeda’s management monitored given their importance to business performance. In the fiscal year ended March 31, 2026, these Growth & Launch Products accounted for JPY 2,313.3 billion, or 51%, of our consolidated revenue. In particular, in the fiscal year ended March 31, 2026, ENTYVIO accounted for JPY 958.0 billion or 21% of our consolidated revenue, our immunoglobulin brands (including GAMMAGARD LIQUID/KIOVIG, HYQVIA and CUVITRU) accounted for JPY 790.6 billion or 18% of our consolidated revenue, ALBUMIN accounted for JPY 140.3 billion or 3% of our consolidated revenue, and TAKHZYRO accounted for JPY 223.9 billion or 5% of our consolidated revenue. Beginning in fiscal year ending March 31, 2027, we are retiring the “Growth & Launch Products” category to refocus on “New Launches,” consisting of products that are within 5 years of launch, while creating a separate category of “Core In-line Brands” for established products that have been marketed for six or more years, generate over JPY 100 billion in revenue and continue to be actively marketed. Although the contribution to consolidated revenue by New Launches may be limited in the early stages of their life cycle, Takeda’s management monitors these products in particular as key drivers of future growth, and believes that information on these products is useful to investors to understand where Takeda expects growth to arise in the future. The specific products that make up this group may vary over time, and products may be added or removed to this group depending on, among other things, the results of clinical trials and regulatory approvals being obtained. As of the start of fiscal year ending March 31, 2027, New Launches consists of EOHILIA, LIVTENCITY, ADZYNMA, FRUZAQLA and QDENGA, and Core In-Line Brands consists of ENTYVIO, GATTEX/REVESTIVE, TAKECAB/VOCINTI, TAKHZYRO, Immunoglobulin products (including GAMMAGARD LIQUID/KIOVIG, HYQVIA and CUVITRU), Albumin products (including HUMAN ALBUMIN/FLEXBUMIN), and ADCETRIS. In the fiscal year ended March 31, 2026, we submitted New Drug Applications (“NDAs”) in the U.S. for oveporexton and rusfertide following successful Phase 3 clinical trial results. The FDA subsequently accepted the NDAs and granted Priority Review for both assets. Furthermore, positive Phase 3 clinical readouts were achieved for zasocitinib, and an NDA submission to the FDA is anticipated in the near future. These developments could result in commercial launches for oveporexton, rusfertide, and zasocitinib in 2026 and 2027, and the designation of these products as New Launches within our disclosed product categories. Acquisitions We may acquire new businesses or assets to expand our R&D capabilities (including expanding into new methodologies) and to acquire new products (whether in the development pipeline or at the marketing stage) or enter other strategic regions. Similarly, we divest from businesses and product lines to maintain our focus on our key growth drivers and to manage our portfolio. We account for acquisitions as business combinations or asset acquisitions. For business combinations, we record the assets acquired and liabilities assumed at fair value, which impacts our results in future periods due to costs related to unwinding fair value step-ups of inventory and amortization expense of acquired property, plant and equipment and intangible assets. For assets acquisitions, we record the assets acquired at transaction price. Our results are also impacted due to additional interest expense when an acquisition is financed with incremental borrowings. There were no significant acquisitions of businesses or assets during the fiscal years ended March 31, 2024, 2025, and 2026, nor through the issuance date of this annual report. For collaborations, licensing arrangements and other asset acquisitions, see “Item 4. Information on the Company—B. Business Overview—Licensing and Collaboration” as well as Note 13 to our audited consolidated financial statements. 1 As of the date of this annual report, Growth and Launch products for the fiscal year ended March 31, 2026 consist of: ENTYVIO, EOHILIA, TAKHZYRO, LIVTENCITY, ADZYNMA, Immunoglobulin products (including GAMMAGARD LIQUID/KIOVIG, HYQVIA and CUVITRU), Albumin products (including HUMAN ALBUMIN/FLEXBUMIN), FRUZAQLA, ALUNBRIG and QDENGA. 60 Table of Contents Divestitures In addition to acquisitions, we divested from businesses and product lines to maintain our focus on our key growth drivers and provide additional cash flow to accelerate the repayment of debts. The following are our major divestitures completed or announced in the fiscal years ended March 31, 2025. We had no such major divestitures in the fiscal years ended March 31, 2024 or 2026, or from April 1, 2026 and through the issuance of this annual report. •During the fiscal year ended March 31, 2025, Takeda decided to enter into discussions with Teva Pharmaceutical Industries Ltd. to dissolve a joint venture business in Japan primarily focused on generic medicines and long-listed products. Following the decision, Takeda reclassified all of its outstanding shares in its associate, Teva Takeda Pharma Ltd., to assets held for sale and recorded an impairment loss of JPY 18.9 billion. Upon the completion of the transfer in March 2025, Takeda received the proceeds from the sale of shares in the associate of JPY 56.5 billion, including JPY 50.8 billion of dividends received, and this amount comprised the majority of Takeda’s proceeds from sales of shares in associates in the consolidated statement of cash flows of JPY 57.7 billion for the fiscal year ended March 31, 2025. Takeda also recognized JPY 1.7 billion in revenue and JPY 3.8 billion in other operating income due to the realization of the unrealized profit from past transactions. Impact of the Availability of Raw Materials Our results of operations may be negatively impacted if we are not able to internally or externally source critical raw materials. For example, human plasma is a critical raw material in our PDT. Efforts to increase the collection of plasma may require strengthening acquisition and third-party contracting capacities and successful regulatory approval of additional plasma collection facilities and plasma fractionation facilitates. Foreign Exchange Fluctuations In the fiscal year ended March 31, 2024, 2025 and 2026, 89.4%, 90.9% and 90.4% of our revenue were from outside of Japan. Changes in foreign exchange rates, particularly for the U.S. dollar and the euro, relative to the yen, which is our reporting currency, will impact our operating results. When the yen weakens against other currencies, our revenues attributable to such other currencies increase, having a positive impact on our results of operations, which may be offset by increased expenses denominated in such currencies. Particularly, our revenues were positively impacted by the weakened yen against other currencies during the fiscal years ended March 31, 2024, 2025 and 2026. Conversely, when the yen strengthens against other currencies, our revenues attributable to such currencies decrease, having a negative impact on our results of operations, which may be offset by decreased expenses denominated in such currencies. In order to help investors understand the effect of year-over-year exchange rate fluctuations on its results, Takeda presents, on a supplementary basis, year-over-year percentage changes calculated on the basis of constant exchange rates, which it refers to as “CER” change (year-over-year changes calculated on the basis of actual exchange rates, in accordance with IFRS, are referred to as “AER” change). See “Item 5. Operating and Financial Review and Prospects —A. Operating Results” for the analysis of our operating results year-over-year with CER percentage changes. CER Change is a measure not presented in accordance with IFRS. See “Annex to Item 5. Certain Supplemental Non-IFRS Measures as Defined and Presented by Takeda” for more information. To mitigate the risk exposed by foreign exchange fluctuations, we utilize certain hedging measures with respect to some of our significant foreign currency transactions, primarily forward exchange contracts, currency swaps and currency options for individually significant foreign currency transactions. Periodic Trends Our revenues were lower in the fourth quarter of each of the fiscal years ended March 31, 2024, 2025, and 2026 partially due to the tendency of wholesalers to increase purchases ahead of the New Year holidays across regions and annual price increases, as well as the reset of annual insurance deductibles in the U.S. at the start of the calendar year. 61 Table of Contents Critical Accounting Policies Our consolidated financial statements have been prepared in accordance with IFRS. The preparation of our consolidated financial statements requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. On an ongoing basis, management evaluates its estimates and assumptions. Management bases its estimates and assumptions on historical experience and on various other factors that it believes to be reasonable at the time the estimates and assumptions are made. Actual outcomes may differ from those estimates and assumptions. We believe the following critical accounting policies are affected by management’s estimates and assumptions, changes to which could have a significant impact on our consolidated financial statements. Revenue Recognition See Note 3 “Material Accounting Policies—Revenue” to our audited consolidated financial statements Impairment of Goodwill and Intangible Assets We review goodwill and intangible assets for impairment whenever events or changes in circumstance indicate that the asset’s balance sheet carrying amount may not be recoverable. Goodwill and intangible assets that are currently not amortized are tested for impairment annually and whenever there is any indication of impairment. As of March 31, 2026, we have JPY 5,809.0 billion of goodwill and JPY 3,419.3 billion of intangible assets which in aggregate represent 59.5% of our total assets. An intangible asset associated with a marketed product is amortized on a straight-line basis over the estimated useful life, which is based on expected patent life, and/or other factors depending on the expected economic benefits of the asset, ranging from 3 to 20 years. Intangible assets related to in-process research and development (“IPR&D”) product rights are not amortized until the product is approved for sale by regulatory authorities in specified markets. At that time, we will determine the useful life of the asset and begin amortization. Goodwill and intangible assets are generally considered impaired when their balance sheet carrying amount exceeds their estimated recoverable amount. The recoverable amount of an intangible asset is estimated for each individual asset or at the larger cash generating unit (CGU) level when cash is generated in combination with other assets. Our cash generating units or group of cash generating units are identified based on the smallest identifiable group of assets that generate independent cash inflows. Goodwill is tested for impairment at the single operating segment level (one CGU), which is the level at which goodwill is monitored for internal management purposes. The estimation of the recoverable value requires us to make a number of assumptions including: •amount and timing of projected future cash flows; •behavior of competitors (launch of competing products, marketing initiatives, etc.); •probability of obtaining regulatory approvals; •future tax rates; •terminal growth rate; and •discount rates. The significant assumptions used in estimating the amount and timing of future cash flows are the probability of technical and regulatory success related to IPR&D projects and the sales forecast of the products. The sales forecast related to certain products in the U.S. is one of the significant assumptions used in estimating the recoverable amount of goodwill. Events that may result in a change in the assumptions include IPR&D projects that are not successfully developed, fail during development, are abandoned or subject to significant delay or do not receive the relevant regulatory approvals, and/or lower sales projections of certain commercially marketed products typically due to launch of newly competing products, and supply constraints. If these events were to occur, we may not recover the value of the initial or subsequent R&D investments made subsequent to acquisition of the asset project nor realize the future cash flows that we have estimated. If there are changes in these assumptions in subsequent periods, we recognize impairment losses and, excluding goodwill, reversal of impairment losses related to intangible assets during the periods presented. See Notes 11 and 12 to our audited consolidated financial statements. 62 Table of Contents Legal Contingencies We are involved in various legal proceedings primarily related to product liability and commercial liability arising in the normal course of our business. These contingencies are described in detail in Note 31 to our consolidated financial statements. These and other contingencies are, by their nature, uncertain and based upon complex judgments and probabilities. The factors we consider in developing our provision for litigation and other contingent liability amounts include the merits and jurisdiction of the litigation, the nature and the number of other similar current and past litigation cases, the nature of the product and the current assessment of the science subject to the litigation, and the likelihood of settlement and current state of settlement discussions, if any. In addition, we record a provision for product liability claims incurred, but not filed, to the extent we can formulate a reasonable estimate of their costs based primarily on historical claims experience and data regarding product usage. In cases we may become involved in significant legal proceedings for which it is not possible to make a reliable estimate of the expected financial effect, if any, which may result from ultimate resolution of the proceedings, no provision is recognized for such cases. We also consider the insurance coverage we have to diminish the exposure for periods covered by insurance. In assessing our insurance coverage, we consider the policy coverage limits and exclusions, the potential for denial of coverage by the insurance company, the financial condition of the insurers, and the possibility of and length of time for collection. Any provision and the related estimated insurance recoverable have been reflected on a gross basis as liabilities and assets, respectively, on our consolidated statements of financial position. As of March 31, 2026, we had a provision of JPY 415.7 billion for outstanding legal cases and other disputes. Income Taxes We prepare and file our tax returns based on our interpretation of tax laws and regulations, and record tax provisions based on these judgments and interpretations. In the normal course of business, our tax returns are subject to examination by various tax authorities, which may result in additional tax, interest or penalty assessment by these authorities. Inherent uncertainties exist in the evaluation of many uncertain tax positions including as a result of changes in tax law resulting from legislation, regulation and judicial decisions across various jurisdictions. When we determine that it is not probable that a tax authority will accept an uncertain tax position, we recognize a liability based on the expected resolution of the uncertainty. Uncertain tax positions are adjusted for changes in facts and circumstances. For example, adjustments could result from changes to existing tax law, the issuance of new regulations or administrative interpretations by the tax authorities, new information obtained during a tax examination, or settlement of a tax examination. We believe that our estimates for uncertain tax positions are reasonable and appropriately reflect currently known facts and circumstances. However, the ultimate resolution of these matters may differ materially from the amounts recognized. We also assess our deferred tax assets to determine the realizable amount at the end of each period. In assessing the recoverability of deferred tax assets, we consider the scheduled reversal of taxable temporary differences, projected future taxable profits, and tax planning strategies. Projected future taxable profits are estimated based on our business plans. Changes in judgment related to forecasted revenues used for our business plans could have a significant impact on the amount of the deferred tax assets to be recognized. Based on the level of historical taxable profits and projected future taxable profits during the periods in which the temporary differences become deductible, we determine the amount of tax benefits we believe are realizable. As of March 31, 2026, we had unused tax losses, deductible temporary differences, and unused tax credits for which deferred tax assets were not recognized of JPY 1,207.3 billion, JPY 713.8 billion, and JPY 29.4 billion, respectively. Changes in our estimates and assumptions in future periods could have a significant impact on our income tax provision. Restructuring Costs We incur restructuring costs associated with planned initiatives to reduce our costs. Our most significant restructuring costs are severance payments. We establish a provision for restructuring costs when we have developed a detailed formal plan for the restructuring and, through an execution of the plan or an announcement of its main features to those affected by it, a valid expectation has been raised in those affected by the plan that the plan will be implemented. The recognition of restructuring provision requires estimates including timing of payments and the number of individuals impacted by the restructuring. As a result of these estimates, the actual restructuring costs may differ from our estimates. On May 9, 2024, we announced a multi-year, enterprise-wide efficiency program aimed at promoting business growth and improving our profitability. This program includes increasing the agility and simplicity of our business organization, investing in digital, data and technology to enhance productivity and efficiency across the organization and implementing cost reductions and process improvements in supply chain and vendor management. Primarily as a result of the initiatives announced in May 2024, we recorded JPY 128.1 billion and JPY 70.8 billion of restructuring expenses in the fiscal year ended March 31, 2025 and March 31, 2026, respectively. On March 25, 2026, we announced that our Board of Directors had approved the next steps in our initiatives to enhance our long-term growth profile and accelerate launch execution, including through the streamlining of corporate functions and process simplifications through the use of advanced technologies. We currently expect to incur JPY 170 billion of restructuring expenses in the fiscal year ending March 31, 2027, with lower restructuring expenses to be recorded in the fiscal years ending March 31, 2028 and 2029. As of March 31, 2026, we had a provision of JPY 27.9 billion for restructuring costs. See Note 22 to our audited consolidated financial statements for a further description of our restructuring provisions and the change between periods. 63 Table of Contents Results of Operations The following table provides selected consolidated statements of profit or loss information for the years ended March 31, 2024, 2025 and 2026: For the fiscal year ended March 31, 2024 2025 2026 (billions of yen) Revenue ¥ 4,263.8 ¥ 4,581.6 ¥ 4,505.7 Cost of sales (1,426.7) (1,580.2) (1,571.6) Selling, general and administrative expenses (1,053.8) (1,104.8) (1,084.2) Research and development expenses (729.9) (730.2) (675.9) Amortization and impairment losses on intangible assets associated with products (652.1) (643.2) (633.5) Other operating income 19.4 26.2 24.7 Other operating expenses (206.5) (206.7) (559.0) Operating profit 214.1 342.6 6.2 Finance income 52.1 46.5 211.2 Finance expenses (219.8) (210.1) (357.6) Share of profit (loss) of investments accounted for using the equity method 6.5 (4.0) (2.2) Profit (loss) before tax 52.8 175.1 (142.4) Income tax (expenses) benefit 91.4 (66.9) (9.8) Net profit (loss) for the year 144.2 108.1 (152.1) Net profit (loss) for the year attributable to owners of the Company ¥ 144.1 ¥ 107.9 ¥ (152.4) In this section, changes versus the previous fiscal year are given both on an as-reported (IFRS) basis (also referred to as “AER”) and, on a supplementary basis, using constant exchange rates (CER), as calculated by Takeda. CER % change is a Non-IFRS Measure. For additional information on CER % change, see “Annex to Item 5. Certain Supplemental Non-IFRS Measures as Defined and Presented by Takeda”. Fiscal Year Ended March 31, 2026 compared with the Fiscal Year Ended March 31, 2025 Revenue Revenue for the fiscal year ended March 31, 2026 was JPY 4,505.7 billion (JPY -75.8 billion and -1.7% AER, -2.7% CER). The decline compared to the previous fiscal year was primarily attributable to a decrease in revenue in Neuroscience, one of our six key business areas. The decrease in Neuroscience was largely attributable to the continued impact from generic erosion of VYVANSE (for attention deficit hyperactivity disorder (“ADHD”)) in the U.S. Revenue increased in our other five key business areas of Gastroenterology (“GI”), Rare Disease, Plasma-Derived Therapies (“PDT”), Oncology and Vaccines. Certain products faced headwinds due to the impact of the Medicare Part D redesign and 340B program expansion in the U.S., while there was stable demand in other regions and for other products. Revenue outside of our six key business areas was JPY 224.0 billion (JPY -33.4 billion and -13.0% AER, -15.9% CER). 64 Table of Contents Revenue by Geographic Region The following shows revenue by geographic region: Billion JPY or percentage For the fiscal year ended March 31, AER CER Revenue: 2025 2026 JPY Change % Change % Change Japan ¥ 418.5 ¥ 433.1 ¥ 14.6 3.5 % 3.4 % United States 2,379.7 2,164.8 (214.8) (9.0) % (7.7) % Europe and Canada 1,055.3 1,146.2 91.0 8.6 % 3.0 % Latin America 235.8 254.1 18.3 7.8 % 4.9 % China 191.7 195.1 3.4 1.8 % 1.4 % Asia (excluding Japan & China) 99.4 98.7 (0.7) (0.7) % (0.3) % Russia/CIS 72.4 79.7 7.4 10.2 % 0.7 % Other* 128.8 133.9 5.0 3.9 % 1.0 % Total 4,581.6 4,505.7 (75.8) (1.7) % (2.7) % *Other includes the Middle East, Oceania and Africa. Revenue by Business Area The following shows revenue by business area: Billion JPY or percentage For the fiscal year ended March 31, AER CER 2025 2026 JPY Change % Change % Change Gastroenterology: ENTYVIO ¥ 914.1 ¥ 958.0 ¥ 43.9 4.8 % 4.2 % GATTEX/REVESTIVE 146.3 145.7 (0.6) (0.4) (0.1) TAKECAB/VOCINTI * 130.8 143.7 12.9 9.9 9.6 DEXILANT 38.5 37.3 (1.3) (3.3) (5.2) EOHILIA 5.5 8.8 3.3 61.0 63.2 RESOLOR/MOTEGRITY 19.5 7.3 (12.2) (62.7) (62.8) Others 102.4 106.8 4.4 4.3 1.5 Total Gastroenterology 1,357.0 1,407.5 50.4 3.7 3.1 Rare Diseases: TAKHZYRO 223.2 223.9 0.8 0.3 (0.4) ADVATE 111.8 105.5 (6.2) (5.6) (6.8) ELAPRASE 97.2 100.5 3.2 3.3 0.8 REPLAGAL 77.9 80.4 2.6 3.3 (0.5) ADYNOVATE/ADYNOVI 64.6 56.7 (7.9) (12.3) (13.1) LIVTENCITY 33.0 46.9 13.9 42.2 41.0 VONVENDI 20.9 25.3 4.3 20.8 18.6 ADZYNMA 7.1 12.0 4.9 68.8 65.1 Others 117.2 111.5 (5.7) (4.8) (6.2) Total Rare Diseases 752.8 762.7 9.9 1.3 (0.3) 65 Table of Contents PDT: Immunoglobulin 757.8 790.6 32.8 4.3 4.1 Albumin 141.4 140.3 (1.1) (0.8) (2.1) FEIBA 39.4 32.9 (6.6) (16.6) (17.7) HEMOFIL/IMMUNATE/IMMUNINE 25.6 25.4 (0.2) (0.8) (4.8) Others 68.5 68.4 (0.1) (0.1) (0.8) Total PDT 1,032.7 1,057.5 24.9 2.4 1.9 Oncology: ADCETRIS 129.0 140.2 11.2 8.7 5.3 LEUPLIN/ENANTONE 119.3 120.8 1.5 1.3 (0.4) NINLARO 91.2 82.1 (9.1) (10.0) (10.5) ICLUSIG 70.7 75.0 4.3 6.1 5.6 FRUZAQLA 48.0 55.1 7.2 14.9 14.6 ALUNBRIG 36.4 36.9 0.5 1.4 0.2 Others 65.8 69.9 4.1 6.3 5.0 Total Oncology 560.4 580.1 19.7 3.5 2.0 Vaccines: QDENGA 35.6 40.8 5.2 14.6 10.7 Others 19.8 18.8 (1.0) (5.0) (5.0) Total Vaccines 55.4 59.6 4.2 7.6 5.1 Neuroscience: VYVANSE/ELVANSE 350.6 203.2 (147.4) (42.0) (43.0) TRINTELLIX 125.7 121.8 (3.9) (3.1) (1.9) ADDERALL XR 28.4 24.7 (3.7) (13.0) (12.1) Others 61.0 64.5 3.5 5.7 4.4 Total Neuroscience 565.8 414.3 (151.5) (26.8) (27.2) Other: FOSRENOL 7.9 8.8 0.9 11.8 7.4 AZILVA * 11.8 7.1 (4.7) (39.5) (39.5) Others 237.7 208.0 (29.7) (12.5) (15.5) Total Other 257.4 224.0 (33.4) (13.0) (15.9) Total 4,581.6 ¥ 4,505.7 ¥ (75.8) (1.7) % (2.7) % * The figures include the amounts of fixed dose combinations and blister packs. Year-on-year change in revenue for this fiscal year in each of our business areas was primarily attributable to the following products: •GI. In GI, revenue was JPY 1,407.5 billion (JPY +50.4 billion and +3.7% AER, +3.1% CER). Sales of ENTYVIO (for ulcerative colitis and Crohn’s disease) were JPY 958.0 billion (JPY +43.9 billion and +4.8% AER, +4.2% CER). Sales in the U.S. were JPY 623.7 billion (JPY +4.5 billion and +0.7% AER). The increase was driven by growth of the subcutaneous formulation, offset by unfavorable foreign exchange rates against the U.S. dollar. Sales in Europe and Canada were JPY 256.7 billion (JPY +29.3 billion and +12.9% AER). The increase was primarily due to continued patient gains through an increased use of the subcutaneous formulation, accompanied by favorable foreign exchange rates against the Euro. Sales of TAKECAB/VOCINTI (for acid-related diseases) were JPY 143.7 billion (JPY +12.9 billion and +9.9% AER, +9.6% CER). The increase was due to strong demand in China and Japan. Sales of EOHILIA (for Eosinophilic Esophagitis) were JPY 8.8 billion (JPY +3.3 billion and +61.0% AER, +63.2% CER). The increase was due to strong demand in the U.S. Sales of RESOLOR/MOTEGRITY (for chronic idiopathic constipation) were JPY 7.3 billion (JPY -12.2 billion and -62.7% AER, -62.8% CER). The decrease was primarily due to the impact of multiple generic entrants in the U.S. beginning in January 2025. •Rare Diseases.In Rare Diseases, revenue was JPY 762.7 billion (JPY +9.9 billion and +1.3% AER, -0.3% CER). 66 Table of Contents Sales of LIVTENCITY (for post-transplant cytomegalovirus infection/disease) were JPY 46.9 billion (JPY +13.9 billion and +42.2% AER, +41.0% CER). The increase was primarily attributable to continued performance in the U.S. market reflecting strong market penetration, complemented by continued geographical expansion in Europe and the Growth and Emerging Markets. Sales of ADZYNMA (for congenital thrombotic thrombocytopenic purpura) were JPY 12.0 billion (JPY +4.9 billion and +68.8% AER, +65.1% CER). The increase was due to post-launch growth in Europe, reflecting an unmet need for treatment of an ultra-rare patient population. Sales of VONVENDI (for von Willebrand Disease) were JPY 25.3 billion (JPY +4.3 billion and +20.8% AER, +18.6% CER). The increase was due to the expanded indication of VONVENDI, enabling prophylactic use for adult populations. Sales of ADYNOVATE/ADYNOVI (for hemophilia A) were JPY 56.7 billion (JPY -7.9 billion and -12.3% AER, -13.1% CER). The decrease was primarily due to competitive pressure in the U.S. Sales of ADVATE (for hemophilia A) were JPY 105.5 billion (JPY -6.2 billion and -5.6% AER, -6.8% CER). The decrease was primarily due to competitive pressure in the U.S. •PDT. In PDT, revenue was JPY 1,057.5 billion (JPY +24.9 billion and +2.4% AER, +1.9% CER). Aggregate sales of immunoglobulin products, mainly used for the treatment of primary immunodeficiency, chronic inflammatory demyelinating polyneuropathy, and multifocal motor neuropathy, were JPY 790.6 billion (JPY +32.8 billion and +4.3% AER, +4.1% CER). The increase was driven by growth in subcutaneous immunoglobulin therapies, CUVITRU and HYQVIA, while sales of GAMMAGARD LIQUID/KIOVIG, which are intravenous immunoglobulin therapies, slightly increased, despite the impacts of the Medicare Part D redesign in the U.S. and unfavorable foreign exchange rates against the U.S. dollar. Sales of FEIBA (for hemophilia A and B) were JPY 32.9 billion (JPY -6.6 billion and -16.6% AER, -17.7% CER). The decrease was driven by competitive pressure from recombinant therapies globally. •Oncology. In Oncology, revenue was JPY 580.1 billion (JPY +19.7 billion and +3.5% AER, +2.0% CER). Sales of ADCETRIS (for malignant lymphomas) were JPY 140.2 billion (JPY +11.2 billion and +8.7% AER, +5.3% CER). The increase was led by strong demand in Europe and the Growth and Emerging Markets, accompanied by favorable foreign exchange rates against the Euro. Sales of FRUZAQLA (for colorectal cancer) were JPY 55.1 billion (JPY +7.2 billion and +14.9% AER, +14.6% CER). The increase was due to the successful launch in Europe, Japan and the Growth and Emerging Markets, as it addressed a need for new treatment options in metastatic colorectal cancer. The increase was partially offset by a sales decline in the U.S., impacted by the Medicare Part D redesign. Sales of ICLUSIG (for leukemia) were JPY 75.0 billion (JPY +4.3 billion and +6.1% AER, +5.6% CER). The increase was primarily due to a sales increase in Canada. Sales of LEUPLIN/ENANTONE (for endometriosis, uterine fibroids, premenopausal breast cancer, prostate cancer, and other certain indications) were JPY 120.8 billion (JPY +1.5 billion and +1.3% AER, -0.4% CER). The increase was primarily due to favorable foreign exchange rates against the Euro. Sales of NINLARO (for multiple myeloma) were JPY 82.1 billion (JPY -9.1 billion and -10.0% AER, -10.5% CER). The decrease was primarily due to intensified competition and decreased demand mainly in the U.S., partially offset by a sales increase in the Growth and Emerging Markets. •Vaccines. In Vaccines, revenue was JPY 59.6 billion (JPY +4.2 billion and +7.6% AER, +5.1% CER). Sales of QDENGA (for prevention of dengue) were JPY 40.8 billion (JPY +5.2 billion and +14.6% AER, +10.7% CER). The increase was due to post-launch growth in the Growth and Emerging Markets, driven by higher demand. Sales of other vaccine products in aggregate decreased primarily due to the continued temporary suspension of shipments of MR vaccine (for prevention of measles and rubella) in Japan. •Neuroscience. In Neuroscience, revenue was JPY 414.3 billion (JPY -151.5 billion and -26.8% AER, -27.2% CER). Sales of VYVANSE/ELVANSE (for ADHD) were JPY 203.2 billion (JPY -147.4 billion and -42.0% AER, -43.0% CER). The decrease was due to the continued impact of generic erosion mainly in the U.S. 67 Table of Contents Cost of Sales Cost of Sales was JPY 1,571.6 billion (JPY -8.6 billion and -0.5% AER, -1.9% CER). The decrease was primarily due to lower revenue as well as an adjustment to Cost of Sales recorded in the fiscal year ended March 31, 2025 following the implementation of an accounting process to recognize accumulated foreign currency impacts of inventories. However, these factors were largely offset by an increase in the cost ratio due to changes in product mix driven by generic erosion, particularly for VYVANSE in the U.S., and foreign exchange impacts from the depreciation of the Japanese yen against the Euro. Selling, General and Administrative (SG&A) Expenses SG&A Expenses were JPY 1,084.2 billion (JPY -20.6 billion and -1.9% AER, -2.5% CER). The decrease was primarily due to cost savings under the enterprise-wide efficiency program. Research and Development (R&D) Expenses R&D Expenses were JPY 675.9 billion (JPY -54.3 billion and -7.4% AER, -7.0% CER). The decrease was primarily due to lower expenses in various development programs resulting from the termination or progression of development activities, the co-development funding for mezagitamab recognized as a reduction of R&D expenses, and cost savings under the enterprise-wide efficiency program. This was partially offset by increased investment in late-stage pipeline programs, including zasocitinib and elritercept. Amortization and Impairment Losses on Intangible Assets Associated with Products Amortization and Impairment Losses on Intangible Assets Associated with Products were JPY 633.5 billion (JPY -9.7 billion and -1.5% AER, -1.7% CER). The decrease was due to lower amortization expenses (JPY -43.9 billion), mainly reflecting the completion of amortization of intangible assets related to VYVANSE/ELVANSE, partially offset by an increase in impairment losses (JPY +34.2 billion). Impairment losses for the fiscal year ended March 31, 2026 included JPY 58.2 billion related to the gamma delta T-cell therapy platform and associated oncology programs recorded following the decision to discontinue cell therapy research, and JPY 31.9 billion related to ALUNBRIG, a treatment for non-small cell lung cancer, recorded due to a reduction in future sales forecasts. Impairment losses for the fiscal year ended March 31, 2025 included JPY 27.8 billion recorded following the decision to terminate the development of TAK-186 and TAK-280 acquired through Maverick Therapeutics Inc., and JPY 21.5 billion recorded as a result of Phase 3 studies of soticlestat (TAK-935) failing to meet their primary endpoints. Other Operating Income Other Operating Income was JPY 24.7 billion (JPY -1.5 billion and -5.6% AER, -4.4% CER). The decrease was due to a gain arising from changes in the fair value of financial liabilities associated with contingent consideration agreement recorded in the fiscal year ended March 31, 2025 and other decreases in the fiscal year ended March 31, 2026 mostly offset by the increase in the divestiture gains recorded in the fiscal year ended March 31, 2026. Other Operating Expenses Other Operating Expenses were JPY 559.0 billion (JPY +352.2 billion and +170.4% AER, +168.9% CER). The increase was primarily attributable to the recognition of provisions for legal proceedings of JPY 403.5 billion following the jury verdict in the AMITIZA antitrust litigation in the U.S. for the fiscal year ended March 31, 2026. The increase was partially offset by a decrease of JPY 57.3 billion in restructuring expenses, reflecting lower costs under the enterprise-wide efficiency program. Operating Profit As a result of the above factors, Operating Profit was JPY 6.2 billion (JPY -336.4 billion and -98.2% AER). Net Finance Expenses Net Finance Expenses were JPY 146.4 billion (JPY -17.1 billion and -10.5% AER, -7.5% CER). The decrease was primarily attributable to an impairment loss of JPY 18.9 billion related to the sale of Teva Takeda Pharma Ltd. shares recognized in the fiscal year ended March 31, 2025. Share of Loss of Investments Accounted for Using the Equity Method Share of Loss of Investments Accounted for Using the Equity Method was JPY 2.2 billion (JPY -1.8 billion and -45.4% AER, -52.9% CER). Income Tax Expenses Income Tax Expenses were JPY 9.8 billion (JPY -57.2 billion and -85.4% AER, -97.6% CER ) . The decrease was primarily attributable to a JPY 58.4 billion increase in Deferred Tax Assets resulting from the recognition of provisions for legal proceedings recorded following the jury verdict in the AMITIZA antitrust litigation in the U.S. for the fiscal year ended March 31, 2026. Net Profit (Loss) for the Year As a result of the above factors, Net Loss for the Year was JPY 152.1 billion (JPY -260.3 billion, compared to Net Profit for the Year of JPY 108.1 billion for the fiscal year ended March 31, 2025) and Net Loss for the Year attributable to owners of the Company was JPY 152.4 billion (JPY -260.3 billion, compared to Net Profit for the Year attributable to owners of the Company of JPY 107.9 billion for the fiscal year ended March 31, 2025). Fiscal Year Ended March 31, 2025 compared with the Fiscal Year Ended March 31, 2024 Revenue Revenue for the fiscal year ended March 31, 2025 was JPY 4,581.6 billion (JPY +317.8 billion and +7.5% AER, +2.9% CER). The increase was 68 Table of Contents attributable to favorable foreign exchange rates and growth from business momentum of Gastroenterology (“GI”), Rare Diseases, Plasma-Derived Therapies (“PDT”), Oncology and Vaccines. Among our six key business areas, the increase of these business areas was offset in part by a decrease in Neuroscience. The decrease in Neuroscience, which was partially mitigated by favorable foreign exchange rates, was largely attributable to continued generic erosion of sales of VYVANSE (for attention deficit hyperactivity disorder (“ADHD”)) in the U.S., which began following loss of exclusivity in August 2023. In addition, revenue outside of our six key business areas decreased mainly due to the decline in sales of AZILVA (for hypertension), which were JPY 11.8 billion (JPY -21.8 billion and -64.9% AER, -64.9% CER) following the entry of generic competitors in Japan beginning in June 2023. Revenue by Geographic Region The following shows revenue by geographic region: Billion JPY or percentage For the fiscal year ended March 31, AER CER Revenue: 2024 2025 JPY Change % Change % Change Japan ¥ 451.4 ¥ 418.5 ¥ (32.9) (7.3) % (7.4) % United States 2,195.7 2,379.7 183.9 8.4 % 2.5 % Europe and Canada 966.8 1,055.3 88.4 9.1 % 4.1 % Latin America 198.1 235.8 37.7 19.1 % 19.7 % China 174.8 191.7 16.9 9.7 % 4.8 % Asia (excluding Japan & China) 86.4 99.4 13.0 15.1 % 11.6 % Russia/CIS 72.6 72.4 (0.2) (0.3) % (1.0) % Other* 117.9 128.8 10.9 9.3 % 4.7 % Total ¥ 4,263.8 4,581.6 317.8 7.5 % 2.9 % *Other includes the Middle East, Oceania and Africa. Revenue by Business Area The following shows revenue by business area: Billion JPY or percentage For the fiscal year ended March 31, AER CER 2024 2025 JPY Change % Change % Change Gastroenterology: ENTYVIO ¥ 800.9 ¥ 914.1 ¥ 113.2 14.1 % 8.5 % GATTEX/REVESTIVE 119.3 146.3 27.0 22.7 17.2 TAKECAB/VOCINTI *1 118.5 130.8 12.2 10.3 9.7 PANTOLOC/CONTROLOC *2 46.5 44.6 (1.9) (4.1) (8.2) DEXILANT 45.3 38.5 (6.7) (14.9) (16.5) EOHILIA 0.2 5.5 5.3 2,627.1 2,500.6 Others 85.5 77.3 (8.3) (9.7) (13.8) Total Gastroenterology 1,216.2 1,357.0 140.8 11.6 6.8 Rare Diseases: TAKHZYRO 178.7 223.2 44.5 24.9 18.9 ADVATE 122.9 111.8 (11.2) (9.1) (13.4) ELAPRASE 91.6 97.2 5.7 6.2 2.1 REPLAGAL 73.6 77.9 4.3 5.8 2.1 ADYNOVATE/ADYNOVI 66.3 64.6 (1.7) (2.6) (6.0) VPRIV 51.3 53.5 2.2 4.2 (0.5) LIVTENCITY 19.1 33.0 13.9 72.9 64.5 ADZYNMA 0.4 7.1 6.7 1,566.2 1,515.8 Others 84.6 84.7 0.0 0.1 (4.4) 69 Table of Contents Total Rare Diseases 688.4 752.8 64.4 9.4 4.6 PDT: Immunoglobulin 644.6 757.8 113.2 17.6 11.5 Albumin 134.0 141.4 7.4 5.5 1.1 Others 125.1 133.5 8.4 6.7 1.5 Total PDT 903.7 1,032.7 129.0 14.3 8.6 Oncology: ADCETRIS 109.4 129.0 19.6 17.9 14.8 LEUPLIN/ENANTONE 107.4 119.3 11.9 11.1 8.2 NINLARO 87.4 91.2 3.9 4.4 (0.2) ICLUSIG 54.7 70.7 16.0 29.3 23.0 FRUZAQLA 10.1 48.0 37.9 375.7 351.3 ALUNBRIG 28.5 36.4 7.9 27.7 22.7 Others 64.9 65.8 0.9 1.3 0.3 Total Oncology 462.4 560.4 98.1 21.2 17.2 Vaccines: QDENGA 9.6 35.6 26.0 272.3 259.0 Others 40.8 19.8 (21.0) (51.4) (51.4) Total Vaccines 50.4 55.4 5.1 10.0 7.5 Neuroscience: VYVANSE/ELVANSE 423.2 350.6 (72.6) (17.2) (21.6) TRINTELLIX 104.8 125.7 20.9 20.0 14.2 ADDERALL XR 41.8 28.4 (13.3) (31.9) (35.3) Others 57.2 61.0 3.8 6.6 4.5 Total Neuroscience 627.0 565.8 (61.2) (9.8) (14.1) Other: AZILVA *1 33.6 11.8 (21.8) (64.9) (64.9) FOSRENOL 13.5 7.9 (5.6) (41.5) (44.1) Others 268.5 237.7 (30.9) (11.5) (13.2) Total Other 315.7 257.4 (58.3) (18.5) (20.0) Total ¥ 4,263.8 ¥ 4,581.6 ¥ 317.8 7.5 % 2.9 % *1The figures include the amounts of fixed dose combinations and blister packs. *2Generic name: pantoprazole. Year-on-year change in revenue for this fiscal year in each of our business areas was primarily attributable to the following products: •GI. In GI, revenue was JPY 1,357.0 billion (JPY +140.8 billion and +11.6% AER, +6.8% CER). Sales of ENTYVIO (for ulcerative colitis (“UC”) and Crohn’s disease (“CD”)) were JPY 914.1 billion (JPY +113.2 billion and +14.1% AER, +8.5% CER). Sales in the U.S. were JPY 619.2 billion (JPY +73.1 billion and +13.4% AER). The increase was due to maintaining strong demand in the first line biologic inflammatory bowel disease (“IBD”) population and continued patient gains after the launch of the subcutaneous formulation, as well as favorable foreign exchange rates. Sales in Europe and Canada were JPY 227.4 billion (JPY +31.6 billion and +16.1% AER). The increase was primarily due to continued patient gains by an increased use of the subcutaneous formulation and favorable foreign exchange rates. Sales of GATTEX/REVESTIVE (for short bowel syndrome) were JPY 146.3 billion (JPY +27.0 billion and +22.7% AER, +17.2% CER). The increase was primarily due to increased demand in the U.S., expansion activities (pediatric indication label expansion), and favorable exchange rates. •Rare Diseases. In Rare Diseases, revenue was JPY 752.8 billion (JPY +64.4 billion and +9.4% AER, +4.6% CER). Sales of TAKHZYRO (for hereditary angioedema) were JPY 223.2 billion (JPY +44.5 billion and +24.9% AER, +18.9% CER). The increase was primarily due to higher demand in the U.S., Europe and Canada supported by strong patient persistency and prophylactic market growth, as well as favorable foreign exchange rates. 70 Table of Contents Sales of LIVTENCITY (for post-transplant cytomegalovirus (“CMV”) infection/disease) were JPY 33.0 billion (JPY +13.9 billion and +72.9% AER, +64.5% CER). The increase was primarily attributable to continued performance in the U.S. market reflecting strong market penetration, complemented by continued geographical expansion in Europe and the Growth and Emerging Markets. Sales of enzyme replacement therapy ELAPRASE (for Hunter syndrome) were JPY 97.2 billion (JPY +5.7 billion and +6.2% AER, +2.1% CER). The increase was primarily due to favorable foreign exchange rates, and strong demand in the Growth and Emerging Markets. Sales of enzyme replacement therapy REPLAGAL (for Fabry disease) were JPY 77.9 billion (JPY +4.3 billion and +5.8% AER, +2.1% CER). The increase was due to favorable foreign exchange rates, and increased demand in the Growth and Emerging Markets. Sales of ADVATE (for hemophilia A) were JPY 111.8 billion (JPY -11.2 billion and -9.1% AER, -13.4% CER). The decrease was primarily due to competitor pressure in the U.S., as well as lower demand in China, with the decline partially offset by favorable foreign exchange rates. •PDT. In PDT, revenue was JPY 1,032.7 billion (JPY +129.0 billion and +14.3% AER, +8.6% CER). Aggregate sales of immunoglobulin products were JPY 757.8 billion (JPY +113.2 billion and +17.6% AER, +11.5% CER). Sales of each of our three global immunoglobulin brands experienced double digit percentage sales growth, due to continued strong demand globally and growing supply, as well as favorable foreign exchange rates. Those include GAMMAGARD LIQUID/KIOVIG (for the treatment of primary immunodeficiency (“PID”) and multifocal motor neuropathy (“MMN”)), and subcutaneous immunoglobulin therapies (CUVITRU and HYQVIA), sales of which are growing at a fast pace due to their benefit to patients and convenience in administration compared to intravenous therapies. Aggregate sales of albumin products including HUMAN ALBUMIN and FLEXBUMIN (both primarily used for hypovolemia and hypoalbuminemia) were JPY 141.4 billion (JPY +7.4 billion and +5.5% AER, +1.1% CER). The increase was primarily driven by favorable foreign exchange rates. •Oncology. In Oncology, revenue was JPY 560.4 billion (JPY +98.1 billion and +21.2% AER, +17.2% CER). Sales of FRUZAQLA (for colorectal cancer) were JPY 48.0 billion (JPY +37.9 billion and +375.7% AER, +351.3% CER). The increase was due to momentum from launch in the U.S. in November 2023, followed by several other countries, as it addressed a need for new treatment options in metastatic colorectal cancer. Sales of ADCETRIS (for malignant lymphomas) were JPY 129.0 billion (JPY +19.6 billion and +17.9% AER, +14.8% CER). The increase was led by strong demand in the Growth and Emerging Markets and Europe, primarily driven by increased use as a first line treatment for Hodgkin lymphoma, complemented by favorable foreign exchange rates. Sales of ICLUSIG (for leukemia) were JPY 70.7 billion (JPY +16.0 billion and +29.3% AER, +23.0% CER). The increase was due to the U.S. label expansion for newly diagnosed Philadelphia chromosome-positive acute lymphoblastic leukemia (Ph+ ALL) in combination with chemotherapy in March 2024, complemented by favorable foreign exchange rates. Sales of LEUPLIN/ENANTONE (for endometriosis, uterine fibroids, premenopausal breast cancer, prostate cancer, and other certain indications) were JPY 119.3 billion (JPY +11.9 billion and +11.1% AER, +8.2% CER). The increase was primarily due to a sales increase in the U.S. and in Growth and Emerging Markets, as well as favorable foreign exchange rates. •Vaccines. In Vaccines, revenue was JPY 55.4 billion (JPY +5.1 billion and +10.0% AER, +7.5% CER). Sales of QDENGA (for prevention of dengue) were JPY 35.6 billion (JPY +26.0 billion and +272.3% AER, +259.0% CER). The increase was due to the expansion of QDENGA availability in endemic countries, with the vaccine now available in approximately 30 countries including both endemic and non-endemic countries. Sales of other vaccine products in aggregate decreased primarily due to the termination of the distribution contract of SPIKEVAX, a COVID-19 vaccine in Japan in March 2024. •Neuroscience. In Neuroscience, revenue was JPY 565.8 billion (JPY -61.2 billion and -9.8% AER, -14.1% CER). Sales of VYVANSE/ELVANSE (for ADHD) were JPY 350.6 billion (JPY -72.6 billion and -17.2% AER, -21.6% CER). The decrease was due to the impact of multiple generic entrants in the U.S. starting from August 2023, partially offset by favorable foreign exchange rates. Sales of ADDERALL XR (for ADHD) were JPY 28.4 billion (JPY -13.3 billion and -31.9% AER, -35.3% CER). The decrease was primarily due to an increase in the availability of generic versions of the instant release formulation in the U.S., which negatively impacted ADDERALL XR. Sales of TRINTELLIX (for major depressive disorder ("MDD")) were JPY 125.7 billion (JPY +20.9 billion, and +20.0% AER, +14.2% CER). The increase was primarily due to improved commercial terms related to pricing in the U.S., complemented by favorable foreign exchange rates. Cost of Sales Cost of Sales was JPY 1,580.2 billion (JPY +153.5 billion and +10.8% AER, +6.5% CER). The increase was primarily due to revenue growth in our key business areas with a change in product mix and the depreciation of the Japanese yen as compared to the fiscal year ended March 31, 2024. Selling, General and Administrative (SG&A) Expenses SG&A Expenses were JPY 1,104.8 billion (JPY +50.9 billion and +4.8% AER, +0.6% CER). The increase was mainly due to the depreciation of the Japanese yen, with efficiency gains largely offsetting incremental investments in Data, Digital and Technology (“DD&T”) and the impact of inflation. 71 Table of Contents Research and Development (R&D) Expenses R&D Expenses were JPY 730.2 billion (JPY +0.3 billion and +0.0% AER, -4.5% CER), essentially flat compared to the fiscal year ended March 31, 2024, reflecting the depreciation of the Japanese yen offset by lower expenses attributable to efficiency gains and termination of development programs in the fiscal year ended March 31, 2024, such as modakafusp alfa (TAK-573) and EXKIVITY (for non-small cell lung cancer). Amortization and Impairment Losses on Intangible Assets Associated with Products Amortization and Impairment Losses on Intangible Assets Associated with Products were JPY 643.2 billion (JPY -8.9 billion and -1.4% AER, -6.0% CER). The decrease resulted from lower impairment charges related to in-process R&D and marketed products (JPY -35.5 billion), partially offset by higher amortization expenses (JPY +26.7 billion) due to the depreciation of the Japanese yen. The decrease in impairment charges was due to the larger impairment charges recorded in the fiscal year ended March 31, 2024, compared with those recorded in the fiscal year ended March 31, 2025. The impairment charges in the fiscal year ended March 31, 2024 primarily include JPY 74.0 billion impairment charges for ALOFISEL (for complex Crohn's perianal fistulas), JPY 28.5 billion impairment charges for EXKIVITY (for non-small cell lung cancer), and impairment charges related to the decision to terminate development of certain in-progress R&D assets in Oncology, which were partially offset by a reversal of impairment loss of JPY 35.7 billion for EOHILIA (for eosinophilic esophagitis). The impairment charges in the fiscal year ended March 31, 2025 include JPY 27.8 billion resulting from the decision to terminate the development of TAK-186 and TAK-280 acquired through Maverick Therapeutics Inc. and JPY 21.5 billion as a result of the Phase 3 studies for soticlestat (TAK-935) failing to meet their primary endpoints. Other Operating Income Other Operating Income was JPY 26.2 billion (JPY +6.8 billion and +35.3% AER, +30.8% CER). The increase was mainly due to a JPY 6.1 billion gain recognized on completion of the sale of TACHOSIL (fibrin sealant patch), including a related manufacturing facility, during the fiscal year ended March 31, 2025. Other Operating Expenses Other Operating Expenses were JPY 206.7 billion (JPY +0.2 billion and +0.1% AER, -3.6% CER), essentially flat compared to the fiscal year ended March 31, 2024, reflecting an increase in restructuring expenses (JPY +46.8 billion) mainly due to the enterprise-wide efficiency program during the fiscal year ended March 31, 2025 being offset by higher provisions for legal proceedings primarily as a result of the supply agreement litigation of AbbVie, Inc. (“AbbVie”) and higher charges on the fair value of financial assets and liabilities associated with contingent consideration arrangements mainly from XIIDRA and EOHILIA recorded in the fiscal year ended March 31, 2024, as well as the effect of a reversal of valuation reserve for pre-launch inventory recorded in the fiscal year ended March 31, 2025. Operating Profit As a result of the above factors, Operating Profit was JPY 342.6 billion (JPY +128.5 billion and +60.0% AER, +51.2% CER). Net Finance Expenses Net Finance Expenses were JPY 163.5 billion (JPY -4.2 billion and -2.5% AER, -5.7% CER). The decrease in Net Finance Expenses was primarily due to a decrease of net loss from Gains and Losses on Foreign Currency Exchange and Derivative Financial Assets related to Foreign Currency Exchange, largely offset by an impairment loss of JPY 18.9 billion related to the sale of Teva Takeda Pharma Ltd. shares, which was completed in the fiscal year ended March 31, 2025. Share of Profit (Loss) of Investments Accounted for Using the Equity Method For the fiscal year ended March 31, 2025, Share of Loss of Investments Accounted for Using the Equity Method was JPY 4.0 billion (JPY -10.5 billion). For the fiscal year ended March 31, 2024, Share of Profit of Investments Accounted for Using the Equity Method was JPY 6.5 billion. Income Tax (Expenses) Benefit Income Tax Expenses were JPY 66.9 billion (JPY +158.3 billion, compared to Income Tax Benefit of JPY 91.4 billion for the fiscal year ended March 31, 2024). The increase was primarily due to a tax expense reduction of JPY 63.5 billion recorded during the fiscal year ended March 31, 2024 resulting from the reversal of the income taxes payable in excess of the settlement with Irish Revenue Commissioners with respect to a tax assessment related to the treatment of an acquisition break fee Shire received from AbbVie in 2014 and an increase in tax expenses due to the reassessment of recoverability of deferred tax assets as well as higher pretax earnings during the fiscal year ended March 31, 2025. Net Profit for the Year As a result of the above factors, Net Profit for the Year was JPY 108.1 billion (JPY -36.1 billion and -25.0% AER, -33.1% CER) and Net Profit for the Year attributable to owners of the Company was JPY 107.9 billion (JPY -36.1 billion and -25.1% AER, -33.2% CER). 72 Table of Contents Supplemental Discussion: Results of Core Financial Measures (Non-IFRS Measures) In addition to its results prepared in accordance with IFRS, on a supplemental basis, Takeda also presents the results of its Core Financial Measures. Takeda strongly encourages investors to review “Annex to Item 5. Certain Supplemental Non-IFRS Measures as Defined and Presented by Takeda” below for more information on these metrics, including their definitions, limitations on their usefulness and reconciliations to the most directly comparable financial measures calculated and presented in accordance with IFRS. Takeda also presents period-over-period change in its Core Financial Measures on a CER % change basis; see “Annex to Item 5. Certain Supplemental Non-IFRS Measures as Defined and Presented by Takeda” for more information. Fiscal Year Ended March 31, 2026 compared with the Fiscal Year Ended March 31, 2025 Billion JPY or percentage For the fiscal year endedMarch 31, AER CER 2025 2026 JPY Change % Change % Change Core revenue ¥ 4,579.8 ¥ 4,505.7 ¥ (74.1) (1.6) % (2.6) % Core operating profit 1,162.6 1,172.5 9.8 0.8 % (0.9) % Core net profit for the year 775.8 814.4 38.6 5.0 % 2.9 % Core net profit for the year attributable to owners of the Company 775.6 814.1 38.5 5.0 % 2.9 % Core EPS (yen) 491 517 26 5.2 % 3.1 % Core Revenue Core Revenue for the fiscal year ended March 31, 2026 was JPY 4,505.7 billion (JPY -74.1 billion and -1.6% AER, -2.6% CER). The decrease was primarily attributable to a decrease in revenue in Neuroscience, largely attributable to the continued impact from generic erosion of VYVANSE in the U.S. Takeda’s Growth and Launch Products* totaled JPY 2,313.3 billion (JPY +111.4 billion and +5.1% AER, +4.5% CER). * Takeda’s Growth and Launch Products for the fiscal year ended March 31, 2026 GI: ENTYVIO, EOHILIA Rare Diseases: TAKHZYRO, LIVTENCITY, ADZYNMA PDT: Immunoglobulin products including GAMMAGARD LIQUID/KIOVIG, HYQVIA, and CUVITRU, Albumin products including HUMAN ALBUMIN and FLEXBUMIN Oncology: 　　　　 ALUNBRIG, FRUZAQLA Vaccines: QDENGA Core Operating Profit Core Operating Profit for the fiscal year ended March 31, 2026 was JPY 1,172.5 billion (JPY +9.8 billion and +0.8% AER, -0.9% CER). The components of Core Operating Profit are as below: Billion JPY or percentage For the fiscal year endedMarch 31, AER CER 2025 2026 JPY Change % Change % Change Core revenue ¥ 4,579.8 ¥ 4,505.7 ¥ (74.1) (1.6) % (2.6) % Core cost of sales (1,581.8) (1,572.6) 9.2 (0.6) % (1.9) % Core selling, general and administrative (SG&A) expenses (1,105.0) (1,084.7) 20.4 (1.8) % (2.5) % Core research and development (R&D) expenses (730.4) (676.0) 54.4 (7.4) % (7.0) % Core operating profit ¥ 1,162.6 ¥ 1,172.5 ¥ 9.8 0.8 % (0.9) % During the periods presented, these items fluctuated as follows: Core Cost of Sales Core Cost of Sales was JPY 1,572.6 billion (JPY -9.2 billion and -0.6% AER, -1.9% CER). The decrease was primarily due to lower revenue as well as an adjustment to Cost of Sales recorded in the fiscal year ended March 31, 2025 following the implementation of an accounting process to recognize accumulated foreign currency impacts of inventories. However, these factors were largely offset by an increase in the cost ratio due to changes in product mix driven by generic erosion, particularly for VYVANSE in the U.S., and foreign exchange impacts from the depreciation of the Japanese yen against the Euro. 73 Table of Contents Core Selling, General and Administrative (SG&A) Expenses Core SG&A Expenses were JPY 1,084.7 billion (JPY -20.4 billion and -1.8% AER, -2.5% CER). The decrease was primarily due to cost savings under the enterprise-wide efficiency program. Core Research and Development (R&D) Expenses Core R&D Expenses were JPY 676.0 billion (JPY -54.4 billion and -7.4% AER, -7.0% CER). The decrease was primarily due to lower expenses in various development programs resulting from the termination or progression of development activities, the co-development funding for mezagitamab recognized as a reduction of R&D expenses, and cost savings under the enterprise-wide efficiency program. This was partially offset by increased investment in late-stage pipeline programs, including zasocitinib and elritercept. Core Net Profit for the Year Core Net Profit for the Year was JPY 814.4 billion (JPY +38.6 billion and +5.0% AER, +2.9% CER) and Core Net Profit attributable to owners of the Company was JPY 814.1 billion (JPY +38.5 billion and +5.0% AER, +2.9% CER) and are calculated from Core Operating Profit as below: Billion JPY or percentage For the fiscal year endedMarch 31, AER CER 2025 2026 JPY Change % Change % Change Core operating profit ¥ 1,162.6 ¥ 1,172.5 ¥ 9.8 0.8 % (0.9) % Core finance income and (expenses), net (140.7) (133.2) 7.5 (5.3) % (1.9) % Core share of profit (loss) of investments accounted for using the equity method 1.1 (0.1) (1.3) ― (82.1) % Core profit before tax 1,023.1 1,039.2 16.1 1.6 % (0.9) % Core income tax expenses (247.3) (224.8) 22.5 (9.1) % (12.8) % Core net profit for the year 775.8 814.4 38.6 5.0 % 2.9 % Core net profit for the year attributable to owners of the Company ¥ 775.6 ¥ 814.1 ¥ 38.5 5.0 % 2.9 % During the periods presented, these items fluctuated as follows: Core Net Finance Expenses Core Net Finance Expenses were JPY 133.2 billion (JPY -7.5 billion and -5.3% AER, -1.9% CER). Core Share of Profit (Loss) of Investments Accounted for Using the Equity Method Core Share of Loss of Investments Accounted for Using the Equity Method was JPY -0.1 billion (JPY -1.3 billion) for the fiscal year ended March 31, 2026. Core Profit Before Tax Core Profit Before Tax was JPY 1,039.2 billion (JPY +16.1 billion and +1.6% AER, -0.9% CER). Core Income Tax Expenses Core Income Tax Expenses were JPY 224.8 billion (JPY -22.5 billion and -9.1% AER, -12.8% CER). The decrease was primarily due to the reassessment of recoverability of deferred tax assets leading to lower core tax expenses during the fiscal year ended March 31, 2026. Core EPS Core EPS was JPY 517 (JPY +26 and +5.2% AER, +3.1% CER). Fiscal Year Ended March 31, 2025 compared with the Fiscal Year Ended March 31, 2024 74 Table of Contents Billion JPY or percentage For the fiscal year ended March 31, AER CER 2024 2025 JPY Change % Change % Change Core revenue ¥ 4,263.8 ¥ 4,579.8 ¥ 316.1 7.4 % 2.8 % Core operating profit 1,054.9 1,162.6 107.8 10.2 % 4.9 % Core net profit for the year 756.9 775.8 18.9 2.5 % (3.4) % Core net profit for the year attributable to owners of the Company 756.8 775.6 18.8 2.5 % (3.4) % Core EPS (yen) 484 491 7 1.5 % (4.3) % Core Revenue Core Revenue for the fiscal year ended March 31, 2025 was JPY 4,579.8 billion (JPY +316.1 billion and +7.4% AER, +2.8% CER). The increase was primarily attributable to favorable foreign exchange rates and growth from business momentum primarily led by Takeda’s Growth and Launch Products* which totaled JPY 2,201.9 billion (JPY +375.9 billion and +20.6% AER, +14.7% CER), partially offset by lower sales of VYVANSE in the U.S. and AZILVA in Japan, which were impacted by generic competition following loss of exclusivities. * Takeda’s Growth and Launch Products for the fiscal year ended March 31, 2025 GI: ENTYVIO, EOHILIA Rare Diseases: TAKHZYRO, LIVTENCITY, ADZYNMA PDT: Immunoglobulin products including GAMMAGARD LIQUID/KIOVIG, HYQVIA, and CUVITRU, Albumin products including HUMAN ALBUMIN and FLEXBUMIN Oncology: 　　　　 ALUNBRIG, FRUZAQLA Vaccines: QDENGA Core Operating Profit Core Operating Profit for the fiscal year ended March 31, 2025 was JPY 1,162.6 billion (JPY +107.8 billion and +10.2% AER, +4.9% CER). The components of Core Operating Profit are as below: Billion JPY or percentage For the fiscal year ended March 31, AER CER 2024 2025 JPY Change % Change % Change Core revenue ¥ 4,263.8 ¥ 4,579.8 ¥ 316.1 7.4 % 2.8 % Core cost of sales (1,426.3) (1,581.8) (155.5) 10.9 % 6.6 % Core selling, general and administrative (SG&A) expenses (1,053.0) (1,105.0) (52.1) 4.9 % 0.7 % Core research and development (R&D) expenses (729.6) (730.4) (0.7) 0.1 % (4.4) % Core operating profit ¥ 1,054.9 ¥ 1,162.6 ¥ 107.8 10.2 % 4.9 % During the periods presented, these items fluctuated as follows: Core Cost of Sales Core Cost of Sales was JPY 1,581.8 billion (JPY +155.5 billion and +10.9% AER, +6.6% CER). The increase was primarily due to revenue growth in our key business areas with a change in product mix and the depreciation of the Japanese yen as compared to the fiscal year ended March 31, 2024. 75 Table of Contents Core Selling, General and Administrative (SG&A) Expenses Core SG&A Expenses were JPY 1,105.0 billion (JPY +52.1 billion and +4.9% AER, +0.7% CER). The increase was mainly due to the depreciation of the Japanese yen, with efficiency gains largely offsetting incremental investments in Data, Digital and Technology (“DD&T”) and the impact of inflation. Core Research and Development (R&D) Expenses Core R&D Expenses were JPY 730.4 billion (JPY +0.7 billion and +0.1% AER, -4.4% CER), essentially flat compared to the fiscal year ended March 31, 2024, reflecting the depreciation of the Japanese yen offset by lower expenses attributable to efficiency gains and termination of development programs in the fiscal year ended March 31, 2024, such as modakafusp alfa (TAK-573) and EXKIVITY (for non-small cell lung cancer). Core Net Profit for the Year Core Net Profit for the Year was JPY 775.8 billion (JPY +18.9 billion and +2.5% AER, -3.4% CER) and Core Net Profit attributable to owners of the Company was JPY 775.6 billion (JPY +18.8 billion and +2.5% AER, -3.4% CER) and are calculated from Core Operating Profit as below: Billion JPY or percentage For the fiscal year ended March 31, AER CER 2024 2025 JPY Change % Change % Change Core operating profit ¥ 1,054.9 ¥ 1,162.6 ¥ 107.8 10.2 % 4.9 % Core finance income and (expenses), net (142.0) (140.7) 1.3 (0.9) % (4.5) % Core share of profit of investments accounted for using the equity method 5.9 1.1 (4.8) (81.2) % (82.2) % Core profit before tax 918.8 1,023.1 104.3 11.3 % 5.8 % Core income tax expenses (161.9) (247.3) (85.4) 52.7 % 48.7 % Core net profit for the year 756.9 775.8 18.9 2.5 % (3.4) % Core net profit for the year attributable to owners of the Company ¥ 756.8 ¥ 775.6 ¥ 18.8 2.5 % (3.4) % During the periods presented, these items fluctuated as follows: Core Net Finance Expenses Core Net Finance Expenses were JPY 140.7 billion (JPY -1.3 billion and -0.9% AER, -4.5% CER). Core Share of Profit of Investments Accounted for Using the Equity Method Core Share of Profit of Investments Accounted for Using the Equity Method was JPY 1.1 billion (JPY -4.8 billion and -81.2% AER, -82.2% CER). Core Profit Before Tax Core Profit Before Tax was JPY 1,023.1 billion (JPY +104.3 billion and +11.3% AER, +5.8% CER). Core Income Tax Expenses Core Income Tax Expenses were JPY 247.3 billion (JPY +85.4 billion and +52.7% AER, +48.7% CER). The increase was primarily due to higher core pretax earnings and the reassessment of recoverability of deferred tax assets leading to higher core tax expenses during the fiscal year ended March 31, 2025 as well as a reduction of tax expense during the fiscal year ended March 31, 2024 due to a favorable resolution of tax contingencies. Core EPS Core EPS was JPY 491 (JPY +7 and +1.5% AER, -4.3% CER). 76 Table of Contents B. Liquidity and Capital Resources Sources and Uses of Liquidity Our liquidity requirements mainly relate to operating cash, capital expenditures, contractual obligations, repayment of indebtedness and payment of interest and dividends. Our operating cash requirements include cash outlays for R&D expenses, milestone payments, sales and marketing expenses, personnel and other general and administrative costs and raw material costs. Income tax payments also require significant cash outlays as well as working capital financing. Our capital expenditures for tangible assets consist primarily of enhancing and streamlining our production facilities, replacing fully depreciated items, and promoting efficiency of our operations. Our capital expenditures for intangible assets represent mainly milestone payments related to licensed products, where such assets have been acquired from third-party partners, as well as software development expenditures. Our capital expenditures, which consist of additions to property, plant and equipment and intangible assets recorded on our consolidated statements of financial position, were JPY 496.7 billion, JPY 319.4 billion and JPY 426.9 billion for the fiscal years ended March 31, 2024, 2025 and 2026, respectively. As of March 31, 2026, we had contractual commitments for the acquisition of property, plant and equipment of JPY 7.7 billion. In addition, we had certain contractual agreements related to the acquisition of intangible assets as of March 31, 2026. See Note 31 to our consolidated financial statements for a description of our milestone payments of intangible assets. As part of our capital management, we periodically assess our level of capital expenditures in light of capital needs, market and other conditions and other relevant factors. Our dividend payments for the fiscal years ended March 31, 2024, 2025 and 2026 were JPY 288.5 billion, JPY 303.9 billion and JPY 313.2 billion, respectively. Takeda returned capital to shareholders using dividends at an annual level of JPY 200 per share, consisting of interim and fiscal year-end dividends of JPY 100 per share for the fiscal year ended March 31, 2026. It is our intention to return capital to shareholders using dividends at an annual level of JPY 204 per share in the fiscal year ending March 31, 2027, consisting of interim and fiscal year-end dividends of JPY 102 per share. See “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information-Dividends” for a description of our dividend policy. We are required to make interest and principal payments on our outstanding borrowings. As of March 31, 2026, we had JPY 140.1 billion of interest due within one year and JPY 514.0 billion of principal payments on our borrowings due within one year. See “Borrowings and Financial Obligations.” Our primary sources of liquidity include cash and cash equivalents on hand, short-term commercial paper, committed borrowing lines from financial institutions and long-term debt financing that includes bonds from the global capital markets. Additionally, we had access to short-term uncommitted borrowing lines from financial institution of JPY 150.0 billion and USD 750.0 million as of March 31, 2025, and JPY 150.0 billion and USD 650.0 million as of March 31, 2026. We monitor and adjust the amount of foreign cash based on projected cash flow requirements. As the majority of our business is conducted outside Japan, we hold a significant portion of cash and cash equivalents outside of Japan. Our ability to use foreign cash to fund cash flow requirements in Japan may be impacted by local regulations and, to a lesser extent, income taxes associated with transferring cash to Japan. We continue to closely monitor our funding situation and do not currently anticipate experiencing funding or liquidity shortfalls in the short term as a result of general market conditions. In addition to the ability to seek additional funding (if needed) from market and other sources, we may also manage our funding and liquidity needs by reconsidering, to the extent necessary and appropriate, our capital expenditure plans. As of March 31, 2026, we held JPY 595.1 billion in cash and cash equivalents on hand, of which JPY 79.2 billion was cash temporarily held on behalf of third parties related to a trade receivables sales program. Takeda had access to JPY 350.0 billion and USD 2,100.0 million in undrawn bank commitment lines. In addition, we held JPY 85.1 billion of U.S. Treasury Marketable Securities (U.S. Treasuries) classified as Level 1 in the fair value hierarchy. Total liquidity available therefore was JPY 1,286.2 billion. We believe that working capital is sufficient for our current business requirements. Furthermore, we continually seek to ensure that our level of liquidity and access to capital market funding continues to be maintained to successfully support our business operations. 77 Table of Contents Consolidated Cash Flows The following table shows information about our consolidated cash flows during the fiscal years ended March 31, 2024, 2025 and 2026: For the fiscal year ended March 31, 2024 2025 2026 (billions of yen) Net cash from operating activities ¥ 716.3 ¥ 1,057.2 ¥ 1,041.4 Net cash used in investing activities (463.9) (367.1) (369.1) Net cash used in financing activities (354.4) (751.4) (496.8) Net increase (decrease) in cash and cash equivalents ¥ (101.9) ¥ (61.3) ¥ 175.5 Cash and cash equivalents at the beginning of the year 533.5 457.8 385.1 Effects of exchange rate changes on cash and cash equivalents 26.2 (11.4) 34.5 Cash and cash equivalents at the end of the year ¥ 457.8 ¥ 385.1 ¥ 595.1 Fiscal Year Ended March 31, 2026 compared with the Fiscal Year Ended March 31, 2025 Net Cash from Operating Activities Net Cash from Operating Activities was JPY 1,041.4 billion (JPY -15.8 billion). The decrease was mainly due to unfavorable impacts resulting from changes in assets and liabilities adjusted for provisions, primarily driven by changes in Other Financial Liabilities. The decrease was largely offset by an increase in net cash inflows from Settlement of Forward Exchange Contracts, Net and favorable impacts resulting from Net Profit (Loss) for the Year adjusted for non-cash items and other adjustments. Net Cash used in Investing Activities Net Cash used in Investing Activities was JPY 369.1 billion (JPY +2.1 billion), essentially flat compared to the fiscal year ended March 31, 2025, reflecting offsetting changes in individual investing activities, including an increase in cash outflows used in Acquisition of Intangible Assets and a decrease in cash outflows from Acquisition of Investments. Net Cash used in Financing Activities Net Cash used in Financing Activities was JPY 496.8 billion (JPY -254.6 billion). The decrease was mainly due to higher net cash inflows from the issuance and repayments of bonds and loans. Fiscal Year Ended March 31, 2025 compared with the Fiscal Year Ended March 31, 2024 Net cash from operating activities. Net Cash from Operating Activities was JPY 1,057.2 billion (JPY +340.8 billion). The increase was mainly due to favorable impacts from Changes in Assets and Liabilities driven by changes in Provisions and Inventories, partially offset by a lower net profit for the year adjusted for non-cash items and other adjustments. Net cash used in investing activities. Net Cash used in Investing Activities was JPY 367.1 billion (JPY -96.8 billion). The decrease was mainly due to a decrease in Acquisition of Intangible Assets, as well as Proceeds from Sales of Shares in Associates primarily attributable to the sale of Teva Takeda Pharma Ltd. This was partially offset by other investing activities, including the investment in U.S. Treasury Marketable Securities (U.S. Treasuries), as well as the upfront payment to AC Immune SA and a minority equity investment in and acquisition of licensing options from Ascentage Pharma Group International. Net cash used in financing activities. Net Cash used in Financing Activities was JPY 751.4 billion (JPY +397.0 billion). The increase was mainly due to a decrease in net cash inflow from short-term loans and commercial papers, repayments of Syndicated Loans and Hybrid Bonds, and an acquisition of treasury shares. This was partially offset by proceeds from issuance of bonds primarily driven by Hybrid Bonds and Unsecured U.S. Dollar-Denominated Senior Notes. 78 Table of Contents Supplemental Discussion: Free Cash Flow and Adjusted Free Cash Flow (Non-IFRS Measures) Free cash flow and Adjusted Free Cash Flow are non-IFRS measures, see “Annex to Item 5. Certain Supplemental Non-IFRS Measures as Defined and Presented by Takeda—Free Cash Flow and Adjusted Free Cash Flow” for further information. The most directly comparable measures under IFRS for Free Cash Flow and Adjusted Free Cash Flow is Net Cash from Operating Activities. For the Year Ended March 31, 2024 2025 2026 (billions of yen) Net cash from operating activities (IFRS) ¥ 716.3 ¥ 1,057.2 ¥ 1,041.4 Free cash flow (non-IFRS) 540.9 856.4 865.4 Adjusted free cash flow (non-IFRS) 283.4 769.0 684.5 Fiscal Year Ended March 31, 2026 compared with the Fiscal Year Ended March 31, 2025 Free Cash Flow for the fiscal year ended March 31, 2026 was JPY 865.4 billion (JPY +9.0 billion). The increase was mainly driven by lower cash outflows for Acquisition of PP&E, partly offset by lower Net Cash from Operating Activities. Adjusted Free Cash Flow for the fiscal year ended March 31, 2026 was JPY 684.5 billion (JPY -84.4 billion). The decrease was primarily due to higher cash outflows for Acquisition of Intangible Assets. Fiscal Year Ended March 31, 2025 compared with the Fiscal Year Ended March 31, 2024 Free Cash Flow for the fiscal year ended March 31, 2025 was JPY 856.4 billion (JPY +315.5 billion). The increase was mainly driven by higher Net Cash from Operating Activities. Adjusted Free Cash Flow for the fiscal year ended March 31, 2025 was JPY 769.0 billion (JPY +485.5 billion). The increase was primarily due to higher Free Cash Flow, further driven by a decrease in Acquisition of Intangible Assets. 79 Table of Contents Credit Ratings Our credit ratings, which reflect each rating agency’s opinion of our financial strength, operating performance and ability to meet our obligations, as of the date of this annual report are as follows: Rating Agency Category Rating Outlook Rating Structure S&P Global Ratings Issuer credit rating/foreign currency long-term and local currency long-term BBB+ Stable Fourth highest of 11 rating categories and first within the category based on modifiers (e.g. BBB+, BBB and BBB- are within the same category). Issuer credit rating (short-term) A-2 Second highest of six rating categories Moody’s Long-term issuer rating and Long-term senior unsecured rating Baa1 Stable Fourth highest of nine rating categories and first within the category based on modifiers (e.g. Baa1, Baa2 and Baa3 are within the same category). The ratings are not a recommendation to buy, sell or hold securities. The ratings are subject to revision or withdrawal at any time by the assigning rating agency. Each of the financial strength ratings should be evaluated independently. Borrowings and Financial Obligations Our total bonds and loans were JPY 4,515.3 billion and JPY 4,881.8 billion as of March 31, 2025 and 2026, respectively. These borrowings include unsecured bonds and senior notes issued by Takeda, bilateral and syndicated loans entered into by the Company, borrowings incurred to fund a portion of the Shire Acquisition, debt assumed in connection with the Shire Acquisition and debt refinanced and are included in our consolidated statements of financial position. Our borrowings are mainly incurred in connection with acquisitions and therefore are not exposed to seasonality. On April 25, 2025, Takeda repaid JPY 10.0 billion in Bilateral Loans falling due. On June 12, 2025, Takeda issued JPY 184.0 billion in unsecured JPY denominated senior bonds (“JPY Bonds”) with maturity dates ranging from June 12, 2030, to June 12, 2035. The proceeds of the JPY Bonds were used to redeem commercial paper. Following this, on June 23, 2025, Takeda redeemed USD 800 million of unsecured U.S. dollar-denominated senior notes on their maturity date. Takeda has also rolled over USD 500 million Bilateral Loan, which was originally drawn down on March 31, 2025, on a monthly basis until July 3, 2025. On July 2, 2025, Takeda issued unsecured U.S. dollar-denominated senior guaranteed notes (the "USD Notes") in an aggregate principal amount of USD 2,400 million with maturity dates of July 7, 2035 and July 7, 2055, through its indirect wholly owned finance subsidiary Takeda U.S. Financing, Inc. The proceeds of the USD Notes were primarily used to repay USD 500 million Bilateral Loan on July 3, 2025, and redeem commercial paper drawings in July 2025. On March 31, 2026, Takeda repaid JPY 75.0 billion in Bilateral Loans falling due and on the same day entered into new Bilateral Loans of JPY 60.0 billion maturing on March 31, 2034. On March 31, 2026, Takeda also entered into commitment facilities of JPY 350.0 billion and USD 2,100 million. These commitment facilities are effective for five years at minimum. These facilities contain certain restrictive covenants, the breach of which may limit our ability to access these facilities. Takeda was in compliance with the covenants as of March 31, 2026. The purpose of the new facilities is for general business use. In connection with these new facilities, Takeda’s existing commitment facility of JPY 700.0 billion, which was put in place in 2019 and was scheduled to expire in September 2026, was cancelled on the same date. We currently have a Japanese unsecured commercial paper program in place to facilitate short-term liquidity management. The total amount drawn on the commercial paper program was JPY 270.0 billion as of March 31, 2025 and no commercial paper remained outstanding as of March 31, 2026. We further have access to short-term uncommitted lines of JPY 150.0 billion and USD 750 million (USD 650 million as of March 31, 2026), which were undrawn as of March 31, 2025 and 2026, respectively. For further description of our borrowings, see Note 19 to our audited consolidated financial statements. 80 Table of Contents Material Cash Requirements from Contractual and Other Obligations Material Contractual Obligations The following table summarizes our contractual obligations as of March 31, 2026: Total contractual amount*1 Within one year Between one and three years Between three and five years More than five years (billions of yen) Bonds and loans: *2 Bonds *3 ¥ 6,448.7 ¥ 650.6 ¥ 668.8 ¥ 1,591.5 ¥ 3,537.7 Loans *3 246.2 3.5 82.5 45.5 114.7 Purchase obligations for property, plant and equipment 7.7 7.7 — — — Repayment of lease liabilities 847.0 65.4 120.9 107.0 553.7 Leases not yet commenced 238.3 7.7 26.8 28.4 175.3 Contributions to defined benefit plans *4 16.1 16.1 — — — Total *5, *6 ¥ 7,804.1 ¥ 751.1 ¥ 899.1 ¥ 1,772.4 ¥ 4,381.4 *1Obligations denominated in currencies other than Japanese yen have been translated into Japanese yen using the exchange rates as of March 31, 2026 and may fluctuate due to changes in exchange rates. *2Includes interest payment obligations. *3The contractual amount in “Between three and five years” includes a JPY 460.0 billion of 2024 hybrid subordinated bonds (“2024 Hybrid Bonds”) and a JPY 40.0 billion of 2024 syndicated hybrid subordinated loan (“2024 Syndicated Hybrid Loan”) as Takeda expects to make early repayments of all of the principal of the 2024 Hybrid Bonds on the first call date of June 25, 2029 and the 2024 Syndicated Hybrid Loan on the first prepayment date of October 3, 2029. For details of the principal and interest rate associated with the 2024 Hybrid Bonds and the 2024 Syndicated Hybrid Loan, see Note 19 to our audited consolidated financial statements. *4Pension and post-retirement contributions cannot be determined beyond the fiscal year ending March 31, 2027 because the timing of funding is uncertain and dependent on future movements in interest rates and investment returns, changes in laws and regulations and other variables. *5Does not include contractual obligations whose timing we are unable to estimate, including defined benefit obligations, litigation reserves and long-term income tax liabilities and does not include liabilities recorded at fair value as amounts will fluctuate based on any changes in fair value including derivative liabilities and financial liabilities associated with contingent consideration arrangements. The carrying amounts of derivative liabilities and financial liabilities associated with contingent consideration arrangements as of March 31, 2026 were JPY 20.5 billion and JPY 3.2 billion, respectively. Milestone payments that are dependent on the occurrence of certain future events are not included. *6Does not include purchase orders entered into for purchases made in the normal course of business. Off-Balance Sheet Arrangements Milestone Payments Under the terms of our collaborations with third parties for the development of new products, we may be required to make payments for the achievement of certain milestones related to the development of pipeline products and the launch and subsequent marketing of new products. As of March 31, 2026, the contractual amount of potential milestone payments totaled JPY 1,333.6 billion, in each case excluding potential commercial milestone payments. See Note 13 and 31 to our audited consolidated financial statements for further details. 81 Table of Contents Supplemental Discussion of Financial Leverage (Adjusted Net Debt to Adjusted EBITDA Ratio) (Non-IFRS Measure) Particularly following the acquisition of Shire, investors, analysts and ratings agencies have closely monitored Takeda’s financial leverage, as represented by the ratio of its Adjusted Net Debt to Adjusted EBITDA. Adjusted Net Debt, Adjusted EBITDA and the ratio thereof are all non-IFRS measures. See “Annex to Item 5. Certain Supplemental Non-IFRS Measures as Defined and Presented by Takeda” for more information, including reconciliations of bonds and loans to Adjusted Net Debt, and of Net Profit for the year to EBITDA and Adjusted EBITDA, in each case, to the most directly comparable measures presented in accordance with IFRS. Takeda’s ratio of Adjusted Net Debt to Adjusted EBITDA, and the ratio of each of the most directly comparable measures to Adjusted Net Debt and Adjusted EBITDA presented in accordance with IFRS as of the dates shown was as follows: For the Year Ended March 31, 2025 2026 (billions of yen, except for ratios) IFRS: Bonds and loans ¥ (4,515.3) ¥ (4,881.8) Net profit for the year 108.1 (152.1) Ratio of bonds and loans to net profit for the year 41.8 x — Non-IFRS: Adjusted net debt ¥ (3,975.5) ¥ (3,817.6) Adjusted EBITDA 1,441.0 1,457.2 Adjusted net debt to adjusted EBITDA ratio 2.8 x 2.6 x C. Research and Development, Patents and Licenses, etc. The information required by this item is set forth in “Item 4. Information on the Company—B. Business Overview—Research and Development” of this annual report. D. Trend Information The information required by this item is set forth in “Item 5.A. Operating Results—Factors Affecting Our Results of Operations—Periodic Trends” of this annual report. E. Critical Accounting Estimates The requirements of this item are not applicable to Takeda, as it prepares its financial statements in accordance with IFRS. Takeda presents information about its critical accounting policies under “Item 5.A. Operating Results—Critical Accounting Policies” of this annual report. 82 Table of Contents Annex to Item 5. Certain Supplemental Non-IFRS Measures as Defined and Presented by Takeda In addition to its results presented in accordance with IFRS, Takeda presents certain “Non-IFRS” financial measures on a supplemental basis. These financial measures include Constant Exchange Rate (“CER”) Change, Core Financial Measures, Net Debt, Adjusted Net Debt, EBITDA, Adjusted EBITDA, Free Cash Flow and Adjusted Free Cash Flow. Takeda’s management evaluates its results of operations and financial condition and makes operating and investment decisions using both IFRS measures and the non-IFRS measures presented herein. Accordingly, Takeda presents both types of measures to provide investors with additional information to analyze Takeda’s results of operations and financial condition and understand how Takeda’s management assesses the same. Takeda’s non-IFRS measures exclude or adjust the calculation of certain income, cost, cash flow or statement of financial position items which are included in the most closely comparable measures presented in accordance with IFRS. These measures are not prepared in accordance with IFRS and such non-IFRS measures should be considered a supplement to, and not a substitute for, measures prepared in accordance with IFRS (which Takeda sometimes refer to as “reported” measures). Takeda strongly encourages investors to review its historical financial statements in their entirety and to use the measures presented in accordance with IFRS as the primary means of evaluating its performance. Moreover, Takeda encourages investors to review the definitions and reconciliations of non-IFRS financial measures to their most directly comparable IFRS measures. Takeda also encourages investors to review the discussions of these non-IFRS financial measures—particularly the limitations on their usefulness—and to understand how such measures differ from similarly titled measures that may be presented by other companies in the pharmaceutical industry or in general. 83 Table of Contents Core Financial Measures Takeda’s Core Financial Measures, particularly Core Revenue, Core Operating Profit, Core Net Profit for the Year attributable to owners of the Company and Core EPS, exclude revenue from divestments, amortization and impairment losses on intangible assets associated with products (including in-process R&D) and other impacts unrelated to the underlying trends and business performance of Takeda’s core operations, such as non-recurring items, purchase accounting effects and transaction related costs. Core Revenue represents revenue adjusted to exclude revenue items unrelated to the underlying trends and business performance of Takeda’s core operations (primarily revenue or related adjustments associated with divestments and liquidations). Core Operating Profit represents operating profit adjusted to exclude other operating expenses and income, amortization and impairment losses on intangible assets associated with products (including in-process R&D) and non-cash items or items unrelated to the underlying trends and business performance of Takeda’s core operations. Core Net Profit for the Year attributable to owners of the Company represents net profit for the year attributable to owners of the Company, adjusted to eliminate the impact of items excluded in the calculation of Core Operating Profit and other non-operating items (e.g. amongst other items, fair value adjustments and the imputed financial charge related to contingent consideration) that are unusual, non-recurring in nature or unrelated to the underlying trends and business performance of Takeda’s ongoing operations and the tax effect of each of the adjustments. Core EPS is calculated by dividing Core Net Profit for the Year attributable to owners of the Company by the average outstanding shares (excluding treasury shares) of the reporting periods presented. Takeda presents its Core Financial Measures because Takeda believes that these measures are useful to understanding its business without the effect of items that Takeda considers to be unrelated to the underlying trends and business performance of its core operations, including items (i) which may vary significantly from year-to-year or may not occur in each year or (ii) whose recognition Takeda believes is largely uncorrelated to trends in the underlying performance of our core business. Takeda believes that similar measures are frequently used by other companies in its industry and that providing these measures helps investors evaluate Takeda’s performance against not only its performance in prior years but on a similar basis as its competitors. Takeda also presents Core Financial Measures because these measures are used by Takeda for budgetary planning and compensation purposes (i.e., certain targets for the purposes of Takeda’s Short-Term Incentive and Long-Term Incentive compensation programs, including incentive compensation of the CEO and CFO, are set in relation to the results of Takeda’s Core Financial Measures). See “Item 6. Directors, Senior Management and Employees—B. Compensation”. The usefulness of Core Financial Measures to investors has significant limitations including, but not limited to, (i) they are not necessarily identical to similarly titled measures used by other companies, including those in the pharmaceutical industry, (ii) they exclude financial information and events, such as the effects of non-cash expenses such as legal provisions, dispositions or amortization of intangible assets, that some may consider important in evaluating Takeda’s performance, value or prospects for the future, (iii) they exclude items or types of items that may continue to occur from period to period in the future (however, it is Takeda’s policy not to adjust out normal, recurring cash operating expenses necessary to operate our business) and (iv) they may not include all items which investors may consider important to an understanding of our results of operations, or exclude all items which investors may not consider to be so. The following tables reconcile, for each of the periods shown, Takeda’s Core Financial Measures to the most directly comparable financial measures calculated and presented in accordance with IFRS, namely: (i) Core Revenue to Revenue as presented under IFRS; (ii) Core Operating Profit to Operating Profit as presented under IFRS and (iii) Core Net Profit for the Year attributable to owners of the Company to Net Profit for the Year attributable to owners of the Company as presented under IFRS. 84 Table of Contents Adjustments to Revenue and Operating Profit to calculate Core Revenue and Core Operating Profit: For the Year Ended March 31, 2026 Reported (IFRS) Amortization of intangible assets Impairment of intangible assets Other operating income/expenses*2 Others*3 Core Financial Measures (non-IFRS) (billions of yen) Revenue ¥ 4,505.7 ¥ — ¥ — ¥ — ¥ — ¥ 4,505.7 Cost of sales (1,571.6) — — — (1.0) (1,572.6) Selling, general and administrative expenses (1,084.2) — — — (0.5) (1,084.7) Research and development expenses (675.9) — — — (0.0) (676.0) Amortization of intangible assets associated with products (504.3) 504.3 — — — — Impairment losses on intangible assets associated with products*1 (129.3) — 129.3 — — — Other operating income (expenses) (534.2) — — 534.2 — — Operating profit ¥ 6.2 ¥ 504.3 ¥ 129.3 ¥ 534.2 ¥ (1.5) ¥ 1,172.5 *1Intangible assets associated with products include in-process R&D (IPR&D). *2Other operating income/expenses include gains on divestment of businesses and subsidiaries, rental income and lease expenses for subleases, restructuring expenses, valuation reserves for pre-launch inventories, donations and contributions, changes in the fair value of financial assets and liabilities associated with contingent consideration arrangements, gains and losses on sales of property, plant and equipment and investment property, legal provisions, write-offs of option assets and other operating income (expenses) that are non-recurring in nature. *3Others: cost of sales includes the unwinding of acquisition accounting adjustments (i.e., step-up) in value of PP&E associated with the Shire acquisition completed in the fiscal year ended March 31, 2019. For the Year Ended March 31, 2025 Reported (IFRS) Amortization of intangible assets Impairment of intangible assets Other operating income/expenses*2 Others*3 Core Financial Measures (non-IFRS) (billions of yen) Revenue ¥ 4,581.6 ¥ — ¥ — ¥ — ¥ (1.7) ¥ 4,579.8 Cost of sales (1,580.2) — — — (1.6) (1,581.8) Selling, general and administrative expenses (1,104.8) — — — (0.3) (1,105.0) Research and development expenses (730.2) — — — (0.1) (730.4) Amortization of intangible assets associated with products (548.2) 548.2 — — — — Impairment losses on intangible assets associated with products*1 (95.0) — 95.0 — — — Other operating income (expenses) (180.5) — — 184.3 (3.8) — Operating profit ¥ 342.6 ¥ 548.2 ¥ 95.0 ¥ 184.3 ¥ (7.5) ¥ 1,162.6 *1Intangible assets associated with products include in-process R&D (IPR&D). *2Other operating income/expenses include changes in fair value of financial assets and liabilities associated with contingent consideration arrangements, gains/losses on sales of property, plant and equipment and investment property, gains on divestment of businesses and subsidiaries, donations and contributions, rental income and lease expense for sublease, restructuring expenses, valuation reserves for pre-launch inventories, expenses for post-trial access, impairment of assets held for sale, legal provisions, write-offs of option assets and other operating income (expenses) that are non-recurring in nature. *3Others: revenue and other operating income (expenses) include JPY 1.7 billion of deferred revenue recognized from the asset sale to Teva Takeda Pharma Ltd. (“Teva”) and JPY 3.8 billion of deferred gain from the business divestiture to Teva, respectively, triggered by the divestment of Teva shares in the fiscal year ended March 31, 2025; cost of sales includes expenses related to the unwinding of acquisition accounting adjustments (i.e., step-up) in value of PP&E associated with the Shire acquisition completed in the fiscal year ended March 31, 2019. 85 Table of Contents For the Year Ended March 31, 2024 Reported (IFRS) Amortization of intangible assets Impairment of intangible assets Other operating income/expenses*2 Others Core Financial Measures (non-IFRS) (billions of yen) Revenue ¥ 4,263.8 ¥ — ¥ — ¥ — ¥ — ¥ 4,263.8 Cost of sales (1,426.7) — — — 0.4 (1,426.3) Selling, general and administrative expenses (1,053.8) — — — 0.9 (1,053.0) Research and development expenses (729.9) — — — 0.3 (729.6) Amortization of intangible assets associated with products (521.5) 521.5 — — — — Impairment losses on intangible assets associated with products*1 (130.6) — 130.6 — — — Other operating income (expenses) (187.1) — — 187.1 — — Operating profit ¥ 214.1 ¥ 521.5 ¥ 130.6 ¥ 187.1 ¥ 1.5 ¥ 1,054.9 *1Intangible assets associated with products include in-process R&D (IPR&D). *2Other operating income/expenses include changes in fair value of financial assets and liabilities associated with contingent consideration arrangements, gains/losses on sales of property, plant and equipment and investment property, gain on divestment of business and subsidiaries, donations and contributions, rental income and lease expense for sublease, restructuring expenses, valuation reserves for pre-launch inventories, impairment of assets held for sale, legal provisions and write-offs of option assets. 86 Table of Contents Adjustments to Net Profit (loss) for the Year attributable to owners of the Company to calculate Core Net Profit for the Year attributable to owners of the Company: For the Year Ended March 31, 2026 Reported (IFRS) Amortization of intangible assets Impairment of intangible assets Other operating income/expenses Others*1 Core Financial Measures (non-IFRS) (billions of yen, except for percentages) Operating profit ¥ 6.2 ¥ 504.3 ¥ 129.3 ¥ 534.2 ¥ (1.5) ¥ 1,172.5 Operating margin 0.1 % — — — — 26.0 % Finance income (expenses), net (146.4) — — — 13.2 (133.2) Share of profit (loss) of investments accounted for using the equity method (2.2) — — — 2.0 (0.1) Profit (loss) before tax (142.4) 504.3 129.3 534.2 13.7 1,039.2 Income tax (expenses) benefit*2 (9.8) (107.2) (17.5) (85.4) (4.9) (224.8) Net profit (loss) for the year (152.1) 397.1 111.7 448.8 8.9 814.4 Non-controlling interests (0.3) — — — — (0.3) Net profit (loss) for the year attributable to owners of the Company ¥ (152.4) ¥ 397.1 ¥ 111.7 ¥ 448.8 ¥ 8.9 ¥ 814.1 *1Others: finance income (expenses), net, includes the loss on non-monetary items for subsidiaries in hyperinflationary economies and for which IAS29, Financial Reporting in Hyperinflationary Economies, is applied, and finance income and expense related to non-core transactions; share of profit (loss) of investments accounted for using the equity method includes gains and losses associated with divestment and liquidations, and other fair value adjustments. *2Taxes on the adjustments between IFRS Accounting Standards and core results take into account the statutory tax rate applicable to the item based upon the jurisdiction where the adjustment is recorded. Total income tax expense on core adjustments (JPY 1,181.5 billion) to profit before tax was JPY 215.0 billion, resulting in an average tax rate of 18.2% on core adjustments. For the Year Ended March 31, 2025 Reported (IFRS) Amortization of intangible assets Impairment of intangible assets Other operating income/expenses Others*1 Core Financial Measures (non-IFRS) (billions of yen, except for percentages) Operating profit ¥ 342.6 ¥ 548.2 ¥ 95.0 ¥ 184.3 ¥ (7.5) ¥ 1,162.6 Operating margin 7.5 % — — — — 25.4 % Finance income (expenses), net (163.5) — — — 22.8 (140.7) Share of profit (loss) of investments accounted for using the equity method (4.0) — — — 5.1 1.1 Profit before tax 175.1 548.2 95.0 184.3 20.4 1,023.1 Income tax (expenses) benefit*2 (66.9) (114.9) (23.4) (45.1) 3.2 (247.3) Net profit for the year 108.1 433.3 71.6 139.2 23.6 775.8 Non-controlling interests (0.2) — — — — (0.2) Net profit for the year attributable to owners of the Company ¥ 107.9 ¥ 433.3 ¥ 71.6 ¥ 139.2 ¥ 23.6 ¥ 775.6 *1Others: finance income (expenses), net, includes the loss on non-monetary items for subsidiaries in hyperinflationary economies and for which IAS29, Financial Reporting in Hyperinflationary Economies, is applied, and finance income and expense related to non-core transactions; share of profit (loss) of investments accounted for using the equity method includes gains and losses associated with divestment and liquidations, and other fair value adjustments. *2Taxes on the adjustments between IFRS Accounting Standards and core results take into account the statutory tax rate applicable to the item based upon the jurisdiction where the adjustment is recorded. Total income tax expense on core adjustments (JPY 848.0 billion) to profit before tax was JPY 180.3 billion, resulting in an average tax rate of 21.3% on core adjustments. 87 Table of Contents For the Year Ended March 31, 2024 Reported (IFRS) Amortization of intangible assets Impairment of intangible assets Other operating income/expenses Others*1 Core Financial Measures (non-IFRS) (billions of yen, except for percentages) Operating profit ¥ 214.1 ¥ 521.5 ¥ 130.6 ¥ 187.1 ¥ 1.5 ¥ 1,054.9 Operating margin 5.0 % — — — — 24.7 % Finance income (expenses), net (167.8) — — — 25.8 (142.0) Share of profit (loss) of investments accounted for using the equity method 6.5 — — — (0.5) 5.9 Profit before tax 52.8 521.5 130.6 187.1 26.8 918.8 Income tax (expenses) benefit*2 91.4 (108.7) (28.6) (43.1) (73.0) (161.9) Net profit for the year 144.2 412.8 102.0 144.1 (46.2) 756.9 Non-controlling interests (0.1) — — — — (0.1) Net profit for the year attributable to owners of the Company ¥ 144.1 ¥ 412.8 ¥ 102.0 ¥ 144.1 ¥ (46.2) ¥ 756.8 *1Others: finance income (expenses), net includes the loss on non-monetary items for subsidiaries in hyperinflationary economies and for which IAS29, Financial Reporting in Hyperinflationary Economies, is applied, and finance income and expense related to non-core transactions; share of profit (loss) of investments accounted for using the equity method includes gains and losses associated with divestments and liquidations, and other fair value adjustments. *2Taxes on the adjustments between IFRS Accounting Standards and core results, take into account the statutory tax rate applicable to the item based upon the jurisdiction where the adjustment is recorded. Total income tax expense on core adjustments (JPY 866.0 billion) to profit before tax was JPY 253.3 billion, resulting in an average tax rate of 29.2% on core adjustments. 88 Table of Contents Constant Exchange Rate (“CER”) Change Constant Exchange Rate Change eliminates the effect of foreign exchange rates from year-over-year comparisons by translating financial results in accordance with IFRS or Core (non-IFRS) financial measures for the current period using corresponding exchange rates in the same period of the previous fiscal year, provided, however, that the results of operations of subsidiaries in countries experiencing hyperinflation, and for which IAS 29, Financial Reporting in Hyperinflationary Economies, is applied, are not adjusted for CER Change, and instead are calculated in accordance with IAS 29. Takeda presents CER change because we believe that this measure is useful to investors to better understand the effect of exchange rates on our business and to understand how our results of operations might have changed from year to year without the effect of fluctuations in exchange rates. These are the primary ways in which our management uses these measures to evaluate our results of operations. We also believe that this is a useful measure for investors as similar performance measures are frequently used by securities analysts, investors and other interested parties in the evaluation of the results of operations of other companies in our industry (many of whom similarly present measures that adjust for the effect of exchange rates). The usefulness of this presentation has significant limitations including but not limited to, that while CER change is calculated using the same exchange rates used to calculate financial results as presented under IFRS for the previous fiscal year, this does not necessarily mean that the transactions entered into during the relevant fiscal year could have been entered into or would have been recorded at the same exchange rates. Moreover, other companies in our industry using similarly titled measures may define and calculate those measures differently than we do and therefore such measures may not be directly comparable. Accordingly, CER change should not be considered in isolation and is not, and should not be viewed as, a substitute for change in financial results as prepared and presented in accordance with IFRS. 89 Table of Contents The following tables show our results of operations, including the year-over-year percentages changes thereto, in each case as calculated and presented in accordance with IFRS, and reconcile the CER percentage changes for each line item to such presentation. CER Change (Reported Measures): Billion JPY or percentage For the fiscal year ended March 31, AER (IFRS) CER(Non-IFRS) 2025 2026 JPY Change % Change % Change Revenue ¥ 4,581.6 ¥ 4,505.7 ¥ (75.8) (1.7) % (2.7) % Cost of sales (1,580.2) (1,571.6) 8.6 (0.5) % (1.9) % Selling, general and administrative expenses (1,104.8) (1,084.2) 20.6 (1.9) % (2.5) % Research and development expenses (730.2) (675.9) 54.3 (7.4) % (7.0) % Amortization and impairment losses on intangible assets associated with products (643.2) (633.5) 9.7 (1.5) % (1.7) % Other operating income 26.2 24.7 (1.5) (5.6) % (4.4) % Other operating expenses (206.7) (559.0) (352.2) 170.4 % 168.9 % Operating profit 342.6 6.2 (336.4) (98.2) % ― Finance income and (expenses), net (163.5) (146.4) 17.1 (10.5) % (7.5) % Share of profit (loss) of investments accounted for using the equity method (4.0) (2.2) 1.8 (45.4) % (52.9) % Profit (loss) before tax 175.1 (142.4) (317.4) ― ― Income tax (expenses) benefit (66.9) (9.8) 57.2 (85.4) % (97.6) % Net profit (loss) for the year 108.1 (152.1) (260.3) ― ― Non-controlling interests (0.2) (0.3) (0.0) 22.9 % 30.8 % Net profit (loss) for the year attributable to owners of the Company ¥ 107.9 ¥ (152.4) ¥ (260.3) ― ― Billion JPY or percentage For the fiscal year ended March 31, AER(IFRS) CER(Non-IFRS) 2024 2025 JPY Change % Change % Change Revenue ¥ 4,263.8 ¥ 4,581.6 ¥ 317.8 7.5 % 2.9 % Cost of sales (1,426.7) (1,580.2) (153.5) 10.8 % 6.5 % Selling, general and administrative expenses (1,053.8) (1,104.8) (50.9) 4.8 % 0.6 % Research and development expenses (729.9) (730.2) (0.3) 0.0 % (4.5) % Amortization and impairment losses on intangible assets associated with products (652.1) (643.2) 8.9 (1.4) % (6.0) % Other operating income 19.4 26.2 6.8 35.3 % 30.8 % Other operating expenses (206.5) (206.7) (0.2) 0.1 % (3.6) % Operating profit 214.1 342.6 128.5 60.0 % 51.2 % Finance income and (expenses), net (167.8) (163.5) 4.2 (2.5) % (5.7) % Share of profit (loss) of investments accounted for using the equity method 6.5 (4.0) (10.5) ― ― Profit before tax 52.8 175.1 122.3 231.7 % 206.4 % Income tax (expenses) benefit 91.4 (66.9) (158.3) ― ― Net profit for the year 144.2 108.1 (36.1) (25.0) % (33.1) % Non-controlling interests (0.1) (0.2) (0.1) 65.7 % 66.3 % Net profit for the year attributable to owners of the Company ¥ 144.1 ¥ 107.9 ¥ (36.1) (25.1) % (33.2) % 90 Table of Contents CER Change (non-IFRS): Billion JPY or percentage For the fiscal year ended March 31, AER CER 2025 2026 JPY Change % Change % Change Core revenue ¥ 4,579.8 ¥ 4,505.7 ¥ (74.1) (1.6) % (2.6) % Core cost of sales (1,581.8) (1,572.6) 9.2 (0.6) % (1.9) % Core selling, general and administrative expenses (1,105.0) (1,084.7) 20.4 (1.8) % (2.5) % Core research and development expenses (730.4) (676.0) 54.4 (7.4) % (7.0) % Core operating profit 1,162.6 1,172.5 9.8 0.8 % (0.9) % Core finance income (expenses), net (140.7) (133.2) 7.5 (5.3) % (1.9) % Core share of profit (loss) of investments accounted for using the equity method 1.1 (0.1) (1.3) ― (82.1) % Core profit before tax 1,023.1 1,039.2 16.1 1.6 % (0.9) % Core income tax (expenses) benefit (247.3) (224.8) 22.5 (9.1) % (12.8) % Core net profit for the year 775.8 814.4 38.6 5.0 % 2.9 % Non-controlling interests (0.2) (0.3) (0.0) 22.9 % 30.8 % Core net profit for the year attributable to owners of the Company ¥ 775.6 ¥ 814.1 ¥ 38.5 5.0 % 2.9 % Billion JPY or percentage For the fiscal year ended March 31, AER CER 2024 2025 JPY Change % Change % Change Core revenue ¥ 4,263.8 ¥ 4,579.8 ¥ 316.1 7.4 % 2.8 % Core cost of sales (1,426.3) (1,581.8) (155.5) 10.9 % 6.6 % Core selling, general and administrative expenses (1,053.0) (1,105.0) (52.1) 4.9 % 0.7 % Core research and development expenses (729.6) (730.4) (0.7) 0.1 % (4.4) % Core operating profit 1,054.9 1,162.6 107.8 10.2 % 4.9 % Core finance income (expenses), net (142.0) (140.7) 1.3 (0.9) % (4.5) % Core share of profit (loss) of investments accounted for using the equity method 5.9 1.1 (4.8) (81.2) % (82.2) % Core profit before tax 918.8 1,023.1 104.3 11.3 % 5.8 % Core income tax (expenses) benefit (161.9) (247.3) (85.4) 52.7 % 48.7 % Core net profit for the year 756.9 775.8 18.9 2.5 % (3.4) % Non-controlling interests (0.1) (0.2) (0.1) 65.7 % 66.3 % Core net profit for the year attributable to owners of the Company ¥ 756.8 ¥ 775.6 ¥ 18.8 2.5 % (3.4) % 91 Table of Contents Free Cash Flow and Adjusted Free Cash Flow Takeda defines Free Cash Flow as cash flows from operating activities less acquisition of property, plant and equipment (“PP&E”). Takeda defines Adjusted Free Cash Flow as cash flows from operating activities, subtracting payments for acquisition of PP&E, intangible assets, investments (excluding debt investments classified as Level 1 in the fair value hierarchy), shares in associates and businesses, net of cash and cash equivalents acquired and other transactional payments deemed related or similar in substance thereto as well as adding proceeds from sales of PP&E, sales and redemption of investments (excluding debt investments classified as Level 1 in the fair value hierarchy), sales of shares in associates and sales of businesses, net of cash and cash equivalents divested and further adjusting for the movement of any other cash that is not available to Takeda’s immediate or general business use. Takeda presents Free Cash Flow and Adjusted Free Cash Flow because Takeda believes that these measures are useful to investors as similar measures of liquidity are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Adjusted Free Cash Flow is also used by our management to evaluate our liquidity and our cash flows, particularly as they relate to our ability to meet our liquidity requirements and to support our capital allocation policies. Takeda also believes that Free Cash Flow and Adjusted Free Cash Flow are helpful to investors in understanding how our strategic acquisitions and divestitures of businesses contribute to our cash flows and liquidity. The usefulness of Free Cash Flow and Adjusted Free Cash Flow to investors has significant limitations including, but not limited to, (i) they may not be comparable to similarly titled measures used by other companies, including those in our industry, (ii) they do not reflect the effect of our current and future contractual and other commitments requiring the use or allocation of capital and (iii) the addition of proceeds from sales and redemption of investments and the proceeds from sales of business, net of cash and cash equivalents divested do not represent cash received from our core ongoing operations. Free Cash Flow and Adjusted Free Cash Flow should not be considered in isolation and are not, and should not be viewed as, substitutes for cash flows from operating activities or any other measure of liquidity presented in accordance with IFRS. The most directly comparable measure under IFRS for Free Cash Flow and Adjusted Free Cash Flow is net cash from operating activities. The following table provides a reconciliation from Net Cash from Operating Activities, the most comparable measure presented in accordance with IFRS, to Free Cash Flow and Adjusted Free Cash Flow for the fiscal year ended March 31, 2024, 2025 and 2026: For the Year Ended March 31, 2024 2025 2026 (billions of yen) Net cash from operating activities (IFRS) ¥ 716.3 ¥ 1,057.2 ¥ 1,041.4 Acquisition of PP&E (175.4) (200.8) (176.0) Free cash flow (non-IFRS) 540.9 856.4 865.4 Adjustment for cash temporarily held by Takeda on behalf of third parties*1 18.0 2.1 26.6 Proceeds from sales of PP&E 8.6 0.1 6.5 Acquisition of intangible assets*2 (305.3) (147.0) (234.9) Acquisition of option to license — (31.8) (3.7) Acquisition of investments*3 (6.8) (17.4) (15.9) Proceeds from sales and redemption of investments 8.0 29.4 7.0 Acquisition of shares in associates — (1.0) (0.6) Proceeds from sales of shares in associates — 57.7 0.9 Proceeds from sales of business, net of cash and cash equivalents divested 20.0 20.6 33.3 Adjusted free cash flow (non-IFRS) ¥ 283.4 ¥ 769.0 ¥ 684.5 *1Adjustment for cash temporarily held by Takeda on behalf of third parties refers to changes in cash balances that are temporarily held by Takeda on behalf of third parties related to vaccine operations and the trade receivables sales program, which are not available to Takeda’s immediate or general business use. *2Proceeds from sale of intangible assets are included in net cash from operating activities, except certain immaterial transactions. *3Acquisition of JPY 80.1 billion debt investments classified as Level 1 in the fair value hierarchy is excluded for the period ended March 31, 2025. 92 Table of Contents EBITDA and Adjusted EBITDA Takeda defines EBITDA as consolidated net profit before income tax expenses, depreciation and amortization and net interest expense. Takeda defines Adjusted EBITDA as EBITDA further adjusted to exclude impairment losses, other operating income and expenses (excluding depreciation and amortization, as well as impairment losses), finance income and expenses (excluding net interest expense), our share of profit or loss of investments accounted for using the equity method, other non-cash items such as non-cash equity-based compensation expense, and other items that management believes are unrelated to our core operations, including EBITDA from divested products, purchase accounting effects and transaction related costs. Takeda presents EBITDA and Adjusted EBITDA because Takeda believes that these measures are useful to investors as they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Primarily, Adjusted EBITDA is used by Takeda for the purposes of monitoring its financial leverage. See “Item 5.B Liquidity and Capital Resources — Supplemental Discussion of Financial Leverage (Adjusted Net Debt to Adjusted EBITDA Ratio) (Non-IFRS Measure)” and “—Adjusted Net Debt/Adjusted EBITDA Ratio” below. Takeda further believes that Adjusted EBITDA is helpful to investors in identifying trends in its business that could otherwise be obscured by certain items unrelated to ongoing operations because they are highly variable, difficult to predict, may substantially impact our results of operations and may limit the ability to evaluate our performance from one period to another on a consistent basis. The usefulness of EBITDA and Adjusted EBITDA to investors has significant limitations including, but not limited to, (i) they may not be comparable to similarly titled measures used by other companies, including those in the pharmaceutical industry, (ii) they exclude financial information and events, such as the effects of an acquisition, or amortization of intangible assets, that some may consider important in evaluating Takeda’s performance, value or prospects for the future, (iii) they exclude items or types of items that may continue to occur from period to period in the future and (iv) they may not include all items which investors may consider important to an understanding of our results of operations, or may not exclude all items which investors may not consider important for such understanding. EBITDA and Adjusted EBITDA should not be considered in isolation and are not, and should not be viewed as, substitutes for operating income, net profit for the year or any other measure of performance presented in accordance with IFRS. The most closely comparable measure presented in accordance with IFRS is net profit for the year. The following table provides a reconciliation from net profit (loss) to EBITDA and Adjusted EBITDA for the fiscal years ended March 31, 2025 and 2026: For the Year Ended March 31, 2025 2026 (billions of yen) Net profit (loss) for the year (IFRS) ¥ 108.1 ¥ (152.1) Income tax expenses (benefit) 66.9 9.8 Depreciation and amortization 761.4 721.1 Interest expense, net 117.7 131.2 EBITDA (non-IFRS) 1,054.2 710.0 Impairment losses 106.5 145.7 Other operating expense (income), net, excluding depreciation, amortization and other miscellaneous non-cash expenses 163.2 516.7 Finance expense (income), net, excluding interest income and expense, net 45.8 15.1 Share of loss (profit) on investments accounted for under the equity method 4.0 2.2 Other adjustments* 67.3 67.5 Adjusted EBITDA (non-IFRS) ¥ 1,441.0 ¥ 1,457.2 *Other adjustments include non-cash items such as non-cash equity-based compensation expense, and other items that management believes are unrelated to our core operations, including purchase accounting effects and transaction related costs, as well as adjustments for EBITDA from divested products which are removed as part of Adjusted EBITDA, including the JPY 1.7 billion of non-cash revenue adjustment related to the asset sale to Teva for FY2024. Adjusted Net Debt/Adjusted EBITDA Ratio Takeda defines Net Debt as the book value of bonds and loans on consolidated statements of financial position adjusted only for cash and cash equivalents and Adjusted Net Debt first by calculating the sum of the current and non-current portions of bonds and loans as shown on our consolidated statement of financial position, which is then adjusted to reflect (i) the use of prior 12-month average exchange rates as of the fiscal year-end for non-JPY debt outstanding at the beginning of the fourth quarter and the use of relevant spot rates for new non-JPY debt incurred and existing non-JPY debt redeemed during the fourth quarter, which reflects the methodology our management uses to monitor our leverage, and (ii) the “equity credit” applied to Takeda’s “hybrid” subordinated indebtedness by S&P Global Rating Japan in recognition of the equity-like features of those instruments pursuant to such agency’s ratings methodology. To calculate Adjusted Net Debt, Takeda deducts from this figure cash and cash equivalents, excluding cash temporarily held by Takeda on behalf of third parties related to vaccine operations and to the trade receivables sales program, and debt investments classified as Level 1 in the fair value hierarchy being recorded as Other Financial Assets. Takeda presents Net Debt and Adjusted Net Debt because Takeda believes that these measures are useful to investors in that our management uses it to monitor and evaluate our indebtedness, net of cash and cash equivalents and, in conjunction with Adjusted EBITDA, to monitor our financial leverage (for the avoidance of doubt, Adjusted Net Debt and the ratio of Adjusted Net Debt to Adjusted EBITDA are not intended to be indicators of Takeda’s liquidity). Takeda also believes that similar measures of indebtedness are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Particularly following the acquisition of Shire, 93 Table of Contents investors, analysts and, in particular, ratings agencies, have closely monitored Takeda’s leverage, as represented by the ratio of its Adjusted Net Debt to Adjusted EBITDA. In light of the weight given by ratings agencies in particular to this ratio, Takeda believes that such information is useful to investors to help understand not only Takeda’s financial leverage, but also how ratings agencies evaluate the level of financial leverage in evaluating Takeda’s quality of credit. Accordingly, as described below, Takeda includes an adjustment to its Adjusted Net Debt to reflect the “equity credit” afforded to certain subordinated indebtedness by ratings agencies (such indebtedness does not qualify for treatment as equity under IFRS). The usefulness of Adjusted Net Debt to investors has significant limitations including, but not limited to, (i) it may not be comparable to similarly titled measures used by other companies, including those in the pharmaceutical industry, (ii) it does not reflect the amounts of interest payments to be paid on Takeda’s indebtedness, (iii) it does not reflect any restrictions on Takeda’s ability to prepay or redeem any of our indebtedness, (iv) it does not reflect any fees, costs or other expenses that Takeda may incur in converting cash equivalents to cash, in converting cash from one currency into another or in moving cash within our consolidated group, (v) it applies to gross debt an adjustment for average foreign exchange rates which, although consistent with Takeda’s financing agreements, does not reflect the actual rates at which Takeda would be able to convert one currency into another and (vi) it reflects an equity credit despite the fact that Takeda’s subordinated bonds are not eligible for equity treatment under IFRS, although Takeda believes this adjustment to be reasonable and useful to investors. Adjusted Net Debt should not be considered in isolation and is not, and should not be viewed as, a substitute for bonds and loans or any other measure of indebtedness presented in accordance with IFRS. The most directly comparable measures under IFRS for Net Debt is bonds and loans. Takeda’s ratio of Adjusted Net Debt to Adjusted EBITDA as of the dates shown was as follows. For the Year Ended March 31, 2025 2026 (billions of yen, except for ratios) Adjusted net debt ¥ (3,975.5) ¥ (3,817.6) Adjusted EBITDA 1,441.0 1,457.2 Adjusted net debt to adjusted EBITDA ratio 2.8 x 2.6 x The following table provides a reconciliation from bonds and loans to Adjusted Net Debt as of March 31, 2025 and 2026: For the Year Ended March 31, 2025 2026 (billions of yen) Non-current portion of bonds and loans (IFRS) ¥ (3,966.3) ¥ (4,369.7) Current portion of bonds and loans (IFRS) (548.9) (512.2) Bonds and loans (IFRS) (4,515.3) (4,881.8) Cash and cash equivalents (IFRS) 385.1 595.1 Net debt (non-IFRS) (4,130.2) (4,286.8) Cash temporarily held by Takeda on behalf of third parties*1 (105.8) (79.2) Level 1 debt investments*1 79.3 85.1 Foreign exchange adjustment*2 (68.9) 213.2 Application of equity credit*3 250.0 250.0 Adjusted net debt (non-IFRS) ¥ (3,975.5) ¥ (3,817.6) *1Adjustments related to cash temporarily held by Takeda on behalf of third parties related to vaccine operations and to the trade receivables sales program, which is not available to Takeda’s immediate or general business use, and debt investments classified as Level 1 in the fair value hierarchy being recorded as Other Financial Assets. *2Foreign exchange adjustment refers to change from the month-end rate to the prior 12-month average exchange rates as of the fiscal year-end used for calculation of debt denominated in currencies other than Japanese yen to match the calculation of Adjusted EBITDA (which is calculated based on average rates). Non-JPY debt outstanding at the beginning of the fourth quarter is translated to JPY using the prior 12-month average exchange rates as of the fiscal year-end. New non-JPY debt incurred during the fourth quarter and existing non-JPY debt redeemed during the fourth quarter are translated to JPY at relevant spot rates as of the relevant date. *3Application of equity credit includes JPY 250.0 billion reduction in debt due to a 50% equity credit applied to JPY 500.0 billion principal amount of our hybrid (subordinated) bonds and loans by S&P Global Rating Japan, given that those instruments qualify for certain equity credit for leverage purposes. 94 Table of Contents