CSL(US:CSLLY)2022-08-17 07:11Financial Data and Key Metrics Changes - Revenue increased by 3% at constant currency, totaling $10.7 billion, while net profit after tax (NPAT) was $2.25 billion, at the top end of financial guidance [9][46] - Gross profit remained steady at $5.8 billion, but EBIT decreased by 8% to $2.9 billion due to increased R&D investments [46][50] - Cash flow from operations fell by 27% to $2.6 billion, primarily due to a significant increase in inventory costs related to plasma [46][52] Business Line Data and Key Metrics Changes - CSL Behring's total revenue rose by 2% at constant currency, with immunoglobulin sales declining by 3% due to lower plasma collections [49][16] - IDELVION, a hemophilia B product, saw a strong performance with sales up 20%, while specialty products grew significantly, with HAEGARDA up 5% [13][25] - CSL Seqirus reported total revenue growth of 13%, driven by a 16% increase in seasonal influenza vaccine sales, particularly FLUAD, which rose by 41% [42][50] Market Data and Key Metrics Changes - North America remained the largest market for CSL Behring, accounting for 49% of total revenue, while Asia-Pacific grew by 21% due to strong albumin demand in China [17][21] - European revenue declined by 5%, impacted by immunoglobulin supply tightness [17] - The overall plasma collections increased by 24% year-on-year, indicating a recovery in supply [10][30] Company Strategy and Development Direction - The acquisition of Vifor Pharma is expected to enhance CSL's portfolio in renal disease and iron deficiency, with strong cash flow generation anticipated [5][6] - The company is focused on executing its 2030 strategy while continuing to invest in R&D for sustainable growth [8][11] - CSL aims to maintain its A credit ratings while expanding its strategic horizons post-acquisition [6][54] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of plasma collections and anticipated strong sales growth for immunoglobulin and albumin products [58] - The company expects revenue growth of 7% to 11% for fiscal year 2023, with NPAT projected between $2.4 billion and $2.5 billion [60] - Challenges such as inflationary pressures and staffing constraints were acknowledged, but the fundamentals of the business were deemed strong [59][60] Other Important Information - The company maintained its final dividend at $1.18 per share, translating to a total of $2.22 per share for the financial year [48] - CSL's sustainability strategy includes a target to reduce carbon emissions by 40% by 2030 [54][55] Q&A Session Summary Question: Organic basis for EBIT or NPAT amidst non-recurring items - Management indicated that the forward guidance of $2.4 billion to $2.5 billion NPAT reflects the underlying performance of the legacy business, excluding Vifor-related costs [63][64] Question: Green shoots in plasma business and exit rates - Management noted that the exit rate in the second half was a good indicator of improvement, despite challenges from COVID variants affecting staffing and donor availability [66] Question: Outlook for immunoglobulin and CIDP indication - Management remains bullish on immunoglobulin as a standard of care, indicating that new products may not significantly impact the existing market share [69][70] Question: Confidence in maintaining albumin sales amidst competitive pressures - Management expressed confidence in albumin demand, particularly in China, while acknowledging pricing pressures due to increased competition [73]