CSL Ltd. — AGM Information 2003

Oct 15, 2003

16 October 2003

The Company Announcements Office Australian Stock Exchange Limited 530 Collins St MELBOURNE VIC 3000

Dear Sir/Madam

CHAIRMAN'S ADDRESS AND MANAGING DIRECTOR'S PRESENTATION

Please find attached copies of the Chairman's Address and Managing Director's presentation slides to be presented at CSL's Annual General Meeting which commences at 10.00 a.m. today.

Yours faithfully

Peter Turvey COMPANY SECRETARY

CSL LIMITED's THIRTEENTH ANNUAL GENERAL MEETING CHAIRMAN'S ADDRESS 16 OCTOBER 2003

"As shareholders will have already appreciated, last financial year proved to be a difficult year for the Company.

"However, I am pleased to be able to report that during the year we have continued to expand key business operations to build our competitive strengths in core activities that position the Company for sustainable growth:

• ZLB Bioplasma, in spite of difficult trading conditions, increased its US market share for IVIG and commenced sales of this Product in Europe, the Middle East and South America:
• CSL Bioplasma commissioned a new plasma testing facility in Melbourne and continued to strengthen its Asia Pacific operations;
• CSL Pharmaceutical took advantage of increased manufacturing capacity to produce and sell more Fhivax® influenza vaccine in Australia than ever before;
• IRH Biosciences acquired the largest independent collector of animal serum in the US, started work on an upgrade of its plant in the United Kingdom, and expanded its presence in Asia;
• Animal Health built and validated a new Leptospira vaccine manufacturing plant in the $\bullet$ US - and this vaccine is now available in the US and Europe.

CORPORATE OBJECTIVES FOR 2002-2003

"Although our returns were reduced last year, we have successfully pursued all other corporate objectives outlined to shareholders in our 2002 Annual Report and at our last Annual General Meeting.

• We have significantly increased our global presence in the plasma products business by broadening the scope of our plasma fractionation operations;
• We have strengthened CSL's Australian market position for our Pharmaceutical and Bioplasma businesses;
• We have further developed our JRH Biosciences and Animal Health operations as specialised international businesses;
• We have achieved notable successes from our investment in innovative and globally ۰ competitive research and development activities

• We have continued to implement human resources policies that help to create an environment for achievement and that align the skills of our people with CSL's strategic objectives.

FINANCIAL RESULTS

"Despite ZLB experiencing a difficult trading year, all our other businesses performed well to deliver \$1.3 billion in Group sales revenues - only $3\%$ less than sales for the previous year. However, after tax profits fell 43% to \$70.4 million due largely to currency movements and lower US prices for blood products. The Managing Director will address in more detail the overall performance of the Company.

FOREIGN EXCHANGE POLICY

"Due to the impact of currency movements during the course of the past year, it is appropriate that I outline our Foreign Exchange Policy.

"In principle we seek to establish a natural hedge by matching foreign assets with debt denominated in the same currency.

"We take a currency hedge to cover known exposures which arise from forward commitments.

"Importantly we do not take currency hedges to cover forecast cash flows.

We believe this is the appropriate policy because over the long-term the impact of currency movements will be relatively small, ie adverse impacts in one year will be offset by favourable impacts in subsequent years. By attempting to eliminate the impact of currency movements we would incur significant hedging costs and reduce our ability to participate in favourable currency movements.

BUSINESS OPERATIONS

"CSL's global operations are carried out through four business units: Human Health, JRH Biosciences, Animal Health and ZLB Plasma Services.

HUMAN HEALTH

"Let me first comment on our Human Health businesses.

"ZLB Bioplasma, had a difficult year due primarily to an oversupplied US market and currency movements - particularly the Swiss franc's strong appreciation against the US dollar. Sales revenue was down 16% to \$398.5 million compared to last year.

"In the US, ZLB Bioplasma Inc. expanded the sales volume of Carimune^TM IVIG year-onyear by 18% but these gains were largely offset by lower prices. Successful transfer of the Sandoglobulin trademark from Novartis AG enabled ZLB's sales of IVIG to commence in

Europe, South America and the Middle East although due to the period allowed to Novartis to sell its inventory, sales uptake was delayed. Increasing sales are now being made through newly established affiliated companies in the United Kingdom, Germany, Belgium and Italy as well as through distributors in a further 24 countries. This expanded commercial structure will provide further opportunities for additional sales of other ZLB products.

"ZLB's investment in broadening commercial operations will help reduce the impact of pricing pressures in the competitive US market by continuing to grow our global market share.

"CSL Bioplasma increased sales revenue by 10% to \$168.4 million in a year of encouraging Growth was underpinned by continuing strong demand for our products, progress. particularly Intragam P and by the increased volumes of plasma we processed on behalf of the Australian Red Cross Blood Service.

"During the year the Federal Government announced the establishment of the National Blood Authority (NBA) to improve and enhance the management of the Australian blood banking and plasma products sector at a national level. The National Blood Authority is now responsible for the demand and supply planning for blood and blood products on behalf of all states and territories and has advised that it will enter into negotiations with CSL on a new Agreement for the supply of plasma products on behalf of all Governments.

"CSL's current Plasma Fractionation Agreement with the Commonwealth is due to expire in June 2004 and it is expected that a new contract will be in place with the Commonwealth by the end of September 2004. We have agreed in principle with the NBA to extend the current Agreement for a six month period to ensure continuity of supply of plasma products throughout the negotiation process. It is expected that a new Agreement for the supply of plasma products will commence from 1 January 2005. The NBA intend to announce this development today.

"CSL Bioplasma continues to build on close working relationships with Blood Services throughout the Asia Pacific region including New Zealand, Hong Kong, Singapore and Malaysia. Our new regional office in Hong Kong is providing increased levels of technical support to clients as we work to further strengthen our mainstream presence in key regional markets.

"In October 2002, CSL Bioplasma commissioned a new nucleic acid amplification testing laboratory. Adding another layer of safety to the plasma products we manufacture, this purpose-built facility uses leading edge technology to screen for blood-born viruses.

"CSL Pharmaceutical delivered sales revenue of \$245.5 million in 2003, 11% ahead of our 2002 result, in a year of significant growth in both vaccine and pharmaceutical sales.

"Two notable events for our vaccine portfolio were the introduction of Menjugate, a conjugated meningococcal C vaccine licensed from Chiron Corporation, and the launch of our thiomersal-free Fhivax ® influenza vaccine.

"In October 2002, shortly after we introduced Menjugate to the market, the Federal Government announced a major vaccination program to provide protection against meningococcal C disease for all children in Australia up to the age of 19. CSL will supply Menjugate to several States and Territories during the three years this program is expected to run.

"Our introduction of preservative-free Fluvax® for Australia's 2003 winter has been an important step in ensuring this key CSL product continues to deliver the most advanced influenza vaccine to the Australian community.

"CSL Pharmaceutical will continue to phase out low margin, distribution activities in favour of more profitable in-licensing arrangements. We will also further develop domestic and international markets for our Fluvax $^\circledast$ influenza vaccine.

"New Product Development opportunities continue to come from CSL's proprietary technologies in plasma fractionation, vaccinology, recombinant proteins and our ISCOM $^{\circledR}$ adjuvant technology. We are investing in an R&D portfolio that provides opportunities for short, medium and longer-term growth.

"CSL's most immediate returns will arise from product improvements such as our liquid IVIG, and from Rhophylac^®, our high-quality anti-D plasma product for preventing haemolytic disease of the newborn. Late in 2002, the US FDA accepted both products for review.

"The main medium term value driver in the portfolio is the HPV vaccine which has resulted from the collaboration with Merck & Co. Inc, our exclusive licensee. This investigational vaccine, now in Phase Three testing at sites around the world, has provided the first evidence that vaccination may reduce the incidence of HPV16 infection and related cervical cancer. Two significant events were achieved during the past year in that patents in both Europe and the US were granted to the Company which will secure royalty revenue from Merck on the launch of the vaccine.

"Our proprietary ISCOM^® adjuvant technology passed a major milestone this year with data from several successfully completed early stage human clinical trials showing ISCOM® product candidates were safe and tolerable, and could generate potent immune responses. This technology should offer CSL a powerful leverage point with partners and give confidence to test ISCOM ® based immunotherapy candidates against chronic infectious diseases and cancer.

"CSL will continue to develop proprietary platform technologies in which we have broadbased intellectual property and skills, and which will enable us to pursue further research and development collaborations with major industry partners.

IRH BIOSCIENCES

"JRH Biosciences delivered strong and profitable growth again this year with sales revenue increasing 16% to \$168.0 million. Growth was fuelled by cell culture-based products from some of the world's largest pharmaceutical companies moving through clinical trials and was supported by launches of new products and services.

"We will sustain our growth by increasing sales of cell culture products for use in clinical phase biopharmaceutical products moving through the drug development pipeline. To this end, we launched four new proprietary EX-CELLTM serum-free media for virus and monoclonal antibody growth and production. Our expanded product range drove the 35% increase in EX-CELL^TM proprietary media revenue.

"In February 2003 we acquired the business of By-Prod Corporation, the largest independent serum collector in the US. Serum is an essential component in the production of many biopharmaceutical products. This secured supply of US serum coupled with our existing Australian serum collection operations has strengthened our leadership position in the serum business.

"We also increased our global serum operations with the establishment of JRH Asia Pacific. Expanding our presence in the developing Asian market, we have appointed local distributors in Taiwan, Korea, Thailand and Singapore. As part of our continuing investment in European infrastructure, we have started work on a significant upgrade of our liquid cell culture media plant in the United Kingdom and extended sales and technical support services for our European customers.

ANIMAL HEALTH

"Animal Health sales revenue increased to \$64.7 million despite severe drought in the US and Australia.

"During the year, both the US Department of Agriculture and United Kingdom's Veterinary Medicines Directorate approved the construction, commissioning and validation of our new Leptospira vaccine facility at Biocor's site in Omaha, Nebraska. Distributed by our marketing partner, Pfizer Animal Health, the Spirovac® bovine leptospira vaccine manufactured in this new facility is now available in the US, the United Kingdom and the Republic of Ireland.

"I would also like to take this opportunity of advising shareholders that the Company has received, in recent times, a number of unsolicited approaches from global companies in the Animal Health industry expressing a desire to acquire our Animal Health business.

"Although our Animal Health Division has been a positive contributor to Group revenues and earnings over a long period of time, and its management team and staff continue to perform exceptionally well, we have begun the process of reviewing the best way to maximise the value of our Animal Health business for all stakeholders, including reviewing our ownership of the business and assessing the attractiveness of alternatives available. Information, protected by Confidentiality Agreements, is being provided to a number of prospective purchasers of the business. We will keep shareholders informed of developments as they occur.

ZLB PLASMA SERVICES

"ZLB Plasma Services is one of the largest collectors of human blood plasma in the world and a major supplier to the US fractionation industry.

"Operational efficiencies implemented this year in plasma collection centres and our plasma testing laboratory in Miami, Florida contributed to financial performance above expectations. At a time of softening demand for plasma, we consolidated our operations and achieved sales of \$255.2 million.

AVENTIS BEHRING LLC

"As we informed shareholders in February 2003, CSL entered into an agreement with Aventis that provided an opportunity to evaluate the Aventis Behring plasma products business.

"We have undertaken a significant due diligence exercise and CSL and Aventis need to resolve a number of commercial issues. If these are able to be resolved, it will enable us to proceed to finalise the agreement to acquire the Aventis Behring plasma business. Once these discussions are completed, we will advise shareholders accordingly.

DIVIDEND

"Expressing confidence in the future performance of the Company, the Board has declared a final dividend of 22 cents per share, fully franked, bringing the total dividend for the year to 34 cents per share - the same as for last year.

"Our total dividend payment for the year represents a pay out ratio of 48% based on earnings per share after tax before goodwill amortisation.

"Your final dividend cheques were mailed to you on the 10th October, unless you have elected to participate in the Company's new Dividend Reinvestment Plan about which I will say more later.

CORPORATE GOVERNANCE

"This year, the Australian Stock Exchange Corporate Governance Council released a set of best practice recommendations for the Corporate Governance practices of listed public companies.

Most of these recommendations apply from 1 July 2003.

"Although CSL's policies and practices already complied with the recommendations to a large extent, a comprehensive review was carried out during the year.

"Following our review, CSL's Corporate Governance policies were updated and are outlined in our 2002-2003 Annual Report. These policies and practices are consistent with the principal recommendations of the ASX Corporate Governance Council.

I would like to draw your attention to some key components.

"Firstly, a formal Charter was adopted by the Board documenting its membership, its operating procedures and the apportionment of responsibilities between the Board and CSL management.

"Regarding the composition of the Board, the Charter provides that a majority of directors should be independent and the Chairman of the Board must be an independent, nonexecutive director. The Board has determined that all of our present non-executive directors are independent.

"The Board has also established formal Charters for each of its sub-committees being the Nomination Committee, the Audit and Risk Management Committee, the Human Resources Committee and the Securities and Market Disclosure Committee.

"An important function of the Audit and Risk Management Committee has been to ensure the independence of the external auditor. The external audit partner is rotated at least every seven years and the auditor is required to make an independence declaration annually. It is also the Company's policy to request that the external auditor attend each Annual General Meeting to be available to answer questions from you, the shareholders.

"The Company has identified and codified a set of values common to all of our operations that clarify our ethical responsibilities. Adopted by the Board, the CSL Group Values of superior performance, innovation, integrity, collaboration and customer focus define what our Company stands for - and what we expect of ourselves.

"In addition, the Board has adopted a Corporate Code of Conduct derived from the CSL Group Values which establishes the foundation for ethical conduct in our operations.

"We are now in the process of updating the information available on our web site in relation to these Corporate Governance Practices.

"The Board is also committed to ensuring the integrity and quality of its financial reporting, risk management and compliance systems. The Board requires the Managing Director and Finance Director to sign written management representations to the Board indicating:

• that the annual financial statements present a true and fair view, in all material respects, of the Company's financial condition;
• that operational results are in accordance with relevant accounting standards; and
• that the representation is founded on a sound and functioning system of risk management and internal compliance.

"We will continue to monitor and update our Corporate Governance Practices in light of ongoing developments in legal requirements and best practice.

OUTLOOK

"It is hard to deny that the year just passed has been a very difficult year for the Company in relation to its trading operations. However, I am of the view that the market for our IVIG products in the US appears to have stabilised. It is also apparent as a result of both Aventis and Bayer deciding to sell their plasma businesses that a degree of consolidation is underway in the industry which, with rationalisation, should provide greater stability in the future.

"CSL today operates two of the highest quality plasma fractionation facilities in the world and should be well positioned to benefit from these changes.

"The Managing Director has already commented on the specifics of the trading outlook.

THE CSL BOARD

"Turning to matters affecting the Board, I would like to advise that the Directors have resolved to terminate the Non-Executive Directors' Retirement Plan originally approved by shareholders in 1994. That Plan provided for the payment of a retirement allowance to Directors who retire having served for more than five years. The effect of the Board's decision is that no further entitlements will accrue after 31 December, 2003.

"In respect to membership of the Board, there have been no changes during the year, although Mr Ian McDonald will be retiring at the conclusion of this Annual General Meeting.

"Mr McDonald has been a Director with CSL since October 1992 and has provided both the Board and myself with the benefit of his many years of experience in the international pharmaceutical industry at a time when CSL has grown from being an Australian based pharmaceutical business to one that now has operations around the world. I would like to take this opportunity on behalf of the Board to express our great appreciation for Ian's valued contributions during his time on the Board.

OUR THANKS TO MANAGEMENT AND STAFF

"CSL's people around the world have faced a challenging year that has required strong commitment to continue to build our business under difficult conditions. The CSL Board would like to take this opportunity to acknowledge the dedication and good work of our management and staff."

OSTALIATIO

AUSTRALIA'S BIO-PHARMAGEUTICAL COMPANY

◆ Review 2002/03

• Currency Strategy
• · Plasma Plan
• · Aventis Behring
• · PFA New Contract
• · US Narket
• . Trading Outlook

AUSTRALIAS BIO PHARMACEUTICAL COMPANY

HALLO MENTETIANO PALOTA

• $\bullet$ JRH Biosciences sales growth 28% to US\$90.2m
• CSL Pharma sales (ex Logistics) growth 23% to \$201.8m
• . 2nd half Cash Flow from Ops \$90.7m
• · Improved financial gearing to below 30%

ALISTAS ILIS SIO PHARMATISTICA LONPANI

NGE MIRIKAY KAWAYO 12 MB

Financial Performance

S Revenues	\$1.313m	$\sim$	$6\%$
• ETTDA	\$255.1m	$\frac{1}{2}$	$\frac{1}{2}$

$$70.4m$

• · NPAT(bef Amort) \$112 Gm
• $\bullet$ NPAT
• · R&D investment SO1.5m
• · Effective tax rate

$-4.3\%$

$-3490$

$-10%$ $-15\%$

Forex adj

$\mathbb{Z}/n$ $240/$

AUSTRALIA SIO PHARMACEUTICAL COMPANY

Sales by Business Unit

June 2003 \$1,300.3m

AUSTRALIA SIO PHARMACEUTICAL COMPANY

AUSTRALIA'S BIO-PRIARINALITICAL CONPANY

COLORED COMPANY TO THE REAL PROPERTY

• Create "natural" hedges where possible
• Gear foreign subsidiaries
• Penominate debt in USD and Swiss Franc
• Better match foreign currency cash flows
• Increase non-USD denominated sales (euro)
• Control/reduce Swiss cost base
• . Cover known exposures only
• Contractual commitments
• Do not hedge anticipated exposures
• Cash flow protection priority
• Cash impact less than profit impact

MASTA LA LA LA LA HAMA LELITTOMI COMPANY

ET CONTRACTO

Operations

• $\bullet$ Efficiency focus
• Integration of global research, sales and marketing
• · Market Expansion
• Sandoglobulin Europe
• RoW business development
• · Product Introductions planned
• Liquid IVIG
• Rhophylac

A 15 MAI 14 S BIO AHARRA DA 14 MAY 20 MAA 41

Clinical Development

• $\bullet$ Encouraged by 5th International Symposium on MG (Interlaken) and recent publications
• Polish study in relapsing/remitting MS
• Other "autoimmune" diseases
• Serious dermatological conditions
• Albumin
• SAM-11141

ALS RALIAS SIO PHASMACEUTOAL COMPANY

DIESARE ZEN

Product Innovation

• Over \$50m invested in product development and innovation
• $\bullet$ Commitment to 4 plasma innovation projects
• Two novel "plasma to biotech" projects (recombinant anti D & rHDL)
• · Focus on high value projects
• · "Best in Class" portfolio

A 19 IV. DA 29 I DE HARRA A EL TICAL COMPANY

I DI FISITATI DI PARTICIO I I I DI LONGI I CON

Improved Liquid IVIG

• $\bullet$ Production process and formulation development completed
• IND to be submitted to FDA early 2004
• Clinical trial program scheduled to commence early-mid 2004

A 15 MAI 14 S BIO AHARRA DA 14 MAY 20 MAA 41

PIESna Pian – Product Intovation

Reconstituted HDL for Stroke

• $\bullet$ Strategic benefit novel fraction from plasma with potential for recombinant next generation
• Encouraging preclinical stroke data validated
• International experts support move to clinic
• · First clinical trials in Australia in 2004

A 19 IV. DA 29 I DE HARRA A EL TICAL COMPANY

FIRST TRIBUTE TRICITION IN STATISTICS

Recombinant Anti D for HDN

• $\bullet$ Global plasma product including $\mathbb Z$ LB/CSL
• Recombinant product has excellent early clinical data
• Recent progress on technical hurdles
• cell line efficiency
• registration strategy
• If successful, medium term CSL plasma to biotech product

A 19 IV. DA 29 I DE HARRA A EL TICAL COMPANY

FIRSTITE TRANSFORMED TO THE MANUSCRIPT

Fibrin Bandage / Haemostatic Dressing

• Over 2000 compassionate use HDs produced for the US Army
• Ongoing production contract with American Red Cross with funding support from US Army
• · US Army undertaking further comparative animal studies with clinical trials articipated to commence in 2004

AN THE TWO AND THE TENDER WHEN A CHANGE TO A CONTRACT A REPORT

Industry Consolidation

• $\bullet$ Competitors moving to reduce output of unprofitable litres - Alpha (Probitas), Baxter
• Revenue per litre priority
• manufacturing yields
• efficiency
• product portfolio
• · CSL evaluates strategic options
• stand alone vs consolidator

A 19 IV. DA 29 I DE HARRA A EL TICAL COMPANY

ZANG BILET ETA BILITI

• Due diligence almost complete
• ◆ Confirmed strategic and operational fit
• Product range
• Manufacturing efficiency
• Geographic and currency benefits
• Scale and throughput
• Substantial commercial issues remain
• Balance Sheet Assets and Liabilities
• Valuation
• Financing
• . Ensure this is best strategic decision for CSL
• All matters should culminate in decision prior to year end

ALISTA JA SERI PHARRA DELI TILA LIGNOPANA

AUSTRITETTE ESTITE CONTROLETTIE

• Current contract expires June 2004
• ◆ CSL / NBA (National Blood Authority) to enter negotiations
• New contract expected September 2004
• NBA and CSL agree to 6 month extension of existing contract to end of 2004
• $\bullet$ New contract expected from January 2005

A 19 IV. DA 29 I DE HARRA A EL TICAL COMPANY

US Marka

o ivig

• Pricing remains competitive (US\$36 to US\$38/gm contract price)
• ex manufactures sales volume 1 10% in 2003
• surplus inventory reducing
• output reductions
• 2004 market likely to improve
• · Alhimin
• Continued oversupply
• SAFE trial outcome relevant to usage

ALISTAS ILIS SIO PHARMATISTICA LONPANI

CASTER THE CITY OF THE CONTRACT

Half Financial Year ended 31 December 2003

• NPAT forecast to be similar to the 2nd half NPAT of 2002/03

Result impacted by further currency movements:

$\sim$ 15D/GHE. $(206)$ $(1206)$ · AUDIUSD

ALISTAS ILIS SIO PHARMATISTICA LONPANI

CS Large Hill COURCY

5 Year USD/CHF Exchange Rate

A 15 MAI 14 S BIO AHARRA DA 14 MAY 20 MAA 41

GSLITEGIROUROOK

5 Year AUD/USD Exchange Rate

AUSTRALIA SIO PHARMACEUTICAL COMPANY

OSTETI FIGURA FRANCIS

Full Financial Year ended 30 June 2004

• Modest growth at NPAT is forecast based on:
• Prices in US market stabilise
• Launch of liquid IVIG in USA
• Influenza vaccine sales
• Forex remaining at current rates

A 19 IV. DA 29 I DE HARRA A EL TICAL COMPANY

GSHOUTIGOR

Medium Term Drivers of Value

• $\bullet$ Plasma rationalisation benefits + new products
• $\bullet$ HPV vacaine
• · Business unit growth
• · Partnering for biotech innovation

AUSTRALIA SIO PHARMACEUTICAL COMPANY