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CSL Ltd. Annual Report 2024

Aug 12, 2024

17854_rns_2024-08-12_7f8856bf-1364-4592-8308-835d5d1d087e.pdf

Annual Report

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For immediate release

13 August 2024

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RESULTS PRESENTATION FOR THE FULL YEAR ENDED 30 JUNE 2024

Melbourne, Australia – CSL (ASX:CSL; USOTC:CSLLY)

Please find attached the slides for the presentation on the full year results that will be given by the Chief Executive Officer and Chief Financial Officer shortly. The live briefing will be webcast and can be viewed at https://edge.media-server.com/mmc/p/e6qpzs7g/

Please note that this link will expire after the webcast concludes.

A recording of the webcast will be made available later in the day at: https://investors.csl.com/investors/financial-results-and-information

Authorised for lodgment by:

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Fiona Mead Company Secretary

For further information, please contact:

Media:

Investors: Media: Chris Cooper Bernard Ronchi Stephen McKeon Jimmy Baker Head, Investor Relations Director, Investor Relations Director, Investor Relations Communications CSL Limited CSL Limited CSL Limited CSL Limited P: +61 455 022 740 P: +61 3 9389 3470 P: 61 402 231 696 P: +61 450 909 211 E: [email protected] E: [email protected] E: [email protected] E: [email protected]

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Driven by Our Promise

2024 Full Year Results 13 August 2024

Zahra K.

IMPORTANT NOTICE AND DISCLAIMER

This presentation contains summary information about CSL Limited (ACN 051 588 348) and its related bodies corporate (together, CSL ) and CSL's activities as at the date of this presentation. It is information given in summary form only and does not purport to be complete. It should be read in conjunction with CSL's other periodic corporate reports and continuous disclosure announcements filed with the Australian Securities Exchange ( ASX ), available at www.asx.com.au. This presentation is for information purposes only and is not a prospectus or product disclosure statement, financial product or investment advice or a recommendation to acquire CSL shares or other securities.

No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, none of CSL or its directors, employees or agents, nor any other person, accepts liability for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it, including, without limitation, any liability from fault or negligence on the part of CSL or its directors, employees, contractors or agents.

This presentation contains forward-looking statements in relation to CSL, including statements regarding CSL's intent, belief, goals, objectives, initiatives, commitments or current expectations with respect to CSL's business and operations, market conditions, results of operations and financial conditions, products in research, risk management practices, climate change and other environmental and energy transition scenarios. Forward-looking statements can generally be identified by the use of words such as "forecast", "estimate", "plan", "will", "anticipate", "may", "believe", "should", "expect", “project,” "intend", "outlook", "target", "assume" and "guidance" and other similar expressions.

The forward-looking statements are based on CSL's good faith assumptions as to the financial, market, risk, regulatory and other relevant environments that will exist and affect CSL's business and operations in the future. CSL does not give any assurance that the assumptions will prove to be correct. The forward-looking statements involve known and unknown risks, uncertainties and assumptions and other important factors, many of which are beyond the control of CSL, that could cause the actual results, performances or achievements of CSL to be materially different to future results, performances or achievements expressed or implied by the statements . Factors that could cause actual results to differ materially include: the success or otherwise of CSL’s research and development activities; factors affecting CSL’s ability to successfully market and sell new and existing products, including decisions by regulatory authorities regarding approval of CSL’s products and regarding label claims, competitive developments affecting CSL’s products, and trade buying patterns; factors affecting CSL’s ability to collect plasma, and difficulties or delays in manufacturing; legislation or regulations affecting the manufacturing, distribution, pricing, or reimbursement of CSL’s products, market access for CSL’s products, environmental protection matters, or tax; litigation or government investigations; fluctuations in interest and currency exchange rates; acquisitions or divestitures; and CSL’s ability to protects its patents and other intellectual property.

.

Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as at the date of the presentation. Except as required by applicable laws or regulations, CSL does not undertake any obligation to publicly update or revise any of the forward-looking statements or to advise of any change in assumptions on which any such statement is based.

TRADEMARKS

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Driven by Our Promise
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Except where otherwise noted, brand names designated by a or ® throughout this presentation are trademarks either owned by and/or licensed to CSL.

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CEO Overview

Financials

Outlook

CEO Overview

Paul McKenzie CEO & Managing Director

3

Delivered on Strategic Priorities in FY24

CSL Behring Strong growth, driven by Ig 14% (Ig 20%)[1]

CSL Seqirus Differentiated portfolio Market outperformance

CSL Vifor Drive synergies $100m+ p.a.

Rika Rollout

Yield Initiatives

84 Centres Horizon 1 and 2 I-Nomogram progressing FDA clearance to plan R&D pipeline Operating efficiency

R&D pipeline Operating efficiency Garadacimab, aTIVc 5.3%[1] HIZENTRA[®] DM (G&A/revenue) FILSPARI[®]

CSL Behring gross margin

120 bps[1]

Financial leverage

2.2x from 2.7x (Net Debt/EBITDA)

Geographic Expansion

HEMGENIX[®] Europe FERINJECT[®] China TAVNEOS[®] EU

PPE capital expenditure

31%

Strongly Positioned for Continued Annual Double-Digit Earnings Growth

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4

CEO Overview

Financials

Outlook

Strong Performance[1]

CSL Behring

Strong growth across the portfolio driven by Ig

Revenue +11% NPATA[2,3] +15% NPAT[3] +25%

  • Ig +20%, HAEGARDA[®] +12%, ALBUMIN[®] +12%, IDELVION[®] +10%

  • • Gross margin +120 bps at CC

  • Rika deployment on schedule for end-FY25

  • I-Nomogram FDA clearance

  • First patient dosed with HEMGENIX[®] in Europe

  • Garadacimab US, EU and Japan regulatory submissions

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$14,800m
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Revenue Growth

Behring +14% Seqirus +4% Vifor nc[4]

CSL Seqirus

Solid performance driven by differentiated portfolio

  • Seqirus +4% , FLUAD[®] +14%

  • KOSTAIVE[®] COVID vaccine approved in Japan

  • aTIVc phase III ongoing; sa-mRNA phase I influenza study

CSL Vifor

Evolving Iron market

  • EU iron volumes robust

  • Continued patient conversion to MIRCERA[®]

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  • Strong Nephrology launches

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5

CEO Overview

Financials

Outlook

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Revenue $10,608m +14%[1]

Revenue $10,608m +14%1
6
Therapy
Revenue ($m)
Change1
Ig
5,666
+20%
Albumin
1,209
+12%
Haemophilia
1,313
+10%
Specialty
1,940
+6%
Performance
Major Brands
• Strong performance across all geographies
– PRIVIGEN®/ INTRAGAM®+21%, HIZENTRA®+19%
• Significant patient demand in core indications
• HIZENTRA® remains clear market leader in SCIG
• Solid growth in all key geographies
• Chinese demand robust
• IDELVION®remains the standard of care, +10%
– Leadership position in US, key EU markets and Japan
• HEMGENIX®US and Europe infusions
– Reimbursement approvals in EU, UK, Switzerland and Canada
• HAEGARDA®+12%
– Continue to add new patients whilst preserving patient base
– Strong EU and Japan performance
• KCENTRA®+5%
– Continues to be gold standard for warfarin reversal
– Some anticipated volume impact from competitor launch

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Operational Highlights

  • Underlying fundamentals of plasma collection remain strong:

  • Plasma donation growth momentum maintained

  • Continued reduction in CPL

  • Expanding geographic footprint

  • Significant progress on digital transformation and enhanced focus on centre efficiencies

  • Horizon 1 and 2 yield initiatives progressing to plan

  • Gross margin recovery on track

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CEO Overview Financials Outlook
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Rika Plasma Donation System

  • Successfully rolled out to 84 centres

  • On track to complete US rollout by end FY25

  • Enhanced donor experience and reduced collection time

  • I-Nomogram deployment throughout FY25

  • Estimated to improve average donation yield by ~10%

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7

CEO Overview

Financials

Outlook

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Revenue $2,128m +4%[1]

Revenue $2,128m +4%1
Therapy
Revenue ($m)
Change1
Egg Based
140
(2%)
Cell Culture
535
(11%)
Adjuvanted Egg
1,040
+14%
In License / Other
181
(13%)
Pandemic
172
+9%
Other Income
60
+146%
Performance
Major Brands

Revenue growth in the northern hemisphere influenza
market during a challenging season

Heightened recognition of benefits of differentiated
product portfolio

First season following US ACIP preferred
recommendation for FLUAD®in 65+

FLUAD®>$1 billion revenue for first time
• Transition to single dose Gardasil vaccine program
• H5N8 avian flu preparedness
• Successful renewal of UK APA tender
• Includes COVID vaccine milestones in Japan

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8

CEO Overview

Financials

Outlook

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Operational Highlights

Product Innovation

Seasonal Influenza Products

  • FLUCELVAX[®] 6-month+ age extension approved in EU, UK, Australia and New Zealand

  • Phase III clinical study commenced for aTIVc

  • Regulatory approval for world-first samRNA COVID vaccine

  • FLUAD[®]

  • Japanese approval for KOSTAIVE[®]

  • 50-year+ age extension approved in the EU

    • Positive 12m durability data published in The Lancet
  • Received preferential recommendation in Canada for 65+

  • Phase I trial for sa-mRNA in seasonal and pandemic influenza

  • population

Pandemic Influenza

  • UK Advance Purchase Agreement awarded solely to CSL Seqirus

  • Selected by BARDA and HERA for delivery of H5N8 vaccine

Tullamarine Certificate of Occupancy

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9

CEO Overview

Financials

Outlook

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Revenue $2,064m

Therapy Revenue ($m) Performance Major Brands
• Robust volume growth in evolving iron market
Iron 1,018 – China FERINJECT® launch
– US step edit pressure
• MIRCERA®
– Strong ESA performance as US patient conversion a
continued
Nephrology:
Dialysis
786 • KAPRUVIA®
– Strong performance in Germany, France and Austria
b c
• VELPHORO®
– US inventory adjustment and China reimbursement
• TAVNEOS®
Nephrology:
Non-Dialysis
200 – Strong performance in all EU launch markets
• VELTASSA®
– Growth in US and EU markets
d
– Paediatric indication approved in US and EU

a. Licensed from F. Hoffman-La Roche AG; b. Licensed from Pfizer Inc.; c. Licensed from Cara Therapeutics, Inc.; d. Rights to EU, UK, Japan and certain other countries licensed from ChemoCentryx, Inc., a wholly owned subsidiary of Amgen, Inc.

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10

CEO Overview

Financials

Outlook

Financials

Joy Linton CFO

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11

CEO Overview

Financials

Outlook

NPATA[2,3]

$3,008m $101m FX $2,907m $2,610m FY23 NPATA FY24 NPATA @ CC

FY23 FY24 Change
Rep4 @ CC %1
NPATA $2,610m $3,008m +15%
Acquired intellectual
property amortisation
($235m) ($298m)
Acquisition related
adjustments
($353m) ($83m)
Tax $85m $59m
NPATA Attributable to NCI $137m $132m
NPAT $2,244m $2,818m +26%
NPAT Attributable to NCI ($50m) ($73m)
NPATto CSL equity holders $2,194m $2,745m +25%

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12

CEO Overview

Financials

Outlook

Segment Financial Highlights

Path to Gross Margin Recovery

CSL Behring

US$ millions reported FY23 FY24 Change
% at CC
1
Sales 8,968 10,334 15%
Other Revenue
Total Revenue
Gross Profit5
GP %5
Sales & Marketing
322
9,290
4,561
49.1%
804
274
10,608
5,275
50.3%1
903
(15%)
14%
17%
12%
Operating Result 3,757 4,372 18%
Operating Segment %5 40.4% 41.2%

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  • Optimise donor fees

  • • RIKA benefits • Centre efficiencies

CPL Reduction

  • HEMGENIX[®]

  • • HIZENTRA[®] PFS • Garadacimab

New Products

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Asp Mix Shift
Key Contributors
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  • HIZENTRA[®] v PRIVIGEN[®]

  • • Geographic mix

Ig Yield Improvements

  • Horizon 1

  • Increased volume

  • • Variable v fixed costs • Manufacturing efficiencies

Scale & Efficiency Measures

Excludes potential benefits of Horizon 2 initiatives

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Illustrative only

13

CEO Overview

Financials

Outlook

Segment Financial Highlights

CSL Seqirus

CSL Seqirus
US$ millions reported FY23 FY24 Change
% at CC
1
Sales 1,851 1,896 1%
Other Revenue 180 232 28%
Total Revenue 2,031 2,128 4%
Gross Profit5 1,259 1,318 4%
GP %5 62.0% 62.3%1
Sales & Marketing 187 196 8%
Operating Result5 1,072 1,122 4%
Operating Segment %5 52.8% 52.7%

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CSL Vifor

CSL Vifor
US$ millions reported FY234 FY24
Sales 1,957 2,029
Other Revenue 32 35
Total Revenue 1,989 2,064
Gross Profit5 1,411 1,413
GP %5 70.9% 68.1%1
Sales & Marketing 490 457
Operating Result5 921 956
Operating Segment %5 46.3% 46.3%

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14

CEO Overview

Financials

Outlook

CSL Group Financial Highlights

US$ Millions FY23
Rep
FY24
Rep
FY24
at CC
1
Change
%
1
Total Revenue
Gross Profit5
GP %5
13,310
7,231
54.3%
14,800
8,006
54.1%
14,744
8,030
54.5%
11%
11%
Sales & Marketing
Operating Result5
R&D5
1,481
5,750
1,266
1,556
6,450
1,428
1,549
6,481
1,421
5%
13%
12%
G&A5
Finance (Net)
827
406
825
437
776
436
(6%)
7%
NPATA3 2,610 2,907 3,008 15%
ETR %
ROIC
Cashflow From Ops
15.5%
12.2%
2,601
19.2%
10.5%
2,764
18.4% 6%Y
NPATA EPS3($) 5.41 6.02 11%Y
NPAT EPS3($)
DPS ($)
4.55
2.36
5.47
2.64
20%Y
12%Y

Y. At reported currency

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R&D

  • Growth in line with sales

  • FY25 R&D expenditure ~10% of revenue

  • G&A

  • Efficiencies driven by centralisation of Enabling Functions and reduced FX impact

Finance

  • Favourable debt structure limited impact of higher rates

Tax

  • Higher ETR due to geographic profit mix and increased UK tax rate

ROIC

  • Full year consolidation impact of CSL Vifor

  • Improvement to be driven by profit growth

  • Cashflow from Operations

  • Increase in cash earnings from growth in sales, partially offset by increase in working capital

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15

CEO Overview

Financials

Outlook

Capital Expenditure

Delivering capital-efficient growth

US$m
-
200
400
600
800
1,000
1,200
1,400
0%
2%
4%
6%
8%
10%
12%
14%
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23 FY24
Capex
% of Rev
% of Revenue

Capital Expenditure for Property, Plant & Equipment

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  • Reduction in capex follows a period of significant capacity expansion required to meet increasing market demand

  • Prioritising yield initiatives for majority of supply expansion through medium-term

  • FY25 capex anticipated to be ~$700-800m

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16

CEO Overview

Financials

Outlook

Cash Conversion Cycle

Days

250

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215
201 192 199
200 196
186 187
10 year
174 174 average
160
150
100
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
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Focus on working capital efficiency

  • Cash conversion has improved from pandemic-driven peak

  • Increase in FY24 due to timing of trade receivables

  • Working capital efficiency is a strategic priority through mid-term

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17

CEO Overview

Financials

Outlook

Outlook Paul McKenzie CEO & Managing Director

18

FY25 Outlook

CSL Behring

CSL Seqirus

  • Continued market outperformance from differentiated portfolio

  • Underlying patient demand for Ig in core indications remains strong

  • sa-mRNA COVID vaccine development

  • Positive reimbursement decisions support HEMGENIX[®] growth

    • Commercialisation of KOSTAIVE[® ] in Japan

    • Preparation for EU and US submissions

  • H5N8 avian influenza preparedness

  • Preparing for Garadacimab regulatory outcome and launch

CSL Vifor

  • Complete roll-out Rika and I-Nomogram

  • Well positioned for iron competition

  • Maintain nephrology launch momentum

  • Horizon 1 and 2 yield initiatives ongoing

  • Collaboration activities across CSL commercial and operations

  • Improving gross margin

  • Continue to advance Patient Blood Management with CSL Behring

FY25 FX impact estimated to be a headwind of approximately $50m if current rates remain unchanged for the remainder of the financial year

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Revenue Growth

~ 5 - 7% @CC[1]

NPATA Growth

~ 10 – 13% @CC[1,3] to ~$3.2 – $3.3b @CC[1.3]

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19

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CSL Contacts
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Chris Cooper Investor Relations  +61 455 022 740 [email protected] Bernard Ronchi Investor Relations  +61 3 9389 3470 [email protected]

Stephen McKeon Investor Relations  +61 402 231 696 [email protected]

Notes

(#) Constant currency removes the impact of exchange rate movements to facilitate comparability of operational performance for the Group. This is done in three parts: a) by converting the current year net profit of entities in the group that have reporting currencies other than US Dollars, at the rates that were applicable to the prior comparable period (translation currency effect); b) by restating material transactions booked by the group that are impacted by exchange rate movements at the rate that would have applied to the transaction if it had occurred in the prior comparable period (transaction currency effect); and c) by adjusting for current year foreign currency gains and losses. The sum of translation currency effect, transaction currency effect and foreign currency gains and losses is the amount by which reported net profit is adjusted to calculate the operational result.

General Disclaimer Non-IFRS

There are references to IFRS (International Financial Reporting Standards) and non-IFRS financial information in this document. Non-IFRS financial measures are financial measures other than those defined or specified under any relevant accounting standard and may not be directly comparable with other companies’ information. Non-IFRS financial measures are used to enhance the comparability of information between reporting periods, and enable further insight and a different perspective into the financial performance. Non-IFRS financial information should be considered in addition to, and is not intended to be a substitute for, IFRS financial information and measures. Non-IFRS financial measures are not subject to audit or review.

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Summary NPAT attributable to members of parent entity

of parent entity
Reportednetprofit after tax $2,642m
Currency effect $103m
Constant currency net profit after tax* $2,745m

Average exchange rates for major currencies for full year ended 30 June 2023/ 30 June 2024 include: USD/EUR (0.96/0.92), USD/AUD (1.49/1.52), USD/CHF (0.94/0.89), USD/CNY (6.95/7.22) and USD/GBP (0.83/0.79).

Summary NPATA2attributable to
members of the parent entity US$m
Reported net profit after tax 2,642
Amortisation of acquired intellectual property 241
Unwind of inventory fair value uplift 20
Acquisition and integration costs 54
Income tax credit on above adjustments (50)
NPATA2 attributable to members
of the parent entity
2,907
Currency effect attributable to members
of the parent entity
101
Constant Currency# NPATA2 attributable
to members of the parent entity
3,008

Summary Revenue

Summary Revenue
Reported revenue $14,800m
Currency effect ($56m)
Constant currency revenue* $14,744m
  • *Constant currency net profit after tax and constant currency sales have not

  • been audited or reviewed in accordance with Australian Auditing Standards.

Footnotes

  1. Percentages shown at constant currency to remove the impact of exchange rate movements, facilitating comparability of operational performance. See end note for further detail

  2. NPATA is defined as the statutory NPAT before impairment and amortisation of acquired IP, business acquisition and integration costs and unwind of the inventory fair value uplift

  3. Attributable to the shareholders of CSL Limited

  4. FY23 includes ~11 months of CSL Vifor contribution

  5. Underlying results have been adjusted to exclude impairment and amortisation of acquired intellectual property, business acquisition and integration costs and unwind of the inventory fair value uplift

NPATA to NPAT FY25 outlook

NPATA to NPAT adjustments,
attributable to:
Group Group CSL shareholders
(post tax)
CSL shareholders
(post tax)
FY25 FY24 FY25 FY24
Outlook at CC outlook at CC
Amortisation of acquired
intellectual property
370 +/- 10% 298 260 +/- 10% 201
Acquisition and integration costs - 53 - 41
Unwind of inventory fair value uplift - 30 - 20
Income tax credit on above
adjustments
(60) +/- 10% (60) - -
Total 310 +/- 10% 321 260+/- 10% 262

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21

Appendix

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22

Appendix A CSL Behring – Key Products

CSL Behring Therapy Group Sales $m Change1%
Privigen IVIG 3,624 27%
Hizentra SCIG 1,961 19%
Albumin
Idelvion
Albumin
Haemophilia
1,209
777
12%
10%
Kcentra Specialty 702 5%
Haegarda Specialty 491 12%
Berinert Specialty 242 (6%)
Haemocomplettan Specialty 233 6%
Humate Haemophilia 184 8%
Haemate Haemophilia 118 10%

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FY24 Revenue By Therapy Group $m

IVIG
SCIG
$3,705
$1,961
35%
18%
CSL Albumin $1,209 11%
Behring
Recombinants Coag $883 8%
Plasma Coag $398 4%
Peri-Operative Bleeding $1,023 10%
Other Specialty $917 9%
Other $512 5%

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23

Appendix B CSL Seqirus & CSL Vifor – Key Products

FY24 Revenue By Therapy Group $m

CSL Seqirus Therapy Group Sales $m Change1%
Fluad
Flucelvax
Afluria
Adjuvanted
Cell culture
Egg-based
1,040
535
140
14%
(11%)
(2%)
CSL Vifor Therapy Group Sales $m
Ferinject / Injectafer
Mircera
Venofer
Iron
Dialysis
Iron
759
619
173
Velphoro Dialysis 109
Veltassa Non Dialysis 138
Maltofer Iron 82
Tavneos Non Dialysis 60

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Cell Culture $535 25%
Adjuvanted $1,040 49%
Egg Based $140 7%
CSL
Seqirus In License $181 9%
Pandemic $172 8%
Other Income $60 2%
Iron $1,018 49%
Dialysis $786 38%
CSL
Vifor Non Dialysis $200 10%
Other $60 3%
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24

Significant progress made with CSL’s Sustainability Strategy

Sustainability strategy refreshed

Moving to 100% renewable electricity in Australia and Europe

  • Repositioned with focus on healthier communities and healthier environment

  • All Australian facilities from Jan 2025

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  • Strong progress on Scope 3 emissions engagement

  • Validation by the Science Based Targets initiative pending

Donor experience Energy Patient experience Water Access and affordability Waste Talent and culture Supplier

CSL’s sustainability vision is for a healthier world

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Strategic themes across focus areas

Health equity & empowerment

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Embed an inclusive culture where all backgrounds and perspectives belong, develop, and thrive

Inclusion & belonging

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Everyone deserves the opportunity to achieve and maintain their highest level of health and well-being

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25