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CSL Ltd. — Interim / Quarterly Report 2011
Feb 15, 2011
17854_rns_2011-02-15_57911b03-6a59-427d-9491-befc749da9a4.pdf
Interim / Quarterly Report
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For immediate release 16 February 2011
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Interim Result Profit $500 million Solid demand for next generation Immunoglobulin products Affirming full year guidance of 10% underlying[1] growth - top of previously provided range Dividend unchanged at 35 cents per share
CSL Limited today announced a profit after tax of $500 million for the six months ended 31 December 2010. This result included an unfavourable foreign exchange impact of $47 million. Net profit after tax in the prior comparable period was $617 million, which included a one-off contribution from the sale of pandemic influenza vaccine (H1N1).
KEY ITEMS
Financial
-
Sales revenue $2.1 billion, up 7% on an underlying[1] basis when compared to the six months ended 31 December 2009
-
Reported net profit after tax $500 million
-
Research and Development expenditure of $143 million
-
Cash flow from operations of $408 million
-
On market share buyback 33% complete, $300 million spent
-
Earnings per share of 91.5 cents
-
Interim dividend unchanged at 35 cents per share, unfranked, payable on 8 April 2011
Operational
-
New large scale biotech facility announced and under construction in Australia
-
Berinert[®] (C1-Esterase Inhibitor), now licensed in 30 countries
-
Immunoglobulins
-
Privigen[®] (10% liquid intravenous immunoglobulin) Solid demand
- Transition program from Carimune[®] well advanced
-
Hizentra[®] (20% liquid subcutaneous immunoglobulin)
- US FDA approval to extend shelf life from 18 to 24 months
1 Excludes the one-off contribution from the sale of pandemic influenza vaccine (H1N1) in the prior comparable period and the impact of foreign exchange movements in the period under review.
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Transition program in the US from Vivaglobin[®] well progressed
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GARDASIL[® ] (Human Papillomavirus Vaccine)
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Australian TGA approval for males up to age 26 for the prevention of external genital lesions
-
US Food and Drug Administration (FDA) approval for the prevention of anal cancer and anal intraepithelial neoplasia in males and females 9 through 26 years of age. .
Dr McNamee, CSL’s Managing Director, said “Our underlying business has continued to grow. We have reached a number of important milestones in the development of our existing portfolio that will support continued growth. These include licensing into new geographic and patient markets. Given the challenges of currency headwinds, Government healthcare reforms and continuing weak economic conditions in a number of countries where we operate, this is a noteworthy achievement.
“The success of our novel A (H1N1) influenza or ‘swine flu’ vaccine, Panvax[®] , in the prior comparable period was a one-off contribution and, as foreshadowed, resulted in a decline in our headline profit.
“Our portfolio of immunoglobulins performed particularly well. Transition programs to new generation products, Privigen[®] and Hizentra[®] , are well underway and construction of additional production capacity to accommodate growth is complete. Applications for approval of this additional capacity have been submitted to the US Food and Drug Administration,” Dr McNamee said.
OUTLOOK (at 09/10 exchange rates)
Commenting on CSL’s outlook, Dr McNamee said “Trading conditions in the second half of this financial year are expected to remain similar. The Company remains well positioned with a broad portfolio of products, a global market reach, and a very strong balance sheet.
“At the Annual General Meeting in October 2010 we provided guidance for a net profit after tax of between $980 million and $1,030 million, at fiscal 09/10 exchange rates. We now anticipate the result to be at the top of this range which represents a ~10%
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growth in underlying[2] profit when compared to the full year 2010. Using current exchange rates, net profit after tax for FY2011 is expected to be approximately $950 million, recognising that there are a number of items that fall unevenly between the first half and second half of the financial year,” Dr McNamee said.
In compiling the Company’s financial forecasts for the year ending 30 June 2011 a number of key variables which may have a significant impact on guidance have been identified and these have been included in the footnote[3] below. To assist investors in determining the impact of movement in key currency pairs, we have provided with our results materials a foreign currency sensitivity analysis. The materials have also been posted on the Company’s website www.csl.com.au
BUSINESS REVIEW
Results overview
CSL Behring sales of US$1.6 billion grew 8% on a constant currency[4] basis when compared to the six months ended 31 December 2009. Sales contribution from the immunoglobulins product portfolio underpinned this growth.
Immunoglobulins grew 22% in constant currency[4] terms of which approximately half was driven by volume growth with the balance coming from a shift in sales mix and demand for Hizentra[®] , the Company’s next generation subcutaneous immunoglobulin. Privigen[®] (10% liquid intravenous immunoglobulin) now accounts for almost 60% of immunoglobulin sold. A proportion of the growth in sales of immunoglobulin is attributed to the withdrawal of a competitor from the market place. The length of time of this withdrawal is unknown.
2 Excludes the one-off contribution from the sale of pandemic influenza vaccine (H1N1) in the prior comparable period and the impact of foreign exchange movements in the period under review.
3 Key variables which may have a significant impact on guidance include material price and volume movements on core plasma products, competitor activity, changes in healthcare regulations and reimbursement policies, royalties arising from the sale of Human Papillomavirus vaccine, implementation of the Company’s influenza strategy and plasma therapy life cycle management strategies, enforcement of key intellectual property, regulatory risk, litigation, the effective tax rate and foreign exchange movements.
4 Constant currency removes the impact of exchange rate movements to facilitate comparability
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The Critical Care segment, including Asian sales[5] , grew 5% in constant currency terms underpinned by volume growth of albumin, particularly in the US and China. Specialty products, primarily Berinert[® ] P (C-1 esterase inhibitor), also made a significant contribution.
Haemophilia sales declined 2% in constant currency terms. Volume growth in plasma derived FVIII grew 5% but was offset by competitive pressure, particularly in European markets. Also contributing to the decline has been an increase in patients covered by Medicaid in the US giving rise to additional rebates payable by CSL Behring.
CSL Biotherapies sales of $375 million grew 4% on an underlying[6] basis when compared to the six months ended 31 December 2009. The prior period included a one-off contribution of $160 million from novel A (H1N1) influenza (swine flu) vaccine sales.
Underlying growth during the period was driven by the Australian plasma therapies business however this was offset by challenges in seasonal influenza vaccine arising from a delayed entry in the US market and our non-participation in the paediatric market.
Business development
Hizentra[®] (Immune Globulin Subcutaneous (Human) 20% Liquid) Extended shelf life
On 18 August 2010 the US FDA approved a supplemental Biologics Licence Application to extend the shelf life of Hizentra[®] , Immune Globulin Subcutaneous (Human), 20% Liquid, from 18 month to 24 months. Hizentra[®] the first and only 20% subcutaneous immunoglobulin (SCIg) approved in the US by the FDA is also the first and only SCIg in the US that may be stored at room temperature.
Subcutaneous immunoglobulin replacement therapy provides patients with the convenience of self infusion in the comfort of their own home. This new formulation will
5 Adjusted to include CSL Behring critical care products sold in Asia by CSL Biotherapies.
6 Excludes the one-off contribution from the sale of pandemic influenza vaccine (H1N1) in the prior comparable period and the impact of foreign exchange movements in the period under review.
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16 February 2011
further add to patient convenience through reduced infusion time and greater portability.
Transition to Hizentra[®] well progressed
CSL Behring recently announced that as a result of the strong uptake of Hizentra[®] in the US, Vivaglobin[®] will be discontinued in the United States by the end of calendar year 2011. CSL Behring will continue to manufacture Vivaglobin[®] for European and Canadian markets.
New Biotech Facility
On 16 July 2010 CSL announced a major biotechnology project at CSL’s manufacturing site in Broadmeadows, Australia. The centrepiece of the project will be the creation of Victoria’s first large scale biotechnology facility for the late stage development of new therapies for cancer, bleeding disorders and inflammation. Construction of the facility commenced in November 2010.
Berinert[®] (C1-Esterase Inhibitor), now licensed in 30 countries
On 27 January 2011 CSL Behring announced that it had been granted national marketing authorisation in Israel to market Berinert[®] for the treatment of acute hereditary angioedema (HAE) attacks in any body location. With this most recent approval Berinert[®] is now licensed in 30 countries, including Europe, Japan , North America, South America and Australia.
ISCOMATRIX[®] adjuvant
During the period CSL signed a worldwide research license and option agreement with Pfizer Inc., granting certain rights and options for the use of CSL’s ISCOMATRIX[®] adjuvant. Building on the License and Option Agreement signed between CSL and Wyeth in 2006, and following the acquisition of Wyeth by Pfizer, this new agreement significantly expands the breadth of use of ISCOMATRIX® adjuvant in Pfizer’s pipeline of investigational vaccine products for infectious diseases and other indications.
Human Papillomavirus Vaccine - GARDASIL[®7]
- In October 2010, the Australian Therapeutics Goods Administration (TGA) approved the extension of the indication for GARDASIL[®] to include males up to 26 years of age for the prevention of external genital lesions and infection caused by human papillomavirus (HPV).
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7 GARDASIL[®] is a trademark of Merck & Co. Inc.
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In December 2010, the US FDA approved GARDASIL[®] for the prevention of anal cancer and anal intraepithelial neoplasia (AIN) grades 1, 2 and 3 (anal dysplasias and precancerous lesions) caused by HPV in males and females 9 through 26 years of age. CSL Biotherapies has submitted data to the Australian Therapeutic Goods Administration (TGA) to support the licensing of GARDASIL[®] in Australia for prevention of anal cancer and AIN, with approval expected mid calendar year 2011.
-
In November 2010, CSL Biotherapies submitted an application in Australia for government funding of GARDASIL to include males on the National Immunisation Program.
Corporate Responsibility Report
On the 1[st] February, CSL released its second Corporate Responsibility Report, providing a comprehensive account of the Company’s economic, social and environmental performance in 2009/10. The report details CSL’s achievements and challenges across its corporate responsibility priority areas and is available on the Company’s website www.csl.com.au
Share Buyback
On 18 August 2010, CSL announced its intention to conduct an on-market share buyback of up to $900 million[8] . Under the Australian Securities Exchange listing rules this buyback has a 12 month completion window. To date CSL has repurchased 8,921,270 shares for approximately $300 million, representing ~33% of the intended repurchase program.
CSL’s balance sheet remains very sound. Cash and cash equivalents totalled $719 million as at 31 December 2010, with interest bearing liabilities totalling $384 million.
8 CSL reserves the right to suspend, terminate or extend the buyback at any time.
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New Director
CSL is pleased to announce the appointment of Ms Christine O’Reilly as a new Director of CSL, effective from 16 February 2011. For further information please see the separate ASX announcement.
Additional details about CSL’s results are included in the Company’s 4D statement, Investor Presentation slides and webcast, all of which can be found on the Company’s website www.csl.com.au
For further information, please contact:
Media: Investors: Sharon McHale Mark Dehring Senior Director Public Affairs Head of Investor Relations CSL Limited CSL Limited Phone: +613 9389 1506 Telephone: +613 9389 2818 Mobile +614 0997 8314 Email: [email protected] Email: [email protected]
Nerida Mossop Hinton & Associates Phone: +613 9600 1979 Mobile: +614 3736 1433 Email: [email protected]
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Group Results
| Half year ended December $ Millions |
Dec 2009 Reported Dec 2009 Underlying 9 Dec 2010 Reported Dec 2010 CC10 Change % |
Dec 2009 Reported Dec 2009 Underlying 9 Dec 2010 Reported Dec 2010 CC10 Change % |
|---|---|---|
| Sales Other Revenue / Income Total Revenue / Income |
2,317 2,157 98 98 2,415 2,255 |
2,116 2,300 7.0% 75 78 2,191 2,378 |
| Earnings before Interest, Tax, Depreciation & Amortisation Depreciation/Amortisation Earnings before Interest and Tax Net Interest Expense / (Income) Tax Expense Net Profit after Tax |
874 751 78 78 796 673 (15) (15) 194 157 |
719 784 4.4% 83 88 636 696 3.4% (11) (11) 147 160 |
| 617 531 |
500 547 3.0% |
|
| Interim Dividend (cents) Basic EPS (cents) |
35.00 35.00 106.34 91.45 |
9 Excludes the one-off impact of pandemic influenza vaccine (H1N1). 10 Constant currency removes the impact of exchange rate movements to facilitate comparability.
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CSL Limited
ABN: 99 051 588 348
ASX Half-year Information 31 December 2010
Lodged with the ASX under Listing Rule 4.2A. This information should be read in conjunction with the 30 June 2010 Annual Report.
Contents
Page
Results for Announcement to the Market
Half-year Report
1 2
CSL Limited
ABN: 99 051 588 348
Appendix 4D Half-year ended 31 December 2010
(Previous corresponding period: Half-year ended 31 December 2009)
Results for Announcement to the Market
-
Revenues from continuing operations down 9.3% to $2.19 billion.
-
Profit from continuing operations after tax and net profit for the period attributable to members down 19.0% to $500.2m.
Dividends
| Dividends | ||
|---|---|---|
| Amount per | Franked amount per | |
| security | security | |
| Interim dividend (determined subsequent to balance date) | 35.00¢ | Unfranked* |
| Interim dividend from the previous corresponding period | 35.00¢ | Unfranked* |
| Final dividend (prior year) | 45.00¢ | Franked to 5.28¢ per |
| share | ||
| Record datefordetermining entitlements to the dividend: | 15March 2011 |
* Non-resident withholding tax is not payable on this dividend as it will be declared to be wholly conduit foreign income.
The Company's Dividend Reinvestment Plan remains suspended and does not apply to the interim dividend.
Explanation of results
For further explanation of the results please refer to the accompanying press release and “Review of Operations” in the Directors’ Report that is within the Half-year Report.
Other information required by Listing Rule 4.3A
The remainder of the information requiring disclosure to comply with Listing Rule 4.3A is contained in the attached Half-year Report (which includes the Directors’ Report) and Media Release.
1
CSL Limited Half-year Report – 31 December 2010
| Contents | Page |
|---|---|
| Directors’ Report | 3 |
| Auditor’s Independence Declaration | 6 |
| Statement of Comprehensive Income | 7 |
| Statement of Financial Position | 8 |
| Statement of Changes in Equity | 9 |
| Statement of Cash Flows | 10 |
| Notes to the Financial Statements | 11 |
| Directors’ Declaration | 20 |
| Independent Review Report to the Members of CSL Limited | 21 |
This Interim Financial Report does not include all the notes of the type normally included in an Annual Financial Report. Accordingly, this report is to be read in conjunction with the Annual Report for the year ended 30 June 2010 and any public announcements made by CSL Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001 .
2
CSL Limited Directors’ Report
The Board of Directors of CSL Limited has pleasure in presenting their report on the consolidated entity for the half-year ended 31 December 2010.
Directors
The following persons were Directors of CSL Limited during the whole of the half-year and up to the date of this report:
Miss E A Alexander, AM (Chairman) Dr B A McNamee, AO (Managing Director) Mr J H Akehurst Mr D W Anstice Mr I A Renard Mr M A Renshaw Professor J Shine, AO Mr D J Simpson Mr P J Turner
Mr A M Cipa was a Director from the beginning of the financial year until his retirement on 13 October 2010.
Review of Operations
In the half year ended 31 December 2010, total sales revenue of the Group was $2.1 billion, up 7% on an underlying[1] basis when compared to the same period last year. Net profit after tax was $500 million. This result included an unfavourable foreign exchange impact of $47 million[2] . Net operating cash flow was $408 million. Net profit after tax in the prior comparable period was $617 million which included a one-off contribution from the sale of pandemic influenza vaccine (H1N1).
CSL Behring sales of US$1.6 billion grew 8% on a constant currency[3] basis when compared to the six months ended 31 December 2009. Sales contribution from the immunoglobulins product portfolio underpinned this growth.
Immunoglobulins grew 22% in constant currency[3] terms of which approximately half was driven by volume growth with the balance coming from a shift in sales mix and demand for Hizentra[®] , the company’s next generation subcutaneous immunoglobulin. Privigen[®] (10% liquid intravenous immunoglobulin) now accounts for almost 60% of immunoglobulin sold. A proportion of the growth in sales of immunoglobulin is attributed to the withdrawal of a competitor from the market place. The length of time of this withdrawal is unknown.
The Critical Care segment, including Asian sales[4] , grew 5% in constant currency terms underpinned by volume growth of albumin, particularly in the US and China. Specialty products, primarily Berinert[® ] P (C-1 Esterase Inhibitor), also made a significant contribution.
Haemophilia sales declined 2% in constant currency terms. Volume growth in plasma derived FVIII grew 5% offset by competitive pressure, particularly in European markets. Also contributing to the decline was an increase in patients covered by Medicaid in the US giving rise to additional rebates payable by CSL Behring.
1 Excludes the one-off contribution from the sale of pandemic influenza vaccine (H1N1) in the prior comparable period and the impact of foreign exchange movements in the period under review.
2 The estimated effect upon NPAT of currency movements between the comparable periods.
3 Constant currency removes the impact of exchange rate movements to facilitate comparability.
4 Adjusted to include CSL Behring critical care products sold in Asia by CSL Biotherapies.
3
CSL Biotherapies sales of $375 million grew 4% on and underlying[5] basis when compared to the six months ended 31 December 2009. The prior period included a one-off contribution of $160 million from novel A (H1N1) influenza (swine flu) vaccine sales.
Underlying growth during the period was driven by the Australian plasma therapies business however this was offset by challenges in seasonal influenza vaccine arising from a delayed entry in the US market and our non-participation in the paediatric market..
Royalties on global sales of Human Papillomavirus Vaccine totalled $45 million for the half.
On 18 August 2010, CSL announced its intention to conduct an on-market share buyback of up to $900 million[6] . Under the Australian Securities Exchange listing rules this buyback has a 12 month completion window. To-date CSL has repurchased 8,921,270 shares for approximately $300 million, representing ~33% of the intended repurchase program.
A final dividend of 45 cents per share (franked to the extent of 5.28 cents per share) was paid out of retained profits for the year ended 30 June 2010 on 8 October 2010. The Directors have determined an interim dividend of 35 cents per ordinary share (unfranked) payable on 8 April 2011.
5 Excludes the one-off contribution from the sale of pandemic influenza vaccine (H1N1) in the prior comparable period and the impact of foreign exchange movements in the period under review.
6 CSL reserves the right to terminate the buyback at any time.
4
CSL Limited Directors’ Report (continued)
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 6.
Rounding of Amounts
The amounts contained in this report and in the financial report have been rounded to the nearest $1,000 (where rounding is applicable) unless specifically stated otherwise under the relief available to the Company under ASIC Class Order 98/0100. The Company is an entity to which the Class Order applies.
This report has been made in accordance with a resolution of the directors.
Elizabeth A Alexander CHAIRMAN
Brian A McNamee MANAGING DIRECTOR
16 February 2011
5
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Auditor’s Independence Declaration to the Directors of CSL Limited
In relation to our review of the financial report of CSL Limited for the half-year ended 31 December 2010, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.
Ernst & Young
Glenn Carmody Partner 16 February 2011
Liability limited by a scheme approved under Professional Standards Legislation
6
CSL Limited and its controlled entities Statement of Comprehensive Income For the half-year ended 31 December 2010
| Consolidated Entity | Consolidated Entity | ||
|---|---|---|---|
| December | December | ||
| 2010 | 2009 | ||
| Notes | $000 | $000 | |
| Sales revenue | 2,116,348 | 2,317,392 | |
| Cost of sales | (1,059,655) | (1,097,529) | |
| Gross profit | 1,056,693 | 1,219,863 | |
| Other revenue | 4(a) | 74,602 | 97,581 |
| Research and development expenses | (143,756) | (146,924) | |
| Selling and marketing expenses | (216,804) | (226,171) | |
| General and administration expenses | 4(c) | (116,047) | (123,159) |
| Finance costs | 4(b) | (7,699) | (9,846) |
| Profit before income tax expense | 646,989 | 811,344 | |
| Income tax expense | 5 | (146,774) | (193,950) |
| Net profit for the period | 500,215 | 617,394 | |
| Other comprehensive income | |||
| Exchange differences on translation of foreign operations, net of | |||
| hedges on net foreign investments | 11 | (261,959) | (194,546) |
| Actuarial gains/(losses) on defined benefit plans, net of tax | (20,406) | 8,627 | |
| Total of other comprehensive income/(expense) | (282,365) | (185,919) | |
| Total comprehensive income for theperiod | 217,850 | 431,475 | |
| Earnings per share(based on netprofit for theperiod) | Cents |
Cents |
|
| Basic earnings per share | 6 | 91.45 | 106.34 |
| Diluted earnings per share | 6 | 91.23 | 106.00 |
7
CSL Limited and its controlled entities Statement of Financial Position As at 31 December 2010
| Statement of Financial Position As at 31 December 2010 |
|||
|---|---|---|---|
| Consolidated | Entity | ||
| December | June | ||
| 2010 | 2010 | ||
| Notes | $000 | $000 | |
| CURRENT ASSETS | |||
| Cash and cash equivalents | 7 | 719,914 | 1,001,059 |
| Trade and other receivables | 818,695 | 883,002 | |
| Current tax assets | 3,534 | - | |
| Inventories | 1,359,202 | 1,454,616 | |
| Other financial assets | 4,999 | 479 | |
| Total Current Assets | 2,906,344 | 3,339,156 | |
| NON-CURRENT ASSETS | |||
| Trade and other receivables | 5,613 | 7,570 | |
| Other financial assets | 11,985 | 4,589 | |
| Property, plant and equipment | 8 | 1,149,976 | 1,207,839 |
| Deferred tax assets | 169,740 | 191,410 | |
| Intangible assets | 893,826 | 955,513 | |
| Retirement benefit assets | 3,135 | 4,967 | |
| Total Non-Current Assets | 2,234,275 | 2,371,888 | |
| TOTAL ASSETS | 5,140,619 | 5,711,044 | |
| CURRENT LIABILITIES | |||
| Trade and other payables | 373,658 | 485,403 | |
| Interest-bearing liabilities | 9 | 17,574 | 25,984 |
| Current tax liabilities | 118,043 | 176,809 | |
| Provisions | 78,972 | 95,697 | |
| Deferred government grants | 995 | 995 | |
| Derivative financial instruments | 1,999 | 1,991 | |
| Total Current Liabilities | 591,241 | 786,879 | |
| NON-CURRENT LIABILITIES | |||
| Trade and other payables | 1,546 | - | |
| Interest bearing liabilities | 9 | 366,237 | 436,219 |
| Deferred tax liabilities | 111,156 | 114,822 | |
| Provisions | 29,663 | 30,924 | |
| Deferred government grants | 10,108 | 10,605 | |
| Retirement benefit liabilities | 127,737 | 116,401 | |
| Total Non-Current Liabilities | 646,447 | 708,971 | |
| TOTAL LIABILITIES | 1,237,688 | 1,495,850 | |
| NET ASSETS | 3,902,931 | 4,215,194 | |
| EQUITY | |||
| Contributed equity | 10 | 846,844 | 1,139,228 |
| Reserves | 11 | (494,814) | (242,615) |
| Retained earnings | 3,550,901 | 3,318,581 | |
| TOTAL EQUITY | 3,902,931 | 4,215,194 |
8
CSL Limited and its controlled entities Statement of Changes in Equity For the half year ended 31 December 2010
| Ordinary | Foreign |
Share | Retained | Total | ||
|---|---|---|---|---|---|---|
| shares | currency | based | earnings | |||
| translation | payment | |||||
| reserve | reserve | |||||
| $000 | $000 | $000 | $000 |
$000 | ||
| At 1 July 2010 | 1,139,228 | (326,778) | 84,163 | 3,318,581 |
4,215,194 | |
| Profit for the period | - | - | - | 500,215 |
500,215 | |
| Othercomprehensiveincome | - | (261,959) | - | (20,406) |
(282,365) | |
| Total comprehensive income for | - | (261,959) | - | 479,809 |
217,850 | |
| the half year | ||||||
| Transactions with owners in | ||||||
| their capacity as owners | ||||||
| Share based payments | 11 | - | - | 9,760 | - | 9,760 |
| Dividends | 12 | - | - | - | (247,489) |
(247,489) |
| Share buy back | 10 | (300,445) | - | - | - | (300,445) |
| Capital raising tax benefit | 10 | - | - | - | - | - |
| Share issues | ||||||
| - Employee share scheme | 10 | 8,061 | - | - | - | 8,061 |
| Balance as at 31 December 2010 | 846,844 | (588,737) | 93,923 | 3,550,901 |
3,902,931 | |
| At 1 July 2009 | 2,760,207 | (50,541) | 65,739 | 2,687,490 |
5,462,895 | |
| Profit for the period | - | - | - | 617,394 |
617,394 | |
| Othercomprehensiveincome | - | (194,546) | - | 8,627 |
(185,919) | |
| Total comprehensive income for | - | (194,546) | - | 626,021 |
431,475 | |
| the half year | ||||||
| Transactions with owners in | ||||||
| their capacity as owners | ||||||
| Share based payments | 11 | - | - | 9,543 | - |
9,543 |
| Dividends | 12 | - | - | - | (235,665) |
(235,665) |
| Share buy back | (1,362,064) | - | - | - |
(1,362,064) | |
| Capital raising tax benefit | 9,341 | - | - | - |
9,341 | |
| Share issues | ||||||
| - Employee share scheme | 5,772 | - | - | - |
5,772 | |
| Balance as at 31 December 2009 | 1,413,256 | (245,087) | 75,282 | 3,077,846 | 4,321,297 |
9
CSL Limited and its controlled entities Statement of Cash Flows For the half-year ended 31 December 2010
| CSL Limited and its controlled entities Statement of Cash Flows For the half-year ended 31 December 2010 |
|||
|---|---|---|---|
| Consolidated Entity | |||
| December | December | ||
| 2010 | 2009 | ||
| Notes | $000 | $000 | |
| Cash flows from Operating Activities | |||
| Receipts from customers (inclusive of goods and services tax) | 2,177,944 | 2,320,256 | |
| Payments to suppliers and employees (inclusive of goods and | |||
| services tax) | (1,595,718) | (1,772,726) | |
| 582,226 | 547,530 | ||
| Interest received | 19,460 | 25,214 | |
| Income taxes paid | (185,992) | (69,725) | |
| Borrowingcosts | (7,291) | (11,848) | |
| Net cash inflow /(outflow)from operatingactivities | 408,403 | 491,171 | |
| Cash flows from Investing Activities | |||
| Proceeds from sale of property, plant and equipment | 100 | 162 | |
| Payments for property, plant and equipment | 8 | (83,518) | (109,907) |
| Payments for intangible assets | (4,080) | (38,382) | |
| Payments for other financial assets | 1,454 | 1,654 | |
| Net cash inflow /(outflow)from investingactivities | (86,044) | (146,473) | |
| Cash flows from Financing Activities | |||
| Proceeds from issue of shares | 9,690 | 5,772 | |
| Payment for shares bought back | (300,445) | (1,442,732) | |
| Dividends paid | (247,489) | (235,665) | |
| Receipts (payments) on closure of foreign exchange hedges | (209) | 104 | |
| Repayment of borrowings | 9 | (16,925) | (213,562) |
| Net cash inflow /(outflow)from financingactivities | (555,378) | (1,886,083) | |
| Net increase (decrease) in cash and cash equivalents | (233,019) | (1,541,385) | |
| Cash and cash equivalents at the beginning of the period | 994,505 | 2,522,192 | |
| Exchange rate variations on foreign cash and cash equivalent | |||
| balances | (42,120) | (25,025) | |
| Cash and cash equivalents at the end of theperiod | 719,366 | 955,782 | |
| Reconciliation of cash and cash equivalents | |||
| Cash and cash equivalents at the end of the period as shown in the | |||
| statement of cash flows is reconciled as follows: | |||
| Cash and cash equivalents | 7 | 719,914 | 955,804 |
| Bank overdrafts | (548) | (22) | |
| 719,366 | 955,782 |
10
CSL Limited and its controlled entities Notes to the financial statements For the half-year ended 31 December 2010
1 Corporate Information
The financial report of CSL Limited (the Company) for the half-year ended 31 December 2010 was authorised for issue in accordance with a resolution of the directors on 16 February 2011. CSL Limited is a company incorporated in Australia and limited by shares, which are publicly traded on the Australian Stock Exchange.
The nature of the operations and principal activities of the Group are described in the Directors’ Report.
2 Summary of Significant Accounting Policies
(a) Basis of Accounting
The half-year financial report does not include all notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report. The half-year financial report should be read in conjunction with the annual financial report of CSL Limited as at 30 June 2010.
It is also recommended that the half-year financial report be considered together with any public announcements made by CSL Limited and its controlled entities during the half-year ended 31 December 2010 in accordance with the continuous disclosure obligations arising under ASX listing rules.
(b) Basis of Preparation
The half-year consolidated financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, applicable Accounting Standards, including AASB 134 Interim Financial Reporting and other mandatory professional reporting requirements. The half-year financial report has been prepared on a historical cost basis, as modified by the revaluation of available-for-sale financial assets, financial assets and liabilities (including derivative instruments) at fair value through profit or loss, and land and buildings.
For the purpose of preparing the half-year financial report, the half-year has been treated as a discrete reporting period.
(c) Significant Accounting Policies
The half-year consolidated financial statements have been prepared using the same accounting policies as used in the annual financial statements for the year ended 30 June 2010.
(d)
Basis of Consolidation
The half-year consolidated financial statements comprise the financial statements of CSL Limited and its subsidiaries as at 31 December 2010 ('the Group').
11
CSL Limited and its controlled entities Notes to the financial statements For the half-year ended 31 December 2010
3 Segment Information
| Intellectual | Other |
||||
|---|---|---|---|---|---|
| Property | Human |
Intersegment |
Consolidated |
||
| CSL Behring | Licensing |
Health |
Elimination |
Group |
|
| December | December |
December |
December |
December |
|
| 2010 | 2010 |
2010 |
2010 |
2010 |
|
| $000 | $000 |
$000 |
$000 |
$000 |
|
| Sales to external customers | 1,741,796 | - |
374,552 |
- |
2,116,348 |
| Inter-segment sales | 58,858 | - |
2 |
(58,860) |
- |
| Other revenue / Other income (excl interest | |||||
| income) | 1,875 | 50,126 |
3,965 |
- |
55,966 |
| Total segment revenue | 1,802,529 | 50,126 |
378,519 |
(58,860) |
2,172,314 |
| Interest income | 18,636 | ||||
| Unallocated revenue / income | - | ||||
| Consolidated revenue | 2,190,950 | ||||
| Segment EBIT | 606,841 | 43,365 |
1,338 |
- |
651,544 |
| Unallocated revenue / income less | |||||
| unallocated costs | (15,492) | ||||
| Consolidated EBIT | 636,052 | ||||
| Interest income | 18,636 | ||||
| Finance costs | (7,699) | ||||
| Consolidated profit before tax | 646,989 | ||||
| Income tax expense | (146,774) | ||||
| Consolidated netprofit after tax | 500,215 | ||||
| Amortisation and impairment loss | 13,417 | - |
2,090 |
- |
15,507 |
| Depreciation | 46,984 | - |
18,036 |
- |
65,020 |
| Segment EBITDA | 667,242 | 43,365 |
21,464 |
- |
732,071 |
| Unallocated revenue / income less | |||||
| unallocated costs | (15,492) | ||||
| Unallocated depreciation and amortisation | 2,095 | ||||
| Consolidated EBITDA | 718,674 |
12
CSL Limited and its controlled entities Notes to the financial statements For the half-year ended 31 December 2010
3 Segment information (continued)
| Intellectual | Other |
||||
|---|---|---|---|---|---|
| Property | Human |
Intersegment |
Consolidated | ||
| CSL Behring | Licensing |
Health |
Elimination |
Group | |
| December | December |
December |
December |
December | |
| 2009 | 2009 |
2009 |
2009 |
2009 | |
| $000 | $000 |
$000 |
$000 |
$000 | |
| Sales to external customers | 1,789,187 | - |
528,205 |
- |
2,317,392 |
| Inter-segment sales | 57,361 | - |
275 |
(57,636) |
- |
| Other revenue / Other income (excl interest | |||||
| income) | 2,373 | 60,787 |
9,360 |
- |
72,520 |
| Total segment revenue | 1,848,921 | 60,787 |
537,840 |
(57,636) |
2,389,912 |
| Interest income | 25,061 | ||||
| Unallocated revenue / income | - | ||||
| Consolidated revenue | 2,414,973 | ||||
| Segment EBIT | 614,694 | 52,097 |
143,649 |
- |
810,440 |
| Unallocated revenue / income less | |||||
| unallocated costs | (14,311) | ||||
| Consolidated EBIT | 796,129 | ||||
| Interest income | 25,061 | ||||
| Finance costs | (9,846) | ||||
| Consolidated profit before tax | 811,344 | ||||
| Income tax expense | (193,950) | ||||
| Consolidated netprofit after tax | **617,394 ** | ||||
| Amortisation and impairment loss | 11,003 | - |
2,090 |
- |
13,093 |
| Depreciation | 46,611 | - |
17,758 |
- |
64,369 |
| Segment EBITDA | 672,308 | 52,097 |
163,497 |
- |
887,902 |
| Unallocated revenue / income less | |||||
| unallocated costs | (14,311) | ||||
| Unallocated depreciation and amortisation | 858 | ||||
| Consolidated EBITDA | 874,449 |
| Geographic areas | Australia $000 |
United States $000 |
Switzerland $000 |
Germany $000 |
Rest of world $000 |
|
|---|---|---|---|---|---|---|
| Total | ||||||
| $000 | ||||||
| December 2010 External sales revenue |
237,233 | 855,917 | 75,469 | 321,531 | 626,198 | |
| 2,116,348 | ||||||
| December 2009 External sales revenue |
311,815 | 896,821 | 74,689 | 361,630 | 672,437 | |
| **2,317,392 ** |
13
CSL Limited and its controlled entities Notes to the financial statements For the half-year ended 31 December 2010
4 Revenue, Income and Expenses from continuing operations
| Consolidated Entity | Consolidated Entity | ||
|---|---|---|---|
| December | December | ||
| 2010 | 2009 | ||
| $000 | $000 | ||
| (a) | Other Revenue | ||
| Interest income | 18,636 | 25,061 | |
| Rent | 497 | 485 | |
| Royalties | 46,404 | 58,729 | |
| Sundry | 9,065 | 13,306 | |
| 74,602 | 97,581 | ||
| (b) | Finance Costs | ||
| Interest paid / payable | 7,699 | 9,846 | |
| (c) | Other Expenses | ||
| General and administration expenses: | |||
| Expense of share based payments | 10,460 | 8,676 | |
| Amortisation of intellectual property and software | 15,507 | 13,093 | |
| Other relevant expenses | |||
| Depreciation and amortisation of property, plant and equipment | 67,115 | 65,227 | |
| Net foreign exchange losses | 8,488 | 5,925 |
5 Income Tax
The reconciliation between income tax expense and the consolidated entity’s applicable tax rate is as follows:
| Profitfromcontinuing activities beforeincome taxexpense | 646,989 | 811,344 |
|---|---|---|
| Income tax calculated at 30% | 194,097 | 243,403 |
| Tax effect of non-assessable / non-deductible items | ||
| Research and development | (4,935) | (4,315) |
| Other (non-assessable revenue)/non-deductible expenses | 2,913 | 960 |
| (Utilisation of tax losses)/Unrecognised deferred tax assets | 3 | 47 |
| Revaluation of deferred tax balances due to income tax rate changes | - | 1,949 |
| Effects of different rates of tax on overseas income | (44,775) | (39,078) |
| Under(over) provision inprevious year | (529) | (9,016) |
| Income taxexpense | 146,774 | 193,950 |
14
CSL Limited and its controlled entities Notes to the financial statements For the half-year ended 31 December 2010
6 Earnings Per Share
| Consolidated Entity | Consolidated Entity | |
|---|---|---|
| December | December | |
| 2010 | 2009 | |
| $000 | $000 | |
| The following reflects the income and share information used in the | ||
| calculation of basic and diluted earnings per share: | ||
| Earnings usedincalculating basic earnings pershare | 500,215 | 617,394 |
| Number | of shares | |
| December | December | |
| 2010 | 2009 | |
| Weighted average number of ordinary shares used in the calculation of basic | ||
| earnings per share: | 546,967,244 | 580,605,173 |
| Effect of dilutive securities: | ||
| Share options | 340,437 | 462,041 |
| Performance rights | 996,972 | 1,361,487 |
| Globalemployee share plan | 2,882 | - |
| Adjusted weighted average number of ordinary shares used in calculating | ||
| diluted earnings pershare | 548,307,535 | 582,428,701 |
*Refer note 10 for a reconciliation of the movement in issued shares.
Conversions, calls, subscription or issues after 31 December 2010
Subsequent to the reporting date 20,478 ordinary shares were issued, as required under the Employee Performance Rights Plan. There have been no other ordinary shares issued since the reporting date and before the completion of this financial report. There have been no other conversions to, calls of, or subscriptions for ordinary shares or issues of potential ordinary shares since the reporting date and before the completion of this financial report.
7 Cash and cash equivalents
| Consolidated | Entity | |
|---|---|---|
| December | June | |
| 2010 | 2010 | |
| $000 | $000 | |
| Cash at bank and on hand | 290,884 | 257,756 |
| Cashdeposits | 429,030 | 743,303 |
| Totalcashand cashequivalents | 719,914 | 1,001,059 |
8 Property, Plant and Equipment
During the half-year ended 31 December 2010, the Group acquired assets with a cost of $83,518,000 (2009: $109,907,000).
15
CSL Limited and its controlled entities Notes to the financial statements For the half-year ended 31 December 2010
9 Borrowings and repayments
For the half year ended 31 December 2010, the Group has repaid $14,994,000 of interest bearing debt and made $1,931,000 of finance lease repayments.
10 Contributed Equity
Movements in the contributed equity
| Number of | $000 | |
|---|---|---|
| Shares | ||
| Ordinary shares | ||
| Balance as at 1 July 2010 | 549,692,886 | 1,139,228 |
| Shares issued to CSL employees through participation in: | ||
| - Performance Option Plan and SESOP Option Plan | 306,722 | 5,454 |
| - Performance Rights Plan | 351,645 | - |
| - Global Employee Share Plan | 95,517 | 2,607 |
| Shares acquired underthe ShareBuyBack | (8,921,270) | (300,445) |
| Balance as at 31 December 2010 | 541,525,500 | 846,844 |
11 Reserves
| Consolidated | Entity | |
|---|---|---|
| December | June | |
| 2010 | 2010 | |
| $000 | $000 | |
| Composition | ||
| Share based payments reserve (i) | 93,923 | 84,163 |
| Foreigncurrency translation reserve (ii) | (588,737) | (326,778) |
| (494,814) | (242,615) |
Nature and purpose of reserves
(i) Share based payments reserve
The share based payments reserve is used to recognise the fair value of options and performance rights issued but not exercised.
(ii) Foreign currency translation reserve
The results of foreign subsidiaries are translated into Australian dollars at average exchange rates. Assets and liabilities of foreign subsidiaries are translated to Australian dollars at exchange rates prevailing at balance date and resulting exchange differences are recognised in the foreign currency translation reserve in equity. On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other financial instruments designated as hedges of such investments, are taken to the foreign currency translation reserve in equity.
16
CSL Limited and its controlled entities Notes to the financial statements For the half-year ended 31 December 2010
12 Dividends
| Consolidated Entity | Consolidated Entity | ||
|---|---|---|---|
| December | December | ||
| 2010 | 2009 | ||
| $000 | $000 | ||
| Ordinary shares | |||
| Dividends providedfororpaid during thehalf-year | 247,489 | 235,665 | |
| Dividends not recognised at the end of the half-year | |||
| Since the end of the half-year the directors have recommended the payment of | |||
| an interim dividend of 35 cents (2010 – 35.00 cents) per fully paid ordinary | |||
| share, unfranked. The aggregate amount of the proposed interim dividend | |||
| expected to be paid on 8 April 2011 out of retained earnings at 31 December | |||
| 2010, butnotrecognised as aliability at the end ofthehalf-year,is: | 189,534 | 194,968 | |
| 13 | NTA Backing | ||
| December | June | ||
| 2010 | 2010 | ||
| $ | $ | ||
| Net tangible asset backing perordinary security | 5.54 | 5.93 |
17
CSL Limited and its controlled entities Notes to the financial statements For the half-year ended 31 December 2010
14 Share Based Payment Plans
(a) Long Term Incentives
On 1 October 2010, 216,420 share options and 284,420 performance rights were granted to senior executives under the CSL Performance Rights Plan. The exercise price of the options of $33.45 is equal to the 5 day volume weighted average market price of CSL Limited shares as traded on the Australian Stock Exchange in the one week before and ending on the grant date. The exercise price for the performance rights is Nil. The options and performance rights will become exercisable between 30 September 2013 and 30 September 2015. The fair value of the options and performance rights granted is estimated as at the date of grant using an adjusted form of the Black-Scholes model, taking into account the terms and conditions upon which the options and performance rights were granted. The following table lists the inputs to the model used for options and performance rights issued in the half-year ended 31 December 2010:
| December | |
|---|---|
| 2010 | |
| Dividend yield (%) | 2.5% |
| Expected volatility (%) | 30.0% |
| Risk-free interest rate (%) | 4.91% |
| Fair Value of Options | |
| 3 year vesting | $8.46 |
| 4 year vesting | $8.90 |
| Fair Value of Performance Rights | |
| 3 year vesting | $26.59 |
| 4 year vesting | $26.23 |
(b) Executive Deferred Incentive Plan
On 1 October 2010, 512,350 phantom shares were granted to employees under the Executive Deferred Incentive Plan. This plan provides for a grant of phantom shares which will generate a cash payment to participants in three years time, provided they are still employed by the company and receive a satisfactory performance review over that period. The amount of the cash payment will be determined by reference to the CSL share price immediately before the three year anniversary.
The following table lists the inputs to the model used for grants issued in the half-year ended 31 December 2010:
| December | |
|---|---|
| 2010 | |
| Dividend yield (%) | 2.5% |
| Fair Value of Grants @ reporting date | $33.91 |
18
CSL Limited and its controlled entities Notes to the financial statements For the half-year ended 31 December 2010
15 Commitments and contingencies
Litigation
The Group is involved in litigation in the U.S. claiming that the Group and a competitor, along with an industry trade association, conspired to restrict output and fix and raise prices of certain plasma-derived therapies in the U.S. The lawsuits, filed by representative plaintiffs, seek status to proceed as class actions on behalf of ‘all others similarly situated’. The Group believes the litigation is unsupported by fact and without merit and will robustly defend the claims.
The Group is involved in other litigation in the ordinary course of business.
The directors believe that future payment of a material amount in respect of litigation is remote. An estimate of the financial effect of this litigation cannot be calculated as it is not practicable at this stage. The Group has disclaimed liability for, and is vigorously defending, all current material claims and actions that have been made.
19
CSL Limited Directors’ Declarations
The directors declare that:
-
(a) the financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001, and:
-
(i) give a true and fair view of the financial position as at 31 December 2010 and the performance for the half-year ended on that date of the consolidated entity; and
-
(ii) comply with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 ; and
-
(b) in the directors' opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
Made in accordance with a resolution of directors.
Elizabeth A Alexander Chairman Melbourne 16 February 2011
Brian A McNamee Managing Director
20
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Independent Review report to the members of CSL Limited
Report on the Condensed Half-Year Financial Report
We have reviewed the accompanying half-year financial report of CSL Limited, which comprises the statement of financial position as at 31 December 2010, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the half-year end or from time to time during the half-year.
Directors’ Responsibility for the Half-Year Financial Report
The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal controls as the directors determine are necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of Interim and Other Financial Reports Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 31 December 2010 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of CSL Limited and the entities it controlled during the half-year, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.
A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Independence
In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 . We have given to the directors of the company a written Auditor’s Independence Declaration, a copy of which is included in the Directors’ Report.
Liability limited by a scheme approved under Professional Standards Legislation
Conclusion
Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of CSL Limited is not in accordance with the Corporations Act 2001 , including:
-
i) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2010 and of its performance for the half-year ended on that date; and
-
ii) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .
Ernst & Young
Glenn Carmody Partner Melbourne 16 February 2011
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CSL Limited
2010/11 Half Year Result
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16 February 2011
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Disclaimer
Forward looking statements
The materials in this presentation speak only as of the date of these materials, and include forward looking statements about CSL’s financial results and estimates, business prospects and products in research, all of which involve substantial risks and uncertainties, many of which are outside the control of, and are unknown to, CSL. You can identify these forward looking statements by the fact that they use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “may,” “assume,” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. Among the factors that could cause actual results to differ materially are the following: the success of research and development activities, decisions by regulatory authorities regarding whether and when to approve our drug applications as well as their decisions regarding labeling and other matters that would affect the commercial potential of our products; competitive developments affecting our products; the ability to successfully market new and existing products in Australia and other countries; difficulties or delays in manufacturing; trade buying patterns and fluctuations in interest and currency exchange rates; legislation or regulations throughout the world that affect product production, distribution, pricing, reimbursement or access; litigation or government investigations, including legal costs, settlement costs and the risk of adverse decisions or settlements; and CSL’s ability to protect its patents and other intellectual property throughout the wor ld . Th e s a emen s e ng ma t t t b i d e n i thi s presen a t ti on o no cons d t tit u e an o t ff er o se t ll , or so li c it a ti on o an o f ff er o uy, any secur t b iti es of CSL.
No representation, warranty or assurance (express or implied) is given or made in relation to any forward looking statement by any person (including CSL). In particular, no representation, warranty or assurance (express or implied) is given in relation to any underlying assumption or that any forward looking statement will be achieved. Actual future events may vary materially from the forward looking statements and the assumptions on which the forward looking statements are based . Given these uncertainties , readers are cautioned to not place undue reliance on such forward looking statements.
Subject to any continuing obligations under applicable law or any relevant listing rules of the ASX, CSL disclaims any obligation or undertaking to disseminate any updates or revisions to any forward looking statements in these materials to reflect any change in expectations in relation to any forward looking statements or any change in events, conditions or circumstances on which any such statement is based . Nothing in these materials shall under any circumstances create an implication that there has been no change in the affairs of CSL since the date of these materials.
2
Highlights - Financial
Total sales $2.1 billion (Underlying[1] growth 7%) NPAT $500 million
• Includes $47 million FX headwind[2] R&D expenditure $143m EBIT $636 million Cashflow from operations 408 million $ On market share buyback 33% complete Cash on hand $719 million EPS 91.5 cents
Interim dividend 35 cents (unfranked)
-
1 Excludes the one-off contribution from the sale of pandemic influenza vaccine (H1N1) in the prior comparable period and the impact of exchange rate movements in the period under review
-
2 Calculated using 1H10 exchange rates
3
Highlights - Operational
New large scale biotech facility under construction in Australia Berinert[® ] - now licensed in 30 countries Privigen[®]
-
Solid demand - transition from Carimune[®] well advanced
-
Hizentra[®]
-
US FDA approval to extend shelf life to 24 months
-
Transition from Vivaglobin[®] well progressed
-
GARDASIL[®]
-
Aust TGA approval for males up to age 26 for the prevention of external genital lesions
-
US FDA approval for prevention of anal cancer and anal intraepithelial neoplasia in males and females 9 – 26 yrs
4
Outlook for FY2011
Affirming guidance at top of previous guidance range
At current exchange rates*
• Net profit after tax At FY 09/10 exchange rates
- $900m $950m
$980m - $1,030m
- Net profit after tax* (Growth ~10% on FY10 operational profit)
Outlook statements are subject to:
Material price and volume movements on core plasma products, competitor activity, changes in healthcare regulations and reimbursement policies, HPV royalties, implementation of the Company’s influenza strategy and plasma therapy life cycle management strategies, enforcement of key intellectual property, regulatory risk, litigation, the effective tax rate and foreign exchange movements.
* See slide 26 for FX guide
5
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Human Health
Business Unit Performance
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-
CSL Behring
-
CSL Biotherapies
-
Intellectual Property Licensing
-
CSL Research & Development
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CSL Behring
Sales US$1,611m (A$1,742m) up 8% at CC EBITDA mar in ~36% in USD g* Optimizing product mix
-
Transition to Privigen[®] & Hizentra[®] advanced
-
Privigen now ~60% of IG portfolio
-
US FDA approval to extend shelf life of Hizentra[® ] from 18 t o 24 mon th s
-
Capacity expansion for Hizentra[® ] & Privigen[®] complete – application for approval submitted to US FDA
-
US and EU Healthcare reform impact –
-
Competitor withdrawal length of time unknown
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- Constant currency (cc) removes the impact of exchange rate movements to facilitate comparability
7
CSL Behring – Product sales up 8% in CC terms
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$M
US$1,611m
US$1,545m
Immuno-
globulins
Wound H
Critical
Care
pdCoag
Helixate
Dec 09 Dec 10
Sales for the 6 month period
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8
CSL Behring – Product sales, Geographic split* Sales for the 6 Month period ended Dec 10 – US$1,611m
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RoW
11%
Japan
7%
USA
45%
E
urope
pdCoag
37%
Helixate
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* Excludes CSL Behring products sold in Asia by CSL Biotherapies
9
Immunoglobulins
Highlights US$686m I mmunog o l b u li n up 22% a t CC US$574m Growth arising from: • Volume ~half • Privigen[®] demand • France Liquid • Competitor withdrawal • Sales mix ~quarter • Transition to Privigen[®] SCIG • SCIG ~quarter Dec 09 Dec 10 • Hizentra[®] demand Sales for the 6 month p eriod
* Includes hyperimmunes
10
Critical Care
US$M
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----- Start of picture text -----
US$358m
US$351m
Highlights
Asia
Up 5% at CC, incl. Asian sales
Albumin Albumin
•
US & Canada volume rowth
g
•
Southern European market
dynamics
Specialty
Critical
Specialty Critical Care
Care
•
US growth with Berinert [®] P
launched Dec 09
Dec 09 Dec 10
Sales for the 6 month period
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* CSL Behring critical care products sold in Asia by CSL Biotherapies
11
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Haemophilia
Highlights
600
Down 2% at CC
US$530m
US$496m
PdC
500 oag
•
Volume up 5%
400 pdCoag • Inventory reduction in US
•
Europe – end of several ITT
300
p atient p ro g rams
•
Price pressure - Europe
200
Helixate [®]
Helixate
100 • US & European growth
•
Canada Safety Stock build
0
included in PCP
Dec 10
Dec 09 • US Medicaid rebates up
S ales or the 6 month period f
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CSL Biotherapies
Sales A$375m
-
Prior period included $160m H1N1 sales GARDASIL[®]
-
Aust. & NZ catch up programs drawn to a close
-
Australian TGA approval for males up to age 26 for the prevention of external genital lesions
-
In luenza sales 82m lat at f $ f CC • US dela s and non- artici ation in aediatric market y p p p
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CSL Intellectual Property Licensing
Segment Revenue $50m HPV royalties $45m ISCOMATRIX[® ] adjuvant
- Broad research license and option agreement finalised with Pfizer
CAM3001 ( GM-CSFRa )
- Medimmume/AstraZeneca commenced Phase II study in Rheumatoid Arthritis Feb 2010
Periodontal disease vaccine
-
Research a reement with Sanofi asteur g p
-
Option to an exclusive worldwide license
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R&D Regulatory Update
Privigen[®]
-
I L a b M o d u e l 2 - su b m tte i d to US FDA Q4 2010 g
-
• European Phase III study in CIDP initiated
-
Hizentra[® ] (IgPro20 sc)
-
Review in progress: EMA, Switzerland, Canada
-
RiaSTAP[™ ] (Fibrinogen) • P os iti ve uropean E MRP comp e l ti on n u y i J l 2010
-
Berinert[®] P (C1 esterase inhibitor)
-
Now licensed in 30 countries
-
Canada: application under review
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Financial Detail
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1H 2011 Underlying Profit
| $663m | FX impact | FX impact |
|---|---|---|
| H1N1 $547m FX |
Reported NPAT $500m Foreign currency* -ve $47m |
|
| Underlying 531 |
NPAT at constant currency | $547m |
| $m | Notable items H1N1 sales |
|
| Gardasil® Health care reform |
||
| Dec 09 Dec 10 Competitor withdrawal |
||
| NPAT for the 6 month period |
* Based on 1H10 exchange rates
17
Strong Financial Fundamentals
1H10 1H11 Cashflow from operations $491m $408m Net interest income $15m $11m C ap it a expen l dit ure $120 m $84 m Jun 10 Dec 10 Cash & Equivalents $1,001m $720m Interest bearing liabilities $459m $384m Inventor turns 1.5 1.6 y Days debtors 69 63
18
Capital Management
On Market Buyback $900m on-market share buyback* Commenced 13 September 2010
-
12 mont h w n i d ow to comp ete l
-
As at 16 February 2011
-
~8.9 million shares repurchased for $300 million
-
~33% complete
-
CSL reserves the right to suspend, terminate or extend the buyback at any time
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FX Impact on FY2011 Guidance*
Foreign Exchange (post tax)
FY10 Est.
Translation ~ $(60)m ~ Transaction $(20)m Total ~ $(80)m
Net profit after tax outlook NPAT FY2011 at constant currency $980m - $1,030m Growth ~10% on FY10 underlying operational profit Est . foreign currency NPAT impact ~ $(80)m
NPAT FY2011 at current rates $900m – $950m
-
Full year impact
-
20 • See foreign exchange sensitivity table - slide 26
FY2011 Outlook in Constant Currency Underlying Profit Growth ~10%
$187m $122m FY2011 considerations FY2010 FY2011 • Growth in immunoglobulin and albumin NPAT Forecast $980m • Growth Continued transition to Privigen $931m to[®] & (H1N1) Hizentra[®] $1,050 ~10% • C on ti nue d grow th i n spec a i lt y pro d uc s t • US & EU healthcare reform Underlying Profit • $931m Gardasil[®] - new indications FY2010 Reported • Profit Influenza vaccine $1,053m $1,053m • _ Global contribution from sale of pandemic influenza vaccine (H1N1) & related fill and finish activities_
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CSL Overview
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Core Business
Other Value-Creating
Businesses
Breakthrough Specialty Vaccine technologies
Medicines
Products
Influenza vaccine
Immuno-
Haemophilia
globulins Products
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Appendix
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Group Results
| Group Results | ||||||
|---|---|---|---|---|---|---|
| Half year ended December $ Millions |
Dec 2009 Reported |
Dec 2009 Underlying Dec 2010 Reported* |
Dec 2010 CC Change %** |
|||
| Sales Other Revenue / Income Total Revenue / Income |
2,317.4 97.6 2,415.0 |
2,157.3 97.6 2,254.9 |
2,116.3 74.6 2,190.9 |
2,300.4 78.2 2,378.6 7.0% |
||
| Earnings before Interest, Tax, Depreciation & Amortisation |
874.5 |
751.1 | 718.7 |
784.5 4.4% |
||
| Depreciation/Amortisation Earnings before Interest and Tax Net Interest Expense / (Income) |
78 4 . 796.1 (15.2) |
78 3 . 672.8 |
82 6 . 636.1 (10.9) |
88 2 . 696.2 3.5% |
||
| (15.2) | (10.9) | |||||
| Tax Expense Net Profit |
193.9 | 157.0 | 146.8 | 160.2 | ||
| 617.4 | 531.1 | 500.2 | 546.9 3.0% |
|||
| Final Dividend (cents) Basic EPS (cents) |
35.00 106.34 |
35.00 91.45 |
- Excludes impact arising from the one-off contribution of H1N1
** Constant currency removes the impact of exchange rate movements to facilitate comparability
24
CSL Behring Sales
| CSL Behring Sales | ||||
|---|---|---|---|---|
| Half year ended December | 1H10 USD$M 1H11 USD$M 1H11 USD$M |
|||
| CC 247 238 250 |
||||
| rFVIII | 247 238 |
250 | ||
| pdCoag Specialty Critical Care Albumin |
283 161 147 258 165 143 |
271 174 144 |
||
| Wound Healing Immunoglobulins Other Product Sales |
50 574 42 50 686 34 |
47 699 34 |
||
| Total Product Sales |
||||
| O h l ( i l l ) t er sa es ma n y p asma Total Sales |
43 37 1,546 1,611 |
25
Foreign Exchange Translation Sensitivity 2H11
NPAT FY2011 at current FX rates ~$950m
- 1% movement in key currency pairs impacts guidance as follows -
Current
1% chg
AUD/USD 1.00 +/- $0.7m AUD/EUR 0.74 +/- $1.6m AUD/CHF 0.97 +/- $* 2.5m
- Table shows full 6 month impact
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* Includes HPV Royalties
26