Release Date: August 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CSL Ltd (CMXHF, Financial) reported strong revenue growth of 11% at constant currency, reaching $14.8 billion.
- Net profit after tax (NPAT) increased by 25%, amounting to $2.6 billion.
- The CSL Behring business unit delivered robust growth, with the Ig franchise growing by 20%.
- CSL Vifor achieved over $100 million in synergies post-acquisition, indicating successful integration.
- The company made significant progress on strategic priorities, including the rollout of Rika and FDA clearance for Terumo's individualized nomogram.
Negative Points
- CSL Vifor faced challenges with generic competition impacting FERINJECT sales.
- The transition from referrals to administrations for HEMGENIX in the US has been slower than anticipated.
- CSL Seqirus experienced modest revenue growth of 4%, below expectations.
- The company faced a 60-basis-point FX headwind impacting gross margins.
- The overall CapEx spend reduced by 31%, which may indicate potential limitations in future capacity expansion.
Q & A Highlights
CSL Ltd (CMXHF) Earnings Call Highlights:
Q: What do you expect in terms of Vifor revenue growth and gross margins for FY25?
A: We expect Vifor's revenue to be flattish and gross margins to broadly stabilize in FY25, despite the headwinds from US step edits. (Paul McKenzie, CEO; Joy Linton, CFO)
Q: Can we expect similar cost reductions in Vifor's sales and marketing in FY25?
A: We have done significant work on cost reduction in Vifor, and there is more to do. We will continue to drive cost efficiency across the enterprise. (Joy Linton, CFO)
Q: What is the expected magnitude of gross margin uplift for Behring in FY25?
A: We anticipate a gross margin increase of 100 basis points or slightly more in FY25, consistent with our guidance from Capital Markets Day. (Joy Linton, CFO)
Q: Are you seeing higher throughput with the Rika rollout, and is the individualized nomogram currently in use?
A: Yes, we are seeing benefits from Rika, including a 30% reduction in bed time. The individualized nomogram has received FDA clearance and is in the validation process. (Paul McKenzie, CEO)
Q: How is the Horizon 2 pilot study progressing, and will a clinical trial be required?
A: Horizon 2 is progressing well with stability and comparability studies ongoing. The need for a clinical trial will depend on the data. (Paul McKenzie, CEO)
Q: What is the outlook for plasma collection and cost per liter (CPL) in FY25?
A: Plasma collections are at record levels, and we expect continued CPL reduction in FY25, driven by efficiencies and the Rika rollout. (Paul McKenzie, CEO)
Q: Can you provide an update on the avian flu vaccine opportunity?
A: We are engaged in discussions with several countries regarding the supply of avian flu vaccines, and we will provide updates as these processes progress. (Ken Lim, Chief Strategy Officer)
Q: How should we think about the impact of FX on Behring's gross margin recovery?
A: Our guidance for gross margin recovery remains unchanged, with recovery expected between FY26 and FY28, despite FX headwinds. (Joy Linton, CFO)
Q: What is the growth outlook for ALBUMIN sales in China?
A: ALBUMIN sales grew 12% year-on-year, with high single-digit growth in China expected to continue over the midterm. (Paul McKenzie, CEO)
Q: How will increased use of contract manufacturing impact earnings and CapEx?
A: Contract manufacturing will help manage CapEx efficiently, particularly for fill-finish capabilities. This is factored into our guidance and aims to optimize capital spend. (Paul McKenzie, CEO)
Q: What is the expected tax rate for FY25?
A: The expected tax rate for FY25 is in the range of 18% to 20%. (Joy Linton, CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
