CSL Limited

Good morning everyone and welcome to CSL's Financial Year 2024 results presentation. I'm Joy Linton, CSL's Chief Financial Officer, and before we begin the formalities today, I would like to say a few words about Mark Daring, who has opened these calls over the past 21 years. As many of you know, Mark Daring has decided to retire as the head of CSL's Investor Relations function. over his extensive time with us. He's been a trusted advisor to our leadership group and a respected spokesperson with the investment community. In the time I've been at CSL, I've very much valued Mark's wisdom, guidance and insights. So thank you, Mark. Also with us today, having moved into Mark's role, is Chris Cooper, who joined CSL earlier this year. Many of you will know Chris from his successful career as a healthcare analyst, and we are delighted to have him on our side of the fence. So Chris, welcome to your first CSL results announcement, and over to you.

Thank you, Joy, and good morning, everyone. It's a pleasure to be here. I also want to personally thank Mark for his help and support while I've been at CSL, and particularly for all those years previously. I've met or spoken with many of you before, and I'm looking forward to doing so again in the days and weeks ahead. I'm pleased to be joined this morning by three of CSL's leadership team. With me are Dr. Paul McKenzie, CSL's Chief Executive Officer, Joy Linton, CSL's Chief Financial Officer, and Ken Lim, CSL's Chief Strategy Officer. As with past practice, Paul will provide an overview of the results, then Joy will provide some additional detail on the financials. We'll then move to Q&A. With a view to giving everyone an opportunity to ask a question, could you please limit your questions to two? If you do have a further question, you are, of course, welcome to rejoin the queue. Please note this briefing is being webcast. And lastly, before we start, I draw your attention to the forward statement disclaimer contained in the slide deck. I now hand over to CSL's Chief Executive Officer, Dr. Paul McKenzie.

Thank you, Chris, and good morning, everyone. Thank you for joining today's CSL full-year result call for 2024. I'd also like to extend my thanks to Mark for his support since I joined CSL. We have spent a lot of time together, be it in airports, meetings, or planning sessions for our results. He always brought wise counsel. Oh, all right, not always, but some of the time. And even a bit of humor when it was needed. Thanks, Mark, and all the best to you and your family for the future. Before we jump into the fiscal year results and the outlook for fiscal year 25, I'd like to make a few remarks about the progress we've made on several key strategic priorities. So let's get started and move to slide four. From the day I joined CSL, I clearly saw that we are well-placed to deliver sustainable, profitable growth well into the future. At our Capital Markets Day last October, CSL's leadership team took the opportunity to spell out this value proposition. At a high level, CSL Bearing is a unique and resilient business, with our IG franchise continuing to drive growth. In our CSL Securus business, the value of our differentiated vaccine portfolio delivers ongoing value to public health systems, and has outperformed the market again in fiscal year 24. CSL V4 has now been fully transitioned into the CSL Group with over $100 million of synergies realized. The business is well placed in iron and has attractive growth opportunities in nephrology. We shared with the market the priorities and plans that would underpin double digit earnings growth over the medium term. I am pleased to report that we have made excellent progress across all fronts in fiscal year 2024. Some highlights include the RECA rollout is ahead of plan with deployment in 84 centers as of the end of fiscal year 24. Terumo's individualized nomogram received clearance from the FDA and has been released to the CSL Plasma team for validation at our centers. Another topic that I know is of interest to a lot of our investors is the progression on our yield initiatives. I am pleased to say that both Horizon 1 and Horizon 2 are progressing to plan. Joy will talk to the CSL bearing gross margin in greater detail later. However, what I will say is that we have delivered on what we said we would do, 120 basis point increase in gross margin at constant currency from fiscal year 23. This is a tremendous effort from the team. However, there is much more to be done. We continue to expand our geographic footprint with the EU launches of Hemgenix and Tavernos, as well as the Ferenjek launch in China. Developing innovative products is at the very core of why we exist, so we are committed to advancing our R&D pipeline. In CSL bearing, Garidacimab provides a great example of this as we aim to build our ongoing strength in HAE. We continue to reinforce our leadership position in IG as we execute studies to expand indications that benefit more patients. We are progressing development of Hycentra in DM, for which we are currently in phase three trials. For CSL Securus, product innovation remains a core focus, with phase three clinical work progressing well for our ATIVC product in seasonal influenza. At CSL v4, the European Commission granted conditional marketing authorization for Felspare, providing us with the exciting new treatment in the IGAN market. We continue to deliver on our key priorities that will enable future growth. We are driving operating efficiencies within our enabling functions, increasing capacity to support SALs, building new capabilities and driving yield to support production of our new products and building new plasma centers. All of these have been a core focus of the business over the last five to 10 years. Increasingly, we are viewing the world differently from an engineering perspective. We intend to further leverage contract manufacturing organizations, particularly for fill finish capabilities and capacities. These initiatives are aimed at making our overall capital spend more efficient and have largely contributed to a significant reduction in our overall capex spend. We believe this can continue and see further opportunities to optimize this in the near term. As you can see, we've made significant progress on the strategic priorities outlined at Capital Markets Day. This is a true testament to the hard work of all of our people but everyone is aware there remains much more to be done. We hope this progress to date demonstrates our ability to execute to plan, and we believe with these foundations well established, CSL is in a strong position to continue to deliver annualized double-digit earnings growth over the medium term. Now let's move on to slide five, where I dive into the results of the CSL group. I'm pleased to report that CSL has delivered an excellent result for fiscal year 24, which has been driven by the strong performance of the CSL-bearing business. First, the headline numbers. Revenue was $14.8 billion, up 11% at constant currency. NPAT-A was $3 billion, up 15%. Net profit after tax, was $2.6 billion, up 25%. In terms of the major highlights for the year, the CSL Bearing business delivered strong growth across the portfolio, primarily driven by the IG franchise, which grew very strongly, up 20%. On the following slide, I will talk to these in more detail. However, Agarda, albumin and adelveon continue to deliver for the CSL bearing portfolio, with each contributing double-digit growth for the fiscal year. There are several plasma initiatives ongoing, some of which have had an immediate impact on the gross margin for fiscal year 24 and positively contributed to the 120 basis point expansion. The RECA rollout has progressed well and we remain on track for full U.S. deployment by the end of fiscal year 25. FDA clearance was obtained for the iNomagram. This is an important milestone for both CSL and Tarumo, and we anticipate the rollout to complete in line with the full deployment of Rika. We are excited about the prospect of bringing Garidacimab to market. building on our strength in HAE with a product that expands the opportunity for patients through differentiated and class-leading efficacy, safety, and convenience. Regulatory filings for Garidacimab have now been submitted in the US, Europe, and Japan. Moving over to CSL Securits, which delivered solid sales growth, outperforming the market in a challenging season, Growth was primarily driven by our adjuvanted Fluad product, which grew 14%. In partnership with Meiji, regulatory approval was received for the world's first ever self-amplifying mRNA vaccine, CoStave, for the prevention of COVID-19 in adults. We expect sales from the Japan launch in this coming fiscal year. The Phase III clinical trial for ATIVC completed enrollment earlier this calendar year, while the Phase I self-amplifying mRNA for seasonal influenza is in progress. As our pipeline illustrates, CSL Securus continues to expand its differentiated portfolio, and we are passionate about bringing these innovations to the market over the next few years. CSLV4 continues to grow volumes despite the impact of generic competition on Ferenject. There has been strong patient conversion to Mesera, our long-acting ESA, and that continued through the year. The strength in nephrology has been supported by Tavanos, and we expect this momentum will be maintained with multiple ongoing and upcoming EU country launches in fiscal year 25. we remain confident in our plan to drive long-term value from the business. Focusing now on CSL Bearing, where revenue was up 14% at constant currency, as I mentioned, growth in our IG franchise remains strong. Sales were up 20%, with strong growth recorded across all geographies. Our intravenous IG products, Privagen and Intergam, were up 21% in total, and our subcutaneous product, Hycentra, was up 19%. Underlying demand for IG continues to be robust across all the core indications of PID, SID, and CIDP. Hycentra maintains its leadership position And earlier this calendar year, we launched the 50-ml pre-filled syringe in the U.S. and the EU. The albumin portfolio grew by 12%, with solid growth in China, U.S., and Europe. Over to hemophilia, up 10%, where once again the standout performer was Adelvion, which was also up 10%. Adelvion continues to be the leading brand and standard of care in all markets where we have launched, maintaining leadership positions in the U.S. and several key markets in the EU and Japan. We also had our first patient enrolled in a Phase III clinical trial in China. Hemgenics, the disruptive addition to CSL Behring's bleeding disorders portfolio, administered infusions in both the U.S., While the transition from referrals to administrations has been slower than we anticipated, largely due to the fragmented U.S. healthcare system, we continue to experience an increasing rate of referrals. These will result in new administrations in fiscal year 25. Specialty products were up 6%, led by Haygarda, which grew 12%. Despite the increased competition in the HAE space, we continue to add new patients and maintain our patient base, with strong growth in EU and Japan. Kcentra remains the gold standard for warfarin reversal, and that grew 5% year over year. With the emergence of competition, there has been some volume impact. However, we remain confident that Kcentra will continue to lead the market. Moving to plasma highlights for CSL Bearing on slide seven. The underlying fundamentals of plasma collection remain strong, with continued momentum in donation growth. While we remain at the early stage of our gross margin recovery timeframe, we are making good progress. Cost per liter continues to reduce, and we have several initiatives in train to manage this down further. We continue to expand the geographic footprint of our network, having opened three centers in Puerto Rico. We have also made significant progress on our digital transformation, and there is an increased focus on center efficiencies, both of which contribute to the overall reduction in CPL and improvement of gross margin. We continue to drive productivity through the centers via a standardized framework for labor staffing, which ultimately leads to maximizing center level output and improving cost absorption at the center level. Focusing now on the Ricca plasma donation system and the iNomagram, the increase in donation yield is expected to be approximately 10% on average per procedure versus current baseline. This allows us to achieve annual leader targets with fewer procedures. Horizon 1 and 2 yield initiatives are both progressing to the plan that we outlined 12 months ago. The recovery of CSL bearing gross margin is on track, and I've spoken to this slide. It gives us confidence on the pathway ahead for continued progress. We are under no illusions. There is still much more to do, but we are encouraged by the progress to date and will be working hard to continue this momentum. Now moving on to CSL Securus, which in fiscal year 24 outperformed the market with revenue growth of 4% at constant currency. This clearly reflects the strength of CSL Securus's differentiated portfolio. Fluad was the standout contributor, growing 14%, achieving $1 billion of annual sales for the first time. This was the first season following U.S. ACIP preferred recommendation for the over 65 age group for Fluad. Pandemic revenue increased 9% as we are the sole awardee for the UK Advanced Purchase Agreement, which was included in other income for fiscal year 24. We also have some milestone payments attributable to Coast Day vaccine launch, which will occur in fiscal year 25. Some operational highlights for CSL Securus. Flu-Celvax six-month age extension approved in the EU, UK, Australia, and New Zealand. And for Fluad, 50-year-plus age extension approved in the EU, in addition to receiving preferential recommendation in Canada for the 65 and over population. In relation to product innovation, we commenced the phase three trial in the Northern Hemisphere for ATIVC. This brings the best of our technologies together, cell culture, high dose, and our adjuvant. Our next generation self-amplifying mRNA COVID vaccine, COSTAVE, recently received regulatory approval in Japan, the first self-amplifying mRNA vaccine approved anywhere in the world. There has also been some very positive immune response duration data that was published in the Lancet earlier this calendar year. We also progressed a phase one trial for self-amplifying mRNA for seasonal and pandemic influenza. On the pandemic side of the business, we were selected by BARDA and HERA to deliver H5N8 vaccine for preparedness against potential avian flu outbreak in humans. Lastly, and this is very recent news, we attained the certificate of occupancy for our new telemarine facility. Turning to CSLV4 on slide 10, where revenue was just over $2 billion. Similar to the prior reporting periods, we have not provided growth numbers since the prior comparable period only included 11 months following the acquisition of V4 Pharma in August 2022. Starting with iron, in an evolving iron market, we have continued to see robust volume growth. As noted at the beginning of the presentation, Ferrinjectin China was included in the national reimbursement drug list with the launch as per our expectation. U.S. step edits remained during fiscal year 24, which placed pressure on our high-dose iron product, Injectifer, albeit with an offsetting positive impact on Venifer, CSLV4's low-dose iron product. The impact of these step edits has begun to stabilize. Moving on to nephrology. Strong ESA performance in the U.S. followed continued patient conversion to Macera, reaching the highest number of patients treated since launch. Strong performance of Capruvia in launch countries, especially Germany, France, and Austria. Valforo's performance in the U.S. was impacted by reduced inventory target levels as requested by our customers, but in China was included on the national drug reimbursement list. Tavanos continues to perform well, having recorded strong sales growth across all launch markets. And finally, Veltasa recorded growth in the U.S. and EU, while also receiving approvals for pediatric indications in these same markets. And just a quick word on R&D. I have summarized some of the updates while describing the performance within the respective business units. As is customary, Bill Mezzanotti and his team will be hosting a full R&D day in October, and we look forward to providing further detail on our portfolio progression at that meeting. So with that, I will hand over to Joy, who will talk you through the financials.