Csl Limited · ASX:CSL
Csl — FY2003 Earnings Presentation
32 slides from Csl's earnings presentation, Aug 21, 2003
Slide 1: CSL Limited
CSL Limited AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 2: Highlights 2002/03
Highlights 2002/03 • JRH Biosciences sales growth 28% to US$90.2m • CSL Pharma sales (ex Logistics) growth 23% to $201.8m • 2nd half Cash Flow from Ops $90.7m • Improved financial gearing to below 30% AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 3: Year in Review 2002/03
Year in Review 2002/03 • Financial Performance Forex adj – Revenues $1,313m -3% 6% – EBITDA $255.1m -15% -1% – NPAT(bef Amort)$112.6m -31% -10% – NPAT $70.4m -43% -15% – R&D investment $91.5m -2% – Effective tax rate 31% AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 4: Sales by Business Unit
Sales by Business Unit June 2003 $1,300.3m ZLB Plasma Services Animal Health 20% 5% Biosciences 13% CSL Bioplasma 13% Pharmaceutical 19% ZLB Bioplasma 30% AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 5: Total Revenues
Total Revenues $1,500 1431.9 $1,250 $1,000 Million $750 1350.2 1313.2 $500 854.8 504.3 $250 $0 2000 2001 2002 2003 Year ended 30 June Constant Forex AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 6: R&D Investment
R&D Investment $100 93.0 $80 $60 Million 93.3 91.5 81.2 $40 43.5 $20 $0 2000 2001 2002 2003 Year ended 30 June AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 7: EBITDA
EBITDA $300 294.6 $250 $200 299.2 $150 255.1 Million 208 $100 110.8 $50 $0 2000 2001 2002 2003 Year ended 30 June Constant Forex AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 8: NPAT before Goodwill
NPAT before Goodwill $175 $150 147.0 $125 $100 Million 163.6 112.6 $75 102.4 $50 54.4 $25 $0 2000 2001 2002 2003 Year ended 30 June Constant Forex AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 9: Operating Profit after Tax
Operating Profit after Tax $150 $125 $100 104.8 Million $75 123.8 $50 78.2 70.4 54.4 $25 $0 2000 2001 2002 2003 Year ended 30 June Constant Forex AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 10: Business Unit Performance
Business Unit Performance AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 11: Business Unit Performance
Business Unit Performance • ZLB Bioplasma – Revenues $398.5m (-16%) – EBITDA $69.3m – Plasma throughput 1.4m litres – Result adversely impacted by • US in market pricing • Appreciating Swiss Franc • Phasing of entry to European markets AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 12: Business Unit Performance
Business Unit Performance • ZLB Bioplasma US – US sales $242.4m – IVIG 3.6m grams increase of 18% – Estimated market share 14% – Current contract NanoFiltered IVIG US$38/gm AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 13: Business Unit Performance
Business Unit Performance • ZLB Bioplasma Europe – European infrastructure in place – Strong 2nd half sales $34m to $63m – 2003/04 growth from first full year of operations under Sandoglobulin AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 14: Business Unit Performance
Business Unit Performance • ZLB Bioplasma 2003/04 outlook – Plasma throughput approx 1.7m litres – Full 12 months European sales – New product launch (late 2nd half) • Liquid IVIG • Rhophylac® AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 15: Business Unit Performance
Business Unit Performance • ZLB Bioplasma sensitivities 2003/04 outlook • NPAT impact on Group AUD +10% appreciation of USD/CHF $32m +10% price increase IVIG $24m +10% volume IVIG $8m AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 16: Plasma Industry Dynamics
Plasma Industry Dynamics Industry focus returning to fundamentals – A number of market participants have recently taken steps to rationalise their production assets and focus on maximising economic returns AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 17: Plasma Industry Dynamics
Plasma Industry Dynamics Why should prices recover • Sector overreacted to IVIG shortages – Increased capacity • Excess of – Focus on manufacturing supply forced scale down prices – Long planning cycle 2-3 years • Increased IVIG demand of 8-10% AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 18: Plasma Industry Dynamics
Plasma Industry Dynamics Why should prices recover • Corrective action – Plasma collections and infrastructure reducing – Focus now on profitable litres rather than manufacturing scale – Emphasis on Working Capital and cash generation AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 19: Business Unit Performance
Business Unit Performance • Pharmaceutical – Growth (excluding Logistics) 23% – Expansion in higher margin products • Tramal 70% increase • Fluvax record number doses • Menjugate sales $27m – Expense control AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 20: Business Unit Performance
Business Unit Performance • Bioplasma (Australia) – Sales growth 10% – Plasma intake growth 6% – Intragam® P yield gains – Continued export growth 16% – Increased operating expenses • plasma segregation • PCR testing AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 21: Business Unit Performance
Business Unit Performance • JRH Biosciences – Sales increase 16% [USD 28%] – Strong margin growth – Market conditions remain robust – High growth in media products, FBS 26% (Australian & US) and Dry Powder 34% – Biotech approvals (demand) continues AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 22: Business Unit Performance
Business Unit Performance • Animal Health – Sales growth US19%, Domestic 6% – Strong performance in • Sheep vaccines • Manufacturing productivity – Spirovac® facility on track • first sales ex facility May 2003 • full 12 months operation 2003/04 AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 23: Business Unit Performance
Business Unit Performance • Plasma Services – Sales $255.2m – Operating efficiencies improved – action taken to reduce collections • closed high cost centres • reduced donor fees • reduced hours of operation AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 24: R&D Highlights
R&D Highlights • Liquid IVIG and Rhophylac – BLA submissions accepted by FDA • Thiomersil-free FluVax launched in Australia • Excellent human tolerability and immunogenicity with ISCOMATRIX therapeutics - HCV, HPV, melanoma • rHDL preclinical stroke data – reduce brain lesions 60% at 6hrs – validate
Slide 25: R&D by Business Unit
R&D by Business Unit June 2003 $91.5m Plasma Life Cycle 27% Animal Health 7% Biosciences 7% Innovation 16% Plasma Innovation 30% Pharm Life Cycle 13% AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 26: Foreign Exchange
Foreign Exchange • USD depreciates sharply against the Swiss Franc – Average rate 2002 1.67 – Average rate 2003 1.42 – Current rate approx 1.39 – 5 year average rate 1.56 – 10 year average rate 1.48 – 2002/03 NPAT impact $32m AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 27: Foreign Exchange
Foreign Exchange • Profit impact greater than cash impact – USD plasma purchases provide natural hedge (cash) – majority profit impact on natural hedge held in inventory • Appreciating AUD – financial impact on profit translation $2.4m AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 28: Working Capital
Working Capital • Cash Flow from Operations $115.5m – Strong 2nd half $90.7m – Inventory reduction 2nd half $47.3m – Improving inventory turns – Emphasis on working capital management • Cash flow demonstrates success of natural hedge AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 29: Debt Restructure
Debt Restructure • Private Placement US$250 • Benefits – maturity spread improved – more efficient – lower borrowing costs natural hedge – natural hedge against US assets – tax structure • Multi-Currency Facility – CHF borrowed at 1.4% – reduces gearing – Foundation debt repaid – Break costs CHF3.75
Slide 30: Group Results
Group Results 2003 2002 $m $m Sales 1,300.3 1,336.4 Other Revenue 12.9 13.8 Total Revenue 1,313.2 1,350.2 Depreciation/Amortisation 119.8 113.1 Net Interest Expense/(Income) 33.5 29.6 Tax Expense 31.3 32.6 Profit after tax before Goodwill Amortisation 112.6 163.6 Amortisation of Goodwill after tax 4
Slide 31: Aventis Behring Analysis
Aventis Behring Analysis • Phase I Due Diligence – Manufacturing – Marketing Nearing – Quality Completed – Plasma collection • Phase II Due Diligence – Finance – Legal Advancing – Taxation • Slowed due to Northern Hemisphere vacation period AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY
Slide 32: Aventis Behring Analysis
Aventis Behring Analysis • Decision making process – Incorporate diligence results in M&A model – Complete analysis • Valuation • Financing – Negotiate Sale & Purchase agreement terms – Assess integration issues AUSTRALIA’S BIO-PHARMACEUTICAL COMPANY