The CSL Limited (ASX: CSL) share price will be on watch today following the release of its highly anticipated half year results.
What happened in the first half?
The biotherapeutics company has started FY 2020 very strongly and delivered an 11% increase in revenue to US$4,980 million in constant currency.
This was driven by an 10% increase in revenue from its CSL Behring business to US$3,768 million and a 9% lift in revenue from its Seqirus business to US$1,018 billion.
On the bottom line CSL delivered a reported net profit after tax of US$1,248 million for the six months ended December 31. This was an increase of 8%, or 11% on a constant currency basis.
The company's chief executive officer and managing director, Paul Perreault, was pleased with the half.
He said, "I am pleased to report a strong first-half result of the 2020 financial year. Our results reflect the focused execution of our strategy, robust demand for our differentiated medicines and a deep, inherent passion for meeting the evolving needs of our patients."
Segment performance.
The key CSL Behring business continued its strong growth thanks to an exceptional performance by its largest franchise, the immunoglobulin portfolio.
PRIVIGEN sales grew 28% and HIZENTRA sales jumped 37% due to continued strong patient demand, together with an expanded label claim. Both products now include Chronic Inflammatory Demyelinating Polyneuropathy (CIDP), a debilitating neurological disorder.
This was supported by growth in Haemophilia and Specialty sales. Haemophilia sales were up 4% thanks to strong growth in recombinant sales, whereas Specialty sales lifted 7% due partly to solid Kcentra sales growth.
As expected, Albumin sales fell 33% during the half. This was due to CSL transitioning to its new direct distribution model in China. This offset double digit growth in Europe and Emerging Markets and a 5% lift in the United States.
The Seqirus influenza vaccines business delivered another strong performance. The main drivers of its growth were a 21% lift in QIV sales and a 21% increase in Adjuvanted sales. These represent 81% of Seqirus' total revenue.
Outlook.
In light of its strong first half performance, management has upgraded its profit guidance for the full year.
Mr Perreault explained: "CSL is well positioned for sustainable growth. Exceptional demand continues for our differentiated therapies. We expect to again outpace the market in expanding plasma collections and our objective to open 40 new collection centers this financial year is on track."
CSL now expects its FY 2020 net profit after tax in the range of US$2,110 million to US$2,170 million in constant currency. This represents growth of approximately 10% to 13% growth over FY 2019 and incorporates the one-off financial impact of transitioning to a new direct distribution model in China. The company's previous guidance was for growth of 7% to 10% in FY 2020.
