CSL Ltd (ASX: CSL) shares will be on watch on Tuesday.
That's because the biotherapeutics giant has just released its eagerly anticipated FY 2024 results.
Let's see how the company performed during the 12 months.
CSL shares on watch amid strong profit growth
- Revenue up 11% in constant currency to US$14.8 billion
- Net profit after tax before amortisation (NPATA) up 11% to US$2.91 billion
- NPATA in constant currency up 15% to US$3.01 billion
- Final dividend of US$1.45 per share
- Total dividends up 12% to US$2.64 (A$4.00) per share
- FY 2025 guidance: NPATA growth of 10% to 13%
What happened in FY 2024?
For the 12 months ended 30 June, CSL reported an 11% increase in constant currency revenue to US$14.8 billion.
A key driver of this growth was the CSL Behring business, which reported a 14% lift in total revenue to US$10.61 billion. Management advised that Immunoglobulin (Ig) product sales came in at US$5,666 million, which is an increase of 20%. This reflects strong growth across all geographies.
Pleasingly, underlying demand for Ig continues to be strong due to significant patient needs in core indications. These are Primary Immune Deficiency, Secondary Immune Deficiency and Chronic Inflammatory Demyelinating Polyneuropathy (CIDP).
Another positive is that its plasma collection costs continue to fall and the roll out of the RIKA plasmapheresis device is on track to be completed by the end of the 2025 financial year. As a result, the yield initiatives in the plasma manufacturing process are progressing to plan.
Also performing positively was the CSL Seqirus vaccines business. It reported a 4% increase in revenue to US$2.128 billion. This was driven by sales of the adjuvanted influenza vaccine FLUAD, which increased by 14%. Management notes that this growth was achieved against a backdrop of reduced rates of immunisation. It feels this highlights the strength of CSL Seqirus' differentiated product portfolio.
Also contributing was the new CSL Vifor business, which recorded total revenue of US$2.064 billion for the period.
What else?
Other items of note include CSL spending US$1.428 billion on its research and development (R&D) activities during FY 2024. This is up 12% year on year but sits at the low end of its 10% to 11% of revenue guidance.
Cashflow from operations was US$2,764 million, which is up 6% year on year. This increase reflects the higher profitability and overall growth in sales, partly offset by an increase in working capital reflecting a strong finish to the year in CSL Behring.
And on the bottom line, CSL reported a 15% increase in NPATA in constant currency to US$3.01 billion. This was in line with its guidance for the year.
Management commentary
CSL's CEO and managing director, Dr. Paul McKenzie, was pleased with the company's performance in FY 2024. He said:
I am pleased to report a strong result for the 2024 financial year led by CSL Behring. Our largest franchise, the immunoglobulins portfolio, delivered exceptional growth driven by significant patient demand and the recovery in CSL Behring's gross margin is progressing to plan. CSL Seqirus outperformed the market in a challenging environment driven by the adjuvanted influenza vaccine FLUAD.
Outlook
Management has provided guidance for FY 2025. It is expecting constant currency NPATA to be in the range of approximately US$3.2 billion to US$3.3 billion. This represents an increase of approximately 10% to 13%.
There's potential for this guidance to disappoint the market today and put pressure on CSL's shares. For example, analysts at Morgans were "look[ing] for FY25 growth guidance to be similar (NPATA +13-17%; US$3.3-3.5bn)."
Though, CSL does have a habit of being conservative, so there's every chance this could be upgraded as the financial year progresses.
Commenting on the company's outlook, Dr McKenzie said:
"The momentum in our CSL Behring business is expected to continue to be underpinned by the strong patient demand in our immunoglobulins franchise.
For FY25, revenue growth is anticipated to be approximately 5-7% over FY24 at constant currency. CSL's NPATA for FY25 is anticipated to be in the range of approximately $3.2 billion to $3.3 billion at constant currency, representing growth over FY24 of approximately 10-13%. Over the medium term, CSL is in a strong position to continue to deliver annualised double-digit earnings growth.
