CSL Announces Half Year Results
CSL LOOKS FORWARD TO IMPROVED TRADING CONDITIONS
Melbourne, Australia — 18/02/2003
CSL Limited today announced its operating results for the half year ended 31 December, 2002. Group sales totalled $633.4m, an increase of 7% over the corresponding period last year. The consolidated earnings before interest, income tax, depreciation and amortisation (EBITDA) were $132m, a decrease of 8% on the corresponding period last year. As predicted at the Company’s Annual General Meeting in October 2002, the strong appreciation of the Swiss franc against the US dollar has had a significant impact on the operating results of the Company. At constant currency rates, EBITDA grew by 4% over the corresponding period last year.
Net profit after providing for income tax (NPAT) was $40.1m, a decrease of 30% on the corresponding period last year. In addition to a strong Swiss franc and as noted at the Annual General Meeting this result was a reflection of a competitive pricing environment for IVIG in the US and the transition from Novartis to ZLB Bioplasma of IVIG distribution in Europe. Further, the effective tax rate of the Company has also risen considerably in the period due to the inability of the Company to benefit the Group results through the lower corporate tax rate offered to ZLB Bioplasma AG in Switzerland.
Earnings per share after tax, before goodwill amortisation, was 38.7c (diluted), a decrease over the corresponding period last year of 20%.
Dr McNamee, CSL’s Managing Director, said, “The Company has continued to increase its investment in the ZLB business by expanding its marketing and sales activity in the US and in Europe”. He noted however that the other businesses in the CSL Group had continued to show strong growth in the period, especially JRH Biosciences, Inc.
Dr McNamee advised that the Company had maintained its investment in R&D expenditure, spending more than $50m in the period, demonstrating its ongoing commitment to innovation as part of its strategy to build a long term future for the business.
Dr McNamee advised that given a higher effective corporate tax rate and continuing currency volatility, NPAT for the full year was hard to forecast with accuracy. However, on the basis of current indications, the anticipated underlying trading performance of the Group was likely to be reflected as an EBITDA split of approximately 45%/55% for the full year. The final result however, he added, was very difficult to predict because of a number of key variables including fluctuations in exchange rates and IVIG market conditions in the US.
The Directors maintained an interim dividend payment of 12c per share fully franked to be paid to shareholders on 15 April, 2003, the same as for the corresponding period last year. Aventis-Behring:
CSL has announced today that it is exploring the strategic option of acquiring Aventis-Behring. In connection with investigating this option, the Company has entered into an agreement with Aventis to allow CSL to appropriately and exclusively evaluate this acquisition opportunity.
On January 31 2003, Aventis announced that its discussions with Bayer regarding a possible blood products joint venture were terminated and that it was proactively exploring alternative options. As part of its 2002 review, Aventis further stated its desire to divest Aventis-Behring within the year 2003.
Aventis-Behring, headquartered in the USA, is a major player in the plasma therapeutic protein industry with a strong position in plasma derived and recombinant coagulation factors and has over 3.0m litres of processing capacity in the USA and Germany.
Dr Brian McNamee commented that the production and distribution of human plasma products is a core business for CSL and management and the Board regularly review acquisition opportunities as they arise. Dr McNamee noted that this acquisition may provide CSL with a broadened and more balanced product portfolio, greater geographical reach and currency balance and would more fully utilise ZLB/CSL strategic assets. He added that the current discussions with Aventis were at an early stage and may or may not result in a transaction, with the ultimate outcome of these discussions depending among other things on whether the Company could secure a transaction that would be sufficiently attractive and value enhancing for CSL’s shareholders.JRH Biosciences Inc:
The Company also announced today that its US subsidiary, JRH Biosciences Inc, had recently acquired from ByProd Corporation a new business in the US, which business was a major collector and producer of animal derived serum. This acquisition had the potential to double JRH’s existing business in animal derived serum. This purchase will enable JRH to secure ongoing supplies of foetal bovine serum and other sera which is in high demand from its customers, being a critical resource used in the production of many important biopharmaceutical products. Dr McNamee commented that the acquisition will position JRH as a major collector and producer of serum in the US and will provide further growth opportunities for JRH which was continuing to perform very strongly.Fibrin Bandage:
In respect to the project to develop a fibrin bandage, the Company has announced that it had recently shipped bandages to the US Army having received FDA approval under an IND in December 2002 for pilot battlefield use. Dr McNamee noted that the unique properties of the bandage differentiated it from competitor dressings. It is anticipated that it will be effective in severe life threatening haemorrhage as it contains potent coagulation proteins necessary for blood clotting and will be able to be used for both internal and external injury as it is capable of being naturally absorbed by the body.Dr Brian McNamee’s Relocation:
Dr McNamee relocated permanently to Australia on February 2, 2003, after overseeing the establishment of ZLB’s US operations as well as ensuring the continued growth of the Company’s other US businesses.
Analyst Presentation (PDF, 0.26MB) - 18 February 2003
For further information please contact:
Dr Brian McNamee
Ph: +61 3 9389 1601
Mr Tony Cipa
Ph: +61 3 9389 1601