The CSL Limited (ASX: CSL) share price is in focus after the ASX healthcare share reported its FY22 result.
CSL is a major biotech business that develops vaccines and advanced therapies for patients around the world.
CSL’s FY22 result
Here are some of the main highlights from the result:
- Net profit after tax (NPAT) was down 6% to $2.25 billion in constant currency terms
- Earnings per share (EPS) fell 8% to $4.81
- Revenue up 3% in constant currency terms
- Final dividend of US$1.18 per share
- Annual dividend steady at US$2.22
- In AUD, the total dividend was up 6% to A$3.11 per share
- CSL reported that it experienced strong growth in its market-leading haemophilia B product called IDELVION and key specialty product KCENTRA
- Immunoglobulin sales were limited by constrained plasma collections in FY21, but improved in the second half which reflected growth in plasma collected
- CSL’s Seqirus, the influenza vaccine business, performance was “exceptional”
Result commentary
Although profit was down, CSL said that the performance was as expected in a difficult global environment. It was at the top end of its guidance range. There was also “significant growth” in its research and development investment.
The Seqirus segment saw revenue rise by 13%, driven by growth in seasonal flu vaccines. HPV royalties were up 55%, rebounding strongly to now exceed pre-COVID levels after strong demand and increased supply.
CSL also announced its carbon emissions reduction targets and the sustainability roadmap has been put in place.
As the year progressed, CSL’s plasma collections increased “significantly”, though at a higher cost. Collections were up 24%, which will underpin “strong” sales growth in its core plasma products Ig and albumin. But, it’s two years behind its projected growth in plasma collections. It opened 27 new plasma collection centres.
During the year, it also announced the acquisition of Vifor, which “adds a high-value and complementary portfolio of products and marke-leading positions in renal disease and diseases of iron deficiency to CSL.”
Outlook and thoughts on the CSL share price
Excluding CSL Vifor, net profit after tax is expected to return to growth and be in the range of between $2.4 billion to $2.5 billion in constant currency terms. It will update its guidance to include Vifor as soon as it can.
CSL CEO and Managing Director Paul Perreault said:
We have continued to invest in all facets of our business and I am very encouraged by the improved momentum we are seeing in our core Ig franchise.
The strong growth we have seen in plasma collections is anticipated to continue as COVID recedes and underpin strong future sales growth in our core plasma therapies. The current higher cost of plasma is also expected to prevail into FY23.
We anticipate our influenza business, CSL Seqirus, to deliver another strong year driven by demand for its differentiated products.
It will be interesting to see how the market reacts (today and over August) to the result and the prediction of growth. CSL is a good business, But, with a market capitalisation of around $140 billion, I’m not sure how much more growth CSL can deliver. I’m not saying it can’t, I just don’t know how large CSL can grow and how much long-term pricing power it really has.
I’m happy to look at other ASX growth shares that are a lot smaller.
