CSL share price on watch after posting US$2.1 billion FY 2020 profit

The CSL Limited (ASX:CSL) share price will be on watch today after releasing its FY 2020 results and revealing a US$2.1 billion profit…

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The CSL Limited (ASX: CSL) share price will be in focus this morning following the release of the biotherapeutics company's full year results.

How did CSL perform in FY 2020?

During the 12 months ended 30 June 2020, CSL delivered a 7.2% increase in reported sales revenue to US$8,797 million. This was driven by solid growth from both its CSL Behring and Seqirus vaccines businesses during the year.

The CSL Behring business delivered an 8% increase in constant current sales to US$7,661 million. The key driver of this was demand for its immunoglobulins, which reported a 22% lift in sales to US$4,014 million. It was supported by solid Haemophilia and Specialty sales, which offset a sharp reduction in Albumin sales. The latter was caused by its transition to a new direct distribution model in China.

Seqirus sales increased 11% in constant currency terms to US$1,297 million. This was driven by a 21% lift in seasonal influenza vaccine sales during the 12 months.

Thanks to margin improvements, CSL's earnings grew at an even quicker rate. The company's net profit after tax came in at US$2,103 million, up 17% in constant currency terms and 9.6% on a reported basis. Earnings per share was US$4.63 per share.

This strong form led to the CSL board declaring a final dividend of US$1.07 per share, up 17% on the prior corresponding period. This lifted its full year dividend to US$2.02 per share. In Australian dollar terms this is A$2.95 per share, up 11% year on year.

Plasma collections.

There has been a lot of speculation that CSL will struggle in FY 2021 because of COVID-19 related impacts on plasma collections. This is an essential raw material used in the production of many of its therapies.

Management revealed that FY 2020 plasma collection volume was down ~5% versus FY 2019, with additional collection costs incurred.

CEO Paul Perreault commented: "The COVID-19 pandemic does, however, present a challenge for the global plasma industry. The collection of plasma has been adversely impacted in the past few months as communities respond to shelter-in-place orders, extended lockdowns and other government actions."

"To mitigate this, we have a number of initiatives in place to sustain plasma collections. It is our view that, at some point, the pandemic will recede and, with that in mind, we continue to invest in plasma collection and manufacturing facilities as well as our hallmark research and development programs," he added.

Outlook.

In FY 2021 the company expects continued strong demand for plasma and recombinant products. It also expects Seqirus' product differentiation and COVID-19 to drive strong demand for influenza vaccines and for albumin sales to normalise following its transition in China.

And while plasma collections will be tough and additional costs are expected, management is forecasting another strong result.

In constant currency, subject to a number of variables, it is forecasting revenue growth of 6% to 10% and a net profit after tax of US$2,100 million to US$2,265 million. The top end of its profit guidance range represents 8% growth year on year.

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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