CSL (ASX:CSL) share price in focus after outperforming FY21 guidance

Here’s how CSL performed in FY 2021…

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The CSL Limited (ASX: CSL) share price could be on the move today.

This follows the release of the biotherapeutics company’s highly anticipated full year results this morning.

CSL share price on watch after strong result but weak guidance

  • Total revenue increased 9.6% in constant currency to US$10,026 million
  • Gross profit up 9% to US$5,675 million
  • Net profit after tax up 10% to US$2,307 million (compared to guidance of 3% to 8% growth)
  • Full year dividend of US$2.22 per share, up 10% year on year
  • FY 2022 guidance: Net profit to decline 2.5% to 6.8% in constant currency or 5% to 9% on reported profits.

What happened in FY 2021 for CSL?

For the 12 months ended 30 June, CSL outperformed its guidance and delivered a 10% increase in net profit after tax in constant currency terms. This could bode well for the CSL share price today.

This was driven by a 6% increase in CSL Behring revenue thanks to strong demand for its immunoglobulin portfolio. This was led by its market leading subcutaneous product Hizentra. Hizentra sales grew 15% in FY 2021 and were driven by the increased preference and patient benefits of home administration and the continued uptake for the treatment of Chronic Inflammatory Demyelinating Polyneuropathy (CIDP). This is a debilitating neurological disorder.

This was offset slightly by a modest decline in sales of its intravenous product Privigen, which was driven by supply tightness and the accelerated patient shift to Hizentra.

Also recording strong sales growth was its transformational therapy for patients with Hereditary Angioedema (HAE), Haegarda. It grew 14% thanks to continued patient growth and a shift from on-demand to prophylaxis treatment.

Albumin sales were another highlight. They grew 61% during the year. Management notes that its new distribution model in China has been fully operational for 12 months, with sales now reflecting a more normalised level.

Finally, the company’s influenza vaccines business, Seqirus, delivered an exceptionally strong performance. It revealed a 30% increase revenue in constant currency. This was driven by record demand for seasonal influenza vaccines.

What did management say?

CSL Chief Executive Officer and Managing Director, Paul Perreault, said: “I am pleased to report a strong result against a backdrop of very challenging conditions brought on by the global COVID-19 pandemic.”

“Despite the uncertainty and complexities we have faced, our CSL Behring and Seqirus businesses maintained all critical operations and we have continued to deliver our life saving and life extending medicines around the world.”

“During the year, we announced plans to construct a new world-class biotech manufacturing facility in Australia as a further sign of our promise to provide safe and effective influenza vaccines around the world. The state-of-the-art facility will use cell-based technology to produce influenza vaccines for use in both seasonal influenza vaccination and pandemic programs.”

“Furthermore, we have accelerated our research in mRNA technology – in the next generation self-amplifying mRNA for influenza. Pre-clinical results appear promising with human clinical trials expected to commence next year,” Mr Perreault said.

What’s next for CSL?

One thing that could weigh on the CSL share price today is its guidance for FY 2022.

CSL’s net profit after tax for FY 2022 is anticipated to be in the range of approximately US$2,150 million to US$2,250 million in constant currency. This represents a year on year decline of 2.5% to 6.8%.

This reflects strong demand for its portfolio of therapies and vaccines, offset by plasma collection headwinds.

Mr Perreault commented: “Demand for CSL’s core plasma products remains robust. Plasma collections are expected to continue improving following multiple initiatives we have implemented. Together with the global rollout of COVID-19 vaccines I’m optimistic of a global recovery with greater social mobility and more normalised conditions. Plasma therapies have a 9 to 12 month manufacturing cycle. Increasing collections today underpin our expectation of an increase in supply of therapies to patients.”

CSL share price performance

The CSL share price has been uncharacteristically out of form over the last 12 months. During this time its shares are up just 1.5%. This compares to a gain of 23% by the ASX 200 over the same period.

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Motley Fool contributor 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 and has recommended CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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