Vaccines and plasma company CSL faces ongoing cost pressures that have hit profits and market value but the underlying performance remains strong, the biomedical leader says.
CEO Paul McKenzie, facing shareholders at his first AGM as CEO of Australia's third-largest company, said CSL had had to navigate a difficult macroeconomic environment.
"There has and remains significant volatility in world currency markets, and CSL being a global company is not immune to this," he said on Wednesday.
Chair Brian McNamee said ongoing inflation had affected the biomedical company's cost base, temporarily reducing margins.
"Whilst our share price has been weaker than we would like, the underlying performance of our company is very strong - profit grew 21 per cent this past year and we are expecting profit growth of 13 to 17 per cent next year," he said.
Revenue growth was forecast at 9.0 per cent to 11 per cent over FY23, with net profit expected to be $2.9 billion to $3.0 billion.
Shares in CSL eased nine cents to $254.98 in morning trade after the company update.
For global vaccine provider CSL Seqirus, another strong year with continued growth driven by demand was expected, CSL said.
CSL Seqirus was also progressing global registrations for its next-generation mRNA COVID vaccine, Mr McKenzie said.
At CSL Behring, which operates one of the world's largest plasma collection networks, gross margin is expected to return to pre-COVID levels in the medium term as it tries to reduce costs per litre.
The biggest components within cost per litre are donor compensation and workforce costs.
"The path to margin recovery however is different to the COVID-driven margin decline," Mr McKenzie said.
CSL is testing different fee schedules, driving increased centre-level productivity, digitising the business and aiming to get more out of the plasma it collects.
He said plasma collections now "comfortably exceed" pre-pandemic levels and manufacturing facilities were now operating at higher utilisation rates, reducing the fixed cost per unit.
"Bringing this all together and keeping in mind the nine-to-12-month inventory cycle, we anticipate modest improvement in the CSL Behring gross margin in FY24 and 25 with a return to pre-COVID margin in the subsequent three years, he said.
CSL said there would be challenges for the growth of its iron deficiency and iron deficiency anaemia business, but the unmet patient need within these markets was "significant".
