The CSL Ltd (ASX: CSL) share price is in focus after the ASX healthcare share reported its FY24 result.
CSL is a major ASX biotech share, with operations across different areas including vaccines and biotherapies.
CSL FY24 result
Here are some of the highlights from the 12 months to 30 June 2024:
- Revenue rose 11% to $14.8 billion, in constant currency terms
- Underlying net profit after tax (NPATA) grew 11% to $2.91 billion
- Reported net profit increased 20% to $2.64 billion, or up 25% in constant currency terms
- Final dividend of US$1.45 per share
- Full year dividend of US$2.64 per share, up 12%
- In AUD terms, the full-year dividend up 10% to A$4.00 per share
The reported total revenue increased 14% to $10.6 billion.
Immunoglobulin (ig) product sales increased 20%, with strong growth recorded across all geographies. Albumin sales rose 12% to $1.2 billion. Haemophilia product sales grew 10% to $1.3 billion. Specialty products sales increased by 6% to $1.94 billion.
Management said the FY24 result was led by CSL Behring. Its largest franchise, the immunoglobulins portfolio, delivered “exceptional growth driven by significant patient demand and the recovery in CSL Behring’s gross margin is progressing to plan.”
The vaccine division, CSL Seqirus, outperformed the market in a challenging environment “driven by the adjuvanted influenza vaccine FLUAD”.
CSL Vifor is continuing to grow iron volume in Europe despite generic entrants. CSL is confident in its plan to “drive long-term value” from this segment.
The company said the momentum in plasma collections has continued and the cost per litre, which includes donor compensation and labour, has reduced further. Significant progress has been made on digital transformation, with a focus on efficiencies. The rollout of the RIKA plasmapheresis device is on track to be completed by the end of FY25. This could be helpful for the CSL share price over time.
Management commentary
The CSL CEO and Managing Director Dr Paul McKenzie said:
Overall, this result demonstrates that we are delivering on the strategic objectives that we communicated at our Capital Markets Day in October last year. We remain confident in our double-digit earnings growth target over the medium-term, reflecting a disciplined focus on the execution of our strategy.
Outlook for the CSL share price
The business continues to invest significantly in research and development, which can create the next generation of CSL products. FY24 R&D expenditure increased 12% to $1.4 billion.
Double-digit earnings growth can continue helping CSL’s shares to keep rising.
The momentum for CSL Behring is expected to continue and it’s excited about the potential growth in its transformational gene therapy product for haemophilia B patients, HEMGENIX.
Market conditions for CSL Seqirus (vaccines) remains “challenging”, though it expects to outperform the market thanks to its product portfolio.
For FY25, revenue growth is anticipated to be approximately 5% to 7% over FY24 at FY24 exchange rates.
CSL’s NPATA (underlying net profit) is expected to be in the range of $3.2 billion to $3.3 billion at constant currency, representing growth of between 10% to 13%.
With the CSL share price up significantly over the past year, I wouldn’t call it cheap. But, if profit keeps rising then the share price could keep sustainably rising. I’m not looking to buy myself, but I’d rather own it over Commonwealth Bank of Australia (ASX: CBA) or BHP Group Ltd (ASX: BHP) due to the earnings growth and R&D spending.
