CSL receives second remuneration strike but avoids board spill
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More news: CSL received a second strike against its remuneration report but avoided a board spill, according to proxy votes released at the company's annual general meeting this morning.
42.32% of proxies were against the remuneration report, with 57.14% in favour. As the resolution received less than 75% of proxies in favour, shareholders were also required to vote on a conditional board spill resolution. However, 97.29% of proxies were against a board spill, with 1.88% in favour.
CSL shares were down 16% to $177.52 at 11:40am AEDT.
CSL shares plunge on guidance downgrade as US vaccination numbers slide
More news: CSL shares tanked in early trade after the struggling biotechnology group slashed its profit and revenue forecasts and pushed back the planned demerger with its influenza vaccine business Seqirus.
Shares were down 14.5% to $180.80 at 10:35am AEDT. The stock has now dropped 38% over the last 12 months.
What they said: "While management's tempered growth outlook is somewhat understandable given it has been mostly attributable to weakness in the influenza vaccine market, we nonetheless expect the stock to underperform the market today on the weaker than expected growth outlook," said RBC Capital Markets analyst Craig Wong-Pan.
"Partially offsetting that is the delay to the Seqirus demerger, which we believe investors will view positively given most did not expect it to create value."
CSL slashes profit and revenue guidance, postpones Seqirus demerger
The news: Biotech giant CSL has downgraded its full-year profit and revenue outlook following lower-than-expected vaccination rates in the US and government cost containment measures in China.
The numbers: The Melbourne-headquartered group cut its FY26 revenue growth outlook from 4-5% to 2-3%, and reduced its NPATA growth forecast from 7-10% to 4-7%.
CSL chief executive Paul McKenzie said that the company's influenza vaccine business Seqirus expects US vaccination rates to decline by 12% for the overall population and by 14% for the 65+ age group compared to last year.
McKenzie said the trend comes despite a positive recommendation from the Trump administration on influenza vaccines and an "unprecedented level of infection impacting public health".
Seqirus now expects full-year revenue to decline by "mid-teens", compared to the previous outlook of a "high single digit" decline. CSL also said the subsidiary's planned demerger, slated for the end of the current financial year, will be postponed given the "heightened volatility" in the US influenza vaccine market.
McKenzie also noted that government cost containment measures in China have reduced the demand for albumin, a key product used in medicine to restore blood volume, and manufactured by CSL's Behring business.
The context: CSL said Behring is on track to maintain "sustainable and robust growth" in FY27 and FY28. However, ongoing uncertainty in the US influenza vaccine market means single digit NPATA growth is a "more appropriate expectation" than double digit growth.
The company, which holds its annual general meeting this morning, was hit by a $20 billion selloff in August after a shock restructure announcement, which included plans to rollback its US plasma centres, slash 3,000 jobs and target $550 million worth of annual costs savings.
In pre-prepared remarks ahead of the AGM, CSL chair Brian McNamee defended the plans.
What they said: "Our share price has suffered significantly in recent months," McNamee said.
"The reality is that for some time now CSL has been operating in a way that is too complex, and this has impacted our ability to react decisively to geo-political headwinds and to maintain our market position.
"It is clear to the board and Paul that changes must be made rapidly and effectively.
"Paul and his management team, with the full support of the board, have identified areas where our business must evolve. They are bold and strategic steps to reshape and simplify the business, build our growth pipeline, reduce costs and improve clinical and commercial execution."
The source: ASX
