Good morning, ladies and gentlemen. My name is Fiona Meade, Company Secretary of CSL Limited. It's a pleasure to welcome you to CSL's 2021 Annual General Meeting. I will be your host for today's meeting. We hope you and your families are keeping well through these unprecedented times.
I'd like to begin by acknowledging the traditional custodians of the land on which we meet today and pay my respects to their elders past and present. I extend that respect to Aboriginal and Torres Strait Islander peoples who are with us today. Before we commence with the formal proceedings, we would like to There are short personal video of some of our patients, Cheryl French and her two daughters, Leah and Emma. Cheryl and her daughters were diagnosed with hereditary angioedema, which is a rare disease that can cause swelling in different parts of the body and it's painful, debilitating and potentially fatal. You can read more about CSL's purpose, including how the people and science at CSL Save Lives in our annual report, which is available on our website, csl.com.
Hi, I'm Cheryl. I am an art teacher. I am a hereditary angioedema patient and a proud mother of 2 daughters who are energetic, independent, Very determined young women. Leah is 11. She is 30 middle school, 6th grader this year.
Absolutely in love with her science class and all things of middle school. Emma is a 17 year old high school senior. This is a You're full of changes and full of challenges and preparing to let go. Hereditary angioedema is a life threatening disease that my family and I live with. It causes me to swell for any reason, for no reason at all.
And now I take my daughters also. Growing up with hereditary angioedema was many things. It was challenging, frightening, painful, Scary, debilitating. My first swelling episode started at 11 years old. Another major landmark is My girls being diagnosed.
One of the hardest days of my life. With CSL, thankfully, their life with HAE. Their childhood with HAE has been nothing like mine life. So much better. CSL is constantly giving us more.
I love their constant need for the, well, good is good, but how can we be better? Because that patient matters, that patient family matters. CSL has given me a beautiful opportunity by allowing me to be patient advocate. I can now use my history and my knowledge and my life experience to help other patients, including my own daughters. To CSL, On behalf of myself as well as my family, thank you.
I don't think I can ever express how grateful I and for the work that you do daily for patients like me, for parents like me, for caregivers, for the patient advocates. I am daily. Grateful for the work you do.
Today's meeting is being held online via the Lumi platform. This allows shareholders and proxy holders to attend the meeting virtually through a live webcast. In addition, shareholders and proxy holders have the ability to ask questions and submit votes. Today, we are conducting this meeting virtually in order to comply with the directions issued by Victoria's Chief Health Officer. This means all attendees are joining virtually.
We've done our best in these challenging circumstances, and every effort has been made to ensure that this meeting runs smoothly for you as shareholders. If you experience any difficulties, please call the AGM helpline number on 0394154024, which is also listed in the AGM user guide on our website and appears on the screen now. In the event that one of our speakers experiences technical difficulties, an alternative speaker will step in to assist. In order to deliver the most interactive meeting possible, we have not prerecorded any portion of today's meeting. Shareholder and proxyholder questions will be dealt with through our online system.
You can ask questions during the meeting in 2 ways. To submit a question in writing, Select the messaging tab at the top of the Loomby platform. At the top of that tab, there is a section for you to type your question. Please also note which resolution your question relates to. Once you've finished typing, please hit the arrow symbol to send.
And to the next question. For those shareholders who wish to ask a verbal question, an audio question facility is available during this meeting. To use this service, please pause the broadcast on the Lumi platform and then click on the link under asking audio questions. A new page will open where you will be asked to enter your name and the topic of your question before being connected. You You will listen to the meeting on this page while waiting to ask your question.
If you have any issues using this system, please return to the Lumi platform. Written questions can be submitted at any time, and you don't need to wait for the relevant item of business to ask your question. In fact, we encourage you to start to enter questions right now rather than wait for the relevant agenda items. All questions should be addressed to the Chair. In order to run this virtual AGM efficiently, we will run through all of the items of business as set out in our notice of meeting first, following which we will address shareholder questions at one time.
I will read out the written questions to the Chair. Written questions may be moderated for etiquette, for example, where there is inappropriate language used. Finally, due to time Australians. It is possible that we may run out of time to answer all questions. To ensure that all our shareholders have the opportunity to ask questions, We ask each of you to ask no more than 2 questions on each resolution.
We've also addressed some of the more frequently raised pre meeting questions in their speeches. Voting today will be conducted by way of a poll on all items business. Voting for all resolutions will open shortly, and the poll will remain open during the AGM so that you can vote on all items at any time during the meeting. If you are eligible to vote at this meeting, a new polling icon will appear on your screen. Selecting this icon will bring up a list of resolutions and present you with voting options.
To cast your vote, simply select one of the options. There's no need to hit a submit or enter button as the vote is automatically recorded. You also have the ability to change your vote up until the time and the Chair's Close Voting Closed. Voting is now open on all items of business. The polling icon will soon appear.
Please submit your votes at any time. We will give you a warning before we move to close, Voci. In order to conduct the poll, Mr. Michael Hutchinson of Computershare Investor Services is appointed to act as Returning Officer, and Mr. Rodney Piltz and Ms.
Kylie Bodinem of SIRM Young are appointed to act as scrutineers. I'm now going to pass to Doctor. Brian McNamee, the Chair of our Board of Directors, to formally open the meeting.
Thank you, Fiona. It is my pleasure to welcome our shareholders to CSL Limited's 2021 Annual General Meeting. Once again, the circumstances have forced us to conduct this meeting virtually. Well, I'm thankful that technology allows your Board to connect with shareholders far and wide. I am looking forward To being able to speak to you once again in person as soon as possible.
There is a quorum present, and I'm delighted to open the meeting. Let me commence our business for today with some introductions. Joining us online are our directors, our Chief Executive Officer and Managing Director, Mr. Paul Perrault and our nonexecutive directors, Mr. Bruce Brook Doctor.
Megan Clark Professor Andrew Cuthbertson, Ms. Carolyn Hughson, Professor Duncan Maskell, Ms. Marie MacDonald and Ms. Allison Watkins. We also have with us our audit partners from AEY and a number of senior executives, including Joy Linton, our Chief Financial Officer.
I'm stating the obvious when I say the pandemic has been persistent in the challenge it has presented to us all. At this time last year, we could not foresee the significant impact the delta variant would have on the endurance of the virus and the subsequent ongoing impact to our lives. Most of us are looking forward to a time when we don't need to talk about pandemic anymore. But for today, it is here, at which I'd like to start because the pandemic has shone a light and our company's purpose and the role we play in protecting the health of communities around the world. The pandemic is a prime example of how a company like CSL adds value to society.
To simplify the story, we identify serious and life threatening conditions, and we try and solve them through scientific research and innovation, finishing with safe and reliable products. In the case of COVID-nineteen. We knew we had to use our expertise in medical science and particularly vaccine development and manufacture to help the world confront this extraordinary challenge. This is where your company operates. The point at which the commercial imperative for our shareholders coincides with social license for broader society.
While this equation is simple to say, in reality, it is more nuanced. We have to decide and quite quickly where we would redirect our resources. Early in 2020, CSL worked with the University of Queensland on its COVID-nineteen vaccine candidate, a unique and innovative platform that had all the makings of a breakthrough vaccine. As we accelerated preparations to take this candidate into Phase twothree clinical trial. The Phase 1 clinical trial showed that the vaccine elicited a robust response towards the virus.
Disappointingly, though, the decision was taken not to progress the vaccine candidate due to the partial immune response causing an unexpected interference with certain HIV tests. As many of you will be aware, we redeployed dedicated COVID-nineteen vaccine teams across our business units and transitioned elements of our Australian manufacturing capacity to manufacture AstraZeneca's COVID-nineteen vaccine for local use. We are pleased to say that the Australian government and AstraZeneca trusted us as their partners to help the country respond to the emerging crisis through the most effective solution available, vaccination. Notwithstanding the perhaps disproportionate criticism that this vaccine's reputation has experienced. We couldn't be prouder that the AstraZeneca vaccine that's given protection to many millions of Australians, and even more will be sent to support our neighbors in the region.
I'd like to reemphasize how delighted I am with the role CSL has played in the pandemic, and I extend my gratitude to those whose priorities were shifted throughout the year to work on initiatives aimed at fighting the virus. Shortly, our CEO and Managing Director, Mr. Paul Perrault, will review the financial and operational highlights for the year. Once again, our businesses had delivered a strong result, which was particularly impressive given the difficult environment across the nearly 40 countries where we have operations around the world and more than 100 countries where our medicines are used. Our people have done an exceptional job navigating the different jurisdictions and shifting environmental conditions to not only remain operational, but to grow and excel.
And thank Paul and his leadership team for their leadership and guidance during this time. I'd also like to reference our strategy in this performance. Our 2,030 strategy was devised prior to the pandemic with the aim of maximizing our capability and advantages in a competitive and changing world. Those last two words, changing world, turned out to be very relevant over the last 18 months. Our performance during this period has given us even more reasons to believe that our 2,030 strategy is right and has proven resilient in the face of these challenges, which none of us have ever seen before in our lifetime.
Our efforts over the last years have focused on maintaining our leadership position and preparing for strong growth when market conditions normalize. Paul will talk to some of those efforts, but your Board is confident that our 2,030 strategy will continue to deliver sustainable growth for our shareholders well into the future. As we look to this future, one of my focus points is to ensure that we have the right skills and expertise on the Board, which flows through to our management teams and operations. When we look at this, we look at multiple parameters, including deep but complementary and diverse domain expertise as well as global and market experience. These considerations are not static and involved in line with markets in which we operate and the nature of our business.
The Board is acutely aware of the importance of talent management and succession planning in good governance. This year, the Board regretfully accepted the resignations of Mr. Abbas Khorsain and Mr. Pascal Soro. CSL has benefited from their immense experience, and we wish them best in their future endeavors.
We're pleased that Ms. Allison Watkins and Professor Duncan Maskell joined the Board on the 18th August 'twenty 1 as nonexecutive directors. Both directors bring great experience to CSL, Gained through senior and diverse roles across manufacturing, science, commerce and entrepreneurship. They will be valuable assets to our Board as we aim to grow shareholder value over the long term. Professor Andrew Cubson retired as an employee of CSL.
Andrew has acted as a strategic counselor on various projects since handing over the reins as Chief Scientific Officer and Head of R and D in 2019, including shepherding the company's efforts in the University of Queensland and AstraZeneca COVID-nineteen vaccine projects. Andrew's skills throughout the pandemic have been invaluable in facilitating the complex passage of our efforts with many partners, and your sound advice and direction will come out to the successful production of the 2 very different vaccines we are able to produce in a remarkably short period of time. I'm grateful that CSL and its shareholders will continue to benefit from Professor Kupfersen's expertise on our Board of Directors. Earlier, I spoke of the social imperative that is built into our business model through our promise. In today's evolving context, whoever, caring for a healthy world also requires delivering sustainable value beyond our stakeholders.
To that end, the Board recently signed off on a new sustainability strategy for CSL. Our new center sustainability vision captures our commitment to a healthier world To deliver on this vision and further support the execution of our 2,030 strategy, we have identified 3 sustainability strategic pillars: environment, social and sustainable workforce. We've identified a number of focus areas for each of these pillars and a series of actions across these focus areas to deliver over the medium term. I look forward to keeping you updated on our progress. Now to outlook.
The Board has every confidence that CSL's strong foundations and disciplined execution of strategy will, In the next 24 months, allow us to return to sustainable growth. Earlier this year, we increased the total full year dividend to US2.22 dollars per share as a reflection of this confidence. The dividend was also partially franked for the first time in many years. This confidence has also underpinned our continued investment in the business. We have several major expansion projects underway that will be vital to the continued sustainable growth of CSL.
In addition to these capital projects, we continue to develop our world class R and D pipeline. Paul will speak to this, but I encourage you to follow our R and D Investor Day being held on the 19th October. At a macro level, a full economic recovery is dependent on vaccine uptake. This has been widely recognized. Less than a fortnight ago, the Victorian government issued a directive that all authorized Workers must be vaccinated.
In line with our responsibility to ensure the safety of people in our workplace, We've extended this mandate to all those of our Australian sites, and we intend to do the same at our U. S. Operations in keeping with the requirements set by the U. S. Government.
These policies and the net effect of a healthier population are important in allowing the world to return to prosperity. I encourage all to continue to reflect the spirits that we have seen come to the fore throughout the pandemic so far. Finally, I'd like to extend my gratitude once again to our people for adapting to the ever changing environment that has resulted from the pandemic. I would just like to thank our shareholders for your continued support. Our industry has well and truly been under the microscope over the last 2 years.
Our community has risen to this challenge and showed what the power of science and collaboration can do. The Board and I are confident in the company's people, our strategy and the long term fundamental outlook for the vital products we supply. I look forward to taking your questions later. And now I'll hand over to Paul.
Thank you, Brian, and good morning, everyone, and thank you for joining us today for CSL's 2021 AGM. I agree with the Chair's sentiment about connecting with shareholders. While I am thankful the technology has allowed us to run our usual program with our I miss interacting with many of our stakeholders around the world. COVID has been a tremendous burden on the world And the world of CSL and our employees have also seen disruption and a loss of social capital as we've been subject to lockdowns and unable to travel to many parts of this business. However, across all countries where we operate, we have maintained a strong connection in a spirit of collaboration that our business requires.
Personally, I can't wait to come back to Melbourne to be with our teams. I'm also looking forward to inspecting the progress of our new global headquarters and R and D facility at Elizabeth Street North and the new Securus facility at Tullamarine. I would like to take this opportunity to thank our people all over the world who have worked tirelessly to maintain our operations against the difficult backdrop of the pandemic. The products that CSL produces are not discretionary. They are essential to keeping patients healthy and in some instances alive.
This is the basis of Our promise,
and I
am proud that we've been able to keep it throughout the last 18 months. Now I will take you through both financial and operational highlights of what we have achieved over the 2021 financial year and provide an outlook for 2022. But before moving on to the highlights, I draw your attention to the legal statements in relation to forward looking statements. I am pleased to report that CSL delivered a strong result for fiscal 2021, with revenue up 10% at constant currency and net profit after tax also up 10% at constant currency. This is an excellent performance given the very challenging conditions and uncertain environment we have faced through the global pandemic.
Despite all the complexities, Our CSL bearing and Securus businesses maintain all critical operations, demonstrating great resilience and agility across the company. This is a testament to the CSL values and to our dedicated employees who have remained focused on delivering on our promise to patients and to public health around the world. In terms of highlights, for CSL Behring, We achieved strong growth in many areas of our core products. This included another strong performance from Hizentra, our market leading subcutaneous IG product, which was up 15%. 2 of our leading specialty products also showed solid growth, Hey Garda, which was up 14% and Kcentra up 7%.
Albumin sales grew 61% as our sales in China normalized. In the CSL bearing business, we implemented several digital transformation initiatives, which have expanded our flexibility and enhanced our customer facing interactions. Our influenza vaccines business, Securus, delivered unexceptional performance. Sales of seasonal influenza vaccines were up a strong 41%. Securus distributed number of doses globally of some 130,000,000.
And we announced a new world class biotech manufacturing facility to be constructed in Melbourne, Australia. Since COVID-nineteen hit in early 2020, that has had an impact on many aspects of our operations. In our CSL bearing business, plasma collections have been challenging. However, we put a number of initiatives in place and are starting to see improvements. I will go into more detail on this a little bit later in my presentation.
And for Securus, COVID has provided a tailwind as demand for influenza vaccines increased. Despite the challenging environment, we have continued to invest in the business and remain focused on executing our long term strategy. I'm confident that CSL is well positioned to emerge stronger than ever. Turning to CSL bearing sales by therapeutic area. Overall, the bearing portfolio recorded revenue growth of 6% at constant currency.
Immunoglobulins, our core franchise, was up 3% with Hizentra growing an impressive 15% and underlying demand for IG continues to be strong. This is due to significant patient needs in core indications, namely primary immune deficiency, secondary immune deficiency and CIDP. Albumin was up 61%. Our new distribution model in China has been operational now for 12 months with sales for fiscal 2021 now reflecting a more normalized level. And the new model is working well and gives us direct management of over 180 distributors in China, expanded our geographic coverage and given us increased penetration into retail pharmacy and lower tier cities and hospitals.
Hemophilia was down 4%. This portfolio was impacted by reduced doctor visits and patient consultations during COVID-nineteen. And against this backdrop, Adelbion, our long acting recombinant Factor IX product, achieved modest growth and remains the clear market leader for hemophilia B patients. Specialty products were up 2% all in constant currency. The standout performer continues to be Hey Garda, our transformational therapy for treating patients with hereditary angioedema or HAE, which grew strongly by 14% due to strong patient demand.
And the other main specialty product to record solid growth was Kcentra, which was up 7%. This is a very strong result given sales have been tempered by the reduction in elective procedures and incidents of trauma during the pandemic. In terms of the geographic split of CSL bearing revenue, North America continues to be our largest market where revenues grew 5%. Our next biggest market is Europe, which was down 6% in revenue. This is where we felt the supply tightness and IVIG.
And Asia Pacific was up 44% as a result of the strong growth in albumin in China. Turning to plasma collections. COVID-nineteen has presented the industry with many challenges and plasma collections is one such area of our business that has been adversely impacted by the pandemic over the past 18 months. Not only were we impacted by quarantines, stay at home orders, restricted movement of donors and fear of disease, but also the unprecedented government stimulus programs provided by the U. S.
Government. As a result, our plasma collection volumes for fiscal year 'twenty one were down around 20% on the previous year, and these leaders were collected at a higher cost. This included additional PPE and cleaning requirements, social distancing and labor costs and higher compensation paid to donors, particularly in the last quarter of the year. In response to these challenging conditions, CSL Plasma implemented several targeted initiatives to focus on growing plasma collections. As a result of our efforts, I'm pleased to say we have seen sustainable improvement in our collections over the course of the past year, and the following slide will show how we've been tracking.
First, I would like to share some of the initiatives that CSL Plasma has undertaken. We have enhanced our operating and marketing efforts to attract not only lapsed donors, but also new donors, which are an important source of future donations. We've seen a strong adoption of new technologies introduced to improve the donor experience, such as a donor app, self serve kiosks and the ability for donors to register online. At last count, we had over 800,000 downloads of the donor app. We continue to lead the industry in the opening of new plasma collection centers.
We opened 25 new centers in fiscal year 'twenty one and plan to open another 40 in fiscal year 2022. We now have a network of over 300 collection centers globally, which we believe to be the most efficient and the industry. We continue to manage our supply chain carefully and optimize finished goods inventory in order to take care of patients. And finally, we've entered into a collaboration with a company named Terumo to deliver a new plasmapheresis platform. Trials are progressing, and we anticipate regulatory clearance in early 2022.
So plasma collections, this next graph shows our donor numbers in the U. S. On a weekly basis. The red line is calendar year 2021 to June 30, The black line is 2020 and the gray 2019. If we go back to the start of our fiscal year 2021, which is July 2020.
This is when we launched our first series of initiatives and saw collections start to improve over the 6 months to December. Then if we turn to January 2021 in the most recent 6 months, the red line, you will see that the collections declined in March in April as a result of another round of U. S. Stimulus and some damaging weather events across the United States. From this point in mid April up to today, we have seen a promising rebound.
After introducing additional initiatives, which included higher donor fees, Combined with the stimulus effect beginning to wear off and the rapid rollout of COVID vaccines in the U. S, we have seen increased movement and more donors coming into our centers. You will note a slight reduction in late June and then the resumption of growth. This was the effect of the U. S.-Mexican border closure Whilst we're still not back to pre COVID levels, we are encouraged by the continued upward trend.
Now moving on to our influenza vaccines business and Securus. Securus delivered an exceptionally strong performance in fiscal 'twenty one. Total revenue was over $1,700,000,000 up 30% at constant currency. This was driven by with very strong sales growth in seasonal influenza vaccines of some 41%. The increase reflects an ongoing shift to Securus' differentiated products such as FLUAD, which was up 60% and increased demand due to COVID-nineteen.
The Northern Hemisphere continues to be the dominant market for Securus with the U. S. And Europe accounting for approximately 80% Pacific was down 6% or $15,000,000 This is due to the lower in license vaccine sales following the completion of the Zostavax catch program in Australia. Moving over to research and development, there's been a lot of activity and achievements in R and D over the past year. While some programs were disrupted by COVID-nineteen in the first half of the year, everything is now back up and running at full pace.
We have a number of exciting programs underway in each of the 6 therapeutic areas. And in the interest of time, I will highlight just a few, beginning with Privagen for the treatment of CIDP, which was launched in Japan. The first patient was enrolled for our Phase 3 study for garidasumab for the treatment of HAE. In hematology, we closed the UniCure transaction to commercialize gene therapy product INTRONADES. The BLA is being prepared for submission to the FDA following completion of the Phase III trial.
In cardiovascular and the metabolic area, the Phase III trial for CSL-one hundred and twelve continues to progress well with over 13,000 patients now enrolled and successfully completed the first and second futility analysis. And in influenza vaccines, we commenced a Phase II study for our adjuvanted quadrivalent cell vaccine, and we have undertaken preclinical assessment of self amplifying mRNA technology for influenza and are expected to commence a Phase I study in 2022. Before I move to the fiscal year 2022 outlook, I would like to touch on our strategy. This is our 2,030 strategy that the Chairman mentioned earlier that we put in place a few years before COVID-nineteen came along. Despite the challenges we faced with the pandemic, our long term strategy remains intact and nothing has changed.
Our purpose on serving our patients and delivering innovative products still holds true. Our employees and purpose driven culture are still at the heart of our strategy, and our values will always guide us in everything we do at Throughout the challenges of the pandemic, our people and our business model have shown great resilience and agility. I've been incredibly proud of their performance. The fundamentals of our business have never been stronger and the diversity of our pipeline is robust. This sets up CSL to build on our track record of sustainable growth for many years to come.
Turning to the outlook for fiscal year 'twenty two. Looking specifically at CSL bearing, Underlying demand for our core product IG is expected to remain strong. IG and albumin sales are reliant, however, on our current plasma collections and manufacturing cycle times. Plasma collections are expected to continue improving with the initiatives that we implemented and with the rollout of COVID vaccines. For SACURIS, product differentiation and COVID-nineteen are expected to continue driving strong demand for our influenza vaccines.
At a CSL group level, gross margin is expected come under some pressure following the increased cost of plasma collections, offset by some modest margin expansion arising from the growth in Securus differentiated influenza vaccines. So in terms of guidance for 'twenty two, we expect revenue growth to be in the range of 2% to 5% over fiscal 2021 at constant currency, with net profit after tax expected to be approximately 2.15 to $2,250,000,000 at constant currency. Of course, our forward looking statements are subject to the usual disclaimers, as I mentioned at the start of presentation. I'd just like to finish by saying COVID-nineteen is a once in a lifetime event. I'm very proud of CSL's response.
CSL is a growth company. Although the impact COVID on plasma collections puts fiscal 'twenty two behind this year's profit number. We will continue to invest in the business and look forward to returning to growth and all of you expect from CSL. I'll now pass you back to Fiona to take you through the meeting protocol. And
thank you, Paul. We'll now move on to the items of business and the resolutions to be put to the meeting. We will take the notice of meeting as read. All resolutions will be determined by means of the poll. I confirm that Doctor.
McNamee is holding available undirected proxies in his capacity as Chair of the meeting and we'll vote all of these available proxies in favor of each resolution. The Board has recommended that shareholders vote in favor of each resolution with interested directors, of course, abstaining from making a recommendation in respect of their resolution. We now come to Item 1 in the notice of meeting, which is to receive and consider the financial statements and the reports of the directors and auditors for the year ended 30 June 2021. This item of business does not require shareholder approval. However, shareholders will have an opportunity to ask questions on the reports and about the management of the company, which we will address in the allocated question time.
As there is no resolution required to be put to the meeting in respect of Item 1. We'll now move to the 2nd item of business, which is the reelection and election of directors. The qualifications and expertise of each of the candidates seeking election or reelection are outlined in the notice of meeting. The Board has reviewed the candidates' performance and supports their reelection or election. Doctor.
McNamee will now stand aside as Chair, and Mr. Bruce Brook will take the role of Chair of the meeting whilst the motion for the reelection of Doctor. McNamee is put.
Thank you, Fiona. Item 2A relates to the reelection of Doctor. Brian McNamee, who is an existing Director and Chair of the Board, submitting himself for reelection for C02 clause 67A of CSL's constitution. Brian retires at this meeting under the company's constitution and is eligible and willing to stand for reelection. Brian has been a Director of CSL since February 2018 and as Chair of the Board and a member of the Innovation Development Committee and the Corporate Governance and Nomination Committee.
Doctor. McNamee was the Chief Executive Officer and Managing Director of CSL from 1990 until his retirement in 2013. Since leaving his executive role at CSL, Doctor. McNamee has served as an advisor to private equity group, Colbert Kravis Roberts. He's pursued a number of private start up and company making activities and in 2014 served on the panel of the Australian Government's Financial System Inquiry.
Doctor. McNamee is currently Chair of the Jeff Ogilby Foundation since May 2021 and Genesis Care since July 2019. In 2019, Doctor. McAnany was made an Officer of the Order of Australia for Services to Business and Commerce. The Board has determined that Brian is an independent Director.
I will now ask Brian to make a brief presentation to the meeting.
Doctor. McNamara is on mute. We will just ask You could come off
mute, please.
It has been an honor to serve CSL Limited as your Chair since 2018. As many of you will know, I have been with the company for a significant period of time, both as an executive and on the Board of Directors. It has been a real privilege to be involved in what has been a remarkable journey for this wonderful company. In my address earlier, I mentioned the value that CSL provides to many people around the world. We have the capability to make a positive contribution to the lives of patients whilst making a substantial economic contribution to our shareholders and the communities in which we operate.
I'm very pleased with the strength of skills, diversity and domain expertise that I've been able to establish within your Board of Directors. The Board, Committee Architecture provides an excellent governance framework and gives appropriate support to management for the implementation of strategy, stewardship of culture and oversight of the company performance, which has continued to deliver strong results. In our sites now is an emergence out of the pandemic from a position of stability and with a clear focus on executing the company's long term strategy. CSL has in abundance The right people, purpose and values to do this, and I see a great future ahead. I am honored to offer myself for reelection as your Chair.
Thank you.
Thank you, Brian. I refer to the slide that has the details of the proxy position for this resolution. As we're holding questions until the end, I'll invite Brian to resume his role as Chair and move to item 2b. Thank you.
Thank you, Bruce. Item 2b relates to the reelection of Professor Andrew who is an existing director submitting himself for reelection pursuant to clause 67A of CSL's constitution. Andrew retires at this meeting under the company's constitution and is eligible and willing to stand for reelection. I will now hand to Fiona, who'll provide background on this resolution.
Professor Carpetson has been an Executive Director of CSL since October 2018 and is Chair of the Innovation and Development Committee. Having retired as an executive of CSL from October 2021, Professor Cuthbertson is standing for election as a Non Executive Director. You can read Professor Cuthbertson's full biography in the notice of meeting. The Board has determined that Professor Cuthbertson is not an independent director at this time. The Board supports the reelection of Professor as the Board believes he brings considerable experience in medicine, science, research and development to CSL.
Andrew will now make a brief presentation to the meeting.
Thanks, Fiona, and Hello shareholders. My career to date has been based on my scientific and medical training, my experience at running and commercializing international biotech R and D programs and my deep relationships with medical research and public health colleagues in Australia and overseas. I think this background fulfills some of the important criteria for the makeup of an appropriately skilled Board member Among other things, this committee reviews CSL's strategic investment in the research and development of new products. It's an important forum for a company such as CSL where the development and commercialization of new products, including vaccines will be critical to its future. I have retired as an executive of CSL after an intense and I must say unexpected last 20 months involved with our COVID vaccine response.
I believe that with my training and career experience, I can continue to make a strong contribution for you to the company as a Non Executive Director, and I would ask for your support. Thank you.
Thank you, Andrew. I refer to the slide that has the details of the proxy situation for this resolution. As we are holding questions to the end, I'll move to the item 2C. This year, there are 2 directors submitting themselves for election pursuant to close 65C of CSL's constitution. Ms.
Allison Watkins and Professor Duncan Maskell will retire at this meeting under the company's constitution and are eligible and willing to stand for election. I will now hand to Fiona, who will provide background on this resolution.
Analyston was appointed a Director of CSL on 19 August 20 '21 and is a member of the Human Resources and Remuneration Committee and the Audit and Risk Management Committee. Appropriate background checks were completed before Alison appointed to the Board. You can read Ms. Watkins' full biography in the notice of meeting. The Board believes that Ms.
Watkins brings valuable knowledge, skills and experience to CSL through her deep experience as a Managing Director and Executive of Major Listed Companies. And accordingly, the Board supports the election of Ms. Watkins. The Board has determined that Ms. Watkins is an independent Director.
Ms. Watkins will now make a brief presentation to the meeting.
Thank you, Fiona. Fellow shareholders, I'm honored to be standing for election today to and represent you as the Director of CSL Limited. My 35 year executive career has given me a long experience in ASX listed companies across several industries as an executive and as a non executive director. I had a combined 11 years as a CEO of 2 ASX Companies. I've served on top 10 ASX listed boards including ANZ, Woolworths and Clearly, I'm no scientist.
However, I hope my experience gives me a number of relevant perspectives. These include a strong financial, commercial and strategic grounding exposure to many international markets and an understanding of how to attract, develop and retain the best talent. I appreciate the vital importance of innovation, Investing to Grow, and I understand manufacturing and logistics disciplines. Through my role as a Director of the Reserve Bank of Australia to latest views on the domestic and global economy. CSL is an inspiring Australian story of innovation and growth and making a difference, 1st and foremost for the patients and people who benefit from the
and welcome to the Q and A session.
If I'm elected as the Director, I'm committed to fulfill the role to the very best of my ability and proud to contribute to CSL's outstanding Board and leadership. Thank you.
Thank you, Alison. I refer to the slide that has the details of the proxy position for this resolution. I will now move to Item 2d. Professor Maskell was appointed a Director of CSL on 19th August 2021 and is a member of the Innovation and Development committee. I'll now hand to Fiona, who will provide background on this resolution.
And welcome to CSL.
Professor Moskell is currently the Vice Chancellor of the University of Melbourne. Prior to this, he was Senior Pro Vice Chancellor at the University of Cambridge in the United Kingdom and has also held roles at the University of Oxford, Imperial College London and Welcome Biotech. Appropriate background checks were completed before Professor Maskell was appointed to the Board. You can read Professor Maskell's full in the notice of meeting. The Board believes that Duncan brings valuable knowledge, skills and experience to CSL through his wide ranging international experience in science and Commerce developed during a 30 year career in research, academia and entrepreneurship.
And accordingly, the Board that supports the election of Professor Maspell. The Board has determined that Duncan is an independent director. He will now make a brief presentation to the
Yes. I'm unmuted now. Thank you very much, Fiona. I was both flattered and excited to be approached about being nominated for election to the Board of CSL. CSL has been a company that I have admired from afar while in the U.
K. And now up close during the last three years that I have been in Australia. I was aware of the precursor to in London, later to become Glaxo Welcome and then GSK, of course. I went back into academia but retained close links to the industry and indeed worked in collaboration with colleagues at a number of different companies. Seeing the evolution of CSL over the years to become the world leading business that it is today has been nothing short of inspirational.
During my time as a professor and ultimately Senior Pro Vice Chancellor in charge of Planning and Resources at Cambridge, I co founded 4 biotech companies, 3 of which have since been sold. I was also a member of the investment committee for the university's seed fund and a member of the Board of Cambridge Innovation Capital, a new patient capital company co founded by the university. So I have seen the start up biotech world from both sides of the investment fence. Before I left the U. K.
To come here, I was a Non Executive Director of the Global Animal Genomics and Breeding Company, Genus VLC, a FTSE200 company, and it was with great regret that I had to leave that position to come to Australia. With that background, I think it should be no surprise if I tell you that I'm excited by the prospect of working with fantastic colleagues, bringing my scientific and business knowledge to bear in a company that espouses patient focus, innovation, integrity, collaboration and superior performance as it values to bring life saving medicines to patients who need them, thereby making the world a better place while providing superior financial results for its shareholders. Thank you.
Thank you, Duncan. I refer to the slide that has the details of proxy position for this resolution. We now come to item 3 on the notice of meeting, which is an advisory vote on the remuneration report. To deliver on our promise to patients and to protect public health. We rely on our people and need to ensure a strong global talent supply.
Our executive remuneration framework enables us to attract, engage and retain talent, provide us with the flexibility to address talent challenges in various markets and allow us to compete with larger global pharmaceutical companies. We motivate our people to deliver their best performance by enabling an approach that integrates market competitive and differentiated reward programs that align to CSL's strategy and the business objectives. The Board is committed to an executive remuneration framework that is focused on driving our performance culture and linking pay to the achievement of CSL's long term strategy and business objectives. These in turn drive long term shareholder value. The remuneration outcomes reported reflect the strong delivery of our strategy across CSL's operational and developmental activities.
As previously communicated, over the course of 2021 financial year, we undertook a review of the framework with the aim of ensuring a fit for purpose design, alignment to our total reward principles and responding to feedback from our investors. Effective the 1st July 2021, Changes have been made to our short and long term incentive programs that drive our pay for performance philosophy and set of incentivize for outperformance, aligned to our global pharmaceutical biotechnology peers and ensure a focus on long term sustainable value. I'll now hand to Fiona, who will provide background on this resolution.
Thank you, Brian. Under the Corporations Act, the company is required to include in the Director's report a detailed remuneration report setting out certain prescribed information relating to Director and Executive remuneration. The company is also required just for adoption by resolution of shareholders at that Annual General Meeting. Annual report. The vote on the resolution in this item is advisory and will not bind the directors of CSL.
However, the Board will take the outcome of the vote into consideration when reviewing remuneration practices and policies of the company. I refer to the slide that has the details of the proxy position for this resolution. Back to you, Brian.
Thank you. We now come to Item 4, which seeks approval for the purpose of ASX listing rule booking and all other purposes. For the greater performance share units under the company's Executive Performance and Alignment Plan to Paul Perrault, the Chief Executive Officer and Managing Director of the company. It is proposed that Paul will be granted 31,640 performance share units. I will now hand to Fiona, who will provide background on this resolution.
The exposure notes to Resolution 4 in the notices meeting provide detail on the terms and conditions, including the performance period and performance measures for the proposed grant of performance share units. The performance share units a hurdle, which ensures shareholder alignment. Following changes to the executive remuneration framework, In addition to the 7 year average return on invested capital or ROIC measure, the performance share units will also be subject to an earnings per share growth chart over a 3 year period, focusing Paul on achieving CSL's long term objectives and sustainable earnings growth. In response to shareholder feedback, the Board has also moved away from a 4 year tranche vesting approach to a single point 3 year vest, now aligned with CSL's Global Pharmaceutical and Biotechnology peer group.
I refer to the slide that has the details of the proxy position for this resolution. The Corporations Act permits the company to include in its constitution provisions prohibiting the registration of a transfer of securities resulting from proportional takeover bid unless the relevant holders of the securities in a meeting approved the bid. I'll now hand to Fiona, who will provide background on this resolution.
Under the Corporations Act. These provisions must be renewed every 3 years or they will cease to be subject. The proportional takeover provisions set out in Rule 98 of the Constitution, were last adopted by 2012 and renewed at the 2018 Annual General Meeting. They will see on 17 October 2021. Accordingly, it is appropriate to consider renewing the proportional takeover provisions in the company's constitution at this AGM today.
The directors consider that it is in the best address of shareholders to renew these provisions in their existing form. A special resolution is being put to shareholders under Section 648 gs of the Corporations Act to renew Rule 98 of the Constitution. If these provisions that are renewed by shareholders that will be in exactly the same terms as the current provisions in Rule 98 of the constitution and will operate for 3 years from the conclusion of the AGM. A copy of CSL's constitution is available on the company's website and more detail on the reasons for renewing the proportional takeover provisions together with scoping the disadvantages as set out in the 2021 notice of MACEY.
I refer to the slide that has the details of the proxy position for this special resolution. We will now move to shareholder questions, some of which we received in writing prior to today's meeting and others that we have received during this meeting. To allow shareholders extra time to submit their questions, we will first address the questions we receive prior to the meeting in relevant themes. Fiona will read these questions to me and I'll answer. We will then move to address questions we've received during the meeting, noting that your questions may be moderate, including appropriate language and etiquette, as Fiona mentioned earlier.
Thank you, Brian. We've received a number of shareholder questions, including from the Australian Shareholders Association, all relating to mRNA Technology. Shareholders want to understand whether mRNA is an opportunity or threat or both to CSL and Securus. And, if a threat, what the company is doing to mitigate this threat. Shareholders are also asking about the progress CSL is making gene and mRNA vaccine and to provide an approximate time line.
Thank you, Fiona, and shareholders for this question. There is no doubt mRNA technology has made a significant contribution to the COVID vaccine development. And we certainly are fully aware that The technology is being evaluated for our other uses. I believe our CEO did speak previously, and I will ask Paul to briefly comment on our internal program that we have from an mRNA perspective, but we can certainly assure shareholders that we see we recognize This is a new and important platform that in many ways complements our existing vaccine and technology platforms that we have in house. So I'll ask Paul to briefly comment on more specifics with regard to our internal activities.
Thank you, Brian. I do think that The mRNA SERPs that we've seen because of the 2 products by Pfizer and Moderna have Certainly put the limelight on the technology that's been under development for 20 plus years. And We see this as quite a good opportunity. As I mentioned, we have access to a self amplifying mRNA technology for influenza vaccines. So we do see an opportunity here for the company.
MRNA vaccines to Since to date have a number of issues that still have to be worked through, including stability and dosing. And so these are areas that I feel we have an opportunity to help improve in our own research. We expect to move into Phase I trials in influenza in fiscal year 'twenty two. And so things are developing and we are anxiously and actively in development. But these Developments do take quite a number of years, as you know, from our R and D program.
So we see this as a very good opportunity to continue to invest in over the future of the company.
Thank you, Paul. Our next question relates to JobKeeper payments. We have a question from Mr. Peter Calero and Mr. Robert Stevenson as well.
Did CSL receive any payments? And if so, how much?
Look, thank you to our shareholders for asking question. No, CSL did not receive any payments during the period because our workers were designated as essential workers, and we obviously need to continue to operate. So we did not except any funding from the JobKeeper facility.
The next question is from Mrs. Mary Christine Parrot, if CSL-one hundred and twelve is successful, will it have a major financial effect on the company?
Look, thanks, Mrs. Barrett, for that question. I would say, 1st and foremost, I think that everything we do is about identifying an important medical need. And the CSL-one hundred and twelve program really has the potential to have an important role in the downstream effects of cardiovascular disease and more importantly acute heart attacks for continuing challenges for these patients. So medically, we know there's an important opportunity there.
And clearly, it's a very valuable proposition for patients. Now we don't yet have the data. It remains a high risk program. So there's certainly no assuredness at all that this will be a successful program. However, If it is successful, we certainly believe there's a significant medical need for this product and therefore, We believe there'll be a significant commercial opportunity for the company also.
Our next question comes from Mrs. Elizabeth Cassells. What is CSL doing to reduce its carbon footprint?
Look, thank you, Mrs. Casselles, for the question. We, as I mentioned in my speech, are very committed sustainability program inside the company. Certainly, this year, we're ensuring that we Establish our appropriate benchmarks all around the company globally to make sure that when we continue to improve and reduce our carbon footprint. We've done a deeply understanding of the benchmarks in which we're operating.
Paul, I don't know whether you want to comment in any more detail on this, but it is certainly something that the Board is fully aware of and very committed to from a sustainability perspective.
Thank you, Brian. I'd just say to what you outlined in your speech that we do have our focused pillar areas in our strategy for sustainability with environment, social and workforce sustainability. And in the environment, we're looking at all the metrics that we have. We are generally a low emitter compared to other companies. However, we understand the importance of reducing carbon footprints, and we will have targets that we're developing, as you said, once we understand the baseline.
I think it's important for companies not to rush out before they understand exactly All of the areas that we have to address. So we have plants across the globe. The plants have been operating at a level and tracking individually.
We want to get
the carbon footprint for the company We want to get the carbon footprint for the company total and well understood to set that target, which I expect within the next 12 months. And
the next question comes from Mr. Robert Stevenson. If the Australian government does not require the full contracted quantity of AstraZeneca vaccine. Is it still required to purchase and or pay for the full amount contracted?
Look, Thank you, Mr. Stevenson, for the question. Yes, we have a full contract with the Australian government to produce 50,000,000 doses, which we are advancing well on. And I'm very delighted that the Australian government have already announced that if and it's clear there will be surplus doses from an Australian perspective that we contributed to important countries in the region to help them manage COVID. So we have a full contract and we will comply with that contract.
And as I said, it's an important part of the Australian government's contribution to the region as well.
Our next question comes from the Australian Shareholders Association relating to the remuneration report. The Australian Shareholders Association notes the very large realized pay of the CEO in a year when total shareholder return with 0. What were the Board considerations in determining whether to apply discretion to reduce the LTI award this year?
Look, first, I'd like to thank the Australian Shareholders Association. So over a long period of time, we've always and joined and welcomed the interaction. And I do know that Megan Clark, our Head of the Human Resources Committee met with them to go through the number of issues, including the changes to the plan as well as the realized returns that some of our executives have received. So when we step back, we realize that it would be completely inappropriate in our view to contemplate using our discretion. We have a high performing CEO who has had extremely strong performance for shareholders over a long period of time.
The hurdles were met to the extent that, therefore, the options and the other rewards fully vested. There's been significant growth in CSL's share price over a number of years and really, to some degree, the result reflected in the high value that he earned. The company does have a clawback and malice policy, but this is only used in instances of poor or fraudulent behavior. So in this situation, We felt that we would comply clearly with the contract and we had really no thought that we should modify The Earned
Result. Our
next question comes from Mr. Peter Slang. Thank you, Chair. For many years, CSL has paid unfranked dividends. The last payment had some franking credits attached.
He wondered what CSL's forecasts are for the future and at what level of dividend.
Look, thank you for that question, Mr. Slade. So there's 2 there's 3 factors to take into consideration here. Historically, our dividend payout ratio has been around 40% to 45%. It goes up and down depending slightly on on a number of factors, but broadly, we've been mainly within that band for a number of years.
The other thing I'd say is that we predominantly an international company with greater than 90% of our revenue earned offshore. We do have significant Australian operations, but we also have significant research and development activities here in Australia also. So where we do want to inflect credits. We will certainly look to distribute them to shareholders. I'm not here today to forecast out for the future beyond what Paul has identified previously with regard to what we see as The company for the next year.
But as a growth company, we certainly anticipate trying to grow our business globally. And if we return greater
Thank you. I have another question from the Australian Shareholders Association, again in relation to the remuneration report. In the remuneration report, CSL recognizes that the commercialization life cycle can extend 7 to 10 years. How does this marry up with the 3 year forward looking performance periods used in the new LTI plan.
Look, again, thank you to the ASA for the questions. We live in the very real world where many of our executives are based internationally. We have we're in competition for talent. We have to try and both recruit, reward and retain our executives in a highly competitive market. And to some degree, we try to take all those factors into consideration as we structure any changes to our remuneration that it has occurred and including feedback we've received from shareholders.
Look, I would ask actually Megan Clark, Megan Clarke to briefly comment on this. Megan has done a tremendous job as Head of the Remuneration Committee, and I think that It is something that she's spoken a lot to our shareholders about.
Thanks very much, Brian. And again, thank you to ASA for their valuable contribution and feedback, which we take very seriously. I'm Absolutely right to mention that we do have a very long term pipeline, sometimes longer than the 7 to 10 years. We look out decades in our forward looking pipeline of innovation and R and D. In terms of moving to a 3 year single point hurdle for our long term incentive program.
We are actually lifting the time frame. So our previous framework head out long term incentive program vesting over 4 years in year 1, year 2, year 3 and year 4. And so we are moving that out to year 3. We include in our long term incentive program, the measures of return on invested capital. And one of the things that we do there is take that because it's a much it's a long term measure, and we look at the return on invested capital over a 7 year horizon.
We're also adding going forward earnings per share to our long term incentive. So thank you for the question. And we certainly do take that long term view in our LTI measures.
Thank you, Megan. That's It's a good segue into a question from Mr. Alexander Short. His question is, in the past decade, CSL has grown EPS at well over 10% per annum. How did the Board arrive at the 5% to 8.3% targets for the EPS growth based incentive.
Look, thank you, Mr. Short, for the question. And again, I want to get Megan again To comment on that. I mean, clearly, we take a number of factors into consideration when we look at it. Megan?
Yes. Thank you very much, Mr. Short, for the question. And as we set that target, We also looked at the 2022 outlook, which our CEO has outlined to shareholders in his and the team's update to the shareholders after our recent results. And we will be seeing a flow through of about 6 to 9 months of the drop in plasma collections that we had this year.
So that flows through into 2022. So we will see a dip before we come back to the growth targets and outlook that the CEO has outlined. So That's the reason that we see the 5%. It includes both the dip down but also an increase in gross. And as you said, the target level, so the threshold was high, but the target level is certainly consistent with CSL's long term growth.
Thank you, Megan. Our next question comes from Mr. Kevin Daly and Ms. Jan Daly. We understand that the FDA has to place conditions on blood collections near the Mexican border.
As most people crossing are processed by the border patrol and and bust off well away from the border. I'm puzzled as to why the FDA restrictions are necessary.
Look, Thank you, Mr. And Mrs. Daley. Given Paul is at least more on the ground than I am with regards to the U. S.
And the Mexican border, I really would ask Tim to cover it
up on this, please. Sure, Brian, and thank you to the devotees for the question. First, it's not a restriction by the FDA. This was an action by Systems and Border Protection Agency. So in early September, CSL Bearings, CSL Plasma and one of our fine competitors.
Grifols filed a lawsuit against the U. S. Customs and Border Protection Agency seeking to overturn a sudden reversal of a policy it applied back in June of this year, which prohibit now prohibits or bans Mexican citizens from crossing into the U. S. Now these are Mexican citizens that have all the appropriate Visa documentation for the purpose of donating plasma.
So our complaint is really that the courts immediately issue a preliminary injunction to prevent CBP from stopping the Mexican citizens from running the U. S. So these are not The border crossings that you may see on the news, etcetera, these are people that have visas and crossing cards and have been donating plasma in the U. S. From Mexico for decades.
So this was quite a surprising turn of events, and we're challenging this against the U. S. Government at
this point.
Thank you, Paul. We have another question from Mr. And Mrs. Cassells. Will the baseline report on CSL's carbon footprint be available prior to the next AGM?
Look, thank you, Mr. And Mrs. Cassell. Certainly, it's our expectation that Within this 12 month period, we will have completed our baseline data and established some of the benchmark and targets for not just time, not just carbon, but a number of the factors we're looking at under our sustainability policy. So I would certainly expect that as part of the communication to shareholders prior to the next AGM, we'll be able to communicate more information on this.
And this is our last question, Chair, from Mr. Oscar Tollefsen. A while ago, I came across an article talking about several rivals which are developing potential FcRn receptor antagonists as an alternative drug treatment to CSL's immunoglobins product. If successful, are these considered to be a threat to CSL?
Thank you, Mr. Tostleffson. FcRn work is certainly very interesting work. I mean, we are Very fortunate with immunoglobulin that we have a very broad number of clinical uses for the product. And FcRn antibodies, if they are successful, will essentially only compete with a moderate subset of those indications.
So our expectation as we look forward Is that immunoglobulin demand remains robust, but that doesn't mean periodically there aren't some indications where monoclonal antibodies or other therapies may partly cannibalize or be synergistic with immunoglobulin in the clinical environment. So we're certainly very mindful of it, but I'd have to say that in of itself today is only one of the many factors that we consider. And that's really why, as the Chief Executive explained, we're expanding our plasma collections. We're investing in new facilities to process more plasma because we anticipate really quite an opportunity for immuno Gorgon for a long, long time yet.
Thank you, Chair. There are no further questions from our shareholders.
Thank you.
And I should say that, that is the conclusion of the discussion on the items of business, and we will now move to finalize the voting. While we wait to do that, we are going to share with you a video showing CSL's latest achievements. After the video finishes, Doctor. McNamee will close the voting system. Please ensure that you have cast Your vote on all resolutions.
We all make
promises, promises to those around us, to those we love and cherish, Those we respect and to ourselves. These promises, Versal language,
regardless of whether it impacts us all or just a rare few.
You can trust that we We'll be there, changing the lives of those we love and cherish. Those when you need it most.
We are driven
by our promise
to you. Look, thank you. I think that was an inspiring video, and we're very appreciative of all shareholders dialing in on another quite challenging environment. Fiona, I'm just confirming that I should now close the meeting.
Yes. So we should now declare the business of the meeting closed and the voting is closed. The votes will be counted and the results of the poll will be announced on the ASX as soon as practicable following the close of the meeting.
Thank you.
I'll hand it over to you to thank the shareholders.
Thanks, Fiona, and appreciate shareholders tolerating some slight clunkiness between us all here. We're all doing our best. So I thank you for your attendance and your support. I know that CSL looks forward to your continuing support in the coming year. Thank you very