CSL Limited reported a 7% decline in underlying NPATA to US$1.9 billion for the half-year, weighed down by restructuring costs and impairments, yet maintains full-year guidance and expands its share buy-back program.
- Underlying NPATA down 7% to US$1.9 billion
- Reported net profit after tax plunged 81% due to one-off costs
- Transformation program achieves 60% of targeted cost savings
- Share buy-back increased from US$500m to US$750m
- FY26 guidance maintained with strong second-half growth expected
Half-Year Financial Snapshot
CSL Limited, a heavyweight in the biotechnology and pharmaceuticals sector, has released its half-year results ending December 2025, revealing a mixed performance. The company reported an underlying net profit after tax before amortisation (NPATA) of US$1.9 billion, marking a 7% decline compared to the previous period. More starkly, the reported net profit after tax (NPAT) plummeted 81% to US$401 million, primarily due to significant one-off restructuring costs and impairments.
Revenue also took a hit, falling 4% to US$8.3 billion, reflecting challenges across several product lines and markets. Despite these setbacks, CSL’s cash flow from operations remained robust at US$1.3 billion, underpinning the company’s strong financial position.
Transformation and Cost Efficiency Drive
CSL’s transformation program is progressing well, with the company achieving approximately 60% of its targeted cost savings for the 2026 financial year. This progress stems from streamlining operations, including integrating commercial and medical teams across CSL Behring and Vifor, reducing duplication, and cutting fixed costs in research and development and infrastructure.
However, these efficiencies come at a cost. The company has recognised one-off restructuring expenses estimated between US$700 million and US$770 million for the full year, with two-thirds already booked in the first half. These measures are expected to yield annual pre-tax savings of US$500 million to US$550 million by 2028, positioning CSL for leaner operations and future growth.
Impairments and Market Pressures
CSL recorded after-tax impairments of approximately US$1.1 billion, mostly in the first half. These impairments largely relate to intangible assets tied to CSL Vifor and CSL Seqirus. CSL Vifor’s write-downs reflect reduced sales forecasts for Venofer due to generic competition, while CSL Seqirus faced setbacks linked to its sa-mRNA vaccine technology amid declining COVID-19 demand and tougher US regulatory hurdles.
Additionally, a US$170 million impairment on property, plant, and equipment was recognised due to accelerated investment in the Horizon 2 plasma manufacturing program in the United States, rendering some existing assets redundant.
Business Segment Highlights
CSL Behring’s revenue fell 7% to US$5.5 billion, with immunoglobulin (Ig) product sales down 6%, impacted by Medicare reforms and a strong prior period. Albumin sales dropped 27%, largely due to policy changes in China. Haemophilia products remained stable, buoyed by growth in HEMGENIX and IDELVION, while KCENTRA sales declined amid competition. The newly launched ANDEMBRY therapy showed promising uptake, now serving over 1,000 patients.
CSL Seqirus saw a 2% revenue decline to US$1.6 billion, affected by the absence of non-recurring avian influenza outbreak revenue from the prior year. However, seasonal influenza vaccine sales grew slightly, with FLUAD performing strongly in European markets.
CSL Vifor delivered a 12% revenue increase to US$1.2 billion, driven by nephrology growth, though iron product sales were pressured by generic competition.
Outlook and Strategic Moves
Despite the headwinds, CSL remains confident in its full-year outlook, maintaining guidance for 2-3% revenue growth and 4-7% NPATA growth excluding one-off costs. The company is banking on a strong second half, propelled by immunoglobulin, albumin, and new product launches.
CSL also announced an expansion of its share buy-back program from US$500 million to US$750 million, signalling confidence in its balance sheet and cash flow generation. The company continues to invest in growth initiatives, including a strategic collaboration with Dutch biotech firm VarmX and a US$1.5 billion expansion of its plasma manufacturing capacity under the Horizon 2 program.
These moves underscore CSL’s commitment to innovation and operational excellence, aiming to navigate current challenges and deliver sustainable long-term value for shareholders and patients alike.
Bottom Line?
CSL’s transformation costs weigh on near-term profits, but strategic investments and buy-back expansion hint at confidence in a stronger second half.
Questions in the middle?
- How will CSL’s restructuring impact its competitive position in key markets over the next two years?
- What are the prospects for CSL Vifor’s iron products amid ongoing generic competition?
- Can the second-half growth ambitions driven by immunoglobulin and albumin materialise as forecast?