CSL reports 2% revenue growth, US$2.6 billion net loss in FY2026

Financial Reset Amid Restructuring and Impairments

CSL Limited (ASX:CSL; USOTC:CSLLY) reported full year revenue of US$15.797 billion for FY2026, a 2% increase on the prior year, but posted a statutory net loss after tax of US$2.579 billion. This sharp turnaround from a US$3.002 billion profit in FY2025 was largely driven by significant one-off restructuring expenses and impairments totalling US$7.923 billion pre-tax, including US$1.7 billion goodwill impairment related to CSL Vifor and a US$1.5 billion write-down on Ferinject intellectual property.

Underlying net profit after tax before amortisation and significant non-recurring items (NPATA) declined 4% to US$3.098 billion, reflecting operational challenges and competitive pressures, particularly in the iron deficiency segment. On a constant currency basis, underlying NPATA fell 2% to US$3.142 billion.

Despite the statutory loss, CSL maintained a strong cash flow from operations of US$3.512 billion and declared a final unfranked dividend of US$1.62 per share, bringing total dividends for the year to US$2.92 per share. The company also completed a A$1 billion on-market share buy-back program, with a further A$1.15 billion announced for FY2027.

Business Segment Performance and Strategic Priorities

CSL Behring, the company’s largest segment, generated US$11.387 billion in revenue, down 1% on a constant currency basis. Immunoglobulin sales remained flat at US$6.2 billion, impacted by inventory normalisation in the U.S. and Medicare Part D changes, while albumin sales fell 17% due to government cost containment in China. The hereditary angioedema franchise showed strength with ANDEMBRY® sales growing strongly following approvals in multiple new markets.

CSL Seqirus reported US$2.031 billion in revenue, down 8%, affected by the absence of prior year avian influenza outbreak revenue. Seasonal influenza vaccine sales increased 4%, led by FLUAD® and FLUCELVAX® growth, with the new Tullamarine manufacturing facility in Melbourne officially opened to support global supply and pandemic preparedness.

CSL Vifor’s revenue rose 3% to US$2.379 billion, with growth in nephrology offset by a 16% decline in iron therapies due to generic competition. The segment faced challenges including the expiry of the TDAPA reimbursement period for VELPHORO® and revocation of the marketing authorisation for TAVNEOS® in Europe.

Transformation and Leadership Renewal

CSL’s transformation program, initiated in FY2026, has realised US$176 million in cost savings, exceeding targets, primarily through operational simplification and integration of commercial and medical affairs across CSL Behring and CSL Vifor. The company is investing approximately US$1.5 billion to expand its U.S. plasma manufacturing footprint, including the Horizon 2 yield improvement program, with clinical trials underway to support regulatory approval.

Leadership changes included the appointment of Gordon Naylor as Interim CEO and Managing Director in February 2026, following Dr Paul McKenzie’s retirement. The Board welcomed three new directors in FY2026, including Cameron Price and Costa Saroukos, with ongoing succession planning for the CEO and Chair roles.

Sustainability Commitments and Climate Risk Management

CSL disclosed detailed sustainability initiatives aligned with its Healthier World strategy, including a 28% reduction in Scope 1 and 2 greenhouse gas emissions since FY2021 and a commitment to reduce these emissions by 42% by FY2030 under Science Based Targets initiative (SBTi) validation. The company also voluntarily disclosed Scope 3 emissions and is actively managing climate-related risks through its Enterprise Risk Management Framework.

Climate-related risks identified include increased heat stress and extreme weather events impacting operations and supply chains, as well as transition risks related to carbon pricing and market expectations. CSL’s scenario analysis indicates resilience under both high emissions and net zero pathways, with financial impacts from climate risks assessed as not material in the near term.

Executive Remuneration Reform Reflects Performance Challenges

In light of the disappointing financial performance, CSL’s Board exercised discretion to reduce FY26 short-term incentive (STI) payments to zero for former executives including Dr McKenzie, Ms Linton, and Mr Schmeltz, with Mr Ken Lim receiving 25% of target STI. Long-term incentives (LTI) scheduled to vest in September 2026 will lapse with no value. The Interim CEO, Gordon Naylor, does not participate in STI or LTI programs due to the interim nature of his role but received a one-off equity grant valued at AUD 5.8 million.

For FY27, CSL has overhauled its executive remuneration framework, removing individual performance weighting from the STI scorecard and focusing 95% on company financial metrics: net profit after tax (NPAT), cash flow from operations, and total group operating revenue, with 5% linked to sustainability targets. The LTI plan will replace Return on Invested Capital (ROIC) and Earnings Per Share (EPS) growth with relative total shareholder return (rTSR) measured against global pharmaceutical peers and ASX50 companies.

The Board also strengthened minimum security holding policies for executives and non-executive directors to better align interests with shareholders. No increases to director fees are planned for FY27.

What to Watch Next

CSL’s FY2027 outlook anticipates a return to sustainable growth, targeting mid-single digit revenue growth for CSL Behring and low single digit growth for CSL Seqirus, partially offset by a 25% revenue decline in CSL Vifor due to ongoing generic competition and regulatory setbacks. The company expects to realise further cost savings from its transformation program while investing in pipeline development and commercial capabilities.

Investors will be watching closely how CSL executes its ambitious manufacturing expansion in the U.S., navigates competitive pressures in iron therapies, and delivers on its sustainability commitments amid evolving climate-related risks. The appointment of a permanent CEO and the effectiveness of the revised executive remuneration framework will also be key governance focal points in the year ahead.