CSL's share price has plunged to a six-year low after it downgraded its growth forecasts amid falling US vaccination rates and reduced demand for China given government cost-control measures.
The blood product giant's shares around midday on Tuesday had dropped 15.9 per cent to $177.17, its lowest level since 2018, after CSL cut its guidance for revenue growth to two to three per cent, from four to five per cent. It also trimmed its profit forecast to four to seven per cent growth, from seven to 10 per cent previously.
CSL shares are now down 36.1 per cent year-to-date, having traded above $300 as recently as October 2024.
"It's clear, it's very frustrating that the share price has gone nowhere for quite awhile, and it's gone down a lot lately," chairman Brian McNamee told shareholders at the company's annual general meeting on Tuesday.
"It's been very disappointing for us, and for you as shareholders," he said, while emphasising that he still believed in CSL's strategy, growth story and ability to generate strong returns.
CSL's board received an embarrassing "second strike" at the meeting, as just 57.1 per cent of shares were cast in favour of its renumeration report, far short of the 75 per cent approval required.
That triggered an automatic resolution on whether to spill CSL's board, which failed resoundingly, with around 97 per cent of votes cast against it.
Dr McNamee said CSL chief executive Paul McKenzie and the board were working to rapidly overhaul the company.
"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 the geopolitical headwinds and to maintain our market leadership position," he said.
"It is clear to the board and Paul that changes must be made rapidly and effectively."
Mr McKenzie said CSL was actively reducing costs and streamlining its research and development footprint from 20 different sites to six.
"Very hard to be relevant, very hard to connected to the ecosystem, very hard to optimise your relationship between R&D and commercial when people are spread across 20 sites," he said.
CSL said it was reducing its guidance in part because it of greater-than-expected decline in influenza vaccination rates in the United States, despite the severity of 2024's flu season and a positive recommendation from the US Centers for Disease Control and Prevention.
Based on insurance claims to date, CSL expects US flu vaccination rates to drop another 14 or 15 per cent, on top of declines for the past two prior years.
"It's remarkable, but it's our reality. We can't see the bottom of the US vaccination realities today. It must be coming soon. The disease prevalence is real and strong," Dr McNamee said.
"We've made this vaccine. We anticipated we're going to sell it. We haven't."
Given the CSL volatility in the US flu vaccine market, CSL said it was no longer targeting spinning off its vaccine-making Seqirus business in 2025/26.
CSL said it was also cutting its guidance because government cost containment controls in China were reducing the demand for the albumin, a blood protein used in a range of medical and surgical problems.
