CSL (CSL) 2015 AGM Report

Company/ASX Code : CSL Limited (CSL)
Venue :
10am National Tennis Centre Melbourne, Victoria
Monitor : Mr Don Hyatt
AGM Details / NoM : Thursday 15th October, 2015
# of Attendees : About 300
# Holdings represented by ASA : 747
Value of Proxies : $195 million
# Shares Represented by ASA : 2.1 million
Market Capitalisation : $42 billion

CSL announces $1 billion share buy back following another strong year

CSL has had an outstanding year for shareholders with a total shareholder return of 32% and increase in dividend of the same amount. We complimented them on their willingness to engage with the ASA as we had been invited to meet and share our thoughts with the Chairman and senior members of the Remuneration Committee prior to the preparation of the Annual Report.

The commitment of 8.5% of revenue to R&D is to be admired and recognised as vital to the company. The pipeline of life saving products coming through the trial phases is to be admired. Whilst debt is high at D/E 62% the recent 9.4 year 1.43% $US500m private placement and strong cash flow will ensure that it is not a problem.

The Chairman announced a $1bn buy back for the upcoming year which would add to over 25% of shares bought back over 7 years. It was pleasing to hear that the most underperforming division within CSL, BioCSL after 3 years of losses, had finally shown a profit. With the spinoff of the flu vaccine business in BioCSL, combined with the newly acquired Novartis for $275 million into a new Division, Sequiris which is expected to be profitable within two years.

We noted with some relief that both the Remuneration Report and Annual Report were streamlined for this year and congratulated CSL for this initiative. The Remuneration Report was broadly in line with ASA’s voting guidelines. We noted only 66% of STIs were awarded this year. All STIs are awarded as cash, however the ASA prefers 50% to be awarded as equity. We noted that there was a share price-linked mechanism use for the deferred payment of STIs which was a moderate compromise and close to the ASA position.

It was a very quiet meeting presumable because shareholders had had a very successful year. The ASA made comment on most resolution and the accounts, but apart from a couple of general shareholder comments about the accounts, nothing else was said by shareholders.

The Chairman directed that all resolutions were to go to a poll. All resolutions were passed. The incentive grant to the CEO/Managing Director received a protest vote of about 13%.