Earnings Transcript for CSL.AX - Q4 Fiscal Year 2024

Joy Linton: Good morning, everyone, and welcome to CSL's Financial Year 2024 Results Presentation. I'm Joy Linton, CSL's Chief Financial Officer. And before we begin the formalities today, I would like to say a few words about Mark Dehring, who has opened these calls over the past 21 years. As many of you know, Mark Dehring has decided to retire as the Head of CSL's Investor Relations function. Over his extensive time with us, he's been a trusted adviser to our leadership group and a respected spokesperson with the investment community. In the time I've been at CSL, I very much valued Mark's wisdom, guidance and insights. So thank you, Mark. Also with us today, having moved into Mark's role is Chris Cooper, who joined CSL earlier this year. Many of you will know Chris from his successful career as a health care analyst, and we are delighted to have him on our side of the fence. So Chris, welcome to your first CSL results announcement, and over to you.

Chris Cooper: Thank you, Joy, and good morning, everyone. It's a pleasure to be here. I also want to personally thank Mark for his help and support while I've been at CSL and particularly for all those years previously. I've met or spoken with many of you before, and I'm looking forward to doing so again in the days and weeks ahead. I'm pleased to be joined this morning by 3 of CSL's leadership team. With me are Dr. Paul McKenzie, CSL's Chief Executive Officer; Joy Linton, CSL's Chief Financial Officer; and Ken Lim, CSL's Chief Strategy Officer. As with past practice, Paul will provide an overview of the results, and then Joy will provide some additional detail on the financials. We'll then move to Q&A. [Operator Instructions] Please note, this briefing is being webcast. And lastly, before we start, I draw your attention to the forward statement disclaimer contained in the slide deck. I'll now hand over to CSL's Chief Executive Officer, Dr. Paul McKenzie.

Paul McKenzie: Thank you, Chris, and good morning, everyone. Thank you for joining today's CSL Full Year Results Call for 2024. I'd also like to extend my thanks to Mark for his support since I joined CSL. We have spent a lot of time together, be it in airports, meetings or planning sessions for our results. He always brought wise counsel -- all right, not always, but some of the time. And even a bit of humor when it was needed. Thanks, Mark, and all the best to you and your family for the future. Before we jump into the fiscal year results and the outlook for fiscal year '25, I'd like to make a few remarks about the progress we've made on several key strategic priorities. So let's get started and move to Slide 4. From the day I joined CSL, I clearly saw that we are well placed to deliver sustainable profitable growth well into the future. At our Capital Markets Day last October, CSL's leadership team took the opportunity to spell out this value proposition. At a high level, CSL Behring is a unique and resilient business with our Ig franchise continuing to drive growth. In our CSL Seqirus business, the value of our differentiated vaccine portfolio delivers ongoing value to public health systems and has outperformed the market again in fiscal year '24. CSL Vifor has now been fully transitioned into the CSL Group, with over $100 million of synergies realized. The business is well placed in iron and has attractive growth opportunities in nephrology. We shared with the market the priorities and plans that would underpin double-digit earnings growth over the medium term. I am pleased to report that we have made excellent progress across all fronts in fiscal year 2024. Some highlights include the Rika rollout is ahead of plan, with deployment in 84 centers as of the end of fiscal year '24. Terumo's individualized nomogram received clearance from the FDA and has been released to the CSL plasma team for validation at our centers. Another topic that I know is of interest to a lot of our investors is the progression on our yield initiatives. I am pleased to say that both Horizon 1 and Horizon 2 are progressing to plan. Joy will talk to the CSL Behring gross margin in greater detail later. However, what I will say is that we have delivered on what we said we would do

Joy Linton: Thank you, Paul. As Paul indicated, CSL has delivered a strong result for the 2024 fiscal year. On a reported basis, NPATA was $2.907 billion, up 11%. On a constant currency basis, NPATA was $3.008 billion, up 15% after adjusting for a currency headwind of $101 million. As a reminder, references to NPATA are attributable to CSL equity holders only. And for the first time, this result includes the full 12-month contribution from CSL Vifor. On this slide, we have again provided a bridge between NPATA down to NPAT at constant currency. Let me run through these numbers. So starting with NPATA, the following adjustments in total are included. $298 million attributable to the amortization of acquired intellectual property. The increase from the prior year was due to the 12 months versus 11 months of amortization for CSL Vifor plus an amount relating to HEMGENIX now that we are booking sales revenue. There were some remaining one-off acquisition costs of $83 million. This consists of continuing integration costs relating to the acquisition of CSL Vifor of $53 million and the final month of unwinding the inventory fair value uplift recognized on acquisition a noncash item of $30 million. And as expected, these items will not continue beyond FY '24. After adjusting for tax and noncontrolling interests, NPAT attributable to CSL shareholders was $2.745 billion, which was up 25%. You will notice at the back of this presentation, on Slide 21, we have provided guidance for FY '25 amortization costs and the associated noncontrolling interest. Turning to the next slide, our largest business unit, CSL Behring, which as Paul has already mentioned, was the main driver of our strong result. This table shows the gross profit of CSL Behring less sales and marketing costs to give the operating result. You will recall that R&D and G&A expenses are no longer allocated to individual segments, as this reflects the way we now manage the business units. A key highlight to focus on here is the gross margin for CSL Behring, which improved 120 basis points from 49.1% to 50.3% at constant currency. This is largely in line with what we anticipated and was driven by a reduction in CPL, price increases for Ig and efficiencies across our plasma collections and manufacturing network. On the right side of the slide is a reminder of the pathway back to our pre-COVID margins and the main contributors to that recovery, as we have previously outlined. Some of these factors have been materially derisked. In particular, the approval of the individualized nomogram is a significant milestone. The Horizon 1 yield improvements are being realized, and we are delivering manufacturing efficiencies as volumes have increased. Other levers are still a work in progress but are progressing well, such as the rollout of Rika, the plan for the rollout of the I-Nomogram, plasma center efficiencies that we've been implementing will see further CPL benefits at the mix shift, which we expect to see over time and momentum from new products. It is still early days, but we remain confident of getting back to pre-COVID margins as we outlined at our Capital Markets Day in October last year. On the next slide is our other 2 business units, CSL Seqirus and CSL Vifor. While both businesses have experienced some near-term challenges, it is pleasing that both have been -- have managed to maintain our operating margins at very healthy rates, which is testament to CSL's focus on commercial execution and efficiency initiatives. As Paul touched on, CSL Seqirus grew its revenue by a modest 4%, which is below where we would have liked it to have been. However, we are pleased that we continue to gain market share in a challenging environment, and we believe that our strategy puts us in a strong position when market demand recovers. For CSL Vifor, the impact of the follow-on competition for iron in Europe has been within our expected range. The franchise has continued to grow volume, notwithstanding the inevitable price reduction that occurs as the market becomes tender-based. This continued volume growth is testament to the degree of underpenetration we see in the iron market over the long term, and it is a core part of what attracted us to Vifor. Bringing this all together on the next slide are the group financial highlights. As mentioned already, total revenue was up 11% to $14.8 billion. The group operating result was up 13% to $6.5 billion. Research and development costs were up 12%, largely in line with sales growth and at the low end of our guidance envelope of 10% to 11% of revenue. General and administration costs were down 6% due to the efficiencies that we have generated from our enabling functions and some reduced FX impacts relative to the prior year. Net finance costs increased 7% due to the full 12-month impact of the CSL Vifor debt and the higher interest rates on our floating debt. The average maturity of our debt is 10.6 years, and the weighted average interest rate is 4.24%, slightly up from 4.11% in the prior year, with 80% of our debt fixed at a rate below 4%. Our balance sheet is in a strong position, and we continue to strongly prioritize our investment grade credit ratings. We have been able to deliver significant deleveraging in the year with our net debt to EBITDA now at approximately 2.2x and we will make more progress in the year ahead. As I mentioned at the start of the presentation, NPATA attributable to CSL shareholders was up 15%. The reported effective tax rate increased to 19.2%, largely within our guidance range. The increase was due to the geographic profit mix and also an increase in the corporate tax rate in the U.K. Return on invested capital was lower at 10.5% as we foreshadowed and this was due to the full year impact of the CSL Vifor acquisition. To reiterate our statements from Capital Markets Day. This is the low point and ROIC is expected to improve over the medium term, driven by our annual double-digit profit growth expectations. Cash flow from operations increased by 6% to $2.8 billion, reflecting the growth in sales partly offset by an increase in working capital, including the cash impact of one-off acquisition and integration costs recognized in the profit statement in the prior year. NPATA EPS was up 11% and NPAT EPS up 20%. Total dividend was up 12% to USD 2.64 a share. This translates to approximately AUD 4, up 10% on the prior year. Turning now to capital expenditure on the next slide. Those of you who have followed CSL closely will know that we've been through a significant capacity expansion program over the last several years to meet the increasing demand for our products. And many of you have had the opportunity to see these investments firsthand. While there will always be the need to invest in future capacity, we are currently well placed to meet the strong demand growth that we expect to see through the medium term. As most of you know, we're excited by the opportunities that we see to improve our collection and manufacturing yields. And this will allow us to continue to expand supply over the medium term without needing to deploy the same level of capital. As a result, our CapEx in FY '24 reduced by 31% to $849 million and, for FY '25, is anticipated to be in the range of $700 million to $800 million. Turning to the next slide. This shows our cash conversion cycle over the past 10 years. The main point to note here is that since the pandemic-driven peak, our cash conversion has steadily improved as the business has grown in size and despite some of the macro headwinds, particularly inflationary pressures that persisted longer than first anticipated. We saw an uptick in the days in FY '24, and this largely reflects some timing differences in trade receivables. Cash flow efficiency is a strategic priority for us and we expect to see a return to an improving trend in FY '25 and beyond. And with that, I'll hand back to Paul.

Paul McKenzie: Thank you, Joy. I'd now like to make a few comments on our outlook for fiscal year '25. Looking by business unit and starting at CSL Behring, we continue to expect strong demand for Ig across core indications. With various positive global reimbursement decisions now in place, we look forward to increasing HEMGENIX patient uptake in fiscal year '25. We are preparing for regulatory approval for garadacimab, which, if achieved, will make this the next CSL product to come to market. We will progress the full deployment of the Rika technology, including the individualized nomogram. Horizon 1 in yield and -- Horizon 1 and 2 yield initiatives will continue to advance. All these factors will drive the expansion of CSL Behring's gross margin. For CSL Seqirus, we expect continued market outperformance, driven by its differentiated portfolio albeit within some tough operating conditions in the market. Commercialization of KOSTAIVE in Japan, while continuing to progress registration for the EU and U.S. markets. We remain prepared to deliver H5N8 vaccine against potential avian flu outbreak in humans. For CSL Vifor, we are operating with an evolving iron market. And while there are challenges for near-term revenue growth, we continue to be the largest and most significant player in the EU iron market, with further geographic expansion planned. We will maintain growth momentum within the nephrology franchise, capitalizing on the recent launch success of TAVNEOS and KAPRUVIA and the imminent launch of FILSPARI. We remain focused on identifying and unlocking value by leveraging capabilities across the entire CSL Group. In collaboration with CSL Behring, CSL Vifor will continue to advance the significant public health need in patient blood management. For CSL at the group level, I am pleased to provide financial guidance for fiscal year '25. Revenue growth is expected to be approximately 5% to 7% at constant currency. With NPATA expected to be in the range of approximately $3.2 billion to $3.3 billion at constant currency, growth of between 10% and 13%. Importantly, I reaffirm our annual double-digit earnings growth outlook over the medium term. And of course, being forward-looking statements, these are subject to the usual disclaimers as mentioned at the start of this presentation. With that, we will now move to your questions.

A - Chris Cooper: Thanks, Paul. [Operator Instructions] Okay. First up, Lyanne Harrison from Bank of America.

Lyanne Harrison: And I might start with guidance but more focused on Vifor. I'm sure there's a lot of questions on guidance. But with Vifor, acknowledge that you're forecasting 5% to 7% revenue growth in the -- for the overall business, what do you expect in terms of Vifor revenue growth? And then also, the second part to that, looking at Vifor gross margins going into '25, given the step-added challenges and also the launches, also note that in the second half gross margin for Vifor seemed to improve. Do we expect to see further gross margin expansion for Vifor in '25 as well?

Paul McKenzie: Great. Thanks, Lyanne. Thanks for the question, and I'll share this off with Joy as well. But from the revenue viewpoint, look, we're being very realistic on our overall revenue. Behring is back, will be high single digits. We expect Seqirus to be above market, but probably in the flattish area given the dynamic of the marketplace itself. And Vifor to your question will be flattish. And I'll ask Joy to comment on the gross margin for Vifor.

Joy Linton: Yes. Thanks, Paul. Lyanne, on Vifor gross margin, we expect that to be broadly stable in FY '25. You referenced the U.S. step edits, which have certainly been a headwind in the year that is gone. I think we're starting to see the impact of some of that stabilize, like getting a full sort of year-on-year view. So I think that will -- we're hopeful that the Vifor margin will broadly stabilize in the next 12 months.

Lyanne Harrison: Okay. And just a quick follow-up on Vifor. Noticing that year-on-year gross margins declined, obviously, due to those step edits and the like. But operating segment margin stayed relatively flat because of cost-out, I guess, in sales and marketing. Can we expect similar cost-out in Vifor sales and marketing in '25? Or is that largely done now?

Joy Linton: Thanks. So we've done a lot of work on the cost side of Vifor and you can clearly see that in the numbers. There is more to do. Some of it is Vifor, some of it is more broadly across the enterprise as we continue to drive cost efficiency and it's a big focus for us. So yes, there's probably some more to come.

Chris Cooper: Thanks, Lyanne. The next question is from Saul Hadassin at Barrenjoey.

Saul Hadassin: Chris, Joy, if I could ask you about your gross margin comments as it relates to Behring. I know last year, you gave some color around the magnitude of that gross margin increase for fiscal '24. Can you talk to the magnitude of uplift and what guidance is factoring in, just the amount of gross margin expansion you expect for Behring in FY '25?

Joy Linton: Yes. Thanks, Saul. So consistent with what we said at Capital Markets Day in October, and I think we said 100 basis points in '24, which we have delivered slightly up on that. And we said -- what did I say, 100 and a bit in '25, over and above '24, we would hold to that guidance.

Saul Hadassin: Joy, just one more just on cash conversion cycle in days. Just noting that '24 fiscal stepped up in those days, but you do talk to better working capital efficiency going forward. I guess from a days' perspective in '25, do you expect much to change as it relates to that conversion cycle?

Joy Linton: We don't expect it to be worse. I'd like to think that we get some improvement both from an inventory perspective and a receivables perspective.

Chris Cooper: Thanks, Saul. The next question is from Gretel Janu at Evans & Partners.

Gretel Janu: I just want to go to Rika to start with. So in the sense of where you have rolled Rika out, are you seeing higher throughput that was expected given the lower collection time? Or has there been anything that you can talk to about what you've experienced? And just one confirmation just around the individualized nomogram. Is it correct that you're not currently rolling out? Do you have it, but not in the centers as yet?

Paul McKenzie: Great. Thanks, Gretel. Let me start with your last question first. So yes, we received FDA clearance, Terumo, for the individualized nomogram, but there's a second part of the validation of that when you put it into beneficial use in the centers. So we've received it, and we're now working through the validation process across all the centers. In terms of Rika, we are in the centers we've rolled out, seeing the benefits of Rika, right? In terms of the reduction of time on the bed, 30% on average. We're also seeing across those centers, enhanced center efficiency for lots of reasons, not just Rika, right? Rika is one part of the overall story of our journey, the donor app. We're now at 4 million downloads of the donor app, and we continue to see more and more people use that to do things like their health questionnaire outside the center. We continue to see efficiencies as we've rolled out an operations efficiency program across all the centers from labor that I mentioned in the speaking notes but as well as donor experience and donor flow. So Rika is living up to its commitments, tied to with all the other work that we're doing on overall center efficiency.

Gretel Janu: The growth continues to be very strong there. Your peers have also seen very strong growth. So has the HAE market has been growing at a faster rate? I guess with the potential upcoming approval of garadacimab, how should we think about the opportunity of HAEGARDA in the next few years? And are you worried about cannibalization there?

Paul McKenzie: Look, the market -- HAE market continues to do well. For instance, in HAEGARDA itself, it's continued to expand and maintain its patient base as well as get new patients on. We find, as we've commented on the past, people end up -- they try another product and then the switch back to HAEGARDA because it's a very reliable product in that space. With that said, garadacimab will be the standard of care in HAE. Efficacy, extremely highly efficacious, very early onset of that efficacy, really favorable safety profile and a great patient convenience with monthly injections. So we'll see how the market plays out and the dynamic, but we have two of the leading products in a market that's expanding, and we will do very well in that space.

Chris Cooper: The next question from Steve Wheen at Jarden.

Steven Wheen: Yes. Joy, I was wondering if you could just talk to the Horizon 2 pilot study stability study that's undergoing or underway for that manufacturing process. Can you just give some time line and even any sort of indication as to what the experience has been thus far?

Paul McKenzie: Yes, Steve, I'll take that question, if you don't mind. Horizon 2 is going well. It's a development project, as we shared before. So what we have done is we completed the laboratory work. We ordered the pilot plant equipment, made pilot plant batches. We now have them up on what is stability studies as well as comparability work. So you do the analytical work to show comparability to the other products made in a different process. So that works all continuing. The stability clock is the stability clock. You need to let time happen to show that stability. We have had a good set of sessions with the FDA. They were all according to plan. And our launch facility concept that we have in mind, if you remember, I wanted to approach this as a modular add-on to the existing Ig modules so that we can run the Ig modules either with or without Horizon 2 as we transition regulatory filings. That design is complete, and we have begun to order the equipment that we need to bring this to use in the initial launch. So it's continuing to plan, and we're quite confident in the technology and we're continuing to engage with regulators.

Steven Wheen: And so sorry, as part of that, do you think there's a -- the requirement -- there will be a requirement to do a clinical trial to support further data? Or based on what you've seen thus far, you probably would -- based on what you've seen, would you conclude that that's unlikely to be required?

Paul McKenzie: Like any development project, Steve, it depends on the data. So as we see the data for stability and comparability, we'll be able to make that judgment and give a recommendation to the regulatory agencies.

Chris Cooper: Next question from Andrew Goodsall of MST Marquee.

Andrew Goodsall: If I could ask you just to give us a little bit of color on collections, I guess, firstly where you're stabilizing -- or sorry, if you're back stabilizing at a more normal cadence now, and then just thinking about FY '24 versus FY '25 where you are on that sort of curve of lower CPL?

Paul McKenzie: Yes. Well, first off, I think our collections were at record levels for our collections, right? And we continue -- team continues to do a great job bringing everything together, the donor experience, the donor fees, the cost at the centers, the efficiency at the centers. So we continue -- the cost overall CPL at the second half of the year kind of stabilized, but we've derisked significant opportunities, the Rika rollout, the I-Nomogram. So we see a continued decrease in the CPL while we continue to bring in the appropriate donors as needed for our demand.

Andrew Goodsall: Okay. And would you say it's more weighted to FY '25 in terms of that CPL flowing down?

Paul McKenzie: Yes, I think that's a fair statement, Andrew.

Andrew Goodsall: My follow-up question, just a bit more color on avian flu sort of where you are on the sort of opportunity set that's sort of come from some of those recent outbreaks.

Paul McKenzie: Yes. So well, I have Ken here. So maybe I'll ask Ken to answer on avian.

Ken Lim: Sure. Thanks for the question. So as you're probably aware, our Seqirus business has contracts with about 3 dozen countries around the world where we stand ready to provide a vaccine in the event of influenza pandemic. Some of those countries, for example, the U.K. and the U.S., have taken steps to explore with us and other manufacturers the potential to supply vaccine in this period now where the risk of human-to-human transmission is causing some concern. Those processes still have some way to play out. And so we're engaged in those discussions. And when we have more to report, we will do so.

Chris Cooper: Thanks, Andrew. Next question from David Low at JPMorgan.

David Low: Joy, if we could just start just with the gross margin guidance of Behring. And there's a 60 basis point FX headwind there. We're very used to FX headwinds with CSL. But just thinking through the return to pre-COVID margins, how much adjustment should we be thinking about with FX?

Joy Linton: Thanks, David, for your question. Yes, FX hasn't been our friend in the last year or 2. Our guidance remains unchanged, though, compared with what we said -- or consistent with what we said at Capital Markets Day. So gross margin recovery in '26 to '28 with the midpoint of '27.

David Low: Okay. So we all -- no adjustment necessary for FX. Look, my other question just related to albumin sales in China. Can I get you to talk a little bit about what you're seeing there and the growth rates that we saw in '24 and what you're expecting in the near term, please?

Paul McKenzie: Yes. Thank you for the question, David. Albumin has done very well. It grew 12% year-on-year, which was a great result. And that growth was across all markets, U.S., EU and China. In China, we continue to see high single-digit growth, which is great. The demand is very strong, and we believe it will continue over the midterm.

Chris Cooper: Thanks, David. Next question from Craig Wong-Pan at RBC.

Craig Wong-Pan: Great. My question is on the increased use of contract manufacturing. Just could you elaborate on what you've done there, the impact that would have on earnings by business unit and sort of the impact on CapEx as well going forward?

Paul McKenzie: Right. So one of our goals was to make sure that we access the right capabilities and capacities when we need them. And so using contract manufacturers, particularly for areas that weren't where we have expertise like in plasma, fill/finish is a great opportunity. There's a lot of changes going on in the regulations, Annex 1, in particular, in Europe, which requires an upgrading of lots of our facilities. By using our contract manufacturing network, we're able to really dial in on where we want to do upgrades and where we want to outsource it. In terms of any margin impact, it's all factored into our guidance. But in general, we're working with providers that as we provide them more opportunity across our portfolio, we obviously can do better in terms of the overall competitive pricing.

Craig Wong-Pan: And sorry, just on...

Paul McKenzie: It's a very select area because of a lot of the regulation change and the need for upgrades across that space. So it makes our capital more efficient.

Craig Wong-Pan: And does that mean the CapEx can stay sort of at these low levels sort of past FY '25?

Paul McKenzie: Well, our goal is always to continue to manage how we spend our dollars and spend it most efficiently. We think that we -- in the medium term, this range looks right. But obviously, as we continue to see demand, we'll have to respond appropriately. But we're trying to pull all levers, right? Engineering excellence, partner utilization and really making sure our operation efficiency. As we brought on these new facilities, they're highly automated, how do we use machine learning and other things to continue to make them even more efficient as we move forward.

Craig Wong-Pan: And sorry, just my second question then. Just on China, Ferinject. Could you talk about just how that launch has gone and whether this could be a meaningful contributor in FY '25?

Paul McKenzie: The launch has gone very well and to have approval and to end up on the reimbursement list within a short time period is a good sign for our opportunity in China. The China -- we don't give forecast for individual products. It's all included in the guidance. But I would say the launch is off to a good start.

Chris Cooper: Thanks, Craig. next question from David Stanton at Jefferies.

David Stanton: Firstly, on garadacimab, can you give us some kind of timing on garadacimab reimbursement approval, particularly in the United States, please?

Paul McKenzie: I'd have to come back to you on that because the team has been -- obviously, we work across so many insurance agencies. Let me circle back with that with you on that, David. I don't want to give you a generic number because there's so many agencies that we need to work with.

David Stanton: No problem. If that means I can sneak in another question because I didn't get that one answered, that would be great. I'll leave it to Chris...

Paul McKenzie: Go ahead.

David Stanton: And then can you give us some kind of guidance or perhaps color on how many HEMGENIX patients in total you expect for '25, please?

Paul McKenzie: Yes, we're going to not forecast that for '25. We had 12 in '24, handful or so in July, and we need to continue to work across this U.S. fragmented system. What we are very happy to see is that our reimbursement contract negotiations in Europe have progressed well, and we'll continue to work to change from referrals to administration. Our referrals are going quite well. We've been able to increase the referrals quite significantly. But again, the U.S. health care system is quite fragmented, and it's taken us longer than we had planned to penetrate that.

David Stanton: Understood. And my last question, if it's okay. One -- perhaps one for Joy. Can you give us some kind of color around expected tax rate for '25, please, Joy?

Joy Linton: David, so I think we would just hold our guidance of 18% to 20%.

Chris Cooper: Thanks, David. Next question from Laura Sutcliffe at UBS.

Laura Sutcliffe: Just going back to the IV iron piece in China. I think I appreciate we're not going to get product-by-product guidance, but I think Vifor as a stand-alone business focused heavily on the patient blood management piece in China given high incidence of hepatitis C in that region. Is that still the right way to think about the China opportunity for you now?

Paul McKenzie: Well, I think there's lots of opportunity in China beyond just patient blood management, right? There's lots of other areas relative to women's health. Pregnancy, for instance, is a huge area. So patient blood management is part of the overall China story, but not the only part of that China story. We see it as a significant unmet need across cancer, women's health and the like.

Laura Sutcliffe: All right. And then just back on HEMGENIX. Can you tell us what percentage of referrals are being converted to administrations at the moment in the U.S.?

Paul McKenzie: No, we would have included everything in the forecast. I don't want to go to that level of granularity because it may confuse how things move forward.

Chris Cooper: Thanks, Laura. Next question from Mathieu Chevrier at Citi.

Mathieu Chevrier: Just on the Ig growth, which was very strong. Could you help us unwrap the contribution from volume mix and pricing? And what are you assuming in F '25 in terms of impact from the launch of Vyvgart from argenx.

Paul McKenzie: Great. Well, thanks for the question, Mathieu. As typical, we're always looking to grow volume more than price, so the growth was about 70%, 80% volume and the rest price. And in terms of argenx, obviously, they're in their launch. But when we look at the data, we see in CIDP, Ig is the standard of care, and we think that will continue to be the standard of care in that space. FcRns, in general, only compete with a small percentage of our overall business and given the clinical data, we don't see a significant advantage for FcRns in that space. So we feel strongly that Ig will remain the standard of care, and we expect to see good growth across CIDP in fiscal year '25.

Mathieu Chevrier: Got it. And then just on the Rika, how should we interpret the safety reports on Rika from the various FDA databases?

Paul McKenzie: Can you clarify your question?

Mathieu Chevrier: Yes, there's some safety reports from a database called MAUDE, M-A-U-D-E, in the U.S. where people can report adverse events from the use of various medical devices. And I was just wondering if there's anything here to flag or to signal that may slow down the use of the device, or it's just part of normal course of using a new device.

Paul McKenzie: No. No more than we would have typically expected in our normal use of plasmapheresis machines across the industry.

Chris Cooper: Thanks, Mathieu. We have one more question in the queue. And after that, we'll draw the meeting to a close. That question is David Bailey at Macquarie.

David Bailey: Yes. Just looking at Vifor on a 12-month annualized basis for '23, it's gone backwards 5% at the top line and 8% at the gross profit line. Just clarifying that for '25, your expectation is stabilization around top line and the gross margin versus '24?

Joy Linton: Yes, that's correct, David.

David Bailey: Yes. And Joy, you sort of reiterated that 3- to 5-year time horizon around the recovery to 57% for the Behring gross margins. Based on your run rates to date, is there any ability -- or can you sort of talk to any potential for tightening of that range either towards the earlier end or other factors that might drive it to be towards that later end of that 3- to 5-year time horizon?

Joy Linton: Not at this stage, David. I think we've been quite clear that '24 and '25 would be 100 bps in a bit. And then once some of these other initiatives that we've been talking about today, Rika, I-Nomogram, the yield initiatives, product mix, new products, once all of those sort of things start to get some more momentum is when we'll start to see some further improvement and FY '26 should be the first part of that. But I think what we've tried to do today is outlay where some areas have been derisked, but there's a lot that is still very much a work in progress. And so our guidance remains unchanged.

Chris Cooper: Thanks, David. We have no further questions in the queue. So I'd like to thank you for your interest in CSL. And I'll now draw the meeting to a close. Thanks, and goodbye.