CSL Limited (CSL) Earnings Call Transcript

Good morning, everybody, and welcome to CSL's 2026 Annual General Meeting. Before I commence the formal proceedings of the meeting, we'd like to play a short video showcasing CSL's impact on patients and its commitment to scientific innovation. [Presentation]

My name is Fiona Mead, I'm the Company Secretary here at CSL Limited. It's a pleasure to welcome you to our 2026 Annual General Meeting. I'm going to run through the procedural aspects of the meeting shortly. I confirm that this meeting is being held in a hybrid format. Thank you to all of you that are here in person, and I welcome everybody who's joining us online. For those here in the room, if there is an emergency, please follow the instructions from the Sofitel staff and listen to the announcements over the PA system. If first-aid is required, please immediately see a Sofitel staff member for assistance. Today, we will run through each item of business stated in the notice of meeting, after which we will invite questions in the room and online. Shareholders and proxy holders present in the room can ask questions during the meeting by lining up at 1 of the microphones located in the aisles when the chair invites questions. Please advise the Computershare representative of your name and show them your red or green voting card to indicate you are a shareholder or proxy holder. If you are a shareholder or a proxy holder participating online, you can submit a written question by clicking on the messaging tab on the Lumi platform. Type your question in the box towards the top of the page and press the send button. A copy of your submitted questions, along with any written responses from our meeting team can be viewed by selecting my messages. Written questions can be submitted online at any time during the meeting. If you are online and wish to ask a question verbally, click on the request to speak button in the broadcast window. You'll be prompted to confirm your name and enter the topic of your question. Submit your request and follow the instructions to allow access to your microphone and join the queue. Please note, while you can submit questions from now on, we will not be addressing them until the relevant time in the meeting. If you have any problems at all, please call the AGM hotline number, which is up on your screen now. I do note that online questions may be moderated for inappropriate language. And if we receive a few questions that are similar, we may combine those questions and answer them together. If the questions are too lengthy, we may need to summarize them in the interest of time. To allow as many shareholders as possible to participate, we kindly ask that each shareholder limit themselves to no more than 2 questions or comments. If we have time at the end, we will ask shareholders with more questions to come forward. The chair will address some of the questions we received online prior to the AGM, then take questions in the room, followed by written questions from the online platform and then verbal questions from the offline platform. If you are entitled to vote today, you'll have a red admission card with your voting paper on the reverse. Please mark the appropriate box beside each resolution to indicate how you wish to vote. Proxy holders will also have a summary of proxy votes attached to their admission card, setting out any voting instructions, which must be followed. For any open votes, please mark the appropriate box beside the relevant resolution. Please print your name and sign your voting paper, then lodge it in a ballot box before leaving the meeting. Computershare staff will also collect voting papers at the exits. Voting will close 10 minutes after the meeting end, allowing time to finalize and lodge your voting paper. If you need a hand, please let a Computershare staff member know and they can assist you. For shareholders joining us online, once voting is declared open, eligible shareholders will see a voting tab appear. Select the tap to view the resolutions and cast your vote by choosing the relevant voting option. Your vote will be recorded automatically. So there's no need to submit or confirm it. You may change your vote at any time before voting closes by selecting a different option for the relevant resolution. Before we hear from the chair, I draw your attention to the legal notice displayed on the screen behind me. And I'd also like to highlight the Go for Gold lifeblood campaign featuring Australian Olympians and currently running across the country. Plasma supplies are at a record low at the moment, and the campaign is aiming to encourage more donations. Plasma really is the liquid gold in our blood. A new donation is needed every 33 seconds and can be used in 18 different life-saving ways. So if you can find time to donate, please do so at your Red Cross life blood donor center. Okay. That covers the logistics of our meeting, and I'll now hand over to our Chair, Dr. Brian McNamee.

Thanks, Fiona, and welcome to you all here today. There's a quorum present, and it's my pleasure to open the meeting. I would now like to introduce your Board of Directors and our Company Secretary. To our right, Fiona Mead, which you've already heard from; Mr. Costa Saroukos, who is standing for election at this meeting, you'll have an opportunity to hear from him later this morning. Ms. Elaine Sorg is next; Professor Andrew Cuthbertson; and Alison Watkins at the end. Very good position, Alison. To my left, Mr. Gordon Naylor, who is our Interim Chief Executive and Managing Director, who's also standing at this meeting. And as some of you would have read yesterday, he is also our Chair elect. Ms. Carolyn Hewson, who is standing for reelection at this meeting. You'll also have a chance to hear from Carolyn later in the meeting. She will also take on the role as Senior Independent Director from the 31st of March. Dr. Brian Daniels, Ms. Samantha Lewis and Mr. Cameron Price. We're fortunate to have such a strong group of directors and our Board. Today, I'll share the Board's perspective on the past year, the actions taken to strengthen CSL and our priorities for the future. I'll then hand over to Gordon, who will provide a detailed review of CSL's performance in 2026 financial year, the progress on our transformation and the outlook for the year ahead. Following Gordon's presentation, we will move to the formal business of the meeting. Finally, as Fiona mentioned, we will take questions from shareholders in the room and online. Voting on all items of the business will be conducted by a poll, and I'm now declaring the poll open. The poll will close 10 minutes after I declare the business of the meeting closed. Before we move to the formal business of the meeting, I'd like to update you on the 2 previously announced leadership changes for our company. Firstly, we now support of Deborah Waterhouse, as CSL's new CEO and Managing Director last week. Deborah will take on the role on the 1st of February and joined CSL from global HIV specialist, Viiv Healthcare, where she's been CEO for the past decade. Viiv is a joint venture majority owned by GSK with Shionogi as a shareholder, which had sales of EUR 7.7 billion during GSK's 2025 financial year. The Board was clear that the new CEO must continue the momentum of our commercial performance, renew our pipeline, simplify our operations and Deborah ticks all those boxes. She's an outstanding leader with a proven ability to grow complex biopharmaceutical businesses. She's renewed the franchise at Viiv and has dedicated her degree to improving outcomes for patients and public health. And she knows the United States well, having previously led GSK's vaccine and Primary Care U.S. business. Deborah is also very familiar with Australia, having lived and worked here in Melbourne when she was GSK's General Manager for Australia and New Zealand between 2008 and 2012. In summary, Deborah is a world-class executive who leads to a purpose passion. She combines a strong focus on business performance with a deep understanding of patients, health care systems and access to [indiscernible]. The board was unanimous in its view that she is the right person to lead CSL in this next chapter of growth, and I look forward to welcoming you here to this role next year. Secondly, yesterday, we announced my intention to retire from the Board and as Chair of CSL on the 31st of March next year. I'll say a brief few words about my time at the great company -- this great company later, but it's been my honor to be part of building something so special. As I mentioned earlier, the Board of Directors undertook a thorough process and have unanimously decided that the best and most qualified person to succeed me as chair is Gordon Naylor. There are a few people who understand this company as well as Gordon and we are fortunate that he will stay on our Board and keep sharing that knowledge and experience. I want to personally thank Gordon for the passion and drive he has shown since he took over as interim CEO in February. We steadied the ship, built on the strong foundations and positioned the company for further growth. Gordon took on this role during 2026 financial year, which is one of the most challenging periods in CSL's recent history. The Board recognizes the effects of the past 12 months have had on shareholders. We know that your confidence has been tested, and we understand it must be earned back through consistent performance and delivery. Financial year '26 was a reset for CSL. The company reassessed previous investments and made clear decisions to establish stronger foundations for the future. The Board supported decisive action by the management team, including Gordon's 90-day review. Gordon and the management team have acted with urgency to simplify the organization, sharpen priorities and enhance accountability. The Board is encouraged by the outcomes of those actions, and Gordon will elaborate them on them shortly. From the Board's perspective, CSL is already a more focused and productive company, capable of converting its scientific commercial and operational strengths into sustainable growth and stronger returns for shareholders. CSL has operated for more than a century by applying science and expertise to some of the most serious and complex challenges in rare disease and public health. The company retains important strengths. It operates in areas of significant unmet medical need, has leading positions in its core markets and possesses scientific and operational capabilities built over many years. These strengths provide a solid foundation, but they cannot be taken for granted. Markets evolve, competition increases, scientific opportunities change. As a result, CSL is responding and executing more consistently and the Board has 4 areas of focus. First, CSL must deliver stronger commercial and operational performance. Second, CSL must improve productivity and returns generated from research and development. Innovation remains central to our future, but CSL's investments must be focused on opportunities supported by strong science, strategic relevance to CSL's therapeutic areas and incredible impact for patients. CSL must assess the best science, whether it be developed internally or through careful selected external partnerships. Gordon will give more detail on this shortly. Thirdly, the company must maintain thoughtful discipline in the allocation of capital. Every significant investment is supported by strong foundations and assessed against our capacity to generate appropriate long-term returns. This applies across research and development, manufacturing, business development and the wider operations of the company. Finally, CSL must translate it strategy into consistent results. The Board has maintained close oversight of the reset and transformation underway across the company. Our role is to ensure that CSL has the right strategy, leadership, governance and risk management in place. The Board is closely monitoring progress and transformation is producing a simpler, more productive company. Just as CSL must continue to evolve as a company, its Board must also evolve. It's essential that the Board maintains the right mix of skills, experience, diversity of thought, to guide CSL in an increasingly complex global environment, includes expertise in science, medicine, commercial execution, financial management, risk, governance, global markets and the operations of a very large and complex organization. Several directors are standing for reelection today. Carolyn Hewson is standing for reelection as a director. Carolyn has served on the CSL Board since December 2019 and brings significant experience across financial services, investment markets and governance. Gordon Naylor is standing for election as a director. Before returning to the Board in December 2025, Gordon had a 33-year executive career at CSL across a range of senior roles, including Chief Financial Officer. His knowledge of CSL and the global biotech sector is valuable addition to the Board. Costa Saroukos is also standing for election as a director. Costa joined the Board in December 2025, following a 25-year career in the pharmaceutical sector, most recently as Chief Financial Officer of Takeda Pharmaceuticals. He has extensive international experience across finance, transformation and global biopharmaceutical industry. You'll have an opportunity to hear from each of the directors standing for election or reelection later in the meeting. The Board believes their collective experience strengthens our ability to oversee CSL strategy, transformation and long-term development. We remain committed to engaging constructively with shareholders, listening careful to their views and ensuring the CSL's remuneration framework supports the long-term interest of the company and its owners. CSL has confronted issues that needed to be addressed. Its strategic priorities are clearer, the organization already is simpler and more focused. Expectations of execution, investment and productivity have been strengthened. At the heart of the company at 29,000 people who bring CSL's purpose to life every day. On behalf of the Board, I want to thank them for their professionalism, resilience and commitment through this period. We believe the actions taken over the past year have established stronger foundations for CSL's future. On a personal note, again, I'd like to reiterate how proud I am to serve this organization as both CEO and Chair. It will be with mixed emotions next March, when the time comes to sign off, but I know I leave CSL in the safe hands of Gordon and Deborah and under the steady guidance of the Board. The Board is confident in CSL's underlying strengths and opportunities. We remain committed to overseeing the changes required to realize those opportunities and create sustainable value for shareholders. Thank you for your support over all these years. So many shareholders have been with the company for the whole journey, and I thank you for that. Gordon will take you through CSL's performance in the 2026 financial year. The actions management have taken and the company's priorities and outlook for the year ahead. Gordon, over to you.

Thank you, Brian. Good morning, everyone. And thank you for joining us today. It is certainly a privilege to address you as interim Chief Executive Officer and Managing Director of CSL. As Brian mentioned, I returned to CSL in February this year, after a gap of several years, following more than 3 decades with the company in a variety of leadership roles. Upon my return to the business, I spent considerable time visiting our sites, meeting with employees, speaking with customers and health care professionals, and engaging with investors and other stakeholders. That review reinforced for me that the special culture and extraordinary people we have at CSL unchanged. CSL possesses exceptional strengths. We operate in leading positions across plasma therapies, influenza vaccines and nephrology. We serve patients with serious and often life-threatening conditions. We have deep scientific expertise, significant manufacturing capabilities and talented people who are deeply committed to our patients, donors and public health. It was also clear for my engagement that the robust and stable industry structure [ that makes ] underpinning the plasma business was fundamentally unchanged. And that the demand for our plasma products continued to be strong and growing. However, it was also clear to me that we needed to improve execution and focus. The business had become too complex, decision-making has slowed and investment was spread across too many priorities. We needed greater focus, clearer accountability and stronger capital discipline. The management team's work to address these issues was already underway when I took on the role, and I'm pleased to say that over the last 9 months, we've seen very tangible results. Today, I'll discuss our FY '26 performance, the progress we've made through the transformation and our priorities for the year ahead. As Brian noted, FY '26 was a successful reset year for CSL. It was a year in which we took decisive action to reposition the company and establish stronger foundations for sustainable growth. Although we completed a number of restructuring initiatives that were already underway, the purpose of the reset was not simply to reduce costs, but to return CSL to sustainable growth that would deliver returns over the long run. My 90-day review of the business provided a valuable framework. In addition to the restructuring initiatives that were already implied, we did the following: brought the leadership team together to collectively drive the business and the necessary changes. We transparently communicated the challenges and the shareholder perspective to the global organization. We stopped a number of noncore initiatives. We enhanced the organization's financial discipline and understanding of industry economics. We reevaluated many assets on the balance sheet in light of current commercial realities. And we critically evaluated our bearing commercial capability and invested to strengthen our competitiveness. The green shoots that we saw back in May are now translating into market share benefits. We enhanced the focus on operational excellence in plasma collection and accelerated the operational separation of Seqirus to allow that business to compete more effectively with its innovative influenza vaccine portfolio. We're now seeing that play out in the current Northern Hemisphere season. Against that backdrop, our underlying business remained resilient. Group revenue was USD 15.8 billion, a decrease of 1%. Underlying net profit after tax, or NPAT, decreased 3% to [indiscernible]. These measures exclude the restructuring costs and impairment-related charges associated with the actions we announced earlier in the year. As a result, on a reported basis, CSL recorded a statutory net loss of USD 2.6 billion. While this result reflects significant one-off charges taken during the year, it does not change the underlying earnings capacity of the business. Most importantly, CSL continued to generate strong operating cash flow of some USD 3.5 billion. And as a result, we were able to maintain the dividend and completed another major buyback. Cash generation remains one of the company's greatest strengths and provides flexibility to invest in future growth while maintaining a strong balance sheet and returning capital to shareholders. Across our portfolio, market demand for immunoglobulin therapies remained robust. And we also saw strong uptake of ANDEMBRY and HEMGENIX, demonstrating the value that differentiated innovation can bring to patients and shareholders alike. While it was clear that more work remained, FY '26 confirmed that the core foundations of the business were strong. We've already made meaningful progress, '26 our transformation program generated USD 176 million of pretax savings, exceeding our target for the year. Those savings were achieved across research and development, commercial and medical affairs and broader operational activities. Importantly, this is not a conventional cost reduction program. Where we identify opportunities capable of generating attractive returns we are reinvesting. That includes strengthening our commercial and medical capabilities and investing in priority development programs. We are becoming more selective with a clear understanding of where CSL has the greatest opportunity to create value. Looking forward, we expect pretax savings from transformation initiatives to increase to approximately USD 400 million in FY '27 and up to approximately $550 million in FY '28. Alongside the transformation, we've continued strengthening the operational foundations of the business. In plasma collection, CSL is the industry leader in operational efficiency and productivity, but we continue to seek opportunities for improvement across our collection and manufacturing network. Reliable plasma supply remains critical to supporting long-term growth in our immunoglobulin franchise and meeting increased patient demand. To underline the importance of our placement network, one of my first actions as interim CEO was to elevate Steve Marlow as Executive Vice President and General Manager for CSL Plasma to the global leadership team. Steve is driving innovation in that space. This is critical for efficiency, our competitiveness and for us to respond quickly to patient needs. We've also strengthened commercial and medical capabilities throughout the organization. In July of this year, Diego Sacristan was appointed Chief Commercial Officer, with responsibility for leading the Behring and Vifor businesses across commercial and medical. Diego previously ran CSL's U.S. business and help transform the commercial and medical operating model and led the expansion of our U.S. sales force. In April, Amy Van Buren was promoted to the role of Chief People Officer. Amy joined CSL late last year, and brings a wealth of experience with more than 25 years of human resources leadership experience in diverse industries, including biotech, retail and consulting. These moves demonstrate the depth of talent we have in the company. Among the important outcomes of FY '26 where our strong cash flows, a disciplined capital allocation and positioning the business for profitable growth. Net debt to EBITDA was 1.8x in FY '26, comfortably within our target range for leverage. A strong balance sheet gives us choices. It allows us to invest in growth opportunities while also continuing to return capital to shareholders, buybacks and dividends. In FY '27, we commenced a further AUD 1.1 billion buyback program. Research and development remains essential to CSL's future. Our approach is now more focused and productive. The reduction in our fixed costs and overheads enables us to focus on key programs. Our model is evolving to combine deep scientific and clinical capability with targeted external partnerships can accelerate innovation and expand access to promising science. A good example of this is the partnership we announced in late 2025, with Dutch biotech company, VarmX. The partnership is to develop a novel treatment to help restore blood coagulation in patients on Factor Xa anticoagulant, who require urgent surgery or are experiencing severe bleeding. Another recent example is our partnership with [indiscernible] Therapeutics. This partnership provides access to potential first-in-class treatment for patients with rare kidney and liver diseases as well as supporting our ambition to build a leading nephrology franchise. We will pursue external partnerships within our core therapeutic areas that can complement our internal capabilities and accelerate patient impact. I am looking forward to working with Deborah Waterhouse, who brings special portfolio development capability to the company. We're also continuing to improve productivity in our manufacturing operations and across our plasma collection network. During the year, we announced the USD 1.5 billion expansion of our manufacturing facility in Kankakee, Illinois. We're currently working through the clinical and regulatory pathways to introduce a higher-yielding process that will allow increased plasma therapeutic supply to patients. We also returned the Lengnau facility in Switzerland to our global manufacturing network. Our expanded collaboration with Haemonetics and the rollout of its next-generation plasmapheresis platform in our U.S. centers is expected to improve operational efficiency and help support future growth in our plasma business. I'd also like to briefly touch on our inaugural sustainability report. This important milestone for CSL provides for the first time, a comprehensive set of climate-related disclosures in line with Australia's new reporting requirements. It provides our shareholders and stakeholders with greater transparency about how we identify, assess and manage climate-related risks and opportunities. As a global company with global operations and supply chains, climate change is a business issue that we must take seriously. FY '27, is a year of focused execution and delivery. I'm pleased to reaffirm guidance based on our progress to date. For the group, we expect revenue to be broadly in line with FY '26, an underlying NPAT to increase by approximately 5% on a constant currency basis. Behring and Seqirus are performing well as expected. We also recognize that FY '27 is a year where Vifor will continue to face challenges from generic competition in the iron portfolio. We expect additional benefits from the transformation program during FY '27 and we'll continue balancing reinvestment in growth opportunities with disciplined financial management. We also expect to maintain strong operating cash flow as we execute the next phase of our capital management program. Our priorities for the year ahead are clear. We will continue to improve our commercial performance, deliver the next phase of transformation benefits, increase our operational productivity and continue to improve returns from R&D and business development. We'll maintain disciplined capital allocation, generating strong and reliable returns for our shareholders. An important outcome of these priorities is the enabling and elevation of our people and the continued growth of talent in the company. Our global workforce has proved resilient during this period of significant change, harnessing their talent and energy has been a big part of the turnaround. I'm grateful for their commitment, their passion and their professionalism. I would also add that it's very high on my personal priorities for this financial year, to affect a smooth CEO to hand over to Deborah followed by my own transition into the Chair role. It is critical that we maintain our momentum. I also want to acknowledge the Australian patients affected by the historical contamination of donated blood. A Senate inquiry is now underway, and CSL will make a submission. I also want to thank our shareholders for their ongoing support, while we've established these stronger foundations for the future. I join Brian in welcoming Deborah Waterhouse to CSL within the timing that we anticipated. Following a thoughtful transition I'm looking forward to commencing my new role as Chair of the Board and working closely with Deborah. I am very confident that Deborah will be an outstanding global leader who will build upon these foundations to realize the potential of this great company. Finally, can I just add a personal note on Brian who, as you know, is retiring as Chair. I actually started at CSL a few years before Brian. And so I've worked very closely with him over many years. I think that Brian's background as a medical doctor has driven him to care very deeply about patients and public health. He's also at heart an entrepreneur always thinking about opportunities. He saw potential in CSL and its people and was the architect of CSL gaining its independence from government and then growing to global leadership in plasma therapeutics. The float followed by a string of major acquisitions, including [indiscernible] and Behring established the foundations of CSL today and generated enormous value for shareholders and our medical stakeholders. The Novartis influenza vaccines acquisition was in the same mold and was the foundation of Seqirus and its rapid ascent, to global leadership in that space. As I became more closely involved in the company again in recent months, it was clear that Brian's passion and accountability for the company remained undimmed. Brian and the Board took steps before my return that made my job easier, recognizing that improvements were needed and initiating a number of changes that I continued. The last few months have made us strong measures. And having the support of Brian and the Board is absolutely critical -- has been absolutely critical, and I am very grateful for that. Thank you.

Thank you, Gordon. We now move on to the formal part of the meeting. The items of business for consideration today are described in the notice of meeting, which I will take as read. In terms of running the AGM efficiently, we will read through all the items of business set out in the notice of meeting, following which we'll address all shareholder questions at one time. I confirm that I'm holding available undirected proxies in my capacity as Chair of the meeting and will vote all available proxies in favor of the resolutions in Items 2 and 3. The Board recommends that shareholders vote in favor of the resolutions in Items 2 and 3 with directors abstaining from making a recommendation in respect of any resolution they have an interest in. To conduct the poll, I appoint Ms. Christina Piccolo of Computershare Investor Services to act as Returning Officer and Ms. Jen Covelo; and Ms. Katrina Mariani of Deloitte to act as scrutineers. Voting is now open on all resolutions. We now come to item 1 in the Notice of Meeting, which is to receive and consider the financial statements and the report of the directors and the auditor for the year ended June 30, 2026. The item business does not require shareholder approval. However, shareholders will be given an opportunity to ask questions and make comments on the reports and about the management of the company. Ms. Jen Covelo; and Mr. Andrew Griffis of the company's auditor, Deloitte Touche, are present today and available to answer questions in relation to the conduct of the audit, the preparation and content of the auditor's report, the accounting policy is adopted by the company in relation to the preparation of the financial statements and the orders independence in relation to the conduct of the audit. Second item of business is the reelection and election of directors. As I mentioned earlier, we have 1 director, Ms. Carolyn Hewson, seeking reelection. Ms. Hewson joined our Board in December 2019 in accordance with our constitution, she is now seeking shareholder reelection. Ms. Hewson's qualifications and expertise that outlined in the notice of meeting. Having reviewed her performance, the Board considers Ms. Hewson to be an independent director and supports her reelection. We also have 2 directors seeking election today. Mr. Gordon Naylor and Mr. Costa Saroukos, both joined the Board in December 2025. In accordance with our constitution, they are now seeking shareholder election. The qualifications and expertise of Gordon and Costa are outlined in the notice of meeting. Having reviewed their performance, the Board considers Mr. Naylor is a non-independent Executive Director; and Mr. Saroukos to be an independent director, and in both cases, support their election to the Board. Item 2A relates to the reelection of Ms. Carolyn Hewson, I'll now ask Ms. Hewson to address the meeting.

Thanks very much, Brian. Good morning, all shareholders. Today, I stand for reelection as a Nonexecutive Director of CSL. As has been said, I've been a Director since December 2019, which is nearly 7 years. And it's been a real privilege to be part of a company that I followed so closely and admired for well over 30 years. I acknowledge that in the past several years, the company has not met the standards we aspire to, and I restate my focus and commitment to the reset we have made and the firm base it now gives us to carefully allocate capital to grow actively and sustainably. During my 7 years, I've been a member of the Audit and Risk Committee, the Human Resources and Remuneration Committee and have chaired the Corporate Governance and Nomination Committee. I am always very mindful of the responsibility I have to help guide one of Australia's largest company and global biopharma leader, especially in what is and has been a dynamic and highly competitive industry. My background is as an economist and investment banker. More recently, I've spent more than 30 years as a nonexecutive director across a number of sectors, including energy, resources, property, finance and industrial companies. This has given me insight into strategy, capital management for natural and nonfinancial risks, social value and organizational culture in a constantly changing external environment. In my role as Chair of our Corporate Governance and Nominations Committee, I've worked closely with my fellow Board members on our CEO and chair succession processes. The transition of our new CEO and Chair will be a priority for CSL over the next 12 to 18 months. And if reelected, I will continue to support these transitions and Board renewal as the Senior Independent Director. And then once that's complete, it will be my intention to retire from the Board. I look forward to continuing to support the work that CSL does for its patients, for its donors for public health. And I consider it a huge honor and responsibility to be a director of CSL. It's a role I take very seriously. And if reelected, I will continue to work diligently Board members to advance CSL's outstanding contribution to our patients, our people and our shareholders. Thank you.

Thank you, Carolyn. The Board is with Ms. Hewson abstaining, recommends the shareholders vote in favor of the reelection of Ms. Hewson. I refer to the slide behind me shows the details of the proxy position for this resolution. Well then, I will now move to item ask Mr. Naylor to address the meeting and look forward to hearing more from Gordon. Thank you.

Thanks, Brian, and good morning again. As you know, I stand now for election as a Non-Executive Director of CSL. Most of my working life was with CSL over a 33-year period, starting in Australia, and then working in numerous international assignments as CSL grew rapidly to become a global leader in biological pharmaceuticals. I've had numerous functional responsibilities in the company, ranging from engineering, supply chain, IT, M&A and finance [indiscernible] business leadership. I was Chief Financial Officer for 5 years before founding Seqirus and positioning that business for global leadership. After my retirement from CSL, I took on the role of Chair of Medical Development International, which is a small Australian device/pharmacompany, based in the Eastern suburbs of Melbourne for several years, and I helped to modernize its governance systems and to steer the international expansion of that company. I am a Non-Executive Director of Orica. And I was the Chair of the Audit Committee of that company through a period of change. Orica is also a very global company with an innovation-driven growth strategy. I helped run my family's philanthropic trust, and I'm an active angel investor. In the latter capacity, I served as Nonexecutive Director for [indiscernible] and Melbourne engineering start-up in the cell and gene therapy space. As a result of these experiences, I'm very familiar with the challenges of running an innovative global company which is listed and based in Australia, ensuring it produces profitable growth whilst managing the risks appropriately. As I mentioned in my earlier remarks, I've been interim CEO and Managing Director of CSL since February. CSL, I believe, is now stable and has returned to strong competitive growth, but much work does remain and the potential of the company is far from realized. I couldn't be more confident in Deborah Waterhouse to realize that potential as CEO. I plan to return to the Board as a Nonexecutive Director on the 1st of February 2027. And I do look forward to using my experience to support Deborah and help her manage -- and her management team as they deliver CSL's next phase of growth. I believe I can make a difference and offer myself for election. Thank you.

Thank you, Gordon. The Board, with Mr. Naylor recommends that shareholders vote in favor of the election of Mr. Naylor. I refer to the slide behind me, which shows the details of the proxy position for this resolution Congratulations. Go ahead, Gordon. Thank you and well done. Item 2c relates to the election of Mr. Costa Saroukos. I will now ask Mr. Saroukos to address the meeting. Costa.

Thank you, Brian, and good morning. It's an honor to be addressing you all today. I joined the Board in December 2025 after many years observing CSL with great interest from the outside. Since joining, I have gained an even greater appreciation of CSL's capabilities, the dedication of its people and the opportunities ahead. I've also recognized the challenges we must address to ensure that CSL fulfills its potential for patients and shareholders. My experience developed over more than 25 years in the global pharmaceutical industry enables me to make a meaningful contribution at this important time. I held a variety of senior roles at companies including Merck & Co and Allergan, where I worked across different geographies, including Switzerland, South Korea, Singapore and Australia. Those experiences gave me a deep understanding of the international pharmaceutical markets, operating complexity and the importance of disciplined financial management. Most recently, I served as Global Chief Financial Officer and a member of the Board of Takeda Pharmaceuticals in Tokyo, a company that also produces plasma-derived therapies like CSL. I've been immersed in the economics of global plasma supply for many years, and this gives me a unique insight into the critical supply chain that brings these life-saving therapies to patients. My previous experience spans audit, business development, financial planning and tax. And at CSL, I'm a member of the Human Resources and Remuneration Committee as well as the Innovation and Development Committee. Alongside my role as CSO, I serve as Chairman of Tanabe Pharma Corporation and as a Director of Olympus Corporation. My time working as an executive in global health care makes me acutely aware of the critical roles these companies play in the lives of our patients. I'm completely invested in CSL's work to deliver enduring impact to the patients and to the public health, especially in areas of unmet needs across rare diseases and vaccines. This work is so important. I thank you for your consideration in my election to the CSL Board. Thank you.

Thank you, Costa. Board with Mr. Saroukos abstaining, recommends that the shareholders vote in favor of the election of Mr. Saroukos. I refer to the slide behind me, which shows the details of the proxy position for this resolution. Congratulations Costa. As we're holding questions until the end of the meeting, I'll now move to item 3. Item 3 of the notice of meeting is an advisory vote to adopt CSL's remuneration report for the financial year 30th of June 2026. To deliver on our patient's promise, and to protect public health, we rely on our people and need to ensure a strong global talent supply. To this end, our executive remuneration framework enables us to attract, engage, retain and suitably -- and retain, suitably talented employees in the various markets in which we operate. This includes competing for talent with larger global companies. The Board is committed to an executive remuneration framework that links pay to the achievement of CSL's long-term strategy and business objectives. This creates a performance culture that in turn drives long-term shareholder value. Under the Corporations Act, the company is required to include in the Director's report a detailed remuneration report setting out certain prescribed information relating to the directors and executive remuneration. The company is also required to submit this for adoption by resolution of shareholders at the Annual General Meeting. The vote on this resolution in this item is advisory and does not bind the directors. However, the Board takes the outcome of the vote into consideration when reviewing the remuneration practices and policies of the company. The screen behind me displays details of the proxy position for this resolution. Based on what you can see in the proxy slide before you, the Remuneration Board has very good support from you, our shareholders this year. As I've mentioned, talent is a critical factor in driving company performance and remuneration is a key component of this. So thank you. Now that completes all the items of business for today, and we'll now move to shareholder questions. Please remember to cast your votes on each resolution. We now invite shareholder questions. As Fiona noted earlier in terms of order, we will firstly address some of the questions we received prior to the meeting, followed by questions from the floor. Next, we'll address written questions submitted online, noting that written questions may be moderated for appropriate language. Following this, we will hear from shareholders with audio questions from our online platform. Fiona? Thank you very much to those shareholders who took the time to send in questions ahead of the meeting.

Thank you. So the first question we received was from Mr. James Go, who wanted to know what changes CSL has made to ensure that the company has a vision and direction to return to profitable and sustainable growth?

Look, thank you for your question. Gordon has already addressed most of the issues embedded in this -- with this question in his address. I'd have to say all businesses operate in competitive markets and operate with risk and particularly R&D can be and is a risky proposition. We're prioritizing our assets to bring our pipeline where we feel we have real strength and making sure we have multiple options for success. We're also constantly improving our governance for external innovation so that we find and assess the scientific merit market opportunity and the most appropriate partnership structures.

We also had a question from 2 shareholders on what progress has been made on reducing our carbon footprint and that of our suppliers also about balancing executive reward with sustainability targets?

Thank you again. So Gordon has already addressed this in his speech, but I'll note that we continue to reduce our footprint. And this year, we saw an 8% reduction in Scope 1 and 2 greenhouse gas emissions from year 2020, 2021 base year and 17% reduction year-on-year compared to last year. On our remuneration structure, it's designed to align accountability for sustainability topics to those that are most able to control the outcomes, which is improving the focus on sustainability and carbon footprint.

And our last pre-submitted question came from Ms. Zoe Johnson, who wanted to know about franking credits on our dividend.

Thank you for the question. CSL is a global organization operating in over 40 countries as more than 93% of our revenues are derived outside Australia. We don't accumulate enough franking credits to allow us to frank dividends for our Australian-based investors. I assure you that if CSL didn't end up with material credits, we would distribute them to shareholders.

Okay. Thank you, Brian. We're now going to turn to questions from the room. I ask that shareholders to come to 1 of the 2 microphones here show their red voting card and clearly tell the Computershare representatives their name.

My question ties to [indiscernible] you outlined the FY '27 guidance in which revenues needed to be flat. Just on when you can comment a little bit more about that [indiscernible] compared to the last year [indiscernible].

Yes. Look, thanks for the question. It's a good one. Because at an aggregate level, you're right, it isn't our long-term plan to run the flat revenue, modest profit growth. And it's really just because we have a mix effect between the different stations units. The substantive part of the company, the core of the company bearing is really doing quite well and is returned to quite strong growth driven by the underlying demand for the products and then all of the measures we've taken operationally and in commercial. In the case of Seqirus, it's also doing well. You'll all be aware of the I guess, slightly controversial policy fund work in the U.S. around vaccines at the moment, which is creating a headwind for us. But against that headwind, Seqirus driven by the quality of the vaccine portfolio is actually gaining market share and so doing quite well. And our challenging space is before where the -- at least part of that franchise is the iron replacement therapies where we're seeing generic competition come in. And we've had that a bit in Europe for a while and it's now becoming more aggressive in the U.S. So that's actually a headwind. And we've guided, I think, to a 25% reduction in the revenue for Vifor. So that's quite a headwind. So you're seeing that mix effect will play out, which comes up to those aggregate numbers that you mentioned. But thank you for the question.

My name stated is [indiscernible], and I'm a volunteer monitor for the Australian shareholders. It's an association, which represents all retire to shareholders in this country. Today, our hold proxies for about 1 million shares and was about $200 million cash. First of all, may I thank your colleagues, Mr. Cameron Price and Fiona for taking the time in advance of this meeting to discuss some matters about our differences in guidelines. So I have 2 questions, if that's all right. Shareholders in Australia have become used to paying for some of their overseas misadventures of the companies that they support. We're a combination of [indiscernible] overly optimistic business cases and poor due diligence have led to significant write-downs in 80 years, often very many years later. Really had the write-downs being so large or the time frame so brief as in the Vifor and related products case with [indiscernible]. So for a business purchased in December 2021, the USD 11.7 billion. The write-down we saw last year in the books was $4.9 billion plus a few others associated with that was an astoundingly large back off from that company. Now partly, the regulatory pressures and generic entrance to their flag products [indiscernible]. We're really strong drum beats in the jungle of the financials in the U.S. and in Europe. And right about the time of the deal, Vifor Switzerland, who was the seller, had settled major generic patent litigation in the U.S. So generic entry was judged by some commentators to be imminent. So my question is, what went wrong with the due diligence and the business case development for this business. And you did mention resets and so on, so what are you actually doing about changing that. The second question is to the auditor. If you like, I can hold that off or [indiscernible] much simpler question. The accounts recognize a deferred tax asset, and we're all familiar with Swiss tax law. I presume of $853 million for Swiss tax losses. So this is an offset, you can move forward. And I understand that it's now changed from 7 to 10 years forward, so recent changes. So arising from the reduction of the Swiss tax carrying value of the investment in CSL and Vifor. So the question really is, how did the order test for the forecast taxable profits given what I just mentioned about a pretty poor judgment of what Vifor's revenues were going to be in the future, not that long before. So how did they come to that test in their order? And they also made the decision to leave around $300 million unrecognized. So I'd be interested to know how that's done. But thank you.

Look, let me deal with Vifor because it's some ways the -- it's one of the issues we have had to face up to, but there are a basket of activities that were included in the noncash write-downs and partly recognition of some of the cash items as well as we restructured. So we had the Marburg R&D facility. We essentially had overbuilt. These are decisions made a long time ago. We had over build R&D infrastructure. We did now allow ourselves at a flexibility to be able to spend on programs without building too large in infrastructure. So we took the decision essentially to shut down our R&D facility in Marburg. That was an expensive decision, but a correct one. We had built a biotech facility in Switzerland that we've now brought back onto the balance sheet. And that has also meant we have recognized some implications of the carrying value because historically, the view was it would be necessary for some R&D pipeline programs that did not essentially progress sufficiently well and that also the activity with [indiscernible] on contract manufacturing did not -- the cost structure in Switzerland did not allow that to be as competitive as we'd hoped it to be with them. So there were some non-formatte also dealt with in that 90-day review, which were all new piece of information that we had very recently. And then we come to both the competitive nature of the market in which Vifor operates. So we have 3 factors that are affecting the revenues this year. And this was the revenue, as Gordon mentioned, is a significant drop of year. It's not just generic competition for the iron franchise. It's actually the way in which products are sold in the U.S. in the dialysis market. It's called TDAPA. We had very good prices for 2 years. Prices dropped dramatically in that market. So we lost probably $100 million of revenue with that product. We also had a regulatory change in Europe with [indiscernible], where the regulator, nothing to do with us, decided that project -- that product should no longer be in the marketplace. That was a product over $100 million for us potentially this year, we thought would grow substantially further. So beyond the generic competition, we had significant factors that came upon us very recently that we just had to recognize. So you then come to the more -- the underlying essence of the question. So what is new? I don't think the generic competition was a new fact. But arguably, there is more generic competition than yes, we had included the one that is true. We still like the rain nephrology space of Vifor. We do think that's an opportunity for us to grow. Was it our finest hour, making that transaction. No, no. Have we done other excellent transactions in our history, yes. So what do we do? We can pick up at back and go home. We're a global company. We have to operate globally. We have to learn from those lessons. We have to understand what we got wrong in that analysis, how we can do it better, what this mistakes were made and we made everyone who was involved in the project did their best work. Competition has evolved, anticipated. And so we've addressed these matters. And I think, we have refreshed the Board. We've refreshed management. I think we've done what the company would do when it accepts that Vifor as a business is actually a business we still like. We even still like the [indiscernible] franchise because it's very cash generative. But we recognize the 6% dilution, which is the dilution we did when we raised the capital, essentially has not [indiscernible], which we are desperately unhappy. But there's no point crying over that. We've dealt with it. We're moving on. We're strengthening the business, and we're learning from it. That's what we're doing. [indiscernible] The good news is I give the Gordon who was Chair [indiscernible]. Now I'm going to tell a story to the [indiscernible] when I first joined CSL good, it's so long ago, I got off of the job [indiscernible] of '89 joined in 1990, a remarkable place coarser debates at the time. But one of the key things is we had some great people there. And I remember when I first joined, I had this lumpy, [indiscernible] head of operation called Charles Guthrie. And he was quite a prickly encouraged, but very knowledgeable in expertise. And he said to me, look, we're building a new plant in [indiscernible]. He said there were 2 people you should watch. He said the person who is managing the projects is Peter Turner. And he said, "I have this young engineer. I just got from [indiscernible] company. He is brilliant. His name's Gordon Naylor. You really should keep your mind for the future. And Peter Turner, by the way, did an incredible job for us ultimately COO and did many things for this a long time. So -- that's why before I now turn to [indiscernible] engineering, Gordon, before he became my financial [indiscernible].

Thank you, Brian, for the surprise, [indiscernible] obviously, to answer your question about [indiscernible] fairly sure the answer to your question is that the tax cost was associated with a partial impairment of the [indiscernible] facility. And so you're right at your understanding of the treatment of it. We continue to operate the facility, which is why there's only a partial impairment to the asset. [indiscernible]

I note that the new CEO will be based in the U.K. My question is, why is that? How will that work? And do you see the headquarters of this great Australian company remaining in Australia in Elizabeth Street in Melbourne.

Yes. So this is really 2 embedded questions there. One is, will head office always remain in Australia. Yes, it will Elizabeth Street will be our corporate headquarters, and it will be where we do significant research to the company. And of course, we have substantial manufacturing plants here in Australia in both Talabre and Broadmeadows. So, we're still a very Australian company. Having said that, we operate globally. And so therefore, -- when I ran the company, yes, I read it from Australia, although I did move to the U.S. at it for a time, we then moved to a model where operationally, the company was essentially run from the U.S. from a day-to-day operation perspective. And then when you appointed Gordon, and we've found that Gordon experienced a very, very good way, which you might describe, which we're now mirroring with Deborah.

Yes. So just to reiterate Brian's point, the -- I guess, the heart and the corporate headquarters continues to be in Australia. This is incredibly important country for us because of the operating, but also because of the relationship with shareholders and with the, I guess, the broader sort of Australian ecosystem. It's quite an important place for us, for example, for sourcing research activity, for instance, a lot of intellectual property comes out of Australia. But operationally, the vast majority of the workforce and our operations are in the Northern Hemisphere. And so for quite some time, in fact, the operational headquarters of the company have been in the Northern Hemisphere. What I have found is that as I've run the business because I'm from here as well, my families here. But I've actually spent most of my time running the company in the Northern Hemisphere, split between Europe and the U.S. The -- I've actually base myself to a large degree in the U.K., coincidentally, it happens to be also where Deborah is from. So we know the model will work just fine. The reality is that all of the CSL people spent a lot of time on the road, spent a lot of time on conference calls, and I talked in the strange times at night and day. It's just a result of running a truly global organization. I think it would be tough to do it from down here. It's -- when I'm down here, like, I've been down here for the last 2 or 3 weeks. Yes, been an awful lot of time on call 6 in the morning and finishing very late in the evening just because of the reality of where the bulk of the economic activity occurs. But that doesn't say anything, as Brian said, about the corporate headquarters, that doesn't change.

But I do think we think we see Heathrow, and we have a very important commercial office in Maven, which is actually relatively near Heathrow, works very well from a logistics perspective. We have a large office and a team there in Mayne as well. So it's -- I mean the real is these are very busy jobs, very busy, a lot of travel. But look, we think we think Deborah can base itself there, but she's committed to spending substantial time in Australia and also in the U.S. That's a [indiscernible] job brief.

Chairman, introducing Don Hyatt.

Chairman, I am a long-term shareholder of CSL. I did for the company -- I was the company monitor for ASA for [indiscernible] I speak for myself and maybe the wider shareholder community and lovely to see my old sparring partner, Gordon Naylor there. Welcome back Gordon, we knew you would come back in some capacity or other, and still not giving us our franking credits that we deserve and still organizing share buybacks, so listening to some music coming in today and thinking the song remains the same, if you're a [indiscernible] fan. Anyway, today, Chairman, I have 2 questions, and I did warn Fiona Mead, that I'm going to sound a little bit grumpy today because when I read your financial year '25 performance, I saw revenue down 1%, underlying NPAT, down 3% reported NPAT a loss of $2.6 billion and cash flow down 1%, all sounded to be going in the wrong direction. And most of us here as investors are looking at share growth. I mean, this is the problem. We do hear about dividends fairly regularly. They're about 2.1%. And if you gross that up, for franking credits, it stays at 2.1%. So we need share growth. And we've just not seen that for a number of years. In fact, they topped out a couple of years ago. I'm going to crave your indulgence a little bit here. Chairman, I've got a couple of minutes and 2 questions. Firstly, I guess it's true to say there's a sense of de javu here. This is the second time I fair well -- the first time was in 2000, you came back again. So congratulations. I looked back at my notes at the time. And at that time, you've been with CSL or since it went public around about 20 years, and due to accumulated long-term incentives and short-term incentives, and because you're a good lever, we considered that for a while at the ASA and thought, yes, let's give this man all of those incentives. And those incentives added up after 20 years of work to about $10 million, which is interesting to reflect because Gordon is getting that for 1 year's work this year. I'm not suggesting you're not worth at Gordon, and I'm just saying maybe you were worth a little bit more. And it's pretty much an indication of how things have changed over the year. Our costs or, I suppose, what we call the cost of attracting the best talent in the world has just gone through the roof. And I wonder about that a little bit from time to time. Secondly -- well, finally, having dealt with CSL for over 8 years, I think it's important for me to say that I have the highest regard for the people I've dealt with. Okay, in terms of their professionalism, the way they behave, the way they've treated me as a person as an ASA member and so forth and so on. And the intellect invariably is right in the top level. And that's why I'm a bit confused as to those results that I spoke to you in a short while ago. And I'm just going to go through a few things. You've heard them before, Chairman. I'm sorry to do this to you. I do apologize. It even pains me to go through these things, but it doesn't pain me as much as the share price hitting $90 in June of this year. That pained me even more. And I'm sure it pained a number of people. However, it's doubled since that time. It was $195 yesterday and hopefully going up. Okay. So a great deal of work goes into the rem report, and I'm just wondering about the amount of work that goes into the Rem report. Whether it achieves what we wanted to achieve, I don't know, -- we had a, what is euphemistically called a retirement recently. 3 people retired infact. Have they lost bonuses, whether that achieved what we wanted it to achieve. We've heard about Ms. Waterhouse. Hopefully, she matches the expectation. We won't know for a couple of years. CSL really is like that ocean liner. It is a massive organization. It is incredibly complex and it is very slow the pipeline of products and things like that. 5, 10 years, things like that. They take a long time to get back on track. So good luck, Gordon Naylor, you got a little bit of work ahead of you. It's not done yet. Okay. just going through a couple of things over the last couple of years. They are very expensive ones, Vifor and CSL112. I know these are in the past that CSL112, we blew up around about $1 billion there. We didn't know what was going to happen until a final bit of Phase II and it mostly fell over. It fell over to the extent where it never got commercialized. And I really think that, that was a problem because I had spoken to our previous CEO, [indiscernible], a number of years before, CSL had always had a really high strike rate. Once we've got things through to Phase III, we had a very, very high level of belief that, that would get through much higher than most other pharmaceutical companies. And yet this one fell over. And I just wonder how much time effort. It's not just the money, but it's the research capacity that was going into CSL112, that didn't go elsewhere. I don't know where else it would go. We've got Andrew Kathleen over here. He would know, but maybe it might have gone into developing mRNA vaccines or something like that, I don't really know. Okay. And the second one, of course, we've heard about Vifor. Vifor was bought in 2022 for USD 11.2 billion, and this year, it was written down by an absolute eye-watering $6.6 billion or 56%. So it's written down by nearly AUD 10 billion. That's a huge amount of money, and you have addressed that to a certain extent, Chairman. But I sort of really wondered, I mean, what I write down, I was a bit of a reader of bits and bases, our marks, for example, talks about second-level thinking, Daniel Kanneman, talks about System 2 thinking. On the surface of it, when I read about it, it sounded absolutely perfect for CSL, a high-end product doesn't cure anything. I hate to say that, but it doesn't cure and it's something that we keep having to provide for the patients to improve their quality of life. Fitted the CSL model, but questions like why was it on sale? What did the vendor know about this that we didn't know. There had to be a bit more intellect put into that about generics and what was coming down the track. I don't know that we actually did what we should have done. You've also mentioned Gordon, I'll call it what it is, the antivaccine [ lunacy ] that's going on in the U.S.A. at the moment. You're a nice guy, you wouldn't call it that, but that's what it is. Hopefully, that gets sorted out in the fullness of time. We're enough kids die pertussis when the smallpox epidemic takes place, maybe they'll change their mind. We have no control over it. Yes. Okay. And of course, we haven't mentioned too much about our little excursion into China via [indiscernible], okay? Now I knew at the time I've spoken to some people who had dealt with China. I said, be very careful about China. You can invest money there, but getting your money back out is almost impossible. That was always going to be a bit fraud, turned out to be such. So CSL bought into radar for $352 million in 2017. They sold out in 2024 for $185 billion and that was a significant loss. So another little mistake. So I noticed that, as I said, 3 staff have departed and bonuses have been forfeited, but I really wonder whether that only 3 people were responsible for that. I really suspect it was broader. So my question really -- my first question, sorry, is yes, -- the second one is really short. The first question is, how is it -- we've got a Board that's incredibly talented, huge expertise in a whole range of areas in pharmaceutical area and governance financing, in law and so on. How is it that these sorts of things? I just simply expect better of CSL. That's my simple bottom line. I expect better of CSL. How could these things -- it's not just one thing, a whole series of things taking place over a period of time?

In many ways, is that [indiscernible]. What's the second question? So I could deal with both.

The second one I had to ask Gordon Naylor, February 2020 share price, $330. July '24, it's still $310 June this year, $90 Gordon and yesterday, $194. Can you assure me is not guarantee, but assure me that I should continue holding my CSL shares into the future, and I will be able to buy the car that I deserve or whatever [indiscernible].

Thank you, Don. Thank you very much. And certainly, a rich set of matters you've raised it. The remuneration report is staggeringly demanding for the Board to put together. So I sort of share your sentiment. I do wonder about the value of the effort we have to go into is the law. So that's where we're on that. I mean I think you're well listed mistakes. You don't well list things we've done well. You also don't -- your time frame -- the challenge for shareholders is the time frame is what you're aware of. But the reality is this is a very long-term industry. So if you look at the 112 decision, the decision to start the Phase III [indiscernible], I think, was 2014 and it took 10 years, partly because of COVID. So although, yes, a nasty result. And once you start these Phase III clinical trials, they're very hard to stop because you're accumulating patients, et cetera. At the time the decision was made, I don't think it's hardly anyone here is too involved on the board. And in essence, it was a reasonable thing to do. What was wrong with 112, I guess you could say it probably was too demanding on the R&D budget. And I think I would share your view as with Gordon, that it lessened our focus on some of the easier, better short-term opportunities in the portfolio. That's true. But once you start this machine, it keeps going, [indiscernible] to the Vifor Essentially, the before down is about it's still a huge number. But delaying the, we built a manufacturing facility for drugs that essentially as I said before, didn't get through the pipeline and the contract manufacturing strategy didn't work. So that's our real [indiscernible]. I think we can operate it successfully, and that's why we've brought it back and now recognized some of those costs. These are the downside. Now remember, I started in [indiscernible] the company made USD 4 million. That was our profit and negative cash flow. So yes, I accept -- it's been a very -- we've had volatility. I was there as was Gordon, when the share price went from [ 52% to 11% ] pre-split. You've probably been there as well. So it's not like this is the first time that we've had challenges. But it's not every decision was bad. There's been many fine decisions made in the company. Our cash flow last year, even in a really last year was USD 3.5 billion. We have a strength that Gordon talked about is it is real. But we had to do the reset. And you could say, well, why did we build up too much infrastructure. Well, there really is the corporate plan at the time, and these are long-term position to build up a new R&D facility it takes 8 years. These are long-term decisions. No one, I don't care how [indiscernible]. You're going to get every decision right. We just have to collectively get more right decisions. And you might -- I think the key lesson for me and Vifor, I mean, yes, of course, we haven't paid them, bloody awful. I mean do you think we are happy. So what is it about that transacting I think it was too big. Looking back, I just don't think we should have done a transaction at large because the risk profile is high. Even though it was only 6% solution to capital, you're risking way more than that 6%. Then we're going to buy those shares back, I think, in the last year, this year and next year. So that's it. But the reality is it's too, too tough. It's too important on your reputation. So I think large transactions are probably too complicated to do it. And I'm leaving that would be my key lesson do the small tuck-ons, tuck-ins more frequently, where you're taking less risk and you can do more of a portfolio approach. So sure, we've learned that lesson. But we've done pretty well. We did well on GRH, we did well in Animal Health. We did a well in diagnostics. We did well in plasma therapeutics, we did well in flu. Yes, we got one wrong. It's still a good business. So let's not throw the bag with the bathwater. We just accept we've got the timing role. We paid too much. We've accepted that. We're fixing the business, but we like the nephrology space in particular. So sure, I accept, yes, we didn't do the one recently well. I cannot explain share price volatility today. It's not just CSL. It's everywhere. So I hear you, volatility is a new part of our life, I think, for any company that's publicly listed. It's a combination of the weight of money swinging depending on macro factors where -- and then you've got the cost of capital, interest rates affected. And -- you've got -- and then you have a lot of machine trading. So at the end of the day, it's quite difficult for a retail investor as well as a Board to watch these generations and know what on earth is going on. But I can assure you, the Board and the senior management have taken to heart the things we didn't do right and have a very clear determination to actually fix what we've done and continue to grow the company, but do it in an intelligent planned way, which includes Gordon, Gordon taking after me, Deborah coming on board, refreshing the senior management and refreshing the Board. It's been very thoughtful I think you'll see the benefits of that over a number of years. And I think that it's a company we're still all mostly invested in being successful. Nothing's changed there. People think it was Hubris that drove us to some of these things. I don't believe it was just judgment. We just overinvested in 112. We probably -- [indiscernible] facility was probably built too early. And Vifor, we clearly got the timing on of the transaction and that's in due diligence from. That is correct. Competition has changed, regulatory environment change. Nothing is constant, but I can assure you this remains a great company and we're looking to the future with optimism. Thank you.

Chairman introducing Rex Makenzie.

I remember in 2002, you were very sick. And in fact, you would die. And the Chairman of the Board was at your bedside and you are claiming to take over Behring. I think it was at the American [indiscernible] My memory is not always -- and I think imagination still has a place even in a very large company, and I'm pleased to see that Gordon is a person who has some imagination. And I hope that the new company head will also have an imagination, but that's not enough. And you have to have patients as well so to shareholders. And the stock market, you know the [indiscernible] place, and I won't bother you with that. But it is a funny place and it isn't necessarily sensible and yearly results are not everything. And I have been very impressed with the way you as a leader of a great company, which you helped establish and it was on your imagination and your endeavor and your ability to build [indiscernible].

Do we have any more questions?

Chairman introducing, Stephen Ma.

I just want to say congratulations as well, Brian, on a wonderful career. It's sad to see you going that thank you for all of your service over many years. I'm a team invest member, we're large shareholders in the business. I have -- well, also, I just want to say thank you to both you and today for the transparency and accountability that you've talked about in the presentations the way you've answered the question, it's very helpful for shareholders to get a context from me. So thank you for that. I do want to just quickly ask a couple of questions about remuneration possibly best for Cameron is our rem share, but whether you feel fit to answer the question. I know we're under a lot of pressure with 2 strikes, and you're probably getting pressure from proxy advisers and others to redesign the plan. The 2 things that I noticed that have changed, and correct me if I'm wrong, is that -- we're firstly proposing to take the $7 million of impairments last year out of the metrics going forward in a fairly quiet way. Perhaps that's because we've got new management coming in, and we don't want to hold them accountable for those past issues. But was that really the best way to do it to remove the $7 billion of impairments from the plan metrics going forward?

What is your other question?

The second question is around the changes to the LTI metrics. So our metrics used to be burning the share growth and return on invested capital. Two excellent metrics that management are largely in control of. We've replaced it with TSR, and there's been lots of discussion today about the share price. Unfortunately, management doesn't get to do much at all about short-term share price movements, and we measure these things on a 12-month basis. So we've seen in the last 12 months, our share price is between $90 and $200. The value of the company hasn't changed that much in the last year. But going forward, that's how we're going to assess LTI for management. So it's something they can get up out of bed every day and control what happens with the short-term share price. So that's my real concern with getting rid of those 2 metrics, and just having it all based around share price going forward?

Look, I mean I think there's no doubt. A lot of work has gone into the whole revised remuneration framework. I mean I think it's fair to say that -- this is a perfect system, by the way. I mean no matter what system we come some critical fine, yes, but there's always the but. So the view was TSR certainly well represents the shareholder experience. It's imperfect, but it's the best proxy for the shareholder experience. That's what you want your long-term intended to do it. Because every other setting, you have the but, I give you an example, return on invested capital my but would be there, well, does that stock management investing in high-returning opportunities down the road. So it's a troubling metric because it partly could reward on investment, and that's sometimes seen in other companies. So that's -- so ROIC is a complex one. And then the earnings per share, actually -- I actually quite like earning because you have always been a bit of a growth in earnings per share. But again, saying what about share buybacks? What about other things? It's that affects earnings per share. So at the end of the day, a lot of work went into it. I mean no perfect answer to it, but I think we came on balance given the TSR the way we're measuring our relevant competitors is fair. But we've got to revisiting it. No final decision has been made as to what on a look-forward basis with regard to in-flight stock at the moment for executives. But we do note that many of those executives were nothing to do with the Vifor transaction, all have come on recently, and we've got to be careful. We are in the business of retaining and rewarding executives and it has an ability to essentially make all these things of no value moving forward as well. So no final decision has been made on that, but we're very mindful that we have to show fairness to the executives and trying to get the balance right. That's all. We're publicly apologize, we've gone and bed lowly to shareholders around Australia, apologizing for the write-downs, which are horrible. I get it. It was awful what we've done. We're going to be determination, moving on. We're growing the business, dealing with issues. We can't keep using the rear vision there. And so that's the concept here. Let's not continue to punish what we've recognized, particularly for all those people who had nothing to do with them.