CSL Limited Limited CSL Annual Report 2019/20 Driven by Our Promise™ CSL Limited Annual Report 2019/20 Contents 1 Chairman and CEO Message 2 9 A Trusted Health Partner 37 2 2020 Performance 6 Product quality and safety 37 Business performance and highlights 6 Value and access 38 Financial highlights 7 Public policy engagement 38 3 Our Company 8 Infl uenza pandemic and emergency response 40 CSL at a glance 8 Relationships with patient groups 40 Our businesses 8 Responsible marketing and promotion 40 Our locations 9 Our expanding footprint 41 Our product portfolio 10 Ethical conduct 42 Our research and development pipeline 10 10 Promising Futures 44 4 Strategy and Performance 12 Diversity 44 Our 2030 strategy 12 Attraction and retention 45 How we create value 14 Training and development 46 United Nations sustainable development goals 16 Our employee-centric approach to COVID-19 46 Our fi nancial review 16 Employee engagement 46 Our operating review 16 Safety and wellbeing 47 Business strategies, prospects and likely developments 17 11 Our Communities 48 5 Our Material Risks 18 Our approach 48 Patient safety and product quality 18 Support for patient communities 49 Product innovation and competition 18 Support for biomedical communities 50 Supply, capacity and operations 18 Support for local communities 52 Market access 18 12 Governance 54 People and culture 19 Governance structure 54 Privacy and cybersecurity 19 Board composition 54 6 Outlook 20 Board of Directors 55 7 Powered by Innovation 21 Board committees 58 Expanding our R&D footprint 21 Leadership team 58 Investment in our R&D pipeline 21 Ethics and transparency 60 Strategic support for innovative medical research 24 Disclosure 60 Our drug delivery platforms 25 Corporate governance 60 Infl uenza vaccine technologies 26 Risk management 60 Addressing the global COVID-19 crisis 27 Tax transparency 60 New products to market 28 13 Financial Performance 61 Clinical trials in process and new 30 Directors’ Report 62 Innovation across the value chain 31 Auditor’s Independence Declaration 67 8 Global Reach and Impact 32 Consolidated Statement of Comprehensive Income 96 Global reach and focus 32 Consolidated Balance Sheet 97 Donor management 32 Consolidated Statement of Changes in Equity 98 Focus on effi ciency, standardised manufacturing 33 Consolidated Statement of Cash Flows 99 processes and integrated supply chain Notes to the Financial Statements 100 Secure and reliable supply 33 Directors’ Declaration 138 Environment, health and safety 34 Independent Auditor’s Report 139 14 Share Information 146 15 Medical Glossary 148 16 Key Performance Data Summary 150 CSL Calendar Annual General Meeting 2020 Key Dates 19 August Annual profi t and fi nal 2020 Annual General Meeting (AGM) of CSL Limited dividend announcement (ABN 99 051 588 348) will be held online on 10 September Shares traded ex-dividend Wednesday, 14 October 2020 at 10 am (Melbourne time). 11 September Record date for fi nal dividend 9 October Final dividend paid 14 October Annual General Meeting 31 December Half Year ends Find out more 2021 Key Dates CSL.com 16 February Half year profi t and interim dividend announcement 4 March Shares traded ex-dividend About this report 5 March Record date for interim dividend This is CSL’s second annual report where we have combined our 1 April Interim dividend paid financial and non-financial performance in one comprehensive 30 June Full Year ends account, linking our sustainability and strategic priorities to our business results. Unless otherwise stated, this report covers CSL’s 18 August Annual profi t and fi nal subsidiaries as listed on Note 17 of the Financial Statements. In 2019/20, dividend announcement we concluded our fourth materiality assessment. Our prioritised 2 September Shares traded ex-dividend topics are listed on page 15 and detailed throughout the Report. 3 September Record date for fi nal dividend In addition to an independent audit of our consolidated financial accounts, limited assurance on a selection of corporate responsibility 30 September Final dividend paid (CR) metrics has been provided by Ernst & Young, and an assurance 12 October Annual General Meeting statement for non-fi nancial indicators, along with more detailed 31 December Half Year ends Group and CR information, including our materiality assessment, can be found on CSL.com (Our Company > Corporate Responsibility). Read Sam’s story on page 42 The people and science of CSL save lives. We develop and deliver innovative medicines that help people with serious and life- threatening conditions live full lives and protect the health of communities around the world. Our Values guide us in creating sustainable value for our stakeholders. Read Stacy’s story on page 28 CSL Limited Annual Report 2020 1 1 Chairman and CEO Message US$2,103 million in reported net profit after tax. US$2.02 dividend per share for 2020. Dear Stakeholders, In writing this message we have had the opportunity to reflect This decision was made following a strategic review and will on the sobering and far-reaching impact that the COVID-19 allow us to access capabilities from an experienced partner pandemic has had on our global community. and leverage our own internal investments. While the pandemic has certainly added complexity to our While some clinical trial stage programs in our research business and operating environment, CSL has had a number portfolio have been slowed due to COVID-19, our Phase 3 of notable achievements throughout the year, including program investigating CSL112 for reduction of recurrent the Company’s 25th anniversary as a listed company on cardiovascular events is progressing well. Over 9,500 patients the Australian Securities Exchange. We are pleased to share are now recruited and the results of a futility analysis have some of those success stories in this report. provided us the confidence to continue as planned. Business Highlights As we’ve seen with the recent registration of Flucelvax in Europe, Seqirus continues to go from strength to strength CSL has continued to deliver value to shareholders because as its differentiated product portfolio gains a strong of our unwavering focus on delivering innovative products reputation in global markets. to people with rare and serious disease, and to protecting the health of the public with our influenza vaccines portfolio. Our relationships with the biomedical community have always been critical to the way we approach our innovation This year we made a series of investments designed to portfolio. In planning for future growth, we made the decision strengthen the next-generation therapeutic areas within our to build a bespoke facility to house our Company’s Australian portfolio. We exercised an option to fully acquire biotechnology headquarters and expand our R&D footprint with a new company Vitaeris, specifically its late-stage monoclonal 16-storey building in the heart of Melbourne’s biomedical antibody therapy to address long-term rejection in kidney precinct. It will accommodate 800 employees from 2024. transplants. Additionally, subject to receiving regulatory The move ensures we are well placed to strengthen our approval we acquired the exclusive global license rights to partnerships and deepen the valuable relationships we have commercialise a Phase 3 stage program adeno-associated virus with the local biomedical community. The move will also (AAV) gene therapy program for the treatment of haemophilia bring key elements of our Australian operations together, B from uniQure, an asset that if successful will prove fostering stronger internal collaboration. transformational for patients suffering this disease. Expanding our stem cell gene therapy portfolio, we established an alliance With our robust research and development (R&D) pipeline, with Seattle Children’s Research Institute to develop stem Commercial and Operations excellence, passionate people cell gene therapies for primary immunodeficiency diseases. and global reputation as a leading biotechnology company, we have delivered a strong result for the year. It reflects the We also entered into a long-term strategic partnership with focused execution of our strategy, robust demand for our Thermo Fisher Scientific for the lease of our state-of-the-art differentiated medicines and our commitment for meeting biotech manufacturing facility currently under construction the needs of people who rely on our therapies. in Lengnau, Switzerland. When construction is complete, Thermo Fisher will lease and operate the Lengnau facility We are pleased to deliver a record dividend to shareholders and provide production support for CSL’s biologics portfolio. of US$2.02 per share for 2020. 2 CSL Limited Annual Report 2020 Unified by our Values Throughout the pandemic period, the majority of our We remain optimistic that the extraordinary amount of employees have continued to work on our sites and in our scientific collaboration happening across industry, academia laboratories carrying out roles that are critical to ensuring and government, including many initiatives we are proud our business continuity. to be a part of, will lead to effective treatments and vaccines in the near future. Until that time, we are greatly encouraged For many others in our workforce, it has meant working by the fast adjustments that our business has been able to remotely and adopting new technologies to ensure our make to adapt to changing conditions, and help us endure culture of collaboration continues as we prepare for the any impacts of the pandemic. safe return to our office sites. We are confident that from the pandemic crisis, society will Through this challenging environment, our employees have eventually discover many benefits arising from it, ranging stayed focused while demonstrating creativity, flexibility and across the acceleration and adoption of new technologies, resilience in continuing to do their jobs and doing them well. a deep resilience and ability to recover by the community, Our people remain unified by our Values of Patient Focus, and a significant contribution to science and medicine.