Ann: CSL Results Announcement, page-40

Not sure how anyone can comment on the result without actually looking at its composition and quality, especially in respect of the second half on pcp, which warrants some bouquets as well as some brickbats (when most CSL results present very few reasons for the dishing out of any brickbats):

The niggles in this result are the slowing top line growth, just 5% in the second half on pcp (and they are cycling a pretty weak pcp):




The other niggles are the cost investment mix.

"Good" costs rose by less than Revenue growth in the second half on pcp: R&D growth up in line with sales and Sales and Marketing costs rose by 3.9%.  

The somewhat soft level of R&D investment is a surprise given the added investment in relation to Covid in the half, which means resources have been taken from other core R&D activities.

On the flipside, "bad" costs, namely SG&, rose by a noteworthy 14% (the was the single biggest delta for any P&L element, which is something that clearly warrants scrutiny).

On the positive side, the GP Margin recovered from the pcp's low of around 53% to its "normal" level of around 57%, no doubt assisted a tad by the lower A$ exchange rate over the past 12 months.



This half-on-half recovery in GP Margin drove a 12% increase in Gross Profit which, combined with the slower increase in the rate of investment in R&D and Sales/Marketing is what underwrote the strong second-half EBIT increase of 14% (cf. DH2019 EBIT growth of 5%)

So for mine, a bit of a loose CSL result ("loose" meaning instead of its usual flawless results, this one needs a few qualifying comments).

While CSL results usually run at 9.5 out of 10, this one I score as 7 out of 10.

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