New CSL chief keeps the faith

Paul Perreault, the new boss of pharmaceutical giant CSL, has a message for those who believe the $31 billion company is overvalued or should start buying businesses: it’s not and it probably won’t.
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Mr Perreault said CSL had looked at 200 buying opportunities last year but was wary of ”lemons”. It made two big acquisitions under previous boss Brian McNamee’s leadership.

”The investment community always get excited when they see something like that [an acquisition] and then the next year they get disappointed because it’s hard to grow on top of it,” Mr Perreault told BusinessDay.

”So the organic growth story for CSL is still very strong and that will be supplemented by the future products in our portfolio.”

He added CSL’s share buybacks had been ”very successful” but another was a matter for the board.

Mr Perreault, an American who this month took over the top job, said Australia was an expensive country that had coped well during the financial crisis but faced challenges if the mining sector slowed.

”You’ve survived a financial crisis quite well. Mining, banking have been stellar sides of the business.

”Manufacturing has been a bit of a tough go. Retail has been up and down. Housing has been too high, probably, maybe a bit of a bubble that needs to be watched.

”I’ve seen it in other countries, including the US, where things get out of whack from a real estate perspective.”

He added that there were differences between the US and Australian housing markets.

”My impression is that people are still out spending [in Australia]; the restaurants are still full … coffee shops seem to be going well,” he said.

”It’ll be interesting to see how the mining goes, because that’ll be a big swing. The banks are still doing pretty well.”

CSL, the one-time government-owned vaccines group, is one of Australia’s top 10 companies.

And the recent departure Dr McNamee has not stopped its shares reaching new record highs.

But the share price surge, from about $40 a year ago to $64.46, has led analysts to call the company overvalued and question its growth.

CIMB director, healthcare, Derek Jellinek said Mr Perreault had ”his work cut out for him” and that Dr McNamee had exited at a great time.

But Mr Perreault said: ”I think we’re great value. We add value.

”My goal is to have a sustainable, growing business that services the patient.”

Formerly the head of the company’s chief money-spinning business CSL Behring, Mr Perreault said there were opportunities in haemophilia and developed markets. CSL would also invest more in sales and marketing and research and development.

Retail shareholders comprise about one-third of CSL’s share register and Australia is home to about 1800 of its 11,000-strong workforce, but 89 per cent of CSL’s sales in the 2012 financial year came from operations outside of Australia.

Despite a bruising conflict with unions last year, Mr Perreault said CSL planned to boost local jobs.

”We love it here in Australia, we’re not looking to exit … we want to do more, we want to hire more people but we also need to have the right balance of productivity along with the employment that we offer for people,” he said.

The original release of this article first appeared on the website of Shanghai Night Net.

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