New CSL chief Perreault keeps the faith on growth plans
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 former 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."
Frequently Asked Questions about this Article…
Analysts have questioned CSL's valuation after the share price rose from about $40 a year ago to $64.46, but new CEO Paul Perreault rejects the idea that the company is overvalued. He says CSL "adds value" and is focused on building a sustainable, growing business that serves patients — investors should weigh those growth plans and future product prospects when judging valuation.
Perreault says CSL reviewed about 200 buying opportunities last year but was cautious about taking on "lemons." While the company made two major acquisitions under the previous CEO, Perreault emphasises organic growth and says acquisitions are unlikely to be pursued for their own sake — any deal would need to clearly add value.
CSL's strategy under Perreault focuses on strong organic growth supplemented by future products in the portfolio. The company plans to invest more in sales, marketing and research & development, and is targeting opportunities in areas such as haemophilia and developed markets.
Perreault described past CSL share buybacks as "very successful," but says any future buyback is a matter for the board to decide. That means buybacks remain a possibility, but not a guaranteed policy.
CSL reported that about 89% of its sales in the 2012 financial year came from operations outside Australia. For investors, that highlights CSL's global exposure — company performance depends largely on international markets, not just the Australian economy.
Despite a tough dispute with unions last year, Perreault said CSL plans to boost local jobs. Australia remains important to the company: roughly 1,800 of its 11,000 employees are based there, and management says they want to hire more while balancing productivity.
Perreault, formerly head of CSL Behring, highlighted opportunities in haemophilia and in developed markets. He also indicated the company will increase investment in sales and marketing and in research and development to drive future growth.
Perreault called Australia an "expensive country" that coped well during the financial crisis but warned a mining slowdown could be a big swing for the economy. He noted mining and banking have been strong, manufacturing tough, and housing may need monitoring — factors investors should consider when assessing domestic risk exposure for Australian-listed stocks like CSL.
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