Note 1: Segment Information continued Geographical areas of operation The Group operates predominantly in Australia, the USA, Germany, the United Kingdom, Switzerland and China. The rest of the Group’s operations are spread across many countries and are collectively disclosed as ‘Rest of World’. Geographic areas Australia US$m United States US$m Germany US$m UK US$m Switzerland US$m China US$m Rest of World US$m Total US$m 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 External operating revenue 1,022.1 859.1 5,123.5 4,983.5 781.2 854.1 596.1 579.5 281.5 307.0 744.6 650.9 2,012.9 2,075.9 10,561.9 10,310.0 PPE, right-of-use assets and intangible assets 1,420.5 1,435.4 3,950.3 3,543.8 1,232.7 1,087.7 331.1 417.3 3,099.3 2,792.9 481.6 483.9 431.2 444.7 10,946.7 10,205.7 Note 2: Business Acquisition Acquisition of Vifor Pharma AG (“Vifor”) On 13 December 2021, the Group entered into a definitive agreement to launch an all-cash public tender offer to acquire 100% of Vifor, which was subject to regulatory approvals. Vifor is a Swiss based, global specialty pharmaceutical company with a world-leading iron replacement platform for treatment of diseases such as iron deficiency anaemia. Through its extensive dialysis portfolio, Vifor has built a strong presence in renal diseases which continues to benefit from the introduction of novel therapies impacting disease progression. A cornerstone of Vifor’s growth strategy has been its strategic partnerships, which have allowed the company to both broaden its portfolio and provide patients access to the treatments they need. Following closing of the tender offer, the Group commenced buying Vifor’s shares on-market. As at 30 June 2022, the Group had purchased 3.3% of Vifor’s shares for $387.7mwith a fair value of $381.1m, recorded as non-current other financial assets in the balance sheet. These securities are carried at fair value through other comprehensive income (“OCI”) as discussed in Note 11(e) and Note 12(b). The Group has secured funding for the acquisition of Vifor as follows: • Completion of a AUD$6,300m ($4,500m) Equity Placement in December 2021 and a AUD$750m ($537m) Share Purchase Plan in February 2022 (Note 12(b)); • Issuance of $4,000m in 144A senior unsecured notes ranging from 5 – 40 years, in April 2022 (Note 11(d)); • $2,500m in bilateral credit facilities secured in May 2022 and drawn down subsequent to 30 June 2022 in August 2022 (Note 11(d)); and • Cash and other bank facilities. During the year ended 30 June 2022, the Group has incurred $27.7m in net finance costs (pre tax) associated with acquisition financing. The Group has also incurred $40.0m of acquisition and integration planning costs (pre tax) in connection with the transaction that are recognised as general and administrative expenses. Subsequent to 30 June 2022, the Group has received all necessary regulatory clearances and completed the acquisition of Vifor on 9 August 2022. The Group has paid $11,441.9m for 98% of Vifor shares (includes Vifor's shares acquired as at 30 June 2022) and will proceed with cancellation of the remaining publicly held Vifor shares, in accordance with Swiss takeover rules. The Group will also apply for the delisting of Vifor shares on the SIX. The total consideration for 100% of Vifor shares is expected to be approximately $11,648.1m. The net book value of the group of assets acquired and the fair values of the identifiable assets and liabilities, of the business combination at the date of acquisition have not been finalised as the acquisition occurred close to the date these financial statements were authorised for release. The acquired assets and liabilities includes publicly listed debt of CHF (Swiss Franc) 465.0m as at the acquisition close. Funds raised in anticipation of the acquisition are adequate to meet the need to repay the debt when it falls due in September 2022. The purchase price accounting for the acquisition will be determined within 12 months from the date of acquisition. At the date of this report, it is not possible to provide a range of outcomes or a reliable estimate of all fair values and obligations. Preliminary purchase price accounting estimates will be completed before the Group’s statutory accounts for the half year ending 31 December 2022 are completed. Note 3: Revenue and Expenses Recognition and measurement of revenue Revenue is recognised when the Group satisfies a performance obligation by transferring control of the promised good or service to a customer at an amount that reflects the consideration to which an entity expects to be entitled in exchange for the goods or services. Further information about each source of revenue from contracts with customers and the criteria for recognition follows. Sales: Revenue is earned (constrained by variable considerations, which include returns, discounts, rebates and allowances) from the sale of products and services. Sales are recognised when performance obligations are either satisfied over time or at a point in time. Generally the supply of product under a contract with a customer will represent the satisfaction of a performance obligation at a point in time, which is when control of the product passes to the customer. CSL Limited Annual Report 2021/22 105
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