Dear Shareholder,

The strong trading performance of our plasma products business and the successful Australian and international launches of the GARDASIL* cervical cancer vaccine have combined to deliver an excellent result for CSL.

Highlights:

• Group net profit after tax from continuing operations increased 54%¹ on the previous year to $539 million;
   
• CSL received royalty payments of $86 million from Merck & Co. Inc. (Merck) on global sales of the GARDASIL* vaccine. In Australia, a free national immunisation program with GARDASIL* is now under way, funded by the Commonwealth Government;
   
• In July 2007, the US Food and Drug Administration (FDA) approved Privigen™ for marketing in the US. Privigen™ is the first proline-stabilised liquid intravenous immunoglobulin (IVIg) ready for immediate use, requiring no refrigeration or reconstitution. Privigen™ is due for launch in the US in the first quarter of 2008;
   
• An agreement with Sanofi-Aventis enabled CSL Behring to conclude an agreement with Bayer to extend arrangements from 2009 to 2017 for the supply of Helixate® FS recombinant Factor VIII;
   
• The licensing arrangements for our proprietary ISCOMATRIX® adjuvant technology have been extended with Merck and we signed a worldwide license and option agreement with Wyeth. Our new US-based manufacturing facility will supply the adjuvant to Merck, Wyeth and other commercial partners;
   
• CSL acquired Cytogam® from Medimmune, Inc. Cytogam® is indicated for prevention of cytomegalovirus (CMV) disease associated with organ transplants. This disease contributes significantly to morbidity and mortality in organ transplant recipients;
   
• The acquisition of Zenyth Therapeutics Limited provided a portfolio that fits well with our research programs in cancer, immunology and inflammation. This has strengthened CSL's investment in developing products based on recombinant monoclonal antibody technology;
   
• A Biologics Licence Application (BLA) was filed with the FDA for registration of CSL's influenza vaccine in the US. Expansion of CSL's influenza vaccine manufacturing facility in Melbourne is on track to deliver extra capacity in 2008.

Our Thanks to Management and Staff

CSL's strong trading performance is underpinned by the skills and commitment of thousands of people in many countries - people involved in research, manufacturing, sales, business development, and a range of other tasks and services that combine to bring us success by delivering life-saving medicines to an international community.

Your Board of Directors congratulates management and staff around the world for everything that we have achieved in another successful year.

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