Performance Highlights Mid-Year 2013/2014

Presented to the Board of Directors November 2013

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Agenda

• Canadian Blood Services’ Strategy 2013 - 2017

• Performance by Key Focus Area • Updates on Key Initiatives • Financials • Emerging Issues • Looking Ahead

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Canadian Blood Services’ Strategy 2013 - 2017

Two Outcomes: 1. Improve patient outcomes

and advance patient care.

2. Demonstrate our commitment to safety, performance improvement, responsible and accountable financial and business management.

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Key Focus Area Stewardship – Patients, Hospitals, and Members

81% 81%

60%

70%

80%

90%

100%

Q1 Q2 Q3 Q4

Earn and Retain the Trust of All Our Key Stakeholders

1. Positive public opinion of Canadian Blood Services: • Acts in the best interests of the public • Seen as a professional organization • Trusted in doing what is best for the blood

system

Key Initiatives: • National Accountability Agreement • Fundraising Initiative for Cord Blood Bank Program

Definition: This key focus area puts the spotlight on CBS’ accountability, transparency, and integrity. We do what we say we will do and deliver on our commitments. We consistently provide safe and effective products and services that meet our customers’ needs. We do this through prudent use of public funds, by ensuring appropriate mechanisms and controls are in place to manage and operate our business effectively, and by consistently doing the right thing.

Performance:

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Key Focus Area Consistently provide safe and effective product, to the right place at the right time Definition: Our intent is to consistently meet the expectations of patients and hospitals through the provision of products that we manufacture. We will establish, align and streamline a robust and integrated supply chain to provide the right product, to the right place, at the right time. Given donations are the source for many of our products, we provide excellent service experiences to build and maintain commitment to donate.

Key Initiatives: • National Facilities Re-Development - Donor Testing and Western Canada • eProgesa • Cord Blood Bank (including cord for research)

1. Demand for red blood cells down by approximately 2% (compared to the previous 12 month demand).

2. Challenged to keep up with demand for O negative red blood cells. No negative patient impacts have been reported.

3. 8,000 donations saved due to improvements in large volume platelet collections.

Performance:

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Key Focus Area Leverage our services, tools, expertise and knowledge to improve patient outcomes

Definition: Leveraging our unique delivery model, knowledge, expertise and capabilities, our intent is to improve patient outcomes by advancing and translating research outcomes, influencing transfusion and transplantation clinical practice, optimizing access to patient services, and impacting relevant national health care policy. Given donations are the source for many of our services, we provide excellent service experiences to build and maintain commitment to donate.

Performance:

Key Initiatives: • Factor Product Utilization • Canadian Organ Donation Transplantation Network • Centre for Innovation

Registries: 1. 162 Canadian Stem Cell transplants 2. 26 Canadian donors for Canadian Stem

Cell transplants 3. 45 Living Donor Paired Exchange

transplants 4. 9 Highly Sensitized Patient transplants

Innovation & Partnership: • Continued to pursue a range of intramural and CBS-CIHR

projects, from basic to translational and clinical research • Extended evidence to improve internal manufacturing methods

and to understand process limitations • Facilitated the development of leading practices and guidelines,

as well as mobilization of knowledge

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Key Focus Area Deliver our products, services and programs more efficiently

Definition: Our intent is to achieve a marked improvement in productivity and efficiency through process management, automation and cost management.

Key Initiatives: • Automated Supply Chain • Strategic Sourcing

1. Softening demands continue to significantly impact CPU

and LHU.

2. Continue to streamline the organization, FTEs: • FY 2010/2011: 3,528 • FY 2011/2012: 3,434 • FY 2012/2013: 3,310 • As of Q2 2013/2014: 3,300

Performance:

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Key Focus Area Advance and mature our quality system and culture in everything we do

Definition: Our intent is to clearly and completely define our quality system and culture, to improve it, and to mature our quality culture so that we consistently deliver safe and effective biological products and clinical services that meet customer requirements.

1. 1558 blood components recalled due to a CMV recall.

2. One extreme EA occurred involving incorrect labeling of O+ instead of A+. No transfusion occurred.

3. Implementing quality education module: “What it means to be a biological manufacturer” to increase staff education and awareness.

Performance:

Add Safety Indicators Table

Safety Indicators Quarterly Targets

Q1 Q2

Number of recalled components due to EAs & PDIs

<433 437 1967

Number of reported adverse transfusion reactions <20 13 11 Number of Health Canada critical observations 0 0 0 Number of revised reports (per 1,000 reports) (DS)

< 5/1000 0.2/1000 0.2/1000

Number of Serious Events (Stem Cells) 0 0 0 Number of Recalled Plasma Units Sent for Further Manufacturing (PPP) due to EAs and PDIs

<150 104 80

Number of Supplier Recalls (PPP) 0 0 0 Number of safety indicators meeting target 7 out of 7 6 out of 7 6 out of 7

Key Initiatives: • Shipping Process • Development Effectiveness

• Equipment Management

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Key Focus Area Sustain a high commitment, high performance culture

1. Employee engagement is steady. A new survey will be performed at the beginning of Q4.

2. Increased organizational capability for change management.

3. Increased organizational leadership capabilities.

Performance:

Definition: Our intent is to shift our cultural mindset and build an organization that is well governed and possesses clear accountabilities and decision rights. We will ensure that we have the right talent in key roles and that all employees are highly engaged in the mission and work of CBS. We will drive improvement in the quality of our leadership and build leadership capacity to ensure our leaders are supported and effective.

75%* 75%*

20%

40%

60%

80%

100%

Q1 Q2 Q3 Q4

Overall Employee Engagement

Key Initiatives: • Enterprise Organization Design • Change Execution Management • Business Intelligence and Enterprise Reporting

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Key Initiatives Cord Blood & Fundraising

National Public Cord Blood Bank • Successfully opened the Cord Blood Bank on

September 30. • $6.4M has been raised as of October 10, 2013 –

with the goal to reach $10M by March 2014.

#Climb4Cord • All 25 climbers reached the summit, and

significant awareness was generated through social media for the campaign.

• Over $350,000 was raised by climbers, with an additional $270,000 raised in sponsorships.

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Key Initiatives Centre for Innovation - ABO Risk-based Decision Making (RBDM) Project

Mandate: To develop an integrated, internationally applicable risk-based decision-making framework, encompassing donor safety and optimal patient outcomes, which guides major policy and operational change.

Key Achievements: • Developed a draft risk framework • Designed overview of health economics methods uniquely suited to blood safety • Defined user requirements and structure for ABO website and risk portal to

enable sharing of risk-related data and information

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• Revising information to donors and physicians regarding iron needs: – Provide all donors with an information

sheet about iron and post-donation advice

– Study the link between hemoglobin and donation frequency

– Provide all donors failing their hemoglobin screen with an enhanced information sheet about further actions

Key Initiatives Donor Health

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Financials Financial Position

September 2013 March 2013

Assets

Cash and cash equivalents 201,646$ 190,676$ Inventory 108,825 131,133Investments 362,073 354,174Capital assets 229,344 234,202Other assets 35,604 31,500

937,493$ 941,685$

Liabilities, Deferred Contributions and Net Assets

Current liabilities 64,142 88,091Provision for future claims 249,886 249,886Employee future benefit liability 29,751 28,109Obligations under capital leases 728 996Deferred contributions: 423,524 419,984Net assets 169,462 154,619

937,493$ 941,685$

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Financials Financial Position

(cont’d)

Invested in capital assets

Restricted for captive

insurance Unrestricted September 2013

Balance, March 31, 2013 15,579 102,829 36,211 154,619

Excess of revenue over expenses - 9,505 5,338 14,843

Balance, as at September 2013 15,579$ 112,334$ 41,549$ 169,462$

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Financials Operations - CBS

Actual Budget Actual Budget Actual Budget

Members' contributions 491,963$ 469,944$ -$ -$ 491,963$ 469,944$ Federal contributions 4,979 4,284 - - 4,979 4,284Other revenue (deferrals) 12,700 15,954 7,164 9,936 19,864 25,890Total revenue 509,642 490,181 7,164 9,936 516,807 500,117

Cost of plasma protein products 239,148 212,656 - - 239,148 212,656Staff costs 157,457 158,913 - - 157,457 158,913General and administrative 53,154 63,943 216 439 53,370 64,382Medical supplies 43,822 44,815 - - 43,822 44,815Amortization 10,724 10,257 - - 10,724 10,257Total expenses 504,304 490,584 216 439 504,520 491,022

Excess (Deficit) 5,338 (403) 6,948 9,498 12,286 9,095

Change in fair value of investments - - 2,557 - 2,557 -

Excess of revenue over expenses 5,338 (403) 9,505 9,498 14,843 9,095

Consolidated CBS Captive

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Emerging Issues

1. Product losses • CMV recall • Factor VIII

2. OPSEU meeting

3. Organizational design

4. OTDT funding

5. Determination of Death – WHO

6. RBC demand in other jurisdictions

7. National Accountability Agreement

8. New Blood Regulations

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Continue to build upon our strong foundation:

1. Improving patient outcomes through the manufacturing and delivery of safe, relevant, quality products and services to Canadians

2. Continually earn the right to serve

through our commitment to safety, performance improvement, responsible and accountable financial management and business management

Looking Ahead

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