Fisher & Paykel Healthcare Corporation Limited · NZX:FPH
Fisher & Paykel Healthcare — Investor Presentation (February 2018)
51 slides from Fisher & Paykel Healthcare's investor presentation, Feb 13, 2018
Slide 1: Retail Investor Visit
Retail Investor Visit ae nm” New Zealand Shareholders’ Association Auckland, 13 February 2018 Fisher & Paykel HEALTHCARE
Slide 2: Morning Agenda
Morning Agenda 10:00am Welcome Marcus Driller General Manager Corporate 10:05am Presentations Sustainable Profitable Growth Lewis Gradon Managing Director & CEO Financial Progress Tony Barclay Chief Financial Officer Patient-focused R&D Andrew Somervell VP - Products & Technology 11:00am Light morni
Slide 3: Sustainable Profitable Growth
if Sustainable@, )«@ Profitable If Growth «4 Lewis Gradon Managing Director & CEO Fisher & Paykel HEALTHCARE
Slide 4: Fisher & Paykel Healthcare - A Global Leader
Fisher & Paykel Healthcare - A Global Leader Medical Technology business with leading positions in respiratory care and obstructive sleep apnea Global reach into hospital and homecare (99% of sales and 1,800 people outside NZ) 47 years’ experience changing clinical practice to improve clinical outco
Slide 5: Fisher &.
3 a 4 4 * 4 i Fisher &.Paykel HEALTHCARE
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Slide 7: _
_ Fisher & Paykel HEALTHCARE
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Slide 9: Question most often asked by investors
Question most often asked by investors How long can you continue to grow at these kind of rates? OPERATING REVENUE nzsmittions NET PROFIT AFTER TAX nzsmittions Fisher & Paykel 5 YEAR CAGR = 12% 5 YEAR CAGR=21% = HEALTHCARE
Slide 10: Impact of Changing Demographics
Impact of Changing Demographics *« Population age and weight both US Population over age 65 increasing 100 (millions) - US population 65 years+ to grow ~80% over next 20 years! ° - US males 60 - 74 years, 80 average weight increased 70 0.4 kg/year since 19602 * 60% of US healthcare cost is after age
Slide 11: Health Spend Growing 5-7% Per Year
Health Spend Growing 5-7% Per Year Total Expenditure on Health (US$/capita) $10,000 $9,000 —<Australia $8,000 Canada =—=Denmark $7,000 : =Finland $6,000 =Germany ==—=Japan $5,000 —=—=Korea $4,000 Netherlands —=New Zealand $3,000 — Norway Switzerland $2,000 e==United Kingdom $1,000 == United States $
Slide 12: Hospital Cost Breakdown
Hospital Cost Breakdown 6% Medical devices Other - includes labour, utilities, drugs, supplies, 94% food, depreciation. cates of Medical be , . < Sonshoe © ene Fisher & Paykel Source: Estimates of Medical Device Spending in the United States, Donahoe, G and King, G, June 2014 HEALTHCARE
Slide 13: Lower Care Intensity = Lower Cost
Lower Care Intensity = Lower Cost Mean Annual COPD-Related Medical, Pharmacy, and Total Costs by Care Intensity Cohort $50,000 $40,000 > xa n $30,000 D> feo] S° iS VY $20,000 » Q ° °° 5 oO $10,000 = o —_ || |_| Outpatient cohort Urgent outpatient cohort ED cohort Standard admission cohort ICU cohort
Slide 14: ~US$6+ Billion and Growing Market Opportunity
~US$6+ Billion and Growing Market Opportunity Invasive Ventilation _— HOSPITAL HOMECARE Noninvasive Hospital Surgical Home CPAP. Ventilation Respiratory Support Humidification Respiratory Support Therapy “NEW APPLICATIONS” Applications outside of invasive ventilation Fisher &Paykel HEALTHCARE
Slide 15: Our Aspiration: Sustainably Doubling Revenue
OUR ASPIRATION: © ® @ @ Susta ina b ly RESPIRATORY CPAP HOSPITAL HOME SURGICAL D (oe) U B LI N G HUMIDIFICATION THERAPY/OSA RESPIRATORY RESPIRATORY TECHNOLOGIES our constant currency revenue every 5-6 years. } oon] SHORT-TERM MEDIUM-TERM LONGER-TERM ‘CONSTANT CURRENCY Fisher& Paykel HEALTHCARE
Slide 16: Characteristics of our business
Characteristics of our business Market opportunities Barriers to entry * Diverse, growing clinical data * Regulated « Underpinned by favourable demographics, *« Patented IP aging populations and developing country * Care Continuum: Throughout hospital to healthcare spend home Sales force investment
Slide 17: Hospital
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Slide 18: Hospital Respiratory Support
Hospital Respiratory Support HEALTHCARE
Slide 19: Optiflow - Displacing Conventional Oxygen Therapy
Optiflow - Displacing Conventional Oxygen Therapy CONVENTIONAL NONINVASIVE OXYGEN THERAPY VENTILATION Fisher & Paykel HEALTHCARE
Slide 20: Patient Groups
Patient Groups What patient groups could benefit from Optiflow therapy? ADULT « Asthma « Emphysema * Atelectasis * Palliative Care * Bronchiectasis * Pneumonia * Bronchitis « Pulmonary embolism ¢ Burns « Respiratory compromise * Carbon monoxide poisoning ¢ Viral pneumonia (HIN1) * Chest trauma ¢« Ch
Slide 21: Clinical Outcomes of Optiflow Nasal High Flow Therapy
Clinical Outcomes of Optiflow Nasal High Flow Therapy Optiflow NHF therapy is associated with: ADULTS: REDUCED intubation> REDUCED re-intubation® 7 ® REDUCED bilevel ventilation’ REDUCED nursing workload’ INCREASED ventilator free days® IMPROVED comfort & patient tolerance® IMPROVED compliance® PAED
Slide 22: Consistently Strong Growth in Hospital New Applications
Consistently Strong Growth in Hospital New Applications Constant Currency Revenue Growth Rate in New Applications Consumables* 35% 30% 25% ee 20% 15% 10% 5% 0% 2011 2012 2013 2014 2015 2016 2017 « New applications consumables made up 54% of Hospital consumables revenue in FY2017, up from 51% in FY20
Slide 23: Optiflow NHF - A Growing Body of Clinical Evidence
Optiflow NHF - A Growing Body of Clinical Evidence Nasal High Flow Clinical Papers Published Annually 2000 2002 2004 2006 2008 2010 2012 2014 2016 — Adult +=—=Neonatal & Paediatric Fisher & Paykel HEALTHCARE
Slide 24: Homecare
c Homecare Fisher & Paykel HEALTHCARE
Slide 25: Home Respiratory Support
Home Respiratory Support HEALTHCARE
Slide 26: Home Respiratory Support
Home Respiratory Support *« Chronic obstructive pulmonary disease (COPD) is a lung disease which is commonly associated with smoking * Emphysema and chronic bronchitis are both forms of COPD ¢ Chronic respiratory disease, primarily COPD, is the third leading cause of death in the US'é * 6% of US adu
Slide 27: Optiflow Therapy in the Home
Optiflow Therapy in the Home « Same physiology * Same mechanisms of action * Clinical studies to investigate: - Improving quality of life - Slowing progression of disease - Reducing hospital admissions Fisher & Paykel HEALTHCARE
Slide 28: Obstructive Sleep Apnea
Obstructive Sleep Apnea Fisher &Paykel HEALTHCARE
Slide 29: Obstructive Sleep Apnea
Obstructive Sleep Apnea * Temporary closure of airway during sleep * Can greatly impair quality of sleep, leading to fatigue; also associated with hypertension, stroke and heart attack * Estimated US$3+ billion worldwide market. ¢ Estimate >50 million people affected in developed countries * Most co
Slide 30: Revolutionary Masks
Revolutionary Masks *« Market leading mask technology * Unique, patented designs * Mask Matters Most - Masks are key to compliance F&P ESON 2° F&P SIMPLUS™ F&P BREVIDA” _Fisher&Paykel HEALTHCARE
Slide 31: Fisher &
Fisher &Paykel HEALTHCARE
Slide 32: Tijuana, Mexico
=— Tijuana, Mexico Fisher & Paykel HEALTHCARE
Slide 33: Fisher & Paykel
Fisher & Paykel HEALTHCARE
Slide 34: Financial Progress
Financial aay <a Tony Barclay Chief Financial Officer Fisher &Paykel HEALTHCARE
Slide 35: First Half Financial Highlights
First Half Financial Highlights H1 FY2018 (6 months to 30 September 2017) NZ$M OPCP* Occ* Record operating revenue 458.4 +8% +8% Record Hospital operating revenue 262.5 +11% +12% Record Homecare operating revenue 191.3 +4% +5% Hospital new applications consumables revenue +18% +19% OSA masks revenue
Slide 36: Hospital Product Group
Hospital Product Group 850"System AIRVO"2 * New applications consumables* make up 55% of Hospital consumables revenue * Strong customer demand for our — Optiflow and AIRVO systems xed Se * Further positive clinical trial results = for Optiflow nasal high flow therapy zag) HumiGard” Fisher & Paykel n
Slide 37: Homecare Product Group
Homecare Product Group Feil YAO QO CPAP therapy / Obstructive Sleep Apnea (OSA) 42% OF OPERATING REVENUE HOMECARE OPERATING REVENUE NZ$191.3M 4% a Simplus” Eson"2 Brevida” SleepStyle” @ Home respiratory support CONSTANT CURRENCY S% MASKS REVENUE 8% a CONSTANT CURRENCY fe) 8% AIRVO"2 810"System Optif
Slide 38: Dividend and Gearing
Dividend and Gearing « Increased interim dividend by 6%: - 8.75 cps + 3.4028 cps imputation credit for NZ residents (gross dividend GEARING® of NZ 12.1528 cps) 30% - Fully imputed 25% - 1.5441 cps non-resident supplementary — 2x dividend 15% * Target gearing ratio* of +5% to -5% 10% debt to debt plu
Slide 39: Foreign Exchange Effects and Cash Flow
Foreign Exchange Effects and Cash Flow * 51% of operating revenue in USD (1H FY17: 52%) and 20% in €. Six months to 31. March Year to 31 March Hedging position for our main exposures as at 13 Feb 2018 2018 2019 2020 2021 2022 2023 USD % cover of expected exposure 95% 70% 55% 20% 0% 0% USD average ra
Slide 40: Outlook FY2018
Outlook FY2018 Guidance below provided on 21 November 2017 Expect at exchange rates as at 21 November 2017 (of NZD:USD 0.685, NZD:EUR 0.59) for the balance of the financial year: * Operating revenue - approaching NZ$1 billion * Net profit after tax - approximately NZ$185 - NZ$190 million Fisher & Pa
Slide 41: Questions?
Questions? Fisher &Paykel HEALTHCARE
Slide 42: Patient-focused R&D
yo hee see oe Patient-focuse R&D Andrew Somervell - Vice President Products and Technology Fisher & Paykel HEALTHCARE
Slide 43: Improving Clinical Practice: R&D approach
Improving Clinical Practice: R&D approach unique products with valued differentiation that: - Improve care and outcomes — Lower overall cost of treating patients Proven innovation history Original thought required Enabled through understanding unmet patient and caregivers’ needs Fisher & Paykel HEAL
Slide 44: Patient Oriented R&D
Patient Oriented R&D * Philosophy of doing what’s best for the patient — Needs of all stakeholders align with patient needs - Encourages long term thinking - Ingrained in FPH culture * Patient focused multi-disciplinary product teams - Specialist skills, broad knowledge Fisher & Paykel HEALTHCARE
Slide 45: Patient Focused Teams: In-depth Knowledge
Patient Focused Teams: In-depth Knowledge Physiology Key Opinion Leaders Environment Clinical Research Users Technology Adjacencies Competitors VY (NEW IDEAS, ORIGINAL THOUGHT _) Fisher &Paykel HEALTHCARE
Slide 46: Enabling our Product Teams
Enabling our Product Teams * Easy access to the user environment: - Strong relationships with local and offshore hospitals and homecare dealers - Patient knowledge, testing solutions Learning by creating - Prototype, test, learn - World-class prototyping and testing facilities Access to world-leadin
Slide 47: F&P 950: Redefining Expectations
F&P 950: Redefining Expectations « F&P 850 current market leader jal + & 950 System PREMIUM SYSTEM PERFORMANCE Minimal condensation —— ws See ws Sil a a ww en Se a Oa 0 Advanced protection Fisher &Paykel HEALTHCARE
Slide 48: AirSpiral Inspiratory Limb
AirSpiral Inspiratory Limb . Opportunity: oc - Optimal humidity, minimal condensation in difficult CO inie-conpmionins AND DRAFTS. ambient conditions Benefits: § - Reduce ventilation breaks HIGH Nate - Reduce infection risk f - Reduce clinician’s time dealing with condensate Low ATEN Idea: DIRECT ‘S
Slide 49: Questions?
Questions?
Slide 50: Fisher & Paykel
Fisher & Paykel HEALTHCARE
Slide 51: Important Notice and References
Important Notice and References Disclaimer The information in this presentation is for general purposes only and should be read in conjunction with Fisher & Paykel Healthcare Corporation Limited’s (FPH) 2018 Interim Report and accompanying market releases. Nothing in this presentation should be cons
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