Slide 1: Results for the half year ended 31 December 2012 (H1 F13)
Cochlear Limited For personal use only Results for the half year ended 31 December 2012 (H1 F13) Chris Roberts CEO Neville Mitchell CFO Cochlear Overview • Cochlear Limited (ASX:COH) - global leader in implantable devices for the hearing impaired • ~ 2,600 employees / direct operations in 20+ countr
Slide 2: Cochlear: Financial Results for H1 F13
Cochlear: Financial Results for H1 F13 For personal use only H1 F13 H1 F12 % $m $m Change Cochlear Implant Sales 329.7 311.5 Ç 6% Bone Anchored Solutions (Baha) Sales 38.5 39.7 È 3% FX Contracts Gains 23.5 36.3 È 35% Total Revenue 391.7 387.5 Ç 1% EBIT * 108.3 108.7* flat Net Profit after Tax * 77.7
Slide 3: Cochlear Implant Unit Sales and Bone Anchored Solutions Sales
Cochlear: Cochlear Implant (CI) Unit Sales For personal use only • H1 F13 CI unit sales up 27% to 13,672 units • H1 F13 CI unit sales up 11% on H2 F12 H2 • CI422 (Slim Straight) launch continues, eg Korea, Japan, India H1 Cochlear: Sales of Bone Anchored Solutions (BAS) in Constant Currency • BAS sa
Slide 4: H1 F13 Regional Split of Sales; Americas Sales
Cochlear: H1 F13 Regional Split of Sales For personal use only EMEA1 Americas 38% 41% CC growth Ç7% CC growth Ç1% Asia Pacific 21% 1 EMEA is Europe, Middle East CC growth Ç33% and Africa 2 CC refers to constant currency Cochlear Americas: Sales in Constant Currency • Americas sales of $150.4 million
Slide 5: EMEA and Asia Pacific Sales in Constant Currency
Cochlear EMEA: Sales in Constant Currency For personal use only • EMEA (Europe, Middle East and Africa) sales of $140.1 million, up 7% in constant currency • Portfolio effect of product H2 and geography • Codacs clinical trial (Phase 1b) enrolment completed – results very positive H1 Cochlear Asia P
Slide 6: Margins Maintained; Ongoing Product Innovation
Margins Maintained For personal use only COGS to Sales • COGS to Sales of 28.5% (28.8% in F12) • EBIT to Revenue (Sales + FX contracts) of 27.6% (27.6% in F12) EBIT to Revenue • Margin maintained even with: • Appreciating AUD • Hedge book roll off • Sales mix (China tender) • R&D increasing Ongoing
Slide 7: Maintaining Market Leadership
Maintaining Market Leadership For personal use only • Ongoing investment in R&D • Development of hearing precinct at Macquarie University • Ongoing investments in online (digital) strategy • Technology partnerships e.g. GN Resound • NEOS chipset to drive next generation products Clinical Trends Supp
Slide 8: H1 F13 Overview
Cochlear H1 F13 Overview For personal use only • CI unit sales of 13,672 units up 27% • Revenues of $391.7 million, up 1% (sales in constant currency up 9%) • Operating margins maintained, eg EBIT to revenue of 27.6% • NPAT of $77.7 million (H1F12 $20.4 million loss) • Dividend up 4% to $1.25 • Buil
Slide 9: H1 F13 Financial Performance
Cochlear H1 F13 Financial Performance For personal use only H1 F13 H1 F12 % $m $m Change Total Revenue 391.7 387.5 Ç 1% EBIT * 108.3 108.7 - Net Profit after Tax * 77.7 80.1 È 3% Product Recall Costs, net of tax - 100.5 Net profit/(loss) attributable to members 77.7 (20.4) Dividends Interim Dividend
Slide 10: Impact of Appreciating AUD on H1 F13 NPAT; Working Capital
Impact of Appreciating AUD on H1 F13 NPAT For personal use only A$m F/(U) Income Statement Translation Impact Sales Revenue (12.5) Difference H1 F13 Total Expenses including tax 4.3 actual vs H1 F13 at H1 F12 rates (8.2) Transaction Impact Net difference - Decrease from H1 F12 of FX gain on hedged s
Slide 11: H1 F13 (Debt) / Cash
Cochlear H1 F13 (Debt) / Cash For personal use only 31 Dec 30 Jun 2012 2012 $m $m Operations Loans and Borrowings Current (78.4) (45.7) Non-current (63.9) (19.9) Total Debt (142.3) (65.6) Cash 69.8 68.5 Net (Debt)/Cash (72.5) 2.9 Gearing ratio 15.6% (1%) (net debt/net debt + equity) Total Loan Facil
Slide 12: Thank you; FX Contract Cover and Rates
For personal use only Thank you Any questions? FX Contract Cover and Rates as at 31 December 2012 Total FX hedges at USD EUR JPY 31 Dec 2012 expressed in Foreign Currency (millions) 230.5m 159.1m 998.5m FX Hedges Total Expressed in AUD millions 242.5m 223.8m 13.2m 479.5m % of total cover (in AUD) 50
Slide 13: Foreign Exchange Rates
Foreign Exchange For personal use only Rates applied H1 F13 vs. H1 F12 H1 F13 H1 F12 % Change Average rates (used for translating P&L) USD 1.03 1.03 - Euro 0.81 0.74 9% JPY 82.9 80.0 4% GBP 0.65 0.65 - Contract rates (used to bring FX to Aust) USD 0.90 0.85 6% Euro 0.69 0.63 10% JPY 78.5 76.4 3% For
Slide 14: Property, Plant & Equipment; Corporate & Other Net Expenses
Property, Plant & Equipment & Leasehold Improvements For personal use only 31 Dec 2012 $m Gross value 31 December 2012 167.8 Accumulated depreciation (105.5) Net book value at 31 December 2012 62.3 H1 F’13 movements Additions 9.7 Depreciation (7.2) FX Impacts 0.2 Corporate & Other Net Expenses H1 F1
Slide 15: H1 F12 Product Recall Expense; Non-IFRS Financial Measures
Cochlear H1 F12 Product Recall Expense For personal use only Composition of Product Recall Expense H1 F13 H1 F12 $m $m Write down of Inventory - 34.9 Impairment of Property, Plant and Equipment - 14.0 Impairment of Intangibles - 13.8 Warranty and other expenses - 76.1 Cost of Sales – Product recall