Fisher & Paykel Healthcare Corporation Limited · NZX:FPH
Fisher & Paykel Healthcare — FY2008 Earnings Presentation
24 slides from Fisher & Paykel Healthcare's earnings presentation, May 26, 2008
Slide 1: FY08 Full Year Update and Overview
FY08 Full Year Update and Overview
Slide 2: Investment Highlights
Investment Highlights • Leading player in respiratory humidification systems • Consistent growth strategy • Estimated US$2.5+ billion and growing market opportunity • High level of innovation • Global presence • Strong financial performance NZSX:FPH, ASX:FPH 2
Slide 3: Operating Results US$
Operating Results US$ FY08 (12 mths) %Revenue US$M %Ìpcp Operating revenue 100% 271.5 +18% Gross profit 50.3% 136.6 +6% SG&A 27.3% 74.2 +17% R&D 6.7% 18.3 +34% Total Operating Expenses 34.1% 92.5 +20% Operating Profit 16.2% 44.1 -16% 3
Slide 4: Operating Results NZ$
Operating Results NZ$ FY08 (12 mths) % Revenue NZ$M %Ìpcp Operating revenue 100% 357.9 +3% Gross profit 50.3% 180.1 -8% SG&A 27.3% 97.9 +2% R&D 6.7% 24.1 +17% Total Operating Expenses 34.1% 122.0 +5% Operating Profit 16.2% 58.1 -27% 4
Slide 5: IFRS Operating Profit/EBIT
IFRS Operating Profit/EBIT 2006 2007 2008 Result Result Result Hedging Hedging $2.2m $1.5m CTR IFRS Expenses CTR IFRS Expenses $4.5m $2.1m $2.0m $0.6m IFRS Impacts on 2007 IFRS Impacts on 2008 5
Slide 6: IFRS
IFRS • 2006 – NZ$47.9m land value increase • 2007 – NZ$2.0M expense increase • Share/option based remuneration • Long service leave – NZ$0.4m balance sheet translation sensitivity on EBIT/operating profit – FX hedge accounting achieved 6
Slide 7: IFRS
IFRS • 2008 – NZ$0.6m expense increase • Share/option based remuneration • Long service leave (offset) – NZ$0.5m balance sheet translation sensitivity on EBIT/operating profit – FX hedge accounting achieved 7
Slide 8: Markets and Products
Markets and Products Distributed/ • Respiratory & Acute Care Other – Heated Humidification 3% OSA – Respiratory Care 46% – Neonatal Care • Obstructive Sleep Apnea – Masks – Flow Generators – Humidifiers Respiratory & Acute 51% Revenue by Product ¯ Consumable and accessory 12 months to 31 March 2008
Slide 9: Respiratory Humidification
Respiratory Humidification • Normal airway humidification is bypassed or compromised during ventilation or O2 therapy • Mucociliary transport system operates less effectively – increases risk of infection – impairs gas exchange • Need to deliver gas at physiologically normal levels – 37°C body core
Slide 10: Respiratory Humidification Systems
Respiratory Humidification Systems • MR850 Respiratory Humidifier System – invasive ventilation, O2 therapy and non-invasive ventilation • MR880 Respiratory Humidifier System – simpler controls – O2 therapy • MR810 Respiratory Humidifier System – entry level system – ventilation and O2 therapy – opt
Slide 11: Single-use Respiratory Components
Single-use Respiratory Components • Single-use chambers – patented auto filling MR290 • Single-use breathing circuits – patented spiral heater wire – proprietary Evaqua™ expiratory tube – minimal condensation – delivery of optimal humidity • Breathing circuit components – Filters, catheter mount, we
Slide 12: Neonatal Care
Neonatal Care • Radiant Warmers – warmers required in delivery and NICU – precise and stable temperature control – opportunity in operating room • Infant CPAP System – proprietary bubble CPAP, non-invasive, oscillating pressure – lower risk alternative to ventilation – high value consumable system •
Slide 13: Expanding Opportunities
Expanding Opportunities Invasive Ventilation Non-invasive Ventilation O2 Therapy Humidity Therapy Laparoscopic Insufflation COPD Humidity Therapy 13
Slide 14: Respiratory & Acute Care Update
Respiratory & Acute Care Update • 19% revenue growth US$, 11% constant currency • Lapped last year’s Broadlane deliveries, another GPO contract in H1 09 • Continuing strong growth in consumables: breathing circuits, NIV masks, infant CPAP, resuscitation • New applications generated 20% of consumable
Slide 15: 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$1.8+ billion worldwide market, growing ≈15% • Potentially 50-60 million affected worldwide • Most co
Slide 16: CPAP Systems
CPAP Systems • HC150 Humidifier • SleepStyle™ 200 Flow Generator series – patented Ambient Tracking™ humidification technology – Auto with SensAwake™ • SleepStyle™ 600 Flow Generator series – ThermoSmart™ heated breathing tube technology – more humidity – reduced symptoms, increased comfort 16
Slide 17: Mask Range
Mask Range Four interface categories: • FlexiFit™ Nasal Masks – patented sliding attachment – FlexiFit™ technology • FlexiFit™ Full Face Mask – under chin seal • Oracle™ Oral Mask – proprietary oral interface • Opus 360™ Nasal Pillows Mask – very light 17
Slide 18: OSA Update
OSA Update • 18% revenue growth US$ • 21% US$ revenue growth excluding add on humidifiers, 13% constant currency • Auto pressure setting flow generator with SensAwake™ introduced • CMS to pay for CPAP following home diagnosis 18
Slide 19: Research & Development
Research & Development • 240 engineers, scientists, physiologists • 6.7% of revenue FY08 • 15% R&D credit from 1 April 08 • Product pipeline includes – Flow generators – Masks – Humidification system for COPD therapy – Respiratory consumables • 81 US patents, 60 US pending, 246 ROW, 256 ROW pending
Slide 20: Manufacturing
Manufacturing • Vertically integrated − electronics assembly − injection moulding − motor assembly • Ample capacity to grow − two buildings 51,000m²/ 550,000 ft² total − 100 acres/40ha land − investigating expansion offshore 20
Slide 21: Global Presence
Global Presence • Direct/offices – hospitals, home care dealers Asia Pacific/Other – Sales/support offices in USA/Canada, 22% UK/Ireland, Europe, India, Japan, UAE, China, Taiwan, Turkey, Brazil, Australia and NZ Europe – 400+ staff in 26 countries 32% – Ongoing international expansion • Distributor
Slide 22: Revenue Growth US$
Revenue Growth US$ 290 280 270 260 FY ended 31 March FY 2003 250 240 FY 2004 230 FY 2005 CAGR 220 210 FY 2006 TOTAL 21% 200 190 FY 2007 180 170 FY 2008 160 US$M 150 140 130 CAGR 20% CAGR 24% 120 110 100 90 80 70 60 50 40 30 20 10 0 Respiratory/ OSA Other TOTAL Acute 22
Slide 23: Balance Sheet
Balance Sheet • NZD 7.0 cps final dividend, 50% imputed • NZ$80.9M net debt at 31 March 2008 • NZ$195.7M total shareholders equity • NZ$331.7M total assets • 25% pre-tax return on equity, 16% on total assets • 30% new NZ tax rate from 1 April 08 • 15% R&D credit from 1 April 08 23
Slide 24: Growth Drivers
Growth Drivers Consistent strategy: • Continue to improve existing product lines • Develop complementary products/ consumables • Target new medical applications – e.g. COPD, NIV, O2 therapy, insufflation • Increase international presence 24
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