Fisher & Paykel Healthcare Corporation Limited · NZX:FPH
Fisher & Paykel Healthcare — H1 FY2014 Earnings Presentation
25 slides from Fisher & Paykel Healthcare's earnings presentation, November 2013
Slide 1: FY 2014 First Half Update
FY 2014 First Half Update 1 November 2013
Slide 2: First Half Growth Highlights
First Half Growth Highlights Actual CC1 Operating profit +40% +43% Operating revenue +14% +12% Gross margin (bps increase) +413- +357- RAC new applications revenue +30% +29% OSA mask revenue +23% +19% 1. CC = constant currency 2
Slide 3: New Products
New Products • ICON+ flow generator range • Simplus full face mask • Pilairo Q nasal pillows mask • FreeMotion RT043 NIV mask 3
Slide 4: H1 FY2014 Operating Results NZ$
H1 FY2014 Operating Results NZ$ H1 FY14 (6 months to 30 September 2013) %Revenue NZ$M PCP CC1 Operating revenue 100% 303.9 +14% +12% Cost of sales 41.6% 126.3 +4% +4% Gross profit 58.4% 177.6 +23% +20% Other income (R&D grant) 1.2 SG&A 28.3% 86.0 +12% +13% R&D 8.5% 25.8 +21% +21% Total operating e
Slide 5: Dividend
Dividend • Interim Dividend – Gross 7.5 NZ cps = 5.4 cps + 2.1 cps imputation credit, NZ residents – Fully imputed – 0.953 cps non-resident supplementary dividend – DRP, for NZ/AU residents, 3% discount 5
Slide 6: Respiratory & Acute Care Update
Respiratory & Acute Care Update • Operating revenue growth H1 FY2014 – NZ$ +15% – Constant currency +14% • New applications consumables revenue (NIV, Optiflow, AIRVO, Surgical) – NZ$ +30% – Constant currency +29% – 40% of RAC consumables revenue • New products rolling out – FreeMotion RT043 NIV mask
Slide 7: Obstructive Sleep Apnea Update
Obstructive Sleep Apnea Update H1 FY2014 • Operating revenue growth – NZ$ +15% – Constant currency +13% • Mask revenue growth – Constant currency +19% • New products rolling out – F&P Pilairo Q – F&P Eson – F&P Simplus – F&P ICON+ 7
Slide 8: Balance Sheet & Cash Flow H1 FY14
Balance Sheet & Cash Flow H1 FY14 NZ$M • Operating cash flow 33.4 • Capital expenditure 18.4 • Depreciation and amortisation 15.2 • Net debt 139.0 • Total shareholders equity 373.1 • Total assets 626.4 • 34% pre-tax return on equity (annualised), 20% on total assets (annualised) • NZ$124M of hedging
Slide 9: Outlook FY14
Outlook FY14 • Expect new products and applications to drive continuation of robust revenue growth • Expect at 0.83 NZD:USD exchange rate for remainder of FY2014: – Operating revenue NZ$610M - NZ$625M – Net profit after tax NZ$90M - NZ$95M 9
Slide 10: Investment Highlights
Investment Highlights • A leader in respiratory and OSA treatment devices • Consistent growth strategy • Estimated US$5.0+ billion and growing market opportunity • High level of innovation • Global presence • Strong financial performance NZSX:FPH, ASX:FPH 10
Slide 11: Markets and Products
Markets and Products • Respiratory & Acute Care (RAC) – Heated Humidification – Respiratory Care – Neonatal Care – Surgery • Obstructive Sleep Apnea (OSA) – Masks – Flow Generators – Humidifiers Consumable and accessory products Revenue by Product Group represent approx. 78% of core product 6 mont
Slide 12: Hospital Cost Breakdown
Hospital Cost Breakdown Utilities, Depreciation Drugs, Devices, Supplies & Food Labour Source: Massachusetts Hospital Association, “An Update to Hospital Costs in Context Report” July 2010 12
Slide 13: Lower Care Intensity = Lower Cost
Lower Care Intensity = Lower Cost $50,000 $40,000 Mean cost (2008 US$) $30,000 $20,000 $10,000 $0 Outpatient cohort Urgent outpatient ED cohort Standard admission ICU cohort All cohort cohort Source: Anand A Dalal, Laura Christensen, 2 Fang Liu, and Aylin A Riedel. Direct costs of chronic obstructiv
Slide 14: Respiratory Humidification
Respiratory Humidification • Normal airway humidification is bypassed or compromised during ventilation or O2 therapy • Mucociliary transport system operates less effectively • Need to deliver gas at physiologically normal levels – 37 oC body core temperature – 44mg/L 100% saturated 14
Slide 15: Respiratory & Acute Care
Respiratory & Acute Care Non-Invasive Invasive Ventilation O2 Therapy Humidity Therapy Ventilation 15
Slide 16: Respiratory & Acute Care
Respiratory & Acute Care • MR850 Respiratory Humidifier System – Invasive ventilation, oxygen therapy and non-invasive ventilation • MR810 Respiratory Humidifier System – Entry level system – Ventilation and oxygen therapy – Optional heated breathing circuit • AIRVO Flow Generator/Humidifier – Optif
Slide 17: Single-use Respiratory Care Systems
Single-use Respiratory Care Systems • 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, w
Slide 18: 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$2.5 billion + worldwide market, growing ~ 6-8% • Potentially 50-60 million affected worldwide • Most
Slide 19: Revolutionary New Masks
Revolutionary New Masks • Comfortable • Easy to fit • Efficient • Nasal Pillows – F&P Pilairo Q • Nasal – F&P Eson • Full Face – F&P Simplus 19
Slide 20: Stylish, Smart + Simplified
+ • Stylish, Smart + Simplified • Efficiently integrates with InfoUSB and InfoSmart Web • Responsive pressure relief - SensAwake • ThermoSmart Humidifier Breathing Tube Technology • Auto-adjusting CPAP 20
Slide 21: Efficient Compliance Reporting
Efficient Compliance Reporting 21
Slide 22: Research & Development
Research & Development • 8.5% of operating revenue, NZ$25.8M1 • Product pipeline includes: – Humidifier controllers – Masks – Respiratory consumables – Flow generators – Compliance monitoring solutions • 107 US patents, 159 US pending, 442 ROW, 260 ROW pending2 1 at 30 September 2013 2 at 31 March 2
Slide 23: Manufacturing & Operations
Manufacturing & Operations • Vertically integrated – COGs improvements; Mexico, Lean, supply chain • Ample capacity to grow Auckland, New Zealand Tijuana, Mexico – Two buildings: 51,000m² / – 18,000m2/200,000ft2 550,000ft² total – Consumables capacity ramping up – 31,000m2 building 3 completed Novem
Slide 24: Global Presence
Global Presence • Direct/offices – Hospitals, home care dealers – Sales/support offices in North America, Europe, Asia, South America, Middle East and Australasia, 15 distribution centres – >550 staff in 30 countries – Ongoing international expansion • Distributors – 100+ distributors worldwide • Or
Slide 25: Consistent Growth Strategy
Consistent Growth Strategy • Experts in humidification, respiratory care, and obstructive sleep apnea • Provide innovative devices which can improve patient care and outcomes • Continuous product improvement • More devices for each patient • Serve more patient groups – Invasive ventilation, NIV, oxy
Fisher & Paykel Healthcare — H1 FY2014 Earnings Presentation on 6ix