Fisher & Paykel Healthcare Corporation Limited · NZX:FPH
Fisher & Paykel Healthcare — FY2015 Earnings Presentation
28 slides from Fisher & Paykel Healthcare's earnings presentation, May 29, 2015
Slide 1: 2015 Full Year Results Presentation
2015 Full Year Results Presentation Year ended 31 March 2015 1
Slide 2: Full Year Result Highlights
Full Year Result Highlights 12 months to 31 March 2015 NZ$M PCP CC1 Record net profit after tax 113.2 +17% +61% Record operating revenue 672.3 +8% +13% Record RAC operating revenue 368.2 +9% +14% Record OSA operating revenue 291.1 +8% +14% RAC new applications consumables revenue +21% +26% OSA mas
Slide 3: Second Half Result Highlights
Second Half Result Highlights 6 months to 31 March 2015 PCP CC1 Net profit after tax +22% +53% Operating revenue +11% +14% Gross margin (bps increase) +286- +429- RAC new applications consumables +24% +27% revenue OSA mask revenue +20% +23% 3 1. CC = constant currency
Slide 4: Innovative Products Driving Growth
Innovative Products Driving Growth • Respiratory & Acute Care - Optiflow™ oxygen therapy system - Evaqua™2 breathing circuits - AIRVO™2 & myAIRVO™2 humidifiers with integrated flow generators • Obstructive Sleep Apnea - Simplus™ full face mask - Eson™ nasal mask 4
Slide 5: Full Year Operating Results
Full Year Operating Results FY15 (12 months to 31 March 2015) %Revenue NZ$M PCP CC1 Operating revenue 100% 672.4 +8% +13% Cost of sales 38.9% 261.4 +1% +2% Gross profit 61.1% 411.0 +12% +22% Other income (R&D grant) 5.0 SG&A 26.9% 180.9 +6% +7% R&D 9.7% 65.0 +20% +20% Total operating expenses 36.6
Slide 6: Dividend and Gearing
Dividend and Gearing • Increased final dividend by 14%: - 8.0 cps + 3.1111 cps imputation credit for New Zealand residents (gross dividend of 11.1111 NZ cps) - Fully imputed - 1.4118 cps non-resident supplementary dividend - Dividend reinvestment plan offered for New Zealand and Australian residents
Slide 7: Respiratory & Acute Care (RAC)
Respiratory & Acute Care (RAC) H2 FY2015 • Operating revenue growth - NZ$ +13% - Constant currency +16% • New applications consumables revenue growth (Noninvasive ventilation (NIV), Optiflow, AIRVO, Surgical) - NZ$ +24% - Constant currency +27% • New applications consumables now make up 47% of RAC c
Slide 8: Obstructive Sleep Apnea (OSA)
Obstructive Sleep Apnea (OSA) H2 FY2015 • Operating revenue growth - NZ$ +10% - Constant currency +13% • Mask revenue growth - Constant currency +23% • Masks continue to take market share 8
Slide 9: Cash Flow & Balance Sheet
Cash Flow & Balance Sheet FY15 (for the 12 months ended 31 March 2015) NZ$M • Operating cash flow (+48%) 146.8 • Capital expenditure 53.6 • Depreciation and amortisation 31.6 FY15 (as at 31 March 2015) NZ$M • Net debt 51.9 • Total shareholders equity 471.2 • Total assets 669.8 • 36% pre-tax return o
Slide 10: Foreign Exchange Effects
Foreign Exchange Effects • NZ~$530M of hedging in place at 31 March 2015 for FY15. • 48% of operating revenue in USD (FY14: 48%) and 24% in €. • Hedging position for our main exposures: Year to 31 March 2016 2017 2018 USD % cover of expected exposure 90% 46% 3% USD average rate of cover 0.74 0.72 0.
Slide 11: Outlook FY16
Outlook FY16 • Expect at current exchange rates*: - Operating revenue – approximately NZ$750 million - Net profit after tax – approximately NZ$125-130 million * Exchange rates at 29 May 2015: NZD:USD = 0.72 and NZD:EUR = 0.67 11
Slide 12: 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 12
Slide 13: Markets & Products
Markets & Products • Respiratory & Acute Care (RAC) - Heated humidification OSA - Respiratory care - Neonatal care - Surgery RAC • Obstructive Sleep Apnea (OSA) - Masks - Flow generators - Data management tools - Humidifiers • Consumable and accessory products Revenue by Product Group 12 months to 3
Slide 14: Hospital Cost Breakdown
Hospital Cost Breakdown Medical devices 6% 94% Other – includes labour, utilities, drugs, supplies, food, depreciation Source: Estimates of Medical Device Spending in the United States, Donahoe, G and King, G, June 2014 14
Slide 15: Lower Care Intensity Equals Lower Cost
Lower Care Intensity Equals Lower Cost Mean Annual COPD-Related Medical, $50,000 Pharmacy, and Total Costs by Care Intensity Cohort $40,000 Mean cost (2008 US$) $30,000 $20,000 $10,000 $0 Outpatient cohort Urgent outpatient ED cohort Standard admission ICU cohort cohort cohort Source: Anand A Dalal,
Slide 16: Respiratory Humidification
Respiratory Humidification • Normal airway humidification is bypassed or compromised during ventilation or oxygen therapy • Mucociliary transport system operates less effectively • Need to deliver gas at physiologically normal levels - 37 oC body core temperature - 44mg/L 100% saturated 16
Slide 17: Therapies - Respiratory Care, Acute Care & Surgical
Therapies - Respiratory Care, Acute Care & Surgical Invasive ventilation Noninvasive ventilation Oxygen therapy Humidity therapy Neonatal invasive Neonatal Neonatal Surgical ventilation noninvasive ventilation oxygen therapy humidification 17
Slide 18: Respiratory & Acute Care - Hardware
Respiratory & Acute Care - Hardware • 850 respiratory humidifier system - Invasive ventilation, oxygen therapy and non-invasive ventilation • 810 respiratory humidifier system - Entry level system - Ventilation and oxygen therapy - Optional heated breathing circuit • AIRVO 2 flow generator/humidifie
Slide 19: Respiratory & Acute Care - Single Use Consumables
Respiratory & Acute Care - Single Use Consumables • Single-use chambers - Patented auto filling MR290 • Single-use breathing circuits - Patented spiral heater wire - Proprietary Evaqua 2 expiratory tube - Minimal condensation - Delivery of optimal humidity • Breathing circuit components - Filters, c
Slide 20: Optiflow Therapy – Delivery Options
OptiflowTM Therapy – Delivery Options 20
Slide 21: 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 approximately 6 - 8% • Potentially 50-60 million affected wor
Slide 22: Revolutionary Masks
Revolutionary Masks • Comfortable • Easy to fit • Efficient 22
Slide 23: Stylish, Smart + Simplified CPAP Range
Stylish, Smart + Simplified CPAP Range • Efficiently integrates with InfoUSB and InfoSmart Web • Responsive pressure relief - SensAwake • ThermoSmart humidifier breathing tube technology • Auto-adjusting CPAP 23
Slide 24: Efficient Compliance Reporting
Efficient Compliance Reporting 24
Slide 25: Research & Development
Research & Development • 9.7% of operating revenue, NZ$65M1 • Product pipeline includes: - Humidifier controllers - Masks - Respiratory consumables - Flow generators - Compliance monitoring solutions • 118 US patents, 287 US pending, 496 ROW, 410 ROW pending1 1 for the 12 months ended 31 March 2015
Slide 26: Manufacturing & Operations
Manufacturing & Operations • Vertically integrated - COGs improvements; Mexico, Lean manufacturing, supply chain • Ample capacity to grow Auckland, New Zealand - Three buildings: 82,000 m² / 885,000 ft² total - 100 acres/40ha land Tijuana, Mexico - 18,000 m2 / 200,000 ft2 - Manufacturing floor area
Slide 27: Global Presence
Global Presence • Direct/offices North - Hospitals, home care dealers America Europe - Sales/support offices in North America, Europe, Asia, South America, Middle East and Australasia, 15 distribution centres - More than 700 staff in 35 countries - Ongoing international expansion - Moving to a more
Slide 28: 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, oxygen th
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