Fisher & Paykel Healthcare Corporation Limited · NZX:FPH
Fisher & Paykel Healthcare — FY2006 Earnings Presentation
22 slides from Fisher & Paykel Healthcare's earnings presentation, May 29, 2006
Slide 1: Cl . | —o —— — oe | ne — oO oS OO
Cl . | —o —— — oe | ne — oO oS OO
Slide 2: Investment Highlights
Investment Highlights * Leading player in heated humidification systems * Consistent growth strategy * Estimated US$2+ billion and growing market opportunity * High level of innovation « Global presence * Strong financial performance NZSX:FPH, ASX:FPH HEALTHCARE
Slide 3: Operating Results US$
Operating Results US$ FY06 (12 mths) *Revenue USSM_ “Apc Trading revenue 100% 199.6 +23% Gross profit 70.1% 140.0 +19% SG&A = 28.2% 56.3 +24% R&D 5.9% 12.0 +9% Total Operating Expenses 34.2% 68.2 +21% Operating Profit 35.9% 71.7 +18%
Slide 4: Operating Results NZ$
Operating Results NZ$ FYO6 (12 mths) % Revenue NZ$M %Apcp +20% +17% +21% +7% +18% +16% Trading revenue 100% Gross profit 70.1% SG&A 228.2% R&D 5.9% Total Operating Expenses 34.2% Operating Profit 35.9% 289.5 203.1 81.7 17.3 99.0 104.1
Slide 5: Markets and Products
Markets and Products Neonatal ¢ Respiratory and humidification 11% * Obstructive sleep apnea ¢ Neonatal and other OSA 44% m> Gonsumable products represent approx. 59% of core product sales Revenue by Product 12 months to 31 March 2006 HEALTHCARE
Slide 6: Respiratory Humidification
Respiratory Humidification * Normal airway humidification is bypassed or compromised during ventilation or O, therapy * Mucociliary transport system operates less effectively — increases risk of infection — impairs gas exchange * Need to deliver gas at physiologically normal levels — 37°C body core
Slide 7: Expanding Opportunities
Expanding Opportunities L . Invasive Ventilation ba le) Humidity therapy Lapar yy y, HEALTHCARE
Slide 8: Humidification Systems
Humidification Systems * MR850 Respiratory Humidifier L “ System — invasive ventilation, O2 therapy and non-invasive ventilation ¢ MR880 Respiratory Humidifier System ~ simpler controls — O, therapy ¢ MR810 Respiratory Humidifier System — entry level system — ventilation and O, therapy — optional he
Slide 9: Single-use Components
Single-use Components * Single-use chambers ~ patented auto filling MR290 * Single-use breathing circuits — patented spiral heater wire ~ proprietary dry expiratory tube — less condensation ~ delivery of optimal humidity * Breathing circuit components ~ filters — catheter mount — weaning kit * Inter
Slide 10: Respiratory Humidification Update
Respiratory Humidification Update * 14% revenue growth US$, 17% ex currency * MR850, MR810 penetration driving increasing breathing circuit share ¢ Increasing value per patient * Introduced broad range of single use interfaces, NIV, O, therapy, humidity therapy ¢ Additional consumables, COPD home sy
Slide 11: 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$1.2+ billion worldwide : . market, growing 15% - 20% Normal breathing _ Potentially 50-60 million affected
Slide 12: CPAP Systems
CPAP Systems * HC150 Humidifier * SleepStyle™ 200 Convertible and integrated Flow Generator series — greater pressure range, altitude adjustment, enhanced user ergonomics — patented Ambient Tracking™ plus auto- adjusting humidification technology * SleepStyle™ 600 Integrated Flow Generator series —
Slide 13: Mask Range
Mask Range Four interface categories: ¢« FlexiFit™ Nasal Masks — patented sliding attachment — FlexiFit™ technology — new 406 Petite model ° FlexiFit™ Full Face Mask — under chin seal ¢ Oracle™ Oral Mask — proprietary oral interface ¢ Infinity™ Direct Nasal Mask — very light
Slide 14: Slide 14
Slide 15: Neonatal and Warming
Neonatal and Warming * Radiant Warmers — warmers required in delivery and NICU — precise and stable temperature control — opportunity in operating room * Infant CPAP System — proprietary bubble CPAP, non-invasive, oscillating pressure — lower risk alternative to ventilation ~ high value consumable s
Slide 16: Neonatal and Warming Update
Neonatal and Warming Update ¢ 24% revenue growth in US$, 26% ex currency * Warmers, CPAP and 7 resuscitators all driving | growth * Single use resuscitation masks, O, nasal cannula introduced HEALTHCARE
Slide 17: Research & Development
Research & Development * 190 engineers, scientists, physiologists ° 6.0% of revenue FY06 ° Product pipeline includes — Flow generators — Masks ~ Humidification system for COPD therapy ~ Respiratory consumables ¢ 61 US patents, 71 US pending, 145 ROW, 236 ROW pending * * at 31 Mar 2006 Fishers Pavel
Slide 18: Manufacturing
Manufacturing * Vertically integrated ~ electronics assembly - injection moulding ~ motor assembly * ISO 9001; Class 100,000 controlled environment * Ample capacity to grow - 300,000ft? / 28,000m? facility - 23,000m? building due for occupation July 2006 - 100 acres / 40 ha Fisher& Paykel HEALTHCARE
Slide 19: Global Presence
Global Presence ° Direct ~ hospitals, home care dealers — Sales/support offices in USA/Canada, Asia Pacific Other UKilreland, France/Benelux/italy/ 19% 5% Spain, Germany/Austria/Switzerland, India, Japan, UAE, China, Taiwan, Sweden, Brazil, Australia and NZ — 350+ staff — Ongoing international expan
Slide 20: Revenue Growth US$ CAGR
Revenue Growth US$ 200 CAGR +90 EY ended 31 March FY 2002 CORE 23.2% 180 iv FY 2003 160 mFY 2004 150 @ FY 2005 140 9 a FY 2006 120 4110 too __CAGR 19% CAGR 28% US$M CAGR 29% Respiratory OSA Warming/ Neonatal HEALTHCARE
Slide 21: Balance Sheet
Balance Sheet ¢ NZ$28.5M cash at 31 March 2006 * Investing in capacity expansion with construction of NZ$60M second building ¢ NZ$7.0 cps final dividend * NZ$27M ongoing share buyback; NZ$15.3M completed to date * Expect debt to range NZ$45M to NZ$70M in FY07. ¢ NZ$53M land revaluation gain * 53% an
Slide 22: Growth Drivers
Growth Drivers Consistent strategy: ¢ Continue to improve existing product lines ¢ Develop complementary products/ consumables ° Target new medical applications —e.g. COPD, NIV, O, therapy, insufflation ¢ Increase international presence ee
Fisher & Paykel Healthcare — FY2006 Earnings Presentation on 6ix