Fisher & Paykel Healthcare Corporation Limited · NZX:FPH
Fisher & Paykel Healthcare — FY2007 Earnings Presentation
23 slides from Fisher & Paykel Healthcare's earnings presentation, 2007
Slide 1: FY07 Full Year Update & Overview
FY07 Full Year Update & Overview
Slide 2: Investment Highlights
Investment Highlights • Leading player in respiratory humidification systems • Consistent growth strategy • Estimated US$2+ billion and growing market opportunity • High level of innovation • Global presence • Strong financial performance NZSX:FPH, ASX:FPH 2 2
Slide 3: Operating Results NZ$
Operating Results NZ$ FY07 (12 mths) % Revenue NZ$M %Ìpcp Trading revenue 100% 349.2 +21% Gross profit * 59.4% 207.4 +2% SG&A 27.9% 97.6 +19% R&D 5.8% 20.2 +16% Total Operating Expenses 33.7% 117.8 +19% Operating Profit 25.7% 89.6 -14% * GP: Net hedge gains contributed NZ$7.9M (FY2006: NZ$41.3M) 3 3
Slide 4: Operating Results US$
Operating Results US$ FY07 (12 mths) %Revenue US$M %Ìpcp Trading revenue 100% 230.5 +16% Gross profit 59.4% 136.9 -2% SG&A 27.9% 64.4 +14% R&D 5.8% 13.3 +11% Total Operating Expenses 33.7% 77.7 +14% Operating Profit 25.7% 59.1 -18% 4 4
Slide 5: Constant Currency Growth
Constant Currency Growth FY07 (12 mths) Trading revenue +19% Respiratory Humidification +18% Obstructive Sleep Apnea +21% Neonatal +24% SG&A +15% R&D +18% 5 5
Slide 6: Markets and Products
Markets and Products Distributed/ • Respiratory humidification Neonatal Other 3% 8% • Obstructive sleep apnea • Neonatal Resp. Hum. 43% OSA 46% ¯ Consumable and accessory products represent approx. 66% Revenue by Product of core product revenue 12 months to 31 March 2007 6 6
Slide 7: Respiratory Humidification
Respiratory Humidification • Normal airway humidification is bypassed or compromised during ventilation or O2 therapy • Mucociliary transport system operates less effectively – increases risk of infection – impairs gas exchange • Need to deliver gas at physiologically normal levels – 37°C body core
Slide 8: Respiratory Humidification Systems
Respiratory Humidification Systems • MR850 Respiratory Humidifier System – invasive ventilation, O2 therapy and non-invasive ventilation • MR880 Respiratory Humidifier System – simpler controls – O2 therapy • MR810 Respiratory Humidifier System – entry level system – ventilation and O2 therapy – opt
Slide 9: Single-use Respiratory Components
Single-use Respiratory Components • Single-use chambers – patented auto filling MR290 • Single-use breathing circuits – patented spiral heater wire – proprietary dry expiratory tube – less condensation – delivery of optimal humidity • Breathing circuit components – filters – catheter mount – weaning
Slide 10: Expanding Opportunities
Expanding Opportunities Invasive Ventilation Non-invasive Ventilation O2 Therapy Humidity Therapy Laparoscopic Insufflation COPD Humidity Therapy 10 10
Slide 11: Respiratory Humidification Update
Respiratory Humidification Update • 10% revenue growth US$, 18% constant currency • MR850, MR810 placements growing breathing circuit market share • Good early acceptance of new interfaces; NIV, O2 therapy, humidity therapy • COPD home system close to introduction 11 11
Slide 12: 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$1.5+ billion worldwide market, growing 15% - 20% Normal breathing • Potentially 50-60 million affect
Slide 13: CPAP Systems
CPAP Systems • HC150 Humidifier • SleepStyle™ 200 Convertible and Integrated Flow Generator series – greater pressure range, altitude adjustment, enhanced user ergonomics – patented Ambient Tracking™ plus auto- adjusting humidification technology • SleepStyle™ 600 Integrated Flow Generator series –
Slide 14: Mask Range
Mask Range Four interface categories: • FlexiFit™ Nasal Masks – patented sliding attachment – FlexiFit™ technology • FlexiFit™ Full Face Mask – under chin seal • Oracle™ Oral Mask – proprietary oral interface • Opus™ Nasal Pillows Mask – very light 14 14
Slide 15: OSA Update
OSA Update • 21% revenue growth US$, 21% constant currency • 28% combined mask and flow generator revenue growth • Introduced Opus™ Nasal Pillows Mask • ThermoSmart™ volume growing rapidly 15 15
Slide 16: 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 17: Neonatal Update
Neonatal Update • 20% revenue growth US$, 24% constant currency • Very strong growth for Bubble CPAP, Neopuff resuscitator • Good early demand for new O2 therapy system, resuscitation masks 17 17
Slide 18: Research & Development
Research & Development • 225 engineers, scientists, physiologists • 5.8% of revenue FY07 • Product pipeline includes – Flow generators, auto – Masks – Humidification system for COPD therapy – Respiratory consumables • 76 US patents, 67 US pending, 208 ROW, 222 ROW pending * * at 31 March 2007 18 18
Slide 19: Manufacturing
Manufacturing • Vertically integrated − electronics assembly − injection moulding − motor assembly • Ample capacity to grow − 300,000ft2 / 28,000m2 facility − 23,000m2 building occupied July 2006 − 100 acres / 40 ha for expansion 19 19
Slide 20: Global Presence
Global Presence • Direct – hospitals, home care dealers Asia – Sales/support offices in USA/Canada, Pacific/Other UK/Ireland, France/Benelux/Italy/ Spain, 20% Germany/Austria/Switzerland, India, Japan, UAE, China, Taiwan, Turkey, Europe Sweden, Brazil, Australia and NZ 31% – 400+ staff – Ongoing int
Slide 21: Revenue Growth US$
Revenue Growth US$ 250 240 230 FY ended 31 March FY 2002 CAGR 220 210 FY 2003 CORE 22% 200 FY 2004 TOTAL 21% 190 180 FY 2005 170 160 FY 2006 150 140 FY 2007 US$M 130 120 CAGR 17% CAGR 27% 110 100 90 80 70 60 50 40 CAGR 29% 30 20 10 0 Respiratory OSA Neonatal Other TOTAL Humidification 21 21
Slide 22: Balance Sheet
Balance Sheet • NZ$33.1M net debt at 31 March 2007 • NZD 7.0 cps final dividend • Invested in capacity expansion with completion of NZ$60M second building • NZ$27M ongoing share buyback; NZ$15.3M completed to date • 44% annualised pre-tax return on equity, 32% on total assets 22 22
Slide 23: 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 23 23
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