Fisher & Paykel Healthcare Corporation Limited · NZX:FPH
Fisher & Paykel Healthcare — Q2 2024 Earnings Presentation
47 slides from Fisher & Paykel Healthcare's earnings presentation, Nov 29, 2023
Slide 1: Foundations for Future Growth
FOUNDATIONS FOR FUTURE GROWTH. Fisher & Paykel HEALTHCARE
Slide 2: Disclaimer
Disclaimer The information in this presentation is for general purposes only and should be read in conjunction with Fisher & Paykel Healthcare Corporation Limited’s (FPH) Interim Report 2024 and accompanying market releases. Nothing in this presentation should be construed as an invitation for subsc
Slide 3: Half year business highlights
Half year business highlights SECURED US 510(k) regulatory clearance for our 950 humidification system LAUNCHED our F&P Solo™ mask into New Zealand and Australia EXPANDED our anesthesia sales team to grow awareness of the benefit to patients CELEBRATED the formal opening of our third manufacturing f
Slide 4: H1 FY24 financial results summary
% of Revenue NZ$M PCP^ CC* Operating revenue 100% 803.7 16% 16% Hospital operating revenue 61% 487.5 11% 11% Homecare operating revenue 39% 314.4 26% 25% Gross margin / Gross profit 60% 486.1 65bps 192bps SG&A 29% (236.6) 17% 16% R&D 12% (96.9) 15% 15% Total operating expenses 41% (333.5) 16% 16%
Slide 5: H1 FY24 hospital revenue composition
HARDWARE H1 FY24 HOSPITAL REVENUE COMPOSITION 10% CONSUMABLES Invasive Noninvasive OptiflowTM OptiflowTM Surgical ventilation ventilation nasal high flow anesthesia 90% Hardware Consumables
Slide 6: Hospital operating revenue and new applications
• • • *New applications = Noninvasive ventilation (NIV), nasal high flow, surgical
Slide 7: H1 FY24 homecare revenue composition
H1 FY24 HOMECARE REVENUE COMPOSITION HARDWARE 13% CONSUMABLES CPAP Therapy/OSA Home Respiratory Support 87% Hardware Consumables
Slide 8: Homecare product group
Homecare product group H1 FY24 HOMECARE OPERATING REVENUE + F&P Evora Full contributed $314.4M nzs 826% s dias? significantly to strong OSA ai ™ mask revenue growth ) : GORISWARI GUNRENEY/ t 25 % - , Revolutionary F&P Solo . OSA mask launched in NZ CE FURIE & Australia REVENUE nzs T 29% Home Respira
Slide 9: Our progress over the last four years
People Research Sales Our progress over the last four years Infrastructure Development Clinical Evidence < otal people FY2023 Commen People in Manufacturing & Operations Plant and equipment capex Manufacturing facilities Land People in R&D R&D expense R&D as a % of revenue Countries with F&P people
Slide 10: Gross margin
GROSS MARGIN 70% • 60% − 50% − • 40% 30% 20% • 10% 0% 1H15 1H16 1H17 1H18 1H19 1H20 1H21 1H22 1H23 1H24 Long Term Gross Margin target
Slide 11: Operating (EBIT) margin
OPERATING (EBIT) MARGIN 40% 35% • 30% • 25% • 20% 15% 10% • • 5% 0% • 1H15 1H16 1H17 1H18 1H19 1H20 1H21 1H22 1H23 1H24 Long Term Operating Margin target
Slide 12: Cash flow and balance sheet
H1 FY23 NZ$M H1 FY24 NZ$M Operating cash flow 1.9 156.5 Capital expenditure (including purchases of intangible assets) (124.8) (275.5) Lease liability payments (6.7) (8.5) Free cash flow (129.6) (127.5) 31 Mar 2023 30 Sep 2023 NZ$M NZ$M Net cash / (debt) (including short-term investments) 37.7 (172.
Slide 13: Dividend history
Dividend 13 Increased interim dividend by 3% - 18.00 cps + 7.00 cps imputation credit for NZ residents (gross dividend of NZ 25.00 cps) - Fully imputed - 3.1765 cps non-resident supplementary dividend The company’s dividend reinvestment plan is available for eligible shareholders with a 3% discount
Slide 14: Reconciliation of constant currency to reported results
H1 FY23 H1 FY24 Change Reconciliation of Constant Currency to Reported Revenue NZ$M NZ$M NZ$M Revenue (constant currency) 657.9 763.1 105.2 Spot exchange rate effect 18.0 48.8 30.8 Foreign exchange hedging result (3.9) (12.1) (8.2) Balance sheet revaluation 18.6 3.9 (14.7) Total impact of foreign ex
Slide 15: Outlook
• • • * At 31 October 2023 exchange rates of NZD:USD: 0.58, NZD:EUR 0.55, NZD:MXN 10.55
Slide 16: Key Financials
r , d Sa Key Financials
Slide 17: Hedging position for our main exposures
• Year to 31 March Hedging position for our main exposures FY29- FY24 FY25 FY26 FY27 FY28 FY34 USD % cover of estimated exposure 85% 70% 60% 50% 40% 5% USD average rate of cover 0.658 0.622 0.608 0.596 0.583 0.550 EUR % cover of estimated exposure 85% 60% 55% 45% 35% 10% EUR average rate of cover 0.
Slide 18: Revenue, cost of sales and operating expenses by currency
H1 FY24 (for the six months ended 30 September 2023) REVENUE BY CURRENCY COST OF SALES BY CURRENCY OPERATING EXPENSES BY CURRENCY 1% 5% 17% 14% 29% 36% <1% 4% 10% 49% 50% 2% 19% 23% 41% NZD USD EUR MXN Other NZD USD EUR MXN Other NZD USD EUR MXN Other
Slide 19: Overview
Slide 20: Company overview and people
• • • • • • • • • • Note: people numbers are represented as full-time equivalents
Slide 21: Applications outside of invasive ventilation
Invasive Noninvasive Hospital Home Respiratory Obstructive Sleep Respiratory Support Anesthesia Support Apnea Ventilation Ventilation Infant Care Surgical Applications outside of invasive ventilation
Slide 22: Long-term growth aspirations
The image above is an illustration of the company’s long-term growth aspirations. It is not a graph and should not be interpreted as being indicative of levels of revenue or profitability in the short term.
Slide 23: Consistent growth strategy
Consistent growth strategy 23 OUR INPUTS 50+ years of trusted relationships Excellence inRaD peve PROFITABLE pusiness in a way tn, pr’ Oo; a) ow co ereating etter prone Ssy Wr, MARKET CONTEXT OUR OUTPUTS Y ited i \ en % x yoo™~ \ / ot fo~ =. | \ vaue | \ \ a, FP ‘eee (Sb oa Pa Meas fone currency | \
Slide 24: F&P product fundamentals
F&P product fundamentals What are we here to do? A drive to not only improve, but transform, clinical practice. Provide products with protected value differentiation. Get our products, including the evidence, knowledge and supporting tools, into the hands of the customer A deep understanding of the
Slide 25: Company facts and figures
• • − − − − − • * For six months ended 30 September 2023 † As at 30 September 2023
Slide 26: US patent portfolio (2008-2023)
FISHER & PAYKEL HEALTHCARE US PATENT PORTFOLIO (2008 – 2023) 600 500 400 300 200 100 0 2008 2010 2012 2014 2016 2018 2020 2022 H1 FY24 US Patents US Patent Applications * As at 30 September 2023
Slide 27: Products in action
• • Insert image of products in action and or Sales • talking with clinician • •
Slide 28: Revenue by region
• Revenue by Region 6 months to 30 September 2023 − − 6% 22% 46% − − • − 26% • − North America Asia Pacific Europe Other •
Slide 29: Hospital
Slide 30: Global population over age 65
Global population over age 65 (Millions)* − − − * Source: United Nations world population prospects - medium-fertility scenario
Slide 31: Medical devices share of healthcare expenditure
7% Medical devices Other – includes labour, utilities, drugs, supplies, 93% food, depreciation. Source: (2022). The European Medical Technology in Figures. MedTech Europe from diagnosis to cure. https://www.medtecheurope.org/datahub/expenditure/#sources
Slide 32: Mean annual COPD-related costs by care intensity
MEAN ANNUAL COPD-RELATED MEDICAL, PHARMACY AND TOTAL COSTS BY CARE INTENSITY COHORT $50,000 $40,000 Mean cost (2008 US$) $30,000 $20,000 $10,000 $0 Outpatient cohort Urgent outpatient cohort ED cohort Standard admission cohort ICU cohort Source: Anand A Dalal, Laura Christensen, Fang Liu, and Aylin
Slide 33: 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°C body core temperature - 44mg/L 100% saturated 33 Fisher &
Slide 34: Optiflow nasal high flow therapy mechanisms of action
Optiflow nasal high flow therapy Mechanisms of action Spontaneously breathing patients with or at risk of respiratory compromise Reduction Dynamic positive airway : pressure Patient comfort Supplemental oxygen Cif required) 34 Fisher & Paykel HEALTHCARE
Slide 35: Conventional oxygen therapy to non-invasive ventilation
CONVENTIONAL NON-INVASIVE OXYGEN THERAPY VENTILATION
Slide 36: Patient groups who may benefit from Optiflow
Patient groups who may benefit from Optiflow ADULTS: * Acute respiratory * Emphysema failure * Palliative Care * Asthma * Pneumonia * Atelectasis * Pulmonary embolism * Bronchiectasis * Respiratory * Bronchitis compromise ¢ Burns * Viral pneumonia * COPD * Carbon monoxide * Chest trauma poisoning PA
Slide 37: Clinical practice guidelines support
Primary support ESICM, ERS, SSC, AARC, MEDICAL ACP, TSANZ, WHO Primary support ESICM, ERS POST-OPERATIVE Pre-escalation support/ Peri- ESICM intubation Post-extubation/ ESICM, ERS, AARC, ACP De-escalation support Complementary support ERS (NIV-rested/proning) Prophylactic support AARC (Require oxyge
Slide 38: Nasal high flow clinical papers published annually
NASAL HIGH FLOW CLINICAL PAPERS PUBLISHED ANNUALLY 700 • 600 500 400 300 200 100 0 Adult Neonatal & Pediatric Source: PubMed
Slide 39: Revenue growth rate in new applications consumables
CONSTANT CURRENCY REVENUE GROWTH RATE IN NEW APPLICATIONS CONSUMABLES* 60% 50% 40% 30% 20% 10% 0% -10% FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 New applications consumables: Non-invasive ventilation, Optiflow, Anesthesia, Surgical * Adjusted to exclude impact of US distributi
Slide 40: Homecare
r Homecare 4 Fisher & Paykel HEALTHCARE
Slide 41: Obstructive Sleep Apnea
Obstructive Sleep Apnea * Obstructive sleep apnea is an underdiagnosed medical condition, with multiple negative outcomes to patients’ health. « It can greatly impair quality of sleep, leading to fatigue; also associated with hypertension, stroke and heart attack * Estimate >100 million people affec
Slide 42: Mask matters most
Mask matters most *« Masks are key to compliance « Unique, patented designs * Released our new F&P Solo™ mask into New Zealand and Australia. Evora Nasal 42 HEALTHCARE Fisher&.Paykel
Slide 43: Home respiratory support
Home respiratory support ¢ Chronic obstructive pulmonary disease (COPD) is a lung disease which is commonly associated with smoking ¢ Emphysema and chronic bronchitis are both forms of COPD ¢ Chronic respiratory disease, primarily COPD, is the third leading cause of death in the world® ¢ 6% of US ad
Slide 44: Manufacturing and operations
Manufacturing and operations New Zealand * Four buildings: 110,000 m? / 1,180,000 ft2 TO ie Bilis * Continued earthworks on building 5 * Received Overseas Investment Office approval for the purchase of land in Karaka for our second New Zealand campus Tijuana, Mexico * Three buildings: 63,000 m2 / 69
Slide 45: Emissions, water and waste data
• • • FY21 FY22 FY23 Scope 1 emissions (tonnes CO2e) 1,465 1,777 2,287 Scope 2 emissions (tonnes CO2e)* 14,542 13,894 14,529 Scope 3 emissions (tonnes CO2e) 718,991 457,112 328,313 Total emissions (tonnes CO2e)* 734,998 472,783 345,129 Water usage (cubic metres) 134,900 184,171 133,517 Landfill wast
Slide 46: Shareholding structure and geographical ownership
• Shareholding structure as at Geographical ownership as at 30 September 2023 30 September 2023 <1% 1% 4% 4% 20% 18% 10% 35% 15% 61% 32% New Zealand Australia North America UK NZ Institutions Other Institutions Europe (ex UK) Asia Brokers & Retail Other Rest of World
Slide 47: References
1. (2022). Ageing and health. World Health Organization. https://www.who.int/news-room/fact-sheets/detail/ageing-and-health 2. Lobstein, T., & Brinsden, H. (2022, March 10). World Obesity Atlas 2022. World Obesity. 3. Safiliou-Rothschild, C. (2009). ARE OLDER PEOPLE RESPONSIBLE FOR HIGH HEALTHCARE C
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