Slide 1: Results for the half year ended 31 December 2009 (H1 F10)
For personal use only Cochlear Limited Results for the half year ended 31 December 2009 (H1 F10) Chris Roberts, CEO Neville Mitchell, CFO
Slide 2: Cochlear Overview
Cochlear Overview For personal use only • Cochlear Limited (ASX:COH) is a medical device company focused on implantable devices for the hearing impaired • Over 2,000 employees • Direct operations in 20+ countries, and products sold in 100+ countries • ~13% of revenues spent on R&D
Slide 3: Cochlear: Financial Results for H1 F10
Cochlear: Financial Results for H1 F10 For personal use only H1 F10 H1 F09 $ millions $ millions +% Cochlear Implants 290.5 301.1 È3 Bone Anchored (Baha) 46.4 45.8 Ç1 FX Contracts 10.7 8.3 Ç29 Revenue 347.6 355.2 È2 EBIT 107.3 100.4 Ç7 Net Profit After Tax 75.2 69.9 Ç8 EPS 134.0 cps 125.5 cps Ç7 Int
Slide 4: Sales in Constant Currency (CC)
Cochlear: Sales in Constant Currency (CC) For personal use only 700 600 • Sales (excluding FX contracts) down 3% to 500 $336.9 million CC Sales A$millions • Sales in constant currency 400 (prior periods restated at H1 F10 rates) up 4% 300 H2 compared to H1 F09 and up 7% compared to H2 F09 200 • Nucl
Slide 5: Cochlear Implant (CI) Unit Sales
Cochlear: Cochlear Implant (CI) Unit Sales For personal use only 20,000 • H1 F10 cochlear implant (CI) unit sales up 7% to 16,000 9,811 • CI unit sales growth biased to Q2 (Dec qtr) CI Unit Sales 12,000 with Q2 unit sales growth H2 of 13% 8,000 • CI unit sales growth of ~ 20% for the countries in wh
Slide 6: Sales of Bone Anchored Solutions (BAS) in Constant Currency
Cochlear: Sales of Bone Anchored Solutions (BAS) in Constant Currency For personal use only 100 • BAS sales (including Baha implants) $46.4 million for 80 H1 F10, up 10% in constant currency BAS CC Sales A$millions 60 • Successful launch of Cochlear Baha BP100 40 H2 20 H1 0 F06 F07 F08 F09 F10
Slide 7: H1 F10 Regional Split of Sales
Cochlear: H1 F10 Regional Split of Sales For personal use only Europe Americas 42% 44% CC growth Ç1% CC growth Ç7% Asia Pacific 14% CC growth Ç9%
Slide 8: Americas: Sales in Constant Currency
Cochlear Americas: Sales in Constant Currency For personal use only 300 • Americas sales of $147.7 250 million, up 7% in constant Americas CC Sales A$millions currency 200 • USA: FDA approval for Nucleus 5 submission (implant and externals) in 150 Sep 09 H2 • USA Nucleus 5 launch: 100 rapid roll-out
Slide 9: Europe: Sales in Constant Currency
Cochlear Europe: Sales in Constant Currency For personal use only 300 • Europe sales of $141.7 250 million, up 1% in constant currency Europe CC Sales A$millions 200 • Tender sales (Middle East and Central/Eastern Europe) down on H1 F09 150 (timing issues) H2 • Nucleus 5 launched in 100 many key cou
Slide 10: Asia Pacific: Sales in Constant Currency
Cochlear Asia Pacific: Sales in Constant Currency For personal use only 100 • Asia Pacific sales of $47.5 million, up 9% in Asia Pacific CC Sales A$millions 80 constant currency • Nucleus Freedom 60 launched in Japan • Nucleus 5 launched in H2 Australia/NZ, Hong Kong, 40 Singapore and Malaysia • 300
Slide 11: Net Profit After Tax (NPAT)
Cochlear: Net Profit After Tax (NPAT) For personal use only 140 120 • NPAT of $75.2 million, up 8% on H1 F09 100 • EPS of $1.34, up 7% • EBIT of $107.3 million up NPAT A$millions 80 7% , being 31% of revenue (H1 F09: 28%) 60 H2 • Free cash flow $89 million • Interim dividend $0.95, up 40 19% 20 H1 0
Slide 12: Nucleus System
Cochlear Nucleus 5 System For personal use only • The next generation cochlear implant system includes over 50 technologic innovations • ~20 countries launched in H1 F10 • Launch execution well planned and implemented • Customer feedback (healthcare professionals and recipients) has been extremely p
Slide 13: Hybrid and Cochlear DACS
Cochlear Hybrid and Cochlear DACS For personal use only • Continued controlled market release of Cochlear Hybrid for electro-acoustic stimulation • First patients implanted with Cochlear DACS with switch on Jan 2010
Slide 14: H1 F10 Overview
Cochlear H1 F10 Overview For personal use only • Net Profit After Tax (NPAT) of $75.2 million up 8%, with EPS of $1.34 up 7% • Successful launch of Cochlear Nucleus 5 in ~ 20 countries in H1 with more country launches in H2 • Cochlear Nucleus 5 customer feedback extremely positive and CI unit sales
Slide 15: H1 F10 Financial Results
For personal use only Cochlear Limited H1 F10 Financial Results Neville Mitchell, CFO
Slide 16: H1 F10 Financial Performance
Cochlear H1 F10 Financial Performance For personal use only H1 F10 % H1 F09 % % Rev Rev $m $m Change Total Revenue 347.6 355.2 È 2% EBIT 107.3 31% 100.4 28% Ç 7% NPAT 75.2 22% 69.9 20% Ç 8% Dividends Interim Dividend 95c 80c Ç 19% Record Date 26 February 2010 Payable Date 16 March 2010 Franking* 100
Slide 17: H1 F09 – H1 F10 NPAT Reconciliation
Cochlear H1 F09 – H1 F10 NPAT Reconciliation For personal use only 90.0 80.0 7.1 (6.3) 0.7 (0.9) 4.1 (1.1) 75.2 69.9 (22.6) 24.3 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 6 9 .9 -2 2 .6 2 4 .3 7 .1 -6 .3 4 .1 0 .7 -0 .9 -1 .1 7 5 .2 H1 F09 FX Gross Other Sales & Admin costs R&D costs Interest Tax H1 F1
Slide 18: H1 F10 Working Capital
Cochlear H1 F10 Working Capital Inventory (Days Stock Held) / Debtors Days Outstanding For personal use only 120.0 250 100.0 200 •• H1 H1 F10 F10 Inventory Inventory days days Inventory ($ millions) 80.0 Days stock held 150 fallen fallen to to 183 183 (June (June F09 F09 60.0 198 198 days) days) 40.
Slide 19: H1 F10 Debt
Cochlear H1 F10 Debt For personal use only 31 Dec 30 Jun 31 Dec 2009 2009 2008 Operations $m $m $m Loans and Borrowings Current - - 16.8 Non-current 142.5 176.6 180.5 Total Debt – operations 142.5 176.6 197.3 Cash 73.5 77.9 62.9 Net Debt – operations 69.0 98.7 134.4 Gearing ratio - operations 15% 21
Slide 20: Negative Impact of Appreciating AUD on H1 F10 NPAT
Negative Impact of Appreciating AUD on H1 F10 NPAT For personal use only A$m F/(U) Income Statement Translation Impact Sales Revenue (28.2) Difference H1 F10 Total Expenses including tax 10.0 actual vs H1 F10 at H1 F09 rates (18.2) Transaction Impact Net difference - Increase from H1 F09 of FX gain
Slide 21: H1 F10 Overview
Cochlear H1 F10 Overview For personal use only • Net Profit After Tax (NPAT) of $75.2 million up 8%, with EPS of $1.34 up 7% • Successful launch of Cochlear Nucleus 5 in ~ 20 countries in H1 with more country launches in H2 • Cochlear Nucleus 5 customer feedback extremely positive and CI unit sales
Slide 22: Thank you
For personal use only Thank you Any questions?
Slide 23: Foreign Exchange
Foreign Exchange For personal use only Rates applied H1 F10 vs. H1 F09 H1 F10 H1 F09 % Change Average rates (used for translating P&L) USD 0.87 0.80 9% Euro 0.60 0.56 7% JPY 79.9 82.6 (3%) GBP 0.53 0.46 15% Contract rates (used to bring FX to Aust) USD 0.80 0.79 1% Euro 0.55 0.58 (5%) JPY 87.2 87.2
Slide 24: Foreign Exchange
Foreign Exchange For personal use only Period end rates applied F10 vs. F09 31 Dec 30 June % change 2009 2009 Period end rates (used for translating Bal Sheet) USD 0.89 0.81 10% Euro 0.62 0.57 9% JPY 81.2 76.9 6%
Slide 25: FX Contract Cover and Rates
FX Contract Cover and Rates as at 31 December 2009 For personal use only Total FX cover at USD Euro JPY Total AUD 31 Dec 2009 257.3m 167.0m 1,055m 657.6m % of total cover (in AUD) 52% 46% 2% 100% 3 yr weighted average rates FX contracts at 31 Dec 09 0.77 0.55 80.5 FX contracts at 31 Dec 08 0.78 0.55