Fisher & Paykel Healthcare Corporation Limited · NZX:FPH
Fisher & Paykel Healthcare — Macquarie Connections NZ Investment Conference 2006
23 slides from Fisher & Paykel Healthcare's conference presentation, Mar 8, 2006
Slide 1: Macquarie Connections NZ Investment Conference
Macquarie Connections NZ Investment Conference 8 March 2006
Slide 2: Investment Highlights
Investment Highlights • Leading player in heated humidification systems • Consistent growth strategy • Estimated US$2+ billion and growing market opportunity • High level of innovation • Global presence • Strong financial performance NZSX:FPH, ASX:FPH 2
Slide 3: Operating Results US$ H1 FY06
Operating Results US$ H1 FY06 FY06 (6 mths) %Revenue US$M %!pcp Operating revenue 100% 95.0 +27% Gross profit 70.6% 67.1 +24% SG&A 29.4% 28.0 +27% R&D 6.2% 5.9 +12% Total Operating Expenses 35.6% 33.9 +24% Operating Profit 35.0% 33.3 +25% 3
Slide 4: Operating Results NZ$ H1 FY06
Operating Results NZ$ H1 FY06 FY06 (6 mths) % Revenue NZ$M %!pcp Operating revenue 100% 135.4 +15% Gross profit 70.6% 95.6 +13% SG&A 29.4% 39.9 +16% R&D 6.2% 8.3 +2% Total Operating Expenses 35.6% 48.2 +13% Operating Profit 35.0% 47.4 +14% 4
Slide 5: Markets and Products
Markets and Products Neonatal • Respiratory and Other humidification 11% • Obstructive sleep apnea • Neonatal and other OSA 44% Resp. Hum. 45% ! Consumable products represent approx. 58% of core Revenue by Product product sales 6 months to 30 September 2005 5
Slide 6: 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 7: Market Opportunity
Market Opportunity • Estimated US$350+ million market worldwide – heated humidifier controllers – humidifier chambers + – breathing circuits and components + – unheated humidifiers – oxygen therapy supplies • Opportunity to move technology into O2 therapy, COPD, xerostomia, insufflation 7
Slide 8: Humidification Systems
Humidification Systems • MR850 Respiratory Humidifier System – invasive ventilation, O2 therapy and non-invasive ventilation • MR810 Respiratory Humidifier System – entry level system – ventilation and O2 therapy – optional heated breathing circuit • HC550 Respiratory Humidifier System – invasive ve
Slide 9: Single-use Components
Single-use Components • Single-use chambers – patented auto filling MR290 – manual filling models • Single-use breathing circuits – adult and neonatal – patented spiral heater wire – proprietary dry expiratory tube – less condensation – delivery of optimal humidity • Breathing circuit components – f
Slide 10: Expanding Opportunities
Expanding Opportunities • MR880 Humidification System – Controller, chamber, breathing circuit, range of single patient use interfaces. – Designed for a range of new patient groups, e.g. O2 therapy, COPD, xerostomia. • MR860 Laparoscopic Humidification System – Humidifies the dry CO2 gas used in ‘ke
Slide 11: Respiratory Humidification H1 FY06
Respiratory Humidification H1 FY06 • 16% revenue growth US$, 13% ex currency • MR850 penetration driving increasing breathing circuit share • Increasing value per patient • Establishing sales of MR860 insufflation humidification system in NZ and Australia • Positive response to MR880 system in NZ an
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$1.2+ billion worldwide market, growing 15% - 20% Normal breathing • Potentially 50-60 million affect
Slide 13: CPAP Systems
CPAP Systems • HC150 Humidifier • SleepStyle™ 200 Convertible and Integrated Flow Generator series – greater pressure range, altitude adjustment, enhanced user ergonomics – patented Ambient Tracking™ plus auto- adjusting humidification technology • SleepStyle™ 600 Integrated Flow Generator series –
Slide 14: Mask Range
Mask Range Four interface categories: • FlexiFit™Nasal Masks – patented sliding attachment – FlexiFit™ technology – new 406 Petite model • FlexiFit™Full Face Mask – under chin seal • Oracle™Oral Mask – proprietary oral interface • Infinity™Direct Nasal Mask – very light 14
Slide 15: OSA H1 FY06
OSA H1 FY06 • 64% flow generator and mask revenue growth in US$ • 42% total revenue growth in US$ • Introduced non-invasive ventilation masks • Introduced FlexiFit™ 406 Petite Nasal Mask • Completed introduction of full range of HC230 and HC600 new generation flow generators • Additional flow genera
Slide 16: 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 17: Neonatal and Warming H1 FY06
Neonatal and Warming H1 FY06 • 28% revenue growth in US$, 25% ex currency • Warmers, CPAP and resuscitators all driving growth • Increasing proportion of recurring revenue • Range of resuscitation masks to be introduced 17
Slide 18: Research & Development
Research & Development • 170 engineers, scientists, physiologists • 6.2% of revenue H1 FY06 • Product pipeline includes – Flow generators – Masks – Humidification system for COPD therapy – Respiratory consumables • Competitive NZ cost base • 52 US patents, 70 US pending, 97 ROW, 234 ROW pending * *
Slide 19: Manufacturing
Manufacturing • Vertically integrated − electronics assembly − injection moulding − motor assembly • ISO 9001; Class 100,000 controlled environment • Ample capacity to grow − 300,000ft2 / 28,000m2 facility − 100 acres / 40 ha − 23,000m2 building due for completion mid 2006 19
Slide 20: Global Presence
Global Presence • Direct – hospitals, home care dealers – Sales/support offices in USA/Canada, Asia Other 4% UK/Ireland, France/Benelux/Italy/ Pacific Spain, Germany/Austria/Switzerland, 20% India, Japan, UAE, China, Australia North America and NZ - 270 staff 48% – Ongoing international expansion •
Slide 21: Revenue Growth US$
Revenue Growth US$ 170 160 FY ended 31 March FY 2000 CAGR 150 FY 2001 CORE 20.0% 140 130 FY 2002 TOTAL 17.3% 120 FY 2003 110 FY 2004 100 FY 2005 US$M 90 80 CAGR 14.4% 70 CAGR 27.1% 60 50 40 30 20 CAGR 31.3% 10 0 Respiratory OSA Warming/ Other TOTAL Humidification Neonatal 21
Slide 22: Balance Sheet
Balance Sheet • NZ$24M cash at 30 September 2005 • Investing in capacity expansion with construction of NZ$60M second building • NZ$5.4cps FY06 interim dividend • NZ$27M ongoing share buyback; NZ$15.3M completed to date. • 50% annualised pre-tax return on average funds employed FY06 (46% FY05) 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, O2 therapy, insufflation • Increase international presence – e.g. South America and Scandinavia 23
Fisher & Paykel Healthcare — Macquarie Connections NZ Investment Conference 2006 on 6ix