Fisher & Paykel Healthcare Corporation Limited · NZX:FPH
Fisher & Paykel Healthcare — Investor Presentation (May 2005)
23 slides from Fisher & Paykel Healthcare's investor presentation, May 23, 2005
Slide 1: Slide 1
Slide 2: Investment Highlights
Investment Highlight: e Leading player in heated humidification systems ¢ Consistent growth strategy « Estimated US$1.5 billion+ and growing market opportunity ¢ High level of innovation ¢ Global presence ¢ Strong financial performance NZSX:FPH, ASX:FPH
Slide 3: FY05 (12 mths) results in US$
FY05 (12 mths) %YRevenue US$M % pcp Operating revenue 100% 162.6 +23% Gross profit 72.0% 117.1 +25% SG&A 27.9% 45.5 +25% R&D 6.7% 10.9 +26% Total Operating Expenses 34.7% 56.5 +25% Operating Profit 37.3% 60.7 +25%
Slide 4: FY05 (12 mths) results in NZ$
t' i FY05 (12 mths) Operating revenue 100% Gross profit 72.0% SG&A 27.9% Total Operating Expenses 34.7% % Revenue NZ$M__ %Apcp 240.6 +12% 173.3 +14% 67.4 +14% R&D 6.7% 16.2 +15% 83.6 +14% 89.7 +14% Operating Profit 37.3%
Slide 5: Revenue by Product
¢ Respiratory humidification ¢ Obstructive sleep apnea « Neonatal and other OSA 40% im Consumable products represent approx. 55% of core product sales Neonatal and Other 11% Revenue by Product 12 months 31 March 2005
Slide 6: Normal airway humidification and ventilation
¢ 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 temperature ~— 44mg/L 100%
Slide 7: Estimated US$350+ million market worldwide
¢ Estimated US$350+ million market worldwide — heated humidifier controllers — humidifier chambers + — breathing circuits and components -- — unheated humidifiers — oxygen therapy supplies * Opportunity to move technology into O, therapy, COPD, xerostomia, insufflation
Slide 8: Respiratory Humidifier Systems
¢ MR850 Respiratory Humidifier System — invasive ventilation, O2 therapy and non-invasive ventilation ¢ MR810 Respiratory Humidifier System — entry level system — ventilation and O, therapy — optional heated breathing circuit ¢ HC550 Respiratory Humidifier System — invasive ventilation for home use
Slide 9: Single-use chambers and breathing circuits
* Single-use chambers — patented auto filling MR290 — manual filling models * Single-use breathing circuits — adult and neonatal — patented spiral heater wire ~ proprietary dry expiratory tube — less condensation — delivery of optimal humidity ¢ Breathing circuit components — filters — catheter moun
Slide 10: MR880 and MR860 Humidification Systems
- MR880 Humidification System <> — Controller, chamber, breathing circuit, range of single patient use interfaces. — Designed for a range of new patient groups, e.g. O, therapy, COPD, xerostomia. ¢ MR860 Laparoscopic Humidification System — Humidifies the dry CO, gas used in ‘keyhole’ surgery. — Imp
Slide 11: Respiratory humidification revenue growth
* 16% revenue growth US$, 12% ex SARS ex currency ¢ MR850 penetration driving increasing breathing circuit share ¢ Increasing value per patient « Introduced MR860 laparoscopic humidification system to NZ/Australia ¢ Introduced MR880 humidification system to NZ, Australia, UK « Additional consumables
Slide 12: 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$1+ billion worldwide market, growing 15% - 20% Potentially 50-60 million affected worldwide Most common treatment is CPAP (Continu
Slide 13: HC150 Humidifier and SleepStyle flow generators
HC150 Humidifier ¢ SleepStyle™ 200 Convertible and Integrated Flow Generator series — greater pressure range, altitude adjustment, enhanced user ergonomics — patented Ambient Tracking™ plus auto- adjusting humidification technology P New | ¢ SleepStyle™ 600 Integrated Flow Generator series — ThermoS
Slide 14: Four mask interface categories
Four interface categories: ¢ FlexiFit™Nasal Masks — patented sliding attachment — FlexiFit™ technology — 3 models ¢ FlexiFit™Full Face Mask — under chin seal ¢« Oracle ™Oral Mask — proprietary oral interface - Infinity™ Direct Nasal Mask — very light 4
Slide 15: OSA revenue growth
T p | 70% flow generator and mask revenue growth in US$ 34% total revenue growth ntroduced full range of HC230 and -4C600 new generation flow generators ntroduced Infinity direct nasal mask Additional flow generators, masks in R&D pipeline
Slide 16: Neonatal products
« 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 ¢ Infant Resusc
Slide 17: Neonatal revenue growth
i late Wi ul al BS 5 ¢ 31% revenue growth in US$, 23% ex Currency e Warmers, CPAP and = resuscitators all driving growth e Increasing proportion of recurring revenue ¢ Range of resuscitation masks to be introduced Ou ' "=" unin,
Slide 18: Research and development
¢ 170 engineers, scientists, physiologists, up 20 on FY04* « 15% increase to 6.7% of revenue FY05 NZ$ « 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 pen
Slide 19: Manufacturing
¢ Vertically integrated — electronics assembly — injection moulding — motor assembly i ¢ ISO 9001; Class 100,000 controlled environment ¢« Ample capacity to grow * 300,000ft? / 28,000m facility * 100 acres / 40 ha * 23,000m? building due for completion mid 2006
Slide 20: Sales and distribution
« Direct ~ hospitals, home care dealers — Sales/support offices in USA/Canada, UK/Ireland, France/Benelux/Italy/ en Spain, Germany/Austria/Switzerland, — 946, India, Japan, UAE, China, Australia and NZ - 250 staff — Ongoing international expansion ¢ Distributors — 100 distributors worldwide - 90 Oth
Slide 21: Revenue growth by product group
170 160 @FY 2000 CAGR | FY ended 341 March —__| 150 FY 2001 CORE 20.0% 140 430 FY 2002 TOTAL 17.3% 420 FY 2003 110 MFY 2004 100 MFY 2005 so | CAGR 14.4% US$M CAGR 27.1% CAGR 31.3% Respiratory OSA Warming/ idification Necnatal
Slide 22: Cash, capacity expansion and capital returns
NZ$37M cash at 31 March 2005 Investing in capacity expansion with construction of NZ$60M second building 90% dividend payout policy, NZ$10.8cps for year NZ$27M ongoing share buyback 48% annualised pre-tax return on average funds employed FY05 (42% FY0O5)
Slide 23: Consistent strategy
Consistent strategy: ¢ Continue to improve existing product lines ¢ Develop complementary products/ consumables ¢ Target new medical applications — e.g. COPD, O, therapy, insufflation ¢ Increase international presence —e.g. South America and Scandinavia
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