Fisher & Paykel Healthcare Corporation Limited · NZX:FPH
Fisher & Paykel Healthcare — H1 FY2016 Earnings Presentation
29 slides from Fisher & Paykel Healthcare's earnings presentation, November 2015
Slide 1: FY2016 Half Year Results Presentation
Fisher & Paykel Healthcare Inspired and world-leading healthcare solutions FY2016 HALF YEAR RESULTS PRESENTATION 6 months ended 30 September 2015 1
Slide 2: First Half Result Highlights
First Half Result Highlights H1 FY2016 (6 months to 30 September 2015) NZ$M PCP CC 1 Record net profit after tax 62.0 +27% +25% Record operating revenue 381.0 +20% +12% Record RAC/Hospital operating revenue 199.6 +18% +11% Record OSA/Homecare operating revenue 175.3 +23% +14% RAC new applications
Slide 3: Innovative New Products Launched
Innovative New Products Launched F&P Eson™ 2 nasal mask AirSpiral tube and uninterruptible power supply (UPS) transport system for AIRVO™2 Optiflow™ + nasal high flow cannula F&P HumiGard™ SH870 surgical humidification system 3
Slide 4: H1 FY2016 Operating Results
H1 FY2016 Operating Results H1 FY2016 (6 months to 30 September 2015) % of Revenue NZ$M PCP CC1 Operating revenue 100.0% 381.0 +20% +12% Cost of sales 36.7% 139.8 +12% +3% Gross profit 63.3% 241.2 +25% +19% Other income (R&D grant) 2.5 SG&A 29.6% 112.7 +24% +17% R&D 9.4% 35.8 +14% +14% Total opera
Slide 5: Dividend and Gearing
Dividend and Gearing o Increased interim dividend by 16%: • 6.7 cps + 2.6056 cps imputation credit for NZ residents (gross dividend of 9.3056 NZ cps) • Fully imputed • 1.1824 cps non-resident supplementary dividend • Dividend reinvestment plan available for New Zealand and Australian residents, no d
Slide 6: Respiratory & Acute Care / Hospital (RAC)
Respiratory & Acute Care / Hospital (RAC) Operating revenue growth H1 FY2016 NZ$ +18% Constant currency +11% New applications consumables revenue growth H1 FY2016 (Noninvasive ventilation (NIV), Optiflow, AIRVO, Surgical) NZ$ +30% Constant currency +22% o New applications consumables now make up 48%
Slide 7: Obstructive Sleep Apnea / Homecare (OSA)
Obstructive Sleep Apnea / Homecare (OSA) Operating revenue growth H1 FY2016 NZ$ +23% Constant currency +14% Mask revenue growth H1 FY2016 Constant currency +25% o Masks continue to take market share 7
Slide 8: Cash Flow & Balance Sheet
Cash Flow & Balance Sheet 1H FY2016 (for the 6 months ended 30 September 2015) NZ$M Operating cash flow (-37%) 35.2 Capital expenditure 36.2 Depreciation and amortisation 16.9 1H FY2016 (as at 30 September 2015) NZ$M Net debt 97.4 Total shareholders equity 447.8 Total assets 735.2 % Pre-tax return o
Slide 9: Foreign Exchange Effects
Foreign Exchange Effects o 51% of operating revenue in USD (1H FY15: 47%) and 21% in €. Six months to 31 March Year to 31 March Hedging position for our main exposures 2016 2017 2018 2019 2020 2021 USD % cover of expected exposure 93% 66% 33% 23% 21% 12% USD average rate of cover 0.719 0.693 0.662 0
Slide 10: Outlook FY2016
Outlook FY2016 o Expect at exchanges rates of NZD:USD 0.66, NZD:EUR 0.62 • Operating revenue – approximately NZ$800 million • Net profit after tax – approximately NZ$135 – NZ$140 million 10
Slide 11: Investment Highlights
Investment Highlights o A leader in respiratory and OSA treatment devices o Consistent growth strategy o Estimated US$5.0+ billion and growing market opportunity o High level of innovation o Global presence o Strong financial performance NZSX:FPH, ASX:FPH 11
Slide 12: Market Opportunity and Patient Groups
Market Opportunity and Patient Groups RESPIRATORY & ACUTE CARE / HOSPITAL OBSTRUCTIVE SLEEP APNEA / HOMECARE Invasive Noninvasive Hospital Surgical Home CPAP Ventilation Ventilation Respiratory Support Humidification Respiratory Support Therapy “NEW APPLICATIONS” Applications outside of invasive ven
Slide 13: Markets & Products
Markets & Products o Respiratory & Acute Care / Revenue by Product Group Hospital (RAC) 6 months to 30 September 2015 • Heated humidification • Respiratory care • Neonatal care • Surgery RAC o Obstructive Sleep Apnea / OSA Homecare (OSA) • Masks • Flow generators • Data management tools • Humidifier
Slide 14: Hospital Cost Breakdown
Hospital Cost Breakdown 6% Medical devices6 94% Other – includes labour, utilities, drugs, supplies, food, depreciation. Source: Estimates of Medical Device Spending in the United States, Donahoe, G and King, G, June 2014 14
Slide 15: Lower Care Intensity = Lower Cost
Lower Care Intensity = Lower Cost Mean Annual COPD-Related Medical, Pharmacy, and Total Costs by Care Intensity Cohort Source: Anand A Dalal, Laura Christensen, Fang Liu, and Aylin A Riedel. Direct costs of chronic obstructive pulmonary disease among managed care patients. Int J Chron Obstruct Pulmo
Slide 16: Respiratory & Acute Care / Hospital (RAC)
Respiratory & Acute Care / Hospital (RAC) Invasive Noninvasive Hospital Surgical Ventilation Ventilation Respiratory Support Humidification “NEW APPLICATIONS” Applications outside of invasive ventilation 16
Slide 17: Respiratory Humidification
Respiratory Humidification o Normal airway humidification is bypassed or compromised during ventilation or oxygen therapy o Mucociliary transport system operates less effectively o Need to deliver gas at physiologically normal levels • 37°C body core temperature • 44mg/L 100% saturated 17
Slide 18: Respiratory, Acute Care & Surgical - Hardware
Respiratory, Acute Care & Surgical - Hardware o 850 respiratory humidifier system • Invasive ventilation, oxygen therapy and non-invasive ventilation o 810 respiratory humidifier system • Entry level system • Ventilation and oxygen therapy • Optional heated breathing circuit o AIRVO 2 flow generator
Slide 19: Respiratory & Acute Care - Single Use Consumables
Respiratory & Acute Care - Single Use Consumables o Single-use chambers • Patented auto filling MR290 o Single-use breathing circuits • Patented spiral heater wire • Proprietary Evaqua 2 expiratory tube • Minimal condensation • Delivery of optimal humidity o Breathing circuit components • Filters, c
Slide 20: Optiflow Therapy – Delivery Options
Optiflow™ Therapy – Delivery Options 20
Slide 21: Obstructive Sleep Apnea / Homecare (OSA)
Obstructive Sleep Apnea / Homecare (OSA) Home CPAP Respiratory Support Therapy 21
Slide 22: Obstructive Sleep Apnea
Obstructive Sleep Apnea o Temporary closure of airway during sleep o Can greatly impair quality of sleep, leading to fatigue; also associated with hypertension, stroke and heart attack o Estimated US$3+ billion worldwide market, growing approximately 6 - 8% o Estimate >50 million people affected in
Slide 23: Revolutionary Masks
Revolutionary Masks o Market leading mask technology o Unique, patented designs o Mask Matters Most • Masks are key to compliance F&P ESON 2 F&P SIMPLUS F&P PILAIRO Q 23
Slide 24: Stylish, Smart + Simplified CPAP Range
Stylish, Smart + Simplified CPAP Range o Efficiently integrates with InfoUSB and InfoSmart Web o Responsive pressure relief - SensAwake o ThermoSmart humidifier breathing tube technology o Auto-adjusting CPAP 24
Slide 25: Efficient Compliance Reporting
Efficient Compliance Reporting 25
Slide 26: Research & Development
Research & Development o 9.4% of operating revenue, NZ$35.8M¹ o Product pipeline includes: • Humidifier controllers • Masks • Respiratory consumables • Flow generators • Compliance monitoring solutions o 125 US patents, 314 US pending, 513 ROW, 471 ROW pending¹ 1. at 30 September 2015 26
Slide 27: Manufacturing & Operations
Manufacturing & Operations o Vertically integrated • COGs improvements; Mexico, Lean manufacturing, supply chain o Ample capacity to grow Auckland, New Zealand • Three buildings: 82,000 m² / 885,000 ft² total • 100 acres/40ha land Tijuana, Mexico • 18,000 m2 / 200,000 ft2 • Manufacturing floor area
Slide 28: Global Presence
Global Presence o Direct/offices Revenue by Region • Hospitals, home care dealers 6 months to 30 September 2015 • Sales/support offices in North America, Europe, Asia, South North America, Middle East and America Europe Australasia, 15 distribution centres • More than 600 staff in 30 countries • Ong
Slide 29: Consistent Growth Strategy
Consistent Growth Strategy o Improving care and outcomes o Four key pillars: o Reducing cost to the Continuous product healthcare system improvement Increase More devices for each • Effectiveness of care patient • Efficiency of care Serve more patient Reduce groups • Intensity of care • Healthcare s
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