Fisher & Paykel Healthcare Corporation Limited · NZX:FPH
Fisher & Paykel Healthcare — Goldman Sachs Australasian Investment Forum 2013
28 slides from Fisher & Paykel Healthcare's conference presentation, September 2013
Slide 1: Fisher & Paykel Healthcare
Fisher & Paykel Healthcare Goldman Sachs Australasian Investment Forum 1 London - September 2013
Slide 2: Investment Highlights
Investment Highlights • A leader in respiratory and OSA treatment devices • Consistent growth strategy • Estimated US$5+ billion and growing market opportunity • High level of innovation • Global presence • Strong financial performance NZSX:FPH, ASX:FPH 2
Slide 3: Improve patient care and outcomes
Improve patient care and outcomes • Increase – effectiveness of care – efficiency of care • Reduce – intensity of care 3
Slide 4: Markets and Products
Markets and Products • Respiratory & Acute Care (RAC) – Heated Humidification – Respiratory Care – Neonatal Care – Surgery • Obstructive Sleep Apnea (OSA) – Masks – Flow Generators – Humidifiers Consumable and accessory products Revenue by Product Group represent approx. 76% of core product 12 mon
Slide 5: FY2013 Second Half Highlights
FY2013 Second Half Highlights Actual CC1 Net profit after tax +22% +54% Operating revenue +9% +14% Gross margin (bps increase) +240- +330- RAC new applications revenue +38% OSA mask revenue +16% 1. CC = constant currency 5
Slide 6: FY13 Operating Results NZ$
FY13 Operating Results NZ$ FY13 (12 months to 31 March 2013) %Revenue NZ$M PCP CC1 Operating revenue 100% 556.3 +8% +11% Cost of sales 44.7% 248.4 +3% +5% Gross profit 55.3% 307.8 +12% +18% Other income (R&D grant) 2.4 SG&A 27.3% 151.8 +6% +9% R&D 8.2% 45.7 +9% +9% Total operating expenses 35.5% 1
Slide 7: Dividend
Dividend • Final Dividend – Gross 9.7 NZ cps = 7.0 cps + 2.7 cps imputation credit, NZ residents – Fully imputed – 1.235 cps non-resident supplementary dividend – DRP, 3% discount NZ/AU residents • Gross dividend yield, 17.2 cps, ~5.5% 7
Slide 8: Outlook FY14
Outlook FY14 • Expect new products and applications to drive continuation of strong revenue growth • May • expected at 0.80 – 0.85 NZD:USD exchange rate: – Operating revenue NZ$610M - NZ$630M – Net profit after tax NZ$85M - NZ$90M • August • expected at 0.80 NZD:USD exchange rate: – Operating revenu
Slide 9: Hospital Cost Breakdown
Hospital Cost Breakdown Utilities, Depreciation Drugs, Devices, Supplies & Food Labour Source: Massachusetts Hospital Association, “An Update to Hospital Costs in Context Report” July 2010 9
Slide 10: Lower Care Intensity = Lower Cost
Lower Care Intensity = Lower Cost $50,000 $40,000 Mean cost (2008 US$) $30,000 $20,000 $10,000 $0 Outpatient cohort Urgent outpatient ED cohort Standard admission ICU cohort cohort cohort Source: Anand A Dalal, Laura Christensen, 2 Fang Liu, and Aylin A Riedel. Direct costs of chronic obstructive pu
Slide 11: Demographics Driving Increases
Demographics Driving Increases • Population age and weight both increasing – US pop. 65yrs+ to grow ~80% over next 20 years1, 60% of US 3 healthcare cost is after age 65yrs – US males 60 -74 yrs, av. weight increased 0.4kg/yr since 19602 • Developing markets increasing healthcare spending – China he
Slide 12: Chronic Obstructive Pulmonary Disease (COPD)
Chronic Obstructive Pulmonary Disease (COPD) • 6% of US adults have been diagnosed with COPD1 (~15 million people) • 4% - 10% COPD prevalence worldwide2 (~400 million people) • 18% of US COPD patients visit ER or admitted to hospital each year1 (~3 million patients) 1. Nicole M Kosacz, Antonello Pun
Slide 13: Obstructive Sleep Apnea (OSA)
Obstructive Sleep Apnea (OSA) • 2% - 7% OSA adult prevalence1 • 70%–80% of those affected remain undiagnosed • Prevalence increases with age and obesity • Estimate >50 million people in developed countries 1. Naresh M. Punjabi. The Epidemiology of Adult Obstructive Sleep Apnea. Proceedings of the Am
Slide 14: Respiratory Humidification
Respiratory Humidification • Normal airway humidification is bypassed or compromised during ventilation or O2 therapy • Mucociliary transport system operates less effectively • Need to deliver gas at physiologically normal levels – 37 oC body core temperature – 44mg/L 100% saturated 14
Slide 15: Respiratory & Acute Care
Respiratory & Acute Care Non-Invasive Invasive Ventilation O2 Therapy Humidity Therapy Ventilation 15
Slide 16: Respiratory & Acute Care
Respiratory & Acute Care • MR850 Respiratory Humidifier System – Invasive ventilation, oxygen therapy and non-invasive ventilation • MR810 Respiratory Humidifier System – Entry level system – Ventilation and oxygen therapy – Optional heated breathing circuit • AIRVO™ Flow Generator/Humidifier – Opti
Slide 17: Single-use Respiratory Care Systems
Single-use Respiratory Care Systems • Single-use chambers – Patented auto filling MR290 • Single-use breathing circuits – Patented spiral heater wire – Proprietary Evaqua™ expiratory tube – Minimal condensation – Delivery of optimal humidity • Breathing circuit components – Filters, catheter mount,
Slide 18: Respiratory & Acute Care Update
Respiratory & Acute Care Update H2 FY2013 • Operating revenue growth – NZ$ +13% – Constant currency +18% • New applications consumables revenue growth (NIV, Optiflow™, AIRVO™, Surgical) – NZ$ +32% – Constant currency +38% – New applications, 38% of RAC consumables revenue • New products roll-out – E
Slide 19: 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$2.5 billion + worldwide market, growing ~ 6-8% • Potentially 50-60 million affected worldwide • Most
Slide 20: Revolutionary New Masks
Revolutionary New Masks • Comfortable • Easy to fit • Efficient • Nasal Pillows – F&P Pilairo™ • Nasal – F&P Eson™ • Full Face – F&P Simplus™ 20
Slide 21: InfoUSB, SensAwake and ThermoSmart Humidifier
+ • Stylish, Smart + Simplified • Efficiently integrates with InfoUSB™ and InfoSmart™ Web • Responsive pressure relief - SensAwake™ • ThermoSmart™ Humidifier Breathing Tube Technology • Auto-adjusting CPAP 21
Slide 22: Efficient Compliance Reporting
Efficient Compliance Reporting 22
Slide 23: Obstructive Sleep Apnea Update
Obstructive Sleep Apnea Update H2 FY2013 • Operating revenue growth – NZ$ +6% – Constant currency +10% • Mask revenue growth – Constant currency +16% • New products roll-out – F&P Pilairo™ – F&P Eson™ – F&P Simplus™ – F&P ICON™+ 23
Slide 24: Research & Development
Research & Development • 8.2% of operating revenue, NZ$45.7M1 • Product pipeline includes: – Humidifier controllers – Masks – Respiratory consumables – Flow generators – Compliance monitoring solutions • 107 US patents, 159 US pending, 442 ROW, 260 ROW pending1 1 at 31 March 2013 24
Slide 25: New Products
New Products • Pilairo™ nasal pillows mask • Eson™ nasal mask • Simplus™ full face mask • ICON™+ flow generator range • Optiflow™ Junior oxygen therapy • Evaqua™2 breathing circuits • AIRVO™2 & myAIRVO™2 flow generator humidifiers 25
Slide 26: Manufacturing & Operations
Manufacturing & Operations • Vertically integrated – COGs improvements; Mexico, Lean, supply chain • Ample capacity to grow Auckland, New Zealand Tijuana, Mexico – Two buildings: 51,000m² / – 18,000m2/200,000ft2 550,000ft² total – Consumables capacity ramping up – 31,000m2 building 3 completed Novem
Slide 27: Global Presence
Global Presence • Direct/offices – Hospitals, home care dealers – Sales/support offices in North America, Europe, Asia, South America, Middle East and Australasia, 15 distribution centres – >550 staff in 30 countries – Ongoing international expansion • Distributors – 100+ distributors worldwide • Or
Slide 28: Consistent Growth Strategy
Consistent Growth Strategy • Experts in humidification, respiratory care, and obstructive sleep apnea • Provide innovative devices which can improve patient care and outcomes • Continuous product improvement • More devices for each patient • Serve more patient groups – Invasive ventilation, NIV, oxy
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