Fisher & Paykel Healthcare Corporation Limited · NZX:FPH
Fisher & Paykel Healthcare — H1 FY2007 Earnings Presentation
24 slides from Fisher & Paykel Healthcare's earnings presentation, November 2006
Slide 1: FY07 Half Year Update & Overview
FY07 Half Year Update & Overview
Slide 2: Investment Highlights
Investment Highlights • Leading player in heated humidification systems • Consistent growth strategy • Estimated US$2+ billion and growing market opportunity • High level of innovation • Global presence • Strong financial performance NZSX:FPH, ASX:FPH 2
Slide 3: Operating Results NZ$
Operating Results NZ$ H1FY07 (6 mths) % Revenue NZ$M %Ìpcp Trading revenue 100% 173.2 +28% Gross profit * 59.7% 103.4 +8% SG&A 27.6% 47.9 +20% R&D 5.5% 9.5 +13% Total Operating Expenses 33.1% 57.3 +19% Operating Profit 26.6% 46.1 -3% * GP: Net hedge gains contributed NZ$2.8M (NZ$22.6M pcp) 3
Slide 4: Operating Results US$
Operating Results US$ H1FY07 (6 mths) %Revenue US$M %Ìpcp Trading revenue 100% 109.4 +15% Gross profit 59.7% 65.3 -3% SG&A 27.6% 30.2 +8% R&D 5.5% 6.0 +2% Total Operating Expenses 33.1% 36.2 +7% Operating Profit 26.6% 29.1 -12% 4
Slide 5: Constant Currency Growth
Constant Currency Growth H1FY07 (6 mths) Trading revenue +22% Respiratory Humidification +23% Obstructive Sleep Apnea +20% Neonatal +23% SG&A +12% R&D +14% 5
Slide 6: Markets and Products
Markets and Products • Respiratory Neonatal Distributed 8% 2% humidification • Obstructive sleep apnea Resp. • Neonatal Hum. 44% OSA 46% ¯ Consumable products represent approx. 62% of core Revenue by Product product sales 6 months to 30 Sept 2006 6
Slide 7: Respiratory Humidification
Respiratory Humidification • Normal airway humidification is bypassed or compromised during ventilation or O2 therapy • Mucociliary transport system operates less effectively – increases risk of infection – impairs gas exchange • Need to deliver gas at physiologically normal levels – 37°C body core
Slide 8: Respiratory Humidification Systems
Respiratory Humidification Systems • MR850 Respiratory Humidifier System – invasive ventilation, O2 therapy and non-invasive ventilation • MR880 Respiratory Humidifier System – simpler controls – O2 therapy • MR810 Respiratory Humidifier System – entry level system – ventilation and O2 therapy – opt
Slide 9: Single-use Respiratory Components
Single-use Respiratory Components • Single-use chambers – patented auto filling MR290 • Single-use breathing circuits – patented spiral heater wire – proprietary dry expiratory tube – less condensation – delivery of optimal humidity • Breathing circuit components – filters – catheter mount – weaning
Slide 10: Expanding Opportunities
Expanding Opportunities Invasive Ventilation Non-invasive Ventilation O2 Therapy COPD Device Coming … Late FY07 Humidity Therapy Laparoscopic Insufflation 10
Slide 11: Respiratory Humidification Update
Respiratory Humidification Update • 12% revenue growth US$, 23% constant currency • MR850, MR810 placements growing breathing circuit market share • Good early acceptance of new interfaces; NIV, O2 therapy, humidity therapy • MR860, preparing for beginning of international introduction • COPD home s
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$1.2+ billion worldwide market, growing 15% - 20% Normal breathing • Potentially 50-60 million affect
Slide 13: CPAP Systems
CPAP Systems • HC150 Humidifier • SleepStyle™ 200 Convertible and Integrated Flow Generator series – greater pressure range, altitude adjustment, enhanced user ergonomics – patented Ambient Tracking™ plus auto- adjusting humidification technology • SleepStyle™ 600 Integrated Flow Generator series –
Slide 14: Mask Range
Mask Range Four interface categories: • FlexiFit™Nasal Masks – patented sliding attachment – FlexiFit™ technology – new 406 Petite model • FlexiFit™Full Face Mask – under chin seal • Oracle™Oral Mask – proprietary oral interface • Infinity™Direct Nasal Mask – very light 14
Slide 15: OSA Update
OSA Update • 20% revenue growth US$, 21% constant currency • 28% combined mask and flow generator revenue growth • Introducing FlexiFit 432 full face mask • ThermoSmart volume growing rapidly • Auto pressure setting flow generator due for introduction early CY2007 15
Slide 16: Neonatal Care
Neonatal Care • 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 •
Slide 17: Neonatal Update
Neonatal Update • 16% revenue growth in US$, 23% constant currency • Very strong growth for BubbleCPAP, Neopuff resuscitator • Good early demand for new O2 therapy system, resuscitation masks 17
Slide 18: Research & Development
Research & Development • 190 engineers, scientists, physiologists • Adding to teams, expect R&D expense growth to increase 2H • 5.5% of revenue H1FY07 • Product pipeline includes – Flow generators – Masks – Humidification system for COPD therapy – Respiratory consumables • 61 US patents, 71 US pendi
Slide 19: Manufacturing
Manufacturing • Vertically integrated − electronics assembly − injection moulding − motor assembly • ISO 9001; Class 100,000 controlled environment • Ample capacity to grow − 300,000ft2 / 28,000m2 facility − 23,000m2 building occupied July 2006 − 100 acres / 40 ha 19
Slide 20: Global Presence
Global Presence • Direct – hospitals, home care dealers Asia – Sales/support offices in USA/Canada, Pacific/Other UK/Ireland, France/Benelux/Italy/ 22% Spain, Germany/Austria/Switzerland, India, Japan, UAE, China, Taiwan, Europe Sweden, Brazil, Australia and 29% NZ – 350+ staff – Ongoing internation
Slide 21: Revenue Growth US$
Revenue Growth US$ 210 200 FY ended 31 March CAGR 190 FY 2002 180 CORE 23.2% 170 FY 2003 TOTAL 22.3% 160 FY 2004 150 FY 2005 140 130 FY 2006 120 US$M 110 100 CAGR 19% CAGR 28% 90 80 70 60 50 40 30 CAGR 29% 20 10 0 Respiratory OSA Warming/ Other TOTAL Humidification Neonatal 21
Slide 22: Balance Sheet
Balance Sheet • NZ$28.1M debt at 30 September 2006 • NZ$5.4 cps interim dividend • Invested in capacity expansion with completion of NZ$60M second building • NZ$27M ongoing share buyback; NZ$15.3M completed to date • 45% annualised pre-tax return on average funds employed FY07 (H1FY06 50%) 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, NIV, O2 therapy, insufflation • Increase international presence 23
Slide 24: Improving Patient Care in More Places
IMPROVING PATIENT CARE IN MORE PLACES
Fisher & Paykel Healthcare — H1 FY2007 Earnings Presentation on 6ix