Fisher & Paykel Healthcare Corporation Limited · NZX:FPH
Fisher & Paykel Healthcare — FY2004 Earnings Presentation
24 slides from Fisher & Paykel Healthcare's earnings presentation
Slide 1: FY04 Full Year Overview & Update
FY04 Full Year Overview & Update
Slide 2: Investment Highlights
Investment Highlights • Leading player in heated humidification devices and consumables for a variety of respiratory markets • Consistent growth strategy • Estimated US$1.3 billion+ market opportunity • High level of innovation • Global presence • Competitive NZ cost base • Strong financial performa
Slide 3: Operating Results US$
Operating Results US$ FY04 (12 mths) % Revenue US$M %Ìpcp Operating revenue 100% 132.1 +28% Gross profit 70.9% 93.6 +34% SG&A 27.5% 36.4 +33% R&D 6.6% 8.7 +52% Total Operating Expenses 34.1% 45.0 +36% Operating Profit 36.8% 48.6 +33% 3
Slide 4: Operating Results NZ$
Operating Results NZ$ FY04 (12 mths) % Revenue NZ$M %Ìpcp Operating revenue 100% 214.9 +3% Gross profit 70.9% 152.3 +8% SG&A 27.5% 59.1 +7% R&D 6.6% 14.1 +22% Total Operating Expenses 34.1% 73.3 +9% Operating Profit 36.8% 79.0 +7% 4
Slide 5: Markets and Products
Markets and Products Respiratory • Respiratory Humidification OSA humidification Neonatal and • Obstructive sleep other apnea 37% 11% • Neonatal and other ¯ Consumable products 52% represent approx. 50% of Revenue by Product core product sales 12 months 31 March 2004 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 Humidification systems are used to create, control and deliver optimal levels of humidity • Estimated US$330+ million market worldwide – heated humidifier controllers – humidifier chambers + – breathing circuits + – unheated humidifiers – oxygen therapy supplies ¯ Heated humidifie
Slide 8: Fisher & Paykel's Humidification Systems
Fisher & Paykel’s Humidification Systems Fisher & Paykel has a full range of industry-leading respiratory humidification systems Products include: MR850 Respiratory Humidification System – invasive ventilation, O2 therapy and non-invasive ventilation – patented flow measuring technology – integrated
Slide 9: Single-use Components
Single-use Components Single-use chambers – patented auto filling MR290 – manual filling models Single-use breathing circuits – adult and neonatal – patented spiral heater wire – proprietary drying expiratory tube – less condensation – delivery of optimal humidity Breathing circuit components – filt
Slide 10: Respiratory Humidification Update
Respiratory Humidification Update • Revenue growth US$ FY04 +34%, underlying growth approx 14% Drying Tube • SARS § US$2M • Sales growth driven by chamber and circuit sales, MR850 share gains • Continued market share growth in Catheter Mount Filter breathing circuits • Revolutionary drying tube tech
Slide 11: 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$800+ million worldwide market, growing 15% - 20% Normal breathing • Potentially 50-60 million affect
Slide 12: Fisher & Paykel's CPAP Systems
Fisher & Paykel’s CPAP Systems Fisher & Paykel has a broad range of CPAP products, including flow generators, humidifiers and masks Products include: • HC150 Humidifier – suitable for use with most OSA flow generators – patented Ambient TrackingTM system • HC220/HC221LE Integrated Flow Generator-Hum
Slide 13: Mask Systems
Mask Systems • FlexiFit™ Masks – patented sliding attachment – FlexiFit™ technology – 3 nasal masks, full face mask ¯less leaks, greater comfort • Oracle™ Oral Mask – proprietary oral interface – no headgear required 13
Slide 14: CPAP/Obstructive Sleep Apnea Update
CPAP/Obstructive Sleep Apnea Update • Flow generator and mask revenue growth US$ FY04 +35%, 2H04 +45% • Total revenue growth US$ FY04 +17% • HC221LE flow generator introduced • HC211 convertible flow generator introduced, expands market opportunity • HC407 FlexiFit™ nasal mask introduced • HC431 ful
Slide 15: Neonatal and Warming
Neonatal and Warming • Radiant Warmers – warmers required in delivery and NICU – precise and stable temperature control • Infant CPAP System – proprietary bubble CPAP, non- invasive, oscillating pressure – lower risk alternative to ventilation – high value consumable system • Infant Resuscitator Sys
Slide 16: Neonatal and Warming Update
Neonatal and Warming Update • Revenue growth US$ FY04 +63% • Strong infant warmer revenue growth, favourable customer mix • Growing acceptance of Neopuff infant resuscitator and neonatal CPAP system • Increasing consumable revenue • Introduced second generation patient warmer with proprietary single
Slide 17: Research & Development
Research & Development • 150 engineers, scientists, physiologists, up 20 on FY03 • R&D NZ$ 22% increase to 6.6% of revenue FY04 • Significant new product pipeline for FY05 – Flow generators – Masks – Humidifier systems • Competitive NZ cost base • 45 US patents, 58 US pending, 52 ROW, 214 ROW pendin
Slide 18: Manufacturing
Manufacturing • Vertically integrated – electronics assembly – injection moulding – motor assembly • ISO 9001; Class 100,000 controlled environment • Ample capacity to grow – 300,000 ft2 / 28,000m2 facility – 100 acres / 40 ha – planning next facility 18
Slide 19: Global Presence
Global Presence • Direct North – hospitals, alternate site, home care America dealers 44% – sales offices in USA/Canada, UK/Ireland, France/Benelux/Italy/ Other 4% Spain, Germany/Austria, India, Australia and NZ, 250 staff – Ongoing international expansion Asia • Distributors Pacific Europe 22% – 10
Slide 20: Experienced Team
Experienced Team Michael Daniell Managing Director, Chief Executive Officer 1979 Tony Barclay Paul Shearer Mike Batty Lewis Gradon Deborah Bailey Angela Whittle Chief Financial Officer SVP Sales & Marketing Group Operations Manager SVP Research & Development Group HR Manager Group Systems Manager 19
Slide 21: Revenue Growth US$
Revenue Growth US$ 130 120 FY 1999 CAGR FY 2000 CORE 19.6% 110 TOTAL 16.2% 100 FY 2001 FY 2002 90 FY 2003 80 CAGR 12.3% FY 2004 US$M 70 60 CAGR 33.9% 50 40 30 20 CAGR 31.4% 10 0 Respiratory OSA Warming/ Other * TOTAL 21 Humidification Neonatal
Slide 22: Balance Sheet / Cash Flow
Balance Sheet / Cash Flow • NZ 28 cps final dividend, NZ 52 cps total for FY04 • NZ$27M ongoing share buyback • NZ$62M free cash flow • NZ$24.1M inventory, 75 days finished goods • 53 days DSO • NZ$72M fixed assets, mainly facility • NZ$224M total assets • 42% pre-tax return on average funds employe
Slide 23: Growth Drivers
Growth Drivers • Consistent strategy • Maintain high level of innovation – continue to improve existing product lines – develop complementary product offerings • Target new medical applications – e.g. COPD, O2 therapy, patient warming • Increase international presence, – e.g. Italy, Spain, India
Slide 24: Fisher Paykel Healthcare
Fisher Paykel HEALTHCARE
Fisher & Paykel Healthcare — FY2004 Earnings Presentation on 6ix