Cochlear Limited · ASX:COH
Cochlear — Shareholder Meeting (October 2006)
54 slides from Cochlear's shareholder meeting presentation, Oct 24, 2006
Slide 1: 2006 Annual General Meeting
Cochlear Limited Ue 2006 Annual General Meeting Wa Ballroom 1, Four Seasons Hotel 199 George Street Sydney NSW Ah Tuesday 24" October 2006
Slide 2: Chairman: Mr Tommie Bergman
Chairman Mr Tommie Bergman Hear now. And always Cochlear~
Slide 3: Mr Neville Mitchell
Mr Neville Mitchell Hear now. And always Cochlear~
Slide 4: Dr Chris Roberts
Dr Chris Roberts Hear now. And always Cochlear~
Slide 5: Mr Justus Veeneklaas
Mr Justus Veeneklaas Hear now. And always Cochlear~
Slide 6: Mr Peter North, AM
Mr Peter North, AM Hear now. And always Cochlear~
Slide 7: Dr John Parker
Dr John Parker Hear now. And always Cochlear~
Slide 8: Prof Ed Byrne, AO
Prof Ed Byrne, AO Hear now. And always Cochlear~
Slide 9: Mr Rick Holliday-Smith
Mr Rick Holliday-Smith Hear now. And always Cochlear~
Slide 10: Mr Paul Bell
Mr Paul Bell Hear now. And always Cochlear~
Slide 11: Mr Donal O'Dwyer
Mr Donal O’Dwyer Hear now. And always Cochlear~
Slide 12: Regional Presidents
Regional Presidents Ws Mark Salmon Richard Brook Chris Smith Hear now. And always Cochlear~
Slide 13: Proceedings
Proceedings Chairman’s Address ‘CEO's Address Formal Resolutions / ow. Hear now. And always Cochlear
Slide 14: Chairman's Address
Cochlear Limited 2006 Annual General Meeting Chairman’s Address ee ye Hear now. And always Cochlear
Slide 15: Record Financial Results for FY06
Record Financial Results for FO6 FO6 FOS $ millions $ millions Cochlear implants 379.9 307.4 tT 24% Bone Anchored (Baha) 51.7 14.8 T 249% FX Contracts 20.7 26.8 4 23% Revenue its 4523 =| 3490 += =F 30% EBIT (25% of revenue) 111.5 82.5 Tt 35% Net Profit After Tax 80.0 59.6 tT 34% Core Earnings* | ses
Slide 16: Area of focus: upgrade to meet growth objectives
e Area of focus is to upgrade to meet ongoing growth objectives e Now 12 months into 30 month programme e Aim to simplify and ready for ongoing growth Hear now, And always
Slide 17: Integration of Entific
Integration of Entific e Purchased in March 2005 e Integration now complete ® Sales integrated into regional offices ® Manufacturing and R&D remain in Gothenburg Hear now. And always Cochlear~
Slide 18: China
China Significant opportunity @ @ $270m order Sy Ba ® Delivery over six years @ First delivery July 2006 Hear now. And always Cochlear~
Slide 19: Phonak Joint Development Project
Phonak Joint Development Project e Developing a new product line of implantable acoustic hearing systems e Good progress is continuing e Next stage is to develop a commercial product for clinical trials Hear now. And always Cochlear
Slide 20: Freedom Launch
Freedom Launch e Successful launch of Nucleus Freedom ® Clinical results show significant performance improvements Hear now, And always
Slide 21: Executive and Board Remuneration
Executive and Board Remuneration * Remuneration Report to be voted on e Remuneration system for senior executives is aligned with shareholder interests and community views ® Total reward = base, short term, long term incentives e Long term incentive plan approved by shareholders at 2003 AGM e Challe
Slide 22: Corporate Governance
Corporate Governance e Cochlear maintains an ongoing commitment to transparency and good Corporate Governance e Cochlear fulfils the major recommendations of the ASX Corporate Governance Council's “Principles of Good Corporate Governance and Best Practice Recommendations” e Justus Veeneklaas and Pet
Slide 23: Outlook
Outlook e Cochlear is well positioned based on its global market share and technology leadership e The industry is growing and future expansion is anticipated Hear now. And always Cochlear
Slide 24: CEO's Address
Cochlear Limited 2006 Annual General Meeting Dr Chris Roberts CEO’s Address i . a ke f ce Hear now. And always Cochlear
Slide 25: Cochlear Background
Cochlear Background ® Global leader in implantable devices for the hearing impaired: ~ ~70% share in cochlear implants for sensorineural hearing loss ~ Bone anchored hearing implants (Baha) for conductive hearing loss and single sided deafness * Global footprint ~ 1100 people & direct operations in
Slide 26: Nucleus Freedom: implant + sound processor
Senn mm onenresnnnnonnt D Nucleus Freedom: implant + sound processor
Slide 27: Record Financial Results for FY06
Record Financial Results for FO6 FO6 FO5 $ millions $ millions Cochlear implants 379.9 307.4 t 24% Bone Anchored (Baha) 51.7 14.8 4249% FX Contracts 20.7 26.8 L 23% Revenue _ 452.3 349.0 t 30% EBIT (25% of revenue) 111.5 82.5 t 35% Net Profit After Tax 80.0 59.6 t 34% CoreEarnings* | 864 | 608 | 42%
Slide 28: Cochlear Implant Unit Sales
10 Year Cochlear Implant Unit Sales 14000 * F06 cochlear implant unit sales of 12,901 12000 | up 19.4% over FOS 10000 - e FO6 growth above | 10 yr CAGR 17% long term growth rate 8000 + ——— Unit Sales 4000 5 2000 | : 0 T T T T T T FQ? F98 FOO FOO FO1 FO2 FO3 FO4 FOS FO06 Hear now. And always Cochlear
Slide 29: Strong Sales Growth (Constant Currency)
Strong Sales Growth (Constant Currency) =), =4009 | £ FOt FQ2 FQ3 F04 FQ 06 « 37% increase in sales in FO6 in constant currency (ie constant — FX rates) » Bone Anchored Solutions: Baha & Vistafax contributed $51.7 million in FO6 ( $14.8) Hear now. And always Cochlear~
Slide 30: Sales by region: Americas, Europe, Asia-Pacific
200 - 180 - 160 - 140 - 120 + @ Americas 100 O Europe 80 - O Asia-Pacific [o>] =) I NR i=) ! FO2 FO3 FO4 FO5 FO6 Hear now. And always Cochlear~
Slide 31: Nucleus Freedom - Setting the New Benchmark in Clinical Outcomes
Nucleus Freedom - Setting the New Benchmark in Clinical Outcomes Freedom Clinical Trial N=28 100 Percent Correct HINT(Q)}60dB —-HINT(N) 60dB_ CNC Words 60dB. GB PRE-OP Gla 3 Months 6 Months Ga 12 Months Data Source : — Mean Scores 1. North American Freedom Multi-Center Clinica! Trial, 2005/06 e Impr
Slide 32: Clinical Outcomes and Implant Reliability
Cumulative Failure % of Implanes Nucleus Freedom - Setting the New Benchmark in Clinical Outcomes and Implant Reliability Input processing preferences for CUNY sentences in noise (N=54) Data Source : ee 1. North American Freedom Multi-Center Clinical Trial, 2005/06 Nucleus Implants Rely Combined Ad:
Slide 33: Nucleus Freedom: Next Steps
Nucleus Freedom: Next Steps e BTE Rechargeable batteries » Freedom Mini BTE e SmartSound Combinations * Backwards Compatibility / Freedom for N24 Hear now. And always Cochlear~
Slide 34: Building Internal Capability
Building Internal Capability e Important for capturing growth opportunities, 2 examples: e Global Supply Chain, including e Manufacturing e Regional Warehouses e Information flow/metrics e Distribution, sales / marketing / clinical support e Direct where appropriate e Doubling USA field force Hear n
Slide 35: Opportunities are Expanding
Opportunities are Expanding e Broadening business by expanding product offering e Baha - a successful acquisition e Other product opportunities (EAS/DACS) @ Clinical results helping market expansion Expanding Indications: eg bilateral implantation Expanding geographical depth e Sales of upgrades to
Slide 36: Cochlear FY06 Overview
Cochlear FO6 Overview e Record financial results for FO6 ~ Revenues of $452.3 million up 30% ~ NPAT of $80.0 million up 34% ~ Core Earnings of $86.4 million up 42% e Baha acquisition/integration successful (730%) e Nucleus Freedom: excellent clinical results ° Investment in internal capability payin
Slide 37: Guest Speaker: Mr Don Kinnersley
Cochlear Limited 2006 Annual General Meeting Guest Speaker Mr Don Kinnersley oo T'TT''TT.iiiiiiiitii i iinet OO ci NMA AM ye Hear now. And always Cochlear
Slide 38: Business of the Meeting
Cochlear Limited 2006 Annual General Meeting Business of the Meeting _llel_w—w_ NN Hear now. And always Cochlear
Slide 39: Resolution: Financial and other reports
Resolution No. 1 Financial and other reports To receive and consider the Company’s Financial Report, Director’ Report and the Auditor’s Report in respect of the year ended 30 June 2006. Hear now. And always Cochlear
Slide 40: Proxy Summary: Financial and other reports
Resolution No. 1 Financial and other reports Proxy Summary « Total number of proxy votes available to be cast « Votes in favour of the resolution « Votes against the resolution « Votes to be cast at the discretion of the proxy « Votes directed to abstain from voting 28,428,182 27,609,611 87,045 550,
Slide 41: Resolution: Remuneration Report
Resolution No. 2 Remuneration Report To consider and, if thought fit, to pass the following non-binding resolution: 2.1 “THAT the Remuneration Report be adopted.” Hear now. And always Cochlear~
Slide 42: Proxy Summary: Remuneration Report
Resolution No. 2 Remuneration Report Proxy Summary « Total number of proxy votes available to be cast « Votes in favour of the resolution « Votes against the resolution « Votes to be cast at the discretion of the proxy « Votes directed to abstain from voting 28,428,182 26,373,771 1,435,710 554,448 6
Slide 43: Resolutions: Remuneration Report
Resolution No. 3 Remuneration Report To consider and, if thought fit, to pass the following resolutions as ordinary resolutions: Hear now. And always Cochlear~
Slide 44: Resolution 3.1: Election of Mr Rick Holliday-Smith
Resolution No. 3.1 Election of Directors - Mr Rick Holliday-Smith "THAT Mr Rick Holliday- Smith, being a Director who is retiring by rotation in accordance with the Company's constitution and, being eligible, offers himself for re-election as a Director of the Company." Hear now. And always Cochlear
Slide 45: Proxy Summary: Resolution 3.1
Resolution No. 3.1 Election of Directors — Mr Rick Holliday-Smith Proxy Summary « Total number of proxy votes available to be cast 28,428,182 100% « Votes in favour of the resolution 27,807,472 98% « Votes against the resolution 33,237 <1% « Votes to be cast at the discretion of the proxy 560,493 2%
Slide 46: Resolution 3.2: Election of Mr Paul Ronald Bell
Resolution No. 3.2 Election of Directors - Mr Paul Ronald Bell "THAT Mr Paul Ronald Bell, being a Director who is retiring by rotation in accordance with the Company's constitution and, being eligible, offers himself for re-election as a Director of the Company." Hear now. And always Cochlear
Slide 47: Proxy Summary: Resolution 3.2
Resolution No. 3.2 Election of Directors — Mr Paul Ronald Bell Proxy Summary « Total number of proxy votes available to be cast « Votes in favour of the resolution « Votes against the resolution « Votes to be cast at the discretion of the proxy « Votes directed to abstain from voting 28,428,182 27,8
Slide 48: Resolution 4.1: Securities issued to the CEO/President
Resolution No. 4 Approval of securities issued to the CEO/President under the Cochlear Executive Long Term Incentive Plan (“CELTIP”) To consider and, if thought fit, to pass the following resolution as ordinary resolution: 4.1 “THAT approval be given to: a) The grant to Dr Christopher Graham Roberts
Slide 49: Proxy Summary: Resolution 4.1
Resolution No. 4.1 Approval of securities issued to the CEO/President under the Cochlear Executive Long Term Incentive Plan (“CELTIP”) Proxy Summary « Total number of proxy votes available to be cast 28,428,182 100% « Votes in favour of the resolution 27,350,781 96% « Votes against the resolution 42
Slide 50: Resolution 5.1: Securities issued to an Executive Director
Resolution No. 5 Approval of securities issued to an Executive Director under the Cochlear Executive Long Term Incentive Plan (“CELTIP”) To consider and, if thought fit, to pass the following resolution as an ordinary resolution: 5.1 “THAT approval be given to: a) The grant to Dr John Louis Parker,
Slide 51: Proxy Summary: Resolution 5.1
Resolution No. 5.1 Approval of securities issued to an Executive Director under the Cochlear Executive Long Term Incentive Plan (“CELTIP”) Proxy Summary « Total number of proxy votes available to be cast 28,428,182 100% « Votes in favour of the resolution 27,350,817 96% « Votes against the resolutio
Slide 52: Resolution 6.1: Adoption of new Article 7.7 and Schedule 1
Resolution No. 6 Adoption of new Article 7.7 and Schedule 1 of the Company’s Constitution To consider and, if thought fit, to pass the following resolution as an ordinary resolution: 6.1 “THAT the proposed version of Article 7.7 and Schedule 1 of the Company’s Constitution tabled at the meeting, reg
Slide 53: Proxy Summary: Resolution 6.1
Resolution No. 6.1 Adoption of new Article 7.7 and Schedule 1 of the Company’s Constitution Proxy Summary « Total number of proxy votes available to be cast 28,428,182 100% « Votes in favour of the resolution 27,464,565 97% « Votes against the resolution 328,947 1% « Votes to be cast at the discreti
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