Fisher & Paykel Healthcare Corporation Limited · NZX:FPH
Fisher & Paykel Healthcare — FY2004 Earnings Presentation
24 slides from Fisher & Paykel Healthcare's earnings presentation, May 24, 2004
Slide 1: FY04 Full Year Overview & Update
Fisher é.Paykel HEALTHCARE FYO4 Full Year Overview & Update Fisher & Paykel mm mo EEE nmemmmmmmmes FA ES le | OT FA RE
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$1.3 billion+ market opportunity High level of innovation Global presence Competitive NZ cost base Strong financial performance Experience
Slide 3: Operating Results US$
Operating Results US$ FY04 (12 mths) % Revenue USSM_ %Apcp Operating revenue 100% 132.1 +28% Gross profit 70.9% 93.6 +34% SG&A 27.5% 364 +33% R&D 6.6% 8.7 +52% Total Operating Expenses 34.1% 45.0 +36% Operating Profit 36.8% 48.6 +33% Fisher & Paykel MEALTHCARE
Slide 4: Operating Results NZ$
‘Operating Results NZ$ FY04 (12 mths) % Revenue NZSM %&pcp Operating revenue 100% Gross profit 70.9% SG&A 27.5% R&D 6.6% Total Operating Expenses 34.1% Operating Profit 36.8% 214.9 +3% 152.3 +8% 59.1 +7% 14.1 +22% 73.3 +9% 79.0 +7% Fisher & Paykel MEALTHCARE
Slide 5: Markets and Products
Markets and Products * Respiratory aoe humidification mOSA * Obstructive sleep © Neonatal and apnea 37% 11% ¢ Neonatal and other nm Consumable products 52% represent approx. 50% of Revenue by Product core prod uct sales 12 months 31 March 2004 Fisher & Paykel MEALTHCARE
Slide 6: Respiratory Humidification
Respiratory Humidificatio LIE LLL * Normal airway humidification is bypassed or compromised during ventilation or O, therapy ¢ Mucociliary transport system operates less effectively —~ increases risk of infection ~ impairs gas exchange * Need to deliver gas at physiologically normal levels — 37°C bo
Slide 7: Market Opportunity
Market Opportunity Humidification systems are used to create, control and deliver optimal levels of humidity * Estimated US$330+ million market worldwide — heated humidifier controllers — humidifier chambers + — breathing circuits + — unheated humidifiers — oxygen therapy supplies »» Heated humidifi
Slide 8: Fisher & Paykel's Humidification Systems
Fisher & Paykel’s Humidification Systems ; Fisher & Paykel has a full range of industry-leading respiratory humidification systems } Products include: MR850 Respiratory Humidification System — invasive ventilation, O2 therapy and non-invasive ventilation —~ patented flow measuring technology — integ
Slide 9: Single-use Components
Single-use Components LEED Single-use chambers — patented auto filling MR290 — manual filling models Single-use breathing circuits — adult and neonatal — patented spiral heater wire — proprietary drying expiratory tube — less condensation ~ delivery of optimal humidity Breathing circuit components —
Slide 10: Respiratory Humidification Update
Respiratory Humidification Update OLE Revenue growth US$ 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 t New )
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$800+ million worldwide market, : growing 15% - 20% Potentially 50-60 million affected Most common treatmen
Slide 12: Fisher & Paykel's CPAP Systems
Fisher & Paykel’s CPAP Systems LETS Fisher & Paykel has a broad range of CPAP products, including flow generators, humidifiers and masks Products include: * HC150 Humidifier — suitable for use with most OSA flow generators — patented Ambient Tracking™ system HC220/HC221LE Integrated Flow Generator-H
Slide 13: Mask Systems
Mask Systems FlexiFit™ Masks — patented sliding attachment ~ FlexiFit™ technology , — 3 nasal masks, full face mask less leaks, greater comfort « Oracle™ Oral Mask — proprietary oral interface ~— no headgear required Fisher & Paykel MEALTHCARE
Slide 14: CPAP/Obstructive Sleep Apnea Update
CPAP/Obstructive Sleep Apnea Update « Flow generator and mask revenue growth US$ FY04 +35%, 2H04 +45% * Total revenue growth US$ FY04 +17% Qo * HC221LE flow generator introduced * HC211 convertible flow generator introduced, expands market opportunity « HC407 FlexiFit™ nasal mask introduced * HC431
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 LL IOEI * Revenue growth US$ FY04 ¢ 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
Slide 17: Research & Development
Research & Development * 150 engineers, scientists, physiologists, up 20 on FYO3 * 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 HE « {SO 9001; Class 100,000 controlled environment ¢ Ample capacity to grow — 300,000 ft? / 28,000m2 facility — 100 acres / 40 ha ~ planning next facility Fisher & Paykel mm mo EEE nmemmmmmmmes FA ES
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/taly/ Spain, Germany/Austria, India, Australia and NZ, 250 staff — Ongoing international expansion Asia ¢ Distributors Pacific 22% | eee — 100 distribut
Slide 20: Experienced Team
Experienced Team LLL Michael Daniail Manoilog Oirsote, hiet Eeceuie Ortewe foe ony bares Paul Shearer Nise ial Lis Grudn ebsioh Bator Aagsstistiy Chlet Fiance tear SVP Sos & Marketing roi Destaion Manger ‘59P Research & Development Group thang Blow Sislos Manager oF 1850 oS #888 is i Patric tsSwoeny
Slide 21: Revenue Growth US$
Revenue Growth uUs$ EET ~ 130 420 FY 1999 CAGR vt w FY 2000 CORE 19.6% ‘oo mw FY 2001 TOTAL 16.2% Gl FY 2002 @ FY 2003 CAGR 12.3% Mm FY 2004 CAGR 33.9% CAGR 31.4% Respiratory OSA Warming/ Other * TOTAL Humidification Neonatal Fisher & Paykel MEALTHCARE
Slide 22: Balance Sheet / Cash Flow
Balance Sheet / Cash Flo 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 employed Planning next b
Slide 23: Growth Drivers
Growth Drivers SLT * Consistent strategy * Maintain high level of innovation — continue to improve existing product lines — develop complementary product offerings ¢ Target new medical applications ~ e.g. COPD, O, therapy, patient warming ¢ Increase international presence, ~ e.g. Italy, Spain, India
Slide 24: Fisher & Paykel Healthcare
Fisheré.Paykel HEALTHCARE Fisher & Paykel mm mo EEE nmemmmmmmmes FA ES le | OT FA RE
Fisher & Paykel Healthcare — FY2004 Earnings Presentation on 6ix