Slide 1: Cochlear Limited Results for the year ended 31 December 2005
Cochlear Limited Results for the year ended 31 December 2005 Chris Roberts CEO Neville Mitchell CFO Hear now. And always Cochlear Cochlear: Background Medical device company (24yr}: global leader in implantable solutions for the hearing impaired, including Leading global position (~70% share) in coc
Slide 2: Record Financial Results for H1 F06
Record Financial Results for H1 F06 Total Revenues $221.1 million ~ 34% ‘Sales $208.7 million ~ 36% ‘Core EBITDA $72.1 million * 45% ‘Core Earnings $47.3 million 7 43% ‘Core EPS 86.9 cps 7 45% ‘Dividend 45 cps * 299 Hear now. And always Cochlear H1 F06 Cl Unit Sales of 6,518 units T30% 12000 4 10006
Slide 3: Cl Unit Sales: Consecutive Half Years
Cl Unit Sales: Consecutive Half Years Unit Sales Hear now. And always 7000 5 8000 5 5000 4 4000 5 Cochlear fons Sales $mill Hear now. And always COH: Sales Revenue by Half Years 225 5 200 + 175 4 150 4 125 4 100 5 moon Oo mo wm po H2 Fol @ Baha aCi Hi H2 Hi H2 Hi H2 Hi H2 Hi FO2 F02 FO3 FO3 FO4 F04
Slide 4: Sales by Half Year in Constant Currency
Sales by Half Year in Constant Currency“ 225 4 200 4 42% » 175-4 growth in 5 150 HY Fos, = 125 4 co Baha ° 100 4 aCi =e 4 ® 50 4 25 4 04 H2 Hi H2 HI H2 Hi H2 Hi H2 HI Fol FO2 Fo2 Fo3 FO3 FO4 FO4 FOS FOS FO6 dj * GC is sales revenues restated at FO6 exchange rates Cochlear " Hear now. And always H1 F
Slide 5: Americas and Europe: Half Year Sales in Constant Currency
Americas: Half Year Sales in Constant Currency (at FO6 FX Rates) Americas i000 - Nucleus Freedom momentum 80.84 Successful integration ® of Baha/Cl field force ° = 004 Entire Americas § operation significantly % 4004 strengthened 3 20.0 4 004 Ha F02 H1FO3 He FO3 Hi F04 H2 FO4 Hi FOS H2 FOS HI FO6 Co
Slide 6: Asia-Pacific: Half Year Sales in Constant Currency
Asia-Pacific: Half Year Sales in Constant Currency (at F06 FX Rates) ; 7 Asia-Pacific Ci unit sales growth stronger than sales revenue growth ~ significant installed base sales in pep 40.0 ho 4 tos Nucleus Freedom not yet launched in a number of key countries Ye Sales $millions 0.0 H2 Fo2 Hi FOS H2
Slide 7: Technology Advances in Freedom Implant
Technology Advances in Freedom Implant * 4 generation ASIC CMOS internal chip * Cleaner sound reproduction * Less internal noise * Improve efficiencies — power consumption * Ultra-low-noise NRT amp (~1RV) es ear now. And aways Even more reliable Cochlear + Launch roll out started April 2005 — over 5
Slide 8: Baha Update
Baha Update Direct Bone Conduction Technology Baha, Entific Medical Systems acquired 3/05 : Cachiea i |\ Baha implant for conductive hearing loss and single sided deafness Distribution integrated into the 3 regions. a = with Bone Anchored Solutions (BAS) Tvary division based in Gothenburg, Sweden H1
Slide 9: Key Growth Drivers include:
Key Growth Drivers include: Demand: Increasing patient motivation Both patient & medical community understanding Supply: Expanding patient access Eg Clinic/surgeon kinetics, reimbursement, health economics (cost/benefit) Product portfolio: Cl/Hybrid/DACS/BAHA Expanding indications Eg bilateral, more
Slide 10: H1 F'06 Financial Performance
Hear now. And always Y Neville Mitchell Chief Financial Officer Financial Results — H1 F’06 Cochlear” H1 F’06 Financial Performance F’o6 AS'm Total Revenue 221.1 Core EBITDA 724 Core Earnings 47.3 Core EPS (cents per share) 86.9 Interim dividend (payable 14/3/06) 45c Franking 100% Hear now. And alwa
Slide 11: H1 F'06 Core Earnings Calculation
H1 F’06 Core Earnings Calculation F’06 Fos $m $m AIFRS NPAT 43.8 33.0 Adjustment items (after tax) * R&D Capitalised (0.1) (2.4) Amortisation of capitalised R&D 0.8 0.5 « Acquired intangible amortisation 1.1 - « Share based compensation 1.7 2.0 Core earnings 47.3 33.1 Hear now. And always H1 F’05 —
Slide 12: H1 F'06 Baha Financial Impact
H1 F’06 Baha Financial Impact First half of full contribution Revenue of $24.6 million Revenue growth up 30% (acquired March 2005) Integration with Cl business — no separation of expenses Gothenburg head office costs included in Admin Expenses Integration savings realised per plan Hear now. And alwa
Slide 13: H1 F'06 Working Capital
H1 F’06 Working Capital Days Sales Outstanding (DSO) $100.0 5 $80.0 4 $60.0 + $40.0 + Net Receivables ($ millions} Jun-Of Jun-02 Jun-O03 Jun-04 Jun-05 =Dec-05 DSO at 83 days (F'05 65) Europe DSO higher as anticipated with direct business model USA DSO higher than target ~ anticipated reducti over ne
Slide 14: H1 F'06 Debt Management
H1 F’06 Debt Management A$Sm 31Dec05 30 June 05 Cash on hand 104.4 106.1 Interest bearing liabilities, current & non current (194.9) (203.1) Net (debt) / cash (90.5) {97.0} Debt / equity ratio 44% 63% | Manageable levels of debt (pre-tax cost of debt is 2.8%) Hear now. And always H1 F’06 AIFRS: Key
Slide 15: Cochlear Summary
Cochlear Summary - First half FO6: Momentum continues « Revenue up 34% to $221.1 million « Core earnings up 43% to $47.3 million Nucleus Freedom: excellent clinical results Baha: successful integration of this complementary product line * Continued building internal capability and operating with fin
Slide 16: H1 F'06 Foreign Exchange Rates
H1 F’06 Foreign Exchange Rates Raies applied F’06 vs F’05 H1F'06 = -H1 F'05 Average rates (used for translating P&L) USD 0.755 0.733 Euro 0.632 0.587 JPY 86.5 79.6 Contract rates (used to bring FX to Australia} USD 0.68 0.61 Euro 0.56 0.56 JPY 59 55 Hear now. And always Foreign Exchange Rates Going