Slide 1: FY16 Result Presentation
FY16 Result Presentation 9 August 2016 Chris Smith Chief Executive Officer & President Neville Mitchell Chief Financial Officer FY16 – Result highlights Sales revenue 23% (12% in CC) to $1.2 billion • Growth across developed and emerging markets • Cochlear implant unit growth 12% and CI sales re
Slide 2: FY17 outlook – expect momentum to continue
FY17 outlook – expect momentum to continue FY17 net profit guidance of $210-225m, up ~10-20% on FY16 at 75c AUD/USD ~10-20% Adjusted net profit excludes patent dispute provision of $15.8 million after tax in FY14 3 Cochlear’s mission We help people hear and be heard. We empower people to connect wit
Slide 3: Strategic platforms – solid progress made
Strategic platforms – solid progress made • Introduced 5 new products to maintain Grow the market leadership Core • Expanded DTC programs • Expanded the sales force (>50 reps) • Established Services as a separate business unit Build a Service • Appointed a President, Services Business • Increased re
Slide 4: Nucleus Profile Series and Cochlear Kanso
Nucleus® Profile Series The industry’s most reliable cochlear implant World’s thinnest cochlear implant 3.9 mm Approved for 3T MRI NEW Slim Modiolar (CI532) electrode • 60% volume reduction compared to Contour Advance® • Closest positioning to the hearing nerve – designed to optimise hearing outcome
Slide 5: Acoustics and Services
Acoustics (bone conduction and acoustic implants) Baha product innovation driving demand and share gains Sales revenue 21% (9% in CC) • Solid performances across all regions New products • Baha® 5 System made for iPhone • Baha 5 Power and SuperPower • Launched in H2 Baha 5 Power Baha 5 SuperPower
Slide 6: Americas and EMEA
Americas Market expansion initiatives driving growth Sales revenue 29% (12% in CC) • US CI units up ~10% • Services revenue up >20% in CC • Latin American revenue decline in CC US revenue 16% in CC • Recent product launches • Accelerated market growth: 8-10%* • Sales force expansion • Services c
Slide 7: Asia Pacific
Asia Pacific All markets delivering growth Sales revenue 31% (23% in CC) • Solid growth across all markets Market growth initiatives • Asia Pacific benefiting from field sales expansion and growing awareness • China performed strongly in both the private pay and tender markets • India growing rapi
Slide 8: Financial highlights and Profit & loss
Financial highlights • Sales revenue up 23% to $1.2 bn • Increased investment in market growth initiatives and R&D • Net profit up 30% to $189m • Working capital management resulting in reduction in inventory days • Strong cash realisation funding net debt reduction and 21% increase in dividends 15
Slide 9: Impact of foreign currency and Working capital
Impact of foreign currency A$m $Am Transaction impacts Reported FX contract losses on hedged sales - FX losses – FY16 (27.5) - FX losses – FY15 (16.3) (11.2) Translation impacts Sales & expenses1 - Sales revenue 93.5 - Total expenses including tax (44.7) 48.8 Reported asset translation impacts - FX
Slide 10: Cash flow and Net debt
Cash flow Strong cash realisation A$m FY16 FY15 $ chg EBIT 262.6 206.4 56.2 Depreciation and amortisation 33.5 30.3 3.2 Change in working capital and other (20.0) (8.5) (11.5) Net interest paid (10.3) (7.3) (3.0) Income taxes paid (80.7) (32.2) (48.5) Operating cash flow 185.1 188.7 (3.6) Capital ex
Slide 11: Dividends and FY17 outlook
Dividends Full year dividends up 21%, fully franked, and on target at 70% payout of net profit A$m FY16 FY15 % chg Interim ordinary dividend $1.10 $0.90 22% Payout ratio % 67% 72% Franking % 100% 35% Conduit foreign income 0% 40% Final ordinary dividend $1.20 $1.00 20% Franking % 100% 100% Total ord
Slide 12: Disclaimer
Disclaimer Non-IFRS financial measures Given the significance of the patent dispute and FX movements the directors believe the presentation of non-IFRS financial measures is useful for the users of this document as they reflect the underlying financial performance of the business. The non-IFRS finan