Slide 1: HY16 Result Presentation / Result Highlights
HY16 Result Presentation 11 February 2016 Chris Smith CEO & President Neville Mitchell Chief Financial Officer HY16 Result Highlights Positive momentum continues Sales revenue up 32% (up 16% in constant currency) delivered across developed and emerging markets Recent product releases and continu
Slide 2: Our Mission; Hearing Loss: Market Opportunity
Our Mission We help people hear and be heard. We empower people to connect with others and live a full life. We transform the way people understand and treat hearing loss. We innovate and bring to market a range of implantable hearing solutions that deliver a lifetime of hearing outcomes. Hearing Lo
Slide 3: Strategic Platforms: Grow the Core
Strategic Platforms Focus on the Customer Grow the Build a Core Service Business Shape the Organisation Value Creation 1. Grow the Core Innovative technology Increased awareness Improved access Business model innovation
Slide 4: Cochlear implants; Bone conduction & acoustic implants
Cochlear implants Recent product launches driving demand 26% unit growth (12% excl China tender) CI system revenue up 34% (17% in CC) Product innovation Nucleus® Profile Series Nucleus 6 with True Wireless™ Market strategies to accelerate market growth DTC Field expansion Expanding
Slide 5: 2. Build a Service Business
2. Build a Service Business Recipient engagement Connectivity; both Recipient and Clinics Optimise upgrades Enhanced digital services Growing CI recipient base drives Services’ revenue Engaged recipients spend 3-4 times more with Cochlear than non-engaged recipients1 1. Based on US data
Slide 6: Services (upgrades & accessories); Americas
Services (upgrades & accessories) Lifetime relationship with over 440,000 recipients Sales revenue up 31% (16% in CC) Product innovation Nucleus 6 for N22 True Wireless CochlearLink Strong Nucleus 6 upgrade cycle Cochlear Family CC = constant currency Americas Market expansion activiti
Slide 7: EMEA; Asia Pacific
EMEA (Europe, Middle East & Africa) Portfolio affect driving consistent growth Sales up 16% (8% in CC) Solid performances across Western Europe German market growth activities delivering results Enhanced Middle East presence CC = constant currency Asia Pacific All markets delivering growth
Slide 8: 3. Shape the Organisation; 4. Value Creation
3. Shape the Organisation Globally integrate enabling activities Targeted field expansion Deep market penetration China and emerging markets Malaysia Operations Building capabilities 4. Value Creation Partnerships/Alliances Drive global efficiency and effectiveness Focus
Slide 9: Profit & loss; Impact of foreign currency
Profit & loss EBIT increased 30% with ongoing investment in market growth initiatives and R&D A$m HY16 HY15 $ chg Cost of goods sold 171.3 127.3 44.0 % of sales 29.4% 28.9% Research & development 70.2 61.4 8.8 Selling & general expenses 158.8 122.6 36.2 Corporate administration 34.7 28.6 6.1 Other i
Slide 10: Working capital; Cash flow
Working capital Improvement in working capital ratios driven by a reduction in inventory days and debtor days and higher sales revenue A$m HY16 FY15 $ chg Trade receivables 258.4 236.7 21.7 Inventories 150.8 145.9 4.9 Less: Trade payables (107.3) (99.9) (7.4) Working capital 301.9 282.7 19.2 Debtor
Slide 11: Net Debt; Dividends
Net Debt Reduction in net debt to $132.9m A$m HY16 FY15 $ chg Loans & borrowings Current 168.5 168.1 0.4 Non-current 44.7 44.6 0.1 Total debt 213.2 212.7 0.5 Cash (80.3) (72.2) (8.1) Net debt 132.9 140.5 (7.6) Total loan facilities 350.0 350.0 Unused Portion of Debt Facilities 135.0 135.0 Dividends
Slide 12: FY16 Financial Outlook; Disclaimer
FY16 Financial Outlook Full year net profit guidance range adjusted to $180-190 million, up 23-30% on FY15 H2 impacts Upgrades biased to H1 due to US seasonality China tender – similar units to FY15 with majority delivered in H1 Investments in market expansion activities biased to H2 Full ye