Fisher & Paykel Healthcare Corporation Limited · NZX:FPH
Fisher & Paykel Healthcare — FY2002 Earnings Presentation
28 slides from Fisher & Paykel Healthcare's earnings presentation, 2002
Slide 1: Fisher & Paykel Healthcare
Fisher é.Paykel HEALTHCARE Fisher & Paykel HEALTHCARE
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation may include forward-looking statements and actual results could vary. Such forward-looking statements, including statements regarding our future revenue and earnings projections and the development of new markets for our products, are subject to risks and
Slide 3: Investment Highlights
Investment Highlights • Leading player in heated humidification devices and consumables for a variety of respiratory markets - estimated US$1 billion+ market opportunity • High level of innovation • Global presence • Competitive NZ cost base • Strong financial performance • Experienced management te
Slide 4: Markets and Products
Markets and Products • Respiratory humidification Respiratory – respiratory humidifiers, Humid- chambers, breathing circuits ification and accessories 51% • Obstructive sleep apnea Neonatal – integrated flow generator- and other humidifiers, humidifiers, masks 12% and chambers • Neonatal and other –
Slide 5: Respiratory Humidification
Respiratory Humidification • Normal airway humidification is bypassed or compromised during ventilation or O2 therapy • Mucociliary transport system operates less effectively – increases risk of infection – impairs gas exchange • Need to deliver gas at physiologically normal levels – 37°C body core
Slide 6: Market Opportunity
Market Opportunity Humidification systems are utilized to create, control and deliver optimal levels of humidity • Estimated US$350 million market worldwide – consists of heated humidifier controllers, humidifier chambers, breathing circuits, unheated humidifiers and related supplies – 1.5 million i
Slide 7: 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 • integrated
Slide 8: Single-use Components
Single-use Components • Single-use chambers – patented auto filling MR290 – manual filling models • Single-use adult breathing circuits – patented spiral heater wire – less condensation – delivery of optimal humidity à On average, 35 system set-ups used per controller per year
Slide 9: Competitive Advantage
Competitive Advantage • Creating, controlling and delivering optimal humidity poses technical challenges • Integrated humidifier, chamber, circuit system provides: – optimal performance – marketing advantage • Bundled consumable sales driven by installed controllers – Estimate F&P has >50% global co
Slide 10: Obstructive Sleep Apnea
Obstructive Sleep Apnea • Estimated US$600 million worldwide market, growing 15%-20% • Temporary closure of airway during sleep • Can greatly impair quality of sleep, leading to fatigue and reduced cognitive function; also associated with stroke and Normal breathing heart attack • 12 million affecte
Slide 11: Benefits of Heated Humidification with OSA
Benefits of Heated Humidification with OSA Compliance can be greatly improved with heated humidification Clinical studies have found that: • Mouth leak resulted in nasal congestion and increased nasal airway resistance (Richards, Journal of Respiratory Care Medicine, 1996) • More patients abandoned
Slide 12: Fisher & Paykel's OSA Systems
Fisher & Paykel’s OSA Systems 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 HC221 Integrated Flow-Generator Humidifier • compa
Slide 13: Mask Systems
Mask Systems • Aclaim™ Nasal Mask – proprietary sliding attachment – auto-adjusting headpiece – bias flow diffuser à less leaks, greater comfort • Oracle™ Oral Mask – proprietary oral interface – no headgear required
Slide 14: Competitive Advantage
Competitive Advantage • Leveraging heated humidification expertise into rapidly growing market – increased penetration of heated humidification in OSA à Fisher & Paykel is the pioneer of heated humidification technologies in OSA • Benefits of integrated flow-generator humidifier • Recently-introduce
Slide 15: Neonatal Warmers and CPAP
Neonatal Warmers and CPAP • Radiant Warmers – 400,000 pre-term live births per year in US – 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
Slide 16: Research & Development
Research & Development • 120 engineers, scientists, physiologists • Competitive NZ cost base • Integrated product teams • Rapid prototype development • Active clinical research program • 29 US patents, 25 pending * * at 31 Mar 2002
Slide 17: New Products
New Products Timing Product Last 6-12 months Aclaim™ Mask Oracle Mask Infant CPAP System Australasia HC150 Humidifier HC221 Integrated Flow Generator Next 6-12 months HC220 Integrated Flow Generator Aclaim2 mask Neonatal breathing circuits MR810 Humidifier Infant CPAP System à Continuously introduci
Slide 18: Global Presence
Global Presence % of Revenue* • Direct – hospitals, alternate site, home care Other 3% dealers North – sales offices in USA/Canada, Asia America UK/Ireland, France/Benelux, Pacific 20% 49% Germany/Austria, Australia and NZ • Distributors – 100 distributors worldwide - 90 countries Europe • Original
Slide 19: Revenue Growth USD
Revenue Growth USD CAGR: Core 17.1% 90 Total 12.7% 70 FY 1999 FY 2000 FY 2001 50 CAGR: 6.1% FY 2002 US$M CAGR: 42.4% 30 FY ends 3/31 10 CAGR: 31.6% Respiratory OSA Warming/ Other * TOTAL -10 Humidification Neonatal * Other includes distributed and discontinued products
Slide 20: Investment Highlights
Investment Highlights • Leading player in heated humidification devices and consumables for a variety of respiratory markets - estimated US$1 billion+ market opportunity • High level of innovation • Global presence • Competitive NZ cost base • Strong financial performance • Experienced management te
Slide 21: FY 2002 Q4 Update
FY 2002 Q4 Update Fisher < Paykel HEALTHCARE Fisher & Paykel HEALTHCARE
Slide 22: Respiratory Humidification
Respiratory Humidification Environment - Warm northern winter - Softer hospital capex - Mild flu season Performance - Good growth in North America - Reduced humidifier sales to OEMs - Strong growth in single-use adult breathing circuits - Revenue -11% in Q4, +2% full year - 48% of revenue Q4
Slide 23: CPAP / Obstructive Sleep Apnea
CPAP / Obstructive Sleep Apnea Environment - Increasing acceptance of humidification benefits - Product price reductions - Improved reimbursement Medicare USA US$100 à US$300 Performance - 27% volume growth in integrated flow-generator humidifiers Q4 - Masks increasing in importance - Revenue +15% i
Slide 24: Neonatal and warming
Neonatal and warming Environment - Increasing USA sales activity - Tender driven, lumpy Performance - Good growth in North America - Revenue +71% in Q4, +30% full year - 8% of revenue Q4
Slide 25: New Products
New Products Timing Product Last 6-12 months Aclaim™ Mask Oracle Mask Infant CPAP System Australasia HC150 Humidifier HC221 Integrated Flow Generator Next 6-12 months HC220 Integrated Flow Generator Aclaim2 mask Neonatal breathing circuits MR810 Humidifier Infant CPAP System à Continuously introduci
Slide 26: Revenue Growth USD
Revenue Growth USD CAGR: Core 17.1% 90 Total 12.7% 70 FY 1999 FY 2000 FY 2001 50 CAGR: 6.1% FY 2002 US$M CAGR: 42.4% 30 FY ends 3/31 10 CAGR: 31.6% Respiratory OSA Warming/ Other * TOTAL -10 Humidification Neonatal * Other includes distributed and discontinued products
Slide 27: Foreign Currency
Foreign Currency • Policy: options and contracts – 100% year 1, 75% years 2 and 3, options only up to 25% years 4 and 5. • Current portfolio: – Year 1 100% @ 0.47 average – Year 2 and 3 75% @ < 0.44 • US$ represents 80% of NZ export value
Slide 28: Balance Sheet
Balance Sheet • DSO improved to 54 days Q4 • Finished inventory 5.9 turns • NZ$73M cash • Dividend NZ$0.25 = NZ$25.6M
Fisher & Paykel Healthcare — FY2002 Earnings Presentation on 6ix