Fisher & Paykel Healthcare Corporation Limited · NZX:FPH
Fisher & Paykel Healthcare — Deutsche Bank Craigs NZ Companies Day 2016
28 slides from Fisher & Paykel Healthcare's conference presentation, Mar 8, 2016
Slide 1: Fisher & Paykel Healthcare
Fisher & Paykel Healthcare Inspired and world-leading healthcare solutions DEUTSCHE BANK CRAIGS NZ COMPANIES DAY Sydney, 8 March 2016 1
Slide 2: Investment Highlights
Investment Highlights o A leader in respiratory and OSA treatment devices o Consistent growth strategy o Estimated US$5.0+ billion and growing market opportunity o High level of innovation o Global presence o Strong financial performance NZSX:FPH, ASX:FPH 2
Slide 3: Market Opportunity and Patient Groups
Market Opportunity and Patient Groups RESPIRATORY & ACUTE CARE / HOSPITAL OBSTRUCTIVE SLEEP APNEA / HOMECARE Invasive Noninvasive Hospital Surgical Home CPAP Ventilation Ventilation Respiratory Support Humidification Respiratory Support Therapy “NEW APPLICATIONS” Applications outside of invasive ven
Slide 4: Markets & Products
Markets & Products o Respiratory & Acute Care / Revenue by Product Group Hospital (RAC) 6 months to 30 September 2015 • Heated humidification • Respiratory care • Neonatal care • Surgery RAC o Obstructive Sleep Apnea / OSA Homecare (OSA) • Masks • Flow generators • Data management tools • Humidifier
Slide 5: Hospital Cost Breakdown
Hospital Cost Breakdown 6% Medical devices6 94% Other – includes labour, utilities, drugs, supplies, food, depreciation. Source: Estimates of Medical Device Spending in the United States, Donahoe, G and King, G, June 2014 5
Slide 6: Lower Care Intensity = Lower Cost
Lower Care Intensity = Lower Cost Mean Annual COPD-Related Medical, Pharmacy, and Total Costs by Care Intensity Cohort Source: Anand A Dalal, Laura Christensen, Fang Liu, and Aylin A Riedel. Direct costs of chronic obstructive pulmonary disease among managed care patients. Int J Chron Obstruct Pulmo
Slide 7: Respiratory & Acute Care / Hospital (RAC)
Respiratory & Acute Care / Hospital (RAC) Invasive Noninvasive Hospital Surgical Ventilation Ventilation Respiratory Support Humidification “NEW APPLICATIONS” Applications outside of invasive ventilation 7
Slide 8: Respiratory Humidification
Respiratory Humidification o Normal airway humidification is bypassed or compromised during ventilation or oxygen therapy o Mucociliary transport system operates less effectively o Need to deliver gas at physiologically normal levels • 37°C body core temperature • 44mg/L 100% saturated 8
Slide 9: Respiratory, Acute Care & Surgical - Hardware
Respiratory, Acute Care & Surgical - Hardware o 850 respiratory humidifier system • Invasive ventilation, oxygen therapy and non-invasive ventilation o 810 respiratory humidifier system • Entry level system • Ventilation and oxygen therapy • Optional heated breathing circuit o AIRVO 2 flow generator
Slide 10: Respiratory & Acute Care - Single Use Consumables
Respiratory & Acute Care - Single Use Consumables o Single-use chambers • Patented auto filling MR290 o Single-use breathing circuits • Patented spiral heater wire • Proprietary Evaqua 2 expiratory tube • Minimal condensation • Delivery of optimal humidity o Breathing circuit components • Filters, c
Slide 11: Optiflow Therapy – Delivery Options
Optiflow™ Therapy – Delivery Options 11
Slide 12: Obstructive Sleep Apnea / Homecare (OSA)
Obstructive Sleep Apnea / Homecare (OSA) Home CPAP Respiratory Support Therapy 12
Slide 13: Obstructive Sleep Apnea
Obstructive Sleep Apnea o Temporary closure of airway during sleep o Can greatly impair quality of sleep, leading to fatigue; also associated with hypertension, stroke and heart attack o Estimated US$3+ billion worldwide market, growing approximately 6 - 8% o Estimate >50 million people affected in
Slide 14: Revolutionary Masks
Revolutionary Masks o Market leading mask technology o Unique, patented designs o Mask Matters Most • Masks are key to compliance F&P ESON 2 F&P SIMPLUS F&P PILAIRO Q 14
Slide 15: Stylish, Smart + Simplified CPAP Range
Stylish, Smart + Simplified CPAP Range o Efficiently integrates with InfoUSB and InfoSmart Web o Responsive pressure relief - SensAwake o ThermoSmart humidifier breathing tube technology o Auto-adjusting CPAP 15
Slide 16: Efficient Compliance Reporting
Efficient Compliance Reporting 16
Slide 17: Research & Development
Research & Development o 9.4% of operating revenue, NZ$35.8M¹ o Product pipeline includes: • Humidifier controllers • Masks • Respiratory consumables • Flow generators • Compliance monitoring solutions o 125 US patents, 314 US pending, 513 ROW, 471 ROW pending2 1. 6 months to 30 September 2015 2. as
Slide 18: Manufacturing & Operations
Manufacturing & Operations o Vertically integrated • COGs improvements; Mexico, Lean manufacturing, supply chain o Ample capacity to grow Auckland, New Zealand • Three buildings: 82,000 m² / 885,000 ft² total • 100 acres/40ha land Tijuana, Mexico • 18,000 m2 / 200,000 ft2 • Manufacturing floor area
Slide 19: Global Presence
Global Presence o Direct/offices Revenue by Region • Hospitals, home care dealers 6 months to 30 September 2015 • Sales/support offices in North America, Europe, Asia, South North America, Middle East and America Europe Australasia, 15 distribution centres • More than 600 staff in 30 countries • Ong
Slide 20: First Half Result Highlights
First Half Result Highlights H1 FY2016 (6 months to 30 September 2015) NZ$M PCP CC 1 Record net profit after tax 62.0 +27% +25% Record operating revenue 381.0 +20% +12% Record RAC/Hospital operating revenue 199.6 +18% +11% Record OSA/Homecare operating revenue 175.3 +23% +14% RAC new applications
Slide 21: Innovative New Products Launched
Innovative New Products Launched F&P Eson™ 2 nasal mask AirSpiral tube and uninterruptible power supply (UPS) transport system for AIRVO™2 Optiflow™ + nasal high flow cannula F&P HumiGard™ SH870 surgical humidification system 21
Slide 22: H1 FY2016 Operating Results
H1 FY2016 Operating Results H1 FY2016 (6 months to 30 September 2015) % of Revenue NZ$M PCP CC1 Operating revenue 100.0% 381.0 +20% +12% Cost of sales 36.7% 139.8 +12% +3% Gross profit 63.3% 241.2 +25% +19% Other income (R&D grant) 2.5 SG&A 29.6% 112.7 +24% +17% R&D 9.4% 35.8 +14% +14% Total opera
Slide 23: Dividend and Gearing
Dividend and Gearing o Increased interim dividend by 16%: • 6.7 cps + 2.6056 cps imputation credit for NZ residents (gross dividend of 9.3056 NZ cps) • Fully imputed • 1.1824 cps non-resident supplementary dividend • Dividend reinvestment plan available for New Zealand and Australian residents, no d
Slide 24: Respiratory & Acute Care / Hospital (RAC)
Respiratory & Acute Care / Hospital (RAC) Operating revenue growth H1 FY2016 NZ$ +18% Constant currency +11% New applications consumables revenue growth H1 FY2016 (Noninvasive ventilation (NIV), Optiflow, AIRVO, Surgical) NZ$ +30% Constant currency +22% o New applications consumables now make up 48%
Slide 25: Obstructive Sleep Apnea / Homecare (OSA)
Obstructive Sleep Apnea / Homecare (OSA) Operating revenue growth H1 FY2016 NZ$ +23% Constant currency +14% Mask revenue growth H1 FY2016 Constant currency +25% o Masks continue to take market share 25
Slide 26: Cash Flow & Balance Sheet
Cash Flow & Balance Sheet 1H FY2016 (for the 6 months ended 30 September 2015) NZ$M Operating cash flow (-37%) 35.2 Capital expenditure 36.2 Depreciation and amortisation 16.9 1H FY2016 (as at 30 September 2015) NZ$M Net debt 97.4 Total shareholders equity 447.8 Total assets 735.2 % Pre-tax return o
Slide 27: Foreign Exchange Effects
Foreign Exchange Effects o 51% of operating revenue in USD (1H FY15: 47%) and 21% in €. o Approximately 45% of the NZD/USD hedging in place for FY17 is in the form of collar options. The average exchange rates resulting from the collar options will vary depending on the spot rate at their expiries.
Slide 28: Consistent Growth Strategy
Consistent Growth Strategy o Improving care and outcomes o Four key pillars: o Reducing cost to the Continuous product healthcare system improvement Increase More devices for each • Effectiveness of care patient • Efficiency of care Serve more patient Reduce groups • Intensity of care • Healthcare s
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