Fisher & Paykel Healthcare Corporation Limited · NZX:FPH
Fisher & Paykel Healthcare — ABN AMRO Conference (March 2006)
22 slides from Fisher & Paykel Healthcare's conference presentation, Mar 1, 2006
Slide 1: —
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Slide 2: Investment Highlights
Investment Highlights ¢ Leading player in heated humidification systems ¢« Consistent growth strategy ¢ Estimated US$2+ billion and growing market opportunity ¢ High level of innovation ¢ Global presence ¢ Strong financial performance NZSX:FPH, ASX:FPH Fisher & Paykel | HEALTHCARE
Slide 3: Operating Results US$ H1 FY06
Operating Results US$ H1 FY06 FY06 (6 mths) % Revenue USSM % A pcp Operating revenue 100% 95.0 +27% Gross profit 70.6% 67.1 +24% SG&A 29.4% 28.0 +27% R&D 6.2% 5.9 +12% Total Operating Expenses 35.6% 33.9 +24% Operating Profit 35.0% 33.3 +25% _ Fisher Paykel 1) FAEALTHCARE
Slide 4: Markets and Products
Markets and Products Neonatal ¢ Respiratory and humidification 11% ¢ Obstructive sleep apnea ¢ Neonatal and other OSA 44% m- Consumable products represent approx. 58% of core product sales Revenue by Product 6 months to 30 September 2005 _Fisher& Paykel 7 TIEALIHICARE
Slide 5: Respiratory Humidification
Respiratory Humidification ¢ Normal airway humidification is bypassed or compromised during ventilation or O, 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 ¢ Estimated US$350+ million market worldwide — heated humidifier controllers — humidifier chambers + — breathing circuits and components + — unheated humidifiers — oxygen therapy supplies ¢ Opportunity to move technology into O, therapy, COPD, xerostomia, insufflation _ Fisher 3,
Slide 7: Humidification Systems
Humidification Systems ¢ MR850 Respiratory Humidifier System — invasive ventilation, O2 therapy and non-invasive ventilation ¢ MR810 Respiratory Humidifier System — entry level system — ventilation and O, therapy — optional heated breathing circuit ¢ HC550 Respiratory Humidifier System — invasive ve
Slide 8: Single-use Components
Single-use Components * Single-use chambers — patented auto filling MR290 ~ manual filling models * Single-use breathing circuits — adult and neonatal — patented spiral heater wire ~ proprietary dry expiratory tube ~ less condensation — delivery of optimal humidity ¢ Breathing circuit components ~—
Slide 9: Expanding Opportunities
Expanding Opportunities * MR880 Humidification System Now | — Controller, chamber, breathing circuit, range of single patient use interfaces. — Designed for a range of new patient groups, e.g. O, therapy, COPD, xerostomia. ¢ MR860 Laparoscopic Humidification System ~ Humidifies the dry CO, gas used
Slide 10: Respiratory Humidification H1 FY06
Respiratory Humidification H1 FY06 ¢ 16% revenue growth US$, 13% ex currency * MR850 penetration driving increasing breathing circuit share ¢ Increasing value per patient * Establishing sales of MR860 insufflation humidification system in NZ and Australia ¢ Positive response to MR880 system in NZ an
Slide 11: Obstructive Sleep Apnea
Obstructive Sleep Apnea Temporary closure of airway during sleep Can greatly impair quality of sleep, leading to fatigue; also associated with hypertension, stroke and heart attack Estimated US$1.2+ billion worldwide market, growing 15% - 20% Potentially 50-60 million affected worldwide _ Most commo
Slide 12: CPAP Systems
CPAP Systems ¢ HC150 Humidifier ¢ SleepStyle™ 200 Convertible and Integrated Flow Generator series — greater pressure range, altitude adjustment, enhanced user ergonomics ~ patented Ambient Tracking™ plus auto- adjusting humidification technology <P “ ¢« SleepStyle™ 600 Integrated Flow Generator ser
Slide 13: Mask Range
Mask Range Four interface categories: ¢ FlexiFit'™Nasal Masks ~ patented sliding attachment ~ FlexiFit™ technology — new 406 Petite model « FlexiFit™Full Face Mask — under chin seal ¢ Oracle™Oral Mask — proprietary oral interface ¢ Infinity™ Direct Nasal Mask — very light _ Fisher & Paykel 1) TAEALT
Slide 14: OSA H1 FY06
OSA H1 FY06 64% flow generator and mask revenue growth in US$ . 42% total revenue growth in US$ Hew | introduced non-invasive ventilation masks introduced FlexiFit™ 406 Petite Nasal Mask Be Completed introduction of full range of HC230 and HC600 new generation flow generators | Additional flow gener
Slide 15: Neonatal and Warming
Neonatal and Warming * Radiant Warmers — warmers required in delivery and NICU ~ precise and stable temperature control ~ Opportunity in operating room * Infant CPAP System ~ proprietary bubble CPAP, non-invasive, oscillating pressure — lower risk alternative to ventilation ~ high value consumable s
Slide 16: Neonatal and Warming H1 FY06
Neonatal and Warming H1 FY06 ¢ 28% revenue growth in US§, 25% ex currency ¢ Warmers, CPAP and resuscitators all driving growth ¢ Increasing proportion of recurring revenue ¢ Range of resuscitation masks to be introduced HEALIHCARE
Slide 17: Research & Development
Research & Development 170 engineers, scientists, physiologists 6.2% of revenue H1 FY06 Product pipeline includes — Flow generators — Masks — Humidification system for COPD therapy — Respiratory consumables Competitive NZ cost base 52 US patents, 70 US pending, 97 ROW, 234 ROW pending * * at 31 Mar
Slide 18: Manufacturing
Manufacturing * Vertically integrated - electronics assembly - injection moulding ~ motor assembly ¢ ISO 9001; Class 100,000 controlled environment ¢« Ample capacity to grow - 300,000ft? / 28,000m? facility ~ 100 acres / 40 ha - 23,000m? building due for completion mid 2006 HEALIHCARE
Slide 19: Global Presence
Global Presence ¢ Direct ~ hospitals, home care dealers ~ Sales/support offices in USA/Canada, Asia omer UK/lreland, France/Benelux/Italy/ Pacific Spain, Germany/Austria/Switzerland, 7°” india, Japan, UAE, China, Australia and NZ - 270 staff — Ongoing international expansion ¢ Distributors North Ame
Slide 20: Revenue Growth US$
Revenue Growth US$ 170 i, L__FY ended 31 March m FY 2000 CAGR ‘ao FY 2001 CORE 20.0% ‘so FY 2002 TOTAL 17.3% 420 FY 2003 110 MFY 2004 100 FY 2005 CAGR 14.4% US$M CAGR 27.1% CAGR 31.3% Warming/ Neonatal Fisher’ Paykel Le : HEALTHCARE
Slide 21: Balance Sheet
Balance Sheet ¢ NZ$24M cash at 30 September 2005 ¢ Investing in capacity expansion with construction of NZ$60M second building ¢ NZ$5.4cps FY06 interim dividend ¢ NZ$27M ongoing share buyback; NZ$15.3M completed to date. ¢ 50% annualised pre-tax return on average funds employed FY06 (46% FY05) EALIH
Slide 22: Growth Drivers
Growth Drivers Consistent strategy: ¢ Continue to improve existing product lines ¢ Develop complementary products/ consumables ¢ Target new medical applications —e.g. COPD, O, therapy, insufflation ¢ Increase international presence —e.g. South America and Scandinavia EALIHCARE
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