Fisher & Paykel Healthcare Corporation Limited · NZX:FPH
Fisher & Paykel Healthcare — H1 FY2008 Earnings Presentation
23 slides from Fisher & Paykel Healthcare's earnings presentation, November 2007
Slide 1: FY08 Half Year Update & Overview
FY08 Half Year Update & Overview
Slide 2: Investment Highlights
Investment Highlights • Leading player in respiratory humidification systems • Consistent growth strategy • Estimated US$2.5+ billion and growing market opportunity • High level of innovation • Global presence • Strong financial performance NZSX:FPH, ASX:FPH 2 2
Slide 3: Operating Results US$
Operating Results US$ H1 FY08 (6 mths) %Revenue US$M %Ìpcp Operating revenue 100% 127.7 +18% Gross profit 53.6% 68.4 +10% SG&A 28.9% 36.9 +23% R&D 6.6% 8.5 +38% Total Operating Expenses 35.5% 45.4 +26% Operating Profit 18.1% 23.1 -11% 3 3
Slide 4: Operating Results NZ$
Operating Results NZ$ H1 FY08 (6 mths) % Revenue NZ$M %Ìpcp Operating revenue 100% 172.6 +0% Gross profit 53.6% 92.5 -6% SG&A 28.9% 49.8 +5% R&D 6.6% 11.5 +18% Total Operating Expenses 35.5% 61.3 +8% Operating Profit 18.1% 31.2 -24% 4 4
Slide 5: IFRS
IFRS • NZ$47.9m land value increase • NZ$2.0M expense increase – Share/option based remuneration – Long service leave • NZ$0.4m balance sheet translation sensitivity • FX hedge accounting achieved 5 5
Slide 6: IFRS Operating Profit/EBIT
IFRS Operating Profit/EBIT 2006 2007 2008 Result Result Result Hedging Hedging $2.2m $1.5m CTR IFRS Expenses $4.5m $2.1m IFRS Impacts on 2007 6 6
Slide 7: Markets and Products
Markets and Products Distributed/ • Respiratory & Acute Care Other – Heated Humidification 3% OSA – Respiratory Care 47% – Neonatal Care • Obstructive Sleep Apnea – Masks – Flow Generators – Humidifiers Respiratory & Acute 50% Revenue by Product ¯ Consumable and accessory 6 months to 30 September 20
Slide 8: Respiratory Humidification
Respiratory Humidification • Normal airway humidification is bypassed or compromised during ventilation or O2 therapy • Mucociliary transport system operates less effectively – increases risk of infection – impairs gas exchange • Need to deliver gas at physiologically normal levels – 37°C body core
Slide 9: Respiratory Humidification Systems
Respiratory Humidification Systems • MR850 Respiratory Humidifier System – invasive ventilation, O2 therapy and non-invasive ventilation • MR880 Respiratory Humidifier System – simpler controls – O2 therapy • MR810 Respiratory Humidifier System – entry level system – ventilation and O2 therapy – opt
Slide 10: Single-use Respiratory Components
Single-use Respiratory Components • Single-use chambers – patented auto filling MR290 • Single-use breathing circuits – patented spiral heater wire – proprietary Evaqua™ expiratory tube – minimal condensation – delivery of optimal humidity • Breathing circuit components – Filters, catheter mount, we
Slide 11: Neonatal Care
Neonatal Care • Radiant Warmers – warmers required in delivery and NICU – precise and stable temperature control – opportunity in operating room • Infant CPAP System – proprietary bubble CPAP, non-invasive, oscillating pressure – lower risk alternative to ventilation – high value consumable system •
Slide 12: Expanding Opportunities
Expanding Opportunities Invasive Ventilation Non-invasive Ventilation O2 Therapy Humidity Therapy Laparoscopic Insufflation COPD Humidity Therapy 12 12
Slide 13: Respiratory & Acute Care Update
Respiratory & Acute Care Update • 15% revenue growth US$, 8% constant currency • Lapped last year’s Broadlane deliveries, Novation in second half • Continuing strong growth in consumables: breathing circuits, NIV masks, infant CPAP, resuscitation • Clinical data presented indicating >40% reduction i
Slide 14: 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$1.8+ billion worldwide market, growing 15% - 20% • Potentially 50-60 million affected worldwide • Mo
Slide 15: CPAP Systems
CPAP Systems • HC150 Humidifier • SleepStyle™ 200 Flow Generator series – patented Ambient Tracking™ humidification technology – Auto with SensaWake™ • SleepStyle™ 600 Flow Generator series – ThermoSmart™ heated breathing tube technology – more humidity – reduced symptoms, increased comfort 15 15
Slide 16: Mask Range
Mask Range Four interface categories: • FlexiFit™ Nasal Masks – patented sliding attachment – FlexiFit™ technology • FlexiFit™ Full Face Mask – under chin seal • Oracle™ Oral Mask – proprietary oral interface • Opus 360™ Nasal Pillows Mask – very light 16 16
Slide 17: OSA Update
OSA Update • 21% revenue growth US$ • 25% revenue growth excluding add on humidifiers, 19% constant currency • Auto pressure setting and SensAwake™ close to introduction 17 17
Slide 18: Research & Development
Research & Development • 225 engineers, scientists, physiologists • 6.6% of revenue H1 FY08 • Product pipeline includes – Flow generators, auto – Masks – Humidification system for COPD therapy – Respiratory consumables • 76 US patents, 67 US pending, 208 ROW, 222 ROW pending * * at 31 March 2007 18
Slide 19: Manufacturing
Manufacturing • Vertically integrated − electronics assembly − injection moulding − motor assembly • Ample capacity to grow − two buildings 51,000m²/ 550,000 ft² total − 100 acres/40ha land − considering expansion offshore 19 19
Slide 20: Global Presence
Global Presence • Direct/offices – hospitals, home care dealers Asia – Sales/support offices in USA/Canada, Pacific/Other UK/Ireland, France/Benelux/Italy/ Spain, 22% Germany/Austria/Switzerland, India, Japan, UAE, China, Taiwan, Turkey, Sweden, Brazil, Australia and NZ Europe 32% – 400+ staff in 26
Slide 21: Revenue Growth US$
Revenue Growth US$ 250 240 230 FY ended 31 March CAGR FY 2002 220 CORE 22% 210 FY 2003 200 TOTAL 21% 190 FY 2004 180 FY 2005 170 160 FY 2006 150 FY 2007 140 US$M 130 120 110 CAGR 18% CAGR 27% 100 90 80 70 60 50 40 30 20 10 0 Respiratory/ OSA Other TOTAL Acute 21 21
Slide 22: Balance Sheet
Balance Sheet • NZD 5.4 cps interim dividend • NZ$76.2M net debt at 30 September 2007 • Completed NZ$27M share buyback • NZ$208.8M total shareholders equity • NZ$333.4M total assets • 27% annualised pre-tax return on equity, 18% on total assets 22 22
Slide 23: Growth Drivers
Growth Drivers Consistent strategy: • Continue to improve existing product lines • Develop complementary products/ consumables • Target new medical applications – e.g. COPD, NIV, O2 therapy, insufflation • Increase international presence 23 23
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