Slide 1: Capital raising to enhance liquidity
Capital raising to enhance liquidity March 2020 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 2: Disclaimer
Disclaimer This investor presentation (Presentation) is dated 25 March 2020 and has been prepared by Cochlear Limited (ACN 002 618 073) (Cochlear or the Company). By attending an investor presentation or briefing, or accepting, accessing or reviewing this Presentation, you acknowledge and agree to t
Slide 3: Disclaimer (cont'd)
Disclaimer (cont’d) Investment risk An investment in Cochlear shares is subject to known and unknown risks, some of which are beyond the control of Cochlear and its directors. Cochlear does not guarantee any particular NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES rate of return or the perfor
Slide 4: Disclaimer (cont'd)
Disclaimer (cont’d) Future performance and forward-looking statements This Presentation contains certain “forward-looking statements”. The words “expect”, “anticipate”, “estimate”, “intend”, “believe”, “guidance”, “should”, “could”, “may”, “will”, “predict”, “plan” NOT FOR DISTRIBUTION OR RELEASE IN
Slide 5: Capital raising rationale
Capital raising rationale • Cochlear is taking pre-emptive and decisive action to ensure it remains strongly capitalised during the current market uncertainties and to position the Company for the future NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Taking decisive • Executing a fully underwr
Slide 6: Key developments impacting Cochlear
Key developments impacting Cochlear • In line with Cochlear’s 16 March 2020 market update, the COVID-19 pandemic is expected to have a significant negative impact on NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES cochlear implants for an uncertain period of time as elective surgeries are defer
Slide 7: Taking decisive action
Taking decisive action • Pro forma total liquidity of A$1,678 million, achieved through • Fully underwritten A$800 million Placement NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES • Existing, committed and undrawn facilities, with no debt maturities prior to 2021 and covenant relief from lende
Slide 8: Pro forma capitalisation and liquidity
Pro forma capitalisation and liquidity Adjusted3 Impact of Pro forma NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES • Pro forma liquidity (cash on hand plus (31-Dec-19) the Offer (31-Dec-19) committed undrawn bank facilities) of A$1,678 million (A$mm)4 Committed Drawn Drawn Drawn • Potential a
Slide 9: Substantial liquidity
Substantial liquidity NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES (93) Legend: 1,678 ~ (80) Identified payments Potential payments • Substantial liquidity to cover (483) commitments and COVID-19 related disruptions (238) 785 • Incorporates “worst case” basis with respect to the AMF judgment
Slide 10: Significant impact expected from COVID-19 surgery deferrals
Significant impact expected from COVID-19 surgery deferrals Exposed to geographies at different stages of COVID-19 related Diversified revenue profile, with a large and growing services disruptions business NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 1H FY2020 revenue by geography 1H FY2020
Slide 11: The Cochlear investment thesis remains strong
The Cochlear investment thesis remains strong • Cochlear is the global leader in implantable hearing solutions, with an estimated market share globally of ~60%1 and in excess of NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 600,000 implants sold over the last ~40 years2 • Positive long term g
Slide 12: Placement and Share Purchase Plan
Placement and Share Purchase Plan Placement size and • Fully underwritten institutional placement to raise approximately A$800 million structure • Approximately 5.7 million new shares to be issued, equivalent to 9.9% of Cochlear’s current shares on issue (New Shares) NOT FOR DISTRIBUTION OR RELEASE
Slide 13: Placement and Share Purchase Plan timetable
Placement and Share Purchase Plan timetable Event Date Record date for SPP 7:00pm (Sydney time), Tuesday, 24 March 2020 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Trading halt and announcement of the Placement and SPP Wednesday, 25 March 2020 Placement bookbuild Wednesday, 25 March 2020 An
Slide 14: Appendix A: Risk factors
Appendix A: Risk factors NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 15: A: Risk factors
Appendix A: Risk factors This section discusses some of the key risks associated with any investment in Cochlear, which may affect the value of Cochlear shares. The risks set out below do not constitute an exhaustive list of all risks involved with an investment in Cochlear. Before investing in Coch
Slide 16: A: Risk factors (cont'd)
Appendix A: Risk factors (cont’d) Interruption to product supply Cochlear relies on third-party suppliers for the supply of key materials and services. This carries the risk of delays and disruptions in supplies. Certain materials are NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES available fr
Slide 17: A: Risk factors (cont'd)
Appendix A: Risk factors (cont’d) Production innovation and competition Cochlear is exposed to the risk of failing to develop and produce innovative products for its customers. NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Increased competition exposes Cochlear to the risk of losing market sh
Slide 18: A: Risk factors (cont'd)
Appendix A: Risk factors (cont’d) Talent management Cochlear operates in a very competitive environment, particularly in relation to attracting scientific talent to Cochlear. Cochlear’s success depends on its ability to attract NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES and retain talent,
Slide 19: A: Risk factors (cont'd)
Appendix A: Risk factors (cont’d) Information security and privacy Cochlear handles and stores personal information, including health information, for its customers and employees. With expanding information privacy and security NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES regulations, and an
Slide 20: A: Risk factors (cont'd)
Appendix A: Risk factors (cont’d) Workplace accidents or incidents may occur There may be an accident or incident at one of Cochlear’s manufacturing facilities that results in serious injury, or damage to property. This may in turn result in Cochlear NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STA
Slide 21: A: Risk factors (cont'd)
Appendix A: Risk factors (cont’d) Insurance Cochlear maintains insurance cover that is consistent with standard industry practice, including workers compensation, business interruption, property damage, public NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES liability, and product liability. How
Slide 22: A: Risk factors (cont'd)
Appendix A: Risk factors (cont’d) Accounting standards may change Accounting standards may change. This may affect the reported earnings of Cochlear and its financial position from time to time. Cochlear has previously and will NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES continue to assess
Slide 23: Appendix B: Foreign Selling Restrictions
Appendix B: Foreign Selling Restrictions NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 24: B: Foreign Selling Restrictions
Appendix B: Foreign Selling Restrictions International Offer Restrictions This document does not constitute an offer of New Shares of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES distribute
Slide 25: B: Foreign Selling Restrictions (cont'd)
Appendix B: Foreign Selling Restrictions (cont’d) Statutory rights of action for damages and rescission Securities legislation in certain of the Provinces may provide purchasers with, in addition to any other rights they may have at law, rights of rescission or to damages, or NOT FOR DISTRIBUTION OR
Slide 26: B: Foreign Selling Restrictions (cont'd)
Appendix B: Foreign Selling Restrictions (cont’d) Language of documents in Canada. Upon receipt of this document, each investor in Canada hereby confirms that it has expressly requested that all documents evidencing or relating in any way to the sale of the New Shares (including for greater certaint
Slide 27: B: Foreign Selling Restrictions (cont'd)
Appendix B: Foreign Selling Restrictions (cont’d) Japan The New Shares have not been and will not be registered under Article 4, paragraph 1 of the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948), as NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES amended (the FIEL) pursuan
Slide 28: B: Foreign Selling Restrictions (cont'd)
Appendix B: Foreign Selling Restrictions (cont’d) Singapore This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Authority of Singapore
Slide 29: B: Foreign Selling Restrictions (cont'd)
Appendix B: Foreign Selling Restrictions (cont’d) United Arab Emirates Neither this document nor the New Shares have been approved or passed on in any way by the Emirates Securities and Commodities Authority (ESCA) or any other NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES governmental author
Slide 30: B: Foreign Selling Restrictions (cont'd)
Appendix B: Foreign Selling Restrictions (cont’d) United States This document may not be distributed or released in the United States. NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES This document does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the
Slide 31: Appendix C: Underwriting agreement summary
Appendix C: Underwriting agreement summary NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 32: C: Underwriting agreement summary
Appendix C: Underwriting agreement summary Cochlear has entered into an underwriting agreement with the Lead Manager in respect of the Placement (Underwriting Agreement) and pursuant to which the Lead Manager is acting as sole lead manager, bookrunner and underwriter of the Placement. NOT FOR DISTRI
Slide 33: C: Underwriting agreement summary (cont'd)
Appendix C: Underwriting agreement summary (cont’d) • any of the following occurs: (i) a director or senior manager of Cochlear is charged with an indictable offence; (ii) any regulatory body commences any public action against a director of Cochlear in his or her capacity as such or announces that
Slide 34: C: Underwriting agreement summary (cont'd)
Appendix C: Underwriting agreement summary (cont’d) • any aspect of the Placement does not comply with the Corporations Act or the ASX Listing Rules; • any certificate which is required to be provided by Cochlear under the Underwriting Agreement is untrue or incorrect; NOT FOR DISTRIBUTION OR RELEAS
Slide 35: NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES