Slide 1: HY24 Result Presentation
Hear now. And always HY24 Result Presentation 19 February 2024 Dig Howitt CEO & President Stu Sayers CFO © Cochlear Limited 2024 1
Slide 2: Our mission
Our mission We help people hear and be heard. We empower people to connect with others and live a full life. We transform the way people understand and treat hearing loss. We innovate and bring to market a range of implantable hearing solutions that deliver a lifetime of hearing outcomes. 2
Slide 3: HY24 Financial summary
HY24 Financial summary Sales revenue Sales revenue up 20% in CC* to $1,113m 2,000 $m in CC* • Strong growth in cochlear implants and sound processor upgrades 1,500 • Cochlear implant units up 14% driven by the consolidation of recent market share gains and strong 20% 1,000 in CC* market growth acro
Slide 4: HY24 Operational review: Cochlear implants
HY24 Operational review Cochlear implants 59% of sales revenue Sales revenue increased 22% in CC with strong growth across both Cochlear implant sales revenue developed and emerging markets $m in CC* 1,400 • Sales revenue increased 18% in CC after adjusting for the impact of the technology exchange
Slide 5: HY24 Operational review: Services
HY24 Operational review Services 31% of sales revenue Services revenue up 29% in CC with strong demand for the new Services sales revenue Nucleus® 8 Sound Processor $m in CC* 600 • Strong uptake of the new sound processor across the developed markets 500 • Emerging markets performed well with growin
Slide 6: HY24 Operational review: Acoustics
HY24 Operational review Acoustics 10% of sales revenue Acoustics revenue declined 9% in CC with lower Acoustics sales revenue demand for Cochlear™ Baha® 6 Max Sound Processor $m in CC* upgrades 300 250 • Lower demand for the Cochlear™ Baha® 6 Max Sound Processor upgrades following 200 strong demand
Slide 7: Profit and loss
Profit and loss Change Change $m HY24 HY23 (reported) (CC) Key points: Sales revenue 1,113.4 892.6 25% 20% Strong growth in cochlear implants and sound processor upgrades GM decline driven by the $15.6m write-down of inventories, largely related to components for older generation products which ar
Slide 8: Capital employed
Capital employed $m Dec23 Jun23 Change Key points: Trade receivables 379.3 388.4 (9.1) Inventories 321.5 311.5 10.0 Less: Trade payables (247.1) (270.4) 23.3 Working capital 453.7 429.5 24.2 Working capital / sales revenue * 20% 22% Property, plant and equipment 279.7 276.7 3.0 Intangible assets 458
Slide 9: Cash flow
Cash flow $m HY24 HY23 Change Key points: EBIT (underlying)* 255.3 185.7 69.6 Strong business performance Depreciation and amortisation 43.1 37.3 5.8 Changes in working capital and other (84.0) (85.3) 1.3 Net interest received 5.1 2.0 3.1 Income taxes paid (62.4) (50.6) (11.8) Operating cash flow
Slide 10: FY24 Outlook
FY24 Outlook FY24 underlying net profit guidance range upgraded to $385-400m on 8 February, a 26-31% increase on FY23 Key assumptions: • Cochlear implant trading conditions continue to be strong across most markets, with an improving trend in adult referral rates in many developed countries. We have
Slide 11: Our company
Hear now. And always Supplementary information Our company For further details please refer to the 2023 Annual Report https://www.cochlear.com/au/en/corporate/investors/annual-reports 11
Slide 12: About Cochlear
About Cochlear Cochlear has been the global leader in implantable hearing solutions for over 40 years, providing a range of implants and sound processor upgrades that deliver a lifetime of hearing outcomes. Our story Our company Graeme Clark, an Australian ear surgeon, saw first-hand Cochlear commen
Slide 13: Cochlear at a glance
Cochlear at a glance Business segments Global presence $1.9b 4.8k 53 % 58 Cochlear Implants* % Cochlear implant systems > ~ female gender balanced in sales revenue* across employees across workforce 180+ 50+ 6 countries countries 30 Services* % Sound processor upgrades, accessories and other Market
Slide 14: Product and services portfolio
Product and services portfolio Cochlear’s market-leading portfolio aims to improve hearing outcomes for recipients and provide a lifetime of hearing solutions. Cochlear implant portfolio Acoustic solutions portfolio Recipient support tools Cochlear Baha® System Cochlear™ Cochlear Nucleus® System Osi
Slide 15: Financial history
Financial history Cochlear has a long track record of investing to grow, delivering growing sales revenue, profits* and dividends. Consistent investment in R&D Long-term growth Growing profits and market growth activities in sales revenue and dividends Research and development Cochlear implants Unde
Slide 16: Strategy and value creation
Hear now. And always Supplementary information Strategy and value creation For further details please refer to the 2023 Annual Report https://www.cochlear.com/au/en/corporate/investors/annual-reports 16
Slide 17: Growth opportunity
Growth opportunity Growing awareness of the cost-effectiveness and quality of life benefits of our products has the potential to underpin long- term industry growth. Hearing loss is prevalent and under- Cochlear implants are a cost-effective Cochlear implants can deliver superior treated solution fo
Slide 18: Growth opportunity
Growth opportunity Product indications are broadening and funding is expanding Good hearing is essential to healthy ageing Product indications and funding are expanding as payers increasingly recognise Hearing loss is particularly prevalent in people over the age of 60, with one in four suffering th
Slide 19: Key market segments
Key market segments Our efforts are targeted at improving awareness, expanding access and building on the clinical evidence that demonstrates the effectiveness of our products across four key market segments. Cochlear implants: Cochlear implants: Adults and Children in developed markets seniors in d
Slide 20: Key market segments
Key market segments Cochlear implants: Acoustic implants: Next generation Children in emerging markets bone conduction hearing solutions Our emerging markets business has been The bone conduction market is under- growing rapidly as awareness of cochlear penetrated and currently has limited Addressab
Slide 21: Our strategy
Our strategy We help people to hear, Strategic priorities Longer-term targets aim Our goal is to help creating value across five pillars focus our time and to provide clear more people to hear, resources stakeholder benefits which contributes to A lifetime of hearing solutions Retain Customers build
Slide 22: Strategic priorities
Strategic priorities Our strategic priorities determine how we focus our time and resources to create value. Over the coming years we are focusing our efforts on delivering value across the following initiatives: Retain market Grow the hearing Build a stronger Minimise Consistent and leadership impl
Slide 23: Creating value for stakeholders
Creating value for stakeholders Value creation describes the impact we have on all our key stakeholders – our customers, our people, our planet, our shareholders as well as society more broadly. Successful execution means achieving the following outcomes for our stakeholders: Customers Society Peopl
Slide 24: Notes
Notes Hear now. And always Forward looking statements Cochlear advises that this document contains forward-looking statements which may be subject to significant uncertainties outside of Cochlear’s control. No representation is made as to the accuracy or reliability of forward-looking statements or
Slide 25: References
References Hear now. And always Growth opportunity (slide 18-19) 11. a. Kramer S, Kapteyn T, Houtgast T. Occupational performance: comparing normally-hearing and hearing-impaired employees using the Amsterdam Checklist for Hearing and Work. International Journal 1. World report on hearing. Geneva: W
Slide 26: www.cochlear.com
www.cochlear.com © Cochlear Limited 2024