Slide 1: Results for the year ended 30 June 2006
Cochlear Limited Results for the year ended 30 June 2006 Chris Roberts ~ CEO Neville Mitchell ~ CFO Hearne 5. eles Cochlear* Cochlear - Background * Medical device company (~24yr): global leader in implantable devices for the hearing impaired » Leading global position (~70% share) in cochlear implan
Slide 2: Record Financial Results for F06
Record Financial Results for FO6 FO6 FOS $ millions $ millions Cochlear implants 379.9 307.4 T 24% Bone Anchored (Baha) 51.7 14.8 T 249% FX Contracts 20.7 26.8 Ll 23% Revenue 452.3 349.0 T 30% EBIT (25% of revenue} 111.5 82.5 T 35% Net Profit After Tax 80.0 59.6 T 34% Core Earnings* 86.4 60.8 T 42%
Slide 3: 10 Year Sales (Excluding FX Contracts)
Sales § millions 450 400 200 {0 Fo7 FOB FOG FOO FOI Fo2 FO3 FO4 FOS FO6 10 yr CAGR 22%, 10 Year Sales (Excluding FX Contracts): F97 to F06 » F06 Sales (ex FX contracts) of $431.6 million, T 34% » F06 sales above 10 year CAGR of 22% » FO6 Cl sales up 24% above Cl unit sales growth CC Sales (§ million
Slide 4: F06 Sales Revenue and Constant Currency growth by Region
FO6 Sales Revenue and Constant Currency* growth by Region Asia-Pacific 14% (T7%) Europe en i Americas 40% (735%) 46% (150%) * CC is Sales revenues restated at FO6 exchange rates Americas: FO6 Sales in Constant Currency (F06 FX Rates) 206 180 « Americas up 50% in ~ constant currency «> 160 S 140 « Su
Slide 5: Europe and Asia Pacific sales in constant currency
Europe: FQ6 Sales in Constant Currency (FQ6 FX Rates) 180 {60 » Europe up 35% in —~ constant currency <> 140 o » Full year of Nucleus 2 120 Freedom = 10 » Benefit from increasing . a direct operations ° » Ongoing upgrade of g European internal ws 49 capability mo 20 0 FOL FO2 FO3 Fd FAQS FG Asia Pac
Slide 6: What have we done in F06?
What have we done in F0Q6? » Continued successful roll-out of Nucleus Freedom Unmatched clinical results and reliability » Successfully integrated bone anchored products (Baha) Kept growth going (30% over full year FOS) » Significant progress in upgrading manufacturing capability People / Lean think
Slide 7: Nucleus Freedom CI Systems
Nucleus Freedom CI Systems Clinical results surpass previous Cochlear Implant systems ~ Hearing performance ~ short, medium and long-term resuits setting new benchmark criteria ~ Speech in complex listening situations; eg speech in noisy environments or music ~ excellent results with ‘SmartSound’ ba
Slide 8: Financial Results: F06 Financial Performance
Financial Results Neville Mitchell - CFO swe Cochlear: FO6 Financial Performance FOG FOS FOS AIFRS AGAAP $m $m $m Total Revenue 452.3 349.0 344.9 Reported NPAT 80.0 59.6 54.5 Core Earnings 86.4 60.8 58.4 Dividends Final Dividend 55¢ 45c 45¢ Record Date 31 August 2006 Payable Date 21 September 2006 F
Slide 9: F06 Core Earnings Calculation
FOQ6 Core Earnings Calculation FO6 FO5 $m $m NPAT 80.0 59.6 Adjustment items (after tax) * R&D 1.6 (2.1) « Acquired intangible amortisation 2.3 0.7 « Share based compensation 2.5 2.6 Core earnings 86.4 60.8 gm Ff 05 - FO6 Core Earnings Reconciliation 83.6 {28.6) (6.8) cy waltintam 96.4 0 ~ "FOS Core
Slide 10: Research & Development Expense and Cash Generated
Research & Development (R&D) Expense AIFRS $m FO6 Fos R&D Expense (incl. minority share) 56.7 44.6 Capitalised Development (0.2) (4.4) Amortised Development 2.4 1.3 58.9 41.5 Pre-tax minority interest (all R&D) 2.5 1.7 R&D Expense (excl. minority) as % of total revenue 12.0% 12.5% Cash Generated Fo6
Slide 11: F06 Working Capital
FO6 Working Capital Inventory (Days Stock Held) » FO6 Inventory at 214 days, $76.8m » Finished goods returned to policy levels (generally 8 weeks) » Year-end build up of processors ahead of backwards compatible Freedom processor release in FO7 Inventory {$ millions) Days stock held Jun-Ot Jun-02) Ju
Slide 12: AIFRS Impacts and F06 Summary
AIFRS Impacts * No material changes in FO06 opening balances for AIFRS adjustments from estimates made in FO5 * No impact on dividend payments - Payout ratio target remains approximately 70% of AIFRS NPAT + No significant impact on gearing ratios * No change to Company structures and strategy ~ FX p
Slide 13: Thank you... Any questions?
Thank you... Any questions? Hewrnow.Ae dae Cochlear Foreign Exchange Core Earnings FX ~ F06 vs FO5 FO6 $m Translation impact (0.7) Transaction impact * FOS (26.8) FOG (20.7) (6.1) Net FX impact for FO6 (6.8) *FX gains on Hedged sales Hesenavedesshssys Cochlear
Slide 14: Foreign Exchange
Foreign Exchange Rates applied F06 vs FO05 FO6 FO5 Average rates (used for translating P&L) USD 0.75 0.75 Euro 0.62 0.60 JPY 86.5 81.0 Contract rates (used to bring FX to Aust) USD Euro JPY Foreign Exchange Rates Going Forward Average Contract Rates USD Euro JPY SEK Weighted average - exchange rates