Fisher & Paykel Healthcare Corporation Limited · NZX:FPH
Fisher & Paykel Healthcare — H1 FY2005 Earnings Presentation
24 slides from Fisher & Paykel Healthcare's earnings presentation, November 2004
Slide 1: H1 FY05 Overview & Update
FisheréPaykel HEALTHCARE H1 FY05 Overview & Update Fisher& Paykel HEALTHCARE
Slide 2: Investment Highlights
Investment Highlights • Leading player in heated humidification devices and consumables for a variety of respiratory and related markets • Consistent growth strategy • Estimated US$1.5 billion+ market opportunity • High level of innovation • Global presence • Competitive NZ cost base • Strong financ
Slide 3: Operating Results US$
Operating Results US$ H1FY05 (6 mths) %Revenue US$M %Ìpcp Operating revenue 100% 75.0 +24% Gross profit 71.9% 54.0 +27% SG&A 29.4% 22.0 +27% R&D 7.0% 5.2 +35% Total Operating Expenses 36.3% 27.3 +28% Operating Profit 35.5% 26.7 +25% 3 3
Slide 4: Operating Results NZ$
Operating Results NZ$ H1FY05 (6 mths) % Revenue NZ$M %Ìpcp Operating revenue 100% 117.4 +12% Gross profit 71.9% 84.4 +14% SG&A 29.4% 34.5 +14% R&D 7.0% 8.2 +21% Total Operating Expenses 36.3% 42.7 +15% Operating Profit 35.5% 41.7 +13% 4 4
Slide 5: Markets and Products
Markets and Products Neonatal • Respiratory and humidification Other 11% • Obstructive sleep Growth Growth apnea • Neonatal and other OSA Resp. 39% Hum. 50% ¯ Consumable products Growth represent approx. 50% Revenue by Product of core product sales 6 months 30 September 2004 5 5
Slide 6: 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 7: Market Opportunity
Market Opportunity Humidification systems are used to create, control and deliver optimal levels of humidity • Estimated US$350+ million market worldwide – heated humidifier controllers – humidifier chambers + – breathing circuits and components + – unheated humidifiers – oxygen therapy supplies • O
Slide 8: Humidification Systems
Humidification Systems Products include: • MR850 Respiratory Humidifier System – invasive ventilation, O2 therapy and non-invasive ventilation – increasing penetration driving consumable growth • MR810 Respiratory Humidifier System – entry level system – ventilation and O2 therapy – optional heated
Slide 9: Single-use Components
Single-use Components • Single-use chambers – patented auto filling MR290 – manual filling models • Single-use breathing circuits – adult and neonatal – patented spiral heater wire – proprietary dry expiratory tube – less condensation – delivery of optimal humidity • Breathing circuit components – f
Slide 10: Laparoscopic Insufflation
Laparoscopic Insufflation • Dry CO2 gas used in ‘keyhole’ surgery • Heated humidification – reduced hypothermia – less post operative pain – less time in recovery room – faster return to normal activities – reduced risk of adhesions • Pilot marketing in NZ/Australia • Potential high volume of consum
Slide 11: Respiratory Humidification Update
Respiratory Humidification Update • 16% revenue growth US$ H1 FY05, 15% ex currency and ex SARS • MR850, breathing circuits driving growth • Consumable value per patient increasing • Revolutionary dry tube circuit well received • MR810 entry level/O2 therapy system ramping up • R&D pipeline – additi
Slide 12: 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$1+ billion worldwide market, growing 15% - 20% Normal breathing • Potentially 50-60 million affected
Slide 13: CPAP Systems
CPAP Systems • HC150 Humidifier • HC210 Convertible Flow Generator series – easy conversion to heated humidity • HC220LE Integrated Flow Generator series – compact, integrated unit – compliance optimizer – proprietary motor technology • HC230 Integrated Flow Generator series – greater pressure range
Slide 14: Mask Range
Mask Range Four interface categories: • FlexiFit™ Nasal Masks – patented sliding attachment – FlexiFit™ technology – 3 models • FlexiFit™ Full Face Mask – under chin seal • Oracle™ Oral Mask – proprietary oral interface • Infinity™ Direct Nasal Mask – very light 14 14
Slide 15: CPAP/Obstructive Sleep Apnea Update
CPAP/Obstructive Sleep Apnea Update • 73% flow generator and mask revenue growth US$ H1 FY05 • 34% total revenue growth • HC230 flow generator series introduced • HC600 ThermoSmart flow generator series introduced • FlexiFit full face, Oracle oral and Infinity direct nasal masks introduced • R&D pip
Slide 16: 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
Slide 17: Neonatal and Warming Update
Neonatal and Warming Update • 46% revenue growth US$ H1 FY05 • 36% constant currency growth • Infant warmer, resuscitator, CPAP system all growing strongly • Increasing consumable revenue 17 17
Slide 18: Research & Development
Research & Development • 150 engineers, scientists, physiologists, up 20 on FY03* • 21% increase to 7.0% of revenue H1 FY05 NZ$ • Product pipeline includes – Flow generators – Masks – Humidification systems for COPD/O2 therapy – Respiratory consumables • Competitive NZ cost base • 45 US patents, 58
Slide 19: Manufacturing
Manufacturing • Vertically integrated – electronics assembly – injection moulding – motor assembly • ISO 9001; Class 100,000 controlled environment • Ample capacity to grow – 300,000 ft2 / 28,000m2 facility – 100 acres / 40 ha – planning next facility, site works underway 19 19
Slide 20: Global Presence
Global Presence • Direct Other – hospitals, home care dealers Asia 4% Pacific – Sales/support offices in 22% USA/Canada, UK/Ireland, North America France/Benelux/Italy/ Spain, 44% Germany/Austria/Switzerland, India, Japan, UAE, China, Australia and NZ - 250 staff – Ongoing international expansion Eu
Slide 21: Revenue Growth US$
Revenue Growth US$ 130 120 FY 1999 CAGR 110 FY 2000 CORE 19.6% 100 FY 2001 TOTAL 16.2% FY 2002 90 FY 2003 80 FY 2004 CAGR 12.3% US$M 70 60 50 CAGR 33.9% 40 30 20 CAGR 31.4% 10 0 Respiratory OSA Warming/ Other TOTAL Humidification Neonatal 21 21 FY ended 31 March
Slide 22: Balance Sheet
Balance Sheet • NZ 5.0 cps interim dividend • 90% dividend payout policy • NZ$27M ongoing share buyback • 46% annualised pre-tax return on average funds employed H1 FY05 • Siteworks underway for next building on Auckland site 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, O2 therapy, patient warming, insufflation • Increase international presence – e.g. Japan, China, India, UAE, Switzerland in FY
Slide 24: Fisher & Paykel Healthcare
Fisher < Paykel HEALTHCARE Fisher& Paykel HEALTHCARE
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