Slide 1: Results for year ended 30 June 2009
For personal use only Cochlear Limited Results for year ended 30 June 2009 Chris Roberts - CEO Neville Mitchell - CFO
Slide 2: Cochlear Background
Cochlear Background For personal use only • Leader in implantable devices for hearing impaired: – Cochlear implants (CI) for sensorineural hearing loss (SNHL) – Bone anchored hearing implants (Baha®) for conductive hearing loss, mixed losses and single sided deafness – Electro-Acoustic Stimulation (
Slide 3: Cochlear's Implant Systems
Cochlear's Implant Systems For personal use only Baha system Cochlear Implant system
Slide 4: Cochlear: Record financial results for F09
Cochlear: Record financial results for F09 For personal use only F09 F08 $ millions $ millions +% Cochlear Implants 614.0 504.8 Ç22 Bone Anchored (Baha) 97.8 75.6 Ç29 FX Contracts (17.1) 21.3 Revenue 694.7 601.7 Ç15 EBIT 183.3 167.3 Ç10 Net Profit After Tax 130.5 115.2 Ç13 EPS 233.7 cps 208.1 cps Ç1
Slide 5: Total Revenues
Cochlear: 5 year Total Revenues For personal use only F09 • Total Revenue up 15% to $694.7 million (after $17.1 million FX contracts loss) • Sales - before FX contracts - up 23% to $711.8 million • Sales in constant currency (ie local currency) up 10%
Slide 6: CI Sales
Cochlear: 5 year CI Sales For personal use only F09 • Cochlear implant/hybrid sales of $614 million, an increase of 22% (7% in constant currency) • Cochlear implant (CI) unit sales of 18,553, up 2% • CI surgeries (from implant registrations) up 11%
Slide 7: BAS Sales
Cochlear: 5 year BAS Sales For personal use only F09 • Bone Anchored Solutions (BAS) sales of $97.8 million, an increase of 29% (17% in constant currency) • Next generation sound processor (Cochlear Baha BP100) launched 6/09
Slide 8: F09 Regional Split of Sales and Constant Currency Growth
F09 Regional Split of Sales and Constant Currency (CC) Growth For personal use only Europe Americas 45% 42% CC growth ↑ 14% CC growth ↑ 10% Asia-Pacific 13% CC growth È5 %
Slide 9: Europe: sales in Constant Currency
Europe: 5 year sales in Constant Currency (CC) For personal use only F09 • Europe sales $318.9 million up 24% (up 14% in constant currency) • UK NICE guidelines for CI (including simultaneous bilateral for children) became effective late in H2
Slide 10: Americas: sales in Constant Currency
Americas: 5 year sales in Constant Currency (CC) For personal use only F09 • Americas sales $300.4 million up 29% (up 10% in constant currency) • Baha BP100 launched at the start of F10 • Awaiting FDA approval of Cochlear Nucleus 5
Slide 11: Asia Pacific: sales in Constant Currency
Asia Pacific: 5 Year sales in Constant Currency (CC) For personal use only F09 • Asia-Pacific sales $92.5 million up 2% (down 5% in constant currency) • No CI sales for China donation (700 units in F08) –negative unit growth for Asia-Pacific • Approval in Japan for Nucleus Freedom – launched 6/09
Slide 12: Net Profit After Tax
Cochlear: 5 year Net Profit After Tax For personal use only F09 • Net Profit After Tax of $130.5 million, up 13% • EBIT of $183.3 million up 10% (26.4% of revenues) • R&D up 21% as we bring Nucleus 5 and BP100 to market
Slide 13: Dividends and Free Cash Flow
Dividends and Free Cash Flow For personal use only • Free cash flow (FCF) of $111 million up 61% • Net debt reduced by $25 million to $109 million • Final year dividend increased by 19% to 95cps, for a full year dividend of $1.75 (up 17%) – fully franked
Slide 14: Cochlear Baha BP100
Cochlear Baha BP100 For personal use only y Improved hearing performance, through advanced automatic signal processing y Amplification strategies designed for bone conduction hearing y Increased fitting accuracy through simple to use fitting options y Improved usability and durability, through new d
Slide 15: Cochlear Nucleus: a new benchmark in hearing performance
For personal use only Cochlear™ Nucleus® 5 Introducing a new benchmark in hearing performance
Slide 16: Introducing Cochlear Nucleus system
Introducing For personal use only Cochlear™ Nucleus® 5 system NEW NEW NEW NEW Nucleus CI512 Nucleus CP810 Nucleus CR110 Custom Sound™ Cochlear Implant Sound Processor Remote Assistant Suite 3.0
Slide 17: Nucleus CI512 Cochlear Implant
Cochlear™ Nucleus® 5 system Nucleus® CI512 For personal use only Cochlear Implant Thin. Strong. Precise.
Slide 18: Nucleus CI512 Cochlear Implant
Nucleus® CI512 Cochlear Implant For personal use only Breakthrough in cochlear implant technology Thin Strong Precise WORLD’S THINNEST 2.5 TIMES MORE PRECISION STIMULATION COCHLEAR IMPLANT IMPACT RESISTANT* FOR LEADING PERFORMANCE • Only 3.9 mm thin • Built on a platform of • Largest number of real,
Slide 19: Nucleus CP810 Sound Processor
Nucleus® CP810 Sound Processor For personal use only Sophisticated design and technology made simple Performance Design Confidence • SmartSound™ 2 – better • Smallest and slimmest • Built on a titanium Nucleus® sound hearing in any processor foundation and tested to environment last • Ergonomically
Slide 20: Nucleus CR110 Remote Assistant
Cochlear™ Nucleus® 5 system Cochlear Nucleus® CR110 For personal use only TM Remote Assistant NEW Monitor. Control. Manage.
Slide 21: Nucleus CR110 Remote Assistant
Nucleus® CR110 Remote Assistant For personal use only Control/Monitor/Manage Only one remote assistant to manage two sound processors simultaneously BILATERAL CONTROL
Slide 22: Pipeline of Opportunities
Pipeline of Opportunities For personal use only Cochlear Hybrid Future Technologies • Combined electrical & acoustic stimulation for low • Direct Acoustic Cochlear frequency residual hearing Stimulation (DACS) – first • European controlled market human implant in F10 release • New electrodes in clin
Slide 23: Construction started on new facilities at Macquarie University
Construction started on new facilities at For personal use only Macquarie University
Slide 24: Cochlear F09 Overview
Cochlear F09 Overview For personal use only • Record financial results: – Revenue up 15% to $694.7 million – NPAT up 13% to $130.5 million – Core earnings up 12% to $138.0 million • Free cash flow up 61% to $111 million • As we enter F10… – Cochlear Baha BP100 being released – Cochlear Nucleus 5 bei
Slide 25: F09 Financial Results
F09 Financial Results For personal use only Neville Mitchell
Slide 26: F09 Financial Performance
F09 Financial Performance For personal use only F09 F08 % $m $m Change Total Revenue 694.7 601.7 Ç 15% NPAT 130.5 115.2 Ç 13% Core Earnings 138.0 123.7 Ç 12% Dividends Final Dividend 95c 80c Ç 19% Record Date 3rd September 2009 Payable Date 24th September 2009 Full Year (Interim and final) 175c 150c
Slide 27: F09 Core Earnings Calculations
F09 Core Earnings Calculations For personal use only F09 F08 $m $m NPAT 130.5 115.2 Adjustment items (after tax) • Net R&D (capitalisation & amortisation) 0.1 1.2 • Acquired intangible amortisation 2.5 2.6 • Share based compensation 4.9 4.7 Total adjustments 7.5 8.5 Core earnings 138.0 123.7
Slide 28: F08 – F09 NPAT Reconciliation
F08 – F09 NPAT Reconciliation For personal use only 180 35.1 (9.4) 160 (8.7) (12.5) 140 3.8 (2.9) 130.5 9.9 120 115.2 $ million 100 80 60 40 20 0 1 1 5 .2 9 .9 3 5 .1 -9 .4 -8 .7 -1 2 .5 3 .8 -2 .9 1 3 0 .5 F08 NPAT FX Gross Margin Sales & Mktg Admin costs R&D costs Interest Tax F09 NPAT
Slide 29: F09 Working Capital
F09 Working Capital Inventory (Days Stock Held) / Debtors Days Outstanding For personal use only 120.0 250 100.0 200 Inventory ($ millions) Days stock held 80.0 150 60.0 • F09 Inventory at 100 198 days, $105.9m 40.0 20.0 50 • Decrease in debtor - - days from 81 to 73 Jun-02 Jun-03 Jun-04 Jun-05 Jun-
Slide 30: F09 Debt
F09 Debt For personal use only 30 June 30 June 2009 2008 $m $m Loans and Borrowings Current - 15.4 Non-current 188.6 154.6 Total Debt 188.6 170.0 Net Debt 108.6 133.3 Gearing ratio (net debt / net debt + equity) 23% 30% New 3 year facility for $300m negotiated to 2012
Slide 31: Foreign Exchange
Foreign Exchange For personal use only Rates applied F09 vs. F08 F09 F08 % Average rates (used for translating P&L) USD 0.76 0.90 (15%) Euro 0.55 0.61 (11%) JPY 75.9 99.3 (24%) GBP 0.47 0.45 4% Contract rates (used to bring FX to Aust) USD 0.81 0.80 1% Euro 0.51 0.59 (13%) JPY 103.0 84.3 22%
Slide 32: Foreign Exchange
Foreign Exchange For personal use only Period end rates applied F09 vs. F08 30 June 30 June % change 2009 2008 Period end rates (used for translating Bal Sheet) USD 0.81 0.96 (15%) Euro 0.57 0.61 (5%) JPY 76.9 102.1 (25%)
Slide 33: FX Contract Cover and Rates
FX Contract Cover and Rates as at 30 June 2009 For personal use only Total FX cover at USD Euro JPY Total AUD 30 June 2009 264.4m 144.4m 1,418m 645.7m % of total cover (in AUD) 55% 42% 3% 100% 3 yr weighted average rates FX contracts at 30 June 09 0.75 0.53 83.2 FX contracts at 30 June 08 0.83 0.57
Slide 34: F09 Net Finance Gain
F09 Net Finance Gain For personal use only F09 F08 $m $m Net finance income/ (expense) Interest (expense) (7.1) (10.6) Net foreign exchange gain on translation of assets 8.7 4.7 Net finance income/(expense) 1.6 (5.9) First half F09 net foreign exchange gain $11.0m
Slide 35: Cochlear F09 Overview
Cochlear F09 Overview For personal use only • Record financial results: – Revenue up 15% to $694.7 million – NPAT up 13% to $130.5 million – Core earnings up 12% to $138.0 million • Free cash flow up 61% to $111 million • As we enter F10… – Cochlear Baha BP100 being released – Cochlear Nucleus 5 bei
Slide 36: Thank you
For personal use only Thank you Any questions?
Slide 37: F09 Core Earnings Reconciliation
F09 Core Earnings Reconciliation For personal use only F09 F08 $m $m Earnings before interest and tax 183.3 167.3 Core earnings adjustments pre-tax • R&D 0.1 1.7 • Acquired intangible amortisation 2.5 2.6 • Share based compensation 4.9 4.7 Core EBIT 190.8 176.3 Net interest (7.1) (10.6) Core tax exp