Slide 1: Cochlear Limited 2007 Annual General Meeting
For personal use only Cochlear Limited 2007 Annual General Meeting Australia Ballroom The Menzies Sydney Hotel 14 Carrington Street Sydney NSW Tuesday, 23rd October 2007 Mr Tommie Bergman Chairman 1
Slide 2: Company Secretary and CEO/President
For personal use only Mr Neville Mitchell Company Secretary Dr Chris Roberts Chief Executive Officer/ President 2
Slide 3: Directors
For personal use only Prof Ed Byrne AO Director Mr Rick Holliday-Smith Director 3
Slide 4: Directors
For personal use only Mr Paul Bell Director Mr Donal O’Dwyer Director 4
Slide 5: Proceedings
For personal use only Mr Andy Denver Director Proceedings ─ Chairman’s Address ─ CEO’s Address ─ Formal Resolutions 5
Slide 6: Chairman's Address: Record Financial Results for F07
For personal use only Cochlear Limited 2007 Annual General Meeting Mr Tommie Bergman Chairman’s Address Record Financial Results for F07 F07 F06 $ millions $ millions Growth Cochlear Implants 480.2 379.9 26% Bone Anchored (Baha) 62.7 51.7 21% FX Contracts 16.5 20.7 (20)% Revenue 559.4 452.3 24% EBIT
Slide 7: Foreign Exchange and Infrastructure Support
Foreign Exchange For personal use only • Effective foreign exchange management is vital to Cochlear • Over 90% of Cochlear’s sales and over 50% of total expenses are in foreign currency • Cochlear delivered impressive profit growth despite a rising Australian Dollar • Our foreign exchange strategy h
Slide 8: Manufacture and Supply Chain; Enterprise Resource Planning
Manufacture and Supply Chain For personal use only • Driving efficiencies in our supply chain is critical • Three year programme to introduce “lean” manufacturing and supply chain processes • Next stage to introduce new innovative electrode designs Enterprise Resource Planning • Oracle based ERP sys
Slide 9: Corporate Strategy and Cochlear Implants
Corporate Strategy For personal use only • Four pillars to strategy: – Cochlear implant field – BAHA field – Electro-acoustic stimulation field (EAS), or Hybrid – Direct acoustic cochlear stimulator (DACS) • Provides scope for continuing growth Cochlear Implants • Cochlear implants account for ≈ 85%
Slide 10: Baha and Electro-Acoustic Stimulation
Baha® For personal use only • Entific business acquired in March 2005 • Sales revenue grew 21% in F’07 • Intenso™ launched • New products in development • Increase in R&D investment Electro-Acoustic Stimulation • EAS, Hybrid implants contain specially designed electrodes to preserve the delicate str
Slide 11: Direct Acoustic Cochlear Stimulator; OIG Update
Direct Acoustic Cochlear For personal use only Stimulator • Longer term horizon • Expanding Cochlear’s global leadership in implantable solutions for the hearing impaired • Technology combines implantable electronics with direct mechanical stimulation of the cochlea • Joint venture with Phonak disba
Slide 12: Board & Executive: Remuneration and Share Ownership Policy
Board & Executive For personal use only Remuneration • Asking shareholders to approve an increase in aggregate remuneration to a total of $1,500,000 per annum • Increase to aggregate remuneration will cover annual fee increases for the next several years • Potential for additional Director • Dr Robe
Slide 13: Employee Share Plan and Corporate Governance
Employee Share Plan For personal use only • Eligible employees are granted shares in the Company as a reward for the Company achieving strong financial results • The scheme continued in September 2007 with a $1,000 grant per employee • Rewarding staff for the significant achievements of the Company
Slide 14: Directors and Employees
Directors For personal use only • Mr Andrew Denver joined the Board from 1st February 2007 • Messrs Peter North AM and Justus Veeneklaas retired at the last AGM • Dr John Parker retired from Cochlear and the Board in March 2007 Employees • Dedicated and engaged workforce fundamental to our ongoing s
Slide 15: Outlook; CEO's Address
Outlook For personal use only • Cochlear continues to be well placed to maintain its growth trend • Ongoing investment in all areas of the business will support Cochlear’s ambitious growth planned for the future Cochlear Limited 2007 Annual General Meeting Dr Chris Roberts CEO’s Address 15
Slide 16: Cochlear – Background
Cochlear – Background For personal use only • Medical device company (~25yr) - global leader in implantable devices for the hearing impaired: – Leading global position (∼70% market share) in cochlear implants for sensorineural hearing loss – Bone anchored hearing implants (Baha) for conductive heari
Slide 17: Record Financial Results for F07
Record Financial Results For personal use only for F07 F07 F06 $ millions $ millions Growth Cochlear Implants 480.2 379.9 26% Bone Anchored (Baha) 62.7 51.7 21% FX Contracts 16.5 20.7 (20)% Revenue 559.4 452.3 24% EBIT 150.2 111.5 35% Net Profit After Tax 100.1 80.0 25% Core Earnings 107.6 86.4 24%
Slide 18: Sales Revenue
Sales Revenue For personal use only (Prior years restated at F07 FX rates) * Sales (constant currency) ($ millions) 5000 • 28% constant currency sales 4000 growth (ex FX contracts) 3000 • BAS + 23% CC 2000 • CI +29% CC 1000 BAS Cochlear Implants 00 F01 F02 F03 F04 F05 F06 F07 * Constant currency (CC
Slide 19: What have we done in F07?
What have we done in F07? For personal use only • Continued successful roll-out of Nucleus® Freedom™ – Unmatched clinical results and reliability – Released product enhancements, e.g. pediatric options • Released Freedom for N24 (backwards compatible speech processor) – ~ 20% potential recipients up
Slide 20: Two ears are better than one
Two ears are better than one For personal use only • Bilateral cochlear implantation (one for each ear) is an important trend underpinning unit sales growth • This bilateral trend is supported by excellent clinical results around the advantages of binaural hearing as well as other factors (e.g. redu
Slide 21: Cochlear F07 Overview; Business of the Meeting
Cochlear F07 Overview For personal use only • Record financial results for F07 – Revenues of $559.4 million up 24% – NPAT of $100.1 million up 25% – Core Earnings of $107.6 million up 24% • Nucleus® Freedom™: the best cochlear implant ever – with product offering expanding, including Freedom for N24
Slide 22: Resolution No. 1: Financial and other reports
Resolution No. 1 For personal use only Financial and other reports To receive and consider the Company’s Financial Report, Directors’ Report and Auditor’s Report in respect of the financial year ended 30 June 2007. Resolution No. 1 Financial and other reports Proxy Summary • Total number of proxy vo
Slide 23: Resolution No. 2: Remuneration Report
Resolution No. 2 For personal use only Remuneration Report To consider and, if though fit, to pass the following non- binding resolution: 2.1 “THAT the Remuneration Report be adopted” Resolution No. 2 Remuneration Report Proxy Summary • Total number of proxy votes available to be cast 26,441,165 100
Slide 24: Resolution No. 3.1: Re-election of directors
Resolution No. 3 For personal use only Re-election and election of directors To consider and, if though fit, to pass the following resolutions as ordinary resolutions: Resolution No. 3.1 Re-election of directors 3.1 “THAT Prof Edward Byrne AO, being a director who is retiring by rotation in accordan
Slide 25: Resolution 3.1 Proxy Summary; Resolution 3.2
Resolution No. 3.1 For personal use only Re-election of directors – Prof Edward Byrne AO Proxy Summary • Total number of proxy votes available to be cast 26,441,165 100% • Votes in favour of the resolution 25,849,553 97.8% • Votes against the resolution 19,562 <1% • Votes to be cast at the discretio
Slide 26: Resolution 3.2 Proxy Summary; Resolution 3.3
Resolution No. 3.2 For personal use only Re-election of directors – Mr Donal O’Dwyer Proxy Summary • Total number of proxy votes available to be cast 26,441,165 100% • Votes in favour of the resolution 25,519,481 96.5% • Votes against the resolution 341,337 1.3% • Votes to be cast at the discretion
Slide 27: Resolution 3.3 Proxy Summary; Resolution 4
Resolution No. 3.3 For personal use only Election of directors – Mr Andrew Denver Proxy Summary • Total number of proxy votes available to be cast 26,441,165 100% • Votes in favour of the resolution 25,512,999 96.5% • Votes against the resolution 342,812 1.3% • Votes to be cast at the discretion of
Slide 28: Resolution 4.1 Proxy Summary; Resolution 5
Resolution No. 4.1 For personal use only Approval of securities issue to the CEO/President under the Cochlear Executive Long Term Incentive Plan (“CELTIP”) Proxy Summary • Total number of proxy votes available to be cast 26,441,165 100% • Votes in favour of the resolution 25,027,666 94.7% • Votes ag
Slide 29: Resolution 5.1 Proxy Summary; Resolution 6
Resolution No. 5.1 For personal use only To increase the maximum aggregate remuneration of non-executive directors Proxy Summary • Total number of proxy votes available to be cast 26,007,257 100% • Votes in favour of the resolution 22,763,408 87.5% • Votes against the resolution 1,027,143 4.0% • Vot
Slide 30: Resolution 6.1 Proxy Summary; Close of Meeting
Resolution No. 6.1 For personal use only Adoption of a new Article 12.8A of the Company’s Constitution Proxy Summary • Total number of proxy votes available to be cast 26,441,185 100% • Votes in favour of the resolution 25,735,452 97.3% • Votes against the resolution 69,245 <1% • Votes to be cast at