Fisher & Paykel Healthcare Corporation Limited

Hi, everyone. Welcome to Fisher and Paykel Health Care's results conference call. My name is Kellyanne. I'll be your operator for today's conference. At this time, everyone except the guest speakers will be in a listen-only mode. Later, we will conduct a question and answer session. We ask for your assistance in keeping the call to a maximum of one hour today. If assistance is required at any time, please press the star key followed by the digit zero on your phone and wait for a coordinator. If you require further assistance, you should redial into the conference. Please note that today's call is being recorded. At this time, I'd like to turn things over to Marcus Driller, Vice President, Corporate. Please go ahead.

Thank you, Kellyanne. Well, good morning, everyone, and welcome to the Fisher & Paykel Healthcare first half 2021 results conference call. On the call today are Lewis Graydon, our Managing Director and Chief Executive Officer, Lyndall York, Chief Financial Officer, Paul Scherer, Senior VP of Sales and Marketing, and Andrew Somerville, our VP of Products and Technology. Lewis and Lyndall will first provide an overview of the results, and then we'll open up the call to questions for the team. We'll be discussing our results for the six months ended 30 September 2020. And we have earlier today provided our interim report, including financial statements and commentary on our results to the NZX and ASX. These documents can be accessed on our website at fphcare.com forward slash investor. With that, I'd now like to turn the call over to Lewis.

Okay, thank you Marcus and welcome everyone. Today I'm going to be referring to the investor presentation pack that was released to the NZX and ASX this morning. We're going to start on page three, but before getting into details of our financial results, I really want to start by thanking some people who are very important to us. First, I'd like to express my thanks and our admiration for the thousands of healthcare providers around the world who have responded to the COVID-19 pandemic with such care and such courage. Second, I want to thank everyone across our entire business, but especially our families and partners, for the contribution you have made this year, supporting the single-minded focus of our people, either working from home or the long hours at the manufacturing and distribution sites, and all of this for extended periods of time. and all of this at a time when you may have had other major concerns as well. Our families and partners have made a big contribution to Fisher & Paykel Healthcare's results this year, and we really want to acknowledge that. And thirdly, I want to thank our suppliers all around the world. They've all gone above and beyond to provide the raw materials, the components and the services we need to answer the global call for our products. So thank you. So now turning to page three, I'd like to acknowledge some of the highlights for the half year. Our biggest achievement by far was ramping up production on a number of our hospital hardware and consumable products to meet that customer demand. We accelerated production in the new Daniel building and we commenced planning for our third manufacturing facility in Mexico, all in the half. We also developed a wealth of new online resources to support healthcare providers who are treating patients with COVID-19. So turn now to our results on page 5. For the first six months of the 2021 financial year Fisher & Paykel Healthcare delivered extremely strong financial performance. Overall operating revenue for the first half of 2021 was $910.2 million. This was a 59% increase compared to the first half of the 2020 financial year, and that's 61% in constant currency. Net profit after tax was $225.5 million. That's up 86% on the first half of last year, or 87% in constant currency terms. Growth continued to be driven by hospital hardware. and that increased 383% in constant currency. In short, the world needed our EVA, our OptiFlow, and our humidification systems, and we have delivered. Our consistent practice has been to pay a dividend to shareholders. Given the positive result, our board of directors has approved a fully imputed dividend of 16 cents per share, and that's an increase of 33% on the first half of the previous financial year. Now achieving these results has required an extraordinary effort from our entire team and to acknowledge the way our global team has gone above and beyond, the board has doubled the discretionary profit sharing bonus our people will receive for the first half of the financial year. This total bonus is equal to approximately 3.1% of annual base pay for each person and it's a total profit share of about $12 million. So now looking more closely at our product groups, starting with hospital, page six. So these are products and systems used for invasive and non-invasive ventilation and nasal hydrotherapy and during surgery. This includes the Evo devices and the therapies like OptiFlow that are being used to treat COVID patients. On page seven. Our reported revenue for hospital products was $681 million, up 93% or 94% in constant currency, and that's over the first half of the 2020 financial year of course. Sales in hardware and consumables continued to track surges in COVID-19 globally, and that's as the virus moved across Europe, North America, South America and South Asia. Revenue growth in new applications consumables was strong at 43% over the first half of the previous year in constant currency terms. So now if we move on to the home care product group, starting on page eight. So this includes products used in the treatment of obstructive sleep apnea, or OSA, and chronic obstructive pulmonary disease, or COPD, as well as other chronic respiratory conditions. We're heading to page nine. In our home care product group, operating revenue grew 5% to $226.2 million, with 6% growth in constant currency. The first half was challenging for our sales team in obstructive sleep apnea. Many sleep clinics around the world were closed or operating at reduced capacity, and that resulted in a reduction in new patient diagnoses. Having said that, customers have responded positively to our Evora and Viterra masks for OSA, our newer masks, and we're confident that these are great products and that they've yet to reach their full potential. So now I'll turn over to our CFO, Lyndall York, to give you some more details about the financials. Lyndall.