Fisher & Paykel Healthcare Corporation Limited

Welcome to Fisher & Paykel Healthcare's results conference call. My name is Cynthia, and I'll be your operator for today's call. At this time, everyone except the guest speakers will be in 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. If assistance is required at any time, please press the star followed by zero on your phone and wait for a coordinator. If you require further assistance, you should redial into the call. Please note this conference call is being recorded. I would now like to turn the call over to Marcus Driller, VP Corporate. Please go ahead.

Thank you, Cynthia. Good morning, everyone, and welcome to the conference call for Fisher & Paykel Healthcare's first half results for the 2024 financial year. On the call today are Lewis Graydon, our Managing Director and Chief Executive Officer, Lyndall York, Chief Financial Officer, Paul Shearer, 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. We'll be discussing our results for the half year ended 30 September 2023. Earlier today we provided our 2024 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 thanks Marcus and welcome to the call everyone. I'm going to be referring to the investor presentation pack that we released to the NZX and the ASX this morning if you'd like to follow along. I'll start on page three with some of our recent highlights. Our new Fisher & Paykel Solo mask was released in New Zealand and Australia in the half. We think this is quite a significant step forward in mask innovation and we'll be gradually rolling this out to more markets in the new year. We've continued to invest in our sales team, particularly in the anaesthesia space. Our Guangzhou facility in China is progressing well and that's on track to be operational in the first six months of the next calendar year. We got 510K approval for the 950 from the United States Food and Drug Administration during the half and we recently showed this at the ARC, American Association of Respiratory Care Conference in Nashville along with Evo 3 to a pretty strong reception last month. Evo 3 is currently available in the United States and the 950 will be available in the new year. We marked the formal opening of our third building in Tijuana, Mexico. And we welcome Graham McLean onto the board. Graham brings a good depth of medical device experience, having spent more than a decade in regional leadership roles in our industry with Stryker. So now if we move on to financials on page four. First half operating revenue was $803.7 million. This is a 16% increase from the first half of the 2023 financial year. and that's in both reported and constant currency, 16%. Net profit after tax for the first half was $107.3 million. That's up 12% on the first half of the 2023 financial year and that is 22% in constant currency. I'll let our CFO, Lyndall York, provide more details on the figures shortly but before that, We'll take a quick look at the product group breakdowns. So first up have a look at hospital on page six. Hospital operating revenue for the first half was $487.5 million. That's up 11% year on year and 11% in constant currency also. New applications consumables revenue was up 20% year on year and that's 19% in constant currency. So against the backdrop of the first half last year, which included destocking coming from the Omicron surge at the end of 2022, we saw strong demand for hospital consumables across the product portfolio in this first half and hardware demand was solid. So turn now to home care on page eight. Home care operating revenue was $314.4 million, that's up 26% on the first half of 2023, or 25% in constant currency. OSA masks and accessories revenue was up 29%, that's 28% in constant currency. A four of four was introduced in the US during our first half last year. And our teams are continuing to receive very positive feedback on that mask's performance and comfort from our customers. Now, before I hand over to Lyndall, I want to turn to page nine and give you some context on the strides we've made over the last few years. Now, here we've tried to drill down into what has fundamentally changed in our business over the last four years. We started with FY19. That's the last year we had no COVID impacts. and we've compared it to FY23, our last financial year. I think this slide puts some context around a lot of what flows through the income statement and the balance sheet this year and maybe into a few more years into the future yet. In the interim report when we talk about the factors converging favourably and our foundations for future growth, this is what we're thinking of. And to just summarise this slide, we think we're very well placed in sales to deliver growth over the short term. We think we have a manufacturing infrastructure we can very efficiently grow into. And we think our accelerated R&D investment sets us up well for sustainable, profitable growth over the long term. So on that note, I'll hand over to you now, Lyndal.