Fisher & Paykel Healthcare Upgrades Guidance

News Release
STOCK EXCHANGE LISTINGS: NEW ZEALAND (FPH), AUSTRALIA (FPH)

FISHER & PAYKEL HEALTHCARE UPGRADES GUIDANCE

Auckland, New Zealand, 28 August 2019 - Fisher & Paykel Healthcare Corporation Limited
announced that it has upgraded its earnings guidance for the financial year ending 31 March
2020 at its Annual Shareholders’ Meeting today.

“We’ve had a good start to the year and are on track to deliver strong revenue and earnings
growth in the 2020 financial year,” said Managing Director and CEO Lewis Gradon.

“During the first quarter, we have seen strong growth in our Hospital product group, which
continues to be supported by uptake in both our Optiflow nasal high flow therapy and non-
invasive ventilation products,” said Mr Gradon.

‘Our New Zealand dollar results can be influenced by exchange rate movements, and our
earnings guidance has benefited from a weakening of the New Zealand dollar.”

The full year guidance previously provided in May, based on a NZ:US exchange rate of 65
cents, was for operating revenue to be approximately $1.15 billion and net profit after tax to
be approximately $240 million to $250 million.

Now, assuming a NZ:US exchange rate of approximately 64 cents for the balance of the
year, the company expects full year operating revenue to be approximately $1.17 billion and
net profit after tax to be approximately $245 million to $255 million.

At current exchange rates, the company expects operating revenue for the first half of the
2020 financial year, ending 30 September 2019, to be approximately NZ$560 million and net
profit after tax to be approximately NZ$120 million.

“Over the past 50 years, we’ve become the world leader in respiratory humidification.
Through strong technical and clinical expertise, we’ve grown into a trusted global brand,
earning the respect of key opinion leaders in healthcare. We’ve built global distribution in
hospital respiratory support and homecare, and we’re building global distribution in surgical
applications.

“I want to assure you that we’re not resting on our laurels. We’re building on the expertise
we’ve developed and the lessons we’ve learnt over the last 50 years to carry on improving
outcomes for more and more patients over the next 50 years,” said Mr Gradon.

The company has provided the Chairman’s speech, CEO’s speech and slide presentation for
the 2019 Annual Shareholders’ Meeting to the NZX and ASX today, and provided an
update (below) on the company’s foreign exchange hedging position as at today’s date. The
Annual Shareholders’ Meeting is scheduled to begin at 2:00pm NZST, 12:00pm AEST
(10:00pm USEDT) and will be broadcast simultaneously over the internet. To view the
webcast, go to: www.virtualmeeting.co.nz/fph19.

ENDS

About Fisher & Paykel Healthcare
Fisher & Paykel Healthcare is a leading designer, manufacturer and marketer of products and
systems for use in respiratory care, acute care, surgery and the treatment of obstructive
sleep apnea. The company’s products are sold in over 120 countries worldwide. For more
information about the company, visit our website www.fphcare.com.

Contact:

Investors:
Hayden Brown
Investor Relations Manager
hayden.brown@fphcare.co.nz
+64 (0) 27 807 8073
Media:
Karen Knott
Senior Communications Manager
karen.knott@fphcare.co.nz
+64 (0) 21 713 911


Foreign Exchange Hedging Position
The hedging position for our main exposures, the US dollar and Euro, as at today’s date is:


Year to 31 March

2020 2021 2022 2023 2024 2025-2027
USD % cover of expected
exposure
90%

80%

40%

10% - -
USD average rate of cover
0.666

0.658

0.656

0.647 - -
EUR % cover of expected
exposure
90%

70%

50%

40%

25% 5%
EUR average rate of cover
0.575

0.546

0.529

0.511

0.502 0.473

Note: Hedging cover percentages have been rounded to the nearest 5%

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Annual Shareholders’ Meeting
28 August 2019

Tony Carter, Chairman

Your Board
Tony Carter
Lewis Gradon
Michael Daniell
Geraldine McBride
Neville MitchellDonal O’Dwyer
Scott St John
Pip Greenwood

Agenda
•Chair’s Address
•Board Subcommittee Updates
•Managing Director and Chief Executive Officer’s Review
•Financial Statements
•Resolutions
•Voting
•General Questions

Operating
Revenue
↑
FY2019 Financial Highlights
Net Profit
After Tax
Dividend
$1.07B
$209.2M
9%
↑
9%
22.35cents
↑
10%

FY2019 Revenue by Product Group
Distributed & Other
1%
OF OPERATING REVENUE
Homecare
39%
OF OPERATING REVENUE
Hospital
60%
OF OPERATING REVENUE

Hospital Product Group
12%
NZ$
11%
Constant
Currency
↑
↑
3 57. 2
436.3
500.4
572.1
642.3
FY15FY16FY17FY18FY19
FY19 Result
Revenue
Revenue Growth
$642M

Homecare Product Group
6%
NZ$
4%
Constant
Currency
↑
↑
3 57. 2
436.3
500.4
572.1
642.3
FY15FY16FY17FY18FY19
FY19 Result
Revenue
Revenue Growth
$421M
302.0
365.8
381.5
398.1
421.4
FY15FY16FY17FY18FY19

Gross and Operating Margins
Gross Margin
Long Term Gross Margin target – 65%
0%
10%
20%
30%
40%
50%
60%
70%
20152016201720182019
Operating (EBIT) Margin
Long Term Operating Margin target – 30%
0%
5%
10%
15%
20%
25%
30%
20152016201720182019

Your Board
Tony Carter
Lewis Gradon
Michael Daniell
Geraldine McBride
Neville MitchellDonal O’Dwyer
Scott St John
Pip Greenwood

Scott St John
Audit & Risk
Committee Chair

Pip Greenwood
People &
Remuneration
Committee Chair

Donal O’Dwyer
Quality, Safety &
Regulatory
Committee Chair

Lewis Gradon, Managing Director and CEO

FY2020 Outlook
First Half
Expect at current exchange rates
Operating RevenueApproximately$560million
Net Profit afterTa xApproximately $120million
Full Year
Expect NZD:USD exchange rateof ~0.64 for the balance of the year
Operating RevenueApproximately $1.17 billion
Net Profit afterTa xApproximately$245 - $255million

Fifty Years of Care
1969 -Agee Jar Humidifier
2019 - F&P950 Humidifier

Lyndal York
Chief Financial
Officer

OUR ASPIRATION:
Sustainably
DOUBLING
our constant
currency revenue
every 5-6 years.
Growth Strategy

Lewis Gradon, Managing Director and CEO

Tony Carter, Chairman

Financial Statements
•Opportunity for shareholders to ask
any questions specifically on the
financial statements, the auditor’s
report or the company’s 2019 annual
report.
•There will be an opportunity to ask
any general questions once all items
on the agenda have been considered.

Resolutions
1.Re-election of Lewis Gradon as Director
2.Re-election of Donal O’Dwyer as Director
3.Election of Neville Mitchell as Director
4.Auditor’s Remuneration
5.Issue of Performance Share Rights
6.Issue of Options
7.Company Constitution

Three Ways to Vote
1.Use your voting card (in person)
2.Use your smartphone using the LINK App (in person)
3.Electronic voting form (online)

Resolution 1: Re-election of Lewis Gradon
That Lewis Gradon, who retires by rotation
and, being eligible, offers himself for
re-election, be re-elected as a director of
the Company.

Resolution 2: Re-election of Donal O’Dwyer
That Donal O’Dwyer, who retires by
rotation and, being eligible, offers himself
for re-election, be re-elected as a director
of the Company.

Resolution 3: Election of Neville Mitchell
That Neville Mitchell, who being eligible,
offers himself for election, be elected as a
director of the Company.

Resolution 4: Auditor’s Remuneration
That the Directors be authorised to fix the
fees and expenses of PwC as the
Company’s auditor.

Resolution 5: Issue of Performance Share Rights
That approval be given for the issue of up
to 60,000performance share rights under
the Fisher & Paykel Healthcare
Performance Share Rights Plan to Lewis
Gradon, Managing Director and Chief
Executive Officer of the Company.

Resolution 6: Issue of Options
That approval be given for the issue of up
to 190,000 options under the
Fisher & Paykel Healthcare 2003 Share
Option Plan to Lewis Gradon,
Managing Director and Chief Executive
Officer of the Company.

Resolution 7: Company Constitution
That the existing constitution of the
Company is revoked, and the constitution
presented at the meeting, and referred to in
Explanatory Note 5 of the Notice of
Meeting, is adopted as the Constitution of
the Company.

Voting
•In respect of each resolution, please tick the “for”, “against” or “abstain” box.
•Once you have completed your voting, please hand your paper to a representative
from Link Market Services.
•Please raise your hand if you require a pen.
•Results will be announced to NZX and ASX as soon as they are available.

Questions?

---

1

FISHER & PAYKEL HEALTHCARE CORPORATION LIMITED
ANNUAL SHAREHOLDERS’ MEETING
28 AUGUST 2019

ADDRESS BY TONY CARTER, CHAIRMAN

Introduction
Fisher & Paykel Healthcare is a world leader in medical devices and systems
for use in respiratory care, acute care, surgery and the treatment of obstructive
sleep apnea.

Our first prototype respiratory humidifier was developed in 1969. In the 50
years since, we’ve focused on continuous improvement and innovation, and
our products are considered leaders in their respective fields. Fifty years in
business is certainly worth celebrating, but we know there is no room for
complacency. We have to continue to strive to understand our customers and
try new things. Long-term thinking got us to this point, and long-term thinking
will take us into the next phase of our growth.

In our Homecare product group, our systems are used to treat the growing
number of people with obstructive sleep apnea, or OSA, and also patients
requiring respiratory support in the home. Like our Hospital products, our
products in this group are designed to be effective, simple and comfortable to
use and to support patient independence. This year, revenue in the Homecare
group was up 4 percent to NZ$398 million.

Financial
Reflecting on the 2019 financial year... we were delighted to achieve the
milestone of becoming a billion-dollar company, with record operating revenue
of $1.07 billion. This was an increase of 9 percent over the previous year. Our
net profit after tax was up 10 percent to $209 million.

2

Reflecting on the 2019 financial year... we were delighted to achieve the
milestone of becoming a billion-dollar company, with record operating revenue
of $1.07 billion. This was an increase of 9 percent over the previous year. Our
net profit after tax was up 10 percent to $209 million.

The total dividend for the financial year was 23.25 cents per share, up 9
percent. This equates to a dividend pay-out ratio of approximately 64 percent
of net profit after tax for the year.

As most of you will know, our business is broadly structured into two major
product groups: Hospital and Homecare. Last year Hospital made up 60
percent of revenue, and Homecare made up 39 percent.

Let’s look at each of those product groups in more detail.

Products in our Hospital group are used primarily to humidify the gases used
in invasive ventilation, non-invasive ventilation, nasal high flow therapy, and
laparoscopic and open surgery. In the 2019 financial year, our Hospital
revenue grew 12 percent to $642 million. We saw strong demand for our
Optiflow and AIRVO systems, driven by a growing body of clinical research in
nasal high flow therapy.

In our Homecare product group, our systems are used to treat the growing
number of people with obstructive sleep apnea, or OSA, and also patients
requiring respiratory support in the home. This year, revenue in the Homecare
group was up 6 percent to $421 million. This was driven by growth in our home
respiratory support business and the successful rollout of our new SleepStyle
system for patients with OSA.

In terms of margin, we saw an improvement over last year. Gross margin
increased from 66.3 percent in the 2018 financial year to 66.9 percent, which

3

remains above our long-term target of 65 percent. Operating margin was 27.3
percent and we are well placed to achieve our target of 30 percent in the
coming years.

As you know, research and development has always been a priority for Fisher
& Paykel Healthcare. Last year, we invested $100 million in R&D,
representing 9 percent of our revenue.

Protecting that investment and our intellectual property is crucial in today’s
competitive global marketplace. I’m happy to report that we have now settled
all outstanding patent infringement disputes between the company and
ResMed. We have an ongoing commitment to improve patient care and
outcomes through inspired and world-leading healthcare solutions, and this
resolution supports that commitment.


People
At Fisher & Paykel Healthcare, we know our people are our strength, and the
results we achieve are due to the hard work and dedication of our global team.
Every six months a profit-sharing bonus is paid to our employees around the
world. In the 2019 financial year, this bonus totalled $5.7 million – which
amounted to more than a week’s additional pay for each employee.

I’d like to take this opportunity to thank our people and acknowledge that our
results would not be possible without their innovative ideas and ability to build
trusted relationships with healthcare providers, which are critical to changing
clinical practice.

Your Board
Turning now to your Board.

4

Last year we welcomed Neville Mitchell as a non-executive director. He has
extensive global financial and medical device experience and most recently
served as Chief Financial Officer of ASX-listed Cochlear Limited. Neville is up
for election this year, so you will hear a few words from him later in the meeting.

We also welcomed Claudia Wyss as part of our Future Directors Programme.
Claudia is the CEO at Healthvision, a home-based healthcare agency that
operates across New Zealand. Both Neville and Claudia have brought
valuable insights and expertise which complement that of other Board
members.

The Board operates in conjunction with the support of three Board
subcommittees, which are the Audit & Risk Committee, the People &
Remuneration Committee and the Quality, Safety & Regulatory Committee.

I would now like to invite the Chairs of each of those three committees to
address the meeting. Scott, Pip and Donal will provide an overview of the
committees and their areas of focus over the past year. Donal is standing for
re-election as a Director of the Board at this meeting, so he will also say a
few words about that. [Committee updates]

Conclusion
Before I pass you over to Lewis, I would I like to thank you, our shareholders,
for your continued support and loyalty. Your investment in Fisher & Paykel
Healthcare has helped around 14 million patients in 120 countries over the
past year, and allows our world of care to continue to expand, grow and
transform. I will now invite Lewis, our Managing Director and CEO, to provide
further commentary on the company’s performance and an update on our
current outlook for the 2020 financial year.

Lewis.

5

FISHER & PAYKEL HEALTHCARE CORPORATION LIMITED
ANNUAL SHAREHOLDERS’ MEETING
28 AUGUST 2018

ADDRESS BY LEWIS GRADON,
MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER

Thank you Tony.

Progress to date this financial year

We’ve had a good start, and we are on track to deliver strong revenue and
earnings growth for the 2020 financial year.

During the first quarter, we have seen strong growth in our Hospital product
group, which continues to be supported by uptake in both our Optiflow nasal
high flow therapy and non-invasive ventilation products. We now expect
Hospital constant currency revenue growth for the 2020 year to be slightly
higher than last year’s growth.

Our Homecare product group continues to perform as expected due to the
phasing of our OSA mask product cycle relative to competitors. Our Vitera OSA
full face mask has performed well in Australasia, Europe and Canada, and we
look forward to rolling this out in other countries as we receive the relevant
regulatory clearances.

Financial outlook

The full year guidance we provided in May was for operating revenue to be
approximately $1.15 billion and net profit after tax to be approximately $240
million to $250 million.

6

We now expect full year operating revenue to be approximately
$1.17 billion and net profit after tax to be approximately $245 million to $255
million. This assumes a New Zealand:US exchange rate of approximately 64
cents for the balance of the year.

Our New Zealand dollar results can be influenced by exchange rate
movements, and our earnings guidance has benefited from a weakening of the
New Zealand dollar. At current exchange rates, we expect operating revenue
for the first half of the 2020 financial year ending 30 September 2019 to be
approximately $560 million and net profit after tax to be approximately $120
million.

Long-term thinking
As you will have seen in our 2019 annual report, we are celebrating fifty years
of care this year. We’re proud of that milestone, and we’re hosting an event this
year for employees to recognise our history. Today, I think it’s appropriate to
reflect on that 50-year milestone and what it means for us and for you as our
shareholders.

Over the past 50 years, we’ve become the world leader in respiratory
humidification. Through strong technical and clinical expertise, we’ve grown into
a trusted global brand, earning the respect of key opinion leaders in healthcare.
We’ve built global distribution in hospital respiratory support and home care,
and we’re building global distribution in surgical applications.

I want to assure you that we’re not resting on our laurels. We’re building on the
expertise we’ve developed and the lessons we’ve learnt over the last 50 years
to carry on improving outcomes for more and more patients over the next 50
years.

7

At Fisher & Paykel Healthcare, we think, act and invest over the long term. And
our long-term thinking is one thing that sets us apart from many of our
competitors.

People
To begin with, we focus on the long-term when it comes to our people.

At our anniversary event, I’ll be handing out certificates to employees who are
celebrating twenty, twenty-five, even thirty-five years with the company. Some
of you here in the room today have also been with Fisher & Paykel Healthcare
for decades as employees. That stability produces valuable institutional
knowledge that helps us achieve results over the long-term.

In order to achieve that stability, we look to recruit and hire the best people,
people who are aligned with our culture and our values.

You may remember that last year our long-serving Chief Financial Officer, Tony
Barclay, retired after 22 years with the company. We conducted a global search
for a new CFO, and I’m pleased to introduce Lyndal York, who joined us in
March. Lyndal has strong international experience in the medical device
industry. Before coming to Fisher & Paykel Healthcare she served as CFO of
Asaleo Care and held leadership positions with Cochlear in Australia.

Products
We also apply long-term thinking when it comes to our products. We do
extensive research to understand the needs of patients and the environments
where our products are used. Our new products improve care and outcomes
and reduce costs for our customers. Last year, we launched neonatal breathing
circuits for the F&P 950 heated humidification system, our new Optiflow 3S
nasal cannula, which is for nasal high flow therapy for adults, and most recently,
our new Vitera OSA mask.

8

Thinking about the long term, we continue to research new applications for our
technologies. For example, just two weeks ago, we were privileged to have a
US physician, Professor Gerard Criner, on site to speak with us. Professor
Criner is a global leader in treating chronic obstructive pulmonary disease, or
COPD, and he has conducted a pilot study using myAirvo and Optiflow systems
to treat COPD in the home. He has seen the potential benefits of nasal high
flow therapy for COPD patients first hand. He is now investigating a longer-term
study, following patients over several years to generate robust clinical data.
However, as with all clinical trials, we need to be patient. Relationships with key
opinion leaders like Professor Criner help us ensure that we deliver the best
possible products to help them provide the best possible care.

Projects
Our commitment to the long-term guides our approach to major projects and
expenditures. It is very important that we start with the problem or the
opportunity, and then implement the right technology to solve it. Last year,
we made a seamless transition to SAP software across North America. We’re
already seeing the benefits of this new system, and we know this is a tool
that we will use long into the future.

Our facilities, too, are designed to meet our future needs. We recently opened
our second manufacturing plant in Mexico, on time and on budget. The
Mexico site has enough land for three more buildings to accommodate
growth and expansion. We’ve applied long-term thinking to our fourth building
here in East Tamaki, and you can find out more about that after today’s
meeting in our Building Four preview tour.

Growth Strategy
It can be challenging to do things for the long term. For some stakeholders, long
term means next year.

9

But that is not our approach. Our opportunities are over the long term, and our
strategy is necessarily very consistent. Global demographic trends point to
significant potential for us. In the US alone, 90 million people will be over the
age of 65 by the year 2050, and many developing countries are increasing their
spend on healthcare. However, our bigger opportunity is enabling change in
clinical practice, and that takes time.

As shown on this slide, when we talk about the short-term, we mean at least the
next five years. Medium-term is more like five to 15 years, and long-term is 15
years plus. Our aspiration is to double our constant currency revenue every five
to six years, and we aim to grow the business in a profitable way that is
sustainable.

Re-election
As you are aware, I am standing for re-election as a Director of your Board at
this meeting. I have been with Fisher & Paykel Healthcare for 36 years now, the
last three years as your CEO and Managing Director. I believe that my
experience and knowledge of the company and our industry will continue to
bring value to the Board. I am committed to the success of this company and to
delivering results for shareholders. With your support, I look forward to
continuing to deliver on this commitment as Managing Director.

Conclusion
In closing, I’d like to thank our customers, clinical partners, suppliers,
employees and shareholders for their continued support of the company.
There are large opportunities to effect positive change to clinical practice if
we stay focused on the long term.

Thanks for taking the journey with us.

Thank you.