FPH ASM and planning for new manufacturing facility

Stock Exchange Announcement
STOCK EXCHANGE LISTINGS: NEW ZEALAND (FPH), AUSTRALIA (FPH)

Fisher & Paykel Healthcare commences planning for new manufacturing facility

Auckland, New Zealand, 21 August 2020 – Fisher & Paykel Healthcare Corporation Limited
announced at its annual shareholders’ meeting today that it has commenced planning for its third
manufacturing facility in Mexico, which is to be commissioned within the next two years.

“As indicated in June we are continuing to grow manufacturing capacity to ensure a further
increase in supply of our respiratory products is available if required. To expedite availability, the
company is utilising its existing infrastructure and property in Tijuana, Mexico,” said Managing
Director and CEO Lewis Gradon.

The company completed its second Mexico facility in January 2019 and its fourth New Zealand
facility, the Daniell Building, in May 2020. Together with the planned new Mexico building, these
three buildings add an additional 17,000 m
2
of cleanroom manufacturing space, to a base of
28,400 m
2
available prior to their construction.

Board subcommittee appointments

As announced in November last year, Board chair Tony Carter retires from the Board with effect
from the close of today’s annual shareholders’ meeting. Current director Scott St John succeeds
Mr Carter as chair and has also been appointed as a member of the company’s Quality, Safety &
Regulatory Committee.

The company also announced that the Board has appointed current director Neville Mitchell to
replace Scott St John as chair of the Audit & Risk Committee from the conclusion of the meeting.
Mr Mitchell is considered by the Board to be an independent director. He is the former CFO of
Cochlear Limited and has been a Board member of Fisher & Paykel Healthcare since November
2018.

The company has provided the Chair’s speech, CEO’s speech and slide presentation for the 2020
Annual Shareholders’ Meeting to the NZX and ASX today.

The Annual Shareholders’ Meeting is scheduled to begin at 2pm NZST, 12pm AEST (10pm
USEDT) and will be a virtual-only meeting broadcast over the internet. To view the webcast, go to:
www.virtualmeeting.co.nz/fph20.

About Fisher & Paykel Healthcare

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

ENDS

Authorised by Fisher & Paykel Healthcare Corporation Limited’s Board of Directors





Media & Investor Contacts:
Karen Knott
Senior Communications Manager
karen.knott@fphcare.co.nz
+64 (0) 21 713 911

Hayden Brown
Investor Relations Manager
hayden.brown@fphcare.co.nz
+64 (0) 27 807 8073

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FISHER & PAYKEL HEALTHCARE CORPORATION LIMITED
ANNUAL SHAREHOLDERS’ MEETING
21 AUGUST 2020

ADDRESS BY TONY CARTER, CHAIR

Introduction
I opened last year’s meeting by stating that Fisher & Paykel Healthcare is a
global leader in medical devices and systems for use in respiratory care,
surgery and the treatment of obstructive sleep apnea. Today, I think it’s
important to point out that the company is also the world’s largest
manufacturer of two of the primary respiratory therapies used to treat
patients admitted to hospital with COVID-19.

This year has certainly presented some unexpected challenges, but we can
all be proud of our company’s world-leading role during the global pandemic.
In the 2020 financial year, Fisher & Paykel Healthcare products touched the
lives of an estimated 16 million patients. With that in mind, I’ll take you
through the highlights of the company’s performance.

Financial
Because of COVID-19, we announced our 2020 full-year results a month
later than usual, at the end of June. After a particularly strong second half,
the company delivered operating revenue of 1.26 billion, up 14 per cent over
last year in constant currency. Net profit after tax was $287 million, up 37 per
cent over the previous year.

The total dividend to shareholders for the financial year was 27.5 cents per
share, up 18 per cent over last year.

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In FY20 the Hospital product group made up 63 per cent of revenue, and the
Homecare product group made up 36 per cent.

The Hospital product group includes products for invasive and noninvasive
ventilation, Optiflow nasal high flow therapy, and surgery. Last year hospital
revenue grew 21 per cent in constant currency terms. This increase was
largely driven by three factors: growth in the use of Optiflow, demand for
products to treat COVID-19 patients, and strong hardware sales throughout
the course of the year.

Looking at the Homecare product group now – this includes products for
obstructive sleep apnea and other therapies used in the home. Homecare
revenue increased by 4 per cent in constant currency to $457.3 million. The
expansion of the Vitera full-face mask and launch of the Evora compact
nasal mask for OSA contributed to these results.

In terms of margin – gross margin was down slightly at 66.1 per cent
compared with 66.9 per cent in 2019. This was due to start-up costs for our
second Mexico manufacturing facility and increased air freight costs
associated with COVID-19. However, it remains above our long-term target
of 65 per cent. Operating margin was 30 per cent, right on our long-term
target.

The pandemic has generated a lot of attention for existing products and
therapies; however at Fisher & Paykel Healthcare, innovation is seen as the
key to long-term success. Last year the company invested $118.5 million in
research and development, which was 9 per cent of revenue. Safeguarding
that investment by protecting the company’s intellectual property remains a
high priority.

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The company could not have achieved these financial results without the
people of Fisher & Paykel Healthcare going ‘above and beyond’ to get
essential products into the hands of customers. Every six months a profit-
sharing bonus is paid to the company’s employees around the world, and in
the 2020 financial year, this bonus totalled $12 million. It was well-deserved,
and I’d like to take this opportunity to personally thank everyone for their
contributions.

Your Board
Turning now to your Board.

Last year there were no changes to the Board; however, we did welcome
Toni Moyes as part of the Future Directors Programme. Toni is chief
operating officer at Montoux, a software-as-a-service company in the life
insurance industry. Toni has a range of experience in leadership,
management, governance, legal and operational roles, and she has brought
valuable insights and expertise that complement the other Board members.

As we have announced previously, I will be retiring at the close of today’s
meeting, and Scott St John will take over as Board Chair. The Board has
commenced a search for a replacement non-executive Director, and with
that appointment will maintain seven non-executive Directors.

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

The Chairs of each of those committees – Scott, Pip, and Donal – will now
provide an update on their areas of focus over the past year. Please note
these updates have been pre-recorded so that we minimise any technical

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issues in this virtual meeting. Pip is standing for re-election as a Director of
the Board at this meeting and so she will also address that.

[Pre-recorded committee updates]

Thank you Scott, Pip and Donal.

As Scott mentioned, he will be taking my place as Chair of the Quality,
Safety & Regulatory Committee, and leadership of the Audit & Risk
Committee will transition to Neville Mitchell.

Conclusion

Before closing, I’d like to say that it has been a privilege to be involved with
Fisher & Paykel Healthcare for ten years – a business that has grown into
New Zealand’s largest listed company.

I’d like to thank everyone I’ve worked with, particularly the management,
Mike Daniell and Lewis Gradon, and each of the directors. And of course I’d
like to thank the team of 6,000 people who design and deliver the products
that are helping so many patients.

I’m confident about the future of this company. I know that Fisher & Paykel
Healthcare will continue to fulfil its purpose of improving care and
outcomes, whatever lies over the horizon.

Finally, I would like to thank you, the shareholders, for your continued
support and loyalty. Your investment in Fisher & Paykel Healthcare has
impacted many lives around the world.

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FISHER & PAYKEL HEALTHCARE CORPORATION LIMITED
ANNUAL SHAREHOLDERS’ MEETING
21 AUGUST 2020

ADDRESS BY LEWIS GRADON,
MANAGING DIRECTOR & CHIEF EXECUTIVE OFFICER

This is a very different year, and I’d like to begin in a different way, by reading a
message from one of our shareholders.

It says:

“My mother was diagnosed with coronavirus about three weeks ago. She
was in hospital for eight days, including three in ICU, and was treated with
Fisher & Paykel Healthcare equipment. She has made a full recovery and
is now back home. So, from our family I just wish to extend the utmost
thanks for your life-saving technology. It is one thing to be a shareholder
studying your company, quite another being someone relying on your
equipment.”

We think that really sums up our purpose of improving care and outcomes
through inspired and world-leading healthcare solutions. It’s about making a
difference for each individual patient and their loved ones.

As we became aware of the coronavirus threat, we acted quickly and decisively
to protect our people, products and patients. We cancelled travel and
international meetings, limited the number of people on site and transitioned a
number of our office employees to working from home. In January we activated
our crisis response team, and by March we were managing ten separate work
streams. Since then we have continued to adapt our work environment as

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conditions change, and our people are living out our purpose with more drive and
clarity than I have ever seen.

Since January, we have steadily increased output on our hospital hardware
products, and we’ve added about 1500 people in manufacturing across New
Zealand and Mexico. There’s been a massive effort behind the scenes to meet
the global demand for our products, while our people continue to innovate and
develop new ones.

In June, we allowed TVNZ One News to visit our site. I think their story sums up
the work we’ve been doing this year, and we’d like to play that for you now.
[VIDEO]

During a respite from COVID here in New Zealand, we opened our fourth
building, the Daniell Building. This state-of-the art facility houses some of our
research and development teams and greatly expands our manufacturing and
distribution capabilities. And today we announced that we’ve commenced
planning for our third manufacturing facility in Mexico.

FY21 progress to date

When we reported our results on the 29
th
of June, we made some initial
assumptions about the progression of COVID-19 around the world, and we
provided a guide to the 2021 financial year. But this is a rapidly changing
situation. So this week, we provided a trading update on the first four months of
this financial year, up to the end of July. You can read that update on our
website.

To summarise, Hospital hardware sales have continued to steadily increase, with
390% constant currency revenue growth compared to the prior comparable
period. Hospital consumables revenue has grown 48%, and overall Hospital

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product group revenue has grown 91%, compared to the prior comparable period
and in constant currency terms.

COVID has also impacted revenue in our Homecare product group. We continue
to see lower diagnosis rates of OSA globally. Homecare revenue growth was 5%
to the end of July in constant currency terms, compared to the prior comparable
period.

So what does all this mean for the 2021 financial year?

It has been our historical practice to provide first half guidance at the Annual
Shareholders’ Meeting. This year, we are not in a position to provide explicit
guidance. We can’t predict the impact of COVID-19 on global demand, future
hospitalisation rates, or clinical practice guidelines and their adoption.

For that reason, we think it’s wiser to provide a guide for the full 2021 financial
year. Before we get to that, let me recap how we are arriving at our guide. We
can’t predict the impact of COVID-19, so we are making some assumptions,
which we are disclosing, and then our guide is an estimate of how those
assumptions would impact our business. It’s important to understand that these
assumptions aren’t predictions, and our guide is not a forecast. So let me recap
our current assumptions for you.

First, we assume that global hospitalisations requiring respiratory support steadily
return to normal by the end of this calendar year.

Second, we assume that countries around the world continue to build respiratory
care infrastructure, including inventory of established ICU ventilators requiring our
humidifiers, and that the trend toward nasal high flow as a preferred therapy
continues for both COVID and non-COVID patients.

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Third, we maintain the assumption that OSA diagnosis rates are reduced for the
year.

And finally, we continue to assume that some costs related to COVID-19,
particularly freight, remain elevated for the year.

On this basis and at current exchange rates, full year operating revenue for the
2021 financial year would be approximately $1.61 billion, and net profit after tax
would be approximately $365 million to $385 million.

These assumptions are not a forecast or a prediction. As I said, we can’t predict
the course of COVID-19 around the world and the impact on our business.

What we can say is that our strategic direction remains the same, and we still
think and plan for the long term. We are still developing new, innovative products
and therapies, expanding our global reach, and working with key opinion leaders
to help change clinical practice. We expect the COVID-19 pandemic has
accelerated our progress.

In closing, I’d like to thank our suppliers, customers, clinical partners, and our
own team of more than 6,000 people for their steadfast commitment.

I also want to thank you, our shareholders, for continuing to support Fisher &
Paykel Healthcare. Because of you, our products were used to treat around 16
million people last year, and they will likely help even more this year.

Tony, I want to acknowledge and thank you for your outstanding leadership as
Board Chair for the past ten years. We wish you the best in your retirement from
the Board of Fisher & Paykel Healthcare.

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This has been a challenging year for us. We’ve scaled up manufacturing faster
than we thought possible, and we’ve placed hardware in hospitals all over the
world that helps them cope with a global pandemic. Most importantly to us, we
have played a role in helping patients get better faster – patients like the mother
in the message I shared with you.

We are confident in our ability to respond to the COVID-19 pandemic, and we’re
optimistic about the future of the company beyond it.

Thank you.

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Voting boxQuestion box

That the 2019 Performance Share Rights
Plan Rules –North American Plan and the
2019 Share Option Plan Rules -North
American Plan be approved.