Fisher & Paykel Healthcare provides FY22 trading update

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

Fisher & Paykel Healthcare Provides FY22 Trading Update

Auckland, New Zealand, 18 August 2021 – Fisher & Paykel Healthcare Corporation Limited has
provided an update on the first four months of the 2022 financial year, which ended 31 July 2021.
The company is holding a virtual-only annual shareholders’ meeting today at 2pm.

Revenue for the first four months was $583M, with 74% of revenue from the company’s Hospital
product group and 26% from its Homecare product group.

In constant currency, revenue for the four months was 2% below the prior comparable period, which
was a period of high demand during the initial surges of COVID-19 in North America and Europe.

Managing Director and CEO Lewis Gradon said, “We would like to express our gratitude for the
incredible efforts of healthcare professionals who are caring for patients during another difficult year.

“We would also like to acknowledge the people of Fisher & Paykel Healthcare working behind the
scenes in our manufacturing facilities, warehouses, offices and at home to meet the ongoing global
demand for respiratory products during the pandemic,” said Gradon.

Hospital product group

In the company’s Hospital product group, constant currency revenue for the four months of the 2022
financial year was 3% below the prior comparable period. This consisted of a 13% decline in
hardware sales, partially offset by 2% growth in consumables.

For the four months ended 31 July 2021:

• 66% of Hospital revenue was from the sale of consumables, and 34% was from hardware
sales.

• Compared to pre-COVID-19 levels, overall hardware volume remained elevated, largely driven
by some regions experiencing COVID-19 hospitalisation surges during the period.

• In North America and Europe, total hardware sales declined 62% and total consumables sales
declined 14% from the prior comparable period, in constant currency, influenced by reduced
COVID-19 hospital admissions and customers’ stockholding decisions. Compared with pre-
COVID-19 levels, sales volumes in North America and Europe remained elevated.

• Outside North America and Europe, hardware grew 42% and consumables grew 31% over
the prior comparable period in constant currency.

• The company’s Hospital consumables sales continue to reflect the clinical practice shift from
invasive ventilation toward the use of Optiflow
TM
nasal high flow therapy, as demonstrated by
new applications consumables growth of 17% in constant currency.

Homecare product group

In the company’s Homecare product group, constant currency revenue for the four months ended 31
July 2021 was 4% above the prior comparable period, with 4% growth in obstructive sleep apnea
(OSA) masks.

Outlook for the remainder of the 2022 financial year

Given the continuing uncertainties associated with vaccination rates, the efficacy of various vaccines
against variants of the coronavirus, and public and civic responses to COVID-19 case numbers, the
company is not providing quantitative revenue or earnings guidance for the remainder of the 2022
financial year.

“With the ongoing global vaccination activity, and most countries now having experienced a COVID-
19 hospitalisation surge resulting in a corresponding boost in hospital treatment capacity, we do not
expect our Hospital hardware revenue to continue at this elevated level for the remainder of the
financial year,” said Mr Gradon.

“Over the short term, we expect our Hospital sales will continue to be impacted by COVID-19-related
hospital admissions. This is currently evidenced by North America where we are seeing an increase
in demand in conjunction with localised COVID-19 surges.

“Individual customers’ stockholding decisions in response to rapid increases and decreases in
COVID-19 related demand and the length of time it takes to return to normal hospital admissions
are likely to influence our consumable sales over the short term. This all contributes to an
environment which is very difficult to predict.

“The longer-term impact from COVID-19 for our Hospital business has been an increased installed
base of our hardware and increased global physician awareness and experience with our therapies
and products throughout hospitals. We are confident this will result in an increasing number of
patients receiving the benefits of these therapies and products in the years to come.

“In our Homecare product group, growth in OSA masks is dependent on new patient diagnosis
rates, which we currently expect will continue to be at or above FY21 rates for the remainder of the
2022 financial year.

“Freight costs have remained elevated, and we have continued growing our investment in R&D and
SG&A as we discussed in May,” said Gradon.

The company has provided the Chair’s speech, CEO’s speech and slide presentation for the 2021
Annual Shareholders’ Meeting to the NZX and ASX today.

The virtual-only Annual Shareholders’ Meeting is scheduled to begin at 2pm NZST, 12pm AEST
(10pm USEDT). To view the webcast, go to: www.virtualmeeting.co.nz/fph21.


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 over 120 countries worldwide. For more information
about the company, visit our website www.fphcare.com.

ENDS

Media & Investor Contacts:
Karen Knott
GM Corporate Communications
karen.knott@fphcare.co.nz
+64 21 713 911
Hayden Brown
Investor Relations Manager
hayden.brown@fphcare.co.nz
+64 27 807 8073


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

---

FISHER & PAYKEL HEALTHCARE CORPORATION LIMITED
ANNUAL SHAREHOLDERS’ MEETING
18 AUGUST 2021

ADDRESS BY SCOTT ST JOHN
BOARD CHAIR

To open this year’s address, I would like to thank healthcare professionals for their incredible
efforts and sacrifices during such a challenging year. I would also like to acknowledge the
people of Fisher & Paykel Healthcare, who have been working so hard behind the scenes to
put the right products into the hands of those helping patients.

Over the past year, I have been amazed at how the business has adapted to the rapid
changes required to remain operational during a time of so much uncertainty. That kind of
pivot can only happen in an environment of high trust, where there is a highly competent
executive team and a great company culture.

Fisher & Paykel Healthcare’s response to COVID-19 was anchored in strong business
continuity processes that had been developed in advance and were ready to put into action.
Instead of telling you more about that, I would rather show you. Back in May, the employees
of Fisher & Paykel Healthcare all around the world watched a video of CEO Lewis Gradon,
reflecting on the 2021 financial year. We thought you, our shareholders, might also like to
see a portion of that video, so we will play that for you now.

[Play “For Life” Video]

As Lewis said in the video, new teams were set up all across the business. Each had a
leader and a control room, and every important decision was funnelled through that control
room. As for the Board, our approach was to stay out of management’s way. The executive
team developed a regular communications process to the Board, and we were well informed.

As you could see in those photos, Fisher & Paykel Healthcare products were shipped all over
the globe, and the company’s Optiflow nasal high flow therapy emerged as one of the
leading therapies for treating patients with COVID-19.

That brings us to our financial performance for the 2021 financial year. It was truly a year like
no other, and the company achieved a record result. Operating revenue was $1.97 billion, up
56% over the previous financial year, or 61% in constant currency. Net profit after tax was
$524.2 million, up 82% over the previous year. The total dividend to shareholders for the
financial year was 38 cents per share, up 38% over the previous financial year.

The business is structured into two major groups: Hospital and Homecare. In the 2021
financial year, the Hospital product group made up a higher percentage of revenue than in
previous years. Hospital products made up 76% of revenue, while the Homecare products
made up 24%.

Looking more closely at the Hospital product group – this includes products for invasive and
noninvasive ventilation, Optiflow nasal high flow therapy, and surgery. Last year revenue for
the Hospital product group was $1.5 billion, an increase of 87%, or 94% in constant currency.
This increase was largely driven by demand for products used to treat COVID-19 patients.

Looking at the Homecare product group – this includes products for obstructive sleep apnea,
or OSA, and other therapies used in the home. Last year was challenging, as COVID-19
restrictions closed many sleep clinics and reduced OSA diagnosis rates. In spite of these
setbacks, the Homecare product group delivered revenue of $466 million, which was an
increase of 2% over the previous year, or 4% in constant currency.

Gross margin decreased by 295 basis points for the year to 63%. This was due to higher
freight costs, including the increased use of airfreight, as well as additional COVID-19 related
costs. However, operating margin was higher than in previous years, as sales growth was
significantly higher than cost growth during the year.

Innovation is critical to the success of Fisher & Paykel Healthcare, and the therapies the
world will use ten years from now are in development today. We were unwavering in our
commitment to research and development during the 2021 financial year and invested
$136.7 million into R&D. We now have nearly 700 people working in R&D related roles,
developing the products of the future.

The company could not have achieved so much without the 6,000-plus people of Fisher &
Paykel Healthcare, and we believe it is important for them to share in the rewards. Our
common practice is to pay a profit-sharing bonus to our people around the world every six
months. In the 2021 financial year, this totalled $29 million for the year, and the bonus was

extended to eligible temporary and contract workers. It was well-deserved, and I would like to
take this opportunity to personally thank everyone for their contributions.

We know that it is also important for a successful business to look after the needs of the
wider community. In the 2021 financial year, the company committed $20 million to establish
the Fisher & Paykel Healthcare Foundation. This independent charitable organisation will
enable a more sustainable model for funding the company’s community initiatives and
charitable giving. We look forward to discussing the Foundation’s activities next year.

Turning now to your Board.

We are in the final stage of our search for a new director to replace Tony Carter, and with that
appointment, we will maintain seven non-executive directors. We are very close to
announcement and will update you on that as soon as we can.

The Board operates with the support of three subcommittees, which are the Audit & Risk
Committee, the People & Remuneration Committee and the Quality, Safety & Regulatory
Committee. The Chairs of each of those committees – Neville, Pip and Donal – will now
provide an update on their areas of focus over the past year. Those updates have been pre-
recorded in order to minimise any technical issues. [Committee updates].

As you will see from the Notice of Meeting, I will be seeking your support for re-election at
this meeting. I thought it appropriate to make a few comments now in support of my re-
election.

I have been on the Board of Fisher & Paykel Healthcare for more than five years, and this
marks my first full year as Board Chair. It is a privilege to be part of a company whose
products have made such an impact on the lives of people around the world.

I have more than three decades of experience in the financial services industry and have
advised some great New Zealand companies that operate in global markets and in highly
regulated industries. I believe my financial and commercial acumen, my governance
experience, and my knowledge of Fisher & Paykel Healthcare will continue to bring value to
the Board. I am a shareholder myself, and I am committed to the success of this company
and to delivering results for all shareholders, and I seek your endorsement for my re-election.

To close, I would I like to thank you, our shareholders, for your continued support and loyalty.
Your investment in Fisher & Paykel Healthcare helped clinicians treat around 20 million
patients in 120 countries during the last financial year.

I will now invite Lewis, our Managing Director and CEO, to update you on the 2022 financial
year.

ADDRESS BY LEWIS GRADON
MANAGING DIRECTOR & CHIEF EXECUTIVE OFFICER

Before I begin, I want to echo Scott’s words and thank the healthcare professionals
worldwide who are caring for patients this year. I would also like to acknowledge the people
of Fisher & Paykel Healthcare who are working in our manufacturing facilities, warehouses,
offices, and still in their own homes in many parts of the world, to meet the ongoing demand
for respiratory products during the pandemic.

Today, we updated the market on our progress for the first four months of the 2022 financial
year, through to the 31
st
of July.

Revenue for the first four months was $583 million, with 74% of revenue from our Hospital
product group and 26% from our Homecare product group. In constant currency, revenue
for the four months was 2% below the prior comparable period, remembering that was a
period of high demand during the initial surges of COVID-19 in North America and Europe.

In our Hospital product group, constant currency revenue for the four months of the 2022
financial year was 3% below the prior comparable period. This consisted of a 13% decline in
hardware sales, partially offset by 2% growth in consumables. 66% of Hospital revenue was
from the sale of consumables, and 34% was from the sale of hardware. Compared to pre-
COVID-19 levels, overall hardware volume remained elevated, and that was largely driven
by some regions experiencing COVID-19 hospitalisation surges during the period.

In North America and Europe, total hardware sales declined 62% and total consumables
sales declined 14% from the same period last year, in constant currency. That was
influenced by reduced COVID-19 hospital admissions in the period, and our customers’
decisions on how much stock of consumables to hold after the big demand they had seen in
our 4
th
quarter across December and January. Compared with pre-COVID-19 levels,
volumes in North America and Europe remained elevated. Outside North America and

Europe, hardware grew 42% and consumables grew 31% over the prior comparable period
in constant currency.

Our Hospital consumables sales continue to reflect the clinical practice shift from invasive
ventilation toward the use of Optiflow nasal high flow therapy, and that was evident in new
applications consumables growth of 17% in constant currency.

In our Homecare product group, constant currency revenue for the four months ended 31
July 2021 was 4% above the prior comparable period, with 4% growth in obstructive sleep
apnea (OSA) masks.

Given the continuing uncertainties associated with vaccination rates, the efficacy of various
vaccines against various variants of the coronavirus, and government responses and the
public’s responses to COVID-19 case numbers, we are not providing quantitative revenue or
earnings guidance for the remainder of the 2022 financial year.

With the ongoing global vaccination activity, and most countries having now experienced a
COVID-19 hospitalisation surge and boosted hospital treatment capacity to some extent, we
do not expect our Hospital hardware revenue to continue at this elevated level for the
remainder of the financial year. We are ready though, just in case it does.

In the short term, we do expect our Hospital consumables sales will continue to be impacted
by COVID-19-related hospital admissions and we are seeing this effect now in North
America where demand is currently increasing in conjunction with the local COVID-19
hospitalisation surges.

How much stock our individual customers choose to hold and then run down in response to
rapid increases and decreases in COVID-19 related demand is likely to influence our
apparent consumables volume in particular over short-term periods, and that also
contributes to an environment that is very difficult to predict and to analyse.

In our Homecare product group, growth in OSA masks is dependent on new patient
diagnosis rates. We currently expect that they will continue to be at or above FY21 rates for
the remainder of the 2022 financial year, on that basis we would expect growth in OSA
masks.

Freight costs have remained elevated, and we have continued growing our investment in
R&D and SG&A as we discussed in May.

If we look through the short-term swings, the longer-term enduring impact from COVID-19 is
that more of our devices have been placed in hospitals, and many more hospital staff have
been trained on how to use them. There is a broader awareness of our therapies and
products among respiratory therapists, and physicians. Nasal high flow therapy has been
featured in the media all over the world.

What we have now is a clip of a news story that aired in Southern California which illustrates
this well.

[play Spectrum video 2:30]

This increased attention on nasal high flow therapy has accelerated the adoption of Optiflow
in a way we could not have imagined a few years ago. Importantly, over the longer term
nasal high flow is not only for treating COVID-19 patients – it has applications across a
broad range of patients requiring respiratory support.

Our sales over the next few years will probably be affected by how long it takes to return to
normal hospital admissions, and the speed of change to utilising Optiflow nasal high flow
therapy for general respiratory patients as discussed in that video

We expect helping clinicians realise the benefits for patients in hospitals and homes will be a
key area of focus for us during the next few years.

Following from the increased sales in the 2021 financial year, we are accelerating some of
our research and development projects and expanding our global sales teams to support the
growing installed base of nasal high flow systems. We are also bringing forward some of our
longer-term building projects and production capacity projects to ensure we have supply if
and when needed.

I’m often asked what is next for our business after COVID-19. As Scott said, the 2021
financial year was an unusual year, and it is always going to be interesting following a year
like that. If you have followed us for a while, then you know that we have always taken a
long-term view.

Our business was on a growth trajectory before the pandemic, and our strategy has not
changed. We are still aiming to deliver sustainable, profitable growth through better
products, changing clinical practice and expanding our global reach.

The work to research, develop and prove the benefits of our products and therapies started
more than fifty years ago. It continues today, so that we will be ready to help clinicians treat
more patients far into the future.

In closing, I would like to thank our customers, clinical partners, suppliers, and employees
for their continued support of the company. As always, I am grateful to our shareholders for
supporting our purpose, our values, our strategy and our team.

Thank you.

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Annual Shareholders’ Meeting 2021

Online Help

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

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

Operating
Revenue
↑
FY2021 Financial Highlights
Net Profit
After Tax
Dividend
$1.97B
$524.2M
56%
↑
38%
38.00cps
↑
82%

FY2021 Revenue by Product Group
Distributed & Other
<1%
OF OPERATING REVENUE
Homecare
24%
OF OPERATING REVENUE
Hospital
76%
OF OPERATING REVENUE

Overview
Overview
Overview
Overview
Hospital
F&P MR850
TM
Optiflow+

500.4
572.1
642.3
801.3
1498.1
FY17FY18FY19FY20FY21
Hospital Product Group
87%
NZ$
94%
Constant
Currency
↑
↑
FY21 Result
Revenue
FY21 Revenue Growth
$1.5B

Homecare
F&P MyAirvo2
TM
Optiflow+

381.5
398.1
421.4
4 57. 3
465.6
FY17FY18FY19FY20FY21
Homecare Product Group
2%
NZ$
4%
Constant
Currency
↑
↑
FY21 Result
Revenue
FY21 Revenue Growth
$466M

0%
5%
10%
15%
20%
25%
30%
35%
40%
201620172018201920202021
0%
10%
20%
30%
40%
50%
60%
70%
201620172018201920202021
Gross and Operating Margins
Gross Margin
Long Term Gross Margin Target – 65%
Operating (EBIT) Margin
Long Term Operating Margin Target –30%

Research and development -$136.7 million investment
See if we can
replace, we
used this one
last year

6,000+ people

Profit-sharing bonus -$29 million

Community
NZ $20MILLION
Fisher & Paykel Healthcare Foundation

FY22 Trading Update
First four months of FY22
•Revenue $538M, 2% below the prior comparable period in constant currency
•Hospital product group
−Revenue down 3% cc from prior comparable period
−13% decline in hardware sales from prior comparable period
−Hardware revenue remained elevated
−Consumables revenue +2% CC*
−New applications consumables +17% CC*
•Homecare product group
−Revenue +4% CC* from prior comparable period
−4% growth in OSA masks
*CC = Constant currency

Outlook for the remainder of FY22
For the remainder of the 2022 financial year*:
•No quantitative guidance provided given continuing uncertainties related to
COVID-19
•Hospital hardware revenue not expected to continue at elevated levels
•Hospital consumables sales will continue to be impacted by COVID-19
hospitalisation rates
•New OSA patient diagnosis rates expected to be at or above FY21 rates
•Freight costs remain elevated
•Continue to grow investment in R&D and SG&A
* Based on observations and expectations as at18 August 2021

Financial Statements
•Opportunity for shareholders to ask
any questions specifically on the
financial statements, the auditor’s
report or the company’s 2021 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 Scott St John as Director
2.Re-election of Sir Michael Daniellas Director
3.Auditor’s Remuneration
4.Issue of Performance Share Rights
5.Issue of Options

How to Vote Online
Voting boxQuestion box

Resolution 1: Re-election of Scott St John
That Scott St John, who retires by rotation
and, being eligible, offers himself for re-
election, be re-elected as a director of the
Company.
Click “Submit Vote” to lodge your vote.
Need help?
Call the Link Market Services helpline
0800 200 220

That Sir Michael Daniell, 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 Sir Michael Daniell
Click “Submit Vote” to lodge your vote.
Need help?
Call the Link Market Services helpline
0800 200 220

Resolution 3: Auditor’s Remuneration
That the Directors be authorised to fix the
fees and expenses of PwC as the
Company’s auditor.
Click “Submit Vote” to lodge your vote.
Need help?
Call the Link Market Services helpline
0800 200 220

Resolution 4: 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.
Click “Submit Vote” to lodge your vote.
Need help?
Call the Link Market Services helpline
0800 200 220

Resolution 5: Issue of Options
That approval be given for the issue of up
to 190,000 options under the
Fisher & Paykel Healthcare 2019 Share
Option Plan to Lewis Gradon, Managing
Director and Chief Executive Officer of the
Company.
Click “Submit Vote” to lodge your vote.
Need help?
Call the Link Market Services helpline
0800 200 220

Questions?

Overview
Overview
Overview
This concludes the 2021
Annual Shareholders’ Meeting.
Thank you for attending.