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Announcement

FLLYR: FPH: FPH Reports Record Annual Result, Net Profit Up 18%

22 May 2017 08:53NZX
FISHER & PAYKEL HEALTHCARE REPORTS RECORD ANNUAL RESULT, NET PROFIT UP 18%
Auckland, New Zealand, 22 May 2017 - Fisher & Paykel Healthcare Corporation
Limited today reported record net profit after tax of NZ$169.2 million for
the year ended 31 March 2017, an increase of 18% over the previous year.
Operating revenue was a record NZ$894.4 million, 10% above the prior year or
14% growth in constant currency.

Chief Executive Officer Lewis Gradon said, "This is a strong result. We
continue to benefit from the increasing adoption of our products by
healthcare providers as they strive to improve the effectiveness and
efficiency of care for their patients in both hospital and homecare
environments."

The company''s directors have approved an increased fully imputed final
dividend of 11.25 cents per share, taking the total dividends for the year to
19.5 cents per share, an increase of 17% on the previous year.

Both major product groups, Hospital and Homecare, delivered record operating
revenue results. Hospital product group revenue grew 15% to NZ$500.4 million,
or 19% growth in constant currency, and Homecare product group revenue grew
4% to NZ$381.5 million, or 8% growth in constant currency.

"We are pleased with our performance in both the hospital and homecare
settings," said Mr Gradon. "Growth in our Hospital product group was driven
largely by new applications, which include nasal high flow, surgical and
non-invasive therapies. Revenue growth from consumables used in new
applications was a robust 24%, or 29% in constant currency for the year. This
performance was supported by strong clinical and economic data demonstrating
the benefits of our therapies and products.

"In the Homecare product group, our masks continue to perform well, with 9%
revenue growth or 13% in constant currency, compared to the previous year.
The new F&P Brevida nasal pillows mask, which was launched in August, is
already showing great results in the markets where it is available. Our
myAirvo home respiratory system is also growing strongly, building from our
market-leading position in hospital humidification."

Gross margin increased by 205 basis points during the financial year due to a
favourable product mix and increased volume from the Mexican manufacturing
facility. In Tijuana, Mexico, the company has now completed the purchase of a
15 hectare greenfield site and has commenced earthworks on the new facility.
"We expect this building to be complete by early 2018, and it will be used to
support manufacturing growth over the next five years, able to supply our
global markets."

The company''s investment in R&D continued, with expenses growing by 17% to
NZ$86 million, representing 9.6% of operating revenue. "We are committed to
continuous product improvement, and this investment has seen the introduction
of a number of innovative products over the financial year, with a
substantial pipeline of new products to come."

The company has provided an update on its patent litigation proceedings with
ResMed on page 67 of its annual report and disclosed that it has incurred
litigation related expenses of $20.7 million in the 2017 financial year. "We
recognise that this is a significant cost and did not enter into litigation
lightly. We have been providing unique solutions for patients for more than
45 years and we take pride in our proprietary technology. We also respect the
valid intellectual property rights of others and we are confident in our
position," said Mr Gradon.

The increased final dividend of 11.25 cents per share, carrying full New
Zealand imputation credit, will be paid on 7 July 2017. The dividend
reinvestment plan (DRP), under which eligible shareholders can elect to
reinvest all or part of their cash dividends in additional shares, will again
be made available in respect of the 2017 final dividend. The DRP will be
offered without a discount in respect of the 2017 final dividend payment.

Outlook for FY2018
"We are well placed to meet the growing global demand for our products. We
have a consistent, well proven strategy for delivering sustainable,
profitable growth. At current exchange rates we expect full year operating
revenue for the 2018 financial year to be approximately NZ$1 billion and net
profit after tax to be approximately NZ$180 million to NZ$190 million"
concluded Mr Gradon.

Full Year Result highlights:
o 18% growth in net profit after tax to a record NZ$169.2 million.
o 13% increase in final dividend to 11.25 cps (2015: 10.0 cps).
o 10% growth in operating revenue to a record NZ$894.4 million, 14%
growth in constant currency.
o 15% growth in Hospital operating revenue, 19% growth in constant
currency.
o Revenue growth of 29% in constant currency for consumables used in
noninvasive ventilation, Optiflow nasal high flow therapy and surgical
applications, accounting for 54% of Hospital consumables revenue.
o 4% growth in Homecare operating revenue, 8% growth in constant
currency.
o Strong performance from OSA masks, 13% revenue growth in constant
currency.
o Gross margin improvement of 205 basis points for the full year, 206
basis points in constant currency.
o Investment in R&D increased by 17% to NZ$86 million, representing
9.6% of operating revenue.
o 86% of the company''s revenue generated from recurring items, such as
consumables and accessories.
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.

Ends

Contact:
Investors:
Marcus Driller
General Manager Corporate
marcus.driller@fphcare.co.nz
+64 (0) 27 578 9663

Media:
Rachel Reynolds
Senior Communications Manager
rachel.reynolds@fphcare.co.nz
+64 (0) 21 713 911
End CA:00301467 For:FPH    Type:FLLYR      Time:2017-05-22 08:53:20
Views: 117
Fisher & Paykel Healthcare Corp Ltd
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