East Tamaki-based medical equipment manufacturer Fisher & Paykel Healthcare (FPH) has provided an update on the first four months of the 2022 financial year, which ended July 31, 2021.
The company held a virtual-only annual shareholders’ meeting last Wednesday. 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 (OSA). The company’s products are sold in more than 120 countries worldwide. It is listed on both the NZX and ASX.
Revenue for the first four months was $583 million, with 74 per cent of revenue from the company’s Hospital product group and 26 per cent from its Homecare product group.
In constant currency, revenue for the four months was 2 per cent 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 per cent below the prior comparable period. This consisted of a 13 per cent decline in hardware sales, partially offset by 2 per cent growth in consumables.
For the four months ended 31 July 2021:
Some 66 per cent of Hospital revenue was from the sale of consumables, and 34 per cent 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 per cent and total consumables sales declined 14 per cent 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 per cent and consumables grew 31 per cent 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 nasal high flow therapy, as demonstrated by new applications consumables growth of 17 per cent in constant currency.
Homecare product group
In the company’s Homecare product group, constant currency revenue for the four months ended July 31, 2021 was 4 per cent above the prior comparable period, with 4 per cent growth in obstructive sleep apnea 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 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,” said Gradon.
“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 (selling, general and administrative or operating expenses) as we discussed in May.”
The company provided the chair’s speech, CEO’s speech and slide presentation for the 2021 Annual Shareholders’ Meeting to the NZX and ASX last week.
FPH shares on the NZX were on Wednesday afternoon August 24 $33.24 a share (market cap $19.48 billion and 52-week high of $37.89) and on the ASX A$31.76 per share (market cap A$18.50b and 52-week high $A34.77).