Fisher & Paykel Healthcare Annual Shareholders' Meeting Speeches

24 AUGUST 2006

In our annual report to you this year, we summed up our performance in four words – more patients, more places.  That’s a brief description of a very positive year for us, in which we made excellent progress in our goal to grow the business by serving a much broader range of patients and by extending our geographic reach.

In the hospital environment, we’ve moved beyond our traditional domain of intensive care, with our products now being used to treat patients with a broad range of respiratory conditions.  In homecare, we are close to introducing a new system to help in the treatment of chronic obstructive pulmonary disease. These opportunities, which offer considerable scope for growth, will be discussed further by Mike in his address.

Our trading revenue increased by 20% to 290 million New Zealand dollars.  We achieved a record operating profit, up 16% to 104 million dollars.  Profit after tax increased by 14% to 70 million dollars.

A very pleasing outcome was an increase in our final dividend to seven cents per share.  In total, shareholders have received a dividend of 12.4 cents per share over the year, fully imputed.  Dividends paid represented approximately 90% of our full year after tax profit, in line with our current policy.  Total shareholder return for the year was 42%.

Our strong result came from new products performing well and from growth across all of our core product groups of respiratory humidification, obstructive sleep apnea and neonatal care.

We have a consistent track record of growth.  Trading revenue from our core product groups has grown at a compound annual rate of 21% in US dollar terms over the past six years.  This has been achieved through the introduction of a broad range of new products and our ability to expand our markets, reflecting the success of our strategy to treat more patients in more places.

Our products are now sold in more than 110 countries and increasingly, we are investing in expanding our presence “on the ground” in key markets.  As in previous years, we continue to invest in expansion of our global sales network.  Nothing really substitutes for being there - forming relationships, listening to customers, gaining their confidence and keeping our eyes open for growth opportunities.

With new products a vital driver of our annual revenue and earnings growth, we remain committed to investing in research and development.  This investment is spread across all of our core product groups, enabling us to broaden our product portfolio and develop new clinical applications for our technology.  The intellectual property from this investment is well protected, with the number of US and international patents we hold increasing each year.

We have invested for growth, with nearly 60 million dollars funding the construction of our new manufacturing, administrative and R&D facility which opened recently.  This new facility, alongside our existing one, leaves us very well served with the manufacturing capacity we need to meet growing demand.

We have continued our share buy-back programme which was originally announced in March 2004.  As we noted at the initiation of this programme, we believe repurchasing our shares is currently an appropriate use for surplus funds.  In total, 5.8 million shares have been acquired at a cost of 15.3 million dollars and an average price of $2.65 per share. We have 12.2 million dollars remaining of the original 27.5 million dollar share purchase amount.

As a company, we are confident about the future and our ability to continue to increase value for our shareholders.  Our R&D teams, our manufacturing skills, our products and the experience we have in worldwide in marketing and sales are considerable strengths.

I know shareholders will join me in thanking our worldwide team for another excellent result this year.  Their experience, knowledge and commitment make a very real difference to our ability to grow our markets and the value we create.

I would also like to thank you, our shareholders, for your continued loyalty to the company. The Board and our management team value your support as we continue to focus on delivering superior returns for you.