Resmed q1 2012 ir presentations 1

Global leaders in sleep and respiratory medicine 1 © ResMed Q1 2012 1 © ResMed Q1 2012

Investor Relations Update

Q1 2012

Global Leaders in Sleep and Respiratory Medicine

Global leaders in sleep and respiratory medicine 2 © ResMed Q1 2012

Forward Looking Statements

Statements contained in this release that are not historical facts are “forward-looking” statements as

contemplated by the Private Securities Litigation Reform Act of 1995.These forward-looking statements,

including statements regarding the Company’s future revenue, earnings or expenses, new product

development, and new markets for the Company's products are subject to risks and uncertainties, which

could cause actual results to materially differ from those projected or implied in the forward looking

statements. Additional risks and uncertainties are discussed in the Company's Annual Report on Form 10-

K for its most recent fiscal year and in other reports the Company files with the U.S. Securities & Exchange

Commission. Those reports are available on the Company's Web site.


Global Leader in SDB and Respiratory Medicine

Global leading developer, manufacturer and distributor of medical

devices to treat sleep-disordered breathing and other respiratory

conditions.


• Improve quality of life for people with sleep-disordered

breathing or respiratory failure through:

– Innovative products and technology

• Raise the benchmark for effective diagnosis, therapy, patient comfort and

compliance.

– Education, awareness, screening

• Help the medical community and public to understand sleep-disordered

breathing.

• Provide tools to identify people at risk.

– Ventilation solutions

• Provide temporary or long-term ventilatory assistance.

– Monitoring systems

• Ensure therapy meets clinical requirements.

What We Do


Market Size – 20% sleep apnea in the adult population. 13% Mild; 7% Moderate to Severe

2002

Young T, Peppard E, and Gottlieb D. Epidemiology of obstructive sleep apnea: a population health perspective. Am J Respir Crit Care Med 2002; 165:1217-1239

7%

13%

Market Opportunities


What is Sleep-Disordered Breathing?

• Abnormal respiration during sleep (e.g. snoring, apneas, reduced airflow).

• Most prevalent is obstructive sleep apnea – a collapse of the upper airway despite ongoing breathing efforts.

• Other types include central sleep apnea characterized by the lack of breathing effort and mixed apneas (combination of obstructive and central sleep apnea).

Healthy upper airway Obstructed upper airway Partially obstructed upper airway


Externally

• Choking arousals

• Fragmented sleep

• Nocturia

• Unrefreshed on wakening

• Morning headaches

• Impaired concentration

• Daytime sleepiness

Internally

• Hypoxemia

• Hypercapnia

• Sympathetic activation

• Endothelial dysfunction

• Metabolic dysregulation

• Hypertension

• Arrhythmias

• Myocardial infarction

• Stroke

SDB

Visible and Hidden Impacts of Sleep-Disordered Breathing


Sjostrom et al.

Thorax 2002

Logan et al.

J. Hypertension 2001

Oldenburg et al,

Eur J Heart Failure, 2007

Einhorn et al.

Endocrine Prac 2007

Gami et al.

Circulation 2004

Garrigue et al.

Circulation 2007

Schafer et al.

Cardiology 1999

Sleep Apnea is Prevalent in Patients with Other Serious Conditions

* Apnea-Hypopnea Index ≥ 5

O’Keefe and Patterson.

Obes Surgery 2004

Coronary Artery Disease

All Hypertension

Atrial Fibrillation

Pacemakers

Type 2 Diabetes

Congestive Heart Failure

Obesity

Drug-Resistant Hypertension 83%

77%

76%

72%*

59%

49%

37%

30%


Obstructive Sleep Apnea

Intermittent Hypoxia

Oxidative Stress

Sleep Fragmentation /

Sleep Deprivation

Neurohormonal Changes

Inflammation

Type 2 Diabetes

Obesity

Insulin Resistance

Hypertension

Dyslipidemia

FIGURE Possible mechanistic links between obstructive sleep apnea, obesity, metabolic syndrome, and type 2 diabetes

Me

tab

olic

Sy

nd

rom

e

Reproduced with permission from Tasali E, p MSM, 2008. Obstructive sleep apnea and metabolic syndrome: Alterations in glucose

metabolism and inflammation. Proc AM Thorax Soc. 5:207-217 (2008). Official journal of the American Thoracic Society. Copyright ©

American Thoracic Society.

Links Between OSA and Chronic Disease


Our Five Strategic Initiatives

1. Sleep-disordered breathing (SDB) and its association

with and impact on cardiovascular and cerebrovascular

diseases.

2. SDB and its association with and impact on type 2

diabetes mellitus.

3. SDB and its association with and impact on peri-

operative risk.

4. SDB and its association with and impact on

occupational health and safety.

5. Ventilatory support with respect to chronic obstructive

pulmonary disease (overlap syndrome) and

neuromuscular disease.


Company Reorganization – May 2011

• Reorganized certain business units and management

responsibilities to more effectively align activities with strategic

goals.

• Provide innovative solutions with scale and efficiency.

• Improve our ability to deliver and result in more effective

investment initiatives.

• Focus on key drivers for future growth.

• Newly-created respiratory care strategic business unit will also

focus on chronic obstructive pulmonary disease.

• Newly-created strategic business unit, ResMed Ventures and

Initiatives, will focus on opportunities in disease states related to

sleep-disordered breathing and other market opportunities tied

to our key strategic initiatives.


Our Commitment to Ventilation

We provide:

Mechanical ventilation for congenital

defects, illness, trauma, obesity, cardiac

arrest, neuromuscular disease, pulmonary

disease and sometimes sepsis and shock.

Non-invasive ventilation solutions with the

best-in-class leak algorithms to support temporary

or long-term ventilation.

Invasive ventilation solutions for dependant patients

with value or leak ventilators providing both pressure

and volume ventilation.

Developing innovative and effective mechanical ventilation solutions to improve the

quality of life for patients and providing assistance to care-givers.


Gründler GmbH Acquisition

• Integrates innovator of medical humidification

products into respiratory care business unit.

• Supplies humidification for neo-natal/pediatric,

non-invasive pressure support and intensive

care unit ventilators.

• Enables ResMed to provide a system to sell into

the home and hospital markets.

• Allows ResMed to build expertise and

competitive position in humidification.

• Leverages humidification technology between

ventilation and obstructive sleep apnea.


• Exclusive five-year distribution agreement for ventilation

products.

– Hospitals, long-term acute care facilities and skilled nursing

facilities.

• Initial focus - launch of the Stellar 100 and related products.

– Stellar provides a perfect solution for CareFusion to enter the fast-

growing non-invasive pressure support ventilation market with

ResMed’s unique performance, size and mobility features that solve

patient/ventilator synchrony and leak compensation problems.

– Competitive price differentiation.

• Non-invasive ventilation is the largest and fastest-growing

segment in America’s sub-acute ventilation market.

CareFusion and ResMed Partner in Ventilation


• First acquisition to become part of ResMed’s

newly-created Ventures and Initiatives unit.

• ResMed has been an investor since 2003.

• BiancaMed is a leading Irish medical technology company.

• Developed an innovative, accurate, convenient, non-contact device to monitor

sleep and breathing in the home and hospital.

• Developing technology for several medical and consumer applications.

– Potential future applications in chronic diseases such as heart failure and chronic

obstructive pulmonary disease.

• Enhances commitment to innovation in sleep and respiratory medicine and the

related co-morbidities by commercializing products incorporating novel

technologies.

BiancaMed Acquisition


OSA and Cardiovascular

Disease


Why Sleep Apnea and Cardiovascular Disease?

• Sleep apnea is highly prevalent in cardiovascular

disease patients1.

– 30% to 80% of patients for common CVD states.

• Obstructive sleep apnea increases risk of incident

heart failure2.

– Men ages 40-70 with AHI >30 were 68% more likely to develop

heart disease than those with AHI <5.

• Sleep apnea can cause changes in blood vessel

function that reduces blood supply to the heart in

people who are otherwise healthy3.

• Benefits of CPAP treatment:

– Continuous positive airway pressure treatment reverses blood

vessel abnormalities.

– Sleep apnea therapy lowers blood pressure4.

• 4mm Hg to 10mm Hg reduction with CPAP therapy .

– Sleep apnea therapy improves cardiovascular health5.

• Left ventricular ejection fraction, six-minute walk, VO2 max, afterload, BNP.

1 Logan et al. J. Hypertension 2001; Schafer et al. Cardiology 1999

2 Gottlieb et al, Circulation July 2010

3 Hypertension: Journal of the American Heart Association July 2010

4 Becker et al. Circulation 2003

5 Kaneko et al. NEJM 2003, Maisel et al. UCSD VA Hospital – Case Study Data

(2002), Teschler et al. AJRCCM 2001


SERVE-HF Clinical Trial

• Aim: Demonstrate that adaptive servo-ventilation therapy over

two years can improve morbidity and mortality in patients with

predominant central sleep apnea and heart failure.

• Design: randomized controlled trial with @1200 evaluable subjects.

− Control arm - optimal medical care.

− Active arm - optimal medical care plus ASV.

• Status: Actively enrolling in Europe.

• Progress: Currently enrolled over 800 patients in 60 centers.

• Main Sub-study: Demonstrate that ASV therapy improves heart

failure outcomes such as left ventricular ejection fraction and quality

of life metrics (n=300).


OSA and Diabetes


Type 2 Diabetes & OSA Clinical Connections

• 72% of patients with type 2 diabetes suffer from obstructive sleep apnea (OSA)1.

– 86% of obese diabetics have OSA.

• OSA may have a causal role in the development

of diabetes2.

• OSA is associated with insulin resistance

(independent of obesity)3.

• Obese patients with sleep apnea are more insulin

resistant than patients with simple obesity4.

• 30% of patients presenting to a sleep clinic have

impaired glucose tolerance or diabetes, of which

40% are undiagnosed5.

1 Einhorn et al. Endocr Pract 2007 2 Reichmuth et al. Am J Respir Crit Care Med 2005 3 Ip et al Am J Respir Crit Care Med 2002, Punjabi et al. Am J

Respir Crit Care Med 2002 4 Tassone et al. Clin Endocrinol 2003 5 Meslier et al. Eur Respir J 2003


OSA and Obesity


2000

Obesity Trends* Among U.S. Adults (*BMI 30, or about 30 lbs. overweight for 5’4” person)

1990

No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%

2010


• In 2008, 9.8 percent of the world’s male population were obese, as were 13.8

percent of women. In 1980, these rates were 4.8 percent and 7.9 percent1.

• The World Health Organization predicts there will be 2.3 billion overweight adults

in the world by 2015 and more than 700 million of them will be obese.

Global Obesity Forecast

1 Majid Ezzati, MD et al, of the Imperial College of London


Peri-operative Risk


• More than 40+ million US adults suffer from sleep-disordered breathing1.

– More than 85% remain undiagnosed2.

• Increase in prevalence of obesity has led to increase in obstructive sleep apnea3.

• High prevalence of undiagnosed obstructive sleep apnea in the surgical patient population (24%)4.

Sleep Apnea Epidemic = Peri-operative Risk

1 Young et al. J Am Med Ass 2004

2 Young et al. Sleep 1997

3 Newman et al. Arch Intern Med 2005

4 Chung et al. Anesthesiology 2007


Sleep-Disordered Breathing

and Occupational Health

and Safety


Transportation Agencies Recognize Link between

Sleep-Disordered Breathing and Accidents

• US

– In October 2009, the National Transportation Safety Board wrote to the US

Coast Guard and Federal Motor Carrier Safety Administration recommending

screening of all ship pilots, bus and truck drivers for sleep apnea.

– US Federal Motor Carrier Safety Administration meeting December 2011 to

discuss its medical review board’s recommendations on sleep apnea.

• UK

– Truck driver with undiagnosed

sleep apnea killed a 26-year old driver.

– Coroner in the case and father of dead man

call for UK professional drivers to be tested.


Health Plan and Disability Cost Benefits of OSA Treatment

Waste Management’s Experience

• 37% reduction in total medical

costs for those treated in 1st year.

• 79% reduction in short-term

disability costs for those treated

in 1st year.

• 72% reduction in short-term

disability days absent in 1st year.

• 52% reduction of employees with

a short-term disability leave in 1st

year.

-100%

-90%

-80%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

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Commercial motor vehicle operators with obstructive sleep apnea and

treated with positive airway pressure therapy (N=156)

Hoffman, et al., Journal of Occupational & Environmental Medicine, vol.

52, no. 5 (2010)


Health Plan and Disability Cost Benefits of OSA Treatment

Schneider Trucking’s Experience

• Results 12 months post-CPAP

treatment1.

– 57.4% reduction in total medical

expenses = $6,456/year.

– 91% reduction in hospital

admissions.

– Does not include savings from

accidents.

• Results from original 6-month

follow up study.

– Improved retention by 229%.

– 73% reduction in accidents.

1Berger, et al., CHEST 2006

-100%

-90%

-80%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0% To

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ica

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Ho

sp

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dm

iss

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% Reduction


Superior Product

Innovation


New Mask Offerings Considered Best in Class

Quattro™ FX Mirage™ FX Swift™ FX

“The FX Trilogy”


S9™ Series Delivers More Comfort,

More Compliance, More Connectivity

High $

Med $

Low $

• Climate control

• Wireless monitoring

• Sleep quality indicator © ResMed 2006

FEATURES

PR

ICE

Premium Segment - Elite

• Climate control

• Wireless monitoring

• Sleep quality indicator

• Comprehensive data

(AHI tracking, mouth

leak, central sleep

apnea detection)

• Ultra quiet Easy-Breathe

• Easy-Breathe waveform makes

breathing more comfortable

• Simple menu settings

• Seamless integration with

optional H5i™ heated

humidifier with Climate

Control

Value Segment – Escape

Bi-Level

VPAP™ Adapt

• Simple menu settings

• Seamless integration with

optional H5i™ heated humidifier

with Climate Control

• Enhanced Vsync™ technology

provides superior

patient–ventilator synchrony


Skinit

• Skins allow a patient to fit the device into their lifestyle.

• Skins present an opportunity for cash revenue for HMEs.

• Personalization has been immensely successful across multiple industries.

• Personalization will lowering the emotional barriers to accepting therapy,

which will drive therapy adherence. Therapy adherence drives customer

revenue and patient health.

• Skins create a unique way to reconnect with patients who have abandoned

therapy and potentially bring them back in to using a device.


Stellar™ 100 – Easy Access to Quality Therapy

• Feature-rich, premium non-

invasive ventilator that can

also be used invasively.

• Light, compact and portable.

• Packed with exciting

innovative features.

• Improved leak management

system (VSync), which makes

breathing more natural for the

patient.


Financial Results


67th Consecutive Quarter of Revenue Growth

Q1 2012

Revenue (Constant Currency)

$314.8M +12%

(+8%)

Net Income $50.5M

-11%

EPS $0.33

-8%


Sales by Region & Product

Q1 2012

Americas 54%

Europe 36%

Asia-Pacific 10%

Masks & Accessories

46%

Flow Generators 54%


-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

2006 2007 2008 2009 2010 2011

US

$ '0

00

Net revenues

Annual Revenue Performance

15% 5YR CAGR


8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

-

50,000

100,000

150,000

200,000

250,000

2006 2007 2008 2009 2010 2011

% o

f R

even

ue

US

$ '0

00

Net Income Net Income as % of Revenue

Net Income Growth

21% 5YR CAGR

* 2007 Net Income excludes the impact of a voluntary product recall expense of $59.7 million, $41.8 million net of tax.

*


$0.58

$0.69 $0.70

$0.95

$1.23

$1.44

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

2006 2007 2008 2009 2010 2011

Sustained EPS Growth

* 2007 EPS excludes the impact of a voluntary product recall expense of $59.7 million, $41.8 million net of tax.

*

20% 5YR CAGR


Balance Sheet

USD '000 Sep-11 Jun-11

Cash/ Marketable Securities 610,063 735,267

Accounts Receivable 251,103 274,352

Inventory 187,950 200,777

Other Current Assets 93,683 82,056

PP&E 432,687 462,107

Patents/ Goodwill 331,628 283,398

Other Assets 28,178 30,965

TOTAL ASSETS 1,935,292 2,068,922

Accounts Payable 46,688 55,194

Accruals 103,274 103,787

Income Taxes Payable 33,262 7,988

Current portion, long term debt 4,095 163

Deferred Revenue 58,897 62,362

Long Term Debt 130,000 100,000

Deferred Income Tax 10,058 8,691

TOTAL LIABILITIES 386,274 338,185

Common Stock 815,765 799,068

Retained Earnings 1,162,380 1,111,862

Treasury Stock -629,338 -504,625

Other Comp Gain (Loss) 200,211 324,432

STOCKHOLDERS EQUITY 1,549,018 1,730,737


• Global leader in sleep medicine.

– Committed to increasing education and awareness of sleep-disordered breathing.

– Complete solutions from screening to support and monitoring.

• Advancing ventilation for respiratory care.

– Creating new benchmarks in ventilation to meet the challenges of respiratory care.

– Innovative homecare solutions to improve quality of life.

• Trusted track record, poised for greater success.

– Strong leadership and globally-diversified team of over 3,300 personnel with diverse

expertise.

– Continuous innovation and investment in research and product development.

– Ongoing journey of growth, leadership and excellence.

– Strong balance sheet.

Health & Medicine

Resmed q1 2012 ir presentations 1