COCHLEAR LIMITED 
By
Dear Shareholder
I am pleased to provide you with extracts from our half year report lodged with the Australian Securities Exchange on 11 February 2014.
Highlights - Revenue
Fiscal year ended 30 June 2014 (F14) is an important year for Cochlear as new products are scheduled for regulatory approval and commercial launch in all product categories.
The year commenced without these regulatory approvals, but with the market still anticipating imminent new product launches. This had the result of a slowdown of sales in the second half of F13 (H2 F13), which continued into the first quarter of F14.
The Nucleus® 6 sound processor received regulatory approval in the key markets of Europe and USA and was then launched. Regulatory approval in the USA did not include all features and further approvals are being received on a progressive basis.
Baha® 4 and Baha Attract were also launched in the second quarter in major markets and have been positively received.
As anticipated, sales in quarter two recovered and were up over 30%
from quarter one following approval and the launch of the new products.
Total revenue for H1 F14 was $371.1 million, down 5% on H1 F13. Sales, excluding FX contracts, were $377.0 million, up 2%. In constant currency (that is restating H1 F13 at H1 F14 FX rates) H1 F14 sales were down 8%.
Cochlear implant unit sales were 11,712, down 14%. In H1 F13, approximately 1,900 unit sales were delivered against a Chinese tender. There were no comparable sales in H1 F14.
Bone Anchored Solutions, (including acoustic implant sales) of $45.9 million were up 19% and up 6% in constant currency.
The Australian dollar (AUD) depreciated against our major currencies during the half which benefits foreign sales when translated into AUD. From a translation perspective, Cochlear benefited by net $18 million. Offsetting this was a reduction in profit from FX contracts. FX contract losses were $5.9 million compared to a gain of $23.5 million in H1 F13.
Dr Chris Roberts
Chief Executive Officer / President 11th February 2014
Cochlear Limited and its controlled entities
Interim Income Statement
For the half year ended 31 December 2013
31 Dec 2013 $000 | 31 Dec 2012 $000 | |
Revenue Cost of sales | 371,060 (123,669) | 391,699 (104,842) |
Gross profit Selling and general expenses Administration expenses Patent dispute provision Research and development expenses Other income Other expenses | 247,391 (114,276) (19,351) (22,545) (65,057) 1,255 (537) | 286,857 (97,536) (21,319) - (59,901) 898 (698) |
Results from operating activities Finance income Finance expense | 26,880 150 (4,740) | 108,301 293 (3,123) |
Net finance expense | (4,590) | (2,830) |
Profit before income tax Income tax expense | 22,290 (1,245) | 105,471 (27,806) |
Net profit Earnings per share Basic earnings per share (cents) Diluted earnings per share (cents) | 21,045 37.0 36.9 | 77,665 136.6 136.1 |
Cochlear Limited and its controlled entities
Interim Balance Sheet
As at 31 December 2013
31 Dec 2013 $000 | 30 Jun 2013 $000 Restated* | |
Current assets Cash and cash equivalents Trade and other receivables Inventories Current tax receivables Prepayments | 59,992 200,733 140,721 16,878 10,299 | 52,689 203,748 131,574 6,207 11,004 |
Total current assets Non-current assets Trade and other receivables Property, plant and equipment Intangible assets Deferred tax assets | 428,623 405 67,864 248,894 65,889 | 405,222 944 65,898 235,774 57,422 |
Total non-current assets | 383,052 | 360,038 |
Total assets Current liabilities Trade and other payables Loans and borrowings Current tax liabilities Provisions Deferred revenue | 811,675 104,811 3,216 2,984 59,009 25,263 | 765,260 96,789 3,309 6,002 63,224 22,506 |
Total current liabilities Non-current liabilities Trade and other payables Loans and borrowings Provisions | 195,283 17,401 223,105 53,464 | 191,830 13,242 167,160 38,517 |
Total non-current liabilities | 293,970 | 218,919 |
Total liabilities | 489,253 | 410,749 |
Net assets Equity Share capital Reserves Retained earnings | 322,422 118,788 (13,091) 216,725 | 354,511 118,788 (32,433) 268,156 |
Total equity | 322,422 | 354,511 |
* Refer Note 3(d) of full financial statements for impact of change in accounting policy.
Cochlear Limited and it Interim Statement of C For the half year ended Cash flows from operating activitiesCash reeeipts from eust
Cash payments to supp and employees
Grant and other ineom lnterest reeeived lnterest paid
lncome taxes paid
Net cash from operatin Cash flows from investing activitiesAequisition of property and equipment
Aequisition of enterpris planning system
Aequisition of intangibl
Net cash used in investing activities Cash flows from financing activitiesRepayment of borrowin
Proeeeds from borrowin
Payments for repurehas of issued eapital, net
Dividends paid by the p
Net cash (used in) l fr financing activities Net increase in cash a cash equivalentsCash and eash equivale
Effeet of exehange rate on eash held
Cash and cash equival 31 December s controlled entities 31 December 20132013$
371,376, and tax and 49,4
* (EBIT)
before 36,
*
, net of tax* (15,7
embers 21,(cents) 3 are (cents) 3
are (cents) 12
on was $22,545,000 before tax an
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sures have not been subject to re taken a set of procedures to agree oks and records of the consolidate
n, please contact:
NSW 2109 Australia
6555
353
esor Services Pty Ltd
ustralia
4000
850 505
N5
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