In a year that will go down in history as one of the world's darkest, one New Zealand company shone light on what can be achieved in the face of adversity.
Fisher & Paykel Healthcare has long been a great company and this year it has shown the world why — responding fast and accurately to the Covid-19 virus so its products could be delivered to the market at a crucial time.
Yes the company has an advantage in that its non-invasive breathing aids, masks and other hospital hardware products are in hot demand — but the way it reacted and seized the opportunity is what turned opportunity into success.
Covid-19 saw demand for its products surge, initially driving a 37 per cent increase in profitability in the 2020 financial year.
Last week the company reported an 86 per cent gain in net profit for the first half of this financial year to $225.5m.
Fisher & Paykel Healthcare's share price soared by as much as 95 per cent over the past year, in doing so becoming the first listed New Zealand company to be worth more than $20 billion. The stock only recently dipped as encouraging signs of vaccine development filtered through the markets.
In short, as Deloitte Top 200 judge Neil Paviour-Smith remarked, F&P Healthcare has had an outstanding year.
"The company's ongoing investment in innovation and development of leading products underpins its success. Overlaid with a well-regarded and high performing management team, it is the stand out winner this year," Paviour-Smith, who is managing director of Forsyth Barr said.
Winning the Company of the Year is just reward for a company whose story began way back in 1934 when Woolf Fisher and Maurice Paykel established Fisher & Paykel Limited to import Crosley refrigerators, Maytag washing machines and Pilot mantle radios.
The company established its medical division in 1977 and listed on the NZX in November 1979 following an IPO that valued the company at just $32 million.
Back then no one would have imagined the medical division would one day be so successful.
In 2001 Fisher & Paykel was spilt into two into two separate entities, F&P Appliances and F&P Healthcare. While the healthcare division went about its business expanding into overseas markets, the appliances division came under pressure as manufacturers grappled with increasing costs of production.
In 2008 at the height of the financial crisis, F&P Appliances made the tough decision to close its Dunedin plant and shift manufacturing offshore. Four years later Chinese whiteware manufacturer Haier bought that business for $927m and it was delisted from the NZX.
But F&P Healthcare forged on, initially with Mike Daniell at the helm and now Lewis Gradon, who came up through the ranks having held various engineering positions within the business overseeing the development of the company's extensive product range.
F&P Healthcare's innovative medical devices now help tens of millions of patients in more than 120 countries. Last year it reinvested approximately $100m of annual revenue into R&D.
The company has two key products used in the fight against Covid.
The first is a humidifier that is attached to ventilators which are connected to lungs via a tube. F&P's system connects the ventilator to that tube and makes sure the gas is at the right temperature and humidity.
The company is the world's largest supplier of those humidifiers.
The second is a new Nasal therapy range called Optiflow, a stable, simple and soft headgear apparatus which has come to replace ventilator use in the normal treatment of coronavirus.
This means hospitals can preserve ICU beds and ventilators for patients that really need them.
And, of course, F&P Healthcare is the world's largest supplier of that Nasal therapy.
Gradon says the company's biggest achievement in the last six months was the extent to which it ramped up production to meet the extra demand.
Asked in a conference call what business would look like once the pandemic was over, Gradon said: "That is the question.
"In terms of Optiflow and Airvo we had such low growth penetration prior to the pandemic, we don't think that we are anywhere near saturation in that market whatsoever."
F&P Healthcare has historically under promised and over delivered, leading some analysts to predict the company has been conservative in its net profit guidance of $400m to $415m for the full year.
Forsyth Barr analyst Chelsea Leadbetter told the Herald last week the company's ability to respond to meet the material spike in demand to help treat Covid-19 patients was "nothing short of extraordinary".
She noted the company's caution in its earnings guide and its list of assumptions.
"The question that a lot of investors and analysts are grappling with is how to forecast the earnings profile beyond the Covid pandemic, and what the new norm will look like," she said.
"Ultimately they don't know. We don't know and I guess we will keep learning as the situation develops globally."
Gradon, meanwhile, hinted at sustained demand for some of the company's other more traditional sleeping aid products.
Since the pandemic started, many sleep clinics around the world had closed, resulting in a reduction in new patient diagnoses.
He said the company's "F&P Evora" and "F&P Vitera" masks for obstructive sleep apnea (OSA) had yet to reach their full potential.
The company's homecare product group, which includes products used in the treatment of OSA and Nasal high flow therapy in the home, operating revenue grew 5 per cent to $226.2m.
As opposed to the hospital product group, which includes products used in acute and chronic respiratory care and surgery, operating revenue grew 93 per cent over the first half of the previous financial year to $681m.
"Sales in hardware and consumables continued to track surges in Covid-19 globally, as the virus moved across Europe, North America, South America and South Asia," Gradon said.
One thing is clear: Fisher & Paykel Healthcare is having a heck of a run and its commitment to innovation will likely see it in good stead for the future, no matter what happens with Covid.
Finalist: Delegat Group
Consistency is the hallmark of Delegat Group, which has earned the crown as New Zealand's number one wine exporter to the world.
Delegat's positioning as a top premium wine company owes much to the vision of its founder and group chairman Jim Delegat and strong execution by management.
The company has grown more than 21-fold since 2002 and last year over 200 million glasses of Delegat's wine were enjoyed by wine lovers around the world.
Delegat's strong single-brand strategy, exporting wine under the Oyster Bay brand has allowed it to maintain and increase pricing, despite the challenges of wine market conditions.
The company exports wine volumes representing around 95 per cent of group sales.
The company grew its earnings by 25 per cent in the past year, another strong result backed by volume growth and margin improvements," Deloitte Top 200 judge Neil Paviour Smith said.
"Delegat continues to successfully take advantage of its well-established in-market distribution channels and the consumer trend globally towards premium wines.
"This performance resulted in Delegat's share price increasing by 31 per cent over the past year with the company now having delivered a 27 per cent per annum compound return to shareholders over the past 10 years."
Executive chairman Jim Delegat said the record results achieved were a testament to the strength of the group's business model as it continued to invest for growth.
"Our global team has once again shown great resolve and resilience while facing unique challenges," Delegat said in announcing the results in August.
The company performed "very well" through global disruptions caused by the Covid-19 pandemic. Classified an essential business, its viticulture and winemaking teams were able to complete harvest operations and winemaking processes for the 2020 vintage.
It said reduced sales in its hospitality channel from March on were offset by increased sales in retail and particularly in e-commerce channels.
Finalist: Zespri
The world's largest marketer of Kiwifruit had another strong year despite the uncertainty of the coronavirus pandemic.
Zespri's profit for the year ended March was $200 million compared with nearly $180m the year prior, with sales rising 7 per cent to more than $3 billion with its Green and Sungold varieties hitting record levels.
The organisation — 100 per cent owned by current and former growers — now provides fresh fruit to more than 50 countries.
Zespri continues to invest significantly in its global supply chain and in new products, with commercialisation of the Zespri Red variety expected to underpin ongoing success.
The average returns per hectare for the Sun Gold fruit reached a record $162,000 during the year.
"On the back of its refreshed brand identity Zespri looks set to continue providing the world with healthy and fresh fruit year round," judge Neil Paviour-Smith said.
Zespri's chief executive Dan Mathieson said the new financial year had started with a milestone achievement in Shanghai, where the Chinese government had approved Zespri's application for key trademark protection status — the only fruit brand and the only New Zealand brand to be recognised like this.
"It is a strong acknowledgement of Zespri's profile, market share and positive corporate reputation," he told the Herald in August.
The past year had been incredibly challenging for the industry and the company, chairman Bruce Cameron said.
"But it's also a year in which we've made decisions that will set us up for future success."
Zespri sold 164.4 million trays of kiwifruit to the world last year. It reported strong market growth globally with sales up 10 per cent or $84m in greater China, up 8 per cent or $52m in Japan, and in Spain sales rose by 5 per cent or just over $14m.
The industry's 27,000 workers in New Zealand had found new ways of working during the Covid-19 pandemic to get the job done, Cameron said.
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