Fisher & Paykel Healthcare Corporation Limited (Fisher & Paykel, the Group, ASX: FPH) commenced operations in 1969 when it developed its first respiratory humidifier prototype and has been listed on the ASX since November 2001. Today the Group is NZX’s largest company by market capitalisation, and 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. The Group’s products are sold in 120 countries worldwide.

Significant boost to manufacturing capability

Fisher & Paykel continue to build on their already extensive domestic manufacturing capability to ensure the Group has the necessary capacity in New Zealand to meet global demand for its pipeline of innovative products and therapies.

On 6 March the Group announced that it has signed a construction contract for the fifth building on its East Tamaki campus in Auckland. The building is to be purpose built with a gross floor area of 28,000 square metres, and includes space for research and development, as well as manufacturing and distribution. The estimated cost of the new building is NZ$250 million and the facility is expected to be operational in 2027.

The site already has over 3,900 employees and the new building will accommodate Fisher & Paykel’s expected growth in Auckland over the next 5 years.

The Group has also recently submitted a private plan change application on its 105-hectare Karaka campus to provide for more growth over the longer term. The 28,000 square metre project is a purposeful investment in infrastructure and is aimed at boosting the Group’s research and development, manufacturing and distribution capability. The Karaka site includes a 20 to 30-year development program, in support of the Group’s long-term infrastructure plans to deliver on its growth strategy of doubling constant currency revenue every five to six years.

Impact of new US tariff regime

Having an expanded New Zealand manufacturing capability makes strategic sense given the threat of US trade protectionism as announced by President Donald Trump, citing plans to introduce 25 percent tariffs on goods entering the US from Canada and Mexico, and to increase existing tariffs on China by 10 percent. Fisher & Paykel currently manufactures 45 percent of its volume in Mexico and 55 percent in New Zealand and for the first half-year of the 2025 financial year about 43 percent of the Group’s revenue came from the US. Approximately 60 percent of US volumes are supplied from Fisher & Paykel’s Mexico manufacturing facilities.

Fisher & Paykel does not currently anticipate a material impact from the announced tariffs on its net profit after tax for the 2025 financial year. For the 2026 financial year, costs are likely to increase due to the new tariffs, although the economic environment and global response to US tariffs may be fluid over this period.

Fisher & Paykel remain confident of achieving its gross margin target of 65 percent through its long-standing continuous improvement program across the entire business and supported by the Group’s investment in manufacturing and distribution infrastructure. The proposed introduction of US tariffs may have added two to three years to this expectation.

The Group is assessing the complexities associated with the imposition of the tariffs and will provide an updated outlook for the 2026 financial year and an updated estimate of the timeframe to return to the gross margin target at the time of release of the full year results at the end of May.

Fisher & Paykel takes a long-term view of cost reduction and efficiency enhancement solutions that reduce the overall cost of providing healthcare for patients and anticipate being able to successfully navigate the cost challenges facing the Group over time.