Medistim

Earnings Release • Apr 28, 2021

Welcome to Medistim ASA's Interim report 1st quarter 2021

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Medistim ASA First quarter 2021

April 28th 2021

Kari E. Krogstad Thomas Jakobsen

PRESIDENT & CEO CFO

Disclaimer

The information included in this Presentation contains certain forward-looking statements that address activities, events or developments that Medistim ASA ("the Company") expects, projects, believes or anticipates will or may occur in the future. These statements are based on various assumptions made by the Company, which are beyond its control and are subject to certain additional risks and uncertainties. The Company is subject to a large number of risk factors including but not limited to economic and market conditions in the geographic areas and markets where Medistim is or will be operating, IP risks, clinical development risks, regulatory risks, fluctuations in currency exchange rates, and changes in governmental regulations. For a further description of other relevant risk factors we refer to Medistim's Annual Report for 2020. As a result of these and other risk factors, actual events and our actual results may differ materially from those indicated in or implied by such forward-looking statements. The reservation is also made that inaccuracies or mistakes may occur in this information given above about current status of the Company or its business. Any reliance on the information above is at the risk of the reader, and Medistim disclaims any an all liability in this respect.

Table of Contents

01 Highlights

Highlights 1st quarter

	Q1 2021	% Q o Q	Q1 sales close to last year's record
Revenue	MNOK 102.6 (103.1)	-0.5%
EBIT	MNOK 29.1 (24.8)	+17.2%
Currency		-4.9%	 Currency neutral sales growth of own products: In the USA with 2%, while decreasing 8.6% in NOK o
No of units sold:			In Asia with 3.4% o
Flow systems	39	-7.1%	While ROW were down 26.8% currency neutral
Imaging systems	22	-15.4%
Flow probes	1 774	+6.0%	Vascularsales down 19.6% in NOK o
Imaging probes	31	-20.5%	Strong 3. party sales with 20% growth o

Sales down by 0.5% in NOK, but currency neutral growth was 4.4%

o Improvement from Q2, Q3 and Q4 2020 which showed 19.3%, 9.7% and 7.2 % currency neutral decline, respectively

Currency neutral sales growth of own products:

• o In the USA with 2%, while decreasing 8.6% in NOK
• o In Europe (own products) with 4.8 % driven by strong sale in UK
• o In Asia with 3.4%
• While ROW were down 26.8% currency neutral
• o Vascularsales down 19.6% in NOK
• o Strong 3. party sales with 20% growth

Procedures (USA) 16 671 +10.8% Second best EBIT ever, margin up from 24.0% to 28.3%

LivaNova is new distributor in India as of January 1st

The General Assembly resolved to pay a dividend of NOK 3.00 per share

02 Financial Statements

Profit and loss Q1 2021

Profit & loss	Q1 2021	Q1 2020
All numbers in NOK 1000
Sales	102 630	103 106
Cost of goods sold	22 801	23 075
Salary and sosial expenses	32 403	33 290
Other operating expenses	12 508	16 464
Total operating expenses	67 711	72 829
Op. profit before depr. and write-offs (EBITDA)	34 919	30 277
EBITDA%	34,0 %	29,4 %
Depreciation	5 853	5 493
Operating profit (EBIT)	29 066	24 785
EBIT%	28,3 %	24,0 %
Financial income	2 001	6 638
Financial expenses	3 216	3 930
Net finance	(1 215)	2 709
Pre tax profit	27 851	27 493
Tax	6 029	6 386 -
Profit after tax	21 821	21 107

Sales per Quarter (TNOK)

Balance sheet – Assets

Cash position by end of quarter was MNOK 86,7

Securing end -of -life components, security stocks of components and lower sales due to COVID 19 resulted in increased inventory level

The General Assembly on April 27th decided to pay a dividend of NOK 3.00 per share based upon 2020 results

Balance sheet	31.03.2021	31.12.2020
All numbers in NOK 1000
Assets
Intangible assets	32 045	33 464
Fixed assets	63 372	66 570
Total intangible and fixed assets	95 417	100 034
Inventory	114 128	112 667
Customers receivables	58 298	57 485
Other receivables	10 591	3 744
Cash	86 657	71 891
Total current assets	269 673	245 786
Total assets	365 090	345 820

Balance sheet	31.03.2021	31.12.2020
All numbers in NOK 1000
Share capital	4 585	4 585
Premium fund	44 172	44 172
Other equity	232 546	208 089
Total equity	281 303	256 846
Total long term debt	27 312	29 497
Total short term debt	56 475	59 477
Total equity and liability	365 090	345 820

Balance sheet – Equity and Liability

9.8 MNOK in interest-bearing debt, of which 6 MNOK is a U.S. Covid-related loan ('Paycheck Protection Program')

26.7 MNOK in obligations

related to lease contracts where 19.9 MNOK is long term

Strong balance sheet with 77 % equity ratio

03 Business segments update

Imaging probes and systems in units

Sales of imaging systems and probes show recovery from previous 3 quarters

Imaging probes in units

Imaging probes US imaging probes

Flow probes and systems in units

Number of flow systems down 7% from Q1 last year, but signs of recovery compared to the previous 3 quarters

6% growth in flow probes indicates that the surgical activity level is getting back to normal levels

Flow systems in units (MiraQ capital sales)

Flow probes in units (excl USA)

Q1 revenue performance by region

Mill NOK	Q1 '21	Q1 '20	Q / Q	2020	2019	Y / Y
Europe	44,7	40,8	9,5 %	173,3	163,9	5,7 %
USA	35,1	38,4	-8,6 %	126,4	136,1	-7,1 %
Asia	19,5	19,2	1,5 %	46,8	41,8	12,0 %
ROW (MEA, CAN, SA, AUS)	3,4	4,8	-28,2 %	16,7	22,0	-24,2 %
Total	102,6	103,1	-0,5 %	363,1	363,7	-0,2 %

• In Europe, Q1 sales of own products increased with 2.8% in NOK and 4.8% currency neutral. 3. party increased with 20.4% for the quarter.
• In the USA, currency neutral sales increased with 2.0% for the quarter.
• In Asia, currency neutral growth of 3,4 %.
• ROW continues to be a small sales territory for Medistim, with significant quarter to quarter variation.

Q1 2021 revenue performance by product

Mill NOK	Q1 '21	Q1 '20	Q / Q	2020	2019	Y / Y
Procedures (USA)	25,9	28,3	-8,4 %	99,4	106,7	-6,9 %
Flow probes	26,2	24,7	6,0 %	92,6	95,0	-2,5 %
Flow systems (MiraQ)	13,1	14,1	-7,3 %	47,2	32,9	43,6 %
Imaging systems (MiraQ)	15,5	17,4	-11,2 %	44,2	49,2	-10,3 %
Imaging probes	1,6	2,1	-24,8 %	5,2	5,0	4,4 %
3rd party	18,7	15,5	20,4 %	67,5	68,1	-0,8 %
Other	1,7	1,0	74,9 %	6,9	6,8	1,7 %
Total revenues	102,6	103,1	-0,5 %	363,1	363,7	-0,2 %

• Procedure sale in the USA: The total number of procedures increased with 10.8%. Lower sales in NOK is explained by product mix and unfavorable currency.
• Flow probes: 6.0% increase in both units and NOK.
• Flow systems: About 7% decrease in both units and NOK, compared to our strongest quarter ever, and before COVID 19 affected the business.
• Imaging systems: 15.4% decrease in units, again, compared to a record quarter last year.
• 3rd party products: Strong start to the year with 20 % growth 16

04 Implementing the strategy

Medistim growth strategy

Emerging high-growth economies (e.g. BRIC)	3
Developing Medistim markets (e.g. USA, UK, France)	2
Strong Medistim markets (e.g. Jp, Nordic, Germany) >50% CABG share	1	4
	CABG surgery (2 BNOK)	Vascular surgery (>1 BNOK)	Other open heartsurgery (1BNOK)

GEOGRAPHIES

• 1. Convert the routine Flow market to a Flow-and-Imaging market by establishing Surgical Guidance and Quality Assessment as the new standard of care through
  2. → Early adopter & KOL support
  3. → REQUEST study
  4. → Ease conversion from flow to imaging with MiraQ
• 1. Achieve routine use of both Flow and Imaging by fighting ignorance, indifference and ease-of-use objections through
  2. → Clinical marketing, guidelines and educational programs
  3. → Product innovation for ease of use
  4. → Increased sales force capacity
• 1. Offer an entry-level solution to reach emerging, price-sensitive, high-growth markets
• 1. Build and strengthen position in vascular surgery
  2. → Dedicated system (MiraQ Vascular) & probes
  3. → Build position with societies and KOLs
• 1. Expand our direct market coverage

APPLICATION AREAS

18

Sales expansion in the USA

Performance US sales

Revenues in USD increased 2.0% in Q1

• o Signs of recovery as COVID vaccination program is starting to show effects
• Total number of procedures was up 10.8% in Q1, a good indicator of higher activity level
  • o Flow procedures up 11.3%
  • o Imaging procedures up 8.5%
  • Recovery of capital systems sales
    • o 9 units for Q1 compared to 10 last year
  • Continued growth in new customers
  • o 10 vs 6 in Q1 last year

Number of procedures per year

Number of procedures per quarter 20

Medistim growth strategy

Emerging high-growth economies (e.g. BRIC)	3
Developing Medistim markets (e.g. USA, UK, France)	2
Strong Medistim markets (e.g. Jp, Nordic, Germany) >50% CABG share	1	4
	CABG surgery (2 BNOK)	Vascular surgery (>1 BNOK)	Other open heartsurgery (1BNOK)

• 1. Convert the routine Flow market to a Flow-and-Imaging market by establishing Surgical Guidance and Quality Assessment as the new standard of care through
  2. → Early adopter & KOL support
  3. → REQUEST study
  4. → Ease conversion from flow to imaging with MiraQ
• 1. Achieve routine use of both Flow and Imaging by fighting ignorance, indifference and ease-of-use objections through
  2. → Clinical marketing, guidelines and educational programs
  3. → Product innovation for ease of use
  4. → Increased sales force capacity
• 1. Offer an entry-level solution to reach emerging, price-sensitive, high-growth markets
• 1. Build and strengthen position in vascular surgery
  2. → Dedicated system (MiraQ Vascular) & probes
  3. → Build position with societies and KOLs
• 1. Expand our direct market coverage

GEOGRAPHIES

APPLICATION AREAS

Distributor Agreement for India signed with LivaNova

India as a longer term growth opportunity

Distribution agreement signed with LivaNova

• Large market with ~ 100,000 CABG procedures annually (about half the size of USA)
• 7-8 % annual growth
• Price sensitive private hospital market
  • o Cost of CABG \$ 2 000 8 000
• Medistim has <1% of the market

• 2-tier product strategy
  • o MiraQ Ultimate for high-end
  • o Replace SonoQ from 3rd party with MiraQ 'Entry-Level' for low-end
• Bundle deals with hospital chains
• Depending on strong distribution partner

The Indian market Medistim strategy LivaNova partnership

• Global medical device manufacturer
• Strong position in cardiac surgery with their heart-lung machines
• Targeting the same customers
• Good collaborative experience from Australia
• Representing Medistim as of January 1st 2021

05 The COVID-19 pandemic

The COVID-19 pandemic

Gradually decreasing impact of COVID over the quarters; illustrated by the currency neutral total sales:

• → Q2-20: -19.3 % vs LY
• → Q3-20: -9.7 % vs LY
• → Q4-20: -7.2 % vs LY
• → Q1-21: +4.4 % vs LY

No significant negative implications on Medistim

• o Healthy employees
• o Intact supply chain
• o Production running as normal
• o Cost containment

Currency neutral sales in Q1 2021 beat the best sales quarter ever

Not quite back to normal

• o Lock-downs, travel and hospital access restrictions
• o Hospital resources and capacity still treating, and keeping ready for, COVID-19 patients
• o Elective surgeries are still being postponed in some countries

Continued positive development is taking surgical activity back to normal levels

• → Vaccination program accelleraton
• → Improved handling of the COVID situation
• → Increasing pressure to treat patients on waiting lists
• → Increasing confidence from patients to seek medical care

Shareholders list per April 26th 2021

Rank	Name	Holding	% of total	Country	Type of account
1	AETERNUM CAPITAL AS	1 862 500	10.2%	Norway	Ordinary
2	VERDIPAPIRFOND ODIN NORDEN	1 800 000	9.8%	Norway	Ordinary
3	INTERTRADE SHIPPING AS	1 285 000	7.0%	Norway	Ordinary
4	SEB EUROPAFOND SMABOLAG	1 032 794	5.6%	Sweden	Ordinary
5	FOLLUM CAPITAL AS	970 000	5.3%	Norway	Ordinary
6	State Street Bank and Trust Comp	929 229	5.1%	USA	Nominee
7	SWEDBANK ROBUR SMABOLAGSFOND NORD	800 000	4.4%	USA	Ordinary
8	Skandinaviska Enskilda Banken AB	643 905	3.5%	Denmark	Nominee
9	State Street Bank and Trust Comp	415 227	2.3%	USA	Nominee
10	State Street Bank and Trust Comp	414 226	2.3%	USA	Nominee
11	SEB NANOCAP	409 723	2.2%	Sweden	Ordinary
12	SEB European Equity Small Caps	384 785	2.1%	Luxembourg	Ordinary
13	FD INVT TR: FD SRS INTL SML CP FD	382 845	2.1%	USA	Ordinary
14	BUANES	379 936	2.1%	Norway	Ordinary
15	SWEDBANK ROBUR MEDICA	335 000	1.8%	USA	Ordinary
16	Danske Bank A/S	258 310	1.4%	Denmark	Nominee
17	MONTANARO EUROPEAN SMALLER COMPANI	250 000	1.4%	UK	Ordinary
18	TIN NY TEKNIK	238 314	1.3%	Sweden	Ordinary
19	BNP Paribas Securities Services	236 210	1.3%	Italy	Nominee
20	Danske Invest Norge Vekst	228 000	1.2%	Norway	Ordinary