Medistim

Investor Presentation • Aug 15, 2018

Medistim ASA Second quarter and first half 2018

Kari E. Krogstad, President and CEO Thomas Jakobsen, CFO August 15th, 2018

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 2017. 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

• 1. Highlights second quarter
• 1. Financial statements
• 1. Business segments update
• 1. Implementing the strategy

1. Highlights 2nd quarter

Highlights 2nd quarter 2018

	Q2 2018	Q o Q
• Back on track after a flat first quarter, Sales for the second quarter increased with 10.2 % in NOK Currency neutral total sales up 10.4 % o Currency neutral sales of own products up o	Revenue MNOK 76.2 (69.2)	10.2%
19.3 % US sales up 1.3 % in USD, down 5.3 % in NOK o Number of procedures in the USA up 7.1 % o	EBIT MNOK 18.1 (13.6)	33.0 %
• EBIT up MNOK 4.5 to MNOK 18.1, a 33.0 % increase	Currency	-0.2 %
• MiraQ received an updated recommendation by UK's NICE	No of capital units sold:
• The first results from the REQUEST study was presented at AATS and concluded that there was a change in the	Flow systems 26 Imaging systems 14	18.2 % 55.6 %
surgical procedures in 26 % of the cases	Flow probes 1 653	52.2 %
• A dividend of NOK 2.00 per share (NOK 1.75) paid in the	Imaging probes 19	-20.8 %
second quarter	Procedures (USA) 12 417	7.1 %

2. Financial statements

Profit and loss Q2 2018

Profit & loss	Q2 2018	Q2 2017
All numbers in NOK 1000
Sales	76 221	69 177
Cost of goods sold	18 606	19 026
Salary and sosial expenses	20 832	19 146
Other operating expenses	15 474	14 123
Total operating expenses	54 912	52 295
Op. res. before depr. and write-offs (EBITDA)	21 309	16 882
EBITDA %	28,0 %	24,4 %
Depreciation	3 183	3 252
Operating result (EBIT)	18 126	13 629
EBIT %	23,8 %	19,7 %
Financial income	1 368	1 720
Financial expenses	1 842	1 438
Net finance	(474)	282
Pre tax profit	17 652	13 911
Tax	4 958	4 090
Result	12 693	9 822

Profit and loss H1 2018

Profit & loss	H1 2018	H1 2017
All numbers in NOK 1000
Sales	150 354	143 537
Cost of goods sold	36 861	36 885
Salary and sosial expenses	47 616	44 563
Other operating expenses	27 993	26 045
Total operating expenses	112 470	107 494
Op. res. before depr. and write-offs (EBITDA)	37 884	36 043
EBITDA %	25,2 %	25,1 %
Depreciation	6 171	6 371
Operating result (EBIT)	31 714	29 672
EBIT %	21,1 %	20,7 %
Financial income	2 754	3 833
Financial expenses	4 507	3 168
Net finance	(1 753)	665
Pre tax profit	29 961	30 337
Tax	7 824	8 657
Result	22 138	21 680

Balance sheet - Assets

Balance sheet	30.06.2018	31.12.2017
All numbers in NOK 1000
Assets
Intangible assets	43 590	45 090
Fixed assets	27 040	25 744
Total intangible and fixed assets	70 630	70 834
Inventory	62 691	62 722
Customers receivables	54 353	57 307
Other receivables	8 582	5 825
Cash	20 812	54 411
Total current assets	146 437	180 265
Total assets	217 067	251 099

Working capital continues to be high, related to:

• MiraQ product line introduction while maintaining the VeriQ/VeriQC products with last-time-buy of components
• Securing safety level of critical components

However, inventory is stabilized compared to year end and customer receivables are reduced

Balance sheet - Equity and liability

Balance sheet	30.06.2018	31.12.2017
All numbers in NOK 1000
Share capital	4 585	4 585
Premium fund	44 172	44 172
Other equity	119 873	134 226
Total equity	168 630	182 983
Total long term debt	8 063	10 500
Total short term debt	40 374	57 616
Total equity and liability	217 067	251 099

• 12.0 MNOK in interest bearing debt
• A dividend of NOK 2,00 per share, MNOK 36.4 in total, was paid in the second quarter

3. Business segments update

Flow probes and systems in units

• 52.2% increase in flow probe number of units
• Solid growth in Europe and Asia
• No back order of probes by quarter end

Flow probes in units (excl USA) Flow systems in units (VeriQ & MiraQ capital sales)

• 18.2 % increase in flow system in number of units
• Strong quarter for Europe (9 vs 5 systems LY) and ROW (4 vs 2)

Imaging probes and systems in units

• After a weak quarter, imaging probe sales is back to an average level

Imaging systems in units (VeriQC & MiraQ capital sales)

• 55.6 % increase in imaging systems number of units
• Strong growth in Asia (7 vs 1 systems LY)

Q2 and H1 revenue performance by region

Mill NOK	Q2 '18	Q2 '17	Q / Q	H1 18	H1 17	Y/Y	2017
Europe	38,3	37,3	2,7 %	78,5	73,5	6,8 %	150,3
USA	23,9	25,2	-5,3 %	46,9	49,8	-5,8 %	104,6
Asia & Jp	9,4	3,5	171,1 %	17,8	13,1	36,2 %	27,0
ROW (MEA, CAN, SA, AUS)	4,7	3,2	45,9 %	7,1	7,2	-1,0 %	19,6
Total	76,2	69,2	10,2 %	150,4	143,5	4,7 %	301,5

• In Europe, sales increased with 2.7 % in Q2. Own products increased with 19.1 % of which 5.1 % was due to favorable currency. 3. party products decreased with 11.9 %.
• In the USA, sales in NOK decreased with 5.3 %, but currency neutral growth was 1.3 %.
• Both Asia/Japan and ROW are so far smaller sales territories with significant quarter to quarter variation. Q2 2018 was a very strong quarter for Asia in particular.

Negative currency effects for 2018 vs 2017 was 0.3 MNOK .

Average actual exchange rate for USD 7.93 and EUR 9.59 versus last year USD 8.48 and EUR 9.18.

Q2 and H1 revenue performance by product

Mill NOK	Q2 '18	Q2 '17	Q/Q	H1 2018	H1 2017	Y/Y	2017
Procedures (USA)	21,6	21,6	0,1 %	41,2	43,1	-4,4 %	86,0
Flow probes	21,4	13,9	53,5 %	41,8	34,8	20,1 %	78,9
Flow systems (VeriQ & MiraQ)	7,0	4,7	50,4 %	13,8	9,4	45,9 %	23,3
Imaging systems (VeriQ C & MiraQ)	6,5	6,6	-1,1 %	13,8	13,5	2,3 %	32,0
Imaging probes	0,9	1,1	-13,3 %	1,5	1,8	-15,6 %	4,2
3rd party	17,4	19,8	-11,9 %	36,2	37,6	-3,9 %	71,7
Other	1,3	1,5	-13,4 %	2,1	3,3	-35,6 %	5,4
Total revenues	76,2	69,2	10,2 %	150,4	143,5	4,7 %	301,4

• Procedure sale in the USA: The total number of procedures increased with 7.1 % in Q2 and 6.4 % in H1. Decline in NOK is due to currency.
• Flow probes: 52.2 % increase in units and 53.5 % increase in NOK for the quarter, manly coming from distributor sales territories. Increase in units for the first half is 7.4 % while sales in NOK increases with 20.1 %. The increase is related to higher level of direct sales (7.5 %) and favorable currency (5.2 %).
• Flow systems: 18.2 % increase in units, the strong 50.4% growth in NOK is driven by higher level of direct sales and currency.
• Imaging systems and probes: Imaging systems increase with 55 % in units while revenue in NOK is flat is due to less sales in direct markets and more units sold through distributors.
• 3rd party products: Weak quarter but first half is close to the same level as last year.

4. Implementing the strategy

Growth opportunities – in developing Medistim markets

Emerging, high-growth economies (e.g. brIC)	4
Developing Medistim markets (e.g. USA, UK, Fra)	2
Strong Medistim markets (e.g. Jp, Nordic, Germany) >50% CABG share	1		3
GEOGRAPHIES APPLICATION AREAS	CABG surgery (2 BNOK)	Vascular surgery (>1 BNOK)		Other open (1 BNOK)	heart surgery

• 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
• o Early adopter & KOL support
• o REQUEST study
• o Ease conversion from flow to imaging with MiraQ
• 2. Achieve routine use of both Flow and Imaging by fighting ignorance, indifference and ease-of-use objections through
• o Clinical marketing, Guidelines and Educational programs
• o Product innovation for ease of use
• o Increased sales force capacaity
• 3. Build and strengthen position in vascular surgery
• o Dedicated system (MiraQ Vascular) & probes
• o Build position with societies and KOLs
• 4. Offer an entry-level solution to reach emerging, pricesensitive, high-growth markets

Performance US sales organization

RESULTS H1

• Revenues up 1 % in USD
• o Revenues down 5.8 % in NOK, to MNOK 23.9
• o Currency has a negative 6.8 % impact
• o Capital revenues were MNOK 5.6 vs. MNOK 6.7 last year
• Number of procedures up by 7.1 %
• o 6.3 % growth in flow procedures
• o 7.0 % growth in imaging procedures
• Continued growth in new customers
• o 7 completely new accounts in Q2, 14 YTD

Number of procedures per year

# of Procedures per Consecutive Quarter

Growth opportunities – in developed Medistim markets

Emerging, high-growth economies (e.g. brIC)	4
Developing Medistim markets (e.g. USA, UK, Fra)	2
Strong Medistim markets (e.g. Jp, Nordic, Germany) >50% CABG share	1	3
GEOGRAPHIES APPLICATION AREAS	CABG surgery (2 BNOK)	Vascular surgery (>1 BNOK)	Other open (1 BNOK)	heart surgery

• 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
• o Early adopter & KOL support
• o REQUEST study
• o Ease conversion from flow to imaging with MiraQ
• 2. Achieve routine use of both Flow and Imaging by fighting ignorance, indifference and ease-of-use objections through
• o Clinical marketing, Guidelines & Educational programs
• o Product innovation for ease of use
• o Increased sales force capacaity
• 3. Build and strengthen position in vascular surgery
• o Dedicated system (MiraQ Vascular) & probes
• o Build position with societies and KOLs
• 4. Offer an entry-level solution to reach emerging, pricesensitive, high-growth markets

Presentation of the first findings from the REQUEST register study

Presentation of the first findings from the REQUEST register study

• All 1.000 patients are now included in the study
• The first findings from the study were presented at
• o The American Association for Thoracic Surgery (AATS) conference taking place in San Diego on May 1st
• o The International Coronary Congress (ICC) in Beijing August 2nd

20 largest shareholders (per August 8th 2018)

Shareholder	Number of shares Shares in %	Nationality
INTERTRADE SHIPPING	4 003 500	21,83	NOR
SALVESEN & THAMS INV	1 862 500	10,16	NOR
JPMorgan Chase Bank, NORDEA TREATY ACCOUN	1 375 246	7,50	GBR
Skandinaviska Enskil A/C CLIENTS ACCOUNT	1 034 379	5,64	DNK
FOLLUM CAPITAL AS	1 000 000	5,45	NOR
Skandinaviska Enskil	743 220	4,05	LUX
State Street Bank an SSB LUX OBO ITS CLIE	721 949	3,94	USA
BUANES ASBJØRN JOHN	494 936	2,70	NOR
GRANDEUR PEAK INTERN BROWN BROTHERS HARRI	420 559	2,29	USA
HOLBERG NORGE VERDIPAPIRFONDET V/HOLBERG	398 656	2,17	NOR
HSBC TTEE MARLB EURO HSBC Bank Plc	360 656	1,97	GBR
PROTECTOR FORSIKRING Aksjer	321 859	1,76	NOR
Skandinaviska Enskil SEB AB, UCITS V - Sw	318 201	1,74	SWE
RBC Investor service S/A LUX SCV-EXEMPT-U	309 658	1,69	LUX
Danske Bank A/S 3993 NORDIC SETTLEME	284 852	1,55	DNK
BNP Paribas Securiti BPSS MLN/PENSION FUN	258 938	1,41	ITA
Danske Invest Norge	250 000	1,36	NOR
REGENTS OF THE UNIVE The Bank of New York	236 386	1,29	USA
NN PARAPLUFONDS 1 N. BNY MELLON SA/NV	202 346	1,10	NLD
Bank Julius Bär & Co s/a Client Assets	200 000	1,09	CHE

Total 20 largest shareholders	14 797 841
Total number of shares outstanding	18 337 336
20 largest shareholders in % of total shares	80,70 %