Medistim

Investor Presentation • Apr 24, 2015

Medistim ASA First Quarter 2015

Kari E. Krogstad, President and CEO Thomas Jakobsen, CFO April 24th, 2015

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 2014. 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 first quarter
• 1. Financial statements
• 1. Business segments update
• 1. Implementing the strategy

1. Highlights first quarter

Highlights first quarter 2015

	Q1 2015	Q o Q
• Double digit growth in the first quarter Strong development in the USA continues, with o 50 % revenue growth in NOK, 18.9 % in USD	Revenue MNOK 57.9 (48.9)	18.5%
Sale of 3.party products up 22.9 % to MNOK 19.8 o Imaging probes up 125 % o	EBIT MNOK 9.9 (7.2)	36.7 %
• MNOK 9.9 in EBIT for the quarter
• VeriQ C™ cleared for sale in China	Currency	8.8 %
• Medtronic will not renew their distribution agreement with	No of units sold
Medistim Norge AS	Systems 29	9.3 %
• The general assembly decided a dividend of NOK 1.40 per	Flow probes 1 318	14.9 %
share (NOK 0.80) to be paid out in May	Imaging probes 18	125 %
	Procedures (USA) 8 277	12.2 %

2. Financial statements

Profit and loss Q1 2015

Profit & loss	Q1 2015	Q1 2014
All numbers in NOK 1000
Sales	57 907	48 857
Cost of goods sold	16 979	12 982
Salary and sosial expenses	18 864	16 775
Other operating expenses	9 640	9 843
Total operating expenses	45 483	39 601
Op. res. before depr. and write-offs (EBITDA)	12 424	9 257
EBITDA %	21,5 %	18,9 %
Depreciation	2 554	2 038
Operating result (EBIT)	9 870	7 219
EBIT %	17,0 %	14,8 %
Financial income	8 246	1 112
Financial expenses	7 208	1 091
Net finance	1 038	21
Pre tax profit	10 909	7 240
Tax	3 499	2 037
Result	7 410	5 203

8

Balance sheet - Assets

Balance sheet	31.03.2015	31.12.2014
All numbers in NOK 1000
Assets
Intangible assets	53 123	53 257
Fixed assets	15 094	15 276
Total intangible and fixed assets	68 217	68 533
Inventory	38 943	36 874
Customers receivables	39 721	39 948
Other receivables	7 447	8 658
Cash	51 281	49 475
Total current assets	137 392	134 955
Total assets	205 609	203 488

• No major changes in the balance sheet compared to year end
• Positive cash flow

Balance sheet - Equity and liability

Balance sheet	31.03.2015	31.12.2014
All numbers in NOK 1000
Share capital	4 585	4 585
Premium fund	41 852	41 852
Other equity	99 594	92 659
Total equity	146 031	139 096
Total long term debt	11 171	13 117
Total short term debt	48 408	51 275
Total equity and liability	205 609	203 488

• 16.4 MNOK in interest bearing debt

3. Business segments update

Flow probes and systems in units

• After two very strong quarters, the number of flow probes sold are down by 230 probes, -14.9 %, by and large driven by Europe
• Asia is the only region with an increase, up 64 %

• Slow quarter in Europe after a record strong Q4 2014

Imaging probes and systems in units

Imaging probes in units

• 24 imaging probes sold when including sales to capital accounts in the USA, up 200 % over Q1 2014

• Increasing trend for the last 4 quarters

• 7 out of 12 imaging sales was on the MiraQ platform

• 3 of the MiraQ sales were to Middle East and 4 was to Europe

Q1 revenue performance by region

Mill NOK	Q1 '15	Q1 '14	Q/Q	2014
Europe	33,4	31,9	4,5 %	128,8
USA	16,1	10,7	50,4 %	56,5
Asia & Jp	5,9	4,4	33,8 %	18,7
ROW (MEA, CAN, SA)	2,6	1,9	40,4 %	10,8
Total	57,9	48,9	18,5 %	214,8

• In Europe, there was strong development in sales of 3.party products with 3.7 MNOK, 22.9 % growth over last year. Sale of own products was 13.6 MNOK, down 14.3 %, after a strong Q4 14.
• In the US, strong growth in the US, partly driven by favorable currency, however, currency neutral growth was also strong, at 18.9 %.
• Both Asia/Japan and ROW are so far smaller sales territories for Medistim, and quarterly performance varies significantly.

Positive currency effects for the quarter with 4.3 MNOK. Average rate to USD was 7.72 in Q1 2015 vs 6.1 in 2014.

Q1 revenue performance by product

Mill NOK	Q1 '15	Q1 '14	Q/Q	2014
Procedures (USA)	15,4	10,4	48,1 %	48,3
Flow probes	13,8	14,4	-3,9 %	61,6
Flow systems (VeriQ & MiraQ)	2,7	4,1	-34,9 %	17,0
Imaging systems (VeriQ C & MiraQ)	4,6	3,1	48,9 %	19,8
Imaging probes	0,9	0,5	86,1 %	2,4
3rd party	19,8	16,1	22,9 %	65,2
Other	0,6	0,2	195,9 %	0,5
Total revenues	57,9	48,9	18,5 %	214,8

• Procedure sale in the USA: The number of flow procedures is up 5.2% and imaging procedures up 159 %. Positive contribution from currency.
• Flow probes revenue: Weaker quarter after two strong quarters in a row.
• Flow systems: The number of systems sold is lower than last year, however, there is an increasing tendency for customers to purchase the imaging modality. 2 units out of 16 was on the new platform MiraQ.
• Imaging systems and probes: Positive development for the quarter. 7 out of 12 units were on the MiraQ platform.
• 3rd party products: Very strong quarter with 22.9 % growth.

4. Implementing the strategy

Back on track in the USA

RESULTS Q1 2015

• Revenues up by 50.4 % in NOK, 18.9 % in USD
• Number of procedures up by 12.2 %
• 159 % growth in imaging procedures
• 1 imaging capital sales vs 1 flow capital sale in 2014
• 7 new accounts
• 3 TTFM accounts converted to Imaging

Growth opportunities – emerging markets

• 1. Strengthen our position as market leader by establishing combined TTFM & Imaging as the new standard of care through
• o Early adopter KOL support
• o Easier conversion to imaging with MiraQ
• 2. Fight ignorance and indifference to QA by increasing the level of evidence and awareness through
• o Clinical marketing
• o Educational programs
• 3. Product innovation and positioning to target new segments in vascular and open heart surgery
• o MiraQ Vascular

VeriQ C cleared for sale in China

• February 2015:

Clearance received from the China Food and Drug Administration (CFDA) for sale of VeriQ C

• Medistim is now positioned to sell VeriQ C in all major markets; Europe, USA, Japan, Canada and China

• China represents a significant market opportunity
• o ≈35.000 CABG procedures/year
• o ≈30% Medistim marekt share

• o ≈10 % annual growth rate

• Medistim's current strong position is based on the routine use of TTFM at all major cardiac centers and the support from leading Chinese surgeons

• Economic growth & healthcare reform are key market drivers for the future

Opportunity in China

• Distributor based in Hong Kong
• o Local support team in China
• o 11 local sub-distributors in China
• Prelaunch at the Chinese national cardiovascular surgery meeting late 2014
• o Growing interest for the combination of ultrasound imaging and TTFM
• o A few hospitals has started budget applications
• o Regular budget cycle is one year
• Next:
• o Conversion of installed base
• o Product demonstrations
• o Exhibitions at trade shows
• o Road-shows across China with European KOLs

Medtronic distribution agreement not renewed

• Medistim has distributed Medtronic's products within neuro- and ENT surgery for more than 10 years
• Current distribution agreement ends April 30th
• Medtronic will take over distribution of these products in the Norwegian market and will not renew the agreement
• Negotiations are ongoing regarding the transition of the business
• 2014 revenues was about MNOK 20
• No product revenues from Medtronic products are expected from 2016