COMPUMEDICS LIMITED — AGM Information 2016

Oct 26, 2016

Annual General Meeting

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AGM Agenda

Meeting Opens Chairman's Address Ordinary Business Meeting Closes

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2

Who is Compumedics?

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A leading global, innovative developer and manufacturer of medical devices for:
Monitoring neurological Ultrasonic monitoring
Diagnosing disorders including Highly sophisticated of blood flow through
sleep disorders long-term epilepsy brain research the brain (Transcranial
monitoring (LTEM) Doppler [TCD])
A technological leader in its chosen markets:
#3 USA sleep
#1 China sleep
diagnostic device
#1 Australian sleep & #1Japan sleep diagnostic device
supplier and emerging
neuro diagnostics diagnostics device supplier to premier
#3 supplier for
device supplier supplier facilities & #1 TCD
neurological monitoring
device supplier
devices
FY16 revenues $37.5m, FY16 EBITDA $5.0m.
FY17 Guidance revenues $41m to $43m, EBITDA $6.0m to $8.0m.
120 employees across four locations, Melbourne, Australia (Head Office), Charlotte, NC,
USA, Hamburg and Singen, Germany.
Compumedics listed ASX Dec 21, 2000. CMP has market capital of around $90m.
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All $ = A$ unless otherwise specified

3

Revenue Composition at $37.5m

30 June 2016

By geographic region

By product/market

Software upgrades 5 to 10% of system sales

Compumedics sells directly to end-user customers in Australia, USA and Germany and through its network of more than 50 distributors to all other parts of the world

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4

Growth Platform – Core and Step-Out

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Sales – schematic only
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*MEG = Magnetoencephalography

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5

Core Business – Premium Focus

Neuro Neuro Sleep Brain Blood Diagnostics – Diagnostics - Diagnostics Flow Diagnostics Clinic Research Global market – 250m 1,300m 20m 15m USD pa Compumedics market share 6% <1% 30% 35% (approximate) Aust – 1 Aust – 1 Aust – 1 Aust – 1 Compumedics USA – 2 USA – 3 USA – 3 USA – 1 market position China – 1 China - 1 China - 1 China – 1 Germany – 1 Capital equip – Capital equip – Capital equip – Capital equip – Business and hardware and hardware and hardware and hardware and product type software software software software Annuity revenues – ~ % of total – 15% 10% 5% 5% supplies & support

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6

Core Business – Margin Improved

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7

Core Business – Restored Net Cash Position

$m	FY10	FY11	FY12	FY13	FY14	FY15	FY16
Cash	1.8	1.2	1.1	1.3	1.1	2.2	3.1
Trade receivables	9.7	10.2	8.7	8.1	8.6	9.8	11.9
Inventories	5.0	5.7	5.3	5.5	6.1	5.7	6.5
Prod. dev’t	4.2	4.2	4.0	3.5	2.9	2.7	2.4
Tax asset	0.2	0.9	0.0	0.0	0.0	0.0	0.5
PP&E	0.9	0.8	0.8	0.7	0.7	0.8	0.8
Other	0.0	0.0	0.0	0.0	0.2	0.5	0.9
Assets	21.8	23.1	19.9	19.1	19.5	21.7	26.1
Trade cred.	4.6	4.7	5.0	4.7	4.7	4.4	4.1
Borrowings	1.9	2.8	2.1	2.3	2.0	2.0	2.6
Def. payment	1.1	0.9	1.4	1.4	1.4	1.6	2.0
Other	1.9	2.0	2.1	2.2	2.3	2.5	2.8
Total Liabilities	9.6	10.3	10.7	10.7	10.4	10.4	11.5
Net Assets	12.2	12.8	9.2	8.4	9.2	11.3	14.6
Debt/Equity	1%	13%	11%	13%	11%	-2%	-3%

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8

Core Business – Adding Mid-Tier Range

Product	Used for	Bought by	Average selling price
Grael	Sleep and neurology	Hospitals, doctors and service providers	USD17,500
Somte PSG	Sleep	Hospitals, doctors and service providers	USD10,000
Siesta	Sleep and neurology	Hospitals, doctors and service providers	USD18,000
Neuvo LTM	Neurology	Hospitals, doctors and service providers	USD35,000
Synamps RT	Brain Research	Universities and teaching hospitals	USD38,000
CURRY	Brain research and neurology	Universities, teaching and regular hospitals	USD20,000

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9

Next Generation Growth – Core and Step-out

		Sleep Diagnostics	Neuro Diagnostics – Clinic	Neuro Diagnostics - Imaging	Brain Blood Flow Diagnostics
	Next generation growth platform	Cloud based sleep diagnostic platforms for both professional and consumer applications	Long term epilepsy market penetration into US, Europe and Asia	Leverage CURRY software into full MEG solution with KRISS	Leverage existing TCD technology and patent to Traumatic Brain Injury (TBI) application
	Market	Professional application > USD3bn pa	Greater than	Research only USD100m pa	Estimated cost of TBI’s in the US
	potential	Consumer application > USD50bn pa	USD100m pa	Brain Imaging >USD4bn pa	alone greater than USD76bn pa
	Business type	Services – fee per service	Capital equipment – bigger market	Capital equipment & Partnership – new market	Mixture of equipment and service fees

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10

Core Business - Growth Drivers

Compumedics/NeuroScan LTEM innovative brain analysis software and high performance amplifiers are unrivalled world class technology

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We have >20,000 systems installed worldwide. Strong reputation and brand name. Customers like buying from Compumedics.

Earnings initiatives to flow through in FY16 – FY20. Lower cost base enables addition of mid-tier.

Opportunity to significantly grow the USA business through strengthening of the management team and expansion of the sales force.

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Expansion into untapped German market

Push into the Chinese neurology market

Ideally positioned to accelerate organic growth and value realisation

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USA – CMP is number 3 Supplier USA Clinical Sales Force Expansion More sales representatives = more revenue for both sleep and neurology Past USD4.5m FY2016 USD6.4m to now FY2017 USD10.0m FY2018 USD15.0m

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12

China - We are the number 1 Premier Supplier Compumedics Clients in China

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Sleep
Neuroscience
2
Neuroscan 28
5
Xin Jiang Helongjiang
Inner Mongolia 2 Jilin
Beijing 88 2 Liaoning
23
Ningxia Qinhuangdao
China Sales (Orders taken) – USD’s QingHai 2 3 3 HeBei 10 3 Tianjin Dalian
16
Gansu 14 12
HeNan
Shandong [Welfang ]
8.2 Shaanxi 6 Rizhao
7.6 SiChuan Jining
JiangSu
10 HuBei 5 11 Shanghai
18 2 13 14 Suzhou 49
Chongqing AnHui 34 6 Zhejiang
3.8
3.4 YunNan GuiZhou 4 Nanchang
2 2 2 Changsha 26
Fujian
GuangXi GuangDong
27 2 Xiamen
8
Shenzhen
FY12 FY13 FY14 FY15 FY16 Hong Kong
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13

FY17 Update Core business

Tracking to guidance – Grael platform shipping, new sales staff in the US employed, new sales person in Germany employed.

MEG

Sales pipeline continues to grow – 30 opportunities identified, 3 to 4 opportunities advanced with one expected to be an “intention to buy” by late calendar 2016, early calendar 2017.

eHealth

Nexus 360 (professional) – initial sites in the US signed and being implemented, China sites continue initial beta activities Somfit (consumer) – software platform working, hardware proto in advanced sta es of com letion strate ic discussions continue g p , g

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Step out 1 - Brain Imaging: A$9m sales in FY17

Opportunity Market & Competition Plan Outcome CMP’s CURRY brain The MEG market is currently H2 FY16 – sign LOI CMP plans to sell analysis software is already estimated at about 35 systems a with KRISS for license and install 2 MEG the gold standard for the year at an average selling price of access to MEG systems in FY17 MEG market USD5.5m each = US$200m/annum hardware platform @ USD3.5m ea MRI is too slow to capture This is expected to grow about 10% H1 FY17 – sign LOI CMP expects to dynamic brain activity a year, excluding China with at least first two sell at least 5 MEG needed for alzheimer's et al It is estimated that China could customers to acquire systems in FY18 CMP’s MEG device CMP’s agreement with double the existing market size to CMP expects to KRISS provides access to a about 70 units a year H1 FY17 – Finalise double sales in new and superior hardware specifications and FY19 to 10 MEG The dominant existing player is platform Elekta, based out of Sweden, manufacture with systems for about KRISS USD40m Compumedics can access followed by Yokogawa (Japanese a complete MEG sale market) and CTF MEG (a much H2 FY17 – install first (circa USD5m each) as smaller player) CMP MEG system opposed to the USD30k software sale*

MEG = Magnetoencephalography *MRI = Magnetic resonance imaging

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15

Step out 2 – eHealth/cloud: A$4m/a sales already

eHealthMedics has already locked in excess of $10m of forward orders over the next three years (primarily in China) for its professional services platform. Initial pilot sites commence in May and June this year.

Operational systems have been developed for the cloud based capture, transfer and translation of medical grade sleep parameters from any webenabled device. The system can then store, analyse and interpret that data

Compumedics are now approaching a select group of strategic partners/ investors to expedite the process and rapidly deploy the platform to market.

Key partners being pursued include web, telco, eHealth, consumer health/ electronics providers and device manufacturers.

in a simple and actionable manner, reducing the need for on-site professionals.

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16

Directors & Executive Team Key Management

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NED - Mr. Alan Anderson, Ph.D. Leading USA Attorney CMP Tenure : 11 yrs

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David Burton, Ph.D. Executive Chairman, CEO Founder, Tenure 26yrs

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Mr. David Lawson Chief Financial Officer & Company Secretary CMP Tenure 13 yrs

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Mr. Warwick Freeman Chief Technology Officer CMP Tenure 15 yrs

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Kerry Hubick, Ph.D. Mr. Christoph Witte Trademark, Patent & General Managing Director General Legal Attorney Compumedics Germany GmbH CMP Tenure 7 yrs CMP/DWL - Tenure 24 yrs

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17

Investor Summary

Core business continues to grow with lower cost base and addition of mid-tier

Compumedics remains committed to continuing to deliver superior returns to shareholders Spin off/strategic decisions to unlock significant value, provide funds for growth and potentially capital returns to shareholders

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International sales force

expansion , neurology market opportunity and earnings improvement initiatives to continue to drive growth of core business

Brain imaging and e-Health are the next steps Moving 25+years and $100m+ in cumulative R&D to a modern platform to solve a massive and growing problems of neuro imaging in clinic and sleep disorders in the home

FY17 guidance: Sales $41m-$43m, $6.0m-$8.0m EBITDA, NPAT $4.0m-$6.0m

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18

Ordinary Business

Item 1 Financial Statements and Reports Item 2 Re-election of Director – Alan Anderson Item 3 Adoption of Remuneration Report (non-binding resolution)

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19

Meeting closes

Refreshments are available in the main reception area, where additional questions and discussion are encouraged, for those who are interested.

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20

Thankyou

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Disclaimer

This presentation has been prepared by Compumedics Ltd (CMP). While the information in this presentation has been prepared in good faith and with reasonable care, no representation or warranty, express or implied, is made as to the accuracy, adequacy or reliability of any statement, estimates, opinions or other information contained in the presentation.

This presentation may contain forward looking statement. These forward-looking statement have been made based upon CMP’s expectations and beliefs concerning future developments and their potential effect on CMP (and it’s controlled entities) and are subject to risks and uncertainty which are, in many instances, beyond CMP’s control. No assurance is given that future developments will be in accordance with CMP’s expectations. Actual results could differ materially from those expected by CMP. This presentation does not constitute an offer to sell or a solicitation of an offer to purchase any security or financial product or service. Any such offer or solicitation shall be made only pursuant to a Product Disclosure Statement, Information Memorandum, Prospectus or other offer document relating to a financial product or service.

Past performance is not necessarily indicative of future results and no person guarantees the performance of any financial product or service or the amount or timing of any return from it. There can be no assurance that the financial product or service will achieve any targeted return, that asset allocations will be met or that the financial product or service will be able to implement its investment strategy and investment approach or achieve its investment objective.

The information contained in this presentation is not intended to be relied upon as advice to investors or potential investors, who should consider seeking independent professional advice depending upon their specific investment objectives, financial situation or particular needs.

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