Compumedics
Limited Corporate
Presenta2on
–
March
2014

_**Who

is
Compumedics?**_

Compumedics is a leading global, innovative developer and manufacturer of medical devices for:
- Diagnosing sleep disorders
Monitoring neurological disorders including long-term epilepsy monitoring (LTEM)
Highly sophisticated brain research
Ultrasonic monitoring of blood flow through the brain (Trans cranial Doppler [TCD])
Compumedics is a technological leader in its chosen markets:
1 Australia sleep & neuro diagnostics device supplier
1Japan sleep diagnostics device supplier
1 China sleep diagnostic device supplier to China’s premier facilities & #1 TCD device supplier
3 USA sleep diagnostic device supplier and emerging #3 supplier for neurological monitoring devices

• Compumedics has a rich intellectual property portfolio

Compumedics Medical Innovations division focuses on complimentary earlyphase developments in sleep treatment, driver fatigue and eHealth solutions
Compumedics was listed on the Australian Stock Exchange, December 21, 2000.

_**Board

and
Key
Management**_

==> picture [583 x 236] intentionally omitted <==

----- Start of picture text -----

David
Burton,
Ph.D.
Execu5ve
Chairman,
CEO
Founder,
Tenure
26yrs
NED
Mr.
David
Lawson
Mr.
Alan
Anderson Execu2ve
Director ,
Chief
Financial
Officer
&
Leading
USA
AHorney
Company
Secretary
CMP
Tenure
:
14
yrs
CMP
Tenure
15
yrs
Mr.
Christoph
WiGe
Kerry
Hubick,
Ph.D .
Mr.
Warwick
Freeman General
Managing
Director
Trademark,
Patent
&
Chief
Technology
Officer
Compumedics
Germany
GmbH
CMP/
General
Legal
AHorney
CMP
Tenure
17
yrs
DWL
CMP
Tenure
9
yrs
Tenure
25
yrs
----- End of picture text -----

==> picture [94 x 74] intentionally omitted <==

==> picture [75 x 72] intentionally omitted <==

==> picture [84 x 71] intentionally omitted <==

==> picture [696 x 97] intentionally omitted <==

_**A

Tradi:on
of
Innova:on**_

==> picture [720 x 367] intentionally omitted <==

----- Start of picture text -----

Comperio
DQ
Summit
IP
2004
SynAmps2
2005
Somté
2003
2001 Siesta
802
Siesta
2000 2005
P
Series
1994
S
Series
1987 Somté
PSG
2006
Neuvo
LTM
SynAmpsRT
2007
2008
CURRY6
2009
Somnilink
SPAP
Grael
HD
2010
2010
----- End of picture text -----

Somté
PSG
2.0 2011

_**Established

Client
Profile**_

==> picture [138 x 73] intentionally omitted <==

==> picture [69 x 84] intentionally omitted <==

==> picture [71 x 71] intentionally omitted <==

==> picture [153 x 46] intentionally omitted <==

==> picture [168 x 16] intentionally omitted <==

==> picture [54 x 55] intentionally omitted <==

==> picture [50 x 30] intentionally omitted <==

==> picture [50 x 12] intentionally omitted <==

==> picture [114 x 39] intentionally omitted <==

==> picture [144 x 21] intentionally omitted <==

==> picture [45 x 44] intentionally omitted <==

==> picture [90 x 25] intentionally omitted <==

==> picture [37 x 41] intentionally omitted <==

==> picture [140 x 20] intentionally omitted <==

==> picture [174 x 66] intentionally omitted <==

==> picture [50 x 45] intentionally omitted <==

==> picture [106 x 30] intentionally omitted <==

==> picture [192 x 51] intentionally omitted <==

==> picture [162 x 17] intentionally omitted <==

==> picture [129 x 34] intentionally omitted <==

==> picture [108 x 39] intentionally omitted <==

==> picture [126 x 32] intentionally omitted <==

==> picture [126 x 50] intentionally omitted <==

==> picture [57 x 57] intentionally omitted <==

_**Strategic

Value
Roadmap
–
Market Opportuni:es**_

Core
Diagnos5c
Business Global
Markets
-‐
$m 150

450 Sleep
Diagnos2cs Neurological
Monitoring Brain
Research TCD

==> picture [11 x 11] intentionally omitted <==

==> picture [11 x 10] intentionally omitted <==

==> picture [11 x 11] intentionally omitted <==

Medical
Innova5ons
Global Markets
-‐
$m

8,000

10,000

15,000

Sleep
Treatment Driver
Vigilance eHealth

_**What

was
achieved
in
the
six
months to
31
December
2013?**_

§ NPAT
of
$0.4
million
compared
to
loss
of
$(0.8)
million
for
the
PCP.
EBITDA was
a
$1.3
million
profit
compared
to
$0.2
million
in
the
PCP,
as
a
result
of ongoing
efficiency
gains
in
manufacturing,
and
the
favourable
impact
of
the lower
Australian
Dollar,
together
with
increased
sales.

§ Shipped
and
invoiced
sales
were
10%
higher
at
$14.5
million
compared
to $13.2
million
for
the
PCP.

§ Cash
on
hand
was
stable
at
$1.3
million
at
31
December
2013,
the
same
as 30
June
2013.
Debt
levels
were
reduced
during
the
six-‐month
period
to
$2.0 million
at
31
December
2013
compared
to
$2.3
million
at
30
June
2013.

_**What

was
achieved
in
the
six
months to
31
December
2013?**_

§ The
Company
had
sales
orders
of
$7.3
million
on-‐hand
at
31
December 2013,
which
it
expects
to
substan2vely
reduce
in
the
early
months
of
the 2014
calendar
year

§ The
Company
has
substan2vely
completed
reloca2ng
some
produc2on
and purchasing
ac2vi2es
to
Asia
as
part
of
its
transi2on
program
to
restore margins
independent
of
the
rela2ve
value
of
the
Australian
Dollar
over
the foreseeable
future.
The
margin
and
profit
improvement
from
these
and other
ini2a2ves,
only
just
commencing,
will
be
seen
in
the
second
half
of
the financial
year
and
beyond

_**H1

Revenue
Composi:on
at
≈$14.5m**_

**By

geographic
region**

**By

product/market**

==> picture [285 x 255] intentionally omitted <==

----- Start of picture text -----

Europe,
USA,
31%
31%
Aust,
Asia,
16%
22%
----- End of picture text -----

==> picture [312 x 298] intentionally omitted <==

----- Start of picture text -----

Tech.
Supply
Service,
Sleep,
Items,
9%
26%
12%
Neuro,
16%
Brain
Brain
Blood
Res,
Flow,
19%
18%
----- End of picture text -----

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

_**Historical

First
Half
Revenues**_

==> picture [648 x 357] intentionally omitted <==

----- Start of picture text -----

Shipped
and
invoiced
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
2011
2012
2013
H2
H1
Rev
F'Cast
Rev
----- End of picture text -----

_**Historical

First-‐Half
Earnings**_

==> picture [648 x 357] intentionally omitted <==

----- Start of picture text -----

NPAT
EBITDA
1
1.6
0.8
1.4
0.6
1.2
0.4
1
0.2
0.8
0
0.6
-‐0.2
2011
2012
2013
H2
0.4
-‐0.4
-‐0.6
0.2
-‐0.8
0
-‐1
2011
2012
2013
H2
NPAT
F'Cast
NPAT
EBITDA
F'Cast
EBITDA
----- End of picture text -----

_**Profitability

Improvement**_

**FY2013

EBITDA
to
forecast
FY2014
EBITDA
with improvement
steps
iden5fied**

==> picture [63 x 195] intentionally omitted <==

----- Start of picture text -----

3.0

2.5

2.0

1.5

1.0

0.5

-‐
-‐0.5
AUDm
----- End of picture text -----

==> picture [465 x 194] intentionally omitted <==

==> picture [234 x 95] intentionally omitted <==

_**Cash,

debt
&
opera:ng
cash**_

==> picture [590 x 286] intentionally omitted <==

----- Start of picture text -----

3
2.5
2
1.5
1
0.5
0
2011
2012
2013
----- End of picture text -----

==> picture [11 x 11] intentionally omitted <==

Opera2ng
cash Cash Debt

_**Employee

Composi:on
at
≈130
staff**_

==> picture [545 x 357] intentionally omitted <==

----- Start of picture text -----

By
geographic
region
By
func5on
Mid
Quality,
Asia,
East,
Admin
2%
2%
1%
&
Fin,
Europe,
USA,
12%
24%
32%
Manuf,
Aust,
R&D,
28%
41%
22%
----- End of picture text -----

==> picture [312 x 252] intentionally omitted <==

----- Start of picture text -----

Quality,
Admin
Sales
&
2%
&
Fin,
Mark,
12%
24%
Manuf,
Service,
R&D,
28%
12%
22%
----- End of picture text -----

Compumedics
has
its
Head
Office
in
Melbourne,
Australia
with
addi2onal offices
in
CharloHe
(NC),
USA
and
Singen,
Germany

_**Ownership

composi:on
–
Feb
2014**_

==> picture [542 x 316] intentionally omitted <==

----- Start of picture text -----

Remaining
shareholders,
18%
Other
top
20
shareholders,
D&DJ
Burton
20%
Holdings,
62%
----- End of picture text -----

There
are
currently
168m
ordinary
shares
on
issue
to
approximately
1,000 shareholders.
There
are
no
op2ons
or
other
equity
instruments
on
issue.

_**Strategic

Value
Roadmap
–
Core Diagnos:c
Business
Opportuni:es**_

==> picture [338 x 343] intentionally omitted <==

----- Start of picture text -----

Core
Diagnos5c
Business
Global
Markets
-‐
$m

25

15

150

450
Sleep
Diagnos2cs
Neurological
Monitoring
Brain
Research
TCD
----- End of picture text -----

==> picture [275 x 261] intentionally omitted <==

----- Start of picture text -----

Medical
Innova5ons
Global
Markets
-‐
$m

8,000

10,000

15,000
Sleep
Treatment
Driver
Vigilance
eHealth
----- End of picture text -----

_**Growth

strategies
–
Core
business**_

Building
growth
momentum
in
key
global
neurological monitoring
markets
with
emphasis
on
LTEM
through
the Company’s
innova2ve
product
planorm
and
growing
brand recogni2on
in
these
new
markets
for
the
Company.
Expansion
across
all
product
lines
in
Asia,
with
emphasis
on China,
through
our
unique
and
long
established rela2onships
there.
Grow
sleep
diagnos2c
market
posi2on
in
the
US
by con2nuing
to
expand
direct
sales
force
there.
Con2nuing
to
grow
and
expand
our
European
business,
with emphasis
on
Germany.

_**Growth

Strategies
-‐
Execu:on
so
far_ Compumedics
Clients
in
China**

_**Earnings

improvement
ac:vi:es**_

Reloca2on
of
selected
manufacturing
ac2vi2es
to
lower cost
regions
in
China
and
Taiwan.
Con2nue
to
drive
component
purchasing
to
lower
cost regions
in
China
and
Taiwan.
Streamlining
of
logis2cs
(final
product
assembly,
tes2ng and
shipment)
as
the
business
grows.
Near-‐term
product
development
focused
on
“cost-‐to-‐ make”
minimiza2on
ini2a2ves,
together
with
selec2ve incremental
feature
gains
to
maintain
technology leadership.

_**Strategic

Value
Roadmap
–
Medical Innova:ons
Commercial
Opportuni:es**_

15 Core
Diagnos5c
Business Medical
Innova5ons
Global Global
Markets
-‐
$m 25 Markets
-‐
$m 150 450 8,000 10,000 Sleep
Diagnos2cs Neurological
Monitoring Brain
Research 15,000 TCD

==> picture [11 x 11] intentionally omitted <==

Sleep
Treatment Driver
Vigilance eHealth

_**Medical

Innova:ons
–
Sleep Treatment**_

The
sleep
treatment
technology
is
the
most
advanced
of
these Medical
Innova2on
technologies.
® ®
The
SomniLink SPAP device
has
been
developed
in
collabora2on with
Medigas
Italia
S.r.l.,
Compumedics
Italian
distributor
and
also a
significant
shareholder
in
the
Company.
®
The
SPAP device
has
been
manufactured
and
sold
to
Medigas.
®
The
Company
is
currently
looking
to
commercialise
the
SPAP device
into
other
markets
and
is
advancing
its
opportuni2es
into the
Asia
Pacific
region
ini2ally.

_**Medical

Innova:ons
–
Sleep Treatment**_

About
20%
of
the
adult
popula2on
globally
suffer from
some
sleep
disorder.
The
global
Apnoea
devices
market
is
es2mated
at about
USD8bn
with
expecta2ons
it
could
reach close
to
$20bn
by
Up
to
100m
people
globally
suffer
from
Sleep Apnoea
however
80%
or
80m
of
these
remain undiagnosed.

_**Medical

Innova:ons
–
Driver Vigilance
Assist**_

Compumedics
has
unique
sleep
monitoring
technology which
has
been
used
to
research
and
develop
proto-‐type systems
for
monitoring
driver
drowsiness
Fa2gue
is
one
of
the
top
three
reasons
for
all
road
fatali2es
Car
manufacturers
are
now
installing
inferior
monitoring systems
at
price
points
from
$1,000
to
$4,500
per
unit
None
of
these
systems
has
any
of
the
unique
and
patented features
of
the
Compumedics
system.

_**Medical

Innova:ons
–
Driver Vigilance
Assist**_

Market
for
this
technology
is
very
large – conserva2vely
es2mated
at
$30m
for
the Australian
market
and
up
to
USD15bn
for
the global
market,
based
on
annual
vehicle produc2on
of
some
60m
vehicles
a
year.
Compumedics
owns
patents in
Australia,
the US
and
Germany
in
rela2on
to
its
unique technology.

_**Medical

Innova:ons
–
eHealth**_

eHealth
home
and
hospital
applica5ons
for
exis5ng Compumedics
technologies
– driven
by
government
and insurers
needs
to
reduce
the
delivery
costs
of
health services
to
ageing
popula2ons.
Large
markets
– US
market
for
exis2ng
eHealth applica2ons
es2mated
at
11.6bn
and
growing
at
a compound
growth
rate
of
almost
19%
pa
to
USD27.3bn
in 2016.
Compumedics
has
significant
exper5se
in
home monitoring
– through
its
20
year
associa2on
with
the
US Sleep
Heart
Health
Study
and
its
Nexus
enterprise
sosware for
pa2ent
scheduling
and
data
management.

Strategic
Growth
Execu:on Capitaliza)on
Pathways

The three principal paths available to Compumedics in order to implement the strategic growth drivers are:

§ “ Do it ourselves ” – recapitalize the group and implement the action plans for the strategic growth drivers ourselves (we are already doing this within the confines of the current personnel and financial constraints of the business)

§ “ Do it with a strategic partner ” – seek out major strategic partners who can bring not only financial resources but also another level of depth to the sales and marketing capability of the group. This could involve an acquisition, merger, joint venture or other combination.

§ “ Let some one else do it ” – divest all or part of the business to a third party who is better able to deliver the strategic growth drivers if the offer price is acceptable to the existing shareholders

**Compara5ve

valua5ons**

**Annualised

Revenes
and
Market
Cap
rela5ve
to
Annualised Revenues**

==> picture [621 x 289] intentionally omitted <==

----- Start of picture text -----

35.0
20.00
18.00

30.0
16.00

25.0
14.00
12.00

20.0
10.00

15.0
8.00
6.00

10.0
4.00

5.0
2.00

-‐

0.00
CMP
MVP
UCM
IPD
UBI
GLH
MBE
Revenues
29.0
9.0
0.8
3.2
15.1
5.0
12.2
Mark
Cap
to
Rev
0.52
8.44
18.88
14.72
4.44
4.28
7.19
Revenues
-‐
$m
Market
Cap
to
Revenues
----- End of picture text -----

Strategic

Growth
Execu2on
strategies
-‐ Demerged
financial
data

Diagnos2c
medical
devices
business
(Sleep
and
Neurology)

	FY2011 Actual	FY2012 Actual	FY2013 Actual	FY2014 Forecast
Revenues - $m	$17.3	$15.8	$15.8	$18.6
EBITDA - $m	$2.1	$(0.3)	$(0.3)	$2.5
NPAT - $m	$1.8m	$(0.6)	$(0.6)	$2.2
Est. demerger cost savings - $m	-	-	-	*$0.9*
Demerged NPAT - $m	-	-	-	*$3.1*

The
Clinical
Business
includes
the
sleep
and
neurological
diagnos2c
devices,
associated supply
and
consumable
items
as
well
as
technical
service
and
support
of
the
devices post
sale.

Strategic

Growth
Execu2on
strategies
-‐ Demerged
financial
data

Brain
Research
(Neuroscan)
business

	FY2011 Actual	FY2012 Actual	FY2013 Actual	FY2014 Forecast
Revenues - $m	$6.2	$5.3	$6.1	$7.5
EBITDA - $m	$1.2	$0.5	$0.9m	$3.1
NPAT - $m	$1.2	$0.5	$0.9m	$3.1
Est. demerger cost savings - $m	-	-	-	*$0.6*
Demerger NPAT - $m	-	-	-	*$3.7*

The
brain
research
business
comprises
high-‐end
and
complex
research
devices
for
in-‐ depth
brain
research.
The
brain
research
business
incorporates
the
Neuroscan business
originally
based
out
of
the
US
and
includes
the
world
most
sophis2cated source
localisa2on
sosware
–
CURRY
NS7.

Strategic

Growth
Execu2on
strategies
-‐ Demerged
financial
data

Ultrasonic
brain
blood
flow
monitoring
business
(DWL)

	FY2011 Actual	FY2012 Actual	FY2013 Actual	FY2014 Forecast
Revenues - $m	$6.0	$6.2	$5.5	$6.5
EBITDA - $m	$0.2	$0.3	$0.4m	$0.9
NPAT - $m	$0.1	$0.2	$0.3	$0.8
Est. demerger cost saving - $m	-	-	-	$0.3
Demerger NPAT - $m	-	-	-	$1.1

The
forecast
does
not
include
ultrasound
imaging
market
opportunity
and
associated China
outlook.

Strategic

Growth
Execu2on
strategies
-‐ Demerged
financial
data

oin On-‐g g
Medical
Innova2on
Investment

	FY2011 Actual	FY2012 Actual	FY2013 Actual	FY2014 Forecast
Revenues - $m	$1.1	$0.5m	$0.0	$0.5
EBITDA - $m	$(1.0)	$(0.6)	$(0.8)	$(0.8)
NPAT - $m	$(1.6)	$(1.4)	$(1.6)	$(1.5)

The
above
financial
data
reflects
the
on-‐going
investment
in
Medical
Innova2on projects.
The
above
numbers
are
part
of
the
overall
group
numbers
presented
to
the Australian
Stock
Exchange
each
repor2ng
period.

Step

out
growth
opportuni2es
–
Sleep Treatment

	Year 1 Forecast	Year 2 Forecast	Year 3 Forecast	Year 4 Forecast
Revenues - $m	$1.7	$5.9	$9.1	$18.3
EBITDA - $m	$0.0	$1.6	$2.8	$6.3
NPAT - $m	$0.0	$1.1	$2.0	$4.2

Assump2ons: 1 Global
Auto-‐set
sleep-‐treatment
market
assumed
to
be
USD300m
currently, growing
to
over
USD500m
by
2016
(Frost
and
Sullivan
N66F-‐56,
2010)
2 Compumedics
share
of
this
market
is
forecast
at
0.8%
in
year
one
rising
to
4.0%
in year
four.
3 Compumedics
average
unit
selling
price
is
forecast
at
$880
declining
to
$780
over the
forecast
period

Step

out
growth
opportuni2es
–
Driver Vigilance
Assist
(DVA)

	Year 1 Forecast	Year 2 Forecast	Year 3 Forecast	Year 4 Forecast
Revenues - $m	$4.0m	$10.3	$26.5	$43.7
EBITDA - $m	$2.5m	$6.3	$16.3	$28.0
NPAT - $m	$1.8m	$4.4	$11.4	$19.6

Assump2ons: 1 Local
car
manufacture
at
200,000
units
pa
with
no
growth
2 Fleet
sales
take
40%
of
local
manufactured
vehicles,
or
80,000
units
pa
3 Penetra2on
of
DVA
device
onto
locally
manufactured
fleet
sales
star2ng
at
2%
in year
one
and
growing
to
20%
by
year
4
4 DVA
unit
price
is
AUD2,500,
increasing
by
3%
CPI
each
year
5 Gross
margins
are
85%
of
DVA
unit
price
6 R&D
expense
at
10%
of
revenues
years
1
through
three,
then
5%
of
revenues
from year
4
onwards

Automated

Sleep
Scoring
and
data warehousing
-‐
eHealth

	Year 1 Forecast	Year 2 Forecast	Year 3 Forecast	Year 4 Forecast
Revenues - $m	$1.0	$2.4	$4.4	$5.8
EBITDA - $m	$0.3	$0.9	$2.8	$4.0
NPAT - $m	$0.2	$0.7	$1.9	$2.8

Assump2ons: 1 Es2mated
sleep
studied
preformed
in
Australia
each
year;
250,000
and
growing
at 5%
pa

2 Es2mated
sleep
studies
converted
to
automated
service
is
25,000
in
year
one, growing
to
145,000
studies
in
year
four. 3 Revenue
to
Compumedics
per
automated
sleep
study
is
$40.00
increased
by
3% CPI
each
year

4 Automated
sleep
study
elapsed
processing
2me
40
minutes
per
sleep
study
in
year one,
decreasing
to
10
minutes
per
sleep
study
in
year
4

_**In

conclusion**_

• Core
business –
refocus
on
sales
and
profit growth
as
Asia
manufacturing
cost
reduc2ons and
clearing
the
sales
order
back-‐log
restore profitability
to
the
Group.
Consider ra2onaliza2on
of
the
Group
and
demerger op2ons
to
provide
clearer
focus • Medical
Innova5ons –
Commercialisa2on
of main
breakout
planorms: – Sleep
treatment – Driver
Vigilance
Assist – eHealth/online
educa2on

OneMedForum 2011 - San Francisco Wednesday 12 January 2011

AI assistant

COMPUMEDICS LIMITED — Investor Presentation 2014

64672_rns_2014-03-26_55c24c12-4a55-47b2-ab0d-bff70cd93030.pdf

_**Who

1 Australia sleep & neuro diagnostics device supplier

1Japan sleep diagnostics device supplier

1 China sleep diagnostic device supplier to China’s premier facilities & #1 TCD device supplier

3 USA sleep diagnostic device supplier and emerging #3 supplier for neurological monitoring devices

• Compumedics has a rich intellectual property portfolio

_**Board

_**A

_**Established

_**Strategic

_**What

_**What

_**H1

**By

**By

_**Historical

_**Historical

_**Profitability

**FY2013

_**Cash,

_**Employee

_**Ownership

_**Strategic

_**Growth

_**Growth

_**Earnings

_**Strategic

_**Medical

_**Medical

_**Medical

_**Medical

_**Medical

**Compara5ve

**Annualised

Strategic

Strategic

Strategic

Strategic

Step

Step

Automated

_**In

More from COMPUMEDICS LIMITED

COMPUMEDICS LIMITED Investor Presentation 2014