COMPUMEDICS LIMITED — Investor Presentation 2016

Aug 30, 2016

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Sleep Diagnostics & Treatment - Neuro Diagnostics - Brain Research - Ultrasonic Blood Flow Monitoring 1

Who is Compumedics?

A leading global, innovative developer and manufacturer of medical devices for:

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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

A technological leader in its chosen markets:

FY16 revenues $37.5m, FY16 EBITDA $5.0m.

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FY17 Guidance revenues $41m to $43m, EBITDA $6.0m to $8.0m.

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120 employees across four locations, Melbourne, Australia (Head Office), Charlotte, NC, USA, Hamburg and Singen, Germany.

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Compumedics listed ASX Dec 21, 2000. CMP has market capital of around $90m.

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All $ = A$ unless otherwise specified

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Revenue Composition at $37.5m

30 June 2016

By geographic region

By product/market

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Supply Tech.
Europe, Items, Service,
16% 10% 8%
Brain
USA,
Blood
33%
Flow,
Sleep,
20%
33%
Asia,
30% Brain
Res,
Aust,
Neuro,
17%
21%
12%
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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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Growth Platform – Core and Step-Out

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Sales – schematic only
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FY16F FY17F FY18F FY19F FY20F
Core - Base Core - Sleep/Neuro - Mid Market Neuro - MEG Sleep - eHealth
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• Step-out - NEURO – BRAIN IMAGING – By signing the new MEG* Agreement with KRISS we can transition from a USD30k software sale to a USD4.0m complete system sale.

• Step-out - SLEEP - CLOUD GROWTH – USD10m in professional application contracts into China, Korea and Taiwan. New personal device “Somfit” – partnering novel “in-house” eHealth sleep device for the home. Potential to keep rapid mid-term EBITDA growth

• Core - SLEEP & NEURO – DIAGNOSTIC GROWTH – By adding mid-market devices we expand and lower the cost base of our product range, enabling us to lock in our premium market dominance, and boost sales in the US and China initially and then Europe, with Germany as a specific focus

• *MEG = Magnetoencephalography

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Core Business – Premium Focus

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

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Core Business – Margin Improved

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40,000 6,000
$k Revenues
35,000 5,000
30,000 4,000
EBITDA
25,000 3,000
20,000 2,000
15,000 1,000
10,000 -
5,000 -1,000
- -2,000
2010 2011 2012 2013 2014 2015 2016
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AUD/USD exchange rate

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1.2000
1.0324 1.0271
0.9865
1.0000 0.8811 0.9188
0.8386
0.7426
0.8000
0.6000
0.4000
0.2000
0.0000
2010 2011 2012 2013 2014 2015 2016
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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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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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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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Core Business - Growth Drivers

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

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

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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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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 3 HeBei 10 3 Tianjin Dalian
2 3
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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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 agreement with	double the existing market size to	CMP’s MEG device	CMP expects to
KRISS provides access to a	about 70 units a year	H1 FY17 – Finalise	double sales in
new and superior hardware	The dominant existing player is	specifications and	FY19 to 10 MEG
platform	Elekta, based out of Sweden,	manufacture with	systems for about
Compumedics can access	followed by Yokogawa (Japanese	KRISS	USD40m
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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Step out 2 – eHealth/cloud: A$4m/a sales already

eHealthMedics	Operational systems have	Compumedics are	Key partners
has already	been developedfor the cloud	now approaching	being
locked in excess	based capture, transfer	a select group of	pursued
of $10mof	and translation of medical grade	strategic	include_web,_
forward orders	sleep parameters from any web-	partners/investors	telco, eHealth,
over the next	enabled device. The system can	to expedite the	consumer
three years	then store, analyse and interpret	process and rapidly	health/
(primarily in	that data	deploy the platform to	electronics
China) for its	in a simple and actionable	market.	providers
professional	manner, reducing the need for		and device
services platform.	on-site professionals.		manufacturers.
Initial pilot sites
commence in
May and June
this year.

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Directors & Executive Team Key Management

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NED - Mr. Alan Anderson 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. Trademark, Patent & General Legal Attorney CMP Tenure 7 yrs

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Mr. Christoph Witte General Managing Director Compumedics Germany GmbH CMP/DWL - Tenure 24 yrs

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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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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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