Medistim

Investor Presentation • Feb 15, 2018

Medistim ASA Fourth Quarter 2017

Kari E. Krogstad, President and CEO Thomas Jakobsen, CFO February 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 2016. 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 fourth quarter
• 1. Financial statements
• 1. Business segments update
• 1. Implementing the strategy

1. Highlights 4th quarter

Highlights 4th quarter 2017

	Q4 2017	Q o Q
• 21.9 % increase in sales for the quarter Currency neutral total growth is 22.3 % o	Revenue	21.9%
Currency neutral growth of own products is 31.3% o Another strong quarter for the USA with currency o neutral sales up 27.8 %	MNOK 82.2 (67.4) EBIT
• EBIT up MNOK 6.6 to MNOK 16.4, an 67.9 % increase	MNOK 16.4 (9.7)	67.9 %
• The probe production capacity issues are solved	Currency	-0.4 %
• Medistim joins GE Vingmed Ultrasound and Sensocure to develop new production technology funded by NRC	No of capital units sold: Flow systems 38	52.0 %
• The Board suggests a dividend of NOK 2.00 per share	Imaging systems 17	240.0 %
(NOK 1.75)	Flow probes 1 925	21.7 %
	Imaging probes 32	77.8 %
	Procedures (USA) 13 995	7.4 %

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15.02.2018	Medistim ASA Q4 2017

2. Financial statements

Profit and loss Q4 2017

Profit & loss	Q4 2017	Q4 2016
All numbers in NOK 1000
Sales	82 230	67 433
Cost of goods sold	20 576	16 529
Salary and sosial expenses	26 720	25 310
Other operating expenses	15 072	12 812
Total operating expenses	62 367	54 651
Op. res. before depr. and write-offs (EBITDA)	19 862	12 783
EBITDA %	24,2 %	19,0 %
Depreciation	3 495	3 034
Write offs	-	-
Operating result (EBIT)	16 368	9 749
EBIT %	19,9 %	14,5 %
Financial income	3 511	8 781
Financial expenses	1 535	9 890
Net finance	1 976	(1 109)
Pre tax profit	18 343	8 640
Tax	5 867	2 798
Result	12 476	5 842

Sales per Quarter (TNOK)

EBIT per Quarter (TNOK)

Profit and loss 2017

Profit & loss	2017	2016
All numbers in NOK 1000
Sales	301 461	268 061
Cost of goods sold	72 782	64 957
Salary and sosial expenses	98 281	89 719
Other operating expenses	51 705	45 304
Total operating expenses	222 768	199 980
Op. res. before depr. and write-offs (EBITDA)	78 693	68 081
EBITDA %	26,1 %	25,4 %
Depreciation	13 223	11 726
Write offs	-	-
Operating result (EBIT)	65 470	56 355
EBIT %	21,7 %	21,0 %
Financial income	8 838	7 506
Financial expenses	7 696	10 334
Net finance	1 142	(2 828)
Pre tax profit	66 612	53 527
Tax	19 038	14 429
Result	47 574	39 098

Sales per Quarter (TNOK)

EBIT per Quarter (TNOK)

10 15.02.2018 Medistim ASA Q4 2017

Balance sheet - Assets

Balance sheet	31.12.2017	31.12.2016
All numbers in NOK 1000
Assets			300 000
Intangible assets	45 090	51 698	250 000 200 000
Fixed assets	25 744	18 404	150 000
Total intangible and fixed assets	70 834	70 102	100 000 50 000
Inventory	62 722	59 297	-
Customers receivables	57 307	48 328
Other receivables	5 825	7 651
Cash	54 411	31 065
Total current assets	180 265	146 341
Total assets	251 099	216 443

• Working capital is still 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
• Increased customer receivables due to record sales for the quarter

Balance sheet - Equity and liability

Balance sheet	31.12.2017	31.12.2016
All numbers in NOK 1000
Share capital	4 585	4 585
Premium fund	44 172	44 172
Other equity	134 226	117 947
Total equity	182 983	166 704
Total long term debt	10 500	2 552
Total short term debt	57 616	47 188
Total equity and liability	251 099	216 444

• 15.4 MNOK in interest bearing debt

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15.02.2018	Medistim ASA Q4 2017

3. Business segments update

Flow probes and systems in units

• 21.7% increase in flow probe number of units
• Production capacity issues are solved

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

• 52 % increase in flow system number of units
• Strong quarter for all regions
• Largest growth in the USA, going from 3 to 11 capital flow system sales this quarter

Imaging probes and systems in units

Imaging probes in units (incl USA)

• 77.8 % increase in imaging probe number of units
• Growing imaging system sales drive the increase in imaging probe sales

0 5 10 15 20 25 30 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 US Asia Europe ROW

• 240 % increase in imaging systems number of units
• Good quarter with growth in number of systems sold in all regions
• Sales in Middle East and Australia drives growth in ROW

Imaging systems in units (VeriQC & MiraQ)

Q4 revenue performance by region

Mill NOK	Q4 '17	Q4 '16	Q / Q	2017	2016	Y/Y
Europe	40,0	38,3	4,4 %	150,3	136,4	10,2 %
USA	27,5	21,9	25,8 %	104,6	91,0	14,9 %
Asia & Jp	5,7	4,7	19,7 %	27,0	24,8	8,7 %
ROW (MEA, CAN, SA, AUS)	9,0	2,5	261,3 %	19,6	15,9	23,4 %
Total	82,2	67,4	21,9 %	301,5	268,1	12,5 %

• In Europe, Q4 was up 4.4 %. Sales of own products increased with 10.3 %, while 3.party products decreased with 2 %.

• In the USA, Medistim delivers yet another good quarter with currency neutral growth of 27.8 %, driven by increase in capital sales
• Both Asia/Japan and ROW are so far smaller sales territories with significant quarter to quarter variation. However, for ROW there was an exceptionally strong quarter with good sales in the Middle East and Australia.

Negative currency effects for 2017 vs 2016 was 1.2 MNOK .

Average actual exchange rate for USD 8.27 and EUR 9.33 versus last year USD 8.38 and EUR 9.41.

Q4 revenue performance by product

Mill NOK	Q4 '17	Q4 '16	Q/Q	2017	2016	Y/Y
Procedures (USA)	21,6	20,3	6,7 %	86,0	81,9	5,0 %
Flow probes	22,9	17,5	31,0 %	78,9	70,4	11,9 %
Flow systems (VeriQ & MiraQ)	9,4	5,6	67,3 %	23,3	17,7	31,7 %
Imaging systems (VeriQ C & MiraQ)	8,7	2,8	210,1 %	32,0	21,0	52,3 %
Imaging probes	1,5	0,6	148,5 %	4,2	3,1	32,8 %
3rd party	17,8	18,2	-2,1 %	71,7	68,4	4,7 %
Other	0,3	2,5	-88,3 %	5,4	5,4	0,3 %
Total revenues	82,2	67,4	21,9 %	301,5	268,1	12,5 %

• Procedure sale in the USA: The total number of procedures grew with 7.4 % in Q4.
• Flow probes revenue: 21.7 % increase in units to 1925 probes, 31.0 % in NOK due to higher level of sales in direct markets.
• Flow systems: 52 % increase in units, however 67.3 % growth in NOK driven by strong sales in USA, a direct market.
• Imaging systems and probes: Strong development in units with 240 % growth.
• 3rd party products: Slight decline in Q4, but 4,7 % growth for the year.

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15.02.2018	Medistim ASA Q4 2017

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 & 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

RESULTS Q4

• Revenues up by 25.8 % in NOK and 27.8 % in USD
• Number of procedures up by 7.4 %
• o 5.2 % increase in flow procedures
• o 20.9 % growth in imaging procedures
• 268 % increase in capital sales (systems and probes)
• Continued growth in new customers
• o 7 completely new accounts
• o No TTFM account converted to Imaging
• o 26 new and 4 converted accounts for the year

Number of procedures per year

# of Procedures per Consecutive Quarter

NFR funding of new production technology development

• Medistim joins GE Vingmed Ultrasound and Sensocure in a collaborative project to develop new production technology (Press release 21.11.17)
• Funded by the Norwegian Research Council with MNOK 14.4 over 3 years
• A unique opportunity to develop new production technology that may bring today's production of ultrasound probes to the next level in terms of effectiveness and quality

• For a company with labor-intensive manufacturing in Norway, this can mean significant strengthening of our competitive edge in a global market

Project name:

«Advanced manufacturing technologies for high impact medical devices»

Goal:

To develop flexible and semi-automated processes for production of sensors. The consortium consists of Sensocure, GE Vingmed Ultrasound og Medistim, as well as the research and development partners SINTEF Raufoss Manufacturing, Norner Research AS and Høgskolen i Sørøst Norge

20 largest shareholders (per 9. February 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	1 376 596	7,51	GBR
FOLLUM CAPITAL AS	1 000 000	5,45	NOR
PROTECTOR FORSIKRING Aksjer	784 155	4,28	NOR
Skandinaviska Enskil A/C CLIENTS ACCOUNT	774 317	4,22	DNK
Citibank Europe plc S/A SEB SA UCITS	706 412	3,85	LUX
BUANES ASBJØRN JOHN	494 936	2,70	NOR
GRANDEUR PEAK INTERN BROWN BROTHERS HARRI	420 559	2,29	USA
JPMorgan Chase Bank, JPMCB RE HB SWED FUN	415 893	2,27	SWE
HOLBERG NORGE VERDIPAPIRFONDET V/HOLBERG FONDSFORVA	398 656	2,17	NOR
RBC Investor service S/A LUX SCV-EXEMPT-U	353 515	1,93	LUX
DYVI INVEST AS	346 154	1,89	NOR
Danske Bank A/S 3993 NORDIC SETTLEME	281 234	1,53	DNK
REGENTS OF THE UNIVE The Bank of New York	255 952	1,40	USA
Danske Invest Norge	250 000	1,36	NOR
BNP Paribas Securiti BPSS MLN/PENSION FUN	228 408	1,25	ITA
NN PARAPLUFONDS 1 N. BNY MELLON SA/NV	222 579	1,21	NLD
Skandinaviska Enskil SEB AB, UCITS V - Sw	218 201	1,19	SWE
The Northern Trust C RE IEDP AIF CL. NON	207 782	1,13	GBR
Total	14 601 349	79,62