Medistim — Investor Presentation 2021

Aug 13, 2021

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Welcome to Medistim ASA's Interim report Q2 and FIRST HALF 2021

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Medistim ASA Q2 and first half 2021

August 13th 2021

Kari E. Krogstad Thomas Jakobsen

PRESIDENT & CEO CFO

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 2020. 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

01 Highlights

Highlights 2 nd Quarter

Revenue	MNOK 109.8 (82.5)	+33.1%
EBIT	MNOK 42.7 (27.7)	+54.0%
Currency		-11.0%

Number of units sold or outplaced:

Flow systems	32	-8.6%
Imaging systems	27	+200%
Flow probes (ex USA)	1 957	+34.5%
Imaging probes	35	+ 66.7%
Procedures (USA)	18 718	+49.6%

>	-8.6%
1	+200%
1	+34.5%
1	+ 66.7%
C	+49.6%

Q2 2021 % Q o Q Best quarterly result ever for revenue and EBIT

• ➢ Record quarterly sales revenue ever, up 26.6% in NOK to MNOK 104.5
  • o Imaging sales up 71% in NOK, Flow sales up 23.6% in NOK
  • o Vascularsales up 6.1% in NOK, Cardiac sales up 31.8 %in NOK
  • o Currency neutral growth was 36.7% in total and 40.2% for own products:

o USA up 56.9%, Europe up 31.4%, Asia up 83.1%, RoW down 39.5%

• ➢ Extraordinary revenue of MNOK 5.3 from the COVID-related Paycheck Protection Program granted by the U.S. federal government is taking total revenue to MNOK 109.8 for the quarter
• ➢ 22.7 % increase in sales of third-party products

Best quarterly EBIT ever, margin up from 33.6% to 38.9%

Pay Per Procedure (PPP) feature added to the MiraQ™ system generation

Highlights 1 st Half

	H1 2021	% H o H		Best first half ever for revenue and EBIT
Revenue EBIT	MNOK 212.8 (185.6) MNOK 71.7 (52.5)	+14.4% +36.7%	➢ o o	Record first half sales revenue ever, up 11.6% in NOK to MNOK 207.1 Imaging sales up 14%, Flow up 9.8% in NOK Vascularsales down 8.2 %, Cardiac up 12.8% in NOK
Currency		-9.3%	o	Currency neutral growth was 20.4% in total and 20.2% for own products:
Number of Flow systems Imaging systems Flow probes	units sold or outplaced: 74 50 (ex USA) 3 731	-6.3% +42.9% +19.3%		MNOK 212.8 for the first half

Imaging probes 66 +10.0%

➢ Record first half sales revenue ever, up 11.6% in NOK to MNOK 207.1

• o Imaging sales up 14%, Flow up 9.8% in NOK
• o Vascularsales down 8.2 %, Cardiac up 12.8% in NOK
• o Currency neutral growth was 20.4% in total and 20.2% for own products:

o USA up 26.6%, Europe up 19.7%, Asia up 29.3%, RoW down 33.4%

• ➢ The extraordinary revenue of MNOK 5.3 from the COVID-related U.S. Paycheck Protection Program granted in Q2 is taking total revenue to MNOK 212.8 for the first half
• ➢ 21.6 % increase in sales of third-party products

Procedures (USA) 35 389 +28.4% Best first half EBIT ever, margin up from 28.3% to 33.8%

LivaNova is new distributor in India as of January 1st

The General Assembly resolved to pay a dividend of NOK 3.00 per share

02 Financial Statements

Profit and loss Q2 2021

Profit & loss	Q2 2021	Q2 2020
All numbers in NOK 1000
Sales revenue	104 476	82 482
Other revenue	5 292	-
Total revenue	109 768	82 482
Cost of goods sold	22 637	15 892
Salary and sosial expenses	25 208	22 413
Other operating expenses	13 611	10 883
Total operating expenses	61 456	49 187
Op. res. before depr. and write-offs (EBITDA)	48 312	33 294
EBITDA %	44,0 %	40,4 %
Depreciation	5 637	5 584
Operating result (EBIT)	42 675	27 710
EBIT %	38,9 %	33,6 %
Financial income	1 250	1 387
Financial expenses	1 103	3 573
Net finance	147	(2 186)
Pre tax profit	42 821	25 525
Tax	8 653	5 256
Profit after tax	34 168	20 269

Sales per Quarter (TNOK)

EBIT per Quarter (TNOK)

Profit and loss H1 2021

Profit & loss	H1 2021	H1 2020
All numbers in NOK 1000
Sales revenue	207 106	185 588
Other revenue	5 292	-
Total revenue	212 398	185 588
Cost of goods sold	45 438	38 966
Salary and sosial expenses	57 611	55 703
Other operating expenses	26 118	27 347
Total operating expenses	129 167	122 016
Op. res. before depr. and write-offs (EBITDA)	83 231	63 572
EBITDA%	39,2 %	34,3 %
Depreciation	11 491	11 077
Operating result (EBIT)	71 741	52 495
EBIT %	33,8 %	28,3 %
Financial income	3 251	8 026
Financial expenses	4 320	7 503
Net finance	(1 069)	523
Pre tax profit	70 672	53 018
Tax	14 682	11 642
Profit after tax	55 990	41 376

Sales per Quarter (TNOK)

EBIT per Quarter (TNOK)

Balance sheet – Assets

Cash position by end of quarter was MNOK 53.0

Securing end-of-life components and keeping security stocks of components explain the high inventory level

A dividend of NOK 3.00 per share, total MNOK 54.6, was paid in May

Balance sheet	30.06.2021	31.12.2020
All numbers in NOK 1000
Assets
Intangible assets	30 826	33 464
Fixed assets	60 329	66 570
Total intangible and fixed assets	91 154	100 034
Inventory	113 485	112 667
Customers receivables	66 041	57 485
Other receivables	8 376	3 744
Cash	53 019	71 891
Total current assets	240 921	245 786
Total assets	332 075	345 820

Balance sheet	30.06.2021	31.12.2020
All numbers in NOK 1000
Share capital	4 585	4 585
Premium fund	44 172	44 172
Other equity	212 229	208 089
Total equity	260 986	256 846
Total long term debt	19 550	29 497
Total short term debt	51 539	59 477
Total equity and liability	332 075	345 820

Balance sheet – Equity and Liability

3.0 MNOK in interest-bearing debt. MNOK 5.3 from the U.S. Paycheck

Protection Program, previously booked as a loan, was this quarter released to other revenue

24.9 MNOK in obligations related to lease contracts where 18.1 MNOK is long term

Strong balance sheet with 78.6 % equity ratio

03 Business segments update

Imaging probes and systems in units

Unit sales of imaging systems sold as capital equipment come back strong after the COVID slow down, growing 133.3% this quarter

Unit sales of imaging probes are also back to normal, growing 66.7% this quarter

Imaging systems in units

Imaging probes in units

Flow probes and systems in units

Number of flow systems sold as capital equipment is down 15% from Q2 last year.

It is Medistims strategy to convert the market from Flow -only to Flow -and -Imaging technology

The total sales of systems (Flow and Flow -and -Imaging ) sold as capital equipment show an increase of 7 units or 16%

35% growth in number of flow probes sold this quarter reflects that the surgical activity level is getting back to normal

Flow systems in units (MiraQ capital sales)

Flow probes in units (excl USA)

Q2 and H1 revenue performance by region

Mill NOK	Q2 21	Q2 20	Q / Q	H1 21	H1 20	H1 / H1	2020
Europe	50,4	40,7	23,8 %	95,1	81,5	16,7 %	173,3
USA	41,4	26,6	55,7 %	76,5	65,0	17,8 %	126,4
Asia	13,8	7,9	73,6 %	33,2	27,1	22,6 %	46,8
ROW (MEA, CAN, SA, AUS)	4,1	7,2	-42,6 %	7,6	12,0	-36,9 %	16,7
Total	109,8	82,5	33,1 %	212,4	185,6	14,4 %	363,1

• In Europe, Q2 sales of own products increased with 24.6% in NOK and 31.1% currency neutral. For the first half, sales of own products increased with 13.5% in NOK and 19.7% currency neutral. 3. party increased with 22.7% in Q2 and 20.4% first half.

• In the USA, total revenues for the quarter and first half include the extraordinary MNOK 5.3 related to the U.S. Paycheck Protection Program. Excluding this, sales revenue for Q2 was NOK 36.1, a 35.8 % increase. Currency neutral this corresponds to an increase of with 56.8 %. Similar for first half, sales revenue was NOK 71.2, a 9.6 % increase in NOK corresponding to a currency neutral increase of 26.6 %.
• In Asia, solid growth both for the quarter and the first half.
• ROW continues to be a small sales territory for Medistim, with significant quarter to quarter variation.

Q2 and first half 2021 revenue performance by product

Mill NOK	Q2 21	Q2 20	Q / Q	H1 21	H1 20	H1 / H1	2020
Procedures (USA)	28,9	22,4	28,8 %	54,8	50,7	8,0 %	99,4
Flow probes	29,0	21,6	34,0 %	55,2	46,4	19,1 %	92,6
Flow systems (MiraQ)	8,4	9,8	-14,1 %	21,5	23,9	-10,1 %	47,2
Imaging systems (MiraQ)	14,8	7,6	95,6 %	30,3	25,0	21,2 %	44,2
Imaging probes	1,9	1,0	86,4 %	3,5	3,1	12,2 %	5,2
3rd party	20,2	16,5	22,8 %	38,9	32,0	21,6 %	67,5
Other	6,5	3,6	83,6 %	8,2	4,5	81,7 %	6,9
Total revenues	109,8	82,5	33,1 %	212,4	185,6	14,4 %	363,1

• Procedure sale in the USA: The total number of procedures increased with 49.6% for the quarter and with 28.4 % for the first half. Lower sales in NOK is explained by unfavorable currency and product mix.

• Flow probes: The percentage growth in NOK corresponds to a similar % growth in units, both for Q2 and first half.
• Flow systems (capital): The percentage decline in NOK corresponds to a similar % decline in capital units, both for Q2 and first half.
• Imaging systems (capital): 133% increase in capital units and 95.6% increase in NOK for the quarter. The lower increase in NOK is related to high sales through distributors this quarter. For the first half, the % growth in number of capital units sold corresponds with similar % increase in NOK.
• 3 rd party products: Strong quarter and first half.
• Other: Includes an extraordinary revenue of MNOK 5.3 related to the U.S. Paycheck Protection Program

04 Implementing the strategy

Medistim growth strategy

Emerging high-growth economies (e.g. BRIC)	3
Developing Medistim markets (e.g. USA, UK, France)	2
Strong Medistim markets (e.g. Jp, Nordic, Germany) >50% CABG share	1	4
	CABG surgery (2 BNOK)	Vascular surgery (>1 BNOK)	Other open heartsurgery (1BNOK)

GEOGRAPHIES

• 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
  2. → Early adopter & KOL support
  3. → REQUEST study
  4. → Ease conversion from flow to imaging with MiraQ
• 1. Achieve routine use of both Flow and Imaging by fighting ignorance, indifference and ease-of-use objections through
  2. → Clinical marketing, guidelines and educational programs
  3. → Product innovation for ease of use
  4. → Increased sales force capacity
• 1. Offer an entry-level solution to reach emerging, price-sensitive, high-growth markets
• 1. Build and strengthen position in vascular surgery
  2. → Dedicated system (MiraQ Vascular) & probes
  3. → Build position with societies and KOLs
• 1. Expand our direct market coverage

APPLICATION AREAS

20

Sales growth in the USA

Performance US sales

Strong Q2 growth in sales and total revenue

• o Total revenue in USD incl. the Paycheck Protection Program extraordinary revenue of TUSD 630 and grows at 79.8%
• o Sales revenue only, in USD, increase by 56.9% in Q2 and by 26.6% in first half
• Total number of procedures was up 49.6% in Q2 and 28.4% in first half
  • o Flow procedures up 54.6% in Q2
  • o Imaging procedures up 26.9% in Q2
• Capital systems sales: 8 units in Q2 vs 4 LY, 17 units in first half vs 14 LY
• Strong growth in new customers
  • o 18 vs 2 in Q2 last year
  • ^o 28 vs 8 in first half last year Number of procedures per quarter ²²

Number of procedures per year

Adding the popular Pay Per Procedure option to MiraQ™ in the USA

▪ Medistim offers various options for product acquisition:

• In the U.S.A., the PPP model has been offered on the previous system generations (Butterfly™, VeriQ™ and VeriQC™) and now we have added it to our latest MiraQ™ system generation as well
• Revenue from the PPP model make up close to 30% of the total U.S. revenue and many of our largest customers prefer this model, hence we want to continue to offer this option

05 The COVID-19 pandemic

The COVID-19 pandemic

From gradually decreasing impact to strong recovery this quarter

Currency neutral sales development Not quite back to normal A positive outlook

• → Q2-20: -19.3 % vs LY
• → Q3-20: -9.7 % vs LY
• → Q4-20: -7.2 % vs LY
• → Q1-21: +4.4 % vs LY

• → Q2-21: +36.7% vs LY (strongest quarter ever)

• o Still some travel and hospital access restrictions

• o In some countries, and some states in the U.S.A., with lower vaccination rates, elective surgeries may still have to be postponed as a potential 4th wave with the Delta variant develops

• → As vaccination rates continue to increase, we expect fewer COVID patients in the hospitals, ensuring sufficient capacity to treat patients in need of cardiac and vascular surgery
• 25 → Medistim is looking at the rest of the year and longer-term future with optimism, while remaining alert to the further development of the pandemic

Shareholders list per August 10th 2021

Name: MEDISTIM ASA
ISIN: NO0010159684
Number of investors:	1 070
Number of shares:	18 337 336

Rank	Name	Holding	% of total	Citizenship	Type of account
1	AETERNUM CAPITAL AS	1 862 500	10,2 %	Norway	Ordinary
2	VERDIPAPIRFOND ODIN NORDEN	1 800 000	9,8 %	Norway	Ordinary
3	INTERTRADE SHIPPING AS	1 285 000	7,0 %	Norway	Ordinary
4	State Street Bank and Trust Comp	1 237 120	6,7 %	United States	Nominee
5	State Street Bank and Trust Comp	1 098 724	6,0 %	United States	Nominee
6	Skandinaviska Enskilda Banken AB	1 029 728	5,6 %	Sweden	Nominee
7	FOLLUM CAPITAL AS	970 000	5,3 %	Norway	Ordinary
8	Skandinaviska Enskilda Banken AB	626 081	3,4 %	Denmark	Nominee
9	State Street Bank and Trust Comp	483 998	2,6 %	United States	Nominee
10	State Street Bank and Trust Comp	416 805	2,3 %	United States	Nominee
11	Skandinaviska Enskilda Banken AB	409 723	2,2 %	Sweden	Nominee
12	SKANDINAVISKA ENSKILDA BANKEN AB	387 682	2,1 %	Luxembourg	Nominee
13	FD INVT TR: FD SRS INTL SML CP FD	382 845	2,1 %	United States	Ordinary
14	BUANES	379 936	2,1 %	Norway	Ordinary
15	Danske Bank A/S	258 310	1,4 %	Denmark	Nominee
16	The Bank of New York Mellon SA/NV	257 500	1,4 %	Denmark	Nominee
17	BNP Paribas Securities Services	253 552	1,4 %	Italy	Nominee
18	Skandinaviska Enskilda Banken AB	238 314	1,3 %	Sweden	Nominee
19	Danske Invest Norge Vekst	228 000	1,2 %	Norway	Ordinary
20	The Bank of New York Mellon SA/NV	210 931	1,2 %	Ireland	Nominee
		13 816 749	75,0 %