Medistim ASA Second Quarter 2016

Kari E. Krogstad, President and CEO Thomas Jakobsen, CFO August 24th, 2016

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 2015. 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.

1. Highlights second quarter
1. Financial statements
1. Business segments update
1. Implementing the strategy

1. Highlights second quarter

Medistim ASA Q2 2016 24.08.2016
Highlights second quarter 2016
	Q2 2016	Q o Q
• 17.4 % sales growth for the quarter Sales of own products increased with 22.2 % to o MNOK 47.7	Revenue MNOK 67.2 (57.3)	17.4%
All time high US sales up 10.9 % to MNOK 22.7 o 3. party sales up by 7.0 % to MNOK 19.5 o	EBIT MNOK 17.1 (11.7)	45.5 %
• 45.5 % EBIT growth to MNOK 17.1 for the quarter For the first half, EBIT is up 41.7 % to MNOK 30.6 o
• Profit per share grows 19.0% to NOK 0.69 (0.58)	Currency	6.9 %
• The Medistim technology has achieved reimbursement in	No of units sold:
Japan	Systems (capital sale) 27	42.1 %
• A dividend of NOK 1.65 (1.40) per share was paid on the	Flow probes 1 518	0.7 %
nd 2 of May	Imaging probes 13	8.3 %
	Procedures (USA) 11 313	2.4 %

2. Financial statements

Profit and loss Q2 2016

Profit and loss Q2 2016

Profit & loss	Q2 2016	Q2 2015
All numbers in NOK 1000
Sales	67 194	57 254
Cost of goods sold	17 322	13 787	80 000
Salary and sosial expenses	18 692	15 513	70 000
Other operating expenses	11 217	10 365	60 000
Total operating expenses	47 231	39 666	50 000
Op. res. before depr. and write-offs (EBITDA)	19 963	17 589	40 000
EBITDA %	29,7 %	30,7 %	30 000
Depreciation	2 880	2 649	Q4 Q1 Q2 Q3 Q4
Write offs of goodwill	-	3 200	12 13 13 13 13

Operating result (EBIT) EBIT %	17 083 25,4 %	11 740 20,5 %	20 000
Financial income	3 427	2 874	15 000
Financial expenses	3 566	1 279	10 000
Net finance	(139)	1 595
	16 944	13 335	5 000
		2 867	- Q4 Q1 Q2 Q3 Q4
Pre tax profit Tax	4 426

Sales per Quarter (TNOK)

Profit and loss H1 2016

Profit and loss H1 2016
Profit & loss	YTD 2016	YTD 2015
All numbers in NOK 1000
Sales	132 694	115 161
Cost of goods sold	33 009	30 767	80 000
Salary and sosial expenses	41 088	34 377	70 000
Other operating expenses	22 261	20 005	60 000
Total operating expenses	96 358	85 149	50 000
Op. res. before depr. and write-offs (EBITDA)	36 336	30 013	40 000
EBITDA %	27,4 %	26,1 %	30 000
Depreciation	5 714	5 202	Q4 Q1 Q2 Q3 Q4
Write offs of goodwill	-	3 200	12 13 13 13 13
Operating result (EBIT)	30 622	21 610
EBIT %	23,1 %	18,8 %	20 000
			15 000
Financial income	3 553	11 120	10 000
Financial expenses Net finance	4 631 (1 079)	8 487 2 633
			5 000
Pre tax profit	29 543	24 243	-
Tax	7 517	6 365	Q4 Q1 Q2 Q3 Q4
	22 026	17 878	12 13 13 13 13

Sales per Quarter (TNOK)

Balance sheet - Assets

Medistim ASA Q2 2016 24.08.2016


Balance sheet	30.06.2016	31.12.2015
All numbers in NOK 1000
Assets			250 000
Intangible assets	53 868	55 122	200 000
Fixed assets	16 469	14 158	150 000
Total intangible and fixed assets	70 337	69 280	100 000
Inventory Customers receivables	60 453 40 446	46 613 44 831	50 000
	5 986	8 787	-
Other receivables		48 925
Cash	18 229
Total current assets	125 113	149 156
Total assets	195 450	218 436		Other assets	Cash


• Inventory build-up related to
• MiraQ product line introduction and VeriQ/VeriQC			last-time-buy of components

- Compensation for returned inventory to Medtronic delayed
Increased consignment inventory of Mentor products related to the Aleris agreement and HINAS tender

Balance sheet - Equity and liability

Balance sheet All numbers in NOK 1000	30.06.2016	31.12.2015
Share capital	4 585		250 000
		4 585
Premium fund Other equity	41 852 101 841	41 852 109 727	200 000
Total equity	148 278	156 164	150 000
Total long term debt	4 776	7 001	100 000
Total short term debt	42 396	55 271	50 000 -

Dividend of NOK1.65 per share paid in May

3. Business segments update

Flow probes and systems in units

Flat probe sales development for the second quarter
6.9 % growth in probe sales for the first half of 2016
25 % growth in number of flow systems sold, with 20 systems sold in Q2 2016 compared to 16 in Q2 2015
In Europe, flow system sales increased with 50 % quarter over quarter, due to positive development in UK and France
Of the 20 flow systems sold, 11 were MiraQ systems, with 10 sold in Europe and one sold in Asia

Imaging probes and systems in units Imaging probes in units (incl USA) 0 5 10 15 20 25 30 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Imaging probes US imaging probes

Imaging probe sales at the same level as Q2 last year
Outside the USA, probe sales were mainly in Europe

Imaging systems in units (VeriQC & MiraQ)

Imaging systems more than doubled compared to Q2 last year
Of the 7 imaging systems sold, 6 were MiraQ systems; 1 were sold in the UK, 1 in France, 2 in Norway and 2 as capital sales in the USA

Q2 revenue performance by region

24.08.2016	Medistim ASA Q2 2016
Q2 revenue performance by region
Mill NOK	Q2 '16	Q2 '15	Q / Q	H1 2016	H1 2015	Y/Y
Europe	38,1	31,6	20,3 %	69,8	65,0	7,3 %
USA	22,7	20,5	10,9 %	45,7	36,5	24,9 %
Asia & Jp	4,0	2,9	40,4 %	11,2	8,7	28,0 %
ROW (MEA, CAN, SA)	2,4	2,3	5,7 %	6,1	4,9	25,1 %
Total	67,2	57,3	17,4 %	132,7	115,2	15,2 %
In Europe, 3. party products increased by 7.0 % despite the loss of the Medtronic agency. Own products increased with 38.0 % mainly driven by increased sales in UK and France. In the USA, growth in NOK in Q2 was driven by both volume growth and favorable currency. Currency neutral sales for the
quarter shows a 5.9 % increase. This is the best quarter ever achieved in the USA, and the growth is compared to the second best quarter ever, which was Q2 2015.
Both Asia/Japan and ROW are so far smaller sales territories for Medistim and quarterly performance varies significantly.		Sales in China drives the growth for both first and second quarter.

38.0 % mainly driven by increased sales in UK and France.
quarter shows a 5.9 % increase. This is the best quarter ever achieved in the USA, and the growth is compared to the second best quarter ever, which was Q2 2015.
Sales in China drives the growth for both first and second quarter.

Positive currency effects for Q2 with 3.9 MNOK and with 8.0 MNOK for H1. Average actual exchange rate for USD 8.45 and EUR 9.42 versus last year USD 7.73 and EUR 8.64.

Q2 revenue performance by product

Q2 revenue performance by product Mill NOK

	Q2 '16		Q2 '15	Q/Q	H1 2016	H1 2015	Y/Y
Procedures (USA)	20,3		17,9	13,5 %	40,8	33,3	22,5 %
Flow probes	17,6		15,0	17,6 %	34,8	28,8	20,9 %
Flow systems (VeriQ & MiraQ)	4,1		3,4	19,3 %	8,4	6,1	37,2 %
Imaging systems (VeriQ C & MiraQ)	3,9		2,1	85,6 %	9,8	6,8	45,0 %
Imaging probes	0,5		0,3	97,0 %	1,2	1,2	6,6 %
3rd party	19,5		18,2	7,0 %	35,9	38,0	-5,6 %
Other	1,3		0,4	231,7 %	1,7	1,0	63,1 %
Total revenues	67,2		57,3	17,4 %	132,6	115,2	15,1 %
• Procedure sale in the USA: the 1st • favorable currency. For the 1st • • 3rd • areas.		Flow procedures are at same level as last year and imaging procedures are up 31.4 % in Q2. For half flow procedures increased with 11.4 % while imaging procedures increased with 33.5 %. Flow probes revenue: Despite flat development in units for the quarter, growth is high due to higher level of direct sales and Flow systems: Strong flow system sales in Europe in Q2, we sold 7 more units compared to last year due to growth in UK and France with 5 units. The increase for the 1st Imaging systems and probes: Total units sold in Q2 was 7, up 4 units from last year. 4 sales to end-users contribute to drive growth in revenues; 2 capital sales in the US and 2 in Norway. Higher level of direct sales increases revenue for the 1st party products: Good performance despite the loss of the Medtronic agency. Strong development in all main product		half probe sales increased with 6.9 % in units. half is also driven by the positive development in UK and France.

the 1st half flow procedures increased with 11.4 % while imaging procedures increased with 33.5 %.
favorable currency. For the 1st half probe sales increased with 6.9 % in units.
France with 5 units. The increase for the 1st half is also driven by the positive development in UK and France.
growth in revenues; 2 capital sales in the US and 2 in Norway. Higher level of direct sales increases revenue for the 1st half.
areas.

4. Implementing the strategy

Growth opportunities – in developing Medistim markets

¹⁷ 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. 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 ^o Dedicated system (MiraQ Vascular) & probes ^o Build position with societies and KOLs
o Early adopter & KOL support
o REQUEST study
o Ease conversion from flow to imaging with MiraQ
1. Build and strengthen position in vascular surgery
1. Offer an entry-level solution to reach emerging, pricesensitive, high-growth markets

RESULTS H1 2016

Revenues up by 24.9 % in NOK
14.3 % growth in USD
Number of procedures up by 13.5 %
o 11.4 % growth in flow procedures
o 33.5 % growth in imaging procedures
o Q2 best quarter ever in the USA
9 completely new accounts

Growth opportunities – in strong Medistim markets

¹⁹ 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. 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 ^o Dedicated system (MiraQ Vascular) & probes ^o Build position with societies and KOLs
o Early adopter & KOL support
o REQUEST study
o Ease conversion from flow to imaging with MiraQ
1. Build and strengthen position in vascular surgery
1. Offer an entry-level solution to reach emerging, pricesensitive, high-growth markets

Medistim technologies gain reimbursement in Japan

Valid from 1 st April 2016, the Ministry of Health, Labour and Welfare in Japan approved a reimbursement of YEN 25,000 [EUR 225] when graft blood flow is controlled, using either transit time flow measurement or high-resolution epicardial ultrasonography intraoperatively value of Medistim's equipment and see the opportunity to
Number of CABG procedures in Japan is approx. 20.000 per year
Medistim equipment is used in 80 % of the procedures performed in Japan = STANDARD OF CARE
Expected to encourage conversion of flow customers to flow and imaging customers in Japan
Could lead other countries to acknowledge the clinical establish reimbursement to drive improved surgical quality and clinical outcomes in CABG and other vascular surgery

21 Medistim ASA Q2 2016 24.08.2016
20 largest share	holders (per 22. august 2016)
SHARE HOLDER	Number of shares per 22.08.16
INTERTRADE SHIPPING	3 850 000
SALVESEN & THAMS INV	1 862 500
STENSHAGEN INVEST AS	1 511 729
PROTECTOR FORSIKRING	1 196 498
SKAGEN VEKST	1 070 072
FOLLUM CAPITAL AS	1 000 000
HOLBERG NORDEN VERDIPAPIRFONDET	570 064
BUANES ASBJØRN JOHN	519 936
DYVI INVEST AS	446 154
GRANDEUR PEAK INTERN BROWN	420 559
BROTHERS HARRI VEVLEN GÅRD AS	393 959
VERDIPAPIRFONDET HAN NORGE	346 154
HOLMEN SPESIALFOND	300 000
HOLBERG NORGE VERDIPAPIRFONDET	280 130
Danske Invest Norge	250 000 210 583
The Bank of New York BNY MELLON BANK JULIUS BÄR & CO S/A CLIENTS	200 000
ASSETS ROSLAND BRIGT	189 378
Medistim ASA	186 000
The Northern Trust C RE IEDP AIF CL. NON	185 242
20 largest share holders total	14 988 958
Total number of shares outstanding	18 337 336 81,7 %

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