PRO MEDICUS LIMITED — AGM Information 2018

Nov 19, 2018

Chairman's Address AGM November 2018

CHAIRMAN'S REPORT

Overview

The Board has continued to follow its strategic plans which have provided the company with significant growth and improved profitability during the last financial year. Each of our businesses in our main markets (Australia, Europe and North America) contributed strongly to the result.

The group continues to invest in our best of breed suite of innovative products - to maintain market leadership, which we believe, is fundamental to your company's success.

The global management team has remained constant throughout the year and the Board is confident that they can continue to deliver long term sustainable financial results given the appropriate strategies.

In late August of this year the Board held a two-day strategy meeting attended by all members of the global leadership team. With the core principles of our strategy intact we focused on developing trends within our existing markets and how best we could position the company for emerging future opportunities. These include conducting research and developing innovative solutions with some of our prestigious clients. In September the group appointed an experienced researcher to lead our efforts in this area. We are also in the process of further developing our capacity in the artificial intelligence (AI) space.

During the year we announced several new contracts including Yale New Haven Health and Visage Open Archive to Mercy Health, in North America as well as the expansion of our relationship with I-MED Radiology Network in Australia. Each of these will contribute to our future revenues.

The group remains in an excellent position to continue to capitalise on the increasing global and local opportunities that present themselves. The management team is working on a number of new opportunities and our pipeline is greater than it has ever been.

Financial Results

The financial results for the 2018 financial year recorded another healthy increase in net profit after tax (2018 $12.744 million: 2017 $9.321 million or 36.7%). This result was another record for the company and just reward for maintaining our strategic focus and has been achieved after making the necessary ongoing investments for future growth. The underlying profit for the year of $12.567million after tax was up 27.4% on the previous year.

As I foreshadowed last year the Board has taken steps to mitigate the impact of currency fluctuations and this resulted in a positive result for the year, after taking into account the cost of hedging the company's exposure.

The Company continued to be cash flow positive with retained cash increasing from $23 million to nearly $25 million after paying an increased dividend.

The Board anticipates another strong year with the majority of growth occurring in the second half of the financial year. Results to date are tracking in line with our expectations and are slightly ahead of budget. Many of our previously announced contracts are progressively contributing to our revenues and we expect this trend to continue as the year unfolds.

Dividend Policy

The Board was pleased to increase dividend payments for the 2018 financial year to 6 cents per share fully franked. This represents an increase of 50% over the previous year and a payout ratio of just below 50%. The dividends were fully funded from the company's internally generated cash flow.

The Board anticipates that future dividends will be fully franked. The Board will continue to determine an appropriate level of dividends having regard to the profitability of the business, its need for ongoing investment and the necessity to retain sufficient funds to pursue other growth opportunities.

Closing

In closing, on your behalf, I would like to thank all of our dedicated staff in Australia, North America and Europe for their contribution to the company during what has been another very positive year. I would also like to thank my fellow Directors who have also worked tirelessly and diligently to ensure that the company reaches its ultimate goals.

CEO Presentation AGM November 2018

Pro Medicus (ASX:PME)

Healthcare IT company specialising in Enterprise Medical Imaging and radiology information system (RIS) software.

Leading edge products, growing presence globally.

Over 40 Software Engineers

Global Management Structure

Malte Westerhoff – Chief Technology Officer

Sean Lambright - Head of Sales

Brad Levin – Head of Marketing

Teresa Gschwind – Head of Services

FY18 in review

• November 2017 $18M Yale New Haven contract
• May 2018 I-MED renewal and extension contract
• May 2018 Mayo Rochester go live
• June 2018 $15M Mercy Open archive deal
• US implementations on/ahead of schedule
• Visage RIS increased market lead
• Pipeline continues to grow strongly

FY2018 Highlights - Financial Results

Financial Highlights	FY2017	FY2018	% YoY
Revenue ($M)	31.60	36.00	14%
Profit before tax ($M)	13.41	17.37	30%
NPAT ($M)	9.32	12.74	37%
Cash ($M)	22.78	25.24	11%
EPS (cps)	9.1	12.4	36%
DPS (cps)	4.0	6.0	50%

Growth in North American business Positive free cash flow in FY2018

Operational (Transaction) Model

• Used in vast majority of US contracts
• Delivered as SaaS model
• Now used in RIS contracts in Australia
• Model based on guaranteed transaction minimums
• Forward revenue > A$135M/5 years*
• Upside as client examination volumes grow
• Annuity style revenue stream greater predictability

* Assumes the majority of key contracts up for renewal in years 4 and 5 are renewed

FY- 18 Full Year Revenue Split

High Operating Leverage

• Highly scalable offering
• No capex (HW) SW only model
• Training & Installation charged as professional services
• Relatively fixed cost base
• Margin continues to grow as footprint increases

Margin Expansion

Visage RIS

$\leftrightarrow$$\Box$Visage RIS - Dr R Simpson (rsna) visage2 (2) @ Visage General Hospital (ris.promed.com.au)$\times$
RECEPTIONTECHNOLOGISTDOCTOR TRANSCRIPTIONIST SEARCHOFFICECLAIMING SETUP			Recent $ \bullet $ Dr R Simpson $ \bullet $ $\Diamond$ $ \bullet $
AppointmentsRequested ArrivalBilling Banking
RegionNorthernBookVisage General Hospitall vil	1 Tue, 17-Oct-2017 ▶		ResetSTART$1 \quad 2$
Visage US Room 1 vVisage $CT \mid \mathbf{v} \mid$Visage X-ray $\vert \blacktriangledown$	Visage US Room 2 $\blacktriangledown$	Visage US Room $3 \mid \text{v}$rsnrs	Visage Mammo v
7070	70	7070	70
$\rightarrow$ @ 0 & 11 Tue, 17-Oct-2017 ▶ ■ ■ ■ ■ 1◀ Tue, 17-Oct-2017◀ Tue, 17-Oct-2017	$\rightarrow$ @ 0 & 1◆ Tue, 17-Oct-2017 ▶ ■ごら 0	1 Tue, 17-Oct-2017 ▶ ■ ■ ■ ● 0	1 Tue, 17-Oct-2017 ▶ 11 【 2】 ● 0
08:30 AM08:30 AM08:00 AM	TEST, Mr Roger: U08:30 AM$\bullet$	08:30 AM	09:00 AM
Test 43.607Blocked08:45 AM09:00 AM08:15 AM	09:00 AM	08:50 AM	09:15 AM
09:30 AM08:30 AM09:00 AM09:15 AM10:00 AM08:45 AM	09:30 AM10:00 AM	09:10 AM09:30 AMUrgent	09:30 AM09:45 AM
$\mathbf{P}$SMITH, Mr John: C09:30 AM10:30 AM09:00 AM	10:30 AM	09:50 AMUrgent	10:00 AM
Blocked11:00 AM09:15 AM09:45 AM	11:00 AM	10:10 AMUrgent	10:15 AM
11:30 AM10:00 AM09:30 AM	11:30 AM	10:30 AMUrgent	10:30 AM
10:15 AM12:00 PMLunch09:45 AM	12:00 PM	10:50 AMUrgent	10:45 AM
12:30 PM10:00 AM10:30 AMLunch	12:30 PM	11:10 AMUrgent	11:00 AM
Blocked10:45 AM01:00 PM10:15 AM	01:00 PM	11:30 AM	11:15 AM
11:00 AM01:30 PM10:30 AMNon Contrast	Edit Appointment	$\leftrightarrow$	$\Box$$\times$$-$
11:15 AM02:00 PM10:45 AM11:30 AM02:30 PM11:00 AM			Lunch
Blocked11:45 AM03:00 PM11:15 AM	APPOINTMENTMr John SMITHO	FOLIO 10.645	ACCESSION 10.1270Lunch
11:30 AM12:00 PM03:30 PM	Tue, 17-Oct-2017	Male 05-Oct-1977 (40y) • H: (03) 1212-1211 Visage General Hospital Visage	Lunch
11:45 AM04:00 PM12:15 PM	10:30 AM - 11:00 AM	450 Swan Stree J. Dr Doogie Ho (03) 9800-1231 Appointment(s) $\triangleq$ Medium	Lunch$\overline{v}$
04:30 PM12:30 PM12:00 PM
$\bullet$ADAMS, Mrs ROSE12:45 PM12:15 PM
01:00 PM12:30 PM	▼ SUMMARY
01:15 PM12:45 PM	Patient SMITH, Mr John 10.645
01:30 PM01:00 PM01:15 PM01:45 PM	Born: 05-Oct-1977 (40y)	Referrer Dr Doogie Howser 0000000Y
02:00 PM01:30 PM	Male	Practice
01:45 PM02:15 PM	(03) 1212-1211	Address 23 Holywood lane ThePlace RICHMOND
02:30 PM02:00 PM	Address 450 Swan Street RICHMOND VIC 3121	VIC 3121 Australia
02:45 PM02:15 PM	View all details	Referral date 09-Oct-2017
02:30 PM03:00 PM		Referral period 12
03:15 PM02:45 PM
03:00 PM03:30 PM	Accession 10.1270
03:45 PM03:15 PM04:00 PM03:30 PM	Order Status Arrived (1/1)
04:15 PM03:45 PM	п		Ы
04:30 PM04:00 PM
04:45 PM04:15 PM		$S$ ave	Cancel
04:30 PM
04:45 PM

Visage RIS – I-MED

• 5 year renewal of existing contract
• Extension of contract to include I-MED Queensland and Regional Imaging practices
• Additional revenue $1.4M pa once fully deployed
• One of the largest RIS installations worldwide
• Growing via acquisition

Visage RIS

• Long term (5 year) contracts with Primary Healthcare and I-MED, the 2 biggest radiology providers in Australia
• Combined additional revenue of $4.4M pa once fully deployed
• Rollouts progressing well
• Potential upside via organic and M&A growth
• Repositions PME as undisputed market leader

Leading Edge Product Set – Visage Imaging Still Number 1 in Speed, Functionality, Scalability

North American market

• PACS market estimated at > US$2 billion pa and growing
• Expanding into Enterprise Imaging
• Paradigm shift to "deconstructed PACS" best in breed approach
• Market fragmented in process of consolidating
• Visage 7.0 proven, market leading technology
• Company ideally positioned

Massive data explosion

• Higher image density CT leaps from 64 slices to 256 and now 640
• 3.0T MRI much larger dataset than 1.5T
• Functional Imaging e.g. PET scan often > 1.5 to 2 gigabytes
• Digital Breast Tomosynthesis (DBT) files can be over 4 to 6 gigabytes
• Prior examinations multiply the problem

Electronic Medical Record (EMR)

• Mandated in US Hospitals by end of 2018
• Consolidates all hospital data clinical and financial
• 90% of EHR is imaging data (by volume)
• Need all imaging data in one repository
• Driving adoption of VNA
• Need for a single Viewer for all images

Solution - Visage 7.0 Streaming Technology

Fast Track Implementation

• All implementations on or ahead of schedule
• Fast track methodology continues to deliver
• Large scale projects completed in under 1/4 the time of industry norm
• Delivers huge savings for client
• Frees PME staff for other jobs
• Reduces barrier to change
• A key differentiator of Visage offering

Visage - Proven RoI

• Significant IT and infrastructure savings
• Increased equipment utilisation CT thin slice – no reformatting.
• Unparalleled increase in radiologist efficiency
• Greater clinical accuracy
• Improved physician engagement
• Delivers superior value proposition

Visage – Case Study

• Child presents with severe headaches
• CT shows multiple aneurysms requiring emergency interventional surgery
• No time to wait for lengthy technologist or 3D lab postprocessing
• MRA/MRV performed on-the-fly by Visage

Visage - Proven RoI - Clinical

Visage – Case Study

• Radiologist able to "walk through the interventional surgery" in advance
• Saved precious time (estimated at tens of minutes)
• Increased the quality and speed of the surgical planning
• Interventional radiologist commenting on the contributions of Visage 7 to his work; "Visage 7 was priceless"

Visage - Proven RoI - Clinical

Current Prior

Fused Image

Fused Subtraction showing intracranial bleed

CT Volume Growth at Visage Customer Reading "Thins"

Visage - Proven RoI

• Acquisition protocols thin slice since Visage 7 golive
• Techs quicker no modality-based reformats
• CT volume increased 23% since go live
• No change in staffing (radiologists or technologists)
• No change in modality (CT Scanner) count
• Techs spend more time with patients

Visage - Proven RoI - Financial

Radiologist Productivity and Turn-Around Time Data Analytics

STAT exams – 30.4% Radiologist turn-around-time improvement (Enterprise)

Visage - Proven RoI - Financial

Visage - Proven RoI – Radiologist

• Unparalleled increase in radiologist productivity.
• Greater clinical accuracy
• Improvements of 20% or more
• Results in better less stressful radiologist work environment
• Delivers very significant financial benefits

Marketing - North America

• Building on the success of RSNA 2017
• Larger more prominent stand
• Record number of pre booked meetings
• Visage to showcase latest product release and AI offerings

US Pipeline

• Pipeline robust in terms of quality and quantity of opportunities
• Increasing number of opportunities coming to market
• Network effect from recent high profile wins
• Prospects at various stages of cycle

Growth Strategy

• Transaction growth from existing clients
• Expand current footprint new clients
• New product offerings for existing clients
• Extend to other geographical markets
• Leverage R&D capability to introduce next generation products

New products – Visage 7 Open Archive

• Same highly scalable enterprise imaging platform used in Visage 7
• Modular design interoperable in complex environments
• Enables Visage to offer choice of deconstructed or single vendor solutions
• Well placed for the North American archive market

Visage 7 Open Archive - Mercy

• $15M – 7 year deal

• Mercy to standardise on Visage 7 Open Archive across its diagnostic imaging business
• Transaction-based model with potential upside
• Over 25 million diagnostic imaging exams to be migrated
• Once completed one of the largest medical imaging archives in North America

New products - Enterprise Imaging

• Single viewer for all images in the medical record (EMR)
• Radiology/Cardiology (DICOM format)
• Other "Ologies" –neurology, ophthalmology etc
• Non radiology reflected light hi res photos & video
• Visage technology ideally suited
• Increases Visage value proposition
• Growth opportunity within existing contracts

Image courtesy of Gray Consulting

Enterprise Imaging

Artificial Intelligence (AI)

• Healthcare imaging ideally suited to AI
• Visage well positioned to take advantage of this emerging technology
• Advanced image processing in healthcare is "in our DNA"
• Visage architecture uses GPU technology
• Growing academic/research focused client base

Visage 7 AI

Malte Westerhoff – Chief Technology Officer

Detlev Stalling – Head of Research & Development

Ming De Lin – Clinical Research Manager North America

Visage 7 AI

• "In product" AI automate high end functions within Visage 7
• Visage 7 AI single visualization platform for both clinical and research environments
• Visage 7 AI Open platform enables integration of 3rd party algorithms
• Platform for possible future Visage created algorithms

Summary

• Unique market position
• Leading edge technology
• Proven implementation & support capability
• Delivers measureable financial benefits
• Meaningful improvement in clinical outcomes
• Unparalleled value proposition
• New products Enterprise Imaging & Open archive
• Leveraging R&D/Research capability AI/Deep Learning

Thank you AGM November 2018