Demo Medical Devices Private & Public Sector

Devices – Public and Private Hospitals Sector (DPPHS)

Medical devices market review 2014 + forecasts 2015-2016

1. General part:

a) Foreword

b) Methodology

c) Macroeconomic trends

d) Major funding sources (federal programs), legislation initiatives

e) Sector financial results of 2012, 2013, 2014; forecasts 2015

f) Brief forecasts 2016-2020

Contents

2. Description per segments (see the list of segments – next slides):

a) Resume for 2012-2014

b) Structure 2014

c) Indicators 2014

d) Segment’s volume change in 2012-2014 + forecasts 2015-2016

e) Segmentation by product categories 2012-2014

f) Brief results of 2012

g) Brief results of 2013

h) Forecasts 2015-2016

i) Rate of demand, funding sources, major market players

j) Detailed data on product categories separately for 2014 and trends 2012-2014

k) Summary – trends per product categories

l) Key accounts segmentation

m) Market capacity, expectations

Contents

1. Operating Room Equipment & Medical Furniture

3. Anesthesiology, Reanimation, Neonatology

4. X-ray, CT, MRI

Anesthesia devices

Medical ventilators

Patient monitors

Resuscitation systems

Neonatal incubators

Ceiling- and wall-mounted pendants, climatizedmodules

Defibrillators

Infusion pumps

Other

MRI

CT

Interventional x-ray (iXr)

Mammography devices

Fixed and mobile diagnostic x-ray devices (dXr)

Dental x-ray

Other

Operating tables

Operating room lighting

Hospital beds

Hospital chairs

Other furniture

2. Ultrasound Diagnostics

Ultrasound diagnostics devices

Probes and accessories

Segments

6. Radiation Therapy & Nuclear Medicine

5. Functional Diagnostics

Linear accelerator

Gamma-therapy devices

Accessories (information management system, dosimetry equipment, fixation systems, etc.)

PET/CT

SPECT/CT

ECG Devices

Blood Pressure Monitoring

Holter ECG and Blood Pressure Monitoring

Neurology & Brain DIagnostics

ENT Diagnostics (ENT combines, Audiometers, Laryngoscopes, etc.)

Other

7. Sterilization & Disinfection

Sterilization Machines

Washing Disinfectors

Ultrasound Washing Machines

Utilization Devices

Other

Segments

8. Rehabilitation & Physiotherapy

Rehabilitation

Physiotherapy

Locomotor Therapy

Mechanotherapy

Balneology

Inhalation devices

Biomechanical Systems

Other

9. Endoscopy & Electrosurgery

Rigid endoscopy

Flexible endoscopy

Electro- and ultrasound surgery

Robotic endosurgery

Laser surgery

Other

Segments

Additional offers

Offer Price

Complete list of Distributors $100 / per segment

Complete list of major Accounts (federal, regional, municipal, privatefacilities)

$50 / per segment

Methodology

The numbers in the report are based upon customs import data

Customs import data is a multi-parameter database provided by Federal Customs Service(http://eng.customs.ru/)

The FCS database is one of two existing information sources (the second one is public auctions database)

As soon as all imported products are to be registered by customs the FCS database is a reliable sourceproviding 100% verified data

The customs data is being processed by professional MR specialists

All segments contain appropriate information regarding the numbers and structure

The figures in the report cannot be related to commercial data of companies, DST takes no responsibility forany commercial use of this report

http://eng.customs.ru/

DPPHS: results of 2012(chart: customs import value in US$)

OR equipment & medical furniture

Anesthesiology, reanimation, neonatology

X-ray, CT, MRI

Rehabilitation & physiotherapy

Sterilization & disinfection

Ultrasound diagnostics

Functional diagnostics

Endoscopy & electro surgery

Radiation therapy & nuclear medicine

4%

18%

32%

3%3%

14%

2%

12%

12%

DEMO

Segment Demand rate 2015 Forecast

2016 Forecast2012 2013 2014

Operating Room Equipment & Medical Furniture

$148,4 $126,6 $87,4 $88,0 $98,0

Anesthesiology, Reanimation, Neonatology

$625,6 $281,6 $177,2 $162,0 $188,0

X-Ray, CT, MRI $1076,8 $575,9 $392,7 $273,0 $340,0

Rehabilitation & Physiotherapy $102,1 $92,1 $66,0 $60,0 $80,0

Sterilization & Disinfection $100,1 $59,7 $66,9 $43,1 $51,1

Ultrasound Diagnostics (USD) $458,5 $270,9 $170,1 $120,0 $155,0

Functional Diagnostics $66,5 $68,9 $34,3 $31,5 $40,0

Endoscopy & Electro Surgery $392,7 $241,8 $176,2 $119,0 $146,5

Radiation Therapy & Nuclear Medicine

$421,3 $127,7 $149,1 $35,0 $118,0

DPPHS: overview 2012-2016(table: customs import value in US$ mlns)

DEMO

DPPHS: forecasts 2012-2020(chart: customs import value in US$ mlns)

$0.0

$500.0

$1,000.0

$1,500.0

$2,000.0

$2,500.0

$3,000.0

$3,500.0

$4,000.0

2012 2013 2014 2015 (frcst) 2016 (frcst) 2017 (frcst) 2018 (frcst) 2019 (frcst) 2020 (frcst)

DEMO

In scope:

» Operating tables

» Operating room lighting

» Hospital beds

» Hospital chairs

» Other furniture

» Other

CAGR for 2012 - 2014:

Operating tables - 36.8%

Operating room lighting - 43.2%

Hospital beds - 17.6%

Hospital chairs - 8.6%

Other furniture 7.6%

Other -

The product categories listed are combined in one segment due to a number of implications: perfectly matches the business structure of major Russian distributors, major manufacturers produce both OR equipment and medical furniture. Some smaller categories are not included in frame of this part. Other major product categories are presented in further segments.

Back to the list of segments

Structure

OR Equipment & Medical Furniture 2

DEMO

Segment volume in 2014:

» Cumulative reduction by 31.0% compared to 2013 (in US$)

» Reduction by 16.8% compared to 2013 (in Rubles)

» Segment’s total in customs import prices for 2014 - $87.4 mln

» Estimated segment’s total in final customer prices for 2014 - $150.0 mln

Reduction in demand largely affected the segment of OR equipment. OR equipment was affected both by demand slowdown and Ruble devaluation. Medical furniture demonstrated more stability during 2012-2014, slightly affected by Ruble devaluation.

valid.

valid.

valid.

estim.

Maquet10%

Vernipoll9%

Lojer8%

Merivaara7%

Hill-Rom6%

Armed6%

Schmitz3%

Linet3%

Trumpf3%

Others45%

valid.

Back to the list of segments

Indicators 2014

OR Equipment & Medical Furniture 3

DEMO

OR Equipment & Medical Furniture in 2012-2014

» In 2011-2013 the segment was a part of Healthcare Modernization program => considerable funding in 2012; the best year for OR equipment, operating tables & lights accounted for more than 50% of total segment

» OR equipment part reduced strongly in 2013 due to smaller number of new facilities launches and gradual reduction of purchases in frame of Healthcare Modernization; the same year medical furniture demonstrated moderate growth as a result of stronger demand in frame of Healthcare Modernization (medical furniture is considered to be secondary equipment and is financed on leftovers)

» Overall deep decline in 2014 was a result of significant Ruble devaluation and strong reduction of funding in frame of federal programs$0.0

$20,000.0

$40,000.0

$60,000.0

$80,000.0

$100,000.0

$120,000.0

$140,000.0

$160,000.0

2012 2013 2014 2015 2016

valid.

Segment’s volume change in 2012-2014 + forecasts 2015-2016 (chart: customs import value in US$ thds)

Back to the list of segments OR Equipment & Medical Furniture 4

DEMO

Operating tables22%

Operating lights11%

Hospital beds32%

Hospital chairs

9%

Other furniture & appliances

(incl. rehab, dental

furniture, stretchers)

26%

valid.

2014

Operating tables20%

Operating lights13%

Hospital beds41%

Hospital chairs

6%

Other furniture & appliances

(incl. rehab, dental

furniture, stretchers)

20%

valid.

2013

Segmentation by product categories(charts: customs import value in US$)


DEMO

» Total segment’s volume in customs import prices -$148.4 mln

» Estimated segment’s volume in final customer prices -$250.0 mln

» At least 1/3 of major manufacturers offer both operating tables and lighting

» Higher and Premium segment dominated in 2012 due to excessive funding provided in 2012 from federal budget in frame of Healthcare Modernization program

» OR equipment accounted for 51% of total segment in 2012

Major manufacturers in 2012

Maquet $15,041.4 -

Merivaara $13,410.3 -

Trumpf $11,348.3 -

KLS Martin $11,251.8 -

Hill-Rom $9,098.8 -

Lojer $7,076.7 -

Vernipoll $6,832.0 -

Schmitz $5,463.9 -

Armed $5,129.2 -

Others $63,750.6 -

valid.

estim.

estim.

Maquet10%

Merivaara9%

Trumpf8%

KLS Martin7%

Hill-Rom6%

Lojer5%

Vernipoll5%

Schmitz4%

Armed3%

Others43%

Segment volume in 2012(chart, table: customs import value in US$ thds)

valid.


DEMO

Forecasts 2015

» Based on assumption that macroeconomic situation is comparatively stable in 2015 expected volume will be => $88.0 mln

» Expected growth only by 0.7% in $ equivalent due to strongest Ruble devaluation in 2015

» The segment will grow by 52.2% in Ruble equivalent (attributable to the program of new 32 perinatal centers and new cardiac surgery centers and departments construction and launch across all regions of Russia)

Forecasts 2016

» Based on assumption that macroeconomic situation is improving in 2016 expected volume will be => $98.0 mln

» Expected growth by 11.4% in $ equivalent due to Ruble change positive effect

» The segment will drop by 13.6% in Ruble equivalent (the program of new 32 neonatal centers construction will continue through 2016, no additional programs)

Forecasts 2015-2016(customs import value in US$)


DEMO

Demand rate is comparatively stable

» No skyrocketing trends in the segment (even if the industry experiencing strong growth)

» Possible moderate growth/reduction as a reaction on the industry trends

» Basic for equipping of the OR units; medical furniture – hospital’s interior

Major financing sources:

» Healthcare Modernization program (2011-2013)

» Patient care improvement program for those injured in traffic accidents (2009-2014)

» 32 new perinatal centers (2015-2016)

» Regular purchases (not limited in period)

Rate of demand, funding


DEMO

Major players:

» Operating tables: Maquet, Trumpf, Mindray, Steris, Lojer, Merivaara

» Operating room lighting: KLS Martin, Mediland, Merivaara, Mindray

» Hospital beds: Hill-Rom, Vernipoll, Armed, Merivaara, Linet

» Hospital chairs: Digiterm, Lojer, Likamed, Borcad

» Other furniture & appliances: Vernipoll, Lojer, Merivaara, Dental Art

Major players


DEMO

Indicator Figure

Estimated total for 2014 $18.8 mln

Cumulative growth 2014/2012 -60.0%

Growth 2014/2013 -24.9%

Estimated CAGR for 2012-2014 -36.8%

Expected growth rate 2015/2014

$ 6-17%

R 60-77%

Expected total for 2015 – $20-22 mln. Expectedlimited growth due to severe Ruble devaluation. Strong growth of the segment in Rubles due to stronger federal funding

Started implementation of federal program 32 new perinatal centers launch and construction and launch of new cardiac surgery centers and departments

valid.

estim.

estim.

estim.

valid.Maquet37%

Trupmpf10%Mindray

9%

Lojer8%Steris

5%

Others31%

valid.

Operating tables in 2014(chart: customs import value in US$)


valid.

valid.

DEMO

2012 2013 2014

Maquet $13,006.7 $3,856.7 $6,965.4

Trupmpf $8,103.3 $6,138.6 $1,954.5

Mindray $1,267.7 $966.6 $1,657.5

Lojer $2,197.9 $2,085.5 $1,407.9

Steris $1,400.5 $758.9 $970.1

Medifa-Hesse

$4,310.6 $868.6 $794.3

Others $16,756.6 $10,337.9 $5,032.8

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2012 2013 2014

Others

Medifa-Hesse

Steris

Lojer

Mindray

Trupmpf

Maquet

valid.

$0.00

$15,000.00

$30,000.00

$45,000.00

$60,000.00

2012 2013 2014

Operating tables in 2012-2014(chart, table: customs import value in US$ thds)


DEMO

Stronger demand in the part of OR devices in 2012 was a result of active implementation of Healthcare Modernization program. Subsequent reduction that started in 2013 caused by shortage of funding and following reduction in demand from public hospitals. Expected growth that can start from 2015 can be fostered by additional federal funding in frame of federal programs (construction & launch of 32 new perinatal centers and construction & launch of cardiac surgery departments and centers across Russia)

$0.0

$5,000.0

$10,000.0

$15,000.0

$20,000.0

$25,000.0

$30,000.0

$35,000.0

$40,000.0

$45,000.0

$50,000.0

2012 2013 2014 2015 2016

Operating tables

Operating lights

CAGR 2012-2014

CAGR 2014-2016

forecasts

- 36,8%

8,2%

- 43,2%

14,6%

Trends per product groups in 2012-2014 + forecasts 2015-2016(chart: customs import value in US$ thds)


DEMO

Rank Clients categories Ownership Key products purchased

3 Regional Clinical Hospitals –multi-disciplinary (are located in Regional capitals and considered to be main healthcare facilities in frame of specific region)

Public Higher and mid price segments operating tables and lighting. Regional Clinical Hospitals receive substantial funding primarily from regional budget, also may receive major part of federal funding that is provided for all hospitals throughout the specific region. Overall funding of Regional Centers directly depends on gross regional revenue. Normally buy mid segment devices if use own funding. Sometimes can get federal funding and buy devices of higher price segment. Can have 3-10 OR units. Cumulative price of OR equipment set can vary within $1-3 mln per facility.Mid price furniture from Europe, Russia, China. In more than 50% cases tend to buy furniture from Russian manufacturers. Buy quality hospital beds or chairs from European, China manufacturers. Cumulative cost of hospital furniture can vary within $0.5-3 mln per facility.Regional Hospitals can use there own funding or receive target funding from Federal Budget

Key accounts segmentation


DEMO

Market capacity is generated by:

» Purchases of devices for new facilities

» Replacement of obsolete equipment

» Increasing the equipment fleet for existing facilities

» Purchases of OR devices and medical furniture for 32 new perinatal centers

» Purchases of OR devices for new cardiac surgery departments and centers

Total market capacity equals to $1,810.0 mln

» Operating tables – $400.0 mln

» Operating lights – $330.0 mln

» Hospital beds – $600.0 mln

» Hospital chairs – $140.0 mln

» Other furniture – $340.0 mln

Market capacity, expectations


DEMO

OR equipment & medical furniture is considered to be ‘basic’. An average demand/capacity rate is estimated at 6-7%

The market capacity rate will grow by 3-4% in 2015-2017 (new equipment for 32 new perinatal centers and cardiac surgery departments, other private and public facilities)

Expected significant demand increase in 2018-2020 as a result of growing necessity of replacing the obsolete equipment in federal and regional facilities

Market demand will increase moderately in 2015-2017 due to implementation of federal program construction and launch of 32 new perinatal centers. Stronger growth in 2019-2020 as a result of more launches of new federal facilities and growing necessity of replacing the obsolete devices.

Market capacity, expectations


estim.

estim.

DEMO

Documents

Demo Medical Devices Private & Public Sector