Chairman’s AddressAGM

November 2018

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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.

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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.

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CEO PresentationAGM

November 2018

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Pro Medicus (ASX:PME)

EU Headquarters / R&DBerlin, Germany

US HeadquartersSan Diego, CA

Group HeadquartersMelbourne

Healthcare IT company specialising in Enterprise

Medical Imaging and radiology information system

(RIS) software.

Leading edge products, growing presence globally.

Over 40 Software Engineers

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Global Management Structure

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Malte Westerhoff – Chief Technology Officer

Sean Lambright - Head of Sales

Brad Levin – Head of Marketing

Teresa Gschwind – Head of Services

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PME

Pro Medicus.netVisage RIS

Visage 7 *Product Suite OEM

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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

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FY2018 Highlights - Financial Results

Growth in North American business Positive free cash flow in FY2018

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%

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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

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$1,370,000 $3,894,000

$11,951,000

$14,878,000

$18,286,000

$10,980,000

$9,359,000

$9,991,000

$10,118,000

$10,858,000

$1,694,000 $2,427,000

$1,890,000

$224,000

$1,810,000

$3,689,000

$6,601,000

$6,817,000

$-

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

$40,000,000

FY14 FY15 FY16 FY17 FY18

Actual Actual Actual Actual Actual

FY- 18 Full Year Revenue Split

Exam/licence revenue*** Support/baseline revenue*** Capital revenue Professional Services

***Recurring revenue

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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

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Margin Expansion

0

10

20

30

40

50

60

FY-14 FY-15 FY-16 FY-17 FY-18

EBIT Margins

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Visage RISF

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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

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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

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

Functionality, Scalability15

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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

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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

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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

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Solution - Visage 7.0 Streaming Technology19

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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

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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 propositionFor

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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 post-

processing

• MRA/MRV performed on-the-fly by Visage

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Visage - Proven RoI - Clinical

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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"

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Visage - Proven RoI - Clinical

Current Prior

Fused Image

Fused Subtraction showing

intracranial bleed

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CT Volume Growth at Visage Customer Reading “Thins"

Visage - Proven RoIF

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• Acquisition protocols thin slice since Visage 7 go-

live

• 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 RoIF

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Visage - Proven RoI - Financial

Radiologist Productivity and Turn-Around Time Data

Analytics

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

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Visage - Proven RoI - Financial

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• 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

Visage - Proven RoI – Radiologist

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Marketing - North America

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• 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

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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

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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

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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

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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

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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

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Image courtesy of Gray Consulting

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Enterprise Imaging39

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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

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Visage 7 AI- 41

Malte Westerhoff – Chief Technology

Officer

Ming De Lin – Clinical Research

Manager North America

Detlev Stalling – Head of Research &

Development

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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

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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

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Thank youAGM

November 2018

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