medical devices market research russia 2012-2014
TRANSCRIPT
Devices – Public and Private Hospitals Sector (DPPHS)
Medical devices market review 2014 + forecasts 2015-2016
The information in this pdf file is subject to DST Company’s full copyright and entitlements as defined and protected by international and Russian law.
The contents of the file are for the sole use of the addressee. All content in this file is owned and operated by DST Company, and the copying or distribution of this file, internally or externally, is strictly prohibited without the prior written permission and consent of DST Company.
If you wish to distribute the file or start any other distribution programs on behalf of the DST Company, please email to [email protected]
Important notice
All information contained in this publication has been researched and compiled from sources believed to be accurate and reliable at the time of publishing.
However, in view of the natural scope for human and/or mechanical error, either at source or during production, DST Company accepts no liability whatsoever for any loss or damage resulting from errors, inaccuracies or omissions affecting any part of the publication.
All information is provided without warranty, and DST Company makes no representation of warranty of any kind as to the accuracy or completeness of any information hereto contained.
Disclaimer
The year 2014 was quite challenging for the Russian economy. International sanctions against Russian state-controlled and private companies, including major banks, were imposed during the year. At the same time, the price of Urals crude oil, the main Russian export commodity, has declined more than twofold over the year. The combination of these factors caused significant depreciation of the Russian ruble versus the US dollar, Euro and other currencies.
An increase in inflation and a negative GDP growth rate forecast for 2015. Additionally, the Russian Central Bank decided in December 2014 to increase its key lending rate from 10.5% to 17% (reduced to 15% in January 2015, to 14% in March 2015 and to 11,5% currently), causing a sharp rise in ruble borrowing costs to levels unviable for most corporate and private borrowers.
Foreword
Russian market of medical devices and disposables is not similar to majority of healthcare markets in Europe, North America or any other developed countries. It is financed from the Government budget by more than 80%.
Heavy reliance on Government funding in fact leads to strongest demand rate fluctuations that took place during 2012-2014.
Total volume of purchases that can be referred to hospitals sector (public and private) may vary within.$3-9 bln, it depends on macroeconomic situation and financing available for medical devices and disposables in the federal budget (e. g. this number in 2012 was over $8.1 bln) (in customs import prices)
Foreword
The classification of medical devices provided in the report is in line with the business approach and official structure of costs that is applied in the majority of public and private hospitals
In scope:
» All major segments range of devices purchased by hospitals for the purpose of medical care delivery to patients
» Not all segments are covered, please see covered segments in the slide hereinafter
Out of scope:
» Medical disposables segments
» Private sector of medical care services
» Public sector of medical care services
» Pharmaceutical sector (hospitals, distribution, drug stores)
Foreword
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
Methodology
Minimal inaccuracies are possible due to the fact that the FCS database contains errors, we fixed the most of these in our report
In the report we will use a special indication that is supposed to let you know about the degree of accuracy related to the data provided:
» You will see if the data provided is composed of calculated and verified numbers. In relation to this report the specified type of data will be taken directly from customs import database without any adjustment and assessment
» You will see if the data provided is an assessment. But still this type of data is calculated based on calculated and verified numbers.
We mainly used Russian Hospitals methodology to compose segments and product categories
This type of segmentation is most common for public tenders
valid.
estim.
Two indicators that will be given in the report are demand and capacity
Demand (in $) is a volume of yearly purchases. The figure includes some part of potential customers who make purchases during the given period
Capacity (in $) is a hypothetical volume of purchases made by all hospitals that can satisfy their demand by 100%. Also can be referred as maximum potential demand
Segments of medical devices can be roughly divided into two groups: ‘basic’ equipment and ‘high-technology’ equipment.
‘Basic’ equipment
» Includes all types of relatively simple devices that are essential for each hospital’s operations (e. g. sterilization and disinfection, medical furniture, functional diagnostics, etc.)
» Hospitals do not tend to upgrade it as often as they do in case of ‘high-technology’ equipment
» The rate of demand is not volatile => in case of stronger funding we have slight growth, and slight reduction in case of weaker funding
Methodology
‘High-technology‘ equipment
» Includes those types of devices that are technologically more sophisticated (e. g. ultrasound devices, endoscopy and electro surgery, x-ray visualization, anesthesiology and reanimation, etc.)
» Hospitals tend to upgrade it as soon as new technologies appear
» The rate of demand is highly volatile => we have sky-rocketing growth in case of stronger funding and dramatic slump in case of weaker funding
Demand/capacity rate is a ratio between average yearly demand and total capacity. We can assess market segments when applying this ratio.
Higher demand/capacity rate will be typical for ‘high-technology’ segments. Thus we can recognize the segments that are considered to grow faster during the period of stronger funding
Lower demand/capacity rate will be typical for ‘basic’ segments. These segments will not grow substantially in case of stronger funding
Methodology
In our report we will use a ranking of major accounts (hospitals) that is applied in many official documents and by themajority of other stakeholders.
Rank Category of account Coverage Description
1
Federal State Budget Hospitals
Federal facilities covering the entire Russian territory
Coverage: all citizens of RussiaSpecialization: particular area of specialization (oncology, ophthalmology, Cardiac Surgery, etc.)Location: Moscow, Saint-Petersburg, regional centers
2Moscow and Saint-Petersburg City Clinical Hospitals
Major facilities covering Moscow and Saint-Petersburg
Coverage: all citizens of Moscow/Saint-PetersburgSpecialization: multi-disciplinaryLocation: Moscow, Saint-Petersburg
3
Regional Clinical Hospitals
Major facilities located in regional centers covering definite region of Russia
Coverage: all citizens of particular region of Russia (Bashkortostan, Lipetsk region, etc.)Specialization: multi-disciplinaryLocation: regional centers (Kazan, Kursk, Ufa, etc.)
4Regional Perinatal Centers
Major facilities located in regional centers covering definite region of Russia
Coverage: all citizens of particular region of RussiaSpecialization: neonatology, obstetrics, gynecology, etc.Location: regional centers
Methodology: key accounts segmentation
Rank Category of account Coverage Description
5
Local City Hospitals Facilities located in cities (not regional centers) with population of > 50 thds.
Coverage: the citizens of particular city district (not covering the entire city)Specialization: multi-disciplinaryLocation: relatively large cities in frame of particular regions of Russia (Naberezhnye Chelny – Tatarstan, Orsk – Orenburg region, etc.)
6
Local Municipal Hospitals
Facilities located in towns with population < 50 thds.
Coverage: all citizens of particular townSpecialization: multi-disciplinary (not obligatory covering all diagnostic and treatment methods due to lack of required equipment)Location: small towns in frame of particular regions of Russia
7
Private Hospitals All types of private facilities across Russia
Coverage: any citizens across Russia that can reach the particular hospital (mainly located nearby)Specialization: multi-disciplinary (in most cases) or particular area of specializationLocation: all larger cities across Russia (more than 60% of private facilities are located in Moscow and Saint-Petersburg
Methodology: key accounts segmentation
As it was mentioned above major funds for medical devices and disposables come from Government sources. This type of funding can account for 80-85% of the total funding (private + public).
In 2015 the Government started a program of foreign manufacturing localization on the territory of Russia. Still the early results of this new program are expected to appear only in 2018-2020. It means that in the short run the Russian sector of medical devices and disposables is heavily dependent on imports.
Every year the Government approves funding for healthcare sector. The funding is calculated in Rubles; the funding for 2015 was approved in the end of 2014; budgets approved did not consider the changes that emerged due to Ruble devaluation and overall macroeconomic deterioration.
Important to start forecasting from funding in Rubles
As a result we have a double reduction of funding in 2015:
Partly due to suspend of funding related to federal programs Oncology, Patient care improvement for those injured in traffic accidents, Blood banking development
Partly due to Ruble devaluation that was not taken into account when recalculating the amount of required funding from federal and regional budgets
In fact one can conclude that total market demand can be slightly higher calculated in rubles and reduced by 30-40% calculated in US dollars.
Local currency ratio is a significant factor that can strongly influence the volume of funding counted in dollars
Normally it means that funding approved in rubles won’t be reassessed even in case of ruble slumping by more than 50%. In fact hospitals will have to buy cheaper devices and disposables or refuse to make a part of pre-planned purchases
In Q4 2014 – Q1 2015 Russian currency was hit by foreign sanctions and drop in oil prices. It resulted in the ruble devaluation by 80-90% compared to the $.
Here below are listed some currency ratios. Dramatic fall started in Q4 2014.
Period Average ratio $1/rubles
Year 2012 (validated)* $1 = 31.09 R
Year 2013 (validated)* $1 = 31.84 R
Year 2014 (validated)* $1 = 38.38 R
Year 2015 (forecasts) $1 = 58.00 R
*Source: Central Bank of Russia official data
Devaluation of local currency (Ruble)
* - official rate of Central Bank of Russia
Purchases of a wide range of medical devices in accordance with the public hospitals demand (first of all meaning the devices of higher price level – CTs, MRIs, USD Diagnostics, Medical ventilators, Anesthesia devices, etc.)
The list of required devices and quantity is provided in frame of specific resolutions issued by the Government
Valid: 2011-2013
Total funding: over $15 bln in three years => $5 bln/year on average
Major segments: X-ray, CT, MRI; Ultrasound diagnostics; Anesthesiology, Reanimation, Neonatology; Endoscopy and Electro Surgery
Funding in frame of Program led to CAGR over 30% in 2011-2012
Contributors:
» Federal Budget (applicable to funding of Federal Hospitals regular purchases and mass purchases of Regional and Local Hospitals)
» Regional Budgets (applicable to funding of Regional and Local Hospitals regular purchases)
Healthcare Modernization Program: 2011-2013
Purchases of specialized medical devices for cancer treatment. Includes: Linear accelerators and accessories, CT and MRI scanners, IORT devices, Endoscopy racks, In-vitro diagnostics (pathomorphology equipment set), etc.
The list of required devices and quantity is provided in frame of “improvement of healthcare provided to cancer patients” resolution issued by the Government
Normally Regional Authority releases a tender (or a series of tenders) that includes the list of required devices
Valid: 2009-2014
Total funding: over $1,5 bln in six years => $250 mln/year on average
Major segments: Radiation Therapy; X-ray, CT, MRI; Endoscopy and Electro Surgery; In-Vitro Diagnostics; Anesthesiology, Reanimation, Neonatology; US Diagnostics
Contributors:
» Federal Budget (over 70% of total funding)
» Regional Budgets (up to 30% of total funding – Regions are demanded to provide this funding in accordance with Government Resolution # 1164 last amended as of 04.09.2012)
Oncology program: 2009-2014
Purchases of specialized medical devices for diagnostic visualization and surgical operations. Includes: CT scanners, Diagnostic X-ray devices, Anesthesia devices, Medical ventilators, USD devices, OR equipment,Endoscopy racks, etc.
The list of required devices and quantity is provided in frame of “patient care improvement for those injured in traffic accidents” resolution issued by the Government
Normally Regional Authority releases a tender (or a series of tenders) that include the required devices
Valid: 2009-2014
Total funding: over $600 mln in five years => $120 mln/year on average
Major segments: X-ray, CT, MRI; Anesthesiology, Reanimation, Neonatology; Endoscopy and Electro Surgery; USD Diagnostics
Contributors:
» Federal Budget (over 70% of total funding)
» Regional Budgets (up to 30% of total funding)
Patient care improvement program for injured in traffic accidents: 2009-2014
Totally equipping of Hospital unit or entire Hospital (neonatal care center). Includes: Anesthesia devices, Medical ventilators, USD devices, OR equipment, Endoscopy racks, etc.
The list of required devices and quantity is provided in frame of “standard for patient care in the field of gynecology and obstetrics” resolution # 572 issued by the Government
Normally Regional Authority releases a series of tenders that include the required devices
Valid: 2015-2016
Total funding: over $1,3 bln in two years => $650 mln/year on average
Up to 40% of total budget (~$500 mln.) to be spent on medical devices
Major segments: Anesthesiology, Reanimation, Neonatology; Sterilization & Disinfection; Surgery Devices; Endoscopy and Electro Surgery; USD Diagnostics
Contributors:
» Federal Budget (over 70% of total funding)
» Regional Budgets (up to 30% of total funding)
Construction and launch of 32 new perinatal centers: 2015-2016
Generally applied scenario
» Projects funding is approved in frame of annual budget just before the 1st of January of the following year
» During the following year funds allocated to regional budget (normally it happens in the middle or end of the following year)
» Regional authorities prepare and launch a tender or a series of tenders (in most cases it happens when funds have already been transferred to regional budget)
» It is generally accepted to divide any new facility’s launch and construction into two phases: construction & interior finishing of facility and supply & installation of required medical devices. Normally these two phases are held in frame of separate tenders. Supply & installation of medical devices may be further divided based on functional area (OR equipment, anesthesiology & reanimation, etc.)
» The results of tenders are announced. Finally the contractors are chosen and subsequently the contract is being signed within 20 days after the results of tenders are announced.
» The contractors fulfill the part of the contract they are responsible for in terms and by conditions that were previously approved.
Funds projected in frame of federal
budget
State tender by Regional authorities
Construction & launch of new
facility/department
1
2
3
As of 5 February 2014 the new Government Resolution #102 came into effect.
The current version from official institution is provided here: http://www.imeda.ru/netcat_files/32/30/GOVERNMENT_RESOLUTION_ON_RESTRICTIONS_OF_ACCESS_FEB_5_2015_Eng.pdf
This new regulation affected the competitive positions of foreign manufacturers at the same time implementing protectionist policy in relation to Russian (+ Belarus, Kazajstan, Armenia) manufacturers.
In fact, the #102 Resolution gives an absolute advantage to Russian (+ Belarus, Kazajstan, Armenia) manufacturers in single product tenders:
In case at least two separate bids from different Russian (+ Belarus, Kazajstan, Armenia) manufacturers are accepted in frame of single product tender, all the bids from foreign manufactures (or their local partners) to be rejected immediately.
# 102 Resolution of the Government
Citing the regulation:
“To establish that, when procuring individual types of medical devices included in the List, the buyer shall reject all offers to supply medical devices originating from foreign countries, other than the Republic of Armenia, the Republic of Belarus, or the Republic of Kazakhstan, provided that at least two bids satisfying the requirements of procurement documentation have been submitted for the supplier selection process, which meet all of the following requirements:
contain offers to supply one or several types of medical devices included in the List, which originate from the Russian Federation, the Republic of Armenia, the Republic of Belarus, or the Republic of Kazakhstan;
do not contain offers to supply one and the same type of medical device from one manufacturer”
Please see the complete list of devices and consumables included in the #102 Resolution by using the link attached.
# 102 Resolution of the Government
Overall sector trends 2012-2014 and forecast 2015-2020
Total market volume of 9 listed segments – DPPHS amounted to $1,822.9 mln in 2013(customs import value)
Severe drop in demand in 2013 resulted in sector volume reduction by 45.9% in US$ equivalent (the same sector demand rate was $3,391.9 mln in 2012 (customs import value)
The negative effect of Ruble devaluation did not exceed 1-2%. Reduction by 44.6% in Ruble equivalent.
Most affected segments (losses in absolute numbers – customs import value):
» X-ray, CT, MRI (-$500.9 mln)
» Anesthesiology, reanimation, neonatology (-$344.3 mln)
» Radiation therapy & nuclear medicine (-$293.6 mln)
» Ultrasound diagnostics (-$187.5 mln)
DPPHS: results of 2013
DPPHS: results of 2012(chart: customs import value in US$)
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%
19%
32%
3%3%
14%
2%
11%
12%
DPPHS: results of 2013(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
7%
15%
32%
5%
3%
15%
4%
12%
7%
Total market volume of 9 listed segments – DPPHS amounted to $1,301.7 mln in 2014(customs import value)
Cumulative reduction in 2014 by 28.6% compared to 2013 in $ equivalent.
Negative impact of Ruble devaluation exceeded 14-15% in 2014. Reduction by 13.9% if calculated in Rubles
Most affected segments (losses in absolute numbers – customs import value):
» X-ray, CT, MRI (-$184.6 mln)
» Anesthesiology, reanimation, neonatology (-$102.8 mln)
» Ultrasound diagnostics (-$100.9 mln)
» Endoscopy & electro surgery (-$61.4 mln)
DPPHS: results of 2014
DPPHS: results of 2014(chart: customs import value in US$)
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
7%
14%
30%
5%
5%
13%
3%
12%
11%
Total market volume of DPPHS segment in 2015 can amount to $950.0 - $1,100.0 mln. Our basic scenario built upon the forecast of total demand - $959.1 mln (customs import value)
Due to complicated macroeconomic situation in Russia the Government decided to cut funding of major federal programs starting from 2015 (-$380.0 mln)
» Oncology Federal Program (radiation therapy devices, endoscopy & electro surgery, other devices)
» Patient Care Improvement for Injured in Traffic Accidents (OR equipment, CT, dXr, other devices)
» Blood Banking Development Federal Program (devices and consumables for storage, processing, transportation of donated blood)
Most affected segments in 2015 (forecasts in $):
» Radiation therapy & nuclear medicine (expected reduction by 70-80%)
» X-ray, CT, MRI (expected reduction by 25-35%)
» Endoscopy & electro surgery (expected reduction by 30-35%)
DPPHS: forecasts 2015
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 $373,6 $219,5 $158,1 $106,5 $132,5
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)
Cumulative reduction in 2014 compared to 2012 exceeded 61%. Major factors: demand oversaturation in some segments; drop in demand from public facilities (due to shortage of funding); Ruble devaluation
It is considered that 2015 can be a “bottom” for demand reduction trend
Recovery is supposed to start from 2016 following the expected Ruble revaluation and growing demand from public facilities attributable to necessity of replacing the obsolete equipment; private sector is expected to grow at least 5-10% annually
DPPHS: overview 2012-2016(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
$4,000.0
2012 2013 2014
DPPHS: major segments in absolute numbers 2012-2014(chart: customs import value in US$ mlns)
$0.0
$200.0
$400.0
$600.0
$800.0
$1,000.0
$1,200.0
Anesthesiology,reanimation,neonatology
X-ray, CT, MRI Ultrasound diagnostics Endoscopy & electrosurgery
Radiation therapy &nuclear medicine
2012
2013
2014
DPPHS: major segments in absolute numbers 2012-2014(chart: customs import value in US$ mlns)
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
$140.0
$160.0
OR equipment &medical furniture
Rehabilitation &physiotherapy
Sterilization &disinfection
Functional diagnostics
2012
2013
2014
DPPHS: forecasts 2012-2020(chart: customs import value in US$ 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)
Basic currency ratio (applied for this research): $1 = 58 RUR
Official CBR* currency ratio for Q1-Q3 equals to $1=59.02 RUR
(http://www.cbr.ru/statistics/print.aspx?file=credit_statistics/ex_rate_ind_15.htm&pid)
Expected AGR in US$ for 2015 equals to -26.3% largely due to Ruble devaluation:
» Total AGR for 2015 in Ruble equivalent will be 11.3%
» Total Ruble devaluation negative effect will be -37.6%
Total for 2015 - $959.1 mln
*CBR – the Central Bank of Russia
DPPHS: forecasts 2015
Estimated CAGR in US$ for 2015-2016 will be -4.6%
Basic currency ratio (applied for this research): $1 = 45 RUR
Expected AGR in US$ for 2016 equals to 23.5% largely due to Ruble devaluation:
» Total AGR for 2016 in Ruble equivalent will be -4.2%
» Total Ruble revaluation positive effect will be 27.7%
Total for 2016 - $1,184.9 mln
DPPHS: forecasts 2016
Estimated CAGR in US$ for 2015-2017 will be 4.9%
Basic currency ratio (applied for this research): $1 = 40 RUR
Expected AGR in US$ for 2017 equals to 27.0% largely due to growing demand:
» Total AGR for 2017 in Ruble equivalent will be 12.9%
» Total Ruble revaluation positive effect will be 14.1%
Total for 2017 - $1,504.4 mln
DPPHS: forecasts 2017
Estimated CAGR in US$ for 2015-2018 will be 9.2%
Basic currency ratio (applied for this research): $1 = 38 RUR
Expected AGR in US$ for 2018 equals to 23.2% largely due to growing demand:
» Total AGR for 2018 in Ruble equivalent will be 17.0%
» Total currency positive effect will be 6.2%
Total for 2018 - $1,852.8 mln
DPPHS: forecasts 2018
Estimated CAGR in US$ for 2015-2019 will be 12.5%
Basic currency ratio (applied for this research): $1 = 36 RUR
Expected AGR in US$ for 2019 equals to 26.7% largely due to Ruble devaluation:
» Total AGR for 2019 in Ruble equivalent will be 20.0%
» Total currency positive effect will be 6.7%
Total for 2019 - $2,346.9 mln
DPPHS: forecasts 2019
Estimated CAGR in US$ for 2015-2020 will be 14.5%
Basic currency ratio (applied for this research): $1 = 36 RUR
Expected AGR in US$ for 2020 equals to 25.0% largely due to Ruble devaluation:
» Total AGR for 2020 in Ruble equivalent will be 25.0%
» Total currency positive effect will be 0.0%
Total for 2020 - $2,933.6 mln
DPPHS: forecasts 2020
In the table above are provided calculated and forecasted growth rates yearly. We can see how different are growth trends in R and US$ equivalents due to R devaluation
Visual assessment shows you the effect of currency devaluation in 2014-2015 and expected subsequent recovery of Ruble value in 2015-2017
2012 2013 2014 2015 2016 2017 2018 2019 2020
R 35,0% -44,6% -13,9% 11,3% -4,2% 12,9% 17,0% 20,0% 25,0%
$ 34,0% -46,0% -28,6% -26,3% 23,5% 27,0% 23,2% 26,7% 25,0%
DPPHS: 2013-2020 growth/reduction rates yearly(calculated – 2013-2014; forecasted – 2015-2020)
$0.0
$500.0
$1,000.0
$1,500.0
$2,000.0
$2,500.0
$3,000.0
$3,500.0
$4,000.0
-60.0%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
2012 2013 2014 2015 2016 2017 2018 2019 2020
Annual GR in R Annual GR in US$ Demand in US$ mln
Market data per segments 2012-2016
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
OR Equipment & Medical Furniture
The segment is supposed to grow moderately in 2015-2016 due to construction and launch of 32 new perinatal centersand purchases related to other new public facilities, construction and launch of new cardiac centers and departments. OR devices and medical furniture are mostly purchased in frame of federal programs.
It is crucially to consider the rate of competition among local competitors in the segment of medical furniture: local manufacturers from Russia and Belarus control over 50% of lower- and average-price segments. The majority of local manufacturers is concentrated on producing general use appliances (cupboards, bollards, etc.)
Back to the list of segments
Resume
OR Equipment & Medical Furniture 1
Funding 2012-2014:
» Healthcare Modernization program – major source of investment for the part of OR equipment. The highest demand on OR devices occurred in 2011-2012. The highest demand on medical furniture (primarily on hospital beds) during the program implementation was in 2013 as a residual investment.
» Patient care improvement program for injured in traffic accidents – secondary investment source, provided annually more than $150 mln Normally 10-15% of this funding can be spent on operating tables & lights
Funding 2015-2016:
» 32 new Perinatal Centers 2015-2016 – primary investment source for the period of 2015-2017. The official timeline is set during 2015-2016; still the implementation can take at least half a year in 2017. In total the total cost of OR equipment can vary within $1-2 mln per center ≈ $30-60 mln in 2015-2017
» Construction and launch of cardiac centers – major investment source. Equipment for cardiovascular OR units incl. mainly operating tables and lights
» New launches and re-equipping – expected demand form newly launched public hospitals, re-equipping of OR units of existing hospitals
In scope:
» Operating tables
» Operating room lighting
» Hospital beds
» Hospital chairs
» Other furniture
» Other
CAGR for 2012 - 2014:
Operating tables - 36.8%
Operating room lighting - 43.2%
Hospital beds - 17.6%
Hospital chairs - 8.6%
Other furniture 7.6%
Other -
The product categories listed are combined in one segment due to a number of implications: perfectly matches the business structure of major Russian distributors, major manufacturers produce both OR equipment and medical furniture. Some smaller categories are not included in frame of this part. Other major product categories are presented in further segments.
Back to the list of segments
Structure
OR Equipment & Medical Furniture 2
Segment volume in 2014:
» Cumulative reduction by 31.0% compared to 2013 (in US$)
» 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
Surgery Devices 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
Surgery Devices in 2015-2016
» Federal program Patient care improvement to injured in traffic accidents suspended starting from 2015 (as a result of overall economic recovery)
» Stronger funding in 2015-2016 mainly due to construction and launch of new 32 neonatal care centers, the program will contribute strongly in growth of OR equipment purchases
» Apart from scheduled funding, there is an additional source. The 2015 is announced is announced the year for combating cardiovascular diseases. Highly expected that federal funding in frame of this initiative will be partly transferred to 2016
» Fewer federal facilities are to be launched in 2015-2016 => reduction of purchases from newly launched federal facilities
0.0 ₽
1,000.0 ₽
2,000.0 ₽
3,000.0 ₽
4,000.0 ₽
5,000.0 ₽
6,000.0 ₽
2012 2013 2014 2015 2016
valid.
Segment’s volume change in 2012-2014 + forecasts 2015-2016 (chart: customs import value in R mlns)
Back to the list of segments OR Equipment & Medical Furniture 5
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$)
Back to the list of segments OR Equipment & Medical Furniture 6
Operating tables32%
Operating lights21%
Hospital beds28%
Hospital chairs
6%
Other furniture & appliances
(incl. rehab, dental
furniture, stretchers)
13%
valid.
2014
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Other furniture &appliances
Hospital chairs
Hospital beds
Operating lights
Operating tables
valid.
Segmentation by product categories(charts: customs import value in US$)
Back to the list of segments OR Equipment & Medical Furniture 7
» 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.
Back to the list of segments OR Equipment & Medical Furniture 8
» Total segment’s volume in customs import prices -$126.6 mln
» Estimated segment’s volume in final customer prices -$215.0 mln
» Overall significant reduction; demand contraction in the part of OR equipment amid strong growth in the part of Medical Furniture
» Medical furniture accounted for 67% of total segment in 2013
Major manufacturers in 2013
Vernipoll $16,593.8
Merivaara $11,335.5
Armed $10,278.7
Hill-Rom $8,450.6
Trumpf $7,462.0
Maquet $5,550.2
Lojer $5,429.3
Schmitz $4,134.0
KLS Martin $3,467.8
Others $53,921.1 -
valid.
estim.
Vernipoll13%
Merivaara9%
Armed8%
Hill-Rom7%
Trumpf6%
Maquet4%
Lojer4%
Schmitz3%
KLS Martin3%
Others43%
valid.
Back to the list of segments OR Equipment & Medical Furniture 9
Segment volume in 2013(chart, table: customs import value in US$ thds)
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$)
Back to the list of segments OR Equipment & Medical Furniture 10
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
Back to the list of segments OR Equipment & Medical Furniture 11
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
Back to the list of segments OR Equipment & Medical Furniture 12
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 – $20-22 mln. Expectedlimited growth due to severe Ruble devaluation. Strong growth of the segment in Rubles due to stronger federal funding
Started implementation of federal program 32 new perinatal centers launch and construction and launch of new cardiac surgery centers and departments
valid.
estim.
estim.
estim.
valid.Maquet37%
Trupmpf10%Mindray
9%
Lojer8%Steris
5%
Others31%
valid.
Operating tables in 2014(chart: customs import value in US$)
Back to the list of segments OR Equipment & Medical Furniture 13
valid.
valid.
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)
Back to the list of segments OR Equipment & Medical Furniture 14
Indicator Figure
Estimated total for 2014 $9.9 mln
Cumulative growth 2014/2012 -67.8%
Growth 2014/2013 -39.5%
Estimated CAGR for 2012-2014 -43.2%
Expected growth rate 2015/2014
$ 1-11%
R 52-68%
Expected total for 2015 – $10-11 mln. Expectedlimited growth due to severe Ruble devaluation. Strong growth of the segment in Rubles due to stronger federal funding
Started implementation of federal programs 32 new perinatal centers launch and construction and new cardiac surgery centers and departments construction and launch
valid.
estim.
estim.
estim.
valid.
Berchtold24%
Maquet18%
KLS Martin14%
Trumpf6%
Draeger5%
Others33%
valid.
Operating lights in 2014(chart: customs import value in US$)
Back to the list of segments OR Equipment & Medical Furniture 15
valid.
valid.
2012 2013 2014
Berchtold $221.8 $1,497.9 $2,391.6
Maquet $2,034.7 $1,693.5 $1,748.8
KLS Martin $11,247.6 $3,467.8 $1,348.7
Trumpf $3,245.0 $1,323.4 $583.9
Draeger $1,151.0 $505.0 $538.2
Mediland $1,758.2 $542.1 $467.7
Merivaara $1,627.9 $1,284.0 $493.5
Others $9,411.4 $6,043.7 $2,324.8
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
Merivaara
Mediland
Draeger
Trumpf
KLS Martin
Maquet
Berchtold
valid.
$0.00
$10,000.00
$20,000.00
$30,000.00
$40,000.00
2012 2013 2014
Operating lights in 2012-2014(chart, table: customs import value in US$ thds)
Back to the list of segments OR Equipment & Medical Furniture 16
Indicator Figure
Estimated total for 2014 $28.3 mln .
Cumulative growth 2014/2012 -32.2%
Growth 2014/2013 -45.4%
Estimated CAGR for 2012-2014 -17.6%
Expected growth rate 2015/2014
$ -1-9%
R 49-65%
Expected total for 2015 – $10-11 mln. Expectedlimited growth or slight reduction due to severeRuble devaluation. Strong growth of the segment in Rubles due to stronger federal funding
Started implementation of federal program 32 new perinatal centers launch and construction, demand from federal facilities in frame of equipping/re-equipping
estim.
estim.
estim.
valid.
Hill-Rom19%
Vernipoll16%
Armed15%
Merivaara11%
Linet9%
Malvestio6%
Yguanbed (Baiqiang Medical)
5%
Others19%
valid.
valid.
valid.
valid.
Hospital beds in 2014(chart: customs import value in US$)
Back to the list of segments OR Equipment & Medical Furniture 17
2012 2013 2014
Hill-Rom $9,098.8 $8,450.6 $5,289.5
Vernipoll $5,385.0 $13,772.0 $4,645.3
Armed $4,311.0 $9,212.3 $4,344.7
Merivaara $3,565.1 $3,142.1 $3,035.2
Linet $3,558.7 $2,954.5 $2,608.8
Malvestio $3,345.9 $964.6 $1,603.9
Yguanbed $0.0 $1,577.0 $1,367.2
Others $12,522.0 $11,871.9 $5,447.2
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
Yguanbed
Malvestio
Linet
Merivaara
Armed
Vernipoll
Hill-Rom
valid.
$0.00
$20,000.00
$40,000.00
$60,000.00
2012 2013 2014
Hospital beds in 2012-2014(chart, table: customs import value in US$ thds)
Back to the list of segments OR Equipment & Medical Furniture 18
Indicator Figure
Estimated total for 2014 $8.0 mln
Cumulative growth 2014/2012 -16.4%
Growth 2014/2013 -4.4%
Estimated CAGR for 2012-2014 -8.6%
Expected growth rate 2015/2014
$ -12-0%
R 32-52%
Expected total for 2015 – $7-8 mln. Expected slight reduction due to severe Ruble devaluation. Strong growth of the segment in Rubles due expected growing demand from public and private facilities
Started implementation of federal program 32 new perinatal centers launch and construction
valid.
estim.
estim.
estim.
valid.
Digiterm23%
Lojer22%
Likamed16%
Borcad7%
Euroclinic7%
Others25%
valid.
Hospital chairs in 2014(chart: customs import value in US$)
Back to the list of segments OR Equipment & Medical Furniture 19
valid.
valid.
2012 2013 2014
Hill-Rom $9,098.8 $8,450.6 $5,289.5
Vernipoll $5,385.0 $13,772.0 $4,645.3
Armed $4,311.0 $9,212.3 $4,344.7
Merivaara $3,565.1 $3,142.1 $3,035.2
Linet $3,558.7 $2,954.5 $2,608.8
Malvestio $3,345.9 $964.6 $1,603.9
Yguanbed $0.0 $1,577.0 $1,367.2
Others $12,522.0 $11,871.9 $5,447.2
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
Yguanbed
Malvestio
Linet
Merivaara
Armed
Vernipoll
Hill-Rom
valid.
$0.00
$20,000.00
$40,000.00
$60,000.00
2012 2013 2014
Hospital chairs in 2012-2014(chart, table: customs import value in US$ thds)
Back to the list of segments OR Equipment & Medical Furniture 20
Indicator Figure
Estimated total for 2014 $22.4 mln
Cumulative growth 2014/2012 15.7%
Growth 2014/2013 -10.3%
Estimated CAGR for 2012-2014 7.6%
Expected growth rate 2015/2014
$ 2-16%
R 55-75%
Expected total for 2015 – $23-26 mln. Expectedlimited growth due to severe Ruble devaluation. Strong growth of the segment in Rubles due expected growing demand from public and private facilities
Started implementation of federal program 32 new perinatal centers launch and construction, launch of new federal facilities and private hospitals
valid.
estim.
estim.
estim.
valid.
Vernipoll15%
Lojer11%
Dental Art10%
Merivaara9%
Schmitz8%
Others47%
valid.
Other furniture in 2014(chart: customs import value in US$)
Back to the list of segments OR Equipment & Medical Furniture 21
valid.
valid.
2012 2013 2014
Vernipoll $1,447.0 $2,821.8 $3,317.2
Lojer $1,403.4 $1,468.9 $2,405.3
Dental Art $644.4 $435.5 $2,190.4
Merivaara $2,395.8 $2,851.3 $1,982.3
Schmitz $2,204.8 $2,444.5 $1,822.6
Others $11,264.2 $14,961.4 $10,684.4
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
Euroclinic
Borcad
Likamed
Lojer
Digiterm
valid.
$0.00
$10,000.00
$20,000.00
$30,000.00
2012 2013 2014
Other furniture in 2012-2014(chart, table: customs import value in US$ thds)
Back to the list of segments OR Equipment & Medical Furniture 22
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)
Back to the list of segments OR Equipment & Medical Furniture 23
Relatively weak demand reduction in 2012-2014 display some peculiarities associated with the part of medical furniture. Medical furniture is in great demand both in public and private sector; during 2012-2014 the segment was not part of any federal program. Demand reduction can attributed to overall macroeconomic deterioration. Expected slight growth in 2015-2016 amid Ruble devaluation due to launch of 32 new perinatal centers and some federal facilities.
$0.0
$10,000.0
$20,000.0
$30,000.0
$40,000.0
$50,000.0
$60,000.0
2012 2013 2014 2015 2016
Hospital beds
Hospital chairs
Other furniture &appliances
CAGR 2012-2014
CAGR 2014-2016
forecasts- 17.6%
2.9%
7.6%
5.6%
- 8.6%
0.3%
Trends per product groups in 2012-2014 + forecasts 2015-2016(chart: customs import value in US$ thds)
Back to the list of segments OR Equipment & Medical Furniture 24
Rank Clients categories Ownership Key products purchased
1 Federal State Budget Hospitals with the key areas of specialization in all types of traditional surgical procedures, incl. trauma & orthopedics, abdominal, oncology, neurosurgery, transplantation, etc.
Public High-end operating tables and lighting, regardless of price. Commonly accepted to purchase devices with the maximum configuration set of premium segment. # of surgical interventions is estimated in thousands (patients flow from all regions of Russia) => can have 5-20 OR units. The price for OR equipment set can vary within $1.5-7 mln per facility (current Ruble value).High quality design furniture regardless of price. In most cases purchase the furniture mainly from European, US manufacturers. In some cases can buy furniture from Russian manufacturers. Major federal facilities have extensive buildings areas and significant # of hospital beds required. The price for equipment set (hospital beds, chairs, other devices) can vary within $2-7 mln per facility (current Ruble value).In frame of Government spending receive the strongest funding from Federal Budget
Key accounts segmentation
Back to the list of segments OR Equipment & Medical Furniture 25
Rank Clients categories Ownership Key products purchased
2 Moscow and Saint-Petersburg City Clinical Hospitals – multi-disciplinary
Public High-end operating tables and lighting of higher price segment. Nearly all Clinical City Hospitals (of Moscow and SPb) have to provide medical care to residents and numerous non-residents (non-residents may create up to 50% of cumulative patients flow). In certain hospitals patients flow can be compared to the one of Federal Centers. # of surgical interventions is not so high as in case of federal institutions. Normally can have 5-15 OR units. The price for OR equipment set can vary within $1.5-5 mln per facility (current Ruble value).High segment design furniture regardless of price. Tend to buy premium furniture mainly from European, US manufacturers. Clinical hospitals located in city area and have more limited area compared to federal facilities. More focus on ambulatory care and less # of beds. The price for equipment set can vary within $1-4 mln per facility (current Ruble value).In frame of City budget receive strong funding
Key accounts segmentation
Back to the list of segments OR Equipment & Medical Furniture 26
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 (current Ruble value).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 (current Ruble value).Regional Hospitals can use there own funding or receive target funding from Federal Budget
Key accounts segmentation
Back to the list of segments OR Equipment & Medical Furniture 27
Rank Clients categories Ownership Key products purchased
4 Regional Perinatal Centers – neonatal care, obstetrics and gynecology
Public Higher and mid price segments operating tables and lights. In frame of Federal Program Construction & Launch of 32 new Perinatal Centers OR devices & medical furniture form a substantial part of required equipment. Perinatal Centers can afford to buy higher or mid price segments devices due to sufficient funding from federal budget. Normally have 3-4 OR units. Total cost of OR equipment set can vary within $0,3-1 mln per facility (current Ruble value).Mid price segment furniture from Russia, Belarus. As a result of more focus on functional (meaning: related to a specific functional area) equipment, medical furniture is purchased on leftovers. This approach is most common in Russia mainly due to the fact that medical furniture is considered to be secondary equipment. Cumulative cost of medical furniture set can vary within $0.4-2 mln per facility (current Ruble value).Regional Perinatal Centers receive funding in frame of federal program “construction and launch of 32 new perinatal centers”
Key accounts segmentation
Back to the list of segments OR Equipment & Medical Furniture 28
Rank Clients categories Ownership Key products purchased
5 Local City Hospitals –multi-disciplinary (are located in cities with population more 100 000; 3 and more hospitals per city)
Public Devices of mid and low price segments. Patients’ flow is normally limited by population of City area (<100 thousands). # of surgical interventions is minimal and normally one OR unit required. In most cases these hospitals can buy or replace OR devices if provided by federal funding. Sometimes city hospitals can afford to buy cheaper devices using their own funds. Cumulative average cost of OR equipment set can vary within $0.1-0.3 mln per facility (current Ruble value).Medical furniture of mid and low price segments. Majority of city hospitals cannot afford to buy quality furniture from Belarus and Russia manufacturers. Hospital beds (simple mechanical) are normally purchased from China and Russia manufacturers. Total average cost of hospital furniture set can vary within $0.3-1 mln per facility (current Ruble value).Are limited in own funds. In most cases purchase tables and lighting when provided with target funding from federal budget
Key accounts segmentation
Back to the list of segments OR Equipment & Medical Furniture 29
Rank Clients categories Ownership Key products purchased
6 Local Municipal Hospitals – multi-disciplinary (are located in towns and localities with population less 100 000; 1-2 hospitals per town)
Public Devices of low price segment. Patients’ flow is minimal, average # of surgical interventions estimated in 10x. Maximum one OR unit required. Only can buy OR devices in frame of federal programs. Total cost of OR equipment cannot exceed $0.1 mln per facility (current Ruble value).Medical furniture of low price segment. Municipal hospitals are strongly limited in own funds. These normally can buy the cheapest medical furniture from Russia manufacturers; can only buy fixed metal beds. Total average cost of hospital furniture set can vary within $0.2-0.5 mln per facility (current Ruble value).Are extremely limited in own funds. Can only buy OR devices when provided with federal funding and buy medical furniture using their own funds.
Key accounts segmentation
Back to the list of segments OR Equipment & Medical Furniture 30
Rank Clients categories Ownership Key products purchased
7 Private Hospitals – multi-disciplinary
Private Devices of mid and higher price segments. Private hospitals mainly do not focus on complicated surgeries; can be performed minimally invasive surgical interventions (plastic surgery, phlebology, comparatively simple ENT, maxillofacial surgeries, etc.). There a few private hospitals in Russia that can provide patients with complicated surgeries (e. g. Meditsina JSC, European Medical Center, etc.) and they do not create sufficient demand on OR equipment.Higher price design furniture. Comparatively low rate of demand. Trying to buy more high quality design furniture from EU and US manufacturers due to stronger customer focus in their activity (funding depends on how much customers they can attract) Largely not interested in purchasing OR equipment. Purchase quality design hospital furniture from European, US manufacturers.
Key accounts segmentation
Back to the list of segments OR Equipment & Medical Furniture 31
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
Back to the list of segments OR Equipment & Medical Furniture 32
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
Back to the list of segments OR Equipment & Medical Furniture 33
estim.
estim.
Ultrasound Diagnostics
US Diagnostics Devices (USDD) segment is one of the strongest in frame of DPPHS. On the results of 2014 Russian segment of USDD (customs import prices) accounts for 2,2% of Global market. The same indicator was 6,9% in 2012. In frame of this analysis the segment only includes diagnostic ultrasound devices.
Minimal competition from local manufacturers exists in the segment. Higher than average demand indicators is the consequence of broad applications in public and private sectors.
Resume
Funding 2012-2014:
» Healthcare Modernization program – major source of investment for the period of 2011-2013. Subsequent reduction in demand that started in 2013 caused by the end of Healthcare Modernization. Separate hospitals of any level could buy USD devices in frame of the program
» Federal facilities and centralized purchases from administrative units – secondary source of investment. Provided strong demand in 2013-2014
» Patient care improvement program for injured in traffic accidents, Oncology program – minor investment source for the period of 2009-2014. Annually purchased up to 100 units in frame of these programs
Funding 2015-2016:
» Private hospitals – primary investment source for the mid term. Estimated growth of the private can reach 10-15% next 5 years, US diagnostics is the basic service for any private hospital
» 32 new Perinatal Centers 2015-2016 – secondary investment source for the period of 2015-2017. 15-30 USD devices are required on average. The total cost of USD devices can vary within $0,5-1 mln per center ≈ $15-30 mln in 2015-2017
» New launches and replacement of obsolete devices –expected demand from newly launched public hospitals, replacement of obsolete devices
Back to the list of segments Ultrasound Diagnostics 1
Segment volume in 2014
» Cumulative reduction by 37.2% compared to 2013 (in US$)
» Reduction by 24.0% compared to 2013 (in Rubles)
» Segment’s total in customs import prices for 2014 - $170.1 mln
» Estimated segment’s total in customer final prices for 2014 - $345.0 mln
Continuing severe reduction in 2014 related to closure of funding flow in frame of Healthcare Modernization program and Ruble devaluation. The rate of reduction demonstrated the signs of slowdown. This will supposedly lead to trend reversal and subsequent growth acceleration in 2015
valid.
valid.
valid.
estim.
Esaote3%
GE Healthcare29%
Hitachi4%
Mindray6%
Philips25%
Samsung Medison
8%
Siemens10%
Sonoscape2%
Toshiba7%
Others6%
valid.
Indicators 2014
Back to the list of segments Ultrasound Diagnostics 2
USD Segment 2012-2014
» The largest amount of funding the segment received during the implementation of Healthcare Modernization program
» Total segment’s amount in customs import pricesexceeded $1070 mln in 2011-2013
» USDD is the most widespread diagnostic method both in private and public facilities
» The highest rate of demand was in 2012 due to combination of large-scale funding and unsatisfied needs of numerous regional and municipal hospitals. Demand from private facilities was not crucial during that period
» Starting from 2015 major federal programs were terminated due to complicated economic situation. No changes are expected in the midterm
Segment’s volume change in 2012-2014 + forecasts 2015-2016 (chart: customs import value in US$ thds)
Back to the list of segments Ultrasound Diagnostics 3
$0.0
$50,000.0
$100,000.0
$150,000.0
$200,000.0
$250,000.0
$300,000.0
$350,000.0
$400,000.0
$450,000.0
$500,000.0
2012 2013 2014 2015 2016
valid.
USD Segment 2015-2016
» Expected stronger demand due to construction and launch of 32 new neonatal care centers and necessity to replace a part of obsolete devices
» The most significant positive changes are expected due to demand from public federal and all types of private facilities. Public sector is expected to grow at least 5-10% yearly – demand associated with the replacement of obsolete equipment. Private sector will expectedly grow 10-15% yearly following further increase in the sector of private healthcare services
» It is vitally to specify, that new patterns can arise inside the market segment starting from 2014. Limited funding will force major customers to switch to cheaper devices in the midterm. Price/Quality ratio will be the leading decision-making factor for any accounts
Segment’s volume change in 2012-2014 + forecasts 2015-2016 (chart: customs import value in R mlns)
Back to the list of segments Ultrasound Diagnostics 4
0.0₽
2,000.0₽
4,000.0₽
6,000.0₽
8,000.0₽
10,000.0₽
12,000.0₽
14,000.0₽
16,000.0₽
2012 2013 2014 2015 2016
valid.
» Total segment’s volume in customs import prices -$459.5 mln
» Estimated segment’s volume in customer final prices – $915.0 mln
» Total 52.3% increase compared to 2011
» Peak of demand in 2012 due to strongest funding from Federal Budget and sufficient market capacity
» Higher market fragmentation is a result of stronger funding => those manufacturers that are limited in marketing promotion budgets were able to increase strongly their market share compared to 2011
Major manufacturers in 2012
Esaote $39,077.9
GE Healthcare
$102,072.4
Hitachi $42,310.4
Mindray $28,712.8
Philips $53,052.5
Samsung Medison
$76,259.0
Siemens $25,903.0
Sonoscape $12,455.1
Toshiba $48,023.5
Others $31,615.1 -
Segment volume in 2012(chart, table: customs import value in US$)
Back to the list of segments Ultrasound Diagnostics 5
Esaote8%
GE Healthcare22%
Hitachi9%
Mindray6%
Philips12%
Samsung Medison
17%
Siemens6%
Sonoscape3%
Toshiba10%
Others7%
valid.
» Total segment’s volume in customs import prices -$270.9 mln
» Estimated segment’s volume in customer final prices –$550.0 mln
» Total reduction approximately by 41% caused by oversaturation of demand in 2012 and overall shortage of public funding
» Still private sector did not experience the same reduction rate. There was a slight growth due more launches of private facilities (practically all private facilities use US diagnostics and have at least one USD devices in their equipment fleet)
Major manufacturers in 2013
Esaote $13,573.0
GE Healthcare
$90,836.4
Hitachi $20,453.0
Mindray $24,345.5
Philips $19,590.6
Samsung Medison
$27,937.1
Siemens $15,070.9
Sonoscape $11,161.8
Toshiba $19,951.0
Others $28,003.4 -
Back to the list of segments
Segment volume in 2013(chart, table: customs import value in US$)
Back to the list of segments Ultrasound Diagnostics 6
Esaote5%
GE Healthcare
34%
Hitachi8%Mindray
9%
Philips7%
Samsung Medison
10%
Siemens6%
Sonoscape4%
Toshiba7%
Others10%
Forecasts 2015:
» Expected cumulative reduction by more than 25.0% => $132.1 mln. Totally attributable to currency devaluation.
» Expected growth by 8.0% compared to 2014 in Rubles.
» Major contributors for 2015 are private hospitals and 32 neonatal centers
Forecasts 2016:
» Based on assumption that macroeconomic situation is improving in 2016 expected volume will be => $177.8 mln.
» Growth by 25.0% in $ due to Ruble change positive effect and necessity of replacing the obsolete equipment that was acquired in frame of healthcare modernization program (2011-2013).
» Expected growth by more than 14.0% in Rubles
Forecasts 2015-2016(customs import value in US$)
Back to the list of segments Ultrasound Diagnostics 7
Demand rate is volatile, cyclical
» Skyrocketing trends in the segment follow industry growth
» The segment is basic for equipping of USD department and other relevant departments
» Approximately $15-30 mln attributable to the segment of USD owing to the program of 32 new perinatal centers construction and startup
Major financing sources:
» Modernization program (2011-2013)
» Oncology program (2009-2014)
» Patient care improvement program for those injured in traffic accidents (2009-2014)
» Regular purchases (not limited in period)
» 32 neonatal care centers (2015-2016)
Major players:
» USD: GE Healthcare, Philips, Siemens, Samsung, Mindray, Toshiba
Rate of demand, funding, major players
Back to the list of segments Ultrasound Diagnostics 8
Indicator Figure
Estimated total for 2014 $170.1 mln
Cumulative growth 2014/2012 -62.9%
Growth 2014/2013 -37.2%
Estimated CAGR for 2012-2014 -39.1%
Expected growth rate 2015/2014
$ 7-17%
R 68-77%
Expected total for 2015 – $190-200 mln Growth is forecasted due to stronger demand mainly from private facilities. Demand from public facilities will driven by 32 new perinatal centers and federal facilities
Started implementation of federal program 32 new perinatal centers launch and construction
estim.
estim.
estim.
Ultrasound diagnostics devices in 2014(chart: customs import value in US$)
Back to the list of segments Ultrasound Diagnostics 9
Esaote3%
GE Healthcare29%
Hitachi4%
Mindray6%
Philips25%
Samsung Medison
8%
Siemens10%
Sonoscape2%
Toshiba7%
Others6%
valid.
valid.
valid.
valid.
2012 2013 2014
Esaote $39,077.9 $13,573.0 $5,580.0
GE $102,072.4 $90,836.4 $50,030.7
Hitachi $42,310.4 $20,453.0 $6,838.6
Mindray $28,712.8 $24,345.5 $10,400.7
Philips $53,052.5 $19,590.6 $42,666.8
Samsung $76,259.0 $27,937.1 $13,861.7
Siemens $25,903.0 $15,070.9 $16,404.8
Sonoscape $12,455.1 $11,161.8 $2,999.9
Toshiba $48,023.5 $19,951.0 $11,577.2
Others $31,615.1 $28,003.4 $9,703.1
Ultrasound diagnostics devices in 2012-2014(chart, table: customs import value in US$ thds)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
Toshiba
Sonoscape
Siemens
Samsung Medison
Philips
Mindray
Hitachi
GE Healthcare
Esaote
valid.
Back to the list of segments Ultrasound Diagnostics 10
$0.00
$200,000.00
$400,000.00
$600,000.00
2012 2013 2014
Rank Clients categories Ownership Key products purchased
1 Federal StateBudget Hospitals – all areas of specialization
Public High-end USD devices regardless of price. Major federal hospitals have the highest rate of patients flow and the strongest funding from federal budget. Normally numerous UDS devices are required per hospital (10-20 and more). This is explained by the large area (-s) that hospital can occupy and numerous OR units + bed capacity > 300-400 on the average. In most cases USD devices are required for “critical” patients and routine diagnostics. Average cost of USD devices set per hospital can vary within $1.5-$4 mln depending on hospital’s scale (current Ruble value).In frame of Government spending receive the strongest funding directly from federal budget.
Key accounts segmentation
Back to the list of segments Ultrasound Diagnostics 11
Rank Clients categories Ownership Key products purchased
2 Moscow and Saint-Petersburg City Clinical Hospitals –multi-disciplinary
Public High-end USD devices regardless of price. These hospitals form receive funding directly from City budget (of Moscow and Saint-Petersburg). Patients flow is much higher compared to regional hospitals; it includes residents and non-residents from the regions of Russia. Normally Moscow and SPb City hospitals can have up to 5-15 USD devices, depending on the patients flow and amount of funding. In most cases USD devices are required for hospitals’ patients’ routine diagnostics and ambulatory services. Average cost of USD devices set per hospital can vary within $0.5-2 mln (current Ruble value).In frame of City budgets receive funding comparable to the one that federal facilities can get.
Key accounts segmentation
Back to the list of segments Ultrasound Diagnostics 12
Rank Clients categories Ownership Key products purchased
3 Regional Clinical Hospitals – multi-disciplinary
Public USD devices of higher price segment. Practically regional clinical hospitals are limited in funding that can be spent on purchases of expensive equipment. Most of this funding hospitals got in frame of federal programs (Healthcare Modernization, Patient care improvement for injured in traffic accidents). There may be exceptions associated with the stronger regional funding. Normally can have up to 2-10 USD devices, depending on the patients flow and amount of funding. Average cost of USD devices per hospital can vary within $0.2-1 mln(current Ruble value).Are limited in own funds. In most cases can purchase USD devices in frame of federal or regional program.
Key accounts segmentation
Back to the list of segments Ultrasound Diagnostics 13
Rank Clients categories Ownership Key products purchased
4 Regional Perinatal Centers – neonatal care, obstetrics and gynecology
Public USD devices of higher price segments. Two categories of facilities should be analyzed in frame of this part. Primarily 32 new perinatal centers should be analyzed (to be launched in 2016-2017). USD devices are included in the list of required equipment; up to 10 devices per facility can be purchased in frame of federal program. Other perinatal centers (launched before 2014) can also make purchases of USD devices in frame of replacement the obsolete devices. USD diagnostics is a very important part of any perinatal center, the range of applications can include the general diagnostics for neonates, all types of diagnostics for pregnant, etc. Average cost of USD devices per facility (mainly related to new 32 perinatal centers) can vary within 0.5-1 mln (current Ruble value).Regional Perinatal centers receive funding in frame of federal program “construction and launch of 32 new perinatal centers”.
Key accounts segmentation
Back to the list of segments Ultrasound Diagnostics 14
Rank Clients categories Ownership Key products purchased
5 Local City Hospitals – multi-disciplinary
Public USD devices of mid- or low-price segment. Local city hospitals have a limited patients flow due to limited coverage; and are mainly dependent from regional authorities in matters of purchasing the expensive medical devices. Nearly all the expensive equipment was acquired in frame of federal and regional programs (Healthcare Modernization, Patient care improvement for injured in traffic accidents). Some hospitals can buy cheaper devices on their own. Generally can have up to 1-2 devices per hospital. Average cost of USD devices per facility can vary within 0.05-0.2 mln (current Ruble value).Local City hospitals are limited in own funds, in most cases can only afford to buy USD devices in frame of federal or regional program
Key accounts segmentation
Back to the list of segments Ultrasound Diagnostics 15
Rank Clients categories Ownership Key products purchased
6 Local Municipal Hospitals – multi-disciplinary
Public USD devices of low-price segment. These facilities may be quite different in terms of patients flow (can vary within 20-400). Still this fact does not lead to any significant differences related to funding – nearly all municipal hospitals receive the purest funding when it comes to expensive equipment. Normally the USD devices are purchased in frame of federal or regional programs. Generally can have up to 1-2 devices per hospital. Average cost of USD devices per facility can vary within 0.05-0.2 mln (current Ruble value).Local Municipal hospitals are limited in own funds, can only afford to buy USD devices in frame of federal or regional program
Key accounts segmentation
Back to the list of segments Ultrasound Diagnostics 16
Rank Clientscategories
Ownership Key products purchased
7 Private Hospitals –multi-disciplinary
Private USD devices of higher and premium price segments. Private hospitals form major and the most stable part of the segment. Despite the severe reduction in the sector of Government spending, the private sector is now experiencing growth making a key contribution to the expected recovery starting from 2015. USD diagnostics is the most widespread method of diagnostics used by private facilities. Private hospitals are the first who tend to renew the equipment fleet as soon as new significant technological upgrade takes place. All private faculties can be divided into different types:Network facilities (estimated in tens) in Moscow, Saint-Petersburg, other megacities (general medicine, obstetrics, gynecology, etc.) have numerous branches, at least one USD device per branch. Average cost of devices per facility can vary within $0.5-2 mln.Multi-disciplinary facilities (estimated in hundreds) without branches can have up to 1-3 devices. Average cost of devices can vary within $0.1-0.4 mln (current Ruble value).Separate office and other small facilities (estimated in thousands) can have normally one USD device. Creating the strongest demand among private facilities.Only can use their own funds to buy USD devices. Funding depends on private investments from physical and legal entities
Key accounts segmentation
Back to the list of segments Ultrasound Diagnostics 17
Market capacity is generated by:
» Purchases of devices for new private facilities (basically buy cheaper USD devices with basic set of probes)
» Purchases of devices for public facilities of federal and regional level (basically buy premium USD devices with extensive set of probes)
» Purchases of devices for public facilities of local and municipal level (basically buy cheaper USD devices with basic set of probes)
» Replacement of obsolete equipment
» Increasing the equipment fleet for existing facilities
Total market capacity equals to $4,085.9 mln
Expected higher market share for low- and medium-priced USD devices in 2015-2016
The market share of high-priced (premium) USD devices will gradually increase starting from the end of 2016
Market capacity, expectations
Back to the list of segments Ultrasound Diagnostics 18
Ultrasound devices are considered to be ‘high-technology’. An average demand/capacity rate is 15%
Market capacity rate will grow by 2-5% annually in the nearest few years (new equipment for 32 new neonatal care centers, demand from other private and public facilities).
After this period growth rate will slow down significantly (due to expected demand oversaturation in the segment of ultrasound diagnostics services)
Relatively high market capacity is a result of broad applications. Ultrasound devices are to be considered as mandatory equipment for every public and private facility. Many Federal Public medical centers have a fleet of devices of 10 units and more
Market demand will increase strongly in 2016-2018 due to the fact that more than 15 000 units were purchased during 2011-2013. Substantial part of these units is to be replaced in 2016-2018 as obsolete equipment. Moderate growth in 2019-2020.
Market capacity, expectations
Back to the list of segments Ultrasound Diagnostics 19
Anesthesiology, Reanimation, Neonatology
Anesthesiology, reanimation, neonatology devices are acquired mostly in frame of main federal programs and other special programs (initiated both by federal and regional authorities). These types of devices are considered to be basic for any type of stationary facility (essential for ERU, OR and ICU equipping).
Strongest growing competition from local manufacturers is supported by #102 Resolution of the Government (please see general part in more detail). Many currently operating local manufacturers will supposedly affect the positions of foreign manufacturers
Resume
Funding 2012-2014:
» Healthcare Modernization program – major source of investment for the period of 2011-2013. Strongest demand on ARN equipment during 2012. Severe drop in demand started from 2013, 2014 was not part of Healthcare Modernization
» Regular purchases from federal facilities – major source of investment during the period of 2013-2014. Still the number of federal level accounts is limited => limited volume of demand
» Patient care improvement program for injured in traffic accidents – secondary investment source for the period of 2009-2014
Funding 2015-2016:
» 32 new Perinatal Centers 2015-2016 – primary investment source for the period of 2015-2017. Anesthesia workstations and ventilators, monitoring systems, neonatal devices, infusion pumps are required in frame of the program. In total the total cost of ARN equipment can vary within $5-8 mln per hospital ≈ $150-240 mln in 2015-2017
» New launches and replacement of obsolete devices –expected demand form newly launched public (preferably federal facilities) hospitals, re-equipping of existing hospitals
» Regular purchases from public facilities
Back to the list of segments Anesthesiology, Reanimation, Neonatology 1
In scope:
» Anesthesia workstations & ventilators
» Patient monitoring
» Neonatal incubators, Infant radiant warmers, etc.
» Ceiling- & wall-mounted pendants
» Other devices (infusion pumps, defibrillators, etc.)
CAGR for 2012 – 2014:
Anesthesia workstations & ventilators
- 43.4%
Patient monitoring - 59.3%
Neonatal incubators, Infant radiant warmers, etc.
- 63.0%
Ceiling- & wall-mounted pendants
- 37.3%
Other - 43.0%
Anesthesia devices, ventilators and patient monitors can be considered as separate segments from business point of view. Nevertheless in Russia all these segments tend to be combined in one segment.
Back to the list of segments
Structure
Anesthesiology, Reanimation, Neonatology 2
Segment volume in 2014:
» Cumulative reduction by 37.0% compared to 2013 (in US$)
» Reduction by more than 30.7% compared to 2013 (in Rubles)
» Segment’s total in customs import prices for 2014 - $177.2 mln
» Estimated segment’s total in customer final prices for 2014 - $350.0 mln
The demand in the segment was one of the strongest in 2011-2012. The demand reduced dramatically in 2013-2014. Total demand in 2014 only equals to 23% of demand in 2012.
valid.
valid.
valid.
estim.
Draeger Medical Systems
37%
GE Healthcare11%
Hafner-Muschler8%
Maquet6%
HT Labor+Hospitalt
echnik4%
Mindray3%
Viessmann Technologies
GmbH2%
MZ Liberec2%
B Braun2%
Others25%
valid.
Back to the list of segments
Indicators 2014
Anesthesiology, Reanimation, Neonatology 3
ARN segment in 2012-2014:
» The segment was part of Healthcare Modernization in 2011-2013. Due to prior existing unsatisfied demand total amount invested 1,5x times exceeded the average one per sector
» Higher market fragmentation of 2011-2013 was the result of higher decentralization in decision-making of major accounts. Regional hospitals and other local accounts had more independence in terms of tenders preparation and launch
» Subsequent reduction of demand led to more centralization in funding allocation, currently most regional and local hospitals are totally dependent on regional authorities
» Major federal institutions are mostly independent. At the same time the funding is revised and approved by federal authorities
$0.0
$100,000.0
$200,000.0
$300,000.0
$400,000.0
$500,000.0
$600,000.0
$700,000.0
2012 2013 2014 2015 2016
valid.
Segment’s volume change in 2012-2014 + forecasts 2015-2016 (chart: customs import value in US$ thds)
Back to the list of segments Anesthesiology, Reanimation, Neonatology 4
0.0 ₽
5,000.0 ₽
10,000.0 ₽
15,000.0 ₽
20,000.0 ₽
25,000.0 ₽
2012 2013 2014 2015 2016
valid. ARN segment in 2015-2016:
» Significant changes are expected in 2015-2016. One part of changes is the result of Ruble devaluation that has been taking place starting from the mid of 2014. Devaluation will supposedly lead to severe reduction of demand in frame regular purchases. The total negative effect of devaluation can amount to more than 30%
» At the same time, the 2015-2016 can be considered special for the segment. Currently the federal program new 32 perinatal centers construction and launch is being implemented. The program will lead to stronger investments from federal budget
» It is expected that two above-mentioned contradictory trends will lead to the same rate of demand in 2015 (compared to 2014) and significantly growing rate in 2016 (due to expected Ruble revaluation) if calculated in US dollars
Segment’s volume change in 2012-2014 + forecasts 2015-2016 (chart: customs import value in R mlns)
Back to the list of segments Anesthesiology, Reanimation, Neonatology 5
Anesthesia workstations & ventilators
48%
Patient monitoring
12%Neonatal
incubators, Infant radiant warmers, etc.
5%
Ceiling- & wall-mounted
pendants, climatized modules
26%
Other devices
9%
valid.
2014
Anesthesia workstations & ventilators
43%
Patient monitoring
24%
Neonatal incubators,
Infant radiant warmers, etc.
8%
Ceiling- & wall-mounted
pendants, climatized modules
13%
Other devices12%
valid.
2013
Segmentation by product categories(charts: customs import value in US$)
Back to the list of segments Anesthesiology, Reanimation, Neonatology 6
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Other devices
Ceiling- & wall-mounted pendants,climatized modules
Neonatal incubators,Infant radiantwarmers, etc.
Patient monitoring
Anesthesiaworkstations &ventilators
Anesthesia workstations & ventilators
43%
Patient monitoring
21%
Neonatal incubators,
Infant radiant warmers, etc.
9%
Ceiling- & wall-mounted
pendants, climatized modules
19%
Other devices
8%
valid.
2012
Segmentation by product categories(charts: customs import value in US$)
Back to the list of segments Anesthesiology, Reanimation, Neonatology 7
valid.
Major manufacturers in 2012
Draeger $128,621.0 -
GE Healthcare $81,475.0 -
Philips $43,097.7 -
Berver GmbH $38,834.6 -
Maquet $22,343.7 -
Nihon Kohden $21,584.8 -
Mindray $20,080.6 -
Carefusion $19,056.9 -
B Braun $17,132.1 -
Chirana $12,424.7 -
Others $215,720.0 -
» Total segment’s volume in customs import prices -$620.4 mln
» Estimated segment’s volume in customer final prices - $1240 mln
» Strongest demand in the product categories: anesthesia ventilators, patient monitoring systems, neonatal equipment
» Stronger than average demand rate due to higher level of unsatisfied needs
» Total share of the segment in frame of DPPHS equaled to 18% - it was the second largest segment
Draeger Medical Systems
21%
GE Healthcare13%
Philips7%
Berver GmbH6%
Maquet4%
Nihon Kohden3%
Mindray3%
Carefusion3%
B Braun3%
Chirana2%
Others35%
valid.
Segment volume in 2012(chart, table: customs import value in US$ thds)
Back to the list of segments Anesthesiology, Reanimation, Neonatology 8
Major manufacturers in 2013
Draeger $81,182.4
GE Healthcare $38,838.4
Mindray $11,353.1
Maquet $10,197.3
Philips $8,699.2
Hamilton $8,304.4
Nihon Kohden $8,061.1
Hafner-Muschler
$6,383.7
B Braun $6,249.1
Others $101,126.0 -
» Total segment’s volume in customs import prices -$280.1 mln
» Estimated segment’s volume in customer final prices - $560.0 mln
» Severe reduction affected all major product categories: patients monitoring systems, neonatal equipment, climatized modules and pendants, anesthesia ventilators
» The demand rate in 2013-2014 returned to its “normal” level
Draeger Medical Systems
29%
GE Healthcare14%
Mindray4%
Maquet4%
Philips3%
Hamilton3%
Nihon Kohden3%
Hafner-Muschler
2%
B Braun2%
Others36%
valid.
Segment volume in 2013(chart, table: customs import value in US$ thds)
Back to the list of segments Anesthesiology, Reanimation, Neonatology 9
Forecasts 2015
» Expected cumulative reduction by 9.2% => $162.0 mln Totally attributable to local currency devaluation.
» Expected growth by 37.2% compared to 2014 in Rubles.
» Major contributors for 2015 are 32 perinatal centers
Forecasts 2016
» Based on assumption that macroeconomic situation is improving in 2016 expected volume will be => $188.0 mln
» Growth by more than 16.0% in $ due to:
» Ruble change positive effect
» Demand from new 32 perinatal centers
» Stronger demand from other public and private facilities due to necessity of replacing obsolete equipment
» Expected reduction by 10.0% in Rubles
Forecasts 2015-2016(customs import value in US$)
Back to the list of segments Anesthesiology, Reanimation, Neonatology 10
Demand rate is volatile, cyclical
» Skyrocketing trends in the segment follow industry growth
» The segment is basic for equipping of ERU, ICU, ORU
» In 2015-2016 a budget of $1.1 bln is going to be allocated for 32 new neonatal care centers
» Approximately $150-240 mln to be attributed to purchases of the Anesthesiology, reanimation, neonatology equipment for the OR, ER, ICU units in 2015-2017 (additional to regular purchases)
Major financing sources:
» Modernization program (2011-2013)
» Patient care improvement program for those injured in traffic accidents (2009-2014)
» Regular purchases (not limited in period)
» New 32 perinatal centers (2015-2016)
Rate of demand, funding
Back to the list of segments Anesthesiology, Reanimation, Neonatology 11
Major players:
» Anesthesia workstations & ventilators: Draeger, GE Healthcare, Maquet, Hamilton, Mindray
» Patient monitoring: Draeger, GE Healthcare, Philips, Mindray
» Neonatal incubators, Infant radiant warmers, etc.: GE, Draeger, Ardo Medical
» Ceiling- & wall-mounted pendants and climatized modules: Hafner-Muschler, HT Labor+Hospitaltechnik, Viessmann Technologies
» Defibrillators: Zoll, Mindray
» Infusion pumps: B Braun, Viltechmeda
» Other: Draeger, Maquet
Back to the list of segments
Major players
Back to the list of segments Anesthesiology, Reanimation, Neonatology 12
Indicator Figure
Estimated total for 2014 $85.5 mln
Cumulative growth 2014/2012 -68.0%
Growth 2014/2013 -28.9%
Estimated CAGR for 2012-2014 -43.4%
Expected growth rate 2015/2014
$ -7-1%
R 41-50%
Expected total for 2015 – $80-85 mln. Estimated shortage due to severe Ruble devaluation. Strong growth of the segment in Rubles due to stronger federal funding
Started implementation of federal program 32 new perinatal centers launch and construction
valid.
estim.
estim.
estim.
valid.
Draeger Medical Systems
60%
GE Healthcare12%
Maquet10%
Hamilton3%
IMT Medical2%
Mindray1%
Others12%
valid.
Anesthesia workstations & ventilators in 2014(chart: customs import value in US$)
Back to the list of segments Anesthesiology, Reanimation, Neonatology 13
valid.
valid.
2012 2013 2014
Draeger $90,743.1 $52,764.9 $51,358.0
GE $38,804.8 $14,440.3 $9,891.0
Maquet $21,209.4 $8,979.3 $8,372.4
Hamilton $10,827.5 $8,273.2 $2,761.7
IMT Medical $0.0 $0.0 $1,697.6
Mindray $8,241.5 $2,306.6 $1,226.7
Carefusion $19,056.9 $5,924.8 $1,015.9
Chirana $11,816.5 $4,484.4 $827.3
Covidien $7,646.2 $1,547.0 $1,339.6
Others $58,766.9 $21,515.3 $6,981.2
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
Covidien
Chirana
Carefusion
Mindray
IMT Medical AG
Hamilton
Maquet
GE Healthcare
Draeger
valid.
$0.00
$100,000.00
$200,000.00
$300,000.00
2012 2013 2014
Anesthesia workstations & ventilators in 2012-2014(chart, table: customs import value in US$ thds)
Back to the list of segments Anesthesiology, Reanimation, Neonatology 14
Indicator Figure
Estimated total for 2014 $21.9 mln
Cumulative growth 2014/2012 -83.4%
Growth 2014/2013 -67.2%
Estimated CAGR for 2012-2014 -59.3%
Expected growth rate 2015/2014
$ -8-1%
R 37-48%
Expected total for 2015 – $20-21.5 mln. Estimated shortage due to severe Ruble devaluation. Strong growth of the segment in Rubles due to stronger federal funding
Started implementation of federal program 32 new perinatal centers launch and construction
valid.
estim.
estim.
estim.
valid.
Draeger Medical Systems
36%
GE Healthcare27%
Mindray9%
Philips5%
Nihon Kohden Corporation
5%Others
18%
valid.
Patient monitoring systems in 2014(chart: customs import value in US$)
Back to the list of segments Anesthesiology, Reanimation, Neonatology 15
valid.
valid.
2012 2013 2014
Draeger $12,539.2 $14,606.1 $7,923.7
GE $27,074.9 $17,390.2 $5,798.5
Mindray $9,932.9 $7,360.7 $2,028.5
Philips $41,731.0 $8,127.5 $1,116.5
Nihon Kohden
$19,500.7 $6,400.6 $993.3
ArjoHuntleigh
$5,601.3 $3,341.7 $576.7
Others $14,911.2 $9,068.1 $3,151.5
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
Arjo Huntleigh
Nihon Kohden
Philips
Mindray
GE Healthcare
Draeger
valid.
$0.00
$50,000.00
$100,000.00
$150,000.00
2012 2013 2014
Patient monitoring systems in 2012-2014(chart, table: customs import value in US$ thds)
Back to the list of segments Anesthesiology, Reanimation, Neonatology 16
Indicator Figure
Estimated total for 2014 $8.2 mln
Cumulative growth 2014/2012 -86.3%
Growth 2014/2013 -65.9%
Estimated CAGR for 2012-2014 -62.9%
Expected growth rate 2015/2014
$ 70-107%
R 150-213%
Expected total for 2015 – $14-17 mln. Strong growth of the segment in $ due to federal funding. In 2014 neonatal equipment was not part of any regional or federal program
Started implementation of federal program 32 new perinatal centers launch and construction
valid.
estim.
estim.
estim.
valid.
GE Healthcare32%
Draeger Medical Systems
31%
Atom7%
Ardo Medical AG
12%
Others18%
valid.
Neonatal incubators, infant warmers, other neonatal equipment in 2014(chart: customs import value in US$)
Back to the list of segments Anesthesiology, Reanimation, Neonatology 17
valid.
valid.
2012 2013 2014
GE $15,038.8 $6,361.3 $2,665.8
Draeger $15,692.7 $7,930.3 $2537.0
Ardo Medical
$5,730.4 $1,537.1 $944.2
Atom $8,814.3 $2,528.5 $546.1
Others $14,512.6 $5,425.4 $1,518.5
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
Atom
Ardo Medical
Draeger
GE Healthcare
valid.
$0.00
$30,000.00
$60,000.00
$90,000.00
2012 2013 2014
Neonatal incubators, infant warmers, other neonatal equipment in 2012-2014(chart, table: customs import value in US$ thds)
Back to the list of segments Anesthesiology, Reanimation, Neonatology 18
Indicator Figure
Estimated total for 2014 $46.2 mln
Cumulative growth 2014/2012 60.1%
Growth rate 2014/2013 29.4%
Estimated CAGR for 2012-2014 -37.3%
Expected growth rate 2015/2014
$ -28-22%
R 7-18%
Expected total for 2015 – $33-36 mln. Moderate reduction of the segment in $ due to anticipated suspend of construction and launch of some new facilities (federal & regional level)
Started implementation of federal program 32 new perinatal centers launch and construction
valid.
estim.
estim.
estim.
valid.
Hafner-Muschler
32%
HT Labor+Hospitaltechnik
14%
Viessmann Technologies GmbH
8%MZ Liberec
8%
AAB Automatisierung
6%
Kendromed4%
Others28%
valid.
Ceiling- & wall-mounted pendants, climatized modules in 2014(chart: customs import value in US$)
Back to the list of segments Anesthesiology, Reanimation, Neonatology 19
valid.
valid.
2012 2013 2014
Hafner-Muschler $11,338.7 $6,383.7 $14,705.6
HT Labor+Hospitaltechnik
$7,810.8 $3,456.0 $6,357.5
ViessmannTechnologies
$6,738.0 $4,088.2 $3,868.8
MZ Liberec $9,688.8 $5,019.6 $3,775.6
AAB Automatisierung
$274.9 $0.0 $2,683.7
Kendromed $0.0 $22.7 $2,025.3
Berver $38,834.6 $4,006.9 $1,571.7
ExaAnlagenexport
$9,942.5 $0.0 $0.0
Others $32,885.9 $12,742.3 $11,246.5
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
Exa Anlagenexport
Berver
Kendromed
AAB Automatisierung
MZ Liberec
ViessmannTechnologies
HTLabor+Hospitaltechnik
Hafner-Muschler
Ceiling- & wall-mounted pendants, climatized modules in 2012-2014(chart, table: customs import value in US$ thds)
Back to the list of segments Anesthesiology, Reanimation, Neonatology 20
valid.
$0.0
$50,000.0
$100,000.0
$150,000.0
$200,000.0
$250,000.0
$300,000.0
2012 2013 2014 2015 2016
Anesthesiaworkstations &ventilators
Patientmonitoring
Ceiling- & wall-mountedpendants
forecasts- 43.4%
2.6%
CAGR 2012-2014
CAGR 2014-2016
- 59.3%
6.8%
- 37.3%
- 11.8%
Stronger demand was in 2011-2012 due to implementation of Healthcare Modernization program and unsatisfied demand of numerous hospitals. These three product categories provide the basis for the segment. Expected slight growth amid Ruble due to construction and launch of 32 new perinatal centers.
Trends per product groups in 2012-2014 + forecasts 2015-2016(chart: customs import value in US$ thds)
Back to the list of segments Anesthesiology, Reanimation, Neonatology 21
Medical devices for neonates, infusion pumps and other secondary devices normally experience a shorter period of strong demand. Neonatal equipment has a limited scope in terms of hospitals demand; infusion pumps, defibrillators and other devices are considered to be secondary equipment when it to prioritizing of devices in yearly purchasing plan. Expected slight growth amid Ruble due to construction and launch of 32 new perinatal centers.
$0.0
$10,000.0
$20,000.0
$30,000.0
$40,000.0
$50,000.0
$60,000.0
2012 2013 2014 2015 2016
Neonatalincubators, Infantradiant warmers,etc.
Other devices
forecasts
CAGR 2012-2014
CAGR 2014-2016
- 43.0%
12.4%
- 62.9%
43.8%
Trends per product groups in 2012-2014 + forecasts 2015-2016(chart: customs import value in US$ thds)
Back to the list of segments Anesthesiology, Reanimation, Neonatology 22
Rank Clients categories Ownership Key products purchased
1 Federal StateBudget Hospitals –specialized care (traditional surgery, cardiac surgery, neurosurgery. etc.)
Public High-end devices regardless of price. Due to highest patients flow and greatest # of surgical interventions (estimated in thousands) these types of hospitals require numerous units of anesthesia ventilators, monitoring systems, anesthesia workstations and pendants. Most federal centers focus on specific area (-s) of medical care (e. g. cardiac surgery, oncology, neurosurgery, neonatal care and obstetrics etc.). Normally federal hospitals can have up to 10-20 OR units and 40-70 resuscitation beds in frame of 1-2 ERU departments. Total cost of required climatized modules and pendants can vary within $12-35 mln per facility. Total cost of anesthesia workstations & ventilators and patient monitoring systems can vary within $4-8 mln per facility (current Ruble value).In frame of Government spending receive the strongest funding from federal budget.
Key accounts segmentation
Back to the list of segments Anesthesiology, Reanimation, Neonatology 23
Rank Clients categories Ownership Key products purchased
2 Moscow and Saint-Petersburg City Clinical Hospitals – multi-disciplinary
Public Devices of higher and premium price segments. Nearly all Clinical City Hospitals (of Moscow and SPb) have to provide medical care to residents and numerous non-residents (non-residents may create up to 50% of cumulative patients flow). In certain hospitals patients flow can be compared to the one of Federal Centers. The # of surgical interventions is much lower. Some Clinical City Hospitals can have up to 5-15 OR units and up to 20-50 resuscitation beds. Total cost of required climatized modules and pendants can vary within $5-20 mln per facility; total cost of other devices can vary within $4-12 mln (current Ruble value).In frame of City budget receive strong funding that can account for 40-50% of one that Federal Centers can get.
Key accounts segmentation
Back to the list of segments Anesthesiology, Reanimation, Neonatology 24
Rank Clients categories Ownership Key products purchased
3 Regional Perinatal Centers – neonatal care, obstetrics and gynecology
Public Devices of mid and higher price segments. In frame of Federal Program Construction & Launch of 32 new Perinatal Centers ARN devices form a substantial part of required equipment (within 40-50% of total budget). Main parts will include neonatal equipment (incubators, infant warmers and other related devices), anesthesia ventilators, patient monitoring systems, anesthesia workstations, infusion pumps. Total cost of listed devices can vary within $4-7 mln per facility. Perinatal Centers normally have 3-4 OR units => much lower cost of climatized modules and pendants. Cumulative cost of mountable equipment can vary within $3-4 mln (current Ruble value).In frame of Federal Program Construction and launch of 32 new perinatal centers receive strong funding from federal budget.
Key accounts segmentation
Back to the list of segments Anesthesiology, Reanimation, Neonatology 25
Rank Clients categories Ownership Key products purchased
4 Regional Clinical Hospitals – multi-disciplinary
Public Devices of mid and higher price segment. 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 anesthesia workstation and ventilators, patient monitoring systems, infusion pumps, etc. are required for any regional hospital due to necessity of making the bulk of surgical interventions at the regional level. Cumulative cost of non-mountable equipment can vary within $3-8 mln. Regional Centers can normally have 3-10 OR units, cost of mountable equipment can vary within $3-10 mln. (current Ruble value).In most cases buy ARN equipment when provided with federal funding. Have own source funding from regional budget.
Key accounts segmentation
Back to the list of segments Anesthesiology, Reanimation, Neonatology 26
Rank Clients categories Ownership Key products purchased
5 Local City Hospitals – multi-disciplinary
Public Devices of lower and mid price segment. Patient’s flow is normally limited by population of City area (<100 thousands). Commonly buy ARN devices when provided with federal funding in frame of specific programs. Sometimes these facilities can use their own funds to renew the obsolete equipment (low budget projects). Average # of surgical interventions yearly on average cannot exceed 200, normally can have 1-3 OR units. Cumulative cost of non-mountable equipment can vary within $1-2.5 mln. Cost of mountable equipment (mainly pendants, do not install climatized modules) can be within $0.3-0.5 mln. (current Ruble value).Mainly buy ARN equipment when provided with federal funding. Can buy separate devices on their own, still strongly limited in own budgets.
Key accounts segmentation
Back to the list of segments Anesthesiology, Reanimation, Neonatology 27
Rank Clients categories Ownership Key products purchased
6 Local Municipal Hospitals – multi-disciplinary
Public Devices of lower and mid price segment. Patients flow is minimal, limited by population of town/village area (<40 thousands). Only buy ARN devices when provided with federal funding in frame of specific programs. Average # of surgical interventions yearly cannot exceed 50-100, mainly not complicated surgeries. In case of complicated cases the patients are redirected to Regional Clinical hospitals. Some Municipal Hospitals have no OR units, on average can have 1 OR unit per facility. Cumulative cost of non-mounted ARN equipment can vary within $0.2-1 mln. Cost of mounted equipment (mainly pendants, do not install climatized modules) can vary within $0.1-0.3 mln. (current Ruble value).Only buy ARN equipment when provided with federal funding. Extremely limited in own funds.
Key accounts segmentation
Back to the list of segments Anesthesiology, Reanimation, Neonatology 28
Rank Clients categories Ownership Key products purchased
7 Private Hospitals – multi-disciplinary
Private Devices of mid and higher price segments. Private hospitals mainly do not focus on complicated surgeries, can be performed minimally invasive surgical interventions (plastic surgery, phlebology, comparatively simple ENT, maxillofacial surgeries, etc.). Normally these types of interventions do not require any extended stay in emergency or ICU units. There a few private hospitals in Russia that can provide patients with complicated surgeries (e. g. Meditsina JSC, European Medical Center, etc.) and they do not create sufficient demand on ARN equipment. Some private hospitals can have OR units (mainly without any climatized systems), there are separate cases of setting up the complete climatized module. Cumulative cost of required ARN equipment (only non-mounted) can vary within $0.1-0.5 mln. (current Ruble value).Do not tend to buy ARN equipment, sometimes can buy minimal set to perform minimally invasive surgeries. Only have funds provided by private physical and legal entities.
Key accounts segmentation
Back to the list of segments Anesthesiology, Reanimation, Neonatology 29
Market capacity is generated by:
» Purchases of devices for newly launched healthcare facilities (mainly public)
» Purchases of devices for 32 new Perinatal centers in 2015-2017
» Replacement of obsolete equipment (mostly supplied during Healthcare Modernization in 2011-2013)
» Increasing the equipment fleet for existing facilities (not expected any significant numbers in frame of this part)
Total market capacity equals to $2,032.0 mln
» Anesthesia workstation & ventilators – $914.4 mln
» Patient monitoring systems – $386.1 mln
» Neonatal incubator, infant warmers, other similar devices – $148.4 mln
» Other devices (infusion pumps, defibrillators, etc.) – $583.1 mln
Market capacity, expectations
Back to the list of segments Anesthesiology, Reanimation, Neonatology 30
» ARN devices are considered to be ‘high-technology’ devices. An average demand/capacity rate equals to 16-17%
» Market capacity will grow 4-7% annually next 3 years (new equipment for 32 new perinatal centers, demand from newly launched public federal facilities)
» Expected demand increase associated with the necessity of replacing the obsolete devices in major federal and regional facilities will slow down the market capacity increment making more concentration on growing demand from existing facilities
Market demand will increase moderately in 2015-2017 due to launch of 32 new perinatal centers. Stronger growth is expected in 2019-2020 as a result of projected buoyant demand from numerous public facilities (of federal, regional, city, municipal levels)
estim.
estim.
Market capacity, expectations
Back to the list of segments Anesthesiology, Reanimation, Neonatology 31
X-ray, CT, MRI
X-ray, CT, MRI diagnostic devices are acquired both in frame of regular purchases and special projects. Radio diagnostics is the most advanced existing method of disease prevention and treatment support.
Strongest growing competition from local manufacturers is supported by #102 Resolution of the Government (please see general part in more detail). Many currently operating local manufacturers will supposedly affect the positions of foreign manufacturers. Diagnostic x-ray devices (all types), computed tomography devices (16x-64x slices) already included in the list.
Resume
Funding 2012-2014:
» Healthcare Modernization program – major source of investment for the period of 2011-2013. Upgrade of existing equipment set in all types of public facilities –СT, MRI, Diagnostic X-ray, Interventional X-ray, etc.
» Regular purchases from federal facilities – major source of investment during the period of 2012-2014. Any types of devices. Second largest source of funding.
» Patient care improvement program for injured in traffic accidents – secondary investment source for the period of 2009-2014
» Oncology federal program – secondary investment source of investment for the period of 2009-2014
Funding 2015-2016:
» Regular purchases from federal facilities – major source of investment during for future periods. Supposedly will account for more than 30% of yearly purchases
» 32 new Perinatal Centers 2015-2016 – secondary investment source for the period of 2015-2017. MRIs, diagnostic x-ray, mammography devices are required in frame of program, total purchases can be $3-4 mln per hospital ≈ $90-120 mln in 2015-2017
» Construction and launch of cardiac centers –secondary investment source starting form 2015
» Regular purchases from public facilities
Back to the list of segments X-ray, CT, MRI 1
In scope:
» MRIs
» CTs
» Interventional X-ray
» Mammography Devices
» Diagnostic X-ray Devices (fixed and mobile)
» Dental X-ray
» Spare Parts and Accessories
All above listed and ultrasound diagnostics devices are frequently considered in the frame of one segment. But in Russia ultrasound diagnostics devices form separate segment from business point of view. This segment normally makes as much as 50% of segment “X-ray, CT, MRI”.
CAGR for 2012 – 2014:
MRIs - 15.4%
CTs - 46.8%
Interventional X-ray - 46.2%
Mammography Devices
- 49.2%
Diagnostic X-ray Devices (fixed and mobile)
- 56.7%
Dental X-rays - 32.5%
Other -
Back to the list of segments
Structure
X-ray, CT, MRI 2
Segment volume in 2014:
» Cumulative reduction by 31.8% compared to 2013 (in US$)
» Reduction by 16.8% compared to 2013 (in Rubles)
» Segment’s total in customs import prices for 2014 - $392.7 mln
» Estimated segment’s total in customer final prices for 2014 - $560.0 mln
The segment was a part of Healthcare Modernization program in 2011-2013. In 2014 most of devices were acquired in frame of special projects related to implementation of Oncology and Patient care to injured in traffic accidents federal programs
valid.
valid.
valid.
estim.
Siemens36%
GE Healthcare27%
Philips9%
Toshiba8%
Villa Sistemi Medicali
2%
Hitachi1%
Italray S.R.L.1%
Sirona Dental Systems
1%Others
15%
valid.
Back to the list of segments
Indicators 2014
X-ray, CT, MRI 3
X-ray, CT, MRI segment 2012-2014:
» The segment was the largest in 2011-2013 due to implementation of Healthcare Modernization program, Oncology program and Patient care to injured in traffic accidents program
» Cumulative volume of funding in 2011-2014 exceeded $2,5 bln. Major funds came from Federal Budget
» During 2012-2014 the segment received funding from nearly all possible sources (public and private). Most of these sources suspended or halted starting from 2015. The segment includes a wide range of product categories. The most significant categories in terms of market volume are MRIs, CTs and dXr
$0.0
$200,000.0
$400,000.0
$600,000.0
$800,000.0
$1,000,000.0
$1,200,000.0
2012 2013 2014 2015 2016
valid.
Segment’s volume change in 2012-2014 + forecasts 2015-2016 (chart: customs import value in US$ thds)
Back to the list of segments X-ray, CT, MRI 4
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₽
2012 2013 2014 2015 2016
valid. X-ray, CT, MRI segment 2015-2016:
» Most funding will come in frame of regular purchases by federal facilities.
» Separately MRIs are included in the list of required equipment for 32 new perinatal centers
» iXr devices are expected to be acquired in frame of Cardiac surgery departments and centers construction and launch in 2015-2016. The program was initiated personally by Putin V. V. and the related funding is included in budgets of major regions.
» Most funding will come in frame of regular purchases by federal facilities and centralized purchases on the level of regions.
» Significant reduction is expected due to Ruble devaluation.
Segment’s volume change in 2012-2014 + forecasts 2015-2016 (chart: customs import value in R mlns)
Back to the list of segments X-ray, CT, MRI 5
CT17%
MRI48%
dXr12%
iXr9%
Mammography3%
Stomatology4%
Spare parts7%
valid.
2014
CT23%
MRI29%
dXr14%
iXr11%
Mammography2%
Stomatology7%
Spare parts14%
valid.
2013
Segmentation by product categories(charts: customs import value in US$)
Back to the list of segments X-ray, CT, MRI 6
CT22%
MRI24%
dXr23%
iXr12%
Mammography5%
Stomatology3%
Spare parts11%
valid.
2012
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Spare parts
Stomatology
Mammography
iXr
dXr
MRI
CT
valid.
Segmentation by product categories(charts: customs import value in US$)
Back to the list of segments X-ray, CT, MRI 7
» Total segment’s volume in customs import prices -$1,076.8 mln
» Estimated segment’s volume in customer final prices -$1,535.0 mln
» In 2012 the cumulative share of the segment equaled to 32% of DPPHS
» The of demand was in 2012 due to implementation of Healthcare Modernization program (funding from federal and regional budgets primarily intended for diagnostic equipment) and separate purchases by federal facilities
Major manufacturers in 2012
Siemens $210,949.7 -
GE Healthcare
$193,550.3 -
Philips $170,796.2 -
Toshiba $171,941.1 -
Villa SistemiMedicali
$31,727.0 -
Hitachi $26,257.0 -
Fujifilm $17,907.5 -
DMS Apelem
$15,535.1 -
Others $238,090.6 -
valid.
estim.Siemens
20%
GE Healthcare
18%
Philips16%
Toshiba16%
Villa Sistemi Medicali
3%
Hitachi2%
Fujifilm Corporation
2%
DMS Apelem1%
Others22%
valid.
Segment volume in 2012(chart, table: customs import value in US$ thds)
Back to the list of segments X-ray, CT, MRI 8
» Total segment’s volume in customs import prices -$575.9 mln
» Estimated segment’s volume in customer final prices -$830.0 mln
» After the successful year 2012 major manufacturers considerably reduced the imported volume. Residual funding in frame of Healthcare Modernization plus other funding programs ongoing could not compensate the same rate of demand.
» Some of market leaders decreased their market share. GE Healthcare and a number of other manufacturers managed to keep the volume of sales thereby increasing market share
Major manufacturers in 2013
Siemens $119,475.4
GE Healthcare
$134,411.0
Philips $77,976.8
Toshiba $72,349.2
Sirona $9,035.9
Hitachi $11,918.6
Neurologica $9,798.5
Others $140,908.1 -
valid.
estim.Siemens
21%
GE Healthcare
23%
Philips13%
Toshiba13%Sirona
2%
Hitachi2%
Neurologica2%
Others24%
valid.
Segment volume in 2012(chart, table: customs import value in US$ thds)
Back to the list of segments X-ray, CT, MRI 9
Forecasts 2015
» Expected cumulative reduction by 30.5% => $273.0 mln. Totally attributable to currency devaluation.
» Expected growth by 5.1% compared to 2014 in Rubles.
» Major contributors for 2015 are 32 neonatal centers, new cardiac surgery centers and departments andother and public and private facilities
» Not expected any specific federal funding in 2015
Forecasts 2016
» Based on assumption that macroeconomic situation is improving in 2016 expected volume will be => $340.0 mln.
» Growth by more than 24.5% in $ due to:
» Ruble change positive effect
» Demand from other public and private facilities due to necessity of replacing obsolete equipment
» Expected reduction by 3.4% in Rubles
Forecasts 2015-2016(customs import value in US$)
Back to the list of segments X-ray, CT, MRI 10
Demand rate is volatile, cyclical
» Skyrocketing trends in the segment follow industry growth
» The segment is basic for equipping of Radiology department and Radiation oncology department
» Strong drivers: “32 new perinatal centers construction and launch” – MRIs; “Cardiac surgery departments and centers construction and launch” – Interventional X-ray
Major financing sources:
» Modernization program (2011-2013)
» Oncology program (2009-2014)
» Patient care improvement program for those injured in traffic accidents (2009-2014)
» Regular purchases from public and private facilities (not limited in period)
» New 32 perinatal centers construction and launch (2015-2016)
» Cardiac surgery departments and centers construction and launch (2015)
Rate of demand, funding
Back to the list of segments X-ray, CT, MRI 11
Major players:
» MRIs: Siemens, GE, Philips
» CTs: Siemens, GE, Toshiba, Philips
» Interventional x-ray: Siemens, GE, Philips
» Diagnostic x-ray devices: Siemens, Villa Sistemi Medicali, GE, Italray, Toshiba, Philips
» Mammography devices: Siemens, IMS Internazionale, GE
» Dental x-ray: Sirona, Planmeca, Palodex
» Other:
Major players
Back to the list of segments X-ray, CT, MRI 12
Indicator Figure
Estimated total for 2014 $66.8 mln
Cumulative growth 2014/2012 -71.7%
Growth 2014/2013 -49.4%
Estimated CAGR for 2012-2014 -46.8%
Expected growth rate 2015/2014
$ -25-22%
R 13-17%
Expected total for 2015 – $50-52 mln. Expected moderate growth of demand against decrease in Ruble value => moderate drop in $, growth in R
Major drivers of demand are federal hospitals, not expected federal funding in frame of specific programs
valid.
valid.
valid.
estim.
estim.
estim.
valid.
GE Healthcare26%
Hitachi3%
Philips9%
Siemens32%
Toshiba27%
Others3%
valid.
CT scanners in 2014(chart: customs import value in US$)
Back to the list of segments X-ray, CT, MRI 13
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
Toshiba
Siemens
Philips
Hitachi
GE Healthcare
valid. 2012 2013 2014
GE $37,703.2 $34,167.2 $17,315.6
Hitachi $8,521.5 $817.2 $1,997.0
Philips $58,298.3 $24,078.8 $6,051.8
Siemens $66,403.0 $34,484.6 $21,644.8
Toshiba $60,997.2 $25,632.5 $18,045.7
Others $3,825.7 $12,594.8 $1,733.1
$0.00
$100,000.00
$200,000.00
$300,000.00
2012 2013 2014
CT scanners in 2012-2014(chart, table: customs import value in US$ thds)
Back to the list of segments X-ray, CT, MRI 14
Indicator Figure
Estimated total for 2014 $187.1 mln
Cumulative growth 2014/2012 -28.4%
Growth rate 2014/2013 13.4%
Estimated CAGR for 2012-2014 -15.4%
Expected growth rate 2015/2014
$ -49-46%
R -23-19%
Expected total for 2015 – $95-100 mln. Demandoversaturation in 2012-2014 will supposedly lead to severe shortage in 2015
Funding from federal budget in 2015-2016 related to 32 new perinatal centers launch and construction
estim.
valid.
estim.
estim.
estim.
Anke High-Tech1%
GE Healthcare36%
Hitachi1%
Philips9%
Siemens48%
Toshiba3%
Others2%
valid.
MRI scanners in 2014(chart: customs import value in US$)
Back to the list of segments X-ray, CT, MRI 15
valid.
valid.
2012 2013 2014
GE $63,475.3 $52,484.2 $68,040.7
Hitachi $14,408.3 $9,587.1 $2,405.8
Anke $3,679.2 $2,729.2 $2,181.6
Philips $43,513.9 $28,612.4 $16,649.9
Siemens $65,561.3 $49,609.7 $88,944.1
Toshiba $56,499.0 $17,445.4 $6,279.5
Others $14,117.1 $4,563.0 $2,573.8
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Anke High-Tech
Others
Toshiba
Siemens
Philips
Hitachi
GE Healthcare
valid.
$0.00
$100,000.00
$200,000.00
$300,000.00
2012 2013 2014
MRI scanners in 2012-2014(chart, table: customs import value in US$ thds)
Back to the list of segments X-ray, CT, MRI 16
Indicator Figure
Estimated total for 2014 $46.7 mln
Cumulative growth 2014/2012 -81.3%
Growth 2014/2013 -40.9%
Estimated CAGR for 2012-2014 -56.7%
Expected growth rate 2015/2014
$ -26-21%
R 12-19%
Expected total for 2015 – $35-37 mln. No significant changes in demand are expected. Shortage in $ due to R devaluation
No specific funding for 2015, there is a possibility of moderately growing demand due to necessity of replacing the obsolete equipment that was acquired in frame of Healthcare Modernization (2011-2013)
valid.
valid.
valid.
valid.
estim.
estim.
estim.
Fujifilm4%
GE Healthcare9%
General Medical Merate
5%
GMI3%
Italray8%
Philips6%
Shimadzu4%Siemens
24%
Toshiba6%
Villa Sistemi Medicali
12%
Others19%
valid.
Diagnostic x-ray devices in 2014(chart: customs import value in US$)
Back to the list of segments X-ray, CT, MRI 17
2012 2013 2014
GE $33,128.5 $10,077.1 $4,402.1
Villa SistemiMedicali
$23,998.0 $5,117.2 $5,593.4
Siemens $32,919.5 $10,130.3 $11,267.1
Italray $7,288.8 $3,523.2 $3,942.0
DMS Apelem $15,535.1 $1,993.0 $907.9
Philips $19,301.6 $4,307.8 $2,896.5
Toshiba $31,110.0 $2,533.2 $2,580.2
MS Westfalia $10,981.2 $787.7 $323.6
Others $76,991.2 $41,216.6 $12,795.7
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
MS Westfalia
Toshiba
Philips
DMS Apelem
Italray
Siemens
Villa Sistemi Medicali
GE Healthcare
valid.
$0.00
$100,000.00
$200,000.00
$300,000.00
2012 2013 2014
Diagnostic x-ray devices in 2012-2014(chart, table: customs import value in US$ thds)
Back to the list of segments X-ray, CT, MRI 18
Indicator Figure
Estimated total for 2014 $35.5 mln
Cumulative growth 2014/2012 -71.1%
Growth 2014/2013 -39.9%
Estimated CAGR for 2012-2014 -46.2%
Expected growth rate 2015/2014
$ 8-15%
R 64-73%
Expected total for 2015 – $40-42 mln. Anticipatedsignificant growth attributable to the federal and regional funds provided to cardiac surgery units andseparate cardiac centers
Extensive funding in frame of new cardiac surgery departments and centers construction and launch
estim.
estim.
estim.
DMS Apelem4%
GE Healthcare27%
Philips20%
Siemens32%
Ziehm Imaging6%
Others11%
valid.
Interventional x-ray devices in 2014(chart: customs import value in US$)
Back to the list of segments X-ray, CT, MRI 19
valid.
valid.
valid.
valid.
2012 2013 2014
GE $34,591.8 $19,182.1 $9,857.2
Philips $33,519.5 $9,343.2 $7,543.4
Siemens $26,680.3 $12,704.3 $11,634.1
Toshiba $9,384.8 $9,421.1 $737.6
Ziehm Imaging
$7,750.4 $4,832.7 $2,242.8
Others $15,124.3 $5,611.1 $4,742.3
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
Ziehm Imaging
Toshiba
Siemens
Philips
GE Healthcare
valid.
$0.00
$50,000.00
$100,000.00
$150,000.00
2012 2013 2014
Interventional x-ray devices in 2012-2014(chart, table: customs import value in US$ thds)
Back to the list of segments X-ray, CT, MRI 20
Indicator Figure
Estimated total for 2014 $12.2 mln
Cumulative growth 2014/2012 -74.2%
Growth 2014/2013 -13.6%
Estimated CAGR for 2012-2014 -49.2%
Expected growth rate 2015/2014
$ -13-5%
R 32-44%
Expected total for 2015 – $11-12 mln. Moderategrowth against decrease in Ruble value
Partial funding in frame of new 32 perinatal centers construction and launch
estim.
estim.
estim.
Fujifilm11%
GE Healthcare17%
IMS Internazionale
21%
Medi-Future11%
Philips10%
Siemens21%
Others9%
valid.
Mammography devices in 2014(chart: customs import value in US$)
Back to the list of segments X-ray, CT, MRI 21
valid.
valid.
valid.
valid.
2012 2013 2014
Fujifilm $10,213.6 $2,451.4 $1,389.8
GE $6,450.6 $1,681.0 $2,012.9
Philips $3,360.2 $291.8 $1,220.2
IMS Internazionale
$5,301.3 $1,625.8 $2,572.6
Siemens $11,403.6 $3,930.9 $2,601.0
Others $12,130.5 $4,643.0 $2,759.7
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
Siemens
IMS Internazionale
Philips
GE Healthcare
Fujifilm
valid.
$0.00
$20,000.00
$40,000.00
$60,000.00
2012 2013 2014
Mammography devices in 2012-2014(chart, table: customs import value in US$ thds)
Back to the list of segments X-ray, CT, MRI 22
Indicator Figure
Estimated total for 2014 $15.7 mln
Cumulative growth 2014/2012 -54.4%
Growth 2014/2013 -61.8%
Estimated CAGR for 2012-2014 -32.5%
Expected growth rate 2015/2014
$ -11-4%
R 35-45%
Expected total for 2015 – $14-15 mln. attributable demand from private facilities, continuing reduction in the public sector
No specific funding in frame of federal or regional budgets
valid.
valid.
valid.
valid.
estim.
estim.
estim.
Gendex7%
Imaging Sciences
7%
Palodex15%
Planmeca20%Sirona
22%
Trophy8%
Others21%
valid.
Dental x-ray devices in 2014(chart: customs import value in US$)
Back to the list of segments X-ray, CT, MRI 23
2012 2013 2014
Gendex $1,334.1 $3,538.9 $1,041.7
Imaging Sciences
$1,677.8 $690.0 $1,082.3
Palodex $3,530.9 $4,982.8 $2,240.2
Planmeca $8,183.5 $6,238.4 $2,992.0
Sirona $6,172.3 $8,189.7 $3,343.9
Trophy $2,285.6 $5,039.3 $1,218.0
Others $11,179.3 $12,269.2 $3,743.3
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
Trophy
Sirona
Planmeca
Palodex
Imaging Sciences
Gendex
valid.
$0.00
$15,000.00
$30,000.00
$45,000.00
2012 2013 2014
Dental x-ray devices in 2012-2014(chart, table: customs import value in US$ thds)
Back to the list of segments X-ray, CT, MRI 24
In 2012 these three product categories accounted for 69% of total market volume thus forming the basis for the entire segment. Demand oversaturation in the part of dXr during the Healthcare Modernization led to severe subsequent drop. CT and MRI are expected to be main drivers in 2015-2016 in frame of regular purchases from federal hospitals and private facilities. $0.0
$50,000.0
$100,000.0
$150,000.0
$200,000.0
$250,000.0
$300,000.0
2012 2013 2014 2015 2016
CT
MRI
dXr
CAGR 2012-2014
CAGR 2014-2016
forecasts
- 46.8%
9.4%
- 15.4%
- 23.3%
- 56.7%
- 7.8%
Trends per product groups in 2012-2014 + forecasts 2015-2016(chart: customs import value in US$ thds)
Back to the list of segments X-ray, CT, MRI 25
iXr and mammography devices formed an important part of Healthcare modernization program. Dental x-ray devices are mainly purchased by private facilities, got minor part of Healthcare Modernization funding in 2011-2013. No substantial changes are expected in 2015-2016, expected nearly the same rate of demand with slight growth due to macroeconomic recovery and private sector growth (dental).
$0.0
$20,000.0
$40,000.0
$60,000.0
$80,000.0
$100,000.0
$120,000.0
$140,000.0
2012 2013 2014 2015 2016
iXr
Mammography
Stomatology
CAGR 2012-2014
CAGR 2014-2016
forecasts- 46.2%
10.7%
- 32.5%
13.0%
- 49.2%
1.5%
Trends per product groups in 2012-2014 + forecasts 2015-2016(chart: customs import value in US$ thds)
Back to the list of segments X-ray, CT, MRI 26
Rank Clients categories Ownership Key products purchased
1 Federal StateBudget Hospitals –all types of diagnostics
Public High-end devices regardless of price. Due to highest patients flow require numerous units to be installed. Some of top hospitals can have up to 4 CTs, 1-2 MRIs, 1-3 angiography devices, numerous diagnostic x-ray devices. Average federal hospital have at least one product of each group (CT/MRI/iXr/dXr). Due to highest flow of interventions largest amount of diagnostic procedures is to be done. Total cost of required devices can vary within $10-20 mln per facility (current Ruble value).In frame of Government spending receive the strongest funding from Federal Budget
2 Moscow and Saint-Petersburg City Clinical Hospitals –all types
Public Premium devices of higher price segment. Practically have almost the same patients’ flows as federal hospitals do. Top hospitals have at least one product of each group (CT/MRI/iXr/dXr). More diagnostic devices are required in frame of ambulatory care provided to Moscow and Saint-Petersburg citizens. Total cost of required devices can vary within $5-9 mln per facility (current Ruble value).In frame of City budget receive strong funding, more limited in funds compared to federal hospitals
Key accounts segmentation
Back to the list of segments X-ray, CT, MRI 27
Rank Clients categories Ownership Key products purchased
3 Regional Perinatal Centers –mammography diagnostics, MRI diagnostics for neonates
Public Devices of mid and higher price segments. According to the list of required equipment, at least one MRI and diagnostic x-ray devices (incl. mammography in some cases) are to be installed per perinatal center. Some of perinatal centers are based on existing hospitals (normally regional clinical hospitals), that is why some equipment may not be required. Average cost of devices (MRI + diagnostic x-ray) can vary within $3-4 mln per facility (current Ruble value).Have substantial funds provided in frame of federal spending. Short period of demand (2015-2017)
Key accounts segmentation
Back to the list of segments X-ray, CT, MRI 28
Rank Clients categories Ownership Key products purchased
4 Regional Clinical Hospitals – multi-disciplinary
Public Devices of mid and higher price segments. Regional Clinical Hospitals are not standardized across regions of Russia. Some of them have stronger funding (e.g. Krasnodar Regional Clinical Hospital #1, Hanty-Mansiysk Regional Clinical Hospital), other facilities are limited in funds (Republic Clinical Hospital of Kabardino-Balkaria, Republic Clinical Hospital of Karelia). These factors directly depend on Regional Budget (composed in accordance with regional GDP) and population level. Normally Regional Clinical Hospitals at least have one CT, dXr, simple iXr (so called C-arm). Some hospitals can have MRI installed. Average cost of devices can vary within $1.5-5.0 mln per facility (current Ruble value). In most cases radio diagnostics is purchased in frame of federal programs Mostly buy radio diagnostics equipment when provided by federal funding. Have own limited budgets to re-equip the obsolete devices, normally buying one new device per year
Key accounts segmentation
Back to the list of segments X-ray, CT, MRI 29
Rank Clients categories Ownership Key products purchased
5 Local City Hospitals – multi-disciplinary
Public Devices of mid and low price segments. Local City Hospitals are limited in own funds, have no opportunity to buy high quality diagnostics equipment at their own expense. Normally these facilities can afford to buy advanced devices if provided with federal funding. In 2012-2014 they were a part Healthcare Modernization, Patient care improvement program for injured in traffic accidents, etc. Some hospitals of top regions of Russia (with the highest GDP) can get funding from regional budget. Equipment fleet is composed of dXr, mammography device (sometimes), CT (rarely). Total cost of equipment can vary within $0.8-2.0 mln per facility (current Ruble value).In most cases buy radio diagnostics equipment when provided with funds from federal budget. Strongly limited in own funds
Key accounts segmentation
Back to the list of segments X-ray, CT, MRI 30
Rank Clients categories Ownership Key products purchased
6 Local Municipal Hospitals – multi-disciplinary
Public Devices of low price segment / no opportunity to buy devices. Local Municipal hospitals cannot afford to buy radio diagnostics devices on their own account. These facilities can get funding in frame of federal programs or (sometimes) in frame specialized regional programs. In 2012-2014 they could get funding in frame of Healthcare Modernizations and Patient care improvement program for injured in traffic accidents. Equipment fleet is composed of dXr (sometimes), mammography device (rarely). In case of required diagnostics for patients these hospitals refer patients to regional clinical or local city hospitals nearby. Total cost of equipment can vary within $0.2-0.5 mln per facility (current Ruble value).Only buy radio diagnostics equipment when provided with funds from federal budget. Extremely limited in own funds
Key accounts segmentation
Back to the list of segments X-ray, CT, MRI 31
Rank Clients categories Ownership Key products purchased
7 Private Hospitals –multi-disciplinary
Private Devices of any price segments / depending on specialization and location. Demand directly depends on the specialization and format of the facility. Can be divided into numerous types:1. Major private hospitals in Moscow and Saint-Petersburg (e.g. European
Medical Center, Meditsina JSC, etc.) have CT, MRI, dXr, mammography device of premium price segment in frame of one multi-disciplinary facility.
2. Network hospitals (e.g. Medsi, Family Doctor, etc. – 60% of them are located in Moscow and Saint-Petersburg) can have at least CT, MRI, dXr, mammography device of premium price segment distributed between branches and central facility.
3. Specialized CT/MRI diagnostics network centers have numerous CTs/MRIsof mid and low price segments distributed between branches.
Only can use own funds to buy radio diagnostics equipment. Funding depends on investments provided by private entities
Key accounts segmentation
Back to the list of segments X-ray, CT, MRI 32
Market capacity is generated by:
» New launches of cardiac surgery centers and departments starting from 2015 (iXr)
» New launches of new perinatal centers across Russia (MRI, dXr, mammography)
» New launches of federal facilities (CT, MRI, dXr, iXr, mammography)
» New launches of Oncology and PET Centers (CT, MRI)
» New launches of dental clinics/offices (dental x-ray)
Total market capacity equals to $6,100.0 mln
» CT - $1,900.0 mln
» MRI - $2,700.0 mln
» dXr - $800.0 mln
» iXr - $400.0 mln
» Mammography devices - $200 mln
» Dental - $100.0 mln
Market capacity, expectations
Back to the list of segments X-ray, CT, MRI 33
Radio diagnostics equipment is considered to be high-technology. Average demand/capacity rate equals to 10-11%
Market capacity will grow 4-5% in 2015-2017 attributable to purchases by new facilities and extended equipment fleet for existing facilities
After this period the growth of market capacity can slow down significantly due to necessity of replacement of obsolete devices
Market demand will increase moderately in 2016-2018 due to purchase in frame of federal programs and separate purchases. Much stronger growth trend 2019-2020 will be fostered by necessity of replacing the obsolete devices in major hospitals across Russia
estim.
estim.
estim.
Market capacity, expectations
Back to the list of segments X-ray, CT, MRI 34
Functional Diagnostics
Functional diagnostics equipment in most cases can be referred to secondary products from point of hospitals equipping. Related devices are normally acquired in frame of regular purchases. In 2012-2013 major funding provided in frame of Healthcare Modernization program (residual funding)
Local competition is mainly represented by local manufacturers of ECG, EEG and other neurology devices. ECG and Holter ECG devices, other cardiology monitoring systems have been already included in the list of #102 Resolution of the Russian Government.
Resume
Funding 2012-2014:
» Healthcare Modernization program – major source of investment for the period of 2011-2013. Strongest demand on ENT combines and ECG devices. Reduction of demand starting from 2014 caused by termination of funding in frame of Healthcare Modernization. The demand of 2014 more correlates to “real” demand from public and private facilities
» Regular purchases from public and private facilities –major source of investment starting from 2014. Any public facility is required to have at least ECG, ENT diagnostics, EEG, spirometry, stethoscopes, etc. Nearly all multi-disciplinary private can have a complete set of equipment for functional diagnostics
Funding 2015-2016:
» Regular purchases from public and private facilities –major investment source for future periods. Normally tenders related to this field are launched and supervised by hospitals without any intervention of regional authorities.
» 32 new Perinatal centers 2015-2016 – secondary investment source for the period of 2015-2017. ENT diagnostics and ECG devices are required in frame of the program. The total cost equipment can vary within $0.1-0.3 mln
» New launches of public facilities – expected demand form newly launched public hospitals
Back to the list of segments Functional Diagnostics 1
In scope:
» ECG Devices
» Holter ECG and blood pressure monitoring
» Neurology (EEG, EMG, etc.)
» ENT diagnostics (ENT combines, audiometers, laryngoscopes, etc.)
» Complex diagnostics
» Other (spirometers, stethoscopes, etc.)
» Blood pressure monitoring devices
CAGR for 2012 – 2014:
ECG devices
- 43.3%Holter ECG & blood pressure monitoring
ENT diagnostics (ENT combines, audiometers, laryngoscopes, etc.)
- 17.2%
Neurology (EEG, EMG, etc.)
- 26.3%Complex diagnostics
Other (spirometers, stethoscopes, etc.)
Blood pressuremonitoring
- 11.3%
Structure
Blood pressure monitoring mostly can be regarded to consumer sector. More than 70% of BPM devices are consumed by ordinary customers through the chains of drug stores or other distribution channels. At the same time a part of the segment is closely bounded with the private and public hospitals. Intentionally we did not include it in basic calculations in order to highlight the DPPHS focus. A couple of slides are devoted to BPM
Back to the list of segments Functional Diagnostics 2
Segment volume in 2014:
» Cumulative reduction by 50.2% compared to 2013 (in US$)
» Reduction by more than 40.0% compared to 2013 (in Rubles)
» Segment’s total in customs import prices for 2014 - $34.3 mln
» Estimated segment’s total in customer final prices for 2014 - $65.0 mln
The demand was stable and growing in 2012-2013 as a result of excessive funding in frame of Healthcare Modernization; then reduced drastically in 2014 as a result of lack of federal funding. Total demand in 2014 only equals to 51,5% of demand in 2012.
valid.
valid.
valid.
estim.
Indicators 2014
Back to the list of segments Functional Diagnostics 3
Interacoustics18%
Schiller8%
G. Heinemann7%
Natus5%
Atmos5%
Nihon Kohden1%
Mortara Instruments
2%
GE Healthcare3%
Carefusion3%
Others48%
valid.
Functional diagnostics in 2012-2014:
» The segment was part of Healthcare Modernization federal program in 2011-2013. Major investments came in 2012-2013 as a residual funding from Healthcare Modernization.
» EGG and ENT devices are considered separately from other devices (neurology, spirometry, etc.) as a result of more focus from federal authorities: both ECG and ENT devices were included in the list of required devices during the Healthcare Modernization.
» Severe reduction of demand in 2014 was due to end of Healthcare Modernization. Major funds in 2014 came from own budgets of hospitals. In 2014 the overall reduction affected the parts of ECG devices and other devices. The part of ENT devices demonstrated more resistance and decline less than the market.
Segment’s volume change in 2012-2014 + forecasts 2015-2016 (chart: customs import value in US$ thds)
Back to the list of segments Functional Diagnostics 4
$0.00
$10,000.00
$20,000.00
$30,000.00
$40,000.00
$50,000.00
$60,000.00
$70,000.00
$80,000.00
2012 2013 2014 2015 2016
valid.
Functional diagnostics in 2015-2016:
» No significant changes are expected in 2015-2016. The segment can decrease slightly amid severe Ruble devaluation. Demand in Rubles will grow strongly as a reaction on increasing cost of equipment with greater demand calculated in units.
» ENT and ECG devices are included in the list of required devices in frame of federal program Construction & launch of 32 new Perinatal centers. Some other devices are also included in that list; total cost of required devices in frame of this program can vary within $9-11 mln per 32 new perinatal centers.
» In 2016 the demand will continue to grow following the expected Ruble revaluation and growing demand from public and private facilities.
Segment’s volume change in 2012-2014 + forecasts 2015-2016 (chart: customs import value in R mlns)
Back to the list of segments Functional Diagnostics 5
0.0 ₽
500.0 ₽
1,000.0 ₽
1,500.0 ₽
2,000.0 ₽
2,500.0 ₽
2012 2013 2014 2015 2016
valid.
Segmentation by product categories(charts: customs import value in US$)
Back to the list of segments Functional Diagnostics 6
ECG devices, holter ECG/BP
19%
ENT devices39%
Other (complex
diagnostics, neurology, spirometry,
etc.)42%
valid.
2014
ECG devices, holter ECG/BP
37%
ENT devices21%
Other (complex
diagnostics, neurology, spirometry,
etc.)42%
valid.
2013
Segmentation by product categories(charts: customs import value in US$)
ECG devices, holter ECG/BP
31%
ENT devices29%
Other (complex
diagnostics, neurology, spirometry,
etc.)40%
valid.
2012
Back to the list of segments Functional Diagnostics 7
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Other (complexdiagnostics,neurology,spirometry, etc.)
ENT devices
ECG devices,holter ECG/BP
Major manufacturers in 2012
G. Heinemann $10,638.1 -
Schiller $7,595.4 -
Natus $4,979.7 -
Interacoustics $3,595.3 -
Carefusion $2,686.9 -
Welch Allyn $2,354.0 -
MortaraInstruments
$2,189.7 -
Nihon Kohden $2,182.4 -
GE Healthcare $2,272.9 -
Fukuda Denshi
$2,141.3 -
Others $25,887.0 -
» Total segment’s volume in customs import prices -$66.5 mln
» Estimated segment’s volume in customer final prices - $130.0 mln
» Major contributors of year 2012 were federal facilities (account for more than 90% of expensive high-tech ECG & neurology devices.
» Regional, local city and municipal hospitals account for more than 60% of ENT devices purchases. Above the normal demand was due to insufficient equipment fleet.
Segment volume in 2012(chart, table: customs import value in US$ thds)
G. Heinemann16%
Schiller12%
Natus8%
Interacoustics5%
Carefusion4%
Welch Allyn4%
Mortara Instruments
3%
Nihon Kohden3%
GE Healthcare3%
Fukuda Denshi
3%
Others39%
valid.
Back to the list of segments Functional Diagnostics 8
Major manufacturers in 2013
Schiller $12,978.3
Covidien $5,999.5
Natus $4,634.2
G. Heinemann $4,061.7
Mortara Instruments
$3,878.9
Interacoustics $3,537.2
Carefusion $3,011.0
Fukuda Denshi
$2,119.9
GE Healthcare $1,835.7
Nihon Kohden $1,890.9
Others $24,227.6 -
» Total segment’s volume in customs import prices -$68.2 mln
» Estimated segment’s volume in customer final prices – $135.0 mln
» Overall demand increase due to significant growth in the parts of ECG devices and other devices amid considerable decline in the part of ENT devices.
» Major contributors of year 2013 were regional, local city and municipal hospitals (mainly purchases of ECG devices.
Segment volume in 2013(chart, table: customs import value in US$ thds)
Back to the list of segments Functional Diagnostics 9
Schiller19%
Covidien9%
Natus7%
G. Heinemann6%
Mortara Instruments
6%Interacoustics5%
Carefusion4%
Fukuda Denshi
3%
GE Healthcare3%
Nihon Kohden
3%
Others35%
valid.
Forecasts 2015
» Expected cumulative reduction by 8.1% => $31.5 mln. Totally attributable to local currency devaluation.
» Expected growth by 38.9% compared to 2014 in Rubles.
» Major contributors for 2015 are 32 perinatal centers
Forecasts 2016
» Based on assumption that macroeconomic situation is improving in 2016 expected volume will be => $40.0 mln.
» Growth by more than 27.0% in $ due to:
» Ruble change positive effect
» Demand from new 32 perinatal centers
» Stronger demand from other public and private facilities due to necessity of replacing obsolete equipment
» Expected reduction by 1.5% in Rubles
Forecasts 2015-2016(customs import value in US$)
Back to the list of segments Functional Diagnostics 10
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 Functional Diagnostics units
» Considered to be secondary in terms of hospital equipment
Major financing sources:
» Healthcare Modernization program (2011-2013)
» Regular purchases (not limited in period)
» New 32 perinatal centers (2015-2016)
Rate of demand, funding
Back to the list of segments Functional Diagnostics 11
Major players:
» ECG devices, Holter ECG and blood pressure monitoring: Schiller, GE Healthcare, Mortara Instruments
» Neurology (EEG, EMG, etc.): Natus, EB Neuro, Nihon Kohden
» ENT diagnostics (ENT combines, audiometers, laryngoscopes, etc.: Atmos, G. Heinemann, HappersbergerOtopront
» Complex diagnostics: Cosmed, H/P/Cosmos
» Other (spirometers, stethoscopes, etc.): Carefusin, Eresearch Technology, Vitalograph, 3M Company
» Blood pressure monitoring devices: Omron, A&D Company, B.Well, Little Doctor
Back to the list of segments
Major players
Back to the list of segments Functional Diagnostics 12
Indicator Figure
Estimated total for 2014 $6.7 mln
Cumulative growth 2014/2012 -67.9%
Growth 2014/2013 -74.1%
Estimated CAGR for 2012-2014 -43.3%
Expected growth rate 2015/2014
$ 12-27%
R 70-92%
Expected total for 2015 – $7.5-8.5 mln. Estimated growth due to growing demand from primarily public facilities.
Started implementation of federal program 32 new perinatal centers launch and construction
valid.
estim.
estim.
estim.
valid.
ECG devices, Holter ECG/BP in 2014(chart: customs import value in US$)
Schiller36%
GE Healthcare10%
Mortara Instruments
10%
Utas9%
Nihon Kohden5%
Others30%
valid.
Back to the list of segments Functional Diagnostics 13
valid.
valid.
2012 2013 2014
Schiller $7,390.9 $12,687.3 $2,397.8
GE Healthcare $1,820.2 $1,835.7 $691.8
MortaraInstruments
$2,189.7 $3,878.9 $681.2
Utas $209.1 $368.9 $572.2
Nihon Kohden $1,677.0 $1,890.9 $308.0
Fukuda Denshi $1,634.3 $1,654.2 $371.1
Others $5,817.9 $3,384.8 $1,637.8
ECG devices, Holter ECG/BP in 2012-2014(chart, table: customs import value in US$ thds)
Back to the list of segments Functional Diagnostics 14
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
Fukuda Denshi
Nihon Kohden
Utas
Mortara Instruments
GE Healthcare
Schiller
valid.
$0.00
$10,000.00
$20,000.00
$30,000.00
2012 2013 2014
Indicator Figure
Estimated total for 2014 $13.4 mln
Cumulative growth 2014/2012 -31.4%
Growth 2014/2013 -6.5%
Estimated CAGR for 2012-2014 -17.2%
Expected growth rate 2015/2014
$ -17-10%
R 24-35%
Expected total for 2015 – $11-12 mln. Estimated shortage due to severe Ruble devaluation. Moderate growth of the segment if calculated in Rubles due to stronger federal funding
Started implementation of federal program 32 new perinatal centers launch and construction
valid.
estim.
estim.
estim.
valid.
ENT devices in 2014(chart: customs import value in US$)
Interacoustics46%
G. Heinemann18%
Atmos12%
Happersberger Otopront
7%
Others17%
valid.
Back to the list of segments Functional Diagnostics 15
valid.
valid.
2012 2013 2014
Interacoustics $3,595.3 $3,537.2 $6,099.8
G. Heinemann $10,638.1 $4,061.7 $2,443.0
Atmos $559.8 $1,686.1 $1,554.7
HappersbergerOtopront
$1,461.4 $1,314.7 $940.1
Others $3,244.8 $3,709.8 $2,343.1
ENT devices in 2012-2014(chart, table: customs import value in US$ thds)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
HappersbergerOtopront
Atmos
G. Heinemann
Interacoustics
valid.
$0.00
$10,000.00
$20,000.00
$30,000.00
2012 2013 2014
Back to the list of segments Functional Diagnostics 16
Indicator Figure
Estimated total for 2014 $14.2 mln
Cumulative growth 2014/2012 -45.7%
Growth 2014/2013 -50.7%
Estimated CAGR for 2012-2014 -26.3%
Expected growth rate 2015/2014
$ -8-5%
R 38-59%
Expected total for 2015 – $13-15 mln.
Started implementation of federal program 32 new perinatal centers launch and construction
valid.
estim.
estim.
estim.
valid.
Other devices (complex diagnostics, neurology, spirometry, etc.) in 2014(chart: customs import value in US$)
Natus13%
Carefusion6%
H/P/Cosmos6%
Cosmed5%
Vitalograph5%
Eresearch Technology
4%
Others61%
valid.
Back to the list of segments Functional Diagnostics 17
valid.
valid.
2012 2013 2014
Natus $4,979.7 $4,634.2 $1,804.4
Carefusion $2,686.9 $3,011.0 $856.1
H/P/Cosmos $621.1 $171.7 $843.5
Cosmed $436.3 $641.8 $752.9
Vitalograph $434.1 $129.0 $681.4
EresearchTechnology
$818.8 $975.2 $611.3
Covidien $1,144.3 $5,999.5 $526.0
Others $14,634.9 $12,695.7 $8,099.8
Neonatal incubators, infant warmers, other neonatal equipment in 2012-2014(chart, table: customs import value in US$ thds)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
Covidien
EresearchTechnologyVitalograph
Cosmed
H/P/Cosmos
Carefusion
Natus
valid.
$0.00
$10,000.00
$20,000.00
$30,000.00
2012 2013 2014
Back to the list of segments Functional Diagnostics 18
The segment of functional diagnostics was not major part of any federal program. In 2012-2013 numerous hospitals (mainly regional, local city and municipal) got investments in frame of Healthcare Modernization. Total contribution of federal hospitals didn’t exceed the 30% in frame of the segment during 2012-2014. Demand in 2015-2016 will be primarily shaped by regular purchases and purchases in frame of federal program Construction & launch of 23 new perinatal centers.
Trends per product groups in 2012-2014 + forecasts 2015-2016(chart: customs import value in US$ thds)
$0.0
$5,000.0
$10,000.0
$15,000.0
$20,000.0
$25,000.0
$30,000.0
$35,000.0
2012 2013 2014 2015 2016
ECG devices, holterECG/BP
ENT devices
Other (complexdiagnostics,neurology,spirometry, etc.)
CAGR 2012-2014
CAGR 2014-2016
forecasts- 26.3%
9.3%
Back to the list of segments Functional Diagnostics 19
- 17.2%
2.3%
- 43.3%
16.3%
Indicator Figure
Estimated total for 2014 $87.5 mln
Cumulative growth 2014/2012 -21.4%
Growth 2014/2013 -21.0%
Estimated CAGR for 2012-2014 -11.3%
Expected growth rate 2015/2014
$ -20-18%
R 20-24%
Expected total for 2015 – $70-72 mln. Reduction due to Ruble devaluation amid falling purchasing power of ordinary consumers. Demand from public and private hospitals is not expected to change significantly
Heavy reliance on consumer sector will lead to lower demand in a mid term
valid.
valid.
valid.
valid.
estim.
estim.
estim.
Blood pressure monitoring in 2014(chart: customs import value in US$)
Back to the list of segments Functional Diagnostics 20
Omron41%
A&D Company38%
B.Well5%
Little Doctor4%
PT NSS (Nissei)4%
CS Medica3%
Medical Technology
Products2%
Microlife1%
Citizen Systems
1%Others
1%
valid.
2012 2013 2014
Omron $35 492,0 $42 567,6 $36 512,0
A&D Company
$41 771,3 $34 739,7 $33 777,6
B.Well $14 500,8 $11 834,7 $4 588,3
Little Doctor $6 476,0 $6 115,8 $3 834,1
PT NSS (Nissei)
$3 172,1 $4 174,1 $3 162,4
CS Medica $3 068,6 $3 456,1 $2 863,3
Medical Technology Products
$1 603,8 $1 495,7 $1 264,8
Microlife $2 641,5 $3 531,1 $1 180,8
Others $1 578,3 $2 274,7 $1 153,7
Blood pressure monitoring in 2012-2014(chart, table: customs import value in US$ thds)
Back to the list of segments Functional Diagnostics 21
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
Microlife
Medical TechnologyProducts
CS Medica
PT NSS (Nissei)
Little Doctor
B.Well
A&D Company
Omron
valid.
Rank Clients categories Ownership Key products purchased
1 Federal State Budget Hospitals –specialized care (traditional surgery, cardiac surgery, neurosurgery. etc.)
Public High-end devices regardless of price. Federal facilities are the biggest consumers of premium expensive devices. Due to highest patients flow and greatest # surgical interventions (calculated in 1000x) need high quality diagnostics to be done. Normally functional diagnostics devices in federal centers are used as auxiliary in a widest range of procedures and interventions. As soon as federal facilities get funding directly from federal budget then they have sufficient budgets to buy premium expensive devices. Practically consume more than 90% of extra expensive devices that are mainly used for complicated clinical cases and scientific research. Total cost of functional diagnostics equipment can vary within $0.5-$4 mln per facility (current Ruble value).In frame of Government spending receive the strongest funding from Federal Budget
Key accounts segmentation
Back to the list of segments Functional Diagnostics 22
Rank Clients categories Ownership Key products purchased
2 Moscow and Saint-Petersburg City Clinical Hospitals – multi-disciplinary
Public Premium expensive devices. City clinical hospitals of Moscow and SPb have the highest flow in frame of out-patient services. Commonly use all range of devices (ECG, ENT, neurology, spirometry, etc.). Some major city clinical hospitals can buy extra expensive devices on a smaller scale than federal centers do. Total cost of FD devices set can vary within $0.3-2 mln per facility (current Ruble value). In frame of City budget receive strong funding.
Key accounts segmentation
Back to the list of segments Functional Diagnostics 23
Rank Clients categories Ownership Key products purchased
3 Regional Perinatal Centers – neonatal care, obstetrics and gynecology
Public Higher and mid price devices. In frame of total budget provided by federal authorities are required to purchase complete devices set for FD department (ECG, ENT, EEG, Holter ECG and BP, etc.). Perinatal centers mainly use functional diagnostics for inpatient diagnostics and patients’ state monitoring. No Perinatal centers purchase extra expensive FD devices. Total cost of FD equipment can vary within $0.3-0.7 mln per facility (current Ruble value).Have substantial funds provided in frame of federal spending. Short period of demand
4 Regional Clinical Hospitals – multi-disciplinary
Public Higher and mid price devices. Regional hospitals can use own provided in frame of regional funding. Normally all regional hospitals have a complete FD department. Patients flow is comparatively high, # of surgical interventions can be estimated in 100x FD devices are required both for outpatient and inpatient services. Normally Regional hospitals do not need to purchase extra expensive devices for complicated diagnostics. Total cost of FD devices set can vary within $0.2-1 mln per facility (current Ruble value).Mostly buy ARN equipment when provided with federal funding. Have own limited budgets to renew the equipment fleet
Key accounts segmentation
Back to the list of segments Functional Diagnostics 24
Rank Clients categories Ownership Key products purchased
4 Local City Hospitals – multi-disciplinary
Public Mid and lower price devices. Local City hospitals have a limited service area and concentrated more on diagnostics => FD required for outpatient services. Normally have a FD department with the basic set of devices (ECG, simple ENT set, EEG, etc.). Are limited and funds and trying to purchase cheaper devices. Total cost of FD devices set can vary within $0.05-0.3 mln per facility(current Ruble value).In most cases buy ARN equipment when provided with federal funding. Strongly limited in own budgets
5 Local Municipal Hospitals –multi-disciplinary
Public Mid and lower price devices. Most municipal hospitals totally concentrate on outpatient services. Patients flow is normally limited by population of the municipality area. Still these hospital are required to an FD department with basic set (ECG, ENT instrumentation, EEG, etc.). Total cost of devices can vary within $0.05-0.1 mln per facility (current Ruble value).Only buy ARN equipment when provided with federal funding. Extremely limited in own budgets
Key accounts segmentation
Back to the list of segments Functional Diagnostics 25
Rank Clients categories Ownership Key products purchased
6 Private Hospitals – multi-disciplinary
Private Mid and lower price devices. Many private hospitals can have separate offices for ECG, EEG, and ENT diagnostics. Normally these are limited in funding and have to buy cheaper devices. The patients flow is minimal. Total cost of devices can vary within $0.02-0.05 mln per facility (current Ruble value).Own limited funding to buy basic set of high quality furniture
Key accounts segmentation
Back to the list of segments Functional Diagnostics 26
Market capacity is generated by:
» Regular purchases of existing federal/regional/city/municipal facilities
» Purchases in frame of federal program Construction & launch of 32 new Perinatal centers in 2015-2017
» Purchases by newly launched facilities (any type of facility)
Total market capacity equals to $480.0 mln
» ECG diagnostics – $138.0 mln
» ENT diagnostics – $145.0 mln
» Other devices (neurology, spirometry ,etc.) – $197.0 mln
Market capacity, expectations
Back to the list of segments Functional Diagnostics 27
Functional diagnostics devices are considered to be “basic” equipment. An average demand/capacity rate equals to 10-11%.
Market capacity will grow 0.5-1.0% in 2015-2017. Launches of new facilities during 2017-2020 will supposedly lead to increasing the market capacity growth rate.
Market share is one of the smallest among the DPPHS sector due to the fact that there is no need to purchase a large number of FD equipment. Generally FD equipment is considered to be secondary in terms of diagnostics.
Market demand will decrease slightly in 2015 due to Ruble devaluation effect; then will grow moderately in 2016-2020 due to launch and construction of Perinatal centers in 2016-2017 and growing demand from newly launched federal and regional facilities during 2018-2020
estim.
estim.
estim.
Market capacity, expectations
Back to the list of segments Functional Diagnostics 28
Radiation Therapy & Nuclear Medicine
Equipment for RT & NM cannot be regarded in frame of regular purchases. Generally these types of devices are acquired in case of special funding programs. Due to strongest shortage of funding in 2014 the Federal program “Oncology” has been suspended starting from 2015. Right now it is not possible to identify the date of resumption. Federal program “Development and construction of PET-centers” is ongoing, related purchases are expected in 2016.
Apart from these Federal programs exist other funding sources: purchases by top federal hospitals, purchases in frame of regional budgets, purchases by private hospitals.
Resume
Funding 2012-2014:
» Federal program Oncology: improving healthcare in fight against cancer – nuclear accelerators, gamma-therapy, intraoperative radiation therapy, accessories
» Federal program Development and construction of PET Centers: improving healthcare in early diagnosis of cancer – PET/CT devices, cyclotrons, other devices
» Regular purchases from public facilities – all the projects related to the demand from federal facilities. Many of them carried out in 2012
» Private funding – some project were initiated and implemented by means of private investors
Funding 2015-2016:
» Development and construction of PET Centers –ongoing program, still the funding is mainly expected in 2016, due to complicated macroeconomic situation all projects are expected to be delayed
» Public-private partnership programs – at least one project in Saint Petersburg is expected to be launched in 2016-2017. The center will focus on proton and radiation therapy
» Regular purchases from public facilities – a number of projects related to single purchases from federal public facilities
Back to the list of segments Radiation Therapy & Nuclear Medicine 1
In scope:
» Linear accelerator
» Gamma-therapy devices
» IORT devices
» Accessories (information management system, dosimetry equipment, fixation systems, etc.)
» PET/CT
» SPECT/CT
» Other
CAGR for 2012 – 2014:
Linear Accelerators
- 50.0%
Gamma-therapy devices
IORT
Accessories
PET/CT
9.4%
SPECT/CT
Other -
It is commonly accepted to consider cyclotrons and related devices in frame of this segments. These devices are not included in this report
As it was mentioned in the resume all these devices are not purchased on a regular basis. Most common approach for this segment – purchase of equipment set in frame of project
Back to the list of segments
Structure
Radiation Therapy & Nuclear Medicine 2
Segment volume in 2014:
» Cumulative reduction by 18.3% compared to 2013 (in US$)
» Growth by 41.9% compared to 2013 (in Rubles)
» Segment’s total in customs import prices for 2014 - $149.1 mln
» Estimated segment’s total in customer final prices for 2014 - $210.0 mln
The segment volume did not change significantly during 2009-2014. It is due to the fact that more than 90% of its funding came out of federal programs. The only significant change was in 2012: federal institute acquired a set of IBA equipment for Proton therapy center located in Volga Federal district (to be launched in 2016-2017)
valid.
valid.
valid.
estim.
GE Healthcare35%
Elekta19%
Varian17%
Accuray13%
Eckert & Ziegler3%
Others13%
valid.
Back to the list of segments
Indicators 2014
Radiation Therapy & Nuclear Medicine 3
RT & NM Segment 2012-2014:
» Cumulative funding in frame of Oncology federal program exceeded $562 mln (more than 40% attributable to radiation therapy equipment)
» 10 Federal and Regional PET-centers launched (total cost of medical equipment acquired was over $240 mln)
» The highest rate of demand was in 2012 within the period of 2012-2014. Apart from normal implementation of two federal programs new launches of Oncology and PET Centers carried out; up to 60-70% of total demand came out of public federal centers and some private facilities
» In 2013-2014 there was a significant shift in terms of funding sources contribution. Major funds provided in frame of federal programs (up to 80-90% of total funding)
valid.
estim.
$0.0
$50,000.0
$100,000.0
$150,000.0
$200,000.0
$250,000.0
$300,000.0
$350,000.0
$400,000.0
$450,000.0
2012 2013 2014 2015 2016
valid.
Back to the list of segments Radiation Therapy & Nuclear Medicine 4
Segment’s volume change in 2012-2014 + forecasts 2015-2016 (chart: customs import value in US$ thds)
0.0₽
2,000.0₽
4,000.0₽
6,000.0₽
8,000.0₽
10,000.0₽
12,000.0₽
14,000.0₽
2012 2013 2014 2015 2016
valid. RT & NM Segment 2015-2016:
» Due to suspend of the federal program Oncology significant drop in demand is expected in 2015 (can exceed 60%)
» Currently no projects are implemented under the program. Nuclear Medicine is expected to keep demand at a minimal level, mostly expected purchases from federal facilities
» 2016 year will hopefully bring new projects in frame of federal program construction and launch of PET Centers (at least 3-5 regional projects are expected to be launched).
» Additionally some federal projects are supposed to be launched in 2016; the most important project expected is Federal Center of Proton therapy under the Federal Medical-Biological Agency
estim.
Segment’s volume change in 2012-2014 + forecasts 2015-2016 (chart: customs import value in R mlns)
Back to the list of segments Radiation Therapy & Nuclear Medicine 5
Radiation therapy
63%
Nuclear medicine
37%
valid.
2014
Radiation therapy
76%
Nuclear medicine
24%
2013
valid.
Segmentation by product categories(charts: customs import value in US$)
Back to the list of segments Radiation Therapy & Nuclear Medicine 6
Radiation therapy
89%
Nuclear medicine
11%
2012
valid.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Nuclearmedicine
Radiationtherapy
valid.
Segmentation by product categories(charts: customs import value in US$)
Back to the list of segments Radiation Therapy & Nuclear Medicine 7
» Total segment’s volume in customs import prices -$421.3 mln
» Estimated segment’s volume in customer final prices -$560.0 mln
» 44% of the segment volume in 2012 attributable to set of equipment for proton therapy (manufactured by Iba)
» Cumulative growth (except Iba 2012 results) compared to 2011 exceeded 40%
» The lowest degree of market consolidation among distributors was registered on the results of 2012; this fact can be explained by stronger and diversified funding flow
Major manufacturers in 2012
Ion Beam Applications
$184,272.2
Elekta $66,530.0
Varian $39,803.0
Accuray $30,039.2
Siemens $21,040.8
GE $14,200.9
Best Theratronics
$11,016.9
Others $54,404.0 -
estim.
valid.
valid.
valid.Ion Beam
Applications44%
Elekta16%
Varian9%
Accuray7%
Siemens5%
GE Healthcare
3%
Best Theratronics
3%
Others13%
valid.
Segment volume in 2012(chart, table: customs import value in US$ thds)
Back to the list of segments Radiation Therapy & Nuclear Medicine 8
» Total segment’s volume in customs import prices -$127.7 mln
» Estimated segment’s volume in customer final prices -$182.0 mln
» Total reduction by 46,1% compared to 2012 (except Iba results) due to the that some part of 2013 projects delayed and transferred to 2014
» During the year 2013 major funds came in frame of federal programs Oncologyand PET-centers launch and construction
Major manufacturers in 2013
Varian $39 954,1
Elekta $14 781,2
GE $25 210,5
Best Theratronics
$8 909,0
Eckert & Ziegler
$5 723,5
Accuray $8 706,0
Others $24 421,7 -
estim.
valid.
valid.
valid.
Varian32%
Elekta12%
GE Healthcare
20%Best Theratronics
7%
Eckert & Ziegler
4%
Accuray7%
Others18%
valid.
Segment volume in 2013(chart, table: customs import value in US$ thds)
Back to the list of segments Radiation Therapy & Nuclear Medicine 9
Forecasts 2015
» Expected cumulative reduction by 76,5% => $35.0 mln. Largely attributable to shortage of funding related to suspend of Oncology federal program. Partly due to Ruble devaluation
» Expected reduction by 64,5% compared to 2014 in Rubles
» Major contributors for 2015 are:
» Top Federal Hospitals
» Post sales services for existing Oncology and PET centers
Forecasts 2016
» Based on assumption that macroeconomic situation is improving in 2016 expected volume will be => $118 mln. Some major projects including Oncology and PET/CT centers construction are supposed to be temporarily halted
» Growth by more than 41% in $ due to Ruble revaluation and new PET/CT centers to be launched. Final launch of Proton therapy center in Saint Petersburg (in frame of Public Private Partnership) is expected in the end of 2016
» Expected growth by more than 20% in Rubles
Forecasts 2015-2016(customs import value in US$)
Back to the list of segments Radiation Therapy & Nuclear Medicine 10
Demand rate is volatile, cyclical
» No skyrocketing trends in the segment (even if the industry experiencing strong growth) – the segment totally depends on the number of projects launched and funding provided; these figures are predictable to a greater extent
» Possible moderate growth/reduction as a reaction on currency value
» Basic for equipping of Oncology and PET Centers
Major financing sources
» Modernization program (2011-2013)
» Oncology program (2009-2014)
» Development and Construction of PET-centers (not limited in period)
» Private Hospitals purchases (not limited in period)
Rate of demand, funding, major players
Back to the list of segments Radiation Therapy & Nuclear Medicine 11
Rate of demand, funding
Major players
» Linear Accelerators: Varian, Elekta, Accuray
» Gamma-Therapy Devices: Eckert & Ziegler, Best Theratronics
» IORT: Carl Zeiss, Sordina, LIAC
» Accessories: WFR/Aquaplast
» PET/CT: GE, Philips, Siemens
» SPECT/CT: GE, Philips, Siemens
» Other:
Back to the list of segmentsBack to the list of segments Radiation Therapy & Nuclear Medicine 12
Major players
Indicator Figure
Estimated total for 2014 $55.2 mln
Cumulative growth 2014/2012 19.8%
Growth 2014/2013 71.3%
Estimated CAGR for 2012-2014 9.4%
Expected growth rate 2015/2014
$ -63-58%
R -45-37%
Expected total for 2015 – $20-23 mln attributable to overall shortage of funding from federal budget and Ruble devaluation
Some major PET Centers are to be launched in 2016. Purchases for federal facilities are expected in 2015 in most cases
estim.
valid.
estim.
valid.
valid.
valid.
estim.GE Healthcare
94%
Siemens3%
Philips3%
PET/CT and SPECT/CT in 2014(chart: customs import value in US$)
Back to the list of segments Radiation Therapy & Nuclear Medicine 13
valid.
2012 2013 2014
GE Healthcare
$14,200.9 $25,210.5 $51,920.4
Philips $10,819.4 $488.9 $1,710.1
Siemens $21,040.8 $4,787.4 $1,541.5
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Siemens
Philips
GE Healthcare
$0.00
$20,000.00
$40,000.00
$60,000.00
2012 2013 2014
valid.
PET/CT and SPECT/CT in 2014(chart, table: customs import value in US$ thds)
Back to the list of segments Radiation Therapy & Nuclear Medicine 14
Elekta31%
Varian29%
Accuray22%
Eckert & Ziegler
6%
Tomotherapy3%
Carl Zeiss3%
Others6%
Indicator Figure
Estimated total for 2014 $93.9 mln
Cumulative growth 2014/2012 -75.0%
Growth 2014/2013 -1.7%
Estimated CAGR for 2012-2014 -50.0%
Expected growth rate 2015/2014
$ -84-78%
R -75-67%
Expected total for 2015 – $18-20 mln attributable to suspend of federal Oncology program, Ruble devaluation and shortage of demand from federal and private facilities
Expected recovery of demand in 2016-2017 due to planned launch of numerous federal facilities
estim.
valid.
estim.
valid.
valid.
valid.
estim.
Linear accelerators, gamma-therapy, IORT, accessories in 2014(chart: customs import value in US$)
Back to the list of segments Radiation Therapy & Nuclear Medicine 15
valid.
2012 2013 2014
Elekta $66,530.0 $14,781.2 $27,268.9
Varian $39,803.0 $39,954.1 $25,908.5
Accuray $30,039.2 $8,706.0 $19,657.9
Eckert & Ziegler
$7,668.3 $5,723.5 $4,837.1
Tomotherapy $5,629.5 $1,988.8 $2,842.3
Best Theratronics
$11,016.9 $8,909.0 $1,661.5
Iba $184,272.2 $0.0 $351.3
Others $30,286.8 $15,434.2 $11,384.8
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
Iba
Best Theratronics
Tomotherapy
Eckert & Ziegler
Accuray
Varian
Elekta
$0.00
$150,000.00
$300,000.00
$450,000.00
2012 2013 2014
Linear accelerators, gamma-therapy, IORT, accessories in 2012-2014(chart, table: customs import value in US$ thds)
Back to the list of segments Radiation Therapy & Nuclear Medicine 16
valid.
Severe shortage is expected in 2015 due to suspend of Oncology federal program, weaker demand from federal facilities and Ruble devaluation. A slight recovery will supposedly start in 2016; mainly associated with the purchases from federal facilities and further implementation of federal program PET Centers construction and launch
$0.0
$50,000.0
$100,000.0
$150,000.0
$200,000.0
$250,000.0
$300,000.0
$350,000.0
$400,000.0
2012 2013 2014 2015 2016
Radiationtherapy
Nuclearmedicine
CAGR 2012-2014
CAGR 2014-2016
forecasts
9.4%
- 17.0%
valid.
- 50.0%
- 7.7%
Trends per product groups in 2012-2014 + forecasts 2015-2016(chart: customs import value in US$ thds)
Back to the list of segments Radiation Therapy & Nuclear Medicine 17
Rank Clients categories Ownership Key products purchased
1 Top Federal State Budget Hospitals – specialized oncology care institutions
Public Radiation Therapy. Normally can purchase up to six linear accelerators of different types depending on the amount of medical care provided. Have a separate funding source from federal budget. The amount of funding depends on the quantity and cost of medical quotas (the list of quotas is individually approved for each federal hospital).Nuclear Medicine. There are few federal hospitals that have PET/CT or PET scanners in use. Annually 1-2 federal hospitals purchase PET/CT scanner. Federal hospitals can acquire these types of devices in frame of regular spending, not in frame of special programs.A number of top federal hospitals combine Oncology and PET Center in frame of one facility. These are listed below – marked yellow.In frame of Government spending receive the strongest funding from Federal Budget
Key accounts segmentation
Back to the list of segments Radiation Therapy & Nuclear Medicine 18
Rank Clients categories Ownership Key products purchased
2 Regional Oncology Centers –specialized oncology care institutions subordinate to Regional Administration
Public Radiation Therapy. In frame of federal Oncology programreceive funding of up to $20 mln. per facility. More than 70 regions received this funding from Federal Budget. Normally Regional Oncology Hospitals purchase 1-2 linear accelerators, IORT device, CT and other devices that included in the list approved by Government Resolution # 1164Have substantial funds provided in frame of federal Oncology program
3 Regional Nuclear Medicine Centers (PET Centers) –specialized institutions subordinate to Regional Administration
Public Nuclear Medicine. In frame of federal PET Centers Construction and Development program receive funding up to $30 mln. per facility. More than 7 regions received funding in frame of this program. Normally purchase PET/CT, Cyclotron and other required devices. Existing Regional PET Centers are listed in table below – marked greenHave substantial funds in frame of federal PET Centers Construction and Development program
Key accounts segmentation
Back to the list of segments Radiation Therapy & Nuclear Medicine 19
Rank Clients categories Ownership Key products purchased
4 Private Oncology and PETCenters – specialized private institutions
Private Radiation Therapy and Nuclear Medicine. For the moment only 4 private PET Centers exist in Russia. All these Hospitals are combined with Oncology Centers. Due to the fact that launch of these facilities requires substantial funding (up to $40 mln. to buy necessary equipment) these centers are used to be launched in Moscow and Saint Petersburg. All the funding for ongoing operations is also taken from private sources. Sometimes private centers can get funding from Government budget in frame of medical quotas if participate in Compulsory Healthcare Insurance. Private PET-Centers are marked orange in the table belowAll funding is provided by private entities and individuals
Key accounts segmentation
Back to the list of segments Radiation Therapy & Nuclear Medicine 20
Healthcare FacilityOwnership/Subordinate
LocationPET Center launch date
PET/CTManufacturer
Baculev National Center for Cardiovascular Surgery Public/Fed* Moscow January 2001 n/d
President Administration Clinical Hospital #1 Public/Fed* Moscow n/d Siemens
Blokhin Russian Oncology Research Center Public/Fed* Moscow n/d GE
Burdenko Chief Clinical Military Hospital Public/Fed* Moscow n/d GE
President Administration Central Clinical Hospital Public/Fed* Moscow January 2003 Siemens
Behterova Institute of Human Brain Public/Fed* Saint Petersburg n/d Philips
Chelyabinsk Regional Clinical Oncology Hospital Public/Reg** Chelyabinsk February 2011 Siemens
Regional Oncology Hospital #2 Public/Reg** Magnitogorsk September 2011 Siemens
Almazov Federal North-West Medical Research Centre
Public/Fed* Saint Petersburg n/d GE
Russian Research Center for Radiology and Surgical Technologies
Public/Fed* Saint Petersburg January 2012 GE
List of major operating PET-centers
Back to the list of segments Radiation Therapy & Nuclear Medicine 21
* Fed – subordinate to federal level authorities** Reg – subordinate to regional level authorities
Healthcare FacilityOwnership/ Subordinate
LocationPET Center launch date
PET/CTManufacturer
Multidisciplinary Clinical Medical Center “Meditsinskiy Gorod”
Public/Reg** Tyumen June 2012 Siemens
Regional Clinical Oncology Center Public/Reg** Khabarovsk August 2012 GE
Interregional Medical Center Private Voronezh October 2012 Siemens
Berezin International Institute of Biological Systems Private Saint Petersburg n/d Siemens
Regional Clinical Hospital Public/Reg** Khanty Mansiysk December 2012 GE
Medicina JSC Private Moscow April 2013 Philips
European Medical Center (GEMC) Private Moscow May 2015 Philips
Regional Oncology Clinical Hospital Public/Reg** Kazan June 2013 GE
Siberian Clinical Center of the Federal Medical Biology Agency (FMBA)
Public/Fed* Krasnoyarsk February 2014 Philips
Center for Nuclear Medicine Public/Reg** Ufa April 2014 GE
Rogachev Federal Research Clinical Center Public/Fed* Moscow n/d GE
List of major operating PET-centers
Back to the list of segments Radiation Therapy & Nuclear Medicine 22
Market capacity is generated by:
» New launches of Oncology Centers
» New launches of PET Centers (need to achieve target 1 PET Center/1 mln population => expected launch of at least 100 new PET Centers in the long term)
» Single purchases by top federal and private hospitals
» New launches of private PET and Oncology Centers
Total market capacity equals to $1,790.0 mln
» Linear Accelerators, Gamma-Therapy, IORT, Accessories – $950.0 mln
» PET/CT, SPECT/CT – $840.0 mln
Market capacity, expectations
Back to the list of segments Radiation Therapy & Nuclear Medicine 23
RT & NM equipment is considered to be high-technology equipment. An average demand/capacity rate is 11-12%
Market capacity will grow annually 2-5% in the nearest few years attributable to new facilities launch. Greater funding will follow the improvement of macroeconomic indicators.
Strong expectations on the future of RT & NM segment can be explained by unsatisfied demand on advanced oncology treatment and diagnostics services (at least 50% of patients cannot access to required oncology treatment annually)
Demand will increase slightly in 2016-2018 mainly due to macroeconomic deterioration, stronger average indicators are expected in 2019-2020 due to new projects implementation and necessity to replace the obsolete equipment purchased during 2012-2014
estim.
estim.
estim.
Market capacity, expectations
Back to the list of segments Radiation Therapy & Nuclear Medicine 24
Sterilization & Disinfection
Devices for sterilization & disinfection can be purchased both if frame of single acquisition or integrated project of hospital Central Sterilization Unit (CSU) equipping or re-equipping. Major funding comes from federal and regional budgets in frame of regular spending. Hospitals can get this funding in frame of obsolete equipment replacement. Any hospitals can use own funding to buy devices in frame of single acquisitions
Strongest growing competition from local manufacturers is supported by #102 Resolution of the Government (please see general part in more detail). Some currently operating local manufacturers will supposedly affect the positions of foreign manufacturers (autoclaves are included in the list of devices in draft amendments to #102 Resolution
Resume
Funding 2012-2014:
» Healthcare Modernization program – major source of investment for CSU equipment during 2011-2012. Mainly for regional and municipal hospitals, as these facilities more limited in own funds
» Regular purchases from federal facilities – major source of investment applicable to federal facilities. Purchases from federal facilities account for at least 30-40% of total demand on CSU equipment
» Regional CSUs modernization programs – approved on regional level, purchases of complete CSUs
Funding 2015-2016:
» 32 new Perinatal Centers 2015-2016 – primary investment source for the period of 2015-2017. Require complete CSUs for each hospital. In total the total cost of one CSU can vary within $0.5-1.0 mln. per hospital ≈ $16-32 mln in 2015-2017
» New launches and replacement of obsolete devices –expected demand form newly launched public (preferably federal facilities) hospitals, re-equipping of CSUs with obsolete devices
» Regular purchases from private and public facilities
Back to the list of segments Sterilization & Disinfection 1
In scope
» CSU Equipment
» Other devices
CAGR for 2012 – 2014
CSU Equipment - 31.4%
Other devices - 0.5%
Segment volume in 2014
» Cumulative growth by 12.0% compared to 2013 (in US$)
» Growth by 35.3% compared to 2013 (in Rubles)
» Segment’s total in customs import prices for 2014 - $66.9 mln
» Estimated segment’s total in customer final prices for 2014 - $111.0 mln
valid.
valid.
valid.
estim.
Melag Medizintechnik
23%
Getinge AB13%
DGM12%
Tuttnauer10%
Binder GmbH8%
BMT (MMM Group)
7%
SteelCo S.P.A.3%
Others24%
Structure, indicators 2014
Back to the list of segments Sterilization & Disinfection 2
Sterilization & Disinfection in 2012-2014
» In 2011-2013 the segment was a part of Healthcare Modernization program => considerable funding in 2012
» Demand in the segment is more stable due to the longer cycle of the devices use (more than 10 years on average
» Major source: regular programs of CSUs re-equipping from regional and federal budgets
» The demand was stronger in 2012 due to excessive funding provided from federal budget and numerous launches of new federal and regional medical facilities
» Expected drop in 2015 is the result of Ruble devaluation ($1 = from R 38 in 2014 to R 58 in 2015)$ 0.0
$20 000.0
$40 000.0
$60 000.0
$80 000.0
$100 000.0
$120 000.0
2012 2013 2014 2015 2016
valid.
Segment’s volume change in 2012-2014 + forecasts 2015-2016 (chart: customs import value in US$ thds)
Back to the list of segments Sterilization & Disinfection 3
0.0 ₽
500.0 ₽
1,000.0 ₽
1,500.0 ₽
2,000.0 ₽
2,500.0 ₽
3,000.0 ₽
3,500.0 ₽
2012 2013 2014 2015 2016
valid. Sterilization & Disinfection in 2015-2016
» Expected stronger funding in 2015-2016 due to construction and launch of new 32 neonatal care centers
» Expected shortage of regular funding from regional and federal budgets
» The demand curve calculated in R looks like to be more stable
» Considerable slump in 2013 was a result of minimum cases of new hospitals launches. Part of the 2013 projects were launched in 2014
» Expected further slow down due to preplanned reduction of funds (in Rubles) from federal and regional budgets
Segment’s volume change in 2012-2014 + forecasts 2015-2016 (chart: customs import value in R mlns)
Back to the list of segments Sterilization & Disinfection 4
CSU Equipment
50%Other
Devices50%
valid.
2013
CSU Equipment
44%
Other Devices56%
valid.
2014
Back to the list of segments Sterilization & Disinfection 5
Segmentation by product categories(charts: customs import value in US$)
CSU Equipment
62%
Other Devices38%
valid.
2012
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Other Devices
CSU Equipment
Segmentation by product categories(charts: customs import value in US$)
Back to the list of segments Sterilization & Disinfection 6
valid.
Major manufacturers in 2012
Getinge AB $16,556.0 -
DGM $16,389.1 -
ASP (Johnson & Johnson)
$10,348.2 -
BMT (MMM Group)
$8,557.5 -
Binder $5,757.8 -
Tuttnauer $4,252.6 -
Steris $4,603.4 -
Cisa S.P.A. $3,416.4
Others $30,219.8 -
» Total segment’s volume in customs import prices -$100.1 mln
» Estimated segment’s volume in customer final prices -$167.0 mln
» Stronger demand in 2012 mainly caused by the purchases of CSU equipment (in frame of integrated replacement of obsolete CSUs)
» Stable demand rate in case of other devices due to normal level of purchases from private faculties and slightly higher purchases rate from public hospitals (associated with the excessive funding from federal budget)
valid.
estim.
Getinge AB17%
DGM16%
ASP (Johnson & Johnson)
10%
BMT (MMM Group)
9%
Binder GmbH6%
Tuttnauer4%
Steris Corporation
5%
Cisa3%
Others30%
valid.
Segment volume in 2012(chart, table: customs import value in US$)
Back to the list of segments Sterilization & Disinfection 7
Major manufacturers in 2013
Getinge AB $7,618.3
DGM $7,494.5
BMT (MMM Group)
$7,129.7
Tuttnauer $5,789.5
MelagMedizintechnik
$3,948.6
ASP (Johnson & Johnson)
$2,986.2
Binder GmbH $4,691.8
Others $20,052.7 -
» Total segment’s volume in customs import prices -$59.7 mln
» Estimated segment’s volume in customer final prices - $100.0 mln
» Total reduction by 17.4% compared to 2012
» During the period of 2012-2014 the CAGR was -22.8%=> most stable segment (the CAGR indicator was one of the strongest amid overall crisis)
» Average CAGR in Ruble equivalent was -14.2% in 2012-2014
valid.
estim.
valid.
valid.
valid.
Getinge AB13%
DGM12%
BMT (MMM Group)
12%
Tuttnauer10%
Melag7%
ASP (Johnson & Johnson)
5%
Binder GmbH8%
Others33%
Segment volume in 2013(chart, table: customs import value in US$)
Back to the list of segments Sterilization & Disinfection 8
valid.
Forecasts 2015
» Expected cumulative reduction by 35.5% => $43.1 mln. Mostly attributable to currency devaluation and shortage of funding
» Expected reduction by 2.6% compared to 2014 in Rubles
» Major contributors for 2015 are private hospitals and 32 perinatal centers
Forecasts 2016
» Based on assumption that macroeconomic situation is improving in 2016 expected volume will be => $51.1 mln
» Growth by 18.6% in $ due to:
» Ruble change positive effect
» Continuing Federal program of 32 perinatal centers construction and launch
» Expected reduction by 8.0% in Rubles
Forecasts 2015-2016(customs import value in US$)
Back to the list of segments Sterilization & Disinfection 9
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, heavy reliance on infrastructure products
» Basic for equipping of the CSU units
Major financing sources
» Modernization program (2011-2013)
» New launches of federal and regional facilities (not limited in period)
» Regular purchases (not limited in period)
» 32 neonatal care centers (2015-2016)
Major players
» CSU equipment: Getinge AB, BMT (MMM Group), DGM
» Other devices: Melag Medizintechnik, Binder GmbH, Tuttnauer
Rate of demand, funding, major players
Back to the list of segments Sterilization & Disinfection 10
Indicator Figure
Estimated total for 2014 $29.2 mln
Cumulative growth 2014/2012 -53.0%
Growth 2014/2013 -1.6%
Estimated CAGR for 2012-2014 -31.4%
Expected growth rate 2015/2014
$ -29-22%
R 7-17%
Expected total for 2015 – $20-23 mln attributable to equipping od CSUs for 32 new perinatal centers
Severe shortage of funding in 2015 will supposedly lead to halt of major pre-planned projects not related to perinatal centers
valid.
valid.
valid.
valid.
estim.
estim.
estim.
Getinge AB29%
DGM28%
BMT (MMM Group)
17%
Lautenschlager6%
Belimed AG3%
Others17%
valid.
CSU equipment in 2014(chart: customs import value in US$)
Back to the list of segments Sterilization & Disinfection 11
2012 2013 2014
Getinge AB $16,556.0 $7,618.3 $8,542.8
DGM $16,389.1 $7,494.5 $8,018.6
BMT $8,557.5 $7,129.7 $4,976.4
Lautenschlager $3,409.2 $1,457.2 $1,807.5
Belimed AG $2,832.1 $551.7 $987.3
Others $14,377.1 $5,444.4 $4,886.8
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
Belimed AG
Lautenschlager
BMT (MMM Group)
DGM
Getinge AB
$0.00
$30,000.00
$60,000.00
$90,000.00
2012 2013 2014
valid.
CSU equipment in 2012-2014(chart, table: customs import value in US$)
Back to the list of segments Sterilization & Disinfection 12
Melag Medizintechnik
41%
Tuttnauer17%
Binder GmbH14%
SteelCo S.P.A.6%
Hirayama Manufacturing
Corp.3% Others
19%
Indicator Figure
Estimated total for 2014 $37.6 mln
Cumulative reduction 2014/2012 0.9%
Growth rate 2014/2013 25.4%
Estimated CAGR for 2012-2014 -0.2%
Expected growth rate 2015/2014
$ -36-41%
R -4-12%
Expected total for 2015 – $22-24 mln attributable to regular demand from private and public facilities
No specific programs for this segment in 2015
valid.
valid.
valid.
valid.
estim.
estim.
estim.
valid.
Other devices in 2014(chart: customs import value in US$)
Back to the list of segments Sterilization & Disinfection 13
2012 2013 2014
Melag $3,121.5 $3,948.6 $15,618.8
Tuttnauer $4,252.6 $5,789.5 $6,327.6
Binder $5,757.8 $4,691.8 $5,446.6
SteelCo $915.3 $1,680.8 $2,207.2
Hirayama $246.1 $398.3 $1,020.8
Others $23,686.4 $13,506.5 $7,019.3
valid.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
HirayamaManufacturing Corp.
SteelCo S.P.A.
Binder GmbH
Tuttnauer
Melag Medizintechnik
$0.00
$15,000.00
$30,000.00
$45,000.00
2012 2013 2014
Other devices in 2012-2014 (chart, table: customs import value in US$)
Back to the list of segments Sterilization & Disinfection 14
Weaker demand on other devices due to limited funding (public and private). CSU Equipment to grow in 2016 in R equivalent due to the federal program ‘construction and launch of 32 new perinatal centers’. Strongest Ruble devaluation in 2015 => overall reduction in $ equivalent
$ 0.0
$10 000.0
$20 000.0
$30 000.0
$40 000.0
$50 000.0
$60 000.0
$70 000.0
2012 2013 2014 2015 2016
CSU Equipment
Other Devices
valid.
- 31.4%
- 1.9%
- 0.2%
- 21.8%
CAGR 2012-2014
CAGR 2014-2016
forecasts
Trends per product groups in 2012-2014 + forecasts 2015-2016(chart: customs import value in US$ thds)
Back to the list of segments Sterilization & Disinfection 15
Rank Clients categories Ownership Key products purchased
1 Federal State Budget Hospitals – all types of hospitals
Public High-end CSU equipment. Normally have a complete high capacity CSU department due to necessity of serving patients nearly from all regions of Russia. Average cost of CSU for federal hospital can vary within $1-$2 mln. (taking into account Ruble devaluation). In most cases federal hospitals can launch modernization of CSU department by reasons of Hospital reconstruction or extension, obsolescence of CSU equipment. Newly launched federal facilities will certainly have high-level CSU department. Due to stronger than average funding have an opportunity to upgrade the equipment fleet more often than other hospitals do. => highest demand on CSU equipment.Other devices. Most federal hospitals are multi-disciplinary facilities, can have In-vitro diagnostics departments, Endoscopy departments, Stomatology offices, etc. => create demand on table-top and other compact sterilizers, still the demand on these types of devices is not so high.In frame of Government spending receive the strongest funding from Federal Budget
Key accounts segmentation
Back to the list of segments Sterilization & Disinfection 16
Rank Clients categories Ownership Key products purchased
2 Moscow and Saint-Petersburg City Clinical Hospitals – multi-disciplinary
Public Expensive CSU equipment. Highest patients flow from two most populous cities of Russia. As a rule cover a territory that can include two or more districts of Moscow or Saint-Petersburg. Patient flow can also include those people who get a temporary registration (in Moscow or SPB). Average cost of CSU for these types of hospitals can vary within $0.5-$1 mln (current Ruble value).Modernization of CSU department can be launched in case of Hospital’s reconstruction, obsolescence of CSU equipment. Other devices. City Clinical hospitals are multi-disciplinary facilities that deliver a wide range of services (unlike federal hospitals that normally focus on one specific type of medical care) => strong demand on table-top and similar sterilizers. In frame of City budget receive strong funding that on average can amount to 40-50% of Federal Hospitals budget
Key accounts segmentation
Back to the list of segments Sterilization & Disinfection 17
Rank Clients categories Ownership Key products purchased
3 Regional Perinatal Centers – neonatal care, obstetrics and gynecology
Public Quality CSU equipment. Perinatal centers receive funding in frame of federal budget. Each of the 32 new perinatal centers will include CSU department. Are limited in funding, can only afford to equip the department at the cost of $0.4-$0.8 mln. (current Ruble value). Demand is expected only in 2015-2017. In subsequent 10 years strong demand on sterilization disposables is expected.Have substantial funds provided in frame of federal spending. Short period of demand
4 Regional Clinical Hospitals – multi-disciplinary
Public Quality CSU equipment. Regional clinical hospitals are major facilities in frame of healthcare systems of separate Russian regions. Normally equip CSU departments at the cost of $0.4-$0.8 mln. (current Ruble value). Create strong demand on sterilization disposables due to high patients flow.Other devices. Regional hospitals are multi-disciplinary facilities that deliver a wide range of services => demand on table-top and similar sterilizers.Have substantial funds in frame of regional budget. Generally are not receiving funds in frame of federal budgets.
Key accounts segmentation
Back to the list of segments Sterilization & Disinfection 18
Rank Clients categories Ownership Key products purchased
5 Local City Hospitals – multi-disciplinary
Public Low budget CSU equipment. Local city hospitals are located in cities with population > 50 thds. and usually cover a definite area. Can only afford to buy cheaper equipment for CSUs at the cost of $0.2-$0.4 mln. (current Ruble value).In most cases re-equip the equipment fleet by making small purchases on yearly basis.Other devices. Create little demand om table-top and other small sterilizers.Strongly limited in own funds. Generally do not receive funds in frame of federal budgets.
6 Local Municipal Hospitals –multi-disciplinary
Public Separate cheap devices, no complete CSU department. Municipal hospitals have no enough funds to purchase the complete solution for CSUs. These can buy sterilizers and disinfecting machines separately during different periods. Normally can run tenders of total value $0.1-0.2 mln yearly (current Ruble value).Other devices. Create little demand on table-top and other small sterilizersStrongly limited in own funds. Generally do not receive funds in frame of federal budgets.
Key accounts segmentation
Back to the list of segments Sterilization & Disinfection 19
Rank Clients categories Ownership Key products purchased
7 Private Hospitals – multi-disciplinary
Private CSU equipment. Some of private hospitals are big enough to allow purchasing high-end CSU complete solution. These are primarily located in Moscow and SPb. The majority of private hospitals concentrate on diagnostics and minimally invasive surgical interventions => do not need to equip a complete CSU.Other devices. Strong demand on table-top and other small sterilizers exists due to highest rate of applicability.Use own funds to sterilization devices. Most private hospitals only buy table-top and other small sterilizers
Key accounts segmentation
Back to the list of segments Sterilization & Disinfection 20
Market capacity is generated by:
» Equipping of new CSUs and re-equipping of existing ones (mainly facilities of federal and regional level)
» Equipping of CSUs for new 32 perinatal centers
» Purchases of separate devices for CSUs
» Purchases of table-top and other similar devices for private and public facilities
Total market capacity equals to $2,950.0 mln.
Market capacity is calculated as a maximum capacity of 5,900 hospitals across Russia with the average price of $0.5 mln for one CSU department
estim.
Market capacity, expectations
Back to the list of segments Sterilization & Disinfection 21
Sterilization & Disinfection devices are considered to be basic. An average demand/capacity rate equals to 3-6%
Market capacity will grow annually by 1-2% due to construction and launch of new 32 perinatal centers and other public facilities (mainly of regional level)
The annual growth rate of market capacity is nearly constant figure due to direct correlation with the number of new facilities launched
Demand will drop in 2015 entirely due to severe Ruble devaluation; during 2016-2018 there will be a slight increase as a result of Ruble revaluation and demand from newly launched facilities; 2019-2020 may be a period of the strongest growth attributable to necessity of replacing the obsolete equipment in major hospitals of regional and federal level
estim.
Market capacity, expectations
Back to the list of segments Sterilization & Disinfection 23
estim.
estim.
Rehabilitation & Physiotherapy
Resume
Back to the list of segments Rehabilitation & Physiotherapy 1
Rehabilitation and physiotherapy equipment was not substantial part of any federal or regional program in 2012-2014. Some investments came out of Healthcare Modernization program as a residual funding. Currently the system of post-operative and other types of rehabilitation is under development, still not implemented universally.
The segment will a part of federal and regional programs throughout 2015-2020. Many rehabilitation centers of federal and regional level are currently under construction. The competition from Russian manufacturers does not really exist in the rehab equipment; average level of competition in the part of physiotherapy devices.
Funding 2012-2014:
» Healthcare Modernization program was major source of funding during 2011-2013 (as a residual funding). Provided strongest growth mainly in the parts of locomotor therapy, lithotripsy and laser therapy. Severe drop in the mentioned product categories started in 2013 and continued in 2014, finally led to drastic reduction (lithotripsy reduced 10x times in 2014 compared to 2012)
» Regular purchases (mainly from federal facilities) –growing demand on professional rehabilitation and physiotherapy devices as a result of implementation the new standards that require hospitals to equip Rehab departments
Funding 2015-2016:
• Healthcare Development 2020 – federal program that was approved in 2013 sets the years 2015-2020 as the main funding period for large-scale development of rehabilitative care. Major part of funds is expected to be allocated in 2017-2019. The launch and dynamic growth is expected starting from 2016.
• Regular purchases (other devices) – expected subsequent reduction in the part of other devices due to reasons: not included in any public investment program; reduction of demand from private sector.
• Regular purchases (rehab & physiotherapy) – demand on separate devices from any types of hospitals
In scope
» Rehabilitation
» Mechanotherapy, locomotor therapy
» Physical therapy
» Lithotripsy
» Cosmetology, cryotherapy, balneology
» Other
» Respiratory therapy
CAGR for 2012 – 2014:
Rehabilitation
- 9.2%Locomotor therapy
Mechanotherapy
Physical therapy 1.7%
Lithotripsy
- 37.1%
Cosmetology,cryotherapy
Balneology
Other
Respiratory therapy - 17.6%
Respiratory therapy mostly can be regarded to consumer sector. More than 80% of nebulizers and oxy concentrators are consumed by ordinary customers. At the same time a part of the segment is closely bounded with the private and public hospitals. Intentionally we did not include it in basic calculations in order to highlight the DPPHS focus. A couple of slides are devoted to respiratory therapy
Back to the list of segments
Structure
Rehabilitation & Physiotherapy 2
Segment volume in 2014
» Cumulative reduction by 28.3% compared to 2013 (in US$)
» Reduction by 13.6% compared to 2013 (in Rubles)
» Segment’s total in customs import prices for 2014 - $66.05 mln
» Estimated segment’s total in customer final prices for 2014 - $110.0 mln
The segment was not part of any federal or regional program in 2010-2014. According to the federal program “Healthcare Development 2020”, major investment will come in 2015-2020. Many infrastructural rehab projects started in 2014.
valid.
valid.
valid.
estim.
BTL12%
BTE Technologies
12%Physiomed
5%
LPG Systems5%
Zimmer5%
Hocoma4%
Dornier3%
Rehard Technologies
2%
Unbescheiden2%
Others50%
valid.
Back to the list of segments
Indicators 2014
Rehabilitation & Physiotherapy 3
Rehab & Physio in 2012-2014
» In 2011-2014 the segment formally was not part of any federal or regional program
» Major source of funding: regular purchases from federal and major regional facilities
» Healthcare Modernization program (residual investments) was the main funding source for rehab equipment in 2012-2013. The funding in 2014 didn’t decrease considerably (as in case of other segments) due to a number of reasons. First, no oversaturation during 2012-2013, second, announced launch of Rehab Development program in 2015-2020
» Steady growth of physiotherapy in terms of Ruble and US dollar primarily is the result of increased funding under the program of Rehab Development and unsatisfied needs in earlier periods (see the trends chart on the page 19 of this part)
$0.0
$20,000.0
$40,000.0
$60,000.0
$80,000.0
$100,000.0
$120,000.0
2012 2013 2014 2015 2016
valid.
Back to the list of segments
Segment’s volume change in 2012-2014 + forecasts 2015-2016 (chart: customs import value in US$ thds)
Rehabilitation & Physiotherapy 4
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 2016
valid. Rehab & Physio in 2015-2016
» Stronger demand on rehab & physiotherapy equipment is expected in 2015-2020 amid Ruble devaluation and overall macroeconomic deterioration due to starting the implementation of part of federal program Healthcare Development 2020.
» A number of huge rehab projects have been already launched in the end of 2014 and during 2015: demand on complete set of equipment for new facilities in 2016-2018 after the major part of construction step is finished.
» Additional considerable part of purchases can be attributed to launch and renewal of rehab & physiotherapy departments in frame existing facilities. Federal facilities are expected to become the largest contributor in this field.
Back to the list of segments
Segment’s volume change in 2012-2014 + forecasts 2015-2016 (chart: customs import value in R mlns)
Rehabilitation & Physiotherapy 5
Rehabilitation, mechanotherapy
& locomotor therapy
36%
Physical therapy
22%
Other (cosmetology, balneology, cryotherapy, lithotripsy)
42%
valid.
2013
Rehabilitation, mechanotherapy
& locomotor therapy
37%
Physical therapy
32%
Other (cosmetology, balneology, cryotherapy, lithotripsy)
31%
valid.
2014
Back to the list of segments
Segmentation by product categories(chart: customs import value in US$)
Rehabilitation & Physiotherapy 6
Rehabilitation, mechanotherapy
& locomotor therapy
29%
Physical therapy
20%
Other (cosmetology,
balneology, cryotherapy, lithotripsy)
51%
valid.
2012
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Other(cosmetology,balneology,cryotherapy,lithotripsy)
Physical therapy
Rehabilitation,mechanotherapy &locomotor therapy
valid.
Back to the list of segments
Segmentation by product categories(chart: customs import value in US$)
Rehabilitation & Physiotherapy 7
Major manufacturers in 2012
Hocoma $10,826.8 -
Dornier $10,606.2 -
Storz Medical $8,036.1 -
LPG Systems $6,656.7 -
Physiomed $3,856.8 -
Edap-TMS $3,507.3 -
Reck-Technik $2,576.0 -
Zimmer $2,562.0 -
Zeltiq $2,070.6 -
BTL $2,028.0 -
Others $49,399.4 -
» Total segment’s volume in customs import prices -102.1 mln
» Estimated segment’s volume in customer final prices -$170.0 mln
» The year 2012 was the year of Healthcare Modernization program implementation => excessive funding; main focus on high-tech extra expensive rehab equipment, lithotripsy devices.
» Mainly the results of 2012 did not reflect the existing trend: numerous purchases of extra expensive equipment made by hospitals can be attributed to excessive funding from federal budget.
valid.
estim.
Hocoma11%
Dornier10%
Storz Medical
8%
LPG Systems
7%
Physiomed4%
Edap-TMS3%Reck-Technik
3%Zimmer
2%
Zeltiq2%
BTL2%
Others48%
valid.
Back to the list of segments
Segment volume in 2012(chart, table: customs import value in US$ thds)
Rehabilitation & Physiotherapy 8
Major manufacturers in 2013
Hocoma $9,736.6
Storz Med. $5,003.9
Zimmer $4,893.3
Physiomed $4,835.8
Dornier $3,509.3
LPG Systems $3,095.6
BTL $2,855.7
SyneronMedical
$2,406.1
Alma Lasers $2,392.4
Reck-Technik $2,312.9
Others $51,331.0 -
» Total segment’s volume in customs import prices -$92.4 mln
» Estimated segment’s volume in customer final prices -$155.0 mln
» The year 2013 marked the termination of Healthcare Modernization program. Significant decrease in the category of lithotripsy devices, cosmetology. Growing demand in rehab & physiotherapy part.
» Subsequent significant drop in 2014 due to continuing reduction in lithotripsy (the category of lithotripsy devices decreased tenfold in 2014 compared to 2012), cosmetology, etc.
valid.
estim.
Hocoma11%
Storz Medical5%
Zimmer5%
Physiomed5%
Dornier4%
LPG Systems3%
BTL3%
Syneron Medical
3%Alma Lasers
3%Reck-Technik
2%
Others56%
valid.
Back to the list of segments
Segment volume in 2013(chart, table: customs import value in US$ thds)
Rehabilitation & Physiotherapy 9
Forecasts 2015
» Expected cumulative reduction by 9.4% => $60.0 mln. Totally attributable to currency devaluation.
» Expected growth by 37.0% compared to 2014 in Rubles.
» Reduction due to severe shortage of regular funding from federal budget. Major infrastructural rehab projects will start producing outcomes for the segment only in 2016
Forecasts 2016
» Based on assumption that macroeconomic situation is improving in 2016 expected volume will be => $80.0 mln.
» Growth by 33.3% in $ due to:
» Ruble change positive effect
» Growing demand from new federal and regional rehab centers
» Expected growth by more than 3.4% in Rubles
Back to the list of segments
Forecasts 2015-2016(customs import value in US$)
Rehabilitation & Physiotherapy 10
Demand rate is volatile, cyclical
» No skyrocketing trends in the segment (even if the industry experiencing strong growth)
» Possible moderate growth/reduction as a reaction on the industry trends
» According to the federal program “Healthcare Development 2020” many investment programs on federal and regional level are to be launched starting from 2015
Major financing sources
» Modernization program (2011-2013)
» Regular purchases (not limited in period)
» Purchases from federal and regional rehab centers in frame of “Healthcare Development 2020” (2015-2020)
Back to the list of segments
Rate of demand, funding
Rehabilitation & Physiotherapy 11
Major players
» Rehabilitation: BTE Technologies, Proxomed
» Physical therapy: BTL, Physiomed
» Mechanotherapy: Ormed, Rimec
» Locomotor therapy: Hocoma
» Lithotripsy: Storz Medical, Dornier
» Cosmetology, cryotherapy: LPG Systems, Pollogen, Ulthera
» Balneology: Unbescheiden, Chirana, Beka-Hospitec
» Other
Back to the list of segments
Major players
Rehabilitation & Physiotherapy 12
Indicator Figure
Estimated total for 2014 $24.9 mln
Cumulative growth 2014/2012 -17.5%
Growth 2014/2013 -28.8%
Estimated CAGR for 2012-2014 -9.2%
Expected growth rate 2015/2014
$ -1-8%
R 50-63%
Expected total for 2015 – $24-26 mln expected limited growth due to R devaluation, at the same time growing government spending in frame of rehab centers construction & launch
Investments in frame of federal program “Healthcare development 2020”
valid.
valid.
valid.
valid.
estim.
estim.
estim.
BTE Technologies
31%
Hocoma9%
Rehard Technologies
7%Proxomed
4%
Ormed3%
Others46%
valid.
Rehabilitation, mechanotherapy & locomotor therapy in 2014(chart: customs import value in US$)
Back to the list of segments Rehabilitation & Physiotherapy 13
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
Reck-Technik
Ormed
Proxomed
Rehard Technologies
Hocoma
BTE Technologies
2012 2013 2014
BTE Technologies
$611.1 $707.1 $7,753.8
Hocoma $10,826.8 $9,736.6 $2,396.1
RehardTechnologies
$0.0 $0.0 $1,651.4
Proxomed $1,285.0 $1,841.6 $967.3
Ormed $1,156.7 $505.3 $743.4
Reck-Technik $2,576.0 $2,312.9 $451.8
Others $12,809.0 $18,830.4 $11,842.5
$0.00
$15,000.00
$30,000.00
$45,000.00
2012 2013 2014
Rehabilitation, mechanotherapy & locomotor therapy in 2012-2014(chart, table: customs import value in US$ thds)
Back to the list of segments Rehabilitation & Physiotherapy 14
Indicator Figure
Estimated total for 2014 $21.3 mln
Cumulative growth 2014/2012 4.3%
Growth 2014/2013 6.4%
Estimated CAGR for 2012-2014 2.1%
Expected growth rate 2015/2014
$ -2-9%
R 49-64%
Expected total for 2015 – $21-23 mln expected limited growth due to R devaluation, at the same time growing government spending in frame of rehab centers construction & launch
Investments in frame of federal program “Healthcare development 2020”
valid.
valid.
valid.
valid.
estim.
estim.
estim.
BTL38%
Physiomed16%
Gymna Uniphy6%
Beka-Hospitec3%
Others37%
Physical therapy in 2014(chart: customs import value in US$)
Back to the list of segments Rehabilitation & Physiotherapy 15
2012 2013 2014
BTL $2,028.0 $2,855.7 $7,973.7
Physiomed $3,856.8 $4,835.8 $3,421.0
GymnaUniphy
$57.8 $887.4 $1,299.4
Beka-Hospitec
$133.2 $309.5 $595.6
Enraf-Nonius $1,598.8 $630.5 $490.7
Trautwein $1,864.0 $247.2 $108.2
Others $10,325.6 $10,209.6 $7,362.7
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
Trautwein
Enraf Nonius
Beka-Hospitec
Gymna Uniphy
Physiomed
BTL
valid.
$15,000.00
$20,000.00
$25,000.00
2012 2013 2014
Physical therapy in 2012-2014(chart, table: customs import value in US$ thds)
Back to the list of segments Rehabilitation & Physiotherapy 16
Indicator Figure
Estimated total for 2014 $20.8 mln
Cumulative growth 2014/2012 -60.4%
Growth 2014/2013 -46.0%
Estimated CAGR for 2012-2014 -37.0%
Expected growth rate 2015/2014
$ -27-18%
R 9-24%
Expected total for 2015 – $15-17 mln estimated reduction due to R devaluation, weaker demand in the categories of lithotripsy, cosmetology. Partly the segment will grow thanks to balneology
Investments in frame of federal program “Healthcare development 2020”
valid.
valid.
valid.
valid.
estim.
estim.
estim.
Other devices (cosmetology, balneology, cryotherapy, lithotripsy) in 2014(chart: customs import value in US$)
Back to the list of segments Rehabilitation & Physiotherapy 17
LPG Systems16%
Zimmer Medizinsysteme
16%
Dornier9%
Unbescheiden6%
Storz Medical4%
Others49%
valid.
2012 2013 2014
LPG Systems $6,656.7 $3,095.6 $3,401.6
Zimmer Medizinsysteme
$2,562.0 $4,893.3 $3,255.9
Dornier $10,606.2 $3,509.3 $1,941.7
Unbescheiden $1,810.3 $2,044.7 $1,267.5
Storz Medical $8,036.1 $5,003.9 $727.0
Edap-TMS $3,507.3 $578.7 $179.8
Others $19,298.4 $19,337.5 $10,017.9
Other devices (cosmetology, balneology, cryotherapy, lithotripsy) in 2012-2014(chart, table: customs import value in US$ thds)
Back to the list of segments Rehabilitation & Physiotherapy 18
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
Edap-TMS
Storz Medical
Unbescheiden
Dornier
ZimmerMedizinsysteme
LPG Systems
valid.
$0.00
$20,000.00
$40,000.00
$60,000.00
2012 2013 2014
Implementation of Healthcare Modernization program in 2012-2013 => excessive funding provided to hospitals, more purchases of extra expensive equipment. Slight decrease of 2013 and subsequent more substantial decrease in 2014 was due to termination of Healthcare Modernization program. Expected growth in 2015-2016 due to implementation of federal program Healthcare Development 2020, construction & launch of new rehab centers and departments.
Trends per product groups in 2012-2014 + forecasts 2015-2016(chart: customs import value in US$ thds)
Back to the list of segments Rehabilitation & Physiotherapy 19
$0.0
$10,000.0
$20,000.0
$30,000.0
$40,000.0
$50,000.0
$60,000.0
2012 2013 2014 2015 2016
Rehabilitation,mechanotherapy &locomotor therapy
Physical therapy
Other (cosmetology,balneology,cryotherapy,lithotripsy)
valid.
- 37.1%
- 1.9%
2.2%
14.7%
CAGR 2012-2014
CAGR 2014-2016
forecasts
- 10.5%
15.1%
Indicator Figure
Estimated total for 2014 $54.3 mln
Cumulative growth 2014/2012 -27.6%
Growth 2014/2013 -23.1%
Estimated CAGR for 2012-2014 -14.9%
Expected growth rate 2015/2014
$ -26-22%
R 11-17%
Expected total for 2015 – $40-42 mln. Reduction due to Ruble devaluation amid falling purchasing power of ordinary consumers. Demand from public and private hospitals is not expected to change significantly
Heavy reliance on consumer sector will lead to lower demand in a mid term
valid.
valid.
valid.
valid.
estim.
estim.
estim.
Respiratory therapy (nebulizers, oxygen concentrators) in 2014(chart: customs import value in US$)
Back to the list of segments Rehabilitation & Physiotherapy 20
A&D Company13%
Amrus Enterprises
11%
Armed4%
B.Well6%
Flaem Nuova 5%
Little Doctor12%
Omron Corp.36%
Vega Technologies
2%
Bitmos2%
Others9%
valid.
2012 2013 2014
A&D Company
$8,124.7 $7,078.5 $7,270.7
AmrusEnterprises
$6,780.8 $7,563.8 $5,842.5
Armed $2,165.7 $3,054.6 $2,047.4
B.Well $9,967.9 $10,433.8 $3,093.4
Flaem Nuova $3,256.6 $2,888.3 $2,911.3
Little Doctor $6,269.1 $6,960.7 $6,448.5
Omron Corp. $21,380.8 $23,060.5 $19,736.4
Vega Technologies
$7,033.9 $2,279.2 $1,083.0
Bitmos $695.8 $768.4 $1,202.9
Others $9,316.0 $6,533.9 $4,679.0
Respiratory therapy (nebulizers, oxygen concentrators) in 2012-2014(chart, table: customs import value in US$ thds)
Back to the list of segments Rehabilitation & Physiotherapy 21
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
Bitmos
Vega Technologies
Omron Corp.
Little Doctor
Flaem Nuova
B.Well
Armed
Amrus Enterprises
A&D Company
valid.
Rank Clients categories Ownership Key products purchased
1 Federal State Budget Hospitals with the key areas of
Public High-end rehab, physiotherapy and other devices regardless of price. Federal centers are normally multi-disciplinary medical facilities with the specific areas of specialization providing a complete cycle of healthcare operations from ambulatory and diagnostics to restorative therapy. Nearly all federal facilities have the separate unit for rehabilitation & physiotherapy. Many of them are able to use excessive funding provided in frame of federal budgets to acquire extra expensive equipment for advanced diagnostics and treatment => in total federal faculties create up to 80-90% of total demand on extra expensive equipment. Complete cost of required equipment set including all listed categories can vary within $2-7 mln per facility (current Ruble value).In frame of Government spending receive the strongest funding from Federal Budget
Key accounts segmentation
Back to the list of segments Rehabilitation & Physiotherapy 22
Rank Clients categories Ownership Key products purchased
2 Moscow and Saint-Petersburg City Clinical Hospitals – multi-disciplinary
Public Higher price physiotherapy, rehab and other devices. City Clinical hospitals are multi-disciplinary and have more focus on diagnostics for ambulatory services, still many of them have advanced OR departments and perform complicated surgeries. The majority of clinical city hospitals are only required to have a complete physiotherapy department fitted with high-end devices. Those of them that have more focus on surgery can have a full-featured rehab department sometimes with extra expensive devices. City Clinical hospitals create up to 5-10% of demand on extra expensive equipment. Cumulative cost of equipment set per hospital can vary within $0.5-3 mln per facility(current Ruble value).In frame of City budget receive strong funding; the funding on rehab & physiotherapy devices is much smaller compared to federal facilities
Key accounts segmentation
Back to the list of segments Rehabilitation & Physiotherapy 23
Rank Clients categories Ownership Key products purchased
3 Regional Clinical Hospitals – multi-disciplinary
Public Higher and mid price physiotherapy, other devices, mid and lower price rehab equipment. Regional hospitals normally have a complete cycle of healthcare services (from outpatient services to restorative therapy). All regional hospitals are required to have a complete physiotherapy department + reduced to essentials rehab department. Some of the most funded hospitals can have a complete rehab department. Total cost of equipment can vary within $0.3-1 mln per facility (current Ruble value).In frame of regional budget get a considerable funding; normally the amount of funding for rehab & physiotherapy is strongly limited.
4 Regional Perinatal Centers – neonatal care, obstetrics and gynecology
Public Mid price physiotherapy devices. Regional Perinatal centers are not generally focused on restorative therapy. Physiotherapy department is required and was included in the healthcare standards. Some of Perinatal centers can have a basic set of rehab devices. Total cost of equipment set can vary within $0.1-0.3 mln per facility (current Ruble value).In frame of federal program receive substantial funding; a small part of this funding can be spent of rehab & physiotherapy.
Key accounts segmentation
Back to the list of segments Rehabilitation & Physiotherapy 24
Rank Clients categories Ownership Key products purchased
5 Local City Hospitals –multi-disciplinary
Public Mid and lower price physiotherapy devices. Local city hospitals are not generally focused on surgery and postoperative restorative therapies. Some of these hospitals can have a physiotherapy department, still are not required to have them. In most cases do not purchase any types of rehab equipment. Total cost of equipment may be up to $0.3 mln per facility (current Ruble value).Have a limited own source of funding; not required to have a complete physiotherapy department.
Key accounts segmentation
Back to the list of segments Rehabilitation & Physiotherapy 25
Rank Clients categories Ownership Key products purchased
7 Private Hospitals – multi-disciplinary
Private Higher and mid price physiotherapy, rehab devices. Most of private facilities are low budget projects aimed at maximizing profits => have a basic set of rehab and physiotherapy devices. The equipment set is composed in accordance with the unified standard of healthcare provision. At the same time there is a number of costly projects of rehab centers, many of them are currently under construction and based on combination of private patient + compulsory health insurance patients in frame of Public-Private partnership. Average cost of equipment for huge projects can amount to $7-8 mln per facility. Total cost of equipment per ordinary private center can vary within $0.3-2 mln (current Ruble value).Have own funds from provided by private investors and legal entities.
Key accounts segmentation
Back to the list of segments Rehabilitation & Physiotherapy 26
Market capacity is generated by:
» Purchases of devices for existing federal facilities (new departments and rehab centers in frame of federal facilities)
» Purchases of devices for new separate rehab centers (most of them are currently under construction)
» Purchases of devices for other public facilities (mainly regional and local city hospitals – new departments)
» Purchases of devices for new private centers
Total market capacity equals to US$700.0 mln
» Rehabilitation, mechanotherapy, locomotor therapy devices – US$270.0 mln
» Physical therapy – US$230.0 mln
» Other devices (cosmetology, balneology, cryotherapy, etc.) – US$200.0 mln
Market capacity, expectations
Back to the list of segments Rehabilitation & Physiotherapy 27
The segment of rehab & physiotherapy devices is expected to become one of the fastest growing segments in 2016-2020
An average demand/capacity rate equals to 12-15%. Currently the segment cannot be regarded to any of categories (high-technology or basic) due to the fact that the widespread launch of rehab centers and departments is a relatively recent trend.
Market capacity will grow 15-30% annually in 2015-2020 (complete equipment set for new rehab centers, departments)
No oversaturation is expected before 2020.
Market demand will grow decrease slightly in 2015 due to severe Ruble devaluation and minimum of purchases related to new rehab centers and departments. The strongest growth is expected in 2016-2020 due to widespread construction and launch of rehab centers and departments throughout Russia.
Market capacity, expectations
Back to the list of segments Rehabilitation & Physiotherapy 28
estim.
estim.
estim.
Endoscopy & Electro Surgery
Resume
Back to the list of segments Endoscopy & Electro Surgery 1
Endoscopy & Electro Surgery segment includes a range of devices that are used both in diagnostics and therapy. Historically in Russia rigid endoscopy forms a major part of the segment. The segment was an inherent part of many federal and regional healthcare programs. Up to 90% of total funding comes from Government.
The segment will not be a part of any significant federal program throughout 2015-2017. Major demand is expected from federal facilities and replacement of obsolete devices. Local manufacturers do not create serious competition for high-profile international companies.
Funding 2012-2014:
» Healthcare Modernization program – major source of investment for the period of 2011-2013. Strong demand of Endoscopy & Electro Surgery devices supported by unsatisfied demand of numerous regional and municipal facilities
» Regular purchases from federal facilities – major source of investment during the period of 2011-2014. Federal facilities have a separate channel of funding, great demand was due to unsatisfied needs and more
» Oncology federal program – secondary investment source for the period of 2009-2014. Annually provided up to $40 mln to the total purchases
Funding 2015-2016:
» New launches of federal facilities – expected demand from newly launched public (mainly federal facilities) hospitals. Expected fewer launches in 2015-2017 compared to 2012-2014, estimated cost of Endoscopy equipment per federal facility can amount to $4-5 mln
» Replacement of obsolete equipment – this part of funding is closely linked to excessive funding provided in frame of Healthcare Modernization during 2011-2013, peak of demand is expected starting from the end of 2016
» Construction and launch of 32 new Perinatal Centers –secondary investment source during 2015-2017
In scope:
» Rigid endoscopy
» Flexible endoscopy
» Robotic endo-surgery
» Other endoscopy
» Electro and ultrasound Surgery
» Surgery and therapeutic Lasers
CAGR for 2012 – 2014:
Rigid endoscopy
- 27.9%
Robotic endo-surgery
Flexible endoscopy, other endoscopy
- 56.7%
Electro and ultrasound Surgery
- 35.8%
Surgery and therapeutic Lasers
- 26.0%
The product types included in the part can be considered as separate segments. But, in fact all these product types are used in different types of minimally invasive surgery.
Important: in case of Surgery an Therapeutic lasers we also take into account laser devices of non-surgery categories produced by those manufacturers that form part of the product category
Back to the list of segments
Structure
Endoscopy & Electro Surgery 2
Segment volume in 2014:
» Cumulative reduction by 28.0% compared to 2013 (in US$)
» Reduction by 13.2% compared to 2013 (in Rubles)
» Segment’s total in customs import prices for 2014 - $157.9 mln
» Estimated segment’s total in customer final prices for 2014 - $340.0 mln
The segment experienced strong growth in 2007-2012 with average CAGR over 11%. Due to oversaturation and shortage of funding in 2013-2014 the segment declined by more than 50% compared with the results of 2012
valid.
valid.
valid.
estim.
Back to the list of segments
Indicators 2014
Endoscopy & Electro Surgery 3
Karl Storz51%
Olympus10%
Intuitive Surgical
7%
Hoya Corp.7%
Richard Wolf3%
Soering2%
Lumenis3% Others
17%
valid.
Endoscopy and Electro Surgery 2012-2014:
» The highest rate of demand was in 2011-2012 as a result of excessive funding provided in frame of Healthcare Modernization program. Significant slowdown in 2013 due to termination of the program.
» Demand in 2013-2014 was strongly supported by federal program Oncology, regular purchases from federal facilities and residual investment in frame of Healthcare Modernization program. Reduction of demand in 2013 mainly affected the categories of rigid endoscopy, flexible endoscopy and electro surgery devices.
» Subsequent reduction of demand was in the part offlexible endoscopy and electro surgery in 2014; practically the same rate of demand in the part of rigid endoscopy.
» Currency devaluation affected the overall demand rate in 2014
Segment’s volume change in 2012-2014 + forecasts 2015-2016 (chart: customs import value in US$ thds)
Back to the list of segments Endoscopy & Electro Surgery 4
$0.0
$50,000.0
$100,000.0
$150,000.0
$200,000.0
$250,000.0
$300,000.0
$350,000.0
$400,000.0
2012 2013 2014 2015 2016
valid.
Endoscopy and Electro Surgery 2015-2016:
» Expected continuing reduction of demand in 2015 due to overall shortage of funding and strongest Ruble devaluation. Slight growth in 2015 if calculated in Rubles.
» Oncology federal program suspended starting from 2015 and will not be a part of demand during 2015-2016; the program can be resumed in future periods.
» Regular purchases from federal facilities are expected to be the main source of funding during 2015-2016, these purchases can make up to 50-60% of total funding
» Necessity of replacing the obsolete equipment acquired in frame of Healthcare Modernization program during 2011-2013 can lead to stronger demand from regional and municipal hospitals
» Little demand in frame of construction and launch of 32 new perinatal centers
Segment’s volume change in 2012-2014 + forecasts 2015-2016 (chart: customs import value in R mlns)
Back to the list of segments Endoscopy & Electro Surgery 5
0.00₽
2,000.00₽
4,000.00₽
6,000.00₽
8,000.00₽
10,000.00₽
12,000.00₽
14,000.00₽
2012 2013 2014 2015 2016
valid.
Segmentation by product categories(charts: customs import value in US$)
Back to the list of segments Endoscopy & Electro Surgery 6
Rigid endoscopy & robotic endo
surgery45%
Flexible endoscopy
28%
Other endoscopy
4% Electro, HF & US Surgery
12%
Surgery & therapeutic
lasers10%
Other devices1%
valid.
2013
Rigid endoscopy & robotic endo
surgery64%
Flexible endoscopy
18%
Other endoscopy
1%
Electro, HF & US Surgery
9%
Surgery & therapeutic
lasers7%
Other devices1%
valid.
2014
Segmentation by product categories(charts: customs import value in US$)
Back to the list of segments Endoscopy & Electro Surgery 7
Rigid endoscopy & robotic endo
surgery52%
Flexible endoscopy
31%
Other endoscopy
3%
Electro, HF & US Surgery
9%
Surgery & therapeutic lasers
5%
Other devices0%
valid.
2012
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Other devices
Surgery &therapeutic lasers
Electro, HF & USSurgery
Other endoscopy
Flexible endoscopy
Rigid endoscopy &robotic endosurgery
valid.
Major manufacturers in 2012
Karl Storz $155 794,2
Olympus $78 295,5
Hoya $24 920,3
Intuitive Surgical
$20 591,2
Soering $11 605,9
Fujifilm $8 787,7
Erbe $6 191,6
Lumenis $5 943,3
Richard Wolf
$4 960,9
Others $56 485,5 -
» Total segment’s volume in customs import prices -$373.6 mln
» Estimated segment’s volume in customer final prices -$780.0 mln
» The year 2012 combined numerous sources of funding implemented both on federal and regional level.
» Main source of funding was Healthcare Modernization program (the greatest amount of funds in frame of the program invested in 2012).
» Additional funding provided during the implementation of federal program Oncology (mainly from Regional Oncology centers)
valid.
estim.
Segment volume in 2012(chart: customs import value in US$)
Back to the list of segments Endoscopy & Electro Surgery 8
Karl Storz42%
Olympus21%
Hoya7%
Intuitive Surgical
5%
Soering3%
Fujifilm2%
Erbe2%
Lumenis2%
Richard Wolf1%
Others15%
valid.
Major manufacturers in 2013
Karl Storz $72 459,6
Olympus $37 582,0
Hoya $17 611,1
Intuitive Surgical
$12 883,0
Lumenis $6 568,8
Soering $6 088,3
Erbe $5 318,5
Deka $4 493,8
Others $55 188,2 -
» Total segment’s volume in customs import prices -$218.2 mln
» Estimated segment’s volume in customer final prices - $480.0 mln
» Termination of Healthcare Modernization program in Q3-4 of 2013 and a lag of funding in frame of Oncology federal program led to more significant demand contraction.
» The demand was supported by regular purchases from major federal and regional facilities and additional funding in frame of other federal programs.
valid.
estim.
Segment volume in 2013(chart: customs import value in US$)
Back to the list of segments Endoscopy & Electro Surgery 9
Karl Storz33%
Olympus17%Hoya
8%
Intuitive Surgical
6%
Lumenis3%
Soering3%
Erbe3%
Deka2%
Others25%
valid.
Forecasts 2015
» Expected cumulative reduction by 32.7% => $105.5 mln. Attributable to currency devaluation and reduction in demand.
» Growth by 1.8% compared to 2014 in Rubles.
» No specific funding from federal budget for this segment in 2015. Expected mostly purchases from public federal facilities
Forecasts 2016
» Based on assumption that macroeconomic situation is improving in 2016 expected volume will be => $132.5 mln.
» Growth by 24.4% in $ due to:
» Ruble change positive effect
» Stronger demand from other public and private facilities due to necessity of replacing the obsolete equipment
» Expected reduction by 3.5% in Rubles
Forecasts 2015-2016(customs import value in US$)
Back to the list of segments Endoscopy & Electro Surgery 10
Demand rate is volatile, cyclical
» Skyrocketing trends in the segment follow industry growth
» The segment is basic for equipping of OR units with a focus on endo-surgery and diagnostic departments with a focus on endoscopic diagnostics
» No major Government programs are expected in 2015-2016 except some demand from 32 new perinatal centers in 2015-2016
Major financing sources
» Healthcare Modernization program (2011-2013)
» Patient care improvement program for those injured in traffic accidents (2009-2014)
» Oncology program (2009-2014)
» Regular purchases (not limited in period)
Rate of demand, funding
Back to the list of segments Endoscopy & Electro Surgery 11
Major players
» Rigid Endoscopy: Karl Storz, Richard Wolf
» Flexible Endoscopy: Olympus, Hoya, Fujifilm
» Robotic Endo-surgery: Intuitive Surgical
» Electro and Ultrasound Surgery: Soering, Ellman, Covidien, Erbe
» Surgery and Therapeutic Lasers: Lumenis, Deka, Candela, Fotona
Major players
Back to the list of segments Endoscopy & Electro Surgery 12
Indicator Figure
Estimated total for 2014 $101.0 mln
Cumulative growth 2014/2012 -48.0%
Growth 2014/2013 1.8%
Estimated CAGR for 2012-2014 -27.8%
Expected growth rate 2015/2014
$ -31-27%
R 4-9%
Expected total for 2015 – $70-73 mln. Shortage due to severe Ruble devaluation. End of major federal programs. Slight growth in Rubles due to stronger growth from federal facilities
Major contributors for 2015 are federal facilities, moderate demand from other pubic facilities
valid.
estim.
estim.
estim.
valid.
Rigid endoscopy & robotic endo surgery in 2014(customs import value in $)
Back to the list of segments Endoscopy & Electro Surgery 13
Karl Storz80%
Intuitive Surgical
11%
Richard Wolf5%
Others4%
valid.
valid.
valid.
2012 2013 2014
Karl Storz $155,794.2 $72,459.6 $80,662.4
Intuitive Surgical
$20,591.2 $12,883.0 $11,015.7
Richard Wolf $4,960.9 $3,550.1 $4,868.9
Others $12,658.9 $10,283.2 $4,425.1
Rigid endoscopy & robotic endo surgery in 2012-2014(customs import value in $)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
Richard Wolf
Intuitive Surgical
Karl Storz
valid.
Back to the list of segments Endoscopy & Electro Surgery 14
$0.00
$100,000.00
$200,000.00
$300,000.00
2012 2013 2014
Indicator Figure
Estimated total for 2014 $30.4 mln
Cumulative growth 2014/2012 -75.4%
Growth 2014/2013 -56.7%
Estimated CAGR for 2012-2014 -50.4%
Expected growth rate 2015/2014
$ -35-29%
R 0-7%
Expected total for 2015 – $19-21 mln. Shortage due to severe Ruble devaluation. End of major federal programs. Slight growth in Rubles due to stronger growth from federal facilities
Major contributors for 2015 are federal facilities, moderate demand from other pubic facilities
valid.
estim.
estim.
estim.
valid.
Flexible endoscopy, other endoscopy in 2014(customs import value in $)
Back to the list of segments Endoscopy & Electro Surgery 15
valid.
valid.
Olympus50%
Hoya36%
Fujifilm4% Others
10%
valid.
2012 2013 2014
Olympus $78,295.5 $37,582.0 $15,049.1
Hoya $24,920.3 $17,611.1 $10,904.9
Fujifilm $8,787.7 $4,036.3 $1,332.7
Others $10,952.1 $10,444.4 $2,991.8
Flexible endoscopy, other endoscopy & endo-surgery in 2012-2014(customs import value in $)
Back to the list of segments Endoscopy & Electro Surgery 16
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
Fujifilm
Hoya
Olympus
valid.
$0.00
$50,000.00
$100,000.00
$150,000.00
2012 2013 2014
Indicator Figure
Estimated total for 2014 $14.4 mln
Cumulative growth 2014/2012 -58.7%
Growth 2014/2013 -46.9%
Estimated CAGR for 2012-2014 -35.8%
Expected growth rate 2015/2014
$ -37-27%
R -6-10%
Expected total for 2015 – $9.0-10.5 mln. Shortage due to severe Ruble devaluation. End of major federal programs. Slight growth in Rubles due to stronger growth from federal facilities
Demand in the segment is partly dependent on the number of endoscopy racks supplied => shortage of endoscopy segment volume will supposedly lead to reduction in this category
valid.
estim.
estim.
estim.
valid.
Electro, HF & US surgery in 2014(customs import value in $)
Back to the list of segments Endoscopy & Electro Surgery 17
Soering28%
Covidien15%
Ellman13%
Ethicon13%
Erbe9%
Others22%
valid.
valid.
valid.
2012 2013 2014
Soering $11,605.9 $6,088.3 $3,748.3
Covidien $1,374.9 $1,797.6 $2,020.0
Ellman $4,454.2 $4,486.0 $1,716.6
Ethicon $448.1 $1,516.1 $1,696.7
Erbe $6,191.6 $5,318.5 $1,127.9
Others $8,975.4 $6,283.6 $2,981.7
Electro, HF & US surgery in 2012-2014(customs import value in $)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
Erbe
Ethicon
Ellman
Covidien
Soering
valid.
Back to the list of segments Endoscopy & Electro Surgery 18
$0.00
$15,000.00
$30,000.00
$45,000.00
2012 2013 2014
Indicator Figure
Estimated total for 2014 $11.0 mln
Cumulative growth 2014/2012 -45.2%
Growth rate 2014/2013 -50.0%
Estimated CAGR for 2012-2014 -26.0%
Expected growth rate 2015/2014
$ -36-17%
R -3-24%
Expected total for 2015 – $7.0-9.0 mln. Shortage due to severe Ruble devaluation.
Demand in the segment is mainly related to private facilities.
valid.
estim.
estim.
estim.
valid.
Surgery & dermatology lasers in 2014(customs import value in $)
Lumenis38%
Deka20%
Candela12%
Quanta Systems
11%
Others19%
valid.
Back to the list of segments Endoscopy & Electro Surgery 19
valid.
valid.
Surgery & dermatology lasers in 2012-2014(customs import value in $)
2012 2013 2014
Lumenis $5,943.3 $6,568.8 $4,135.6
Deka $2,706.8 $4,493.8 $2,220.6
Candela $3,668.9 $4,124.9 $1,248.9
Quanta Systems
$1,701.3 $1,694.0 $1,210.1
Others $2,373.2 $4,665.8 $2,053.5
Back to the list of segments Endoscopy & Electro Surgery 20
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
Others
Quanta Systems
Candela
Deka
Lumenis
valid.
$0.00
$10,000.00
$20,000.00
$30,000.00
2012 2013 2014
Trends per product groups in 2012-2014 + forecasts 2015-2016(customs import value in $ thds)
Back to the list of segments Endoscopy & Electro Surgery 21
Healthcare Modernization program of 2011-2013 mainly contributed to the demand in the categories of rigid and flexible endoscopy. In 2013 the segment decreased more than 38%; flexible and rigid endoscopy reduced almost by half amid moderate growth in the part of other endoscopy. In 2014 flexible endoscopy continued falling amid more stable positions of rigid and other endoscopy. Further decline is expected in 2015 mainly due to Ruble devaluation, slight growth in 2016 due to expected Ruble revaluation.
$0.0
$50,000.0
$100,000.0
$150,000.0
$200,000.0
$250,000.0
2012 2013 2014 2015 2016
Rigid endoscopy &robotic endosurgery
Flexible endoscopy
Other endoscopy
forecasts
- 27.8%
- 8.3%
CAGR 2012-2014
CAGR 2012-2016
- 50.4%
- 7.5%
Trends per product groups in 2012-2014 + forecasts 2015-2016(customs import value in $ thds)
Back to the list of segments Endoscopy & Electro Surgery 22
Electro, HF & US Surgery followed the segment’s trends during 2012-2014. Demand rate soared in 2012 due to unprecedented growth in the part of endoscopy devices. Surgery & therapeutic lasers growth 2013/2012 was the result of “deferred” demand, peak of demand in 2013 was due to excessive funding in frame of Healthcare Modernization. Subsequent decline in 2014 was the result of reduced funding. Further decline is expected in 2015 mainly due to Ruble devaluation, slight growth in 2016 due to expected Ruble revaluation
$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
2012 2013 2014 2015 2016
Electro, HF & USSurgery
Surgery &therapeutic lasers
Other devices
forecasts
CAGR 2012-2014
CAGR 2012-2016
- 26.0%
- 9.4%
- 35.8%
- 12.6%
Rank Clients categories Ownership Key products purchased
1 Federal State Budget Hospitals with the key areas of specialization in oncology, neurosurgery, abdominal surgery, other)
Public High-end endoscopy, electro surgery devices and instrumentation, integrated endo OR units, robotic endo-surgery. Federal centers are the main consumers of separate endoscopy racks and integrated systems (like OR1 solution of Karl Storz). Federal facilities can have up to 5-20 OR units and perform thousands of surgical interventions annually. Those centers specializing on neurosurgery, oncology can normally have one endoscopy 1 endoscopy set (rack)/2 ORs, numerous electro, HF and US surgery devices. Federal facilities are major consumers of robotic endo-surgery (primarily, meaning the da Vinci solution – more than 20 installations YTD) and integrated OR solutions(primarily meaning the Karl Storz OR1 – more than 160 installations YTD). Highest patients flow require sufficient diagnostic equipment. Cumulative cost of operating and diagnostic equipment can vary within $4-11 mln per facility (current Ruble value).In frame of Government spending receive the strongest funding from Federal Budget
Key accounts segmentation
Back to the list of segments Endoscopy & Electro Surgery 23
Rank Clients categories Ownership Key products purchased
2 Moscow and Saint-Petersburg City Clinical Hospitals – multi-disciplinary
Public High-end endoscopy, electro surgery devices and instrumentation, integrated endo OR units. Clinical City hospitals create strong demand on endoscopy devices due to high # of surgical interventions and highest patients flow compared to the one federal centers have; can have up to 5-15 OR units. Normally these facilities are multi-disciplinary and cover various clinical cases. Still most of complicated surgeries done in federal centers of Moscow or SPb. Normally these hospitals have at least 1-3 endoscopy sets (racks) per facility, electro, HF and US surgery devices for various applications. Top City Clinical hospitals have integrated endo OR implemented in one or several ORs. Highest patients flow require sufficient diagnostic equipment. Total cost of equipment can vary within $2-7 mln per facility (current Ruble value)In frame of City budget receive strong funding compared with one that federal centers can get.
Key accounts segmentation
Back to the list of segments Endoscopy & Electro Surgery 24
Rank Clients categories Ownership Key products purchased
3 Regional Clinical Hospitals –multi-disciplinary
Public Higher price endoscopy, electro surgery devices and instrumentation. Regional Clinical hospitals are normally responsible for all complicated surgeries that can be done in frame of separate region of Russia. # of surgical interventions depends on the regional population and overall funding. Normally these hospitals can have up to 1-3 endoscopy sets (racks). Regional Clinical hospitals are multi-disciplinary and cover various clinical cases. Higher patients flow require sufficient diagnostic equipment. Total cost of equipment can vary within $1-4 mln (current Ruble value).Regional Hospitals can use there own funding or receive target funding from Federal Budget
Key accounts segmentation
Back to the list of segments Endoscopy & Electro Surgery 25
Rank Clients categories Ownership Key products purchased
4 Regional Oncology Centers – oncology diagnostics and treatment, specialized surgeries
Public Higher price endoscopy, electro surgery devices and instrumentation. Regional Oncology centers specifically designed for diagnostics and treatment of oncology diseases. # of surgical interventions is moderate. These hospitals only receive funding in frame of Oncology federal program. Normally these hospitals can have at least 3-4 endoscopy sets (racks), electro, US surgery devices. Higher patients flow require sufficient diagnostic equipment. Total cost of equipment can vary within $2-4 mln (current Ruble value). Starting from 2015 the main funding source – Oncology federal program – suspended.Regional Perinatal Centers receive funding in frame of Oncology federal program.
Key accounts segmentation
Back to the list of segments Endoscopy & Electro Surgery 26
Rank Clients categories Ownership Key products purchased
7 Private Hospitals – multi-disciplinary
Private Mid price endoscopy and electro surgery devices, instrumentation. The majority of private hospitals are trying to avoid any type of surgeries and concentrate more on diagnostic. Still endoscopy diagnostics is considered to be expensive enough in terms of costs => not so widespread as US Diagnostics. Average private hospital can have up to 1-2 cheaper endoscopy sets (racks). Total cost of equipment can vary within $0.1-0.3 mln per facility (current Ruble value)There is a number of large private facilities (Meditsina JSC, European Medical Center, etc.) that can have a separate endoscopy department and purchase the most advanced medical devices. Are calculated in tens. Total cost of endoscopy & electro surgery can vary within $1-3 mln. per facility (current Ruble value).Can only use own funds provided by physical or legal entities.
Key accounts segmentation
Back to the list of segments Endoscopy & Electro Surgery 27
Market capacity is generated by:
» Purchases of devices for new federal facilities
» Purchases of devices for new public facilities of regional level (Regional Clinical hospitals and Regional Oncology centers)
» Purchases of devices for new private facilities (mainly flexible endoscopy for diagnostics)
» Increasing the equipment fleet for existing facilities
Market capacity, expectations
Back to the list of segments Endoscopy & Electro Surgery 28
Total market capacity equals to US$1,460.0 mln
» Rigid endoscopy & robotic endo-surgery – US$715.0 mln
» Flexible endoscopy, other endoscopy – US$490.0 mln
» Electro, RF & US surgery, surgery & therapeutic lasers – US$255.0 mln
Endoscopy & electro surgery devices are considered to be ‘high-technology’. An average demand/capacity rate is estimated at 13-14%
Market capacity rate will grow by 0,5-1% annually in 2015-2017 (new equipment for 32 new neonatal care centers, demand from federal and regional facilities).
After this period growth rate will slow down significantly (due to expected new cycle of replacing the obsolete equipment by major hospitals)
Market demand will drop in 2015 due to severe Ruble devaluation and decrease in funding. Expected moderate growth during 2016-2017 and subsequent strong growth during 2018-2020 (due to construction & launch of new federal facilities and necessity of replacement the obsolete devices.
Market capacity, expectations
Back to the list of segments Endoscopy & Electro Surgery 29
Contact us:[email protected]+7 916 815 85 01Moscow
Visit our website to get more details:www.dst-research.company